Contracts I Maggs Fall 2011 Attack Sheet Reasons that a contract exists 1.

Consideration
a. b. c. d. e. f. g. a. b. 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 can be implied in law (obligation to do business in good faith) can be implied in fact (I will sell your clothes)

2. Implied Promise 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

5. Modern Modification Rule Defenses 1. Assent

a. b.

Generally None, except: Webb, necessary to prevent injustice or a. promise for bankruptcy b. statute of limitations and c. infancy
If there is a change in circumstances Watkins

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 a. b. c. d. e. 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) Dont forget the mailbox rule (reliance on a later rejection can overcome /as can agreement between them overcome/ option contract)

3. Acceptance

4. 5. 6. 7. 8.

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

Dont forget Surety Promissory estoppel can overcome this Monarco

External Reasons to void a contract Infancy Mental Infirmity

This can be either not understanding Or not acting in a reasonable manner in relation to

Must be restitution if emancipated for necessary items

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 b. c. d. e. Reliance Restitution Nominal Liquidated

Loss in value and other costs minus costs avoided and other loss avoided

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