MBE Contracts - WTF

• (i) the promisor should reasonably expect it to induce action or forbearance on the part of the promisee or a third person,
• (ii) the promise does induce such action or forbearance, and
• (iii) injustice can be avoided only by enforcement of the promise

the person to whom it is communicated could reasonably interpret it as an offer.  It must express the present intent of a person to be legally bound to a contract.

trade usage, course of dealing, or course of performance. Evidence of the parties’ conduct with respect to the current contract at issue is accorded priority over evidence of the past course of dealings or trade usage.

consideration

when it is so unfair to one party that no reasonable person in the position of the parties would have agreed to it.

an acceptance that is mailed within the allotted response time is effective when sent (not upon receipt), unless the offer provides otherwise.

then the mailbox rule will not apply, and the first one to be received by the offeror will prevail.

when a party performs an unrequested service for another party that constitutes a material benefit, the performing party can enforce a promise of payment made by a party who benefits from the service rendered.

enforceable

those the plaintiff reasonably incurred in reliance upon the contract

which put the injured party in the position that she would have been in if not for the breach

compare the value of performance without the breach (what was promised) with the value of the performance with the breach (what was received).

foreseeable

the fair market value for the goods at the time of the conversion

the unfair persuasion of a party to assent to a contract.

an improper threat that deprives a party of a meaningful choice.

that the objective definitions of contract terms control the meaning of the contract, may be applicable in ascertaining whether to admit extrinsic evidence despite the written agreement being a total integration.

both parties are mistaken as to an essential element of the contract. In such a situation, the contract may be voidable by the adversely affected party upon proof of the following: (i) mistake of fact existing at the time the contract was formed; (ii) the mistake relates to a basic assumption of the contract; (iii) the mistake has a material impact on the transaction; and (iv) the adversely affected party did not assume the risk of the mistake.

generally prevents a party to a written contract from presenting prior extrinsic evidence that contradicts the terms of the contract as written. Generally, the parol-evidence rule prevents a party to a written contract from presenting other evidence that contradicts the terms of the contract as written. If a document is determined not to be “integrated,” then the parol-evidence rule may not apply. When documents are only partially integrated, the parties are permitted to present extrinsic evidence as long as the evidence is consistent with the writing. If the writing completely expresses all of the terms of the parties’ agreement, then it is a total integration, and the parties cannot introduce any extrinsic evidence (oral or written) of prior or contemporaneous understandings or negotiations.

requires that a party refrain from conduct that wrongfully prevents or interferes with the occurrence of a condition in a contract.

a contract under which a seller agrees to sell all that she manufactures of a product to the buyer.

(i) the time for performance under the contract has not yet elapsed or (ii) the seller had reasonable grounds to believe that the buyer would accept despite the nonconformity. The seller must give notice of the intent to cure and make a new tender of conforming goods. If the seller had reasonable grounds to believe that the buyer would accept despite the nonconformity, the tender must be made within a reasonable time.

irrevocable.   If no consideration supports the assignment (a gratuitous assignment), then it will generally be revocable, unless the obligor has already performed or promissory estoppel applies.

there has been an unequivocal refusal of the buyer or seller to perform, or when reasonable grounds for insecurity arise with respect to the performance of either party, and the other party fails to provide adequate assurances within a reasonable time, not to exceed 30 days. Mere expressions of doubt as to a party’s ability to perform do not constitute an anticipatory repudiation.

she did not bear the risk of mistake and the non-mistaken party caused the mistake, had a duty to disclose or failed to disclose the mistake, and knew or should have known that the other party was mistaken.

Under common law, all essential terms – the parties, subject matter, price, and quantity – must be specified in the agreement or the contract fails. Under the UCC, a court may supply missing terms, but a contract must still specify the parties, subject matter, and quantity.

an unforeseeable event must occur and the nonoccurrence of that event must have been a basic assumption on which the contract was made.

does not pass to the buyer until the goods are tendered to the buyer at the designated place.

f the main purpose of the surety in agreeing to pay the debt of the principal is the surety's own economic advantage, rather than for the principal's benefit, then the contract does not fall within the Statute of Frauds, and an oral promise by the surety is enforceable.

the person to whom it is communicated could reasonably interpret it as an offer. The primary test of whether a communication is an offer is based on the objective theory of contracts; i.e., whether an individual receiving the communication would believe that he could enter into an enforceable agreement by satisfying the condition. It must create the power of acceptance in the offeree.

• (i) a valid contract existed between the plaintiff and a third party,
• (ii) the defendant knew of the contractual relationship,
• (iii) the defendant intentionally interfered with the contract, causing a breach, and
• (iv) the breach caused damages to the plaintiff.

Trade libel - The statements must be derogatory and relate to the plaintiff's title to his business property, the quality of his business, or the quality of its products.

• 1) Agreement (offer and acceptance)
• 2) Consideration (and related theories for when you have to keep your promises)
• 3) Defenses to formation (incapacity, duress, etc.)
• 4) Statute of Frauds

• Under common law: all essential terms must be covered in the contract. Parties, price, quantity, and subject.
• Under the UCC: The law is more willing to plug the gaps. A contract need only identity the parties, subject, and quantity.

invitations to deal

• - Reward advertisements 
• - Advertisements that are very specific and leave nothing open to negotiation,including

• 1. Revocation by the offeror
• 2. Constructive revocation (the offeror takes an action that is inconsistent with a continuing ability to contract)
• 3. Rejection (by the offeree)
• 4. Counter-offer (by the offeree)
• 5. Death (of the offeror, must occur before acceptance)
• 6. Time (a reasonable amount of time passes)

• 1. Option
• 2. Firm Offer - under the UCC, mad by a business person in a transaction of a commercial nature
• 3. The start of performance (for a unilateral contract, once it has begun the law gives the promisee the right to finish)
• 4. Detrimental reliance (if the offeree reasonably and detrimentally relies on the offer in a foreseeable manner)

• 1. Must be made by a merchant in a commercial transaction
• 2. Must be written, contain an explicit promise not to revoke, and be signed by the offeror
• 3. It will last as long as is stated in the writing or a reasonable time, not to exceed 90 days

This arises from a promise that requests acceptance by an action of the promisee (versus a return promise of the promisee, which is called a "bilateral contract"). Cannot be revoked by the offeror if the offeree has started performance. Because a unilateral contract can be accepted only by performance, the law gives the promisee the right to finish.

• An offer cannot be revoked if the offeree reasonably and detrimentally relies on the offer in a foreseeable manner.
• Look especially for a general contractor/subcontractor context. ("promissory estoppel")

• An acceptance is a manifestation of a willingness to enter into the agreement by the offeree.
• Acceptance is governed by an objective test.
• The starting place here is a famous phrase: "The offeror is master of the offer." This means that the offeree must accept the offer according to the rules of the offer.

The UCC treats this as acceptance plus breach.

• An acceptance sent by mail is valid when the letter is sent Does not apply:
• o If the offeree sends something else first (e.g., rejection, counteroffer).
• o To other types of communication (e.g., revocations, rejections).
• o To option contracts.
• o It is unclear whether this applies to other media (fax, e-mail, etc.).

• There is a past history of silence serving asacceptance (such that the offeree should reasonably notify the offeror if she doesnot accept)
• The offeror says that acceptance must come via silence, and the offeree intends to accept the offer by silence

• Under common law, the terms in the acceptance must match the terms of the offer exactly—or it is not an acceptance, but a counteroffer.
• Treat conditional acceptance as just another form of counteroffer.

• The UCC replaces the mirror image rule with § 2-207.
• The main intuition of § 2-207 is that a purported acceptance that does not match the terms of the offer exactly can still count as a legal acceptance in many circumstances. But just because there's been an acceptance, do not assume that all terms in the purported acceptance will govern the contract.
• Under 2-207, it does not matter whether the parties are merchants.

• Both parties are merchants;
• The new term does not materially alter the deal;
• The initial offer did not expressly limit acceptance to its terms; and
• The offeror does not object within a reasonable time to the new term.

detriment or benefit

A promisor must clearly commit to the deal or there is no consideration. There must be a way for the promisor to breach.Satisfaction contracts are not illusory. They are real contracts with consideration.

honest belief

Modification under the UCC - The UCC universe does not follow the preexisting duty rule.Rather, you should simply ask whether a modification is made in good faith. If so, it is binding even without new consideration.

Common law has historically followed the preexisting duty rule, which means that a promise to do something that you are already legally obligated to do (by prior contract or otherwise) is not consideration. Exceptions include a change in performance, a third party promising to pay, or unforeseen difficulties that would excuse performance.

The key is to ask whether the debt is currently due and undisputed. If so, the modification is not binding.

• Look for a situation in which one party conferred a benefit on another party, and it would be fair to pay for that benefit. Quasi-contract elements:
• The plaintiff confers a measurable benefit on the defendant;
• The plaintiff reasonably expected to get paid; and
• It would be unfair to let the defendant keep the benefit without paying (look for an opportunity to decline or a good reason why there was no opportunity to decline).

• When one party makes a promise, and the other party relies on that promise to take some action. Three key elements for a claim under reliance: 
• A promise is made that would be reasonably expected to induce reliance;
• The promisee does indeed take detrimental action in reliance on the promise; and
• Injustice can be avoided only by enforcement of the promise.

• 1) Misunderstanding
• 2) Incapacity
• 3) Mistake
• 4) Fraud/Misrepresentation/Nondisclosure
• 5) Duress
• 6) Illegality
• 7) Unconscionability

• The parties use a material term that is open to two or more reasonable interpretations (so the objective test cannot apply);
• Each side attaches a different meaning to the term; and
• Neither party knows, or should know, of the confusion.

• Minors (under the age of 18)
• The mentally ill—two standards:
•      • The person cannot understand the nature and consequences of his actions; or
•      • The person cannot act in a reasonable manner in relation to the transaction (if the other side knows this)
• Very intoxicated persons (if the other side knows this)

• The contract is voidable meaning that the incapacitated party can disaffirm;
• For necessities, the party without capacity must still pay fair value for the necessity (not necessarily the contract price);
• A party without capacity can ratify the deal by keeping the benefits of the contract after capacity is obtained.

• There is a mistake of fact, existing at the time that the deal is made;
• The mistake relates to a basic assumption of the contract and has a material impact on the deal; and
• The impacted party did not assume the risk of mistake.

• She can prove all of the elements of mutual mistake; plus
• • The mistake would make the contract unconscionable; or
• • The other side knew of, had reason to know of, or caused the mistake.

• A misrepresentation is a statement at the time of contracting that is not true. It can be intentional (fraudulent) or accidental.o To assert this defense, the party must show:
• A misrepresentation of a present fact (not opinion);
• That is material or fraudulent (intentional); and
• That is made under circumstances in which it is justifiable to rely on the representation.

Fraud in the execution is when you trick someone into signing something that she doesn't even know is a contract.

The other party doesn't learn the truth about something, but now you just remain quiet. Normally, you need not tell the other side about all material facts related to the deal. But watch out for a special (fiduciary) relationship or active concealment.

• Duress is an improper threat that deprives a party from making a meaningful choice to contract.
• Economic duress arises when one party makes threats to induce another party to contract (or modify a contract).
• Undue influence arises when a party puts very intense sales pressure on another party—who often seems weak minded or susceptible to high-pressure sales tactics.

a party who substantially performs can recover on the contract even though full performance has not been tendered.  Substantial performance is negated if the incomplete performance amounted to a material breach of contract.  If the failure of a constructive condition of exchange is minor, however, it will not negate substantial performance. (22)

An assignment is the transfer of rights under a contract. An assignee takes all of the rights of the assignor as the contract stands at the time of the assignment, but takes subject to any defenses that could be raised against the assignor. If the contract right that is being assigned is evidenced by a document that symbolizes the right (e.g., a bank book, insurance policy, or stock certificates), delivery of the document along with appropriate words of assignment will generally make the assignment irrevocable.

If the offeror does not set a time limit for acceptance, the power of acceptance terminates at the end of a reasonable period of time. If the offeror effectively revokes the offer, it automatically terminates.

under the UCC, an F.O.B. shipment contract provision (i.e., which specifies "F.O.B. the craftsman's place of business"), shifts the risk of loss to the buyer the moment the seller gives the goods to the carrier.

Under common law, a material breach of contract allows the nonbreaching party to withhold any promised performance and to pursue remedies for the breach, including damages. A breach is considered minor when the breaching party has substantially performed.

Express conditions generally contain language such as, "on condition that" or "provided that." If a condition is not express, then substantial performance may suffice.