Is intent an important element in determining if there exists a contract between parties? The element of intent is of prime importance when it comes to determining whether a contract

1. Is intent an important element in determining if there exists a contract between parties?

The element of intent is of prime importance when it comes to determining whether a contract has been formed. A party’s intention to enter into a legally binding agreement, or contract, is judged by outward, objective facts. The facts are interpreted by a reasonable person, rather by the party’s own secret, subjective intentions.

2. What are the essential elements of a contract?

A contract is “a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes a duty.” It is an agreement that can be enforced in court. A valid contract must have 4 elements: agreement, consideration, contractual capacity, and legality. If any of these is lacking, no contract will be formed. Additional to these four elements, a contract must have defenses to the enforceability of an otherwise valid contract. Those two elements include voluntary consent and form. A contract must have all six elements to be valid, otherwise, the contract is unenforceable.

3. What is the importance of a promise in making a bilateral contract?

Every contract involves at least two parties. A bilateral contract is made when the offeree, the party to whom the offer is made, accepts a contract by promising to perform. It is defined as a “promise for a promise”. The importance of a promise in making a bilateral contract is that this contract ceases to exist without the promises being exchanged from the offeror and offeree. No performance such as payment of funds or delivery of goods, needs to take place for a bilateral contract to be formed.

4. What is a unilateral contract?

A unilateral contract is defined as “a promise for an act”. This contract is formed not at the moment when promises are exchanged but at the moment when the contract is performed. If the offer is phrased so that the offeree can accept the offer only by completing the contract performance, it is a unilateral contract.

5. Is a statement of future intent to do something in the future an offer?

6. Is an invitation to negotiate an offer?

7. Is an ad an offer?

8. Is there an offer when the terms are not definite?

9. Does a rejection of an offer terminate it?

10. What is the mailbox rule?

The mailbox rule is also known as the deposited acceptance rule, which the majority of courts follow. Acceptance takes effect, thus completing formation of the contract, at the time the offeree sends or delivers the communication via the mode expressly or impliedly authorized by the offeror. This is what the mailbox rule is defined as. If the authorized mode of communication is the mail, then an acceptance becomes valid when it is dispatched, or placed in the control of the U.S Postal service, not when it is received by the offeror. The mailbox rule does not apply to instantaneous forms of communication such as when the parties are dealing face to face, by telephone, fax, or email.

11. What is a click-on agreement?

A click-on agreement is an agreement resulting from such an acceptance. The courts have concluded that the act of clicking on a box labeled “I accept” or “I agree” can indicate the acceptance of an online offer. The law does not require that the parties have read all of the terms in the contract for it to be effective. Therefore, clicking on a box that states “I agree” to certain items can be enough.

12. Is performance of an offer in a unilateral contract a way of fulfilling the promise of the offer?

13. What is the effect of the pre-existing duty rule?

The pre-existing duty rule is a principle under contract law that states that if a party to a contract is under a pre-existing duty to perform, then no consideration is given for any modification of the contract and the modification is therefore voidable. In other words, it is a promise to do what one already has a legal duty to do, and it does not constitute legally sufficient consideration. If a party is already bound by contract to perform a certain duty, that duty cannot serve as consideration for a second contract.

14. How may unforeseen difficulties in performing the original contract raise the original price agreed upon?

15. Can a promise that is made after the consideration is past be enforced?

Promises made in return for actions or events that have already taken place are unenforceable. These promises lack consideration in that the element of bargained-for exchange is missing. You can bargain for something to take place now or in the future, but not for something that has already taken place. Past consideration is no consideration.

16. How does the doctrine of promissory estoppel work?

Under the doctrine of promissory estoppel, also known as detrimental reliance, a person who has reasonably and substantially relied on the promise of another may be able to obtain some measure of recovery. This is because, sometimes, individuals rely on promises to their detriment, and their reliance may form a basis for a court to infer contract rights and duties. This doctrine is applied in a wide variety of contexts which a promise is otherwise unenforceable, such as when a promise is made without consideration.

17. Can a contract made by a person of minor age be ratified and enforced after the minor reaches the age of majority?

The general rule is that a minor can enter into any contract that an adult can, except contracts prohibited by law for minors, such as the purchase of tobacco or alcoholic beverages. A contract entered into by a minor is voidable at the option of that minor, subject to certain exceptions.

18. What could make a contract made by an intoxicated person be enforceable?

Contracts made by mentally incompetent people can be void, voidable, or valid. If a court has previously determined that a person is mentally incompetent, any contract made by that person is void, no contract exists. Only a guardian appointed by the court to represent a mentally incompetent person can enter into binding legal obligations on that person’s behalf.

19. Is a contract voidable if made by a mentally incompetent person if he/she did not comprehend the consequences?

A contract is voidable if the person did not know they were entering into the contract or lacked the mental capacity to comprehend its nature, purpose, and consequences. If a court has not previously judged a person to be mentally incompetent but the person was incompetent at the time the contract was formed, the contract may be voidable.

20. Is a contract to do something prohibited by statute enforceable?

A statute sets forth rules specifying which terms and clauses may be included in contracts and which are prohibited. Any contract to commit a crime is in violation of a statute. Therefore, a contract to sell illegal drugs in violation of criminal laws is unenforceable. If the object or performance of a contract is rendered illegal by a statute after the parties entered into a contract, the contract is considered to be discharged by law.

21. Will a court most likely reform a covenant in a contract if it contained an unreasonable restriction?

Depending on the jurisdiction, courts will reform covenants not to compete. If a covenant is found to be unreasonable in time or geographic area, the court may convert the terms into reasonable ones and then enforce the reformed covenant. Such court actions present a problem in that the judge implicitly becomes a party to the contract. Consequently, courts usually resort to contract reformation only when necessary to prevent undue burdens or hardships.

22. What is the purpose of a usury statute?

The purpose of a usury statute is to set the maximum rate of interest that can be charged for different types of transactions, including ordinary loans. Usurious contracts are illegal, but most states limit the interest that the lender may collect on the contract to the lawful maximum interest rate in that state.

23. What kind of agreements does the Statute of Frauds make unenforceable?

24. Is a writing required for an employment contract?

Certain types of contracts are required to be in writing ot evidenced by a memorandum or electronic record. An exchange of emails that evidences the parties’ agreement is usually sufficient, provided that they are “signed” or agreed to by the party against whom enforcement is sought.

25. What is an intended third-party beneficiary?

A third-party beneficiary contract is a contract in which the parties to the contracts intend that the contract benefit a third party. A third party is one who is not a direct party to a particular contract and they normally do not have rights under that contract. However, the intended third-party beneficiary has legal rights and can sue the promisor directly for breach of contract.

Chapter 13 (Contract Performance, Breach, and Remedies)

26. Is the bidder at an auction of an item still liable on the bid although the item turns out to be worth less than the bidder originally thought because the item needed more repairs than originally estimated?

27. Would a court rescind a contract for sale of land even though both parties originally thought the land was worthless but it turned out to be very valuable?

28. What is a bilateral mistake?

A bilateral mistake is a mutual misunderstanding concerning a basic assumption on which the contract was made. The mistake must be about a material fact. When both parties are mistaken about the same material fact, the contract can be rescinded by either party. A word or term in a contract may be subject to more than one reasonable interpretation. If the parties to the contract attch materially different meanings to the term, a court may allow the contract to be rescinded because there has been no true “meeting of the minds.”

29. Can a contract be rescinded if the deal was based on fraudulent misrepresentation?

If a mistake concerns the future value or quality of the object of the contract, the mistake is one of value, and the contract normally is enforceable. If the parties to the contract attach materially different meanings to the term, a court may allow the contract to be rescinded because there was no meeting of minds.

30. What are some causes for a contract to be rescinded on the basis of undue influence?

31. Could the parties’ obligations under a contract to buy an office building be discharged if an appraiser discovers a condition in the building to be substandard?

32. Can a lease contract for housing require conditions to be met before the housing is rented to him/her?

33. Is a contract fully discharged if a seller gets its money from a buyer who gets an item he/she bought from the seller?

34. What is meant by an absolute duty to pay for items in a contract?

35. What is complete performance of a contract?

A complete performance of a contract is when a party peforms exactly as agreed. Normally, conditions expressly stated in a contract must fully occur in all aspects for complete performance of the contract to take place (strict performance). Any deviation breaches the contract and and discharges the other party’s obligation to perform.

36. What is substantial performance of a contract?

A substantial performance of a contract is defined as a party who in good faith performs substantially all of the terms of a contract can enforce the contract against the other party under the doctrine of substantial performance. There are three basic requirements for performance to qualify as substantial: the party must have performed in good faith, the performance must not vary greatly from the performance promised in the contract, and the performance must create substantially the same benefits as those promised in the contract.

37. What is a material breach in a contract?

A breach of contract is the nonperformance of a contractual duty. The breach is material when performance is not at least substantial. When there is a material breach, the non-breaching party is excused from the performance of contractual duties. That party can also sue the breaching party for damages resulting from the breach. Only a material breach can discharge the non-breaching party from the contract.

38. What kind of contract would require a mutual agreement to rescind?

Recission is the process by which a contract is canceled or terminated and the parties are returned to the positions they occupied prior to forming it. For mutual recission to take place, the parties must make another agreement that also satisfies the legal requirements for a contract. There must be an offer, an acceptance, and consideration.

39. What is a novation?

A novation occurs when both parties to a contract agree to substitute a third party for one of the original parties. There are four requirements of a novation: a previous valid obligation, an agreement by all parties to a new contract, the extinguishing of the old obligation, and a new contract that is valid.

40. What is the effect of the statute of limitations in a breach of contract case?

Statutes of limitations restrict the period during which a party can sue on a particular cause of action. After the applicable limitations period has passed, a suit can no longer be brought. The limitations period for bringing suits for breach of oral contracts usually is two to three years, and for written contracts, four to five years.

41. Be able to compute the measure of damages in a breach of contract case (2).

42. When would specific performance be an appropriate remedy in a breach of contract case? (2)

43. If A’s performance is not timely (not done on time agreed to), could B recover the loss of profit from the delayed opening caused by A?

44. What does the doctrine of mitigation of damages require?

45. Is a provision in a contract designed to penalize one party to a contract enforceable?

46. Can A’s fraudulent representation of the value of goods in a contract, making B pay an inflated price, result in B’s right to rescind the contract?

47. When would reformation be an appropriate remedy in a breach of contract case? (2)