Table Of Content®
Contract Law For Dummies
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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
