Contract Law Exam Study Guide: Updated A+ Score
Guide Solution
What is a Contract? - ANSWERA contract is a legally enforceable agreement
composed of a promise or promises that have been agreed on and that create both
rights and duties for the parties to the agreement.
What does a Contract Require? - ANSWERRequires:
Mutual Assent, Consideration, aka "Bargained-for Exchange of promises", and No
Defenses to Formation.
What are unliquidated damages? - ANSWERDamages that cannot be determined by
a fixed formula and must be established by a judge or jury. Debt where there is a
legitimate dispute over the amount of the debt or the liability for the debt.
What law applies to:
Services
Land
Goods - ANSWER• Common law (state case law) for services;
• Common law (state case law) for land sales; and
• Uniform Commercial Code for goods
(UCC Article 2).
.
What are the key three elements of a contract? - ANSWER• Mutual assent
• Consideration
• No defenses to formation .
What three forms do contracts take? - ANSWER• express contracts: formed by
written or spoken language
• implied contracts: formed by conduct
.
• quasi-contracts: a legal fiction, they are formed by law as a consideration
substitute to avoid unjust enrichment ; not formed by mutual agreement of the
parties.
How are the three forms of contracts classified? - ANSWERclassifications are:
• bilateral
• unilateral.
What is the preemption doctrine? - ANSWERFederal substantive law supplants state
law, but, both state and federal courts have concurrent jurisdiction of actions arising
under that law.
Will not be on test.
,What is mutual assent (or consent)? - ANSWERMeeting of the minds wherein the
parties manifest their intention to enter into a contract. This manifestation consists
of a valid offer and a valid acceptance.
Merged and edited agreement, approval, permission; especially, verbal or nonverbal
conduct reasonably interpreted as willingness.
The requirement of assent; which is fundamental to the formation of a binding
contract, implies in a general way that both parties to an exchange shall have a
reasonably clear conception of what they are getting and what they are giving up.
What is an offer and how is it made? - ANSWERThe beginning of a contract where
the offeror indicates his intention to enter into an agreement in a way that the
offeree can accept by simply assenting to the stated intention.
A promise to perform conditional on receiving acceptance.
.
Must be accepted while alive.
What comprises a valid offer? - ANSWERA valid Offer composed of:
a) a promise to enter into a contract is expressed
b) in clear and certain terms
c) communicated to the offeree
What is an offer for a bilateral contract? - ANSWERA promise (offer) is offered in
exchange for a promise (acceptance).
The initial offer is composed of:
a) the expression of a promise to enter into a contract
b) in clear and certain terms
c) communicated to the offeree
What is an offer for a unilateral contract? - ANSWERA promise (offer) is offered in
exchange for performance (acceptance).
The initial offer is composed of:
a) the expression of a promise to enter into a contract
b) in clear and certain terms
c) communicated to the offeree acceptance is by performance, that is, by completion
of the requested act.
Offeror cannot revoke the offer once it has been relied upon by the offeree.
Offeror must allow completion; otherwise, subject to restitution damages.
What is a quasi-contract? - ANSWERa legal fiction formed by law to avoid unjust
enrichment exemplified by promissory estoppel, aka detrimental reliance. The court
imposes this contract as a remedy whereby detrimental reliance becomes a
consideration substitute. Unjust enrichment is mandatory for the imposition of this
quasi-contract
,.
quasi-contract: implied-in-law contract: an obligation created by law for the sake of
justice; specifically, an obligation imposed by law because of some special
relationship between the parties or because one of them would otherwise be
unjustly enriched. An implied-in-law contract is not actually a contract, but instead is
a remedy that allows the plaintiff to recover a benefit conferred on the defendant.
Also termed contract implied-in-law, quasi-contract, constructive contract (Black's).
.
How are offers terminated? - ANSWER1. revocation by the offeror;
2. rejection by the offeree;
3. termination by law
.
Who can accept offers? - ANSWERA person can accept an offer if the offeror has
created a power of acceptance in them. This means that any person can accept an
offer if he knows of the offer and he is the party to whom the offer was made.
.
Who can revoke an offer? - ANSWERThe offeror.
Who can reject an offer? - ANSWERthe offeree.
What is an acceptance and what are the methods of acceptance? - ANSWERwhen an
offeree assents to or agrees to an offer, which creates an agreement.
Can be by:
• performance,
• promise, and,
• in limited cases, by silence.
What is a valid acceptance for a bilateral contract? - ANSWERcomposed of:
a) an offeree who has the power of acceptance;
b) his acceptance is unequivocal [and identical to the offer], and
c) his acceptance is communicated to the offeror
acceptance in a bilateral contract occurs when the offeree makes a promise to
perform the requested act.
What is a valid acceptance for a unilateral contract? - ANSWERBy a completion of an
act:
when the offeree performs--that is, completes--the requested act.
When can an offer be accepted or not accepted? - ANSWERWhile alive or pending
and not when the offer has been:
1. revoked by the offeror;
2. rejected by the offeree; or
, 3. terminated by law due to
a) death of a party;
b) destruction of the subject matter; or
c) illegality
What is the mailbox rule? - ANSWERAn acceptance is effective or valid upon posting,
that is, when it is dispatched or mailed.
acceptance is valid on dispatch (Beckman, lecture 8/1/2013)
.
What are the exceptions to the mailbox rule? - ANSWER1. the offer states
otherwise--the offer governs;
2. rejection by offeree, then acceptance--whichever arrives first governs;
3. acceptance by offeree, then rejection--whichever arrives first governs but
rejection requires detrimental reliance by offeror;
4. option contract deadlines (#1, p. 17).
What are the cautions to the mailbox rule? - ANSWER1. No good lawyer ever lets the
mailbox rule take effect.
2. NEVER draft a contract that doesn't specify:
a) The means of acceptance, that is, valid on receipt, and
b) The means of delivery, that is, by fax, USPS, or UPS same-day delivery, and NEVER
by email.
c) The deadline for receipt.
3. There is no defense to the mailbox rule if it takes effect.
What is the mirror image? - ANSWERThe acceptance to an offer must mirror or be
identical [and unequivocal ] to the terms of the offer made or the acceptance will be
deemed to be a rejection and counteroffer.
If the offeree reserves the right to the original offer while making a counteroffer,
there is generally no rejection. The statement "I would like to consider your offer,
but would you consider . . . .."
may be treated as a reservation.
.
Does not apply to UCC contracts.
What is a counter-offer? - ANSWERA counter-offer is an offer to an initial offer that
constitutes, through implied rejection, a termination of the initial offer. A response
to an offer that does not precisely mirror that offer is a counteroffer, not an
acceptance.
What is consideration? - ANSWERPromises or acts that are agreed on involving an
obligation on each party (mutuality) to perform something that they were not
otherwise required to perform;
Guide Solution
What is a Contract? - ANSWERA contract is a legally enforceable agreement
composed of a promise or promises that have been agreed on and that create both
rights and duties for the parties to the agreement.
What does a Contract Require? - ANSWERRequires:
Mutual Assent, Consideration, aka "Bargained-for Exchange of promises", and No
Defenses to Formation.
What are unliquidated damages? - ANSWERDamages that cannot be determined by
a fixed formula and must be established by a judge or jury. Debt where there is a
legitimate dispute over the amount of the debt or the liability for the debt.
What law applies to:
Services
Land
Goods - ANSWER• Common law (state case law) for services;
• Common law (state case law) for land sales; and
• Uniform Commercial Code for goods
(UCC Article 2).
.
What are the key three elements of a contract? - ANSWER• Mutual assent
• Consideration
• No defenses to formation .
What three forms do contracts take? - ANSWER• express contracts: formed by
written or spoken language
• implied contracts: formed by conduct
.
• quasi-contracts: a legal fiction, they are formed by law as a consideration
substitute to avoid unjust enrichment ; not formed by mutual agreement of the
parties.
How are the three forms of contracts classified? - ANSWERclassifications are:
• bilateral
• unilateral.
What is the preemption doctrine? - ANSWERFederal substantive law supplants state
law, but, both state and federal courts have concurrent jurisdiction of actions arising
under that law.
Will not be on test.
,What is mutual assent (or consent)? - ANSWERMeeting of the minds wherein the
parties manifest their intention to enter into a contract. This manifestation consists
of a valid offer and a valid acceptance.
Merged and edited agreement, approval, permission; especially, verbal or nonverbal
conduct reasonably interpreted as willingness.
The requirement of assent; which is fundamental to the formation of a binding
contract, implies in a general way that both parties to an exchange shall have a
reasonably clear conception of what they are getting and what they are giving up.
What is an offer and how is it made? - ANSWERThe beginning of a contract where
the offeror indicates his intention to enter into an agreement in a way that the
offeree can accept by simply assenting to the stated intention.
A promise to perform conditional on receiving acceptance.
.
Must be accepted while alive.
What comprises a valid offer? - ANSWERA valid Offer composed of:
a) a promise to enter into a contract is expressed
b) in clear and certain terms
c) communicated to the offeree
What is an offer for a bilateral contract? - ANSWERA promise (offer) is offered in
exchange for a promise (acceptance).
The initial offer is composed of:
a) the expression of a promise to enter into a contract
b) in clear and certain terms
c) communicated to the offeree
What is an offer for a unilateral contract? - ANSWERA promise (offer) is offered in
exchange for performance (acceptance).
The initial offer is composed of:
a) the expression of a promise to enter into a contract
b) in clear and certain terms
c) communicated to the offeree acceptance is by performance, that is, by completion
of the requested act.
Offeror cannot revoke the offer once it has been relied upon by the offeree.
Offeror must allow completion; otherwise, subject to restitution damages.
What is a quasi-contract? - ANSWERa legal fiction formed by law to avoid unjust
enrichment exemplified by promissory estoppel, aka detrimental reliance. The court
imposes this contract as a remedy whereby detrimental reliance becomes a
consideration substitute. Unjust enrichment is mandatory for the imposition of this
quasi-contract
,.
quasi-contract: implied-in-law contract: an obligation created by law for the sake of
justice; specifically, an obligation imposed by law because of some special
relationship between the parties or because one of them would otherwise be
unjustly enriched. An implied-in-law contract is not actually a contract, but instead is
a remedy that allows the plaintiff to recover a benefit conferred on the defendant.
Also termed contract implied-in-law, quasi-contract, constructive contract (Black's).
.
How are offers terminated? - ANSWER1. revocation by the offeror;
2. rejection by the offeree;
3. termination by law
.
Who can accept offers? - ANSWERA person can accept an offer if the offeror has
created a power of acceptance in them. This means that any person can accept an
offer if he knows of the offer and he is the party to whom the offer was made.
.
Who can revoke an offer? - ANSWERThe offeror.
Who can reject an offer? - ANSWERthe offeree.
What is an acceptance and what are the methods of acceptance? - ANSWERwhen an
offeree assents to or agrees to an offer, which creates an agreement.
Can be by:
• performance,
• promise, and,
• in limited cases, by silence.
What is a valid acceptance for a bilateral contract? - ANSWERcomposed of:
a) an offeree who has the power of acceptance;
b) his acceptance is unequivocal [and identical to the offer], and
c) his acceptance is communicated to the offeror
acceptance in a bilateral contract occurs when the offeree makes a promise to
perform the requested act.
What is a valid acceptance for a unilateral contract? - ANSWERBy a completion of an
act:
when the offeree performs--that is, completes--the requested act.
When can an offer be accepted or not accepted? - ANSWERWhile alive or pending
and not when the offer has been:
1. revoked by the offeror;
2. rejected by the offeree; or
, 3. terminated by law due to
a) death of a party;
b) destruction of the subject matter; or
c) illegality
What is the mailbox rule? - ANSWERAn acceptance is effective or valid upon posting,
that is, when it is dispatched or mailed.
acceptance is valid on dispatch (Beckman, lecture 8/1/2013)
.
What are the exceptions to the mailbox rule? - ANSWER1. the offer states
otherwise--the offer governs;
2. rejection by offeree, then acceptance--whichever arrives first governs;
3. acceptance by offeree, then rejection--whichever arrives first governs but
rejection requires detrimental reliance by offeror;
4. option contract deadlines (#1, p. 17).
What are the cautions to the mailbox rule? - ANSWER1. No good lawyer ever lets the
mailbox rule take effect.
2. NEVER draft a contract that doesn't specify:
a) The means of acceptance, that is, valid on receipt, and
b) The means of delivery, that is, by fax, USPS, or UPS same-day delivery, and NEVER
by email.
c) The deadline for receipt.
3. There is no defense to the mailbox rule if it takes effect.
What is the mirror image? - ANSWERThe acceptance to an offer must mirror or be
identical [and unequivocal ] to the terms of the offer made or the acceptance will be
deemed to be a rejection and counteroffer.
If the offeree reserves the right to the original offer while making a counteroffer,
there is generally no rejection. The statement "I would like to consider your offer,
but would you consider . . . .."
may be treated as a reservation.
.
Does not apply to UCC contracts.
What is a counter-offer? - ANSWERA counter-offer is an offer to an initial offer that
constitutes, through implied rejection, a termination of the initial offer. A response
to an offer that does not precisely mirror that offer is a counteroffer, not an
acceptance.
What is consideration? - ANSWERPromises or acts that are agreed on involving an
obligation on each party (mutuality) to perform something that they were not
otherwise required to perform;
