***** ALL RULES MUST BE FULLY EXPLAINED
CONTRACT LAW
4 Elements of Contract
Agreement. Consideration. Legal Capacity. Legality
Whether we have a valid contract
Defenses to Enforceability
Voluntary (Mutual) Consent (1/ Mistake and 2/ Fraudulent Misrepresentation)
Form (MY LEGS - Statute of Frauds)
Whether we have an enforceable contract
Offer:
I - Intention
D - Definiteveness
C - Communication (Must be communicated to offeree)
Termination of an Offer:
1. By the Offeror (must be communicated) or through Express Repudiation/conduct
Effective when offeree receives it
2. By the Offeree
Rejection or Counteroffer
Effective when Received
3. Termination by Law
Lapse of Time, Destruction of Subject of Contract
Offers are generally revocable unless:
1. Merchant’s Firm Offer - UCC 2-205 Two Merchants, signed by Offeror, written, open and
irrevocable for 3 months, THEN OPEN AND REVOCABLE AFTER 3 MONTHS
2. NY Exception - NY GOL 5-1109 If an offer is written and states that it is irrevocable, it will
remain irrevocable as long as it is signed. Applies to All, NO TIME LIMIT
Acceptance:
Effective Moment - Mailbox Rule
Acceptance is effective when sent.
Termination is effective when received (Think about Offers on Reverb)
Common Law:
Mirror Image Rule - Offer and Acceptance must match one another. If not, there is a counteroffer.
, UCC:
Non Merchants: Additional Terms do not become part of the contract.
Merchants: Additional Terms become part of contract unless offer expressly limited acceptance to its
terms, additional terms materially alter the contract, or the offeror objects within reasonable time.
Consideration:
1) Legally Sufficient Value + Bargain for Exchange
2) Adequacy of Consideration
3) Agreements that lack consideration
1. Pre-existing Duty (Exception: Unforeseen Difficulties, rescission, new contract)
2. Past Consideration (Unless it is written)
3. Illusory Promises
*********************EXCEPTION FOR CONSIDERATION:
Enforceable if in writing and signed by the party against whom enforcement is sought
NY GOL 5-1103: Written Agreement for Modification or Discharge (Must be written, signed by party
you are trying to sue in attempt to modify the agreement)
NY GOL 5-1105: Written Promise Expressing Past Consideration
Accord and Satisfaction
******Unliquidated Debt Only!
Accord and Satisfaction
- Parties do not fully perform duties under contract and a dispute arises about who breached.
- The parties enter into a new agreement to settle the dispute
- If the parties enter into accord and satisfaction - no further claims under the old agreement
*********************NY EXCEPTION: If a creditor accepts payment but adds “without prejudice”
or “under protest” - no settlement.
Legal Capacity
- Minors
- Intoxicated Person
- Disabled Person
Legality
1. Contract contrary to a statute (crime)
2. Contracts contrary to public policy, contracts in restraint of trade
3. Unconscionable contracts or clauses
CONTRACT LAW
4 Elements of Contract
Agreement. Consideration. Legal Capacity. Legality
Whether we have a valid contract
Defenses to Enforceability
Voluntary (Mutual) Consent (1/ Mistake and 2/ Fraudulent Misrepresentation)
Form (MY LEGS - Statute of Frauds)
Whether we have an enforceable contract
Offer:
I - Intention
D - Definiteveness
C - Communication (Must be communicated to offeree)
Termination of an Offer:
1. By the Offeror (must be communicated) or through Express Repudiation/conduct
Effective when offeree receives it
2. By the Offeree
Rejection or Counteroffer
Effective when Received
3. Termination by Law
Lapse of Time, Destruction of Subject of Contract
Offers are generally revocable unless:
1. Merchant’s Firm Offer - UCC 2-205 Two Merchants, signed by Offeror, written, open and
irrevocable for 3 months, THEN OPEN AND REVOCABLE AFTER 3 MONTHS
2. NY Exception - NY GOL 5-1109 If an offer is written and states that it is irrevocable, it will
remain irrevocable as long as it is signed. Applies to All, NO TIME LIMIT
Acceptance:
Effective Moment - Mailbox Rule
Acceptance is effective when sent.
Termination is effective when received (Think about Offers on Reverb)
Common Law:
Mirror Image Rule - Offer and Acceptance must match one another. If not, there is a counteroffer.
, UCC:
Non Merchants: Additional Terms do not become part of the contract.
Merchants: Additional Terms become part of contract unless offer expressly limited acceptance to its
terms, additional terms materially alter the contract, or the offeror objects within reasonable time.
Consideration:
1) Legally Sufficient Value + Bargain for Exchange
2) Adequacy of Consideration
3) Agreements that lack consideration
1. Pre-existing Duty (Exception: Unforeseen Difficulties, rescission, new contract)
2. Past Consideration (Unless it is written)
3. Illusory Promises
*********************EXCEPTION FOR CONSIDERATION:
Enforceable if in writing and signed by the party against whom enforcement is sought
NY GOL 5-1103: Written Agreement for Modification or Discharge (Must be written, signed by party
you are trying to sue in attempt to modify the agreement)
NY GOL 5-1105: Written Promise Expressing Past Consideration
Accord and Satisfaction
******Unliquidated Debt Only!
Accord and Satisfaction
- Parties do not fully perform duties under contract and a dispute arises about who breached.
- The parties enter into a new agreement to settle the dispute
- If the parties enter into accord and satisfaction - no further claims under the old agreement
*********************NY EXCEPTION: If a creditor accepts payment but adds “without prejudice”
or “under protest” - no settlement.
Legal Capacity
- Minors
- Intoxicated Person
- Disabled Person
Legality
1. Contract contrary to a statute (crime)
2. Contracts contrary to public policy, contracts in restraint of trade
3. Unconscionable contracts or clauses
