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Black Letter Law
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Black Letter Law
Deck 1
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Intention to not be legally bound
Although neither party need manifest an intention that their bargain is legally binding for it to be a contract, there is no contract if either party at the time the bargain was formed expressly or impliedly manifested an intention that the bargain is not legally binding.
Breach of contract claim
The elements of a breach of contract claim are: 1) the formation of a contract, and 2) a breach of the contract.
Promissory estoppel claim
The elements of a promissory estoppel claim are: 1) a promise, 2) the promisor should reasonably have expected the promisee to detrimentally rely on the promise, 3) the promisee in fact detrimentally relied on the promise in the manner that should have been expected, 4) a breach of the promise, and 5) injustice can be avoided only by enforcing the promise.
Quasi contract claim
The elements of a quasi contract claim are: 1) the defendant has been enriched by the plaintiff, 2) it would be unjust for the defendant to not pay the plaintiff for the benefit received.
Quasi contract claim based on service provided
It is unjust to not pay for a service that has been provided when: 1) the actions of the person providing the benefit were not officious, and 2) a reasonable person in the position of the recipient would believe the benefit was provided with an expectation of compensation.
Actions of the person providing the benefit
Actions must not be officious and must be provided with an expectation of compensation.
Elements of contract formation
Requires an offer, acceptance, and consideration.
Guardianship and capacity to form a contract
A person under guardianship due to mental illness does not have legal capacity to form a contract.
Elements of an offer
Offeror's manifestation of willingness, justified understanding of assent by offeree, reasonable certainty of offer's terms.
Preliminary negotiations
Communication is not an offer if a reasonable person would believe that the person making the communication does not intend to conclude a bargain until further manifestation of assent.
Advertisements as offers
Advertisements are usually considered solicitations for an offer, not offers themselves.
Price quotations
Whether a price quotation is an offer depends on the circumstances.
Auctions
Specific rules apply to contracts formed through auctions.
Is a price quotation considered an offer?
Whether a price quotation is an offer depends on the circumstances.
Auctions and reserve
Unless the seller manifests an intention that the auction is without reserve, the auction is with reserve, and the buyer is the offeror, and the seller is the offeree.
Written document to follow
When negotiations show that the parties discussed or contemplated that they would express their bargain in a written document but they fail to do so, there is no agreement if either party manifested an intention that the bargain would not be final unless and until reduced to a written document, but there is an agreement if the parties manifested an intent that the written document would simply memorialize the deal.
Unsigned Signature Line for Party Proposing Written Contract
If there is a signature line for the party presenting a proposed written contract and the document is unsigned, the document is typically considered a solicitation for an offer.
Gap-filling implied terms
When the parties have entered into a bargain that omits an essential term, the court will supply a term as directed by a statute such as the UCC or in the absence of a statutory directive, a term that is reasonable in the circumstances.
Acceptance
Acceptance of an offer typically requires a manifestation of assent by an offeree to the terms of the offer made.
Acceptance of an offer typically requires
1. A manifestation of assent. 2. By an offeree. 3. To the terms of the offer. 4. Made in a manner invited or required by the offer. 5. While the offeree still has the power of acceptance.
Manifesting assent to unknown offer
As a general rule, an offeree can only manifest assent if she knows of the offer. But it is possible to manifest assent to an offer for a bilateral contract without knowledge of it. Except for an offer of a government reward, an offeree cannot accept an offer for a unilateral contract unless the offeree actually knows of the offer prior to completing the act or acts necessary to accept.
Cross offers
When parties make cross offers, there is no contract unless one accepts the other's offer upon delivery.
Duty to read rule
A party's failure to read the terms of a written offer does not prevent the offeree's manifestation of assent from being effective unless the offeree does not know and has no reason to know either that the document is a proposed contract or its essential terms.
Grumbling acceptance
An offeree's expression of dissatisfaction with an offer does not prevent the offeree's manifestation of assent from being effective.
Silence and inaction as acceptance
When an offeree fails to reply to an offer, silence and inaction can be considered as acceptance.
Effective
Producing a decided, decisive, or desired effect.
Appended
To add as a supplement or accessory.
Black Letter Law
Basic principles of law that are accepted by the legal community and have been around for a long time.
Silence and Inaction as Acceptance
When an offeree fails to reply to an offer, the offeree's silence and inaction is not construed as a manifestation of assent to an offer, unless certain conditions are met.
Exercise of Dominion as Acceptance
Where an offeree does any act inconsistent with the offeror's ownership of offered property and the terms of the offer are not manifestly unreasonable, the offeree will be found to have manifested assent and will therefore be bound to the offer's terms.
Deck 2
Study
Misrepresentation doctrine
A party has the power of avoidance when: 1) the other party or a third party makes a misrepresentation to the party, 2) the misrepresentation is either fraudulent or material, 3) the misrepresentation induces the party's assent to the contract, 4) the party is justified in relying on the representation, and 5) if the misrepresentation was made by a third party, the other party at the time of contract formation knew or had reason to know of the misrepresentation.
Duress doctrine
A party (the victim) has the power of avoidance when: 1) the other party or a third party makes an improper threat to the victim, 2) the threat induces the victim to manifest assent to the contract or the contract modification, 3) the threat leaves the victim with no reasonable alternative but to manifest assent, and 4) if the threat was made by a third party, the other party at the time of contract formation or modification knew or had reason to know of the threat.
Undue influence doctrine
A party (the victim) has the power of avoidance when: 1) the victim was justified in assuming that the person exercising the persuasion would not act in a manner inconsistent with the victim's welfare, i.e., a so-called confidential relationship, or the victim was under the domination of the person exercising the persuasion.
1. Unfair Persuasion
Factors constituting unfair persuasion: 1. The party exerting unfair persuasion did so in a manner inconsistent with the victim's welfare, confidential relationship, or the victim being under the domination of the persuading party. 2. The other party or third party exerted unfair persuasion upon the victim. 3. The victim's manifestation of assent was induced by unfair persuasion. 4. If the unfair persuasion was from a third party, the other party at the time of contract formation knew or had reason to know of the unfair persuasion.
2. Contract between Fiduciary and Beneficiary
A beneficiary has the power to void a contract with the fiduciary unless the fiduciary can prove that: 1. The contract's terms are fair to the beneficiary. 2. The beneficiary agreed to the contract with a full understanding of her legal rights and with knowledge of all relevant facts known or should have been known by the fiduciary.
3. Door to Door Sales
A person has the power of avoidance in door-to-door sales when: 1. The purchase of goods or services is for personal, family, or household purposes. 2. The contract is made at the buyer's home for a price of $25 or more, or at a place other than the seller's regular place of business for a price of $130 or more.
4. Public Policy Doctrine
According to the public policy doctrine, an agreement is void or a contract term unenforceable on grounds of public policy if legislation expressly provides that it is void or unenforceable, or if public policy is clearly violated.
Public Policy Doctrine
An agreement is void or a contract term unenforceable on grounds of public policy if: 1) legislation expressly provides that it is void or unenforceable, or 2) public policy clearly outweighs the interest in enforcing the agreement.
Restitution when Agreement is Against Public Policy
Restitution is unavailable to a party who has entered into an agreement that is void as being against public policy, unless: 1) the party will suffer a forfeiture that is disproportionate to the public policy contravened, 2) he was excusably ignorant of the facts or of legislation of a minor character, 3) the other party was more in the wrong, or 4) he did not engage in serious misconduct and he withdrew from the transaction before the improper purpose was achieved.
Unconscionability
For a party to prove that a contract or one of its terms is unconscionable, the party must prove both: 1) procedurally unconscionability and 2) substantively unconscionability, though a sliding scale is used where more of one can compensate for less of the other.
Effect of Finding of Unconscionability
If a party proves that a contract or term was unconscionable, the court may: 1) refuse to enforce the contract, 2) enforce the contract without the unconscionable term, or 3) limit the application of the unconscionable term to avoid an unconscionable result.
What action may the court take if a contract is unconscionable?
The court may refuse to enforce the contract, enforce the contract without the unconscionable term, or limit the application of the unconscionable term to avoid an unconscionable result.
What is the general rule of contract liability?
Contract liability is generally strict, meaning a promisor is usually liable for breach of contract even if performance was impossible, more difficult than expected, or if the other party's performance became virtually worthless to the promisor.
What is a force majeure clause?
A force majeure clause allows parties to agree that a party's failure to perform as promised will be excused upon the occurrence or nonoccurrence of a particular event, and these clauses are as enforceable as any other contract provision.
When is a party's duty to perform discharged or never arises due to impracticability of performance?
A party's duty to perform is discharged or never arises if existing impracticability occurs after the contract's formation, was unknown to the parties at the time of formation, and the occurrence of the event makes the party's performance of the duty impossible or impracticable, was not due to the party's fault, and the nonoccurrence of the event was a basic assumption on which the contract was made.
duty
a moral or legal obligation
impossible
not able to occur, exist, or be done
impracticable
not capable of being put into practice
occurrence
the action, fact, or instance of happening
fault
responsibility for an undesirable outcome or situation
non-occurrence
the absence of an event or happening
basic assumption
a fundamental proposition that serves as a foundation for a system of belief
contract
a legally binding agreement between two or more parties
discharge
to perform, complete, or release from obligations
doctrine
a set of principles, beliefs, or teachings
impracticability of performance
the state of being impractical or unfeasible to perform
frustration of purpose
the prevention or hindrance of fulfilling the purpose of a contract
restitution
the restoration of something lost or stolen to its proper owner
benefit
an advantage or profit gained from something
substantial
considerable in importance, value, degree, amount, or extent
