Michael Wechsler

St. Johns University School of Law Contracts 1 Law Outline 2016-01-05

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Cases and Materials on Contracts
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Contracts law outline from a two part law school class. 56 pages in Microsoft Word format.

A. Elements Necessary to Form Contract

1. Offer
2. Acceptance
3. Consideration

B. Exceptions:

1. Reliance

a. Promissory Estoppel: Enforces promises without consideration (e.g. A sells raffle tickets on reliance of B's promise to raffle ruby slippers. Even though B returned nothing to A as consideration, A relied on B's promise to raffle ruby slippers.

2. Restitution - (Quantum Meruit, Quasi-Contract, Unjust Enrichment) - There is no contract or even a promise, but you recover because of unjust enrichment. Must have enrichment, and reasonable expectation of payment for enrichment. (Classic example is Dr. who stops to help unconscious pedestrian can charge, Cotnam v. Wisdom)

C. Defenses to Contract Formation

1. Statute of Frauds - Contracts for sale of goods over $500. Must be in writing to be enforceable
2. Incompetence - Under 18 (minor), infirmed individual - voidable
3. Illegality - If illegal (e.g. sale of cocaine) void
4. Fraud - Voidable
5. Duress - Voidable
6. Mistake - Under certain circumstances (see later)

D. Terms of the Contract
1. Parol Evidence Rule - Prevents claiming other terms that ought to be included in the written contract. There are exceptions.

E. Performance

1. Conditions

a. Absolute Duty - No conditions (e.g. typical - A sends $100 for B's painting)
b. Conditional - A will perform conditional on B's performance of something. A's duty of performance does not come into being until condition performed. (e.g. If you lose 100 lbs I'll spend the night with you)

2. Relieved of Duty to Perform - Discharge of duty to perform:

a. Full Performance - of terms under contract
b. Mutual Recission - by both parties
c. Release - One party allows other to escape
d. Impossible Performance - Subject matter may be destroyed (e.g. promise to buy parrot but parrot dies before delivery)

3. Breach - First question: "Is the breach material"

a. Yes - Other party does not have to perform at all and can sue for breach
b. No - If insignificant breach, other party must perform then sue for breach (e.g. A sells 1000 slippers to B and only 990 sent by mistake. Minor breach and B must pay in full and sue if necessary for the value of the missing 10 pairs)

F. Third Party Contracts

1. Third Party Beneficiaries
a. Primary Concern - (Vesting) - When can they sue for non-performance of k? (e.g. A runs up $1000 debt with B. C wants to buy slippers from A for $1000. A promises C will pay B directly. What if C doesn't pay? B can sue C directly if B's rights have vested. Vesting occurs when:

1. B files suit to enforce K
2. B indicates assent to the K
3. B relies on the K to B's detriment

2. Assignments and Delegations

a. Assignment: To transfer your rights under a K to someone else. (e.g. to payment)
b. Delegation: Transfer your duty to perform to someone else. (e.g. to sell something) More difficult as the duty might be specialized. (e.g. Painting a portrait is specialized duty, not assignable)
c. Cannot delegate duty or assign rights if it is detrimental to the other party (e.g. delegate duty to pay to one with a bad credit risk)
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