Table Of Content

® Contract Law For Dummies Visit www.dummies.com/cheatsheet/contractlaw to view this book's cheat sheet. Table of Contents Introduction About This Book Conventions Used in This Book What You’re Not to Read Foolish Assumptions How This Book Is Organized Part I: Introducing Contract Law and Contract Formation Part II: Determining Whether a Contract Is Void, Voidable, or Unenforceable Part III: Analyzing Contract Terms and Their Meaning Part IV: Performing the Contract or Breaching It Part V: Exploring Remedies for Breach of Contract Part VI: Bringing Third Parties into the Picture Part VII: The Part of Tens Icons Used in This Book Where to Go From Here Part I: Introducing Contract Law and Contract Formation Chapter 1: Getting the Lowdown on Contract Law Grasping the Concept of Contract Law Defining contract Comparing different schools of thought on contract rules Tracing contract law’s roots Meeting the Key Players: Common Law, the Restatement, and the UCC Exploring the common law: Tradition and precedent Capturing general rules in the Restatement Statutes: Supplanting common law with codes Brushing up on the Uniform Commercial Code (UCC) Applying state law in federal court Applying different sources of contract law Forming, Defending, and Interpreting Contracts: The Basics Understanding contract formation Checking out attack and defense maneuvers Finding the terms of the contract and building contract-interpretation skills Examining Contract Performance, Breach, and Remedies Recognizing breach of contract Formulating remedies and establishing losses Exploring the role of third parties in contract law Practicing in the Real World of Contracts Chapter 2: Let’s Make a Deal: Offer and Acceptance Contract Formation: Getting a Handle on the Essentials Forming a Contract: Promises, Offers, and Mutual Assent Making a commitment by making a promise Turning a promise into an offer by asking for something in return Giving acceptance by giving or agreeing to give what was requested in return Assenting in action or thought: Objective manifestation versus subjective intent Forming contracts without words: The implied-in-fact contract Determining Whether Language Constitutes an Offer Distinguishing a preliminary inquiry from an offer Ads, catalogs, and circulars: Distinguishing advertisements from offers Deciding How Long an Offer Remains Open Determining Whether the Offeror Can Back Out: Revoking the Offer Making an option contract Recognizing statutes that create an option Relying on the offer Deciding Whether the Offer Has Been Accepted Acceptance must match the offer: The mirror-image rule Acceptance is effective on dispatch: The mailbox rule Looking at various forms of acceptance Making Sense of the “Battle of the Forms” and UCC § 2-207 Deciding whether acceptance is conditional Dealing with additional or different terms Chapter 3: Sealing the Deal: The Doctrine of Consideration Checking an Agreement for Consideration Using a simple Q and A Making a diagram Making Distinctions about Consideration Deciding whether it’s a bargain or a gift promise Distinguishing between sufficient and adequate consideration Detecting an Absence of Consideration Spotting a phony: Nominal consideration Applying the pre-existing duty rule Finding past consideration Tracking Down Illusory Promises Dealing with satisfaction clauses Analyzing output and requirements contracts Spotting illusory promises in settlements Too Many Blanks: Distinguishing Contracts from Agreements to Agree Looking for Consideration Substitutes: Enforcing without Consideration Evaluating the Recital of Consideration in a Contract Term Chapter 4: Noting Exceptions: Promises Enforceable without a Contract Examining Exceptions: When Contracts Aren’t Necessary The Doctrine of Reliance: Looking for a Promise That Induced Action Determining whether reliance applies Limiting the remedy for breach of the promise Deciding Cases That Test the Limits of Reliance: Promissory Estoppel Deciding whether a charitable pledge is enforceable Deciding whether a sophisticated party can claim reliance Remembering that reliance doesn’t usually qualify as acceptance The Doctrine of Restitution: Creating an Obligation to Prevent Unjust Enrichment Battling unjust enrichment with the implied-in-law contract Determining when a court is likely to find unjust enrichment Sorting out restitution in a material breach Part II: Determining Whether a Contract Is Void, Voidable, or Unenforceable Chapter 5: Introducing Contract Defenses Leveraging the Power of Policies Freedom of contract Efficiency Fairness Predictability Making the Most of Statutes Protecting consumers with state and federal statutes Tapping the power of statutes to bring a contract claim Examining the Courts’ Role in Policing Contracts Checking into Affirmative Defenses Distinguishing valid, void, and voidable contracts Separating matters of law and matters of fact Chapter 6: Considering Whether an Agreement Is Unenforceable Due to Illegality or Unfairness Determining Enforceability When the Legislature Has Spoken Recognizing illegal agreements that are unenforceable Noting exceptions: Illegal but enforceable agreements Making a Public Policy Argument Examining enforceability in agreements that restrain trade Examining enforceability in agreements that interfere with family relationships Examining enforceability in agreements that encourage torts Testing an Agreement against the Doctrine of Unconscionability Applying the doctrine of unconscionability in the UCC Distinguishing procedural and substantive unconscionability Challenging Enforceability with the Doctrine of Reasonable Expectations Chapter 7: Evaluating the Parties’ Ability to Make the Contract Recognizing Who Can Legally Make a Contract Passing the mental capacity check Child’s play? Making contracts with minors Basing a Contract Defense on One Party’s Bad Actions Saying things that aren’t true: The fraud defense Making an offer they can’t refuse: The duress defense Taking unfair advantage: The undue influence defense Whoops! The Mistake Defense Evaluating a mutual mistake defense Using the mutual mistake defense to escape a release Finding relief when the mistake is unilateral Chapter 8: Assessing the Enforceability of Oral Agreements Asking Whether the Parties Intended to Orally Form a Contract Challenging Oral Agreements with the Statute of Frauds Determining whether a transaction is within the statute of frauds Distinguishing between voidable and unenforceable agreements Finding a Writing That Satisfies the Statute Does it describe the contract? Is it signed by the party against whom enforcement is sought? Finding Exceptions to the Statute Revisiting reliance Finding an exception in the main purpose rule Examining part performance and restitution Finding exceptions in UCC § 2-201 Finding a big exception in international contracts Part III: Analyzing Contract Terms and Their Meaning Chapter 9: Evaluating Unwritten Terms with the Parol Evidence Rule Introducing the Parol Evidence Rule Identifying Parol Evidence: The Stuff outside the Writing Asking Why the Evidence Is Being Offered To prove a modification To prove a defense to formation To prove an unfulfilled condition To prove the meaning of a term To add a term to the agreement Deciding Whether the Agreement Is Final and Complete Recognizing the difference between subjective and objective intent Figuring out whether the agreement is final Checking whether the agreement is complete Dealing with a merger clause that says the contract is final and complete Considering Evidence That Supplements or Contradicts the Agreement Contrasting the Common Law with the UCC Parol Evidence Rule Getting Terms in Writing to Avoid the Parol Evidence Rule Quagmire Chapter 10: Finding Unwritten Terms That Complete the Contract Finding the Terms of an Incomplete Contract Using contract rules to fill the gaps Understanding types of gap-filling rules Reading In the Duty of Good Faith Being honest: The subjective duty of good faith Being reasonable: The objective duty of good faith Using freedom of contract to refine the definition of good faith Working with and around the Default Rules Recognizing default rules when you see them Using freedom of contract to change the rules and shift the risk Protecting Buyers through Warranties Making express warranties Looking for an implied warranty of title or warranty against infringement Checking for an implied warranty of merchantability Seeking out an implied warranty of fitness for a particular purpose Shifting the Risk by Disclaiming or Limiting Warranties Making warranty disclaimers specific and conspicuous Limiting the remedy for breach Drafting a disclaimer of warranty Recognizing the statutory regulation of disclaimers Chapter 11: Interpreting Contracts Grasping the Basics of Ambiguity Doing the Interpretation Two-Step Understanding How Courts Decide What’s Ambiguous Applying the rules of interpretation Examining the baggage the parties bring to the contract Bringing in objective meaning from outside the contract Considering subjective evidence: Context and testimony Deciding What Something Means Dealing with Misunderstanding Part IV: Performing the Contract or Breaching It Chapter 12: Evaluating Whether Contract Modifications Are Enforceable Considering Modifications Made during Performance Determining whether consideration is required Written requirements: Seeing whether the modification is within the statute of frauds Dealing with “no oral modification” clauses Agreeing to future, unilateral modifications Making Changes after One Party Fully Performed: Accord and Satisfaction Determining whether the parties formed an accord: Offer and acceptance Finding consideration: Doing something additional or different Finding consideration in unliquidated debts and debt-dispute settlements Figuring out what happens when the accord has been satisfied . . . or not Distinguishing accord and satisfaction from substituted contract Applying the rule of UCC § 3-311 to settlements by check Doing away with consideration by statute or case law Chapter 13: Deciding Whether Unforeseen Events Excuse Performance Deciding Whether a Nonperforming Party Is in Breach Did the event occur after contract formation? Did performance become impracticable? Was nonoccurrence of the event a basic assumption? Did the party seeking to be discharged carry the risk? Determining Whether a Buyer’s Purpose Was Frustrated Figuring Out What Happens When a Party’s Performance Is Excused Using our old friends reliance and restitution Allocating the loss when a performance is partially excused Using Freedom of Contract to Allocate Risk Drafting a “force majeure” clause to identify events excusing nonperformance No excuses: Drafting a “hell or high water” clause Chapter 14: Checking for Conditional Language Defining Condition in Legal Terms Telling the difference between a promise and a condition Determining whether a condition is express or implied Tapping the Power of Express Conditions Determining Whether Courts Will Find an Implied Condition Sorting Out Conditions Precedent, Concurrent, and Subsequent Deciding Who Must Go First Checking out the default order of performance Making agreements about the order of performance Determining Whether a Party Has Substantially Performed Considering how the type of breach affects the outcome Running tests to find substantial performance Deciding whether a breach with respect to time is material Solving the problem by drafting express conditions Looking at Conditions in the UCC Rule § 2-601: Making a “perfect tender” Rule § 2-612: Dealing with installment contracts Excusing Conditions Finding promise: Interpreting your way out of a condition Using restitution when a condition bars recovery Finding a divisible contract Claiming waiver to excuse a condition Throwing yourself on the mercy of the court to excuse a condition