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Contracts
University of Iowa School of Law
Andersen, Eric G.

 
1L Contracts
Contracts – Andersen – Fall 2015 (RSC = Restatement 2nd of Contracts; pages are supplement)
I. Contract (RSC 1, p145)
Promise or set of promises that, if breached, the law will give remedy, or that performance of which is deemed a duty
A.       Promises are a manifestations of intention to act or not act in a specific way such that a promisee understands that a commitment has been made (RSC 2, p145)
B.        Voidable Contracts
One or more parties to the contract has the power to either avoid or ratify the legal requirements of a contract (RSC 7, p146)
1.       Infancy (RSC 12, 14, p147-48)
Persons under the age of 18 can incur only voidable duties
2.       Mentally Ill (RSC 12,15, p147-48)
A person who can't understand the contract or its consequences by reason of mental illness or defect incurs only voidable duties, unless the contract has been performed and the other party didn't know of the disability
3.       Intoxication (RSC 12, 16, p147-48)
If a party has reason to know the other party intoxicated and therefore is unable to understand the contract and its consequences or is unable to act in a reasonable manner, then the intoxicated party has only voidable duties
4.       Duress and Threats (RSC 175, 176; p196)
Promises induced by threats or duress are voidable unless the other party was acting in good faith and provided value
5.       Misrepresentation (RSC 164, p195)
Fraud or material misrepresentation which reasonably induces a manifestation of assent is voidable
6.       Mistake RSC 151 – voidable contract results (both parties RSC 152 p189)(single party RSC153)
C.        Unenforceable Contract (RSC 8, p 146)
A contract for which the remedies of damages and specific performance are unavailable
D.       Unconscionable terms/contracts (UCC 2-302, p32; RSC208, p207)
Court may make a contract unenforceable, leave the bad terms out, or limit the bad term's application to avoid a bad result
1. Good faith is read into all contracts (UCC 1-305, p13 and RSC 205, p206)
E.         Requirement of a Bargain (RSC 17, p 151)
Bargains require Mutual Assent and Consideration
1.       Mutual Assent (RSC 18, p151)
Each party must either make a promise or begin to render performance
a.       Conduct as assent (RSC 19, p152)
Assent can be written, but can also be made by conduct through action or inaction; joking doesn't prevent assent if the party knows or should know their actions could lead the other party to assume s/he assents
b.       Misunderstanding

C 86, p173
3.       Intention (RSC 21,  p153)
Both parties must intend to be bound; Intention is measured by manifestation of assent under objective theory – actual intention to assent is not required (what you think is irrelevant if you act or talk like you intend to be bound)
F.         Offer (RSC 24, p 153) (Similar outcome in UCC 2-206, p27)
Manifestation of willingness to enter into a bargain such that the other party is justified in believing that his acceptance is invited and will conclude the contract
1.       Preliminary Negotiations are not offers (RSC 26, p 153)
An invitation to bargain is not an invitation to enter into a bargain – Ads are generally not offers, they are invitations to bargain
a.       Even Written Negotiations might not be a Contract (RSC 27, p154)
Even if all the necessary terms are in a written agreement signed by both parties, if the written agreement says it isn't binding until some future condition is met (approval, different writing, etc.) then it isn't binding.