Contracts Law

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Contracts by Mind Map: Contracts

1. Restitution as an Alternative Basis for Recovery

2. Reliance as a Basis of Enforcement

3. Remedying Breach

3.1. Sullivan O'Conner (nose/surgery)

3.1.1. Compensatory Measures Expectations Puts plaintiff where she would be if Contract fully performed Reliance Puts plaintiff back before the contract was formed "want my $ back". Restitution Disgorgement US Naval v. Charter Comm. Specific Perfromance White v. Benkowski

4. Promissory Liability

4.1. Definition: A promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way was recognizes as a duty

4.2. Hawkins v. McGee, Bayliner v. Crow issue of "standard of performance"

5. Consideration as a Basis For Enforcement

5.1. Hamer v Sidway

5.1.1. Forbearance as consideration

5.1.2. "Nephew"

5.2. Gratuitous Promises

5.2.1. gifts not enforceable

5.3. Feinberg v. Pfeiffer

5.4. Moral Obligations

5.4.1. Mills v. Wyman

5.4.2. Webb v McGowin (material benefit conferred); issue where is consideration? subsequent promise is enforceable saved life became disabled/couldn't work

5.4.3. Harrington v Taylor

6. Legal Bases for Recognizing and Enforcing Promises (Week 1 -4)

7. "Love For Dogs Treat Every Rover Terrifically" - *Barbari notes

7.1. Love= Law ; Common Law vs. UCC

7.2. For = Formation; Consideration/Acceptance, Offer,Terms, Communication, Expressed vs. Implied, Bilateral/Unilateral, Enforceability

7.3. Dogs=Defenses: Statute of Frauds, Misrepresentation

7.3.1. Mistakes Mutual Mistake Sherwood v Walker (fertile cow) 1 party mistake Misrepresentation Fraude

7.3.2. Statue of Frauds: M.Y. L.E.G.S. M=Marriage prenup (M) Marriage A contract made in consideration of marriage triggers the statute of frauds. However, the marriage contract itself (i.e., the promise between two people to marry each other) does NOT trigger the statute of frauds. Y=Year (1 year contract) (O) One-Year Provision A contract that by its terms CANNOT be performed within one year from the day after its formation triggers the statute of frauds. The one-year provision is interpreted very narrowly. There generally must be no possible way that the contract could be performed within one year from formation. E.g., A hires B to give him contract law lessons for the rest of A's life. Since A could die within one year from formation, the statute of frauds is not triggered under the one-year provision. E.g., A hires B to build a full-scale replica of the Egyptian pyramids. Here, even though it is unlikely, it is possible that B could build the replica within one year from formation. Therefore, the statute of frauds is not triggered under the one-year provision. L= Land (R) Real Estate Contracts Any agreement or promise to transfer, receive, or create an interest in real estate triggers the statute of frauds. Notably, agreements to build structures on land (i.e., construction projects) do not transfer, receive, or create an interest in real estate. Therefore, these types of construction project contracts do not trigger the statute of frauds unless they fall under the one-year provision. E=Executor (must be writing) (E) Executor/Administrator of an Estate Creditors of the estate have priority to the assets of the estate over beneficiaries. The executor or administrator of a will is responsible to use the estate’s assets to pay off the estate’s debts to creditors before distributing any assets to beneficiaries. However, if an executor or administrator of an estate promises to personally pay a debt that the estate owes to a creditor, the statute of frauds is triggered. This is very similar to a suretyship contract. G= Goods at $500 or more is covered by UCC Statute of Frauds (U) UCC Goods Contracts for $500 or More A contract for the purchase or sale of goods for $500 or more triggers the statute of frauds. S= Surety (promise must be in writing) Guarantor to pay for debts is pass away (S) Suretyship A suretyship contract generally triggers the statute of frauds. A suretyship contract is a three-party agreement where the surety promises an obligee to pay the principal's debt if the principal fails to pay the obligee (usually a suretyship contract is in the context of one family member wishing to help another family member get approved for some type of loan). Main Purpose Exception: However, If the surety's main purpose in agreeing to pay the principal's debt is for the surety's own economic benefit, then the statute of frauds is NOT triggered. Exceptions Specialized Goods: "Bubba boots" Performance: Full performance subst. writing Written Merchant Confirmatory Memorandum, both parties are Merchants;"answer the damn letter" Admit to having a contract Promissory Estoppel

7.3.3. Statute of Fraud: The statute of frauds is a common law concept that requires written contracts for certain agreements to be binding.

7.3.4. Duress:Duress describes the act of using force, false imprisonment, coercion, threats, or psychological pressure to compel someone to act contrary to their wishes or interests (can be economic as well)

7.3.5. Conscionability

7.4. Treat= Terms

7.5. Every=Excuse

7.6. Rover = Remedies

7.7. Terrifically = Third Party Rights

8. Formation Acronym: My Cats Do Sneak

8.1. My= Mutual Assent

8.1.1. Mutual Assent between the parties;

8.2. A traditional, enforceable contract is formed when there is


8.3. Cats= Consideration

8.3.1. Valid Consideration vs. Invalid Consideration The promisee incurs a legal detriment OR the promisor receives a legal benefit; AND The promise induces the detriment AND the detriment induces the promise. courts only focus on whether the promisee incurred a legal detriment, irrespective of a benefit to the promisor. The promise induces the detriment AND the detriment induces the promise. Promising not to sue (settlement of a legal claim) will act as a legal detriment so long as the party promising not to sue has an honest and good faith belief in the validity of the claim. A bargained-for exchange requires reciprocal inducement – that the promise induces the promisee to incur his legal detriment and that the legal detriment induces the promisor to make his promise. EXAMPLES OF INVALID CONSIDERATION Gift Promises are NOT consideration. E.g., A promises to give B his truck for free. Here, B incurs no legal detriment and A's promise to give B his truck is not induced by any action or forbearance from B. This is a gift promise, not bargained-for consideration. Conditional gifts are NOT consideration. E.g., A promises to give B his truck if B will drive 30 minutes away to pick the truck up from A's house. Here, A's promise to give B his truck is not induced by B coming to pick the truck up. Thus, A is not bargaining for B to come. This is a conditional gift, not bargained-for consideration. A preexisting legal duty is NOT consideration. E.g., A promises to pay B $100 if B refrains from smoking crack-cocaine for 6 months. Here, B already has a preexisting legal duty imposed by law to refrain from smoking crack-cocaine. Thus, B incurs no legal detriment, which means consideration is not present. Notably, if A promised to pay B $100 if B refrained from smoking tobacco for 6 months, then consideration would be present (assuming B is 18 years of age or older and can legally smoke tobacco). Refraining from or promising to refrain from exercising a legal right which the party is otherwise entitled to exercise constitutes a legal detriment. Past consideration is NOT consideration. E.g., A's truck catches fire as A is demonstrating the truck’s safety features to B. After the fire erupts, B rushes over and extinguishes the flames saving A's life. Grateful, A promises to pay B $100 for the rescue. Here, A's promise to pay B is induced by an action that B already completed. This is past consideration, not bargained-for consideration. A pretense of consideration or sham consideration is NOT consideration. E.g., A and B are cousins. A wishes to give B his truck that is valued at $10,000 as a gift for B's birthday. Attempting to form an enforceable contract, A "sells" B his truck for $1 solely to meet the consideration requirement. Here, A is not induced to give B his truck for the $1. This is merely a pretense of consideration, not bargained-for consideration. An illusory promise is NOT consideration. An illusory promise occurs when the promisor fails to clearly commit to the deal. E.g., A promises to buy B's truck if “he feels like it.” Here, A is not committing to the deal. This is an illusory promise, not bargained-for consideration.

8.4. Defenses

8.4.1. No defenses to formation or enforcement that would invalidate the otherwise valid contract.

8.4.2. DEFENSES TO CONTRACT FORMATION AND ENFORCEMENT Even if mutual assent and consideration are present, the otherwise valid contract can be invalidated if any of the following defenses are successfully asserted: Incapacity Mistake Misunderstanding Misrepresentation Duress Undue Influence Illegality Unconconscionability If a defense is successful, the contract will generally be void or voidable. A void contract is treated as though it never existed (i.e., neither party can enforce the contract). A voidable contract is enforceable until a party takes action to rescind the contract (i.e., the adversely affected party may be able to enforce the contract).

8.5. Statute of Fraud

8.5.1. Alternative Theories: Pouncing Quells Mice Pouncing= Promissory Estoppel Quell= Quasi Contract Mice = Moral Obligations

9. Performance Acronym: Sarah Plays with Cat Every Afternoon

9.1. Sarah = Substantial Perf.

9.2. Plays= Parol Evidence

9.3. Cat= Conditions

9.4. Every= Excuses

9.5. With= Warranties

9.6. Afternoon= Anticipatory Reputation

9.7. If a traditional, enforceable contract is formed, and either party fails to perform their contractual duties without a valid excuse for nonperformance, then the breaching party may be held liable for breach of contract.

9.8. If we conclude that a traditional, enforceable contract was formed, we must next determine whether either party failed to perform their contractual duties without a valid excuse for nonperformance.