Contracts

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scottyk311
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14003
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Contracts
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2010-04-11 23:04:51
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Contracts
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Restatements
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  1. § 1
    Contract Defined..
    • A contract is a promise or a set of promises for the breach of
    • which the law gives a remedy, or the performance of which the law in
    • some way recognizes as a duty.
  2. § 2 PROMISE; PROMISOR; PROMISEE...
    • (1) A promise is a manifestation of intention to act or refrain
    • from acting in a specified way, so made as to justify a promisee in
    • understanding that a commitment has been made.
    • (2) The person manifesting the intention is the
    • promisor.
    • (3) The person to whom the manifestation is
    • addressed is the promisee....
  3. §24. OFFER DEFINED
    • An offer is the manifestation of willingness to enter into a
    • bargain, so made as to justify another person in understanding that his
    • assent to that bargain is invited and will conclude it.
  4. §26. PRELIMINARY NEGOTIATIONS
    • A manifestation of willingness to enter into a bargain is not an
    • offer if the person to whom it is addressed knows or has reason to know
    • that the person making it does not intend to conclude a bargain until he has made a
    • further manifestation of assent.
  5. §30. FORM OF ACCEPTANCE INVITED
    • (1) An offer may invite or require acceptance to be made by an
    • affirmative answer in words, or by performing or refraining from
    • performing a specified act, or may empower the offeree to make a selection of terms in his
    • acceptance.
    • (2) Unless otherwise indicated by the language
    • or the circumstances, an offer invites acceptance in any manner and by any
    • medium reasonable in the circumstances.
  6. §32. INVITATION OF PROMISE OR
    PERFORMANCE´╗┐
    • In case of doubt an offer is interpreted as inviting the offeree
    • to accept either by promising to perform what the offer requests or by
    • rendering the performance, as the offeree chooses.´╗┐
  7. §33. CERTAINTY
    • (1) Even though a manifestation of intention is intended to be
    • understood as an offer, it cannot be accepted so as to form a contract
    • unless the terms of the contract are reasonably certain.
    • (2) The terms of a contract are reasonably certain if they
    • provide a basis for determining the existence of a breach and for giving
    • an appropriate remedy.
    • (3) The fact that one or more terms of a
    • proposed bargain are left open or uncertain may show that a manifestation of intention is not
    • intended to be understood as an offer or as an acceptance.
  8. §34. CERTAINTY
    AND CHOICE OF TERMS; EFFECT OF PERFORMANCE OR
    RELIANCE
    • (1) The terms of a contract may be reasonably certain even
    • though it empowers one or both parties to make a selection of terms in
    • the course of performance.
    • (2) Part performance under an agreement may remove
    • uncertainty and establish that a contract enforceable as a bargain has been formed.
    • (3) Action in reliance on an agreement may make a
    • contractual remedy appropriate even though uncertainty is not removed.
  9. §36 Methods of TERMINATION of the power of acceptance
    • (1) An offeree's power of acceptance may be terminated by:
    • (a) rejectiong of counteroffer by the offeree, OR
    • (b) lapse of time, OR
    • (c) revocation of the offeror, OR
    • (d) death or incapacity of the offeror or offeree
    • (2) In addition, an offeree's power of acceptance is terminated by the
    • non-occurance of any condtion of acceptance under the terms of the offer
  10. §39 COUNTER-OFFERS
    • (1) a counter-offer is an offer made by an offeree to his offeror
    • relating to the same matter as the original offer and proposing a
    • substitued bargain differing from that proposed by the original offer
  11. (2) an offeree's power of acceptance is terminated by his making of a
    • counter-offer, unless the offeror has manifested a contrart intention or
    • unless the counter-offer manifests a contrary intention of the offeree
  12. §41 When Offeree's power of acceptance is terminated
    • (1) An o'ee's power of acceptance is terminated at the time specified
    • in the offer, or if no time is specified, at the end of a reasonable time

    • (2) what a reasonble time "is" is a question of face, depending on all
    • the circumstances existing when the offer and attempted aceptance are made

    • (3) Unless otherwise indicated by the language or the circumstances,
    • and subject to the rule stated in §49, an offer sent by mail is
    • seasonably accepted if an acceptance is mailed at any time before
    • midnight on the day on which the offer is recieved
  13. §43 INDIRECT communication of Revocation
    • An o'ee's power of acceptance is terminated when the o'or takes definite
    • action inconsistent with an intention to enter into the proposed
    • contract and the o'ee acquires reliable information to that effect
  14. §50 Acceptance of offer defined;
    Acceptance by performance;
    Acceptance by promise
    • 1.) Acceptance of an offer is a manifestation of assent to the terms thereof
    • made by the offeree in a manner invited or required by the offer.
    • 2.) Acceptance by performance requires that at least part of what the offer requests be performed or tendered
    • and includes acceptance by a performance which operates as a return promise.
    • 3.) Acceptance by a promise requires that the offeree complete every act essential to the making of the promise.
  15. §54. ACCEPTANCE BY PERFORMANCE;
    NECESSITY OF NOTIFICATION TO OFFEROR
    • (1) Where an offer invites an offeree to accept by rendering a
    • performance, no notification is necessary to make such an acceptance
    • effective unless the offer requests such a notification.
    • (2) If an offeree who accepts by rendering a
    • performance has reason to know that the offeror has no adequate means of learning of the
    • performance with reasonable promptness and certainty, the contractual duty of the offeror
    • is discharged unless
    • (a) the offeree exercises reasonable diligence
    • to notify the offeror of acceptance, or
    • (b) the offeror learns of the performance
    • within a reasonable time, or
    • (c) the offer indicates that notification of
    • acceptance is not required.
  16. §56.
    ACCEPTANCE BY PROMISE; NECESSITY OF NOTIFICATION TO OFFEROR
    • Except as stated in §69 or where the offer manifests a contrary
    • intention, it is essential to an acceptance by promise either that the
    • offeree exercise reasonable diligence to notify the offeror of acceptance or that the
    • offeror receive the acceptance seasonably.
  17. §59.
    PURPORTED ACCEPTANCE WHICH ADDS QUALIFICATIONS
    • A reply to an offer which purports to accept it but is
    • conditional on the offeror's assent to terms additional to or different
    • from those offered is not an acceptance but is a counter-offer.
  18. §60.
    ACCEPTANCE OF OFFER
    WHICH STATES PLACE, TIME OR MANNER OF ACCEPTANCE
    • If an offer prescribes the place, time or manner of acceptance
    • its terms in this respect must be complied with in order to create a
    • contract. If an offer merely suggests a permitted place, time or manner of acceptance,
    • another methodof acceptance is not precluded.
  19. §63. TIME WHEN ACCEPTANCE
    TAKES EFFECT
    • (a) an acceptance made in a manner and by a medium invited by an
    • offer is operative and completes the manifestation of mutual assent as
    • soon as put out of the offeree's possession, without regard to whether it ever
    • reaches the offeror; but
    • (b) an acceptance under an option contract is
    • not operative until received by the offeror.
  20. §64. ACCEPTANCE BY
    TELEPHONE OR TELETYPE
    • Acceptance given by telephone or other medium of substantially
    • instantaneously two-way communication is governed by the principles
    • applicable to acceptances where the parties are in the presence of each other.
  21. §71 REQUIREMENT OF EXCHANGE; Type of Exchange
    CONSIDERATION
    • (1) To constitue consideration, a performance or a return promise must
    • be bargained for
    • (2) A performance or return promise is bargained for if it is sought by
    • the promisor in exchange for his promise and is given by the promisee
    • in exchange for the promise
    • (3) the performance may consist of:
    • (a) an act other than a promise, OR
    • (b) a forbearnce, OR
    • (c) the creation, modification, or destruction of a legal relation
    • (4) The performance or return promise may be given to the promisor or
    • to some other person. It may be given to the promisee or by some other
    • person
  22. §90 Promise reasonably Inducing Action or Forbearance

    Promissory Estoppel
    • (1) A promise which the promisor should reasaonbly expect to induce
    • action or forbearance on the part of the promisee or a third person and
    • which does induce such action or forbearance is binding if injustice
    • can be avoided only by enforcement of the promise.
    • The remedy granted for breach may be limited as justice requires.
  23. (2) A charitable subscription or a marriage settlement is binding under
    • subsection (1) without proof that the promise induced action or
    • forbearance
  24. Section 151 – Mistake Defined
    A mistake is a belief that is not in accord with the facts.
  25. Section 152 – When Mistake of
    Both Parties Makes a Contract Voidable

    Bilateral Mistake
    • 1.) Where a mistake of both parties at the time a contract was made as to a basic assumption
    • on which a contract was made has a material effect on the agreed excheange of performances,
    • the contract is voidable by the adversely affected party unless he bears the risk of mistake under the rule stated in section 154.
    • 2.) In determining whether the mistake has a material effect on the agreed exchange of performances, account is taken of any relief by way of reformation, restitution, or otherwise.
  26. Section 153 – When Mistake of
    One Party Makes a Contract Voidable
    • Where
    • a mistake of one party at the time a contract was made as to a basic
    • assumption on which he made the contract has a material effect on the
    • agreed exchange of performances that is adverse to him, the contract is
    • voidable by him if he does not bear the risk of the mistake under the
    • rule stated in § 154, and
    • (a) the effect of the mistake is such that
    • enforcement of the contract would be unconscionable, or
    • (b)the other party had reason to know of the mistake or his fault caused
    • the mistake.
  27. § 154.
    When A Party Bears The Risk Of A Mistake
    • Aparty bears the risk of a mistake when
    • (a) the risk is allocated to him by agreement of the parties, or
    • (b)he is aware, at the time the contract is made, that he has only limited
    • knowledge with respect to the facts to which the mistake relates but
    • treats his limited knowledge as sufficient, or
    • (c)the risk is allocated to him by the court on the ground that it is
    • reasonable in the circumstances to do so.
  28. § 162.
    When A Misrepresentation Is Fraudulent Or Material
    • (1) A misrepresentation is fraudulent if the maker intends his assertion
    • to induce a party to manifest his assent and the maker
    • (a)knows or believes that the assertion is not in accord with the facts, or
    • (b) does not have the confidence that he states or implies in the truth of the assertion, or
    • (c)knows that he does not have the basis that he states or implies for the
    • assertion.
    • (2) A misrepresentation is material if it would be likely to induce a reasonable person to
    • manifest his assent, or if the maker knows that it would be likely to
    • induce the recipient to do so.
  29. § 175.
    When Duress By Threat Makes A Contract Voidable
    • (1) If a party's manifestation of assent is induced by
    • an improper threat by the other party that leaves the victim no
    • reasonable alternative, the contract is voidable by the victim.
    • (2) If a party's manifestation of assent is induced by one who is not a party to
    • the transaction, the contract is voidable by the victim unless the other
    • party to the transaction in good faith and without reason to know of
    • the duress either gives value or relies materially on the transaction.
  30. § 205.
    Duty Of Good Faith And Fair Dealing
    • Every contract imposes upon each party a duty of good faith and fair dealing
    • in its performance and its enforcement.
  31. § 206.
    Interpretation Against The Draftsman
    • In choosing among the reasonable meanings of a promise or agreement or a
    • term thereof, that meaning is generally preferred which operates against
    • the party who supplies the words or from whom a writing otherwise
    • proceeds.
  32. § 208.
    Unconscionable Contract Or Term
    • If a contract or term thereof is unconscionable at the time the contract
    • is made a court may refuse to enforce the contract, or may enforce the
    • remainder of the contract without the unconscionable term, or may so
    • limit the application of any unconscionable term as to avoid any
    • unconscionable result.
  33. § 344.
    Purposes Of Remedies
    • Judicial remedies under the rules stated in this Restatement serve to protect
    • one or more of the following interests of a promisee:
    • (a) his “expectation interest,” which is his interest in having the benefit of his bargain by
    • being put in as good a position as he would have been in had the
    • contract been performed,
    • (b) his “reliance interest,” which is his interest in being reimbursed for loss
    • caused by reliance on the contract by being put in as good a position as
    • he would have been in had the contract not been made, or
    • (c) his “restitution interest,” which is his interest in having restored to
    • him any benefit that he has conferred on the other party.
  34. § 347.
    Measure Of Damages In General
    • Subject to the limitations stated in §§ 350-53, the injured party has a right to damages based on
    • his expectation interest as measured by
    • (a) the loss in the value to him of the other party's performance caused by its failure or
    • deficiency, plus
    • (b) any other loss, including incidental or consequential loss, caused by the breach, less
    • (c) any cost or other loss that he has avoided by not having to perform.
  35. § 350.
    Avoidability As A Limitation On Damages
    • (1) Except as stated in Subsection (2), damages are not
    • recoverable for loss that the injured party could have avoided without
    • undue risk, burden or humiliation.
    • (2) The injured party is not precluded from recovery by the rule stated in Subsection (1) to
    • the extent that he has made reasonable but unsuccessful efforts to avoid loss.
  36. § 356.
    Liquidated Damages And Penalties
    • (1) Damages for breach by either party may be
    • liquidated in the agreement but only at an amount that is reasonable in
    • the light of the anticipated or actual loss caused by the breach and the
    • difficulties of proof of loss. A term fixing unreasonably large
    • liquidated damages is unenforceable on grounds of public policy as a penalty.
    • (2) A term in a bond providing for an amount of
    • money as a penalty for non-occurrence of the condition of the bond is
    • unenforceable on grounds of public policy to the extent that the amount
    • exceeds the loss caused by such non-occurrence.
  37. § 359.
    Effect Of Adequacy Of Damages
    • (1) Specific performance or an injunction will not be
    • ordered if damages would be adequate to protect the expectation interest
    • of the injured party.
    • (2) The adequacy of the damage remedy for failure to render one part of the performance due does
    • not preclude specific performance or injunction as to the contract as a
    • whole.
    • (3) Specific performance or an injunction will not be refused merely because there is a remedy for breach other than
    • damages, but such a remedy may be considered in exercising discretion under the rule stated in § 357.
  38. § 360. Factors Affecting
    Adequacy Of Damages
    • In determining whether the remedy in damages would be adequate, the
    • following circumstances are significant:
    • (a) the difficulty of proving damages with reasonable certainty,
    • (b) the difficulty of procuring a suitable substitute performance by means
    • of money awarded as damages, and
    • (c) the likelihood that an award of damages could not be collected.
  39. § 371.
    Measure Of Restitution Interest
    • If a sum of money is awarded to protect a party's restitution interest, it
    • may as justice requires be measured by either
    • (a) the reasonable value to the other party of what he received in terms of what it would have
    • cost him to obtain it from a person in the claimant's position, or
    • (b) the extent to which the other party's property has been increased in
    • value or his other interests advanced.

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