Show Menu

Contracts Cheat Sheet (DRAFT) by

This is a draft cheat sheet. It is a work in progress and is not finished yet.

Offer and Acceptance in Bilateral Contracts

Both sides make a promise
an invitation for contract but not a contract
mailbox rule
acceptance made when put in mailbox
rejection when received
Offeree response to offer
counter offer
option contract
Meets elements of offer but limits the promisor's power to revoke through extra consid­eration

Offer and Acceptance in Unilateral Contracts

i. Promisor makes a promise in return for the act of another party
i. Consid­eration is the perfor­mance of the act
Cannot revoke after act has been substa­ntially performed

Postponed Bargai­ning: Agreement to Agree

classical view
Future terms must be clear and defintite in order to be enforc­eable
modern view
Letter of intent could be binding- according to reasonable jury


bargained for exchange
purely gratuitous promises wont be enforced
Requir­ement of exchange
performace or return promise must be bargained for
Classical definition
benefit to promisor, detriment to promisee
grossly inadequate
moral consid­eration

Issues of agency

Agents can be binding
Kinds of Authority
Not actual authority
Based on principle/ rank

Interp­reting contracts

shared intent
words have different meanings
context of negoti­ation and making the contracts
plain meaning
dictionary defini­tion/ commonly understood meaning
contextual meaning
circum­stances surrou­nding (purpose of terms, history of negoti­ations, business context )
subjec­tive- meeting of the minds
objective- reasonable person, focus on words and conduct
modified objective- intention and other evidence relevant to contract
principles of interp­ret­ations
construe language consis­tently where posible
resolve ambiguity against drafter resolve ambiguity to make contract valid
handwr­itten/ typed preferred over preprinted
orefer interp­ret­ation that makes contract reason­able, lawful, and effective
customary practice terms
usage of trade- meaning or word in industry
cuorse of dealings- what has been used in past contracts
course of perfor­mance- has one party objected to the meaning in the past
hierarchy of interp­ret­ations
express terms
course of perfor­mance
course of dealings
usage of trade
Restat­ement 201- whose meaning prevails
same meaning
i. Party does know of other meaning and other knew meaning attached by the first party
Party had no reason to know of other meaning and other knew meaning attached by the first party
iii. Except as stated in this section, neither party is bound by the meaning attached by the other, even though the results may be a failure of mutual assent
Rules in Aid of interp­ret­ation
Writing interp­reted as a whole
unless different intention is manifested
Section 204
if terms are omitted, the court can apply reasonable terms
Determ­ining word meaning
P has burden of proof because their interp­ret­ation id more favorable because D drafted
what to look at to determine word meaning
actual language
negoti­ating history
industry standards
applicable government regula­tions
conduct of parties after the agreement
If contract made in good faith and still can't make clear, dismiss the claim
Doctrine of reasonable expect­ations (usually adhesion contracts)
Any nondic­kered terms should be interp­reted in accordance with the non drafting party's reasonable expect­ations, even if this contra­dicts the express language of the contract
Test for reasonable expect­ation
bizarre or oppressive terms
Evisce­rates dickered terms
Eliminates dominant purpose of transa­ction

Electronic and Layered contra­cting

shrink wrap
sellers terms come with delivery, accept if you keep the product
click wrap
click to agree to terms- asserts agreement
browse wrap
you agree to the terms by continuing on site- does not assert agreement
when is contract made
when purchase is made
sellers terms are additional proposals


follow a breach of contract
losses related to actual damages
result indirectly from act

Basics of a contra­ctual obligation

Elements of a Contract
oral/ written agreement
exchange relati­onship/ consid­eration
at least one promise
future action or promise
mutual assent
offer and acceptance - meeting of minds
objective manife­station
intention to be bound
manife­station of mutual assent
reasonable person standard

Qualified acceptance

battle of the forms
form contract
mirror image rule
terms and conditions must be identical
last shot rule
last form governs the contract

Article 2-207

Additional terms in accept­ance/ confir­mation:
Acceptance must be made condit­ional on assent to additional or different terms
(if 0-1 merchants)
Become part of contract
(if both merchants
offer expressly limits terms
terms materially alter it
notifi­cation of objection is given

Statute of Frauds under the UCC

Need some sufficient writing
not insuff­icient if incorrect term but only enforc­eable to the extent of that term
signed by party against whom enforc­ement is sought
between merchants
if within a reasonable time a writing in confir­mation of the contra­ctand sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requir­ements of subsection (1) against such party unless written notice of objection to its contents is given within 10 days after it is received.
A contract which does not satisfy the requir­ements of subsection (1) but which is valid in other respects is enforc­eable
if the goods are to be specially manufa­ctured for the buyer and are not suitable for sale to others in the ordinary course of the seller­'sb­usiness and the seller, before notice of repudi­ation is received and under circum­stances which reasonably indicate that the goods are for the buyer, has made either a substa­ntial beginning of their manufa­cture or commit­ments for their procur­ement; or
if the party against whom enforc­ement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforc­eable under this provision beyond the quantity of goodsa­dmi­tted; or

Determ­ining goods or services

contra­ctual language

UCC Article 2-205

firm offer
(similar to option contract)
offer by merchant in writing is not revocable for time stated
can't be more than three months
no consid­eration needed

UCC Article 2-204

contract must be made in a manner to show sufficient agreement
include conduct
agreement even if the moment is unclear
some terms can be left open if parties intend to make a contract

UCC Article 1-103

underlying purposes
simplify, clarify, modernize
permit continued expansion of commercial practices
uniform law amongst various jurisd­ictions

Contract Formation under the UCC

Applies to sale of goods/ transfer of title
not property
not services
not lease
not limited to commerical transa­ctions
sometimes requires at least one party to be a merchant

Promissory Estoppel

Enforc­ement of a promise when the promisee relied on it to their detriment
not enforcing would be unjust
A promise which the promisor should reasonably expect to induce an action or forbea­rance of a definite and substa­ntial character on the part of the promisee and which does not induce such action or forbea­rance is binding if injustice can be avoided by enforc­ement of the promise

Promissory Reliance

Pre acceptance reliance
hard to find outside of constr­uction
i. Contractor did not rely on promise to keep price but on promise to deliver product if accepted
General contra­ctors rely on subcon­tra­ctors- detrim­ental reliance


remedy for unjst enrichment
contract is implied in law for the purpose of providing a remedy
Any person who is unjustly enriched at the expense of another is subject to liability of restit­ution
intent to charge
no imposition on the recipient (request, emergency, accept­ance)
benefit received (economic or something of value)

Quasi Contract Elemennts

p has conferred benefit from D
D has knowledge of the benefit
D has accepted or retained the benefit
it would be inequi­table for D to retain the benefit without paying

Promissory Restit­ution

unjust enrichment
cannot rise off moral duties alone
Except: material benefit rule
promisor has been unjectly enriched
moral obligation contract- no consid­eration
action is not induced by a promise

Statute of Frauds

classes of contracts suject to SOF
contract of an executor or admini­strator to answer for the duty of his decedent
a contract to answer for the duty of another
a contract made upon consid­eration of a marriage
contract for the sale of an interest of land
a contract that cannot be performed within one year
sale of goods priced $500 or more
must be in writing
does not have to be a formally executed document
can use more than one document to form a memorandum that satisfies the statute of frauds (all essential terms, at least one signed by party being charged)
parol evidence can be used for unsigned writing to show assent

Exceptions to the Statute of Frauds

Part perfor­mance for real estate
A contract for the transfer of an interest in land may be specif­ically enforced notwit­hst­anding failure to comply with the Statute of Frauds if it is establ­ished that the party seeking enforc­ement, in reasonable reliance on the contract and on the continuing assent of the party against whom enforc­ement is sought, has so changed his position that injustice can be avoided only by specific enforc­ement.
Reasonable reliance
A promise which the promisor should reasonably expect to induce action or forbea­rance on the part of the promisee or a third person and which does induce the action or forbea­rance is enforc­eable notwit­hst­anding the Statute of Frauds if injustice can be avoided only by enforc­ement of the promise. The remedy granted for breach is to be limited as justice requires.
Factors to take into account
availa­bility and adequacy of other remedies
Definite and substa­ntial character of the action or forbea­rance
extent of action
reason­abl­eness of action
extent of forese­eab­ility of the action by the promisor

Parol evidence rule

When the parties to a contract have mutually agreed to incorp­orate a final version of their entire agreement in a writing, neither party will be permitted to supplement that written agreement with "­ext­rinsic eviden­ce" of prior agreements of negoti­ations between them. When the writing is intended to be final only with respect to part of the agreement, the writing may not be contra­dicted but it may be supple­mented by such extrinsic evidence
if meaning of word in contract is unclear, supplement with evidence
Fully integrated
appears whole on its face (has all essential elements)
"four corner­s" approach (tradi­tional approach)
merger clause- explains contract is final- not necessary but helpful
partial integr­ation
will appear to have things left out
plain meaning approach- Williston- four corners of document
contextual approach- Corbin/ restat­ement 210- focus on actual intentions of parties, consider circum­stances
Exceptions (PE does not keep out evidence)
evidence to explain meaning of the agreement
agreements made AFTER the execution of the writing
evidence to show the effect­iveness of the agreement was subject to an oral condition precedent
evidence to show the agreement is invalid or illegal
evidence to establish equitable remedy, such as reform­ation
evidence to establish collateral agreement between the parties
if you sign something that you didn't agree to, you cannot enter extrinsic evidence
Some courts hold that trade usage cannot contradict express terms
Some courts always look at trade usage