Contracts I – Maggs – Fall 2011 – Attack Sheet
Reasons that a contract exists
1. Consideration
a.
b.
c.
d.
e.
f.
g.
past performance
at will employee (continued non bargained for service)
forbearance from asserting an invalid claim needs to be in good faith
promises to make gifts including conditional promises
sham bargain (peppercorn)
truly illusory promise
preexisting duty Alaska Packers
2. Implied Promise
a.
b.
can be implied in law (obligation to do business in good faith)
can be implied in fact (I will sell your clothes)
3. Reliance
Elements
1. A promise by defendant
2. That results in action/ forbearance by plaintiff
3. Induced by (i.e. taken in reliance on) the promise
4. Reasonably expected by promisor
5. Necessary to prevent injustice
4. Moral Obligation
Generally None, except:
Webb, necessary to prevent injustice or
a. promise for bankruptcy
b. statute of limitations and
c. infancy
5. Modern Modification Rule
If there is a change in circumstances Watkins
Defenses
1. Assent
a.
b.
if a reasonable person would know
if the other party knew
2. Offer
preliminary negotiation because (courts are hesitant to find offers if unclear)
a.
cannot do it for less than
b. not answering both questions
c.
unsolicited price quote (unless you said for immediate acceptance
d. advertisement
3. Acceptance
a.
b.
c.
d.
e.
4.
5.
6.
7.
8.
if promise was there notice?
If action was there complete performance?
Was it accepted in a manner permitted by the offer
Silence (unless taking or past relationship)
Don’t forget the mailbox rule (reliance on a later rejection can overcome /as can agreement between them
overcome/ option contract)
Lapse of either reasonable time or specified time
Revocation of offer must have been communicated to offerree
Death of offeror
Rejection
Counteroffer
9. Purported acceptance that adds qualifications (mirror image rule)
10.Indefiniteness reliance can overcome this
11.Statute of Frauds MYLEGS
Don’t forget Surety
Promissory estoppel can overcome this Monarco
External Reasons to void a contract
Infancy
Must be restitution if emancipated for necessary items
Mental Infirmity
This can be either not understanding
Or not acting in a reasonable manner in relation to
Duress
a.
b.
c.
needs to be an improper threat like crime or tort that leaves no reasonable alternative
or breach of duty and good faith
needing money is not duress
Fraud
Plaintiff will argue material fraudulent misrepresentation based on active concealement or half truths
Defendant will argue bare non disclosure, this will not work if in special relationship
Or defendant will argue that it was just opinon/puffing
Mistake
Plaintiff will say that it was a material mistake of fact
Defendant will say that it was an incorrect prediction
If it is unilateral it must get to higher level of unconscionable
Sometimes the court will say that a party must bear the mistake if it is reasonable for that side to
Strict Construction this goes against the drafter contract
Adequate Notice
Public Policy
a.
b.
c.
d.
promise to commit a tort
not to get married
courts can make new categories Busch
we also had the Ocallagan and Hennigsen cases of someon being in a financially better position
Unconscionability
Usually for exculpation from negligence
Damages
a. Specific Performance
1.
2.
not allowed if damages are adequate
and not allowed if it was unfair
a. Expectation
Loss in value and other costs minus costs avoided and other loss avoided
b.
c.
d.
e.
Reliance
Restitution
Nominal
Liquidated
1. Defendant does not have to pay if it is a penalty this is determined by whether it is fair in relation to actual
or anticipated loss and whether there is difficulty of proof that is a good reason to have liquidated damages
2. If plaintiff wants to get out then it has to be unconscionable
Limits to damages
1. Avoidability
There is constructive labor unless there is a reasonable alternative available Parker v. Fox
2. Uncertainty
3. Unforeseeability
If the damages was deficient or incomplete performance
1. Loss in value to plaintiff
This is difficult to prove with certainty
2. Loss in market value
3. Cost to complete
This cannot be disproportionate to value to plaintiff Jacob & Young, John Wunder disagrees