COB 318 EXAM 3 VERIFIED STUDY GUIDE
CONTRACT (n.) - Answers - •A promise/set of promises
•the performance of which law recognizes as a duty
•AND
•the breach of which law gives a remedy
contract law - Answers - •Contract law reflects our social values, interests, and
expectations.
•Distinguishes between "moral" promises which are not legally binding, and promises
that are legally binding.
•Sources of Contract Law - Answers - •Common law governs all regular, traditional
contracts
•except when modified or replaced by:
•statutory law, such as the Uniform Commercial Code (UCC)
OR
•administrative agency regulations.
•The Objective Theory of Contracts
Determines intent in contract law
•Elements of Valid Contract - Answers - •VALID contract includes ALL OF THE
FOLLOWING FOUR ELEMENTS:
1.Agreement
a)Offer and
b)Acceptance
2.Consideration
3.Capacity (may come later, e.g., with minors becoming adults, drunks sobering up,
etc.)
4.Legality
*REMEMBER ACCL*
*if you are missing even one of these, it is NOT a valid contract*
•Two Defenses to Enforceability of Valid Contract (K) - Answers - •EVEN IF all four
elements present, contract may be unenforceable based on one of two defenses:
1.Lack of voluntary consent
2.Form (Statute of Frauds requires writing in some circumstances)
•Real estate contracts
,•Agreements in anticipation of marriage (prenups)
•Surety agreements
•Ks not conceivably completed in less than one year)
contracts are all about: - Answers - - bargaining / negotiating
- coming to an agreement
•Contract Formation (bilateral vs unilateral) - Answers - •Every contract has at least
two parties: the offeror and the offeree.
bilateral vs unilateral
express vs implied
offer - Answers - an invitation to make a contract
eg. i will let you live in this house for x amount of dollars, bidding on an item online,
putting a price tag on a product in a store
bilateral vs unilateral contracts - Answers - •Bilateral contracts
- the norm (99% of contracts are this.)
• Needs 2 sides. The contract is formed when the offeror and offeree exchange
promises to each other. Contract formed immediately.
•Unilateral contracts
- uses a promise and a performance
•The offeror is 'bargaining' for performance in exchange for his promise. Contract is only
formed when the offeree performs.
- ie game shows, mowing someones lawn, etc.
t/f: "will" is an acceptable substitute for "shall" - Answers - FALSE
will is NOT as strong as shall. use shall in contracts, NOT will
•Express vs. Implied Contracts - Answers - •Express Contracts
- 99% of contracts are this
•Agreement's terms set forth in writing or orally.
•Implied Contracts
- no words, just action
•Agreement's terms based merely on conduct and reasonable expectations (ie if you go
to a doctor's office, you EXPECT the doctor to check on you even if you don't ask
explicitly):
•Plaintiff furnished service or property
•Plaintiff reasonably expected to be compensated
•Def. knew or should have known that payment was expected
•Defendant had chance to reject property or service but did not reject
, •Contract Performance - Answers - •Executed vs. Executory
•Executed
•Fully performed by both sides
•Executory
•At least one of the parties has not performed
•Contract Enforceability - Answers - •Voidable contracts
•Unenforceable contracts
•Void contracts
Agreement - Answers - •mutual understanding or a "meeting of the minds" between
two or more individuals regarding terms of a K.
•Requirements of an Offer - Answers - 1. Intent = Offeror must have serious intent to
be bound by offer.
2. Definiteness of Terms = Terms must be definite, i.e., reasonably certain, so parties
and court can ascertain terms.
3. Communication = Offer must be communicated to offeree.
meanings of intent, definiteness, and communication in an offer - Answers - •Intent
•Objective theory
•Definiteness of terms
a)Identification of parties
b)Identification of object or subject matter
c)Consideration to be paid
d)Time of payment, delivery, or performance
•Communication
•Termination of Offer (party actions vs operation of law) - Answers - •By parties'
actions
1.Revocation by offeror
2.Rejection by offeree
3.Counteroffer by offeree
•By operation of law
1.Lapse of time
2.Destruction of specific subject matter of offer
3.Death or incompetence of offeror or offeree
Supervening illegality of proposed contract
Requirements of Acceptance - Answers - 1.Unequivocal - Mirror Image Rule
2.Communicated
•Silence is NEVER acceptance unless offer says so expressly
CONTRACT (n.) - Answers - •A promise/set of promises
•the performance of which law recognizes as a duty
•AND
•the breach of which law gives a remedy
contract law - Answers - •Contract law reflects our social values, interests, and
expectations.
•Distinguishes between "moral" promises which are not legally binding, and promises
that are legally binding.
•Sources of Contract Law - Answers - •Common law governs all regular, traditional
contracts
•except when modified or replaced by:
•statutory law, such as the Uniform Commercial Code (UCC)
OR
•administrative agency regulations.
•The Objective Theory of Contracts
Determines intent in contract law
•Elements of Valid Contract - Answers - •VALID contract includes ALL OF THE
FOLLOWING FOUR ELEMENTS:
1.Agreement
a)Offer and
b)Acceptance
2.Consideration
3.Capacity (may come later, e.g., with minors becoming adults, drunks sobering up,
etc.)
4.Legality
*REMEMBER ACCL*
*if you are missing even one of these, it is NOT a valid contract*
•Two Defenses to Enforceability of Valid Contract (K) - Answers - •EVEN IF all four
elements present, contract may be unenforceable based on one of two defenses:
1.Lack of voluntary consent
2.Form (Statute of Frauds requires writing in some circumstances)
•Real estate contracts
,•Agreements in anticipation of marriage (prenups)
•Surety agreements
•Ks not conceivably completed in less than one year)
contracts are all about: - Answers - - bargaining / negotiating
- coming to an agreement
•Contract Formation (bilateral vs unilateral) - Answers - •Every contract has at least
two parties: the offeror and the offeree.
bilateral vs unilateral
express vs implied
offer - Answers - an invitation to make a contract
eg. i will let you live in this house for x amount of dollars, bidding on an item online,
putting a price tag on a product in a store
bilateral vs unilateral contracts - Answers - •Bilateral contracts
- the norm (99% of contracts are this.)
• Needs 2 sides. The contract is formed when the offeror and offeree exchange
promises to each other. Contract formed immediately.
•Unilateral contracts
- uses a promise and a performance
•The offeror is 'bargaining' for performance in exchange for his promise. Contract is only
formed when the offeree performs.
- ie game shows, mowing someones lawn, etc.
t/f: "will" is an acceptable substitute for "shall" - Answers - FALSE
will is NOT as strong as shall. use shall in contracts, NOT will
•Express vs. Implied Contracts - Answers - •Express Contracts
- 99% of contracts are this
•Agreement's terms set forth in writing or orally.
•Implied Contracts
- no words, just action
•Agreement's terms based merely on conduct and reasonable expectations (ie if you go
to a doctor's office, you EXPECT the doctor to check on you even if you don't ask
explicitly):
•Plaintiff furnished service or property
•Plaintiff reasonably expected to be compensated
•Def. knew or should have known that payment was expected
•Defendant had chance to reject property or service but did not reject
, •Contract Performance - Answers - •Executed vs. Executory
•Executed
•Fully performed by both sides
•Executory
•At least one of the parties has not performed
•Contract Enforceability - Answers - •Voidable contracts
•Unenforceable contracts
•Void contracts
Agreement - Answers - •mutual understanding or a "meeting of the minds" between
two or more individuals regarding terms of a K.
•Requirements of an Offer - Answers - 1. Intent = Offeror must have serious intent to
be bound by offer.
2. Definiteness of Terms = Terms must be definite, i.e., reasonably certain, so parties
and court can ascertain terms.
3. Communication = Offer must be communicated to offeree.
meanings of intent, definiteness, and communication in an offer - Answers - •Intent
•Objective theory
•Definiteness of terms
a)Identification of parties
b)Identification of object or subject matter
c)Consideration to be paid
d)Time of payment, delivery, or performance
•Communication
•Termination of Offer (party actions vs operation of law) - Answers - •By parties'
actions
1.Revocation by offeror
2.Rejection by offeree
3.Counteroffer by offeree
•By operation of law
1.Lapse of time
2.Destruction of specific subject matter of offer
3.Death or incompetence of offeror or offeree
Supervening illegality of proposed contract
Requirements of Acceptance - Answers - 1.Unequivocal - Mirror Image Rule
2.Communicated
•Silence is NEVER acceptance unless offer says so expressly
