Fundamentals of U.S. Contracts Law

Explore what makes a contract legally binding, including mutual assent and consideration, and learn how offers and acceptances establish a valid contract with definite terms and proper timing.

An offer is a promise to do or refrain from doing something in exchange for something else, expressed or implied, evaluated by an objective standard rather than the promisor's intent.

Explore how mistakes in the offer can rescind a contract if the other party knows or should know, and how ambiguity, communication, and offer termination affect formation.

Explore how offers terminate by lapse of time, including expiration dates, how time limits begin (date of offer vs receipt), mail delays, and the effects of late or counter offers.

Explore how an offeror can revoke an offer, when revocation takes effect, and how acceptance, unilateral contracts, option considerations, and UCC vs common law shape contract formation.

Understand that revocation becomes effective when received by the offeror or his agent, not when the offeree is aware. The majority requires receipt; the minority view favors sending.

Understand indirect revocation: an offer ends when the offeror's action contradicts contract intent and the offeree knows of the conflicting sale; a unilateral contract becomes irrevocable once performance begins.

Identify how an offeree rejects an offer, whether express or implied, and how a counter offer terminates the original offer, becoming effective only upon receipt.

Explore how death or insanity terminates an offer before acceptance, and how destruction or illegality of the subject matter also ends a contract, with competing views on notice.

Explore how acceptance forms mutual assent by either performing (unilateral contracts) or promising (bilateral contracts), and examine timing, knowledge, and intent required for valid acceptance.

Explain acceptance of unilateral and bilateral contracts, comparing traditional and restatement rules, including knowledge, intent, performance or promise, and the role of counteroffers in forming contracts.

Explore when acceptance becomes effective in bilateral contracts, inherent terms under the UCC, and why inquiries may not create counteroffers, with the Adams v. Linde cell doctrine governing authorized communications.

Explains when acceptance becomes effective under authorized and unauthorized means, with receipt by offer or its agent, and how mail, wire, or air mail affect timing, rejection, and counter offers.

Discover when silence amounts to acceptance, including cases where silence is deemed acceptance because of intent, or because of failure to reject goods, or due to past dealings.

Explore consideration as the bargained-for exchange that supports promises in contracts, and distinguish it from gratuitous promises. Learn how legal sufficiency and mutual consent determine enforceability.

Explore the concept of consideration in contracts, including bargain vs past consideration, legal sufficiency in unilateral contracts, legal detriment, and pre-existing duties.

Explore pre-existing duty and consideration by examining law-imposed obligations, prior contracts with the same promise or a third party, and the traditional versus benefit theories.

Explore legal sufficiency of consideration in bilateral and unilateral contracts, including mutuality of obligation, legal detriment, illusory promises, pre-existing duties, forbearance, and contract modification under traditional and restatement rules.

Explore when contract modifications require new consideration, contrasting traditional and restatement views, and cover rescission, accord and satisfaction, waivers, and the rule on lesser amounts in full payment.

Explore illusory promises, cancellation provisions, and requirement and output contracts, with emphasis on consideration, notice of termination under the UCC, and certainty in damages.

Learn how gratuitous promises become enforceable under promissory estoppel when detrimental reliance is foreseeable and injustice is avoided, with remedies limited to reliance costs, including charitable subscriptions.

The lecture explains enforcement of gratuitous promises via promissory estoppel and moral obligation, including promises to expired or discharged debts and past gratuitous services.

Explore defenses to contract formation, including writing requirements (statute of frauds), lack of capacity, illegal bargains, and inducement by mistake, misrepresentation, or duress, despite mutual assent and consideration.

Explain the statute of frauds, which contracts must be in writing, and how bilateral versus unilateral contracts differ, including when a signed memorandum can remove an agreement from the rule.

Learn how contracts within the one-year provision can be taken out of the statute of frauds via a signed memorandum or through full performance, enabling enforcement even without a writing.

This lecture explains the statute of frauds governing promises to pay another's debt, when writing is required, and introduces the main purpose doctrine and sufficient memorandum.

Promises in consideration of marriage must be in writing to be enforceable under the statute of frauds; promises to marry are not within it, but a memorandum can remove them.

Real property sale contracts must be in writing under the statute of frauds. The one-year lease is exempt; a memorandum in writing and part performance can support specific performance.

Explore the statute offrauds for the sale of goods over $500 and how a sufficient memorandum, possibly from multiple writings, makes the contract enforceable, with essential terms and signatures.

Explain how a defendant may be estopped from asserting the statute of frauds due to plaintiff reliance and extreme hardship, and clarify when written modifications are required under the statute.

Examine lack of capacity as a defense to contract formation, focusing on infants, age of majority, void versus voidable contracts, disaffirmance, and ratification, plus quasi-contract recovery for necessities.

Explain how mental infirmity affects contract formation. Identify when a contract by an unsound person is avoidable, and when it is void under guardianship.

Explore the illegal bargains defense, when contracts are void, and how licensing statutes, severability, pari delicto, and unconscionable terms shape remedies and recovery.

The uniform commercial code (UCC) harmonizes state commercial law for cross-state transactions, detailing ten articles from definitions to sales of goods, negotiable instruments, and secured transactions, with flexible formation rules.

Examine how the UCC formation for sale of goods relaxes offer rules, allows price to be settled later at a reasonable price, and covers output or requirement contracts.

Explore how under the UCC a merchant can create a firm offer that is irrevocable and held open for up to three months, without consideration.

The UCC allows acceptance in any reasonable medium, including electronic forms, and treats nonconforming goods as acceptance with breach unless timely accommodation is provided.

Learn how the UCC governs acceptance, when added terms become part of a contract, differences for merchants and non-merchants, and the battle of the forms, plus auction sale rules.

Explore how the UCC changes consideration rules for modifications, rescissions, and waivers under sections 2-209, emphasizing good faith and notice requirements between merchants and non-merchants.

Explore how the UCC relaxes formation defenses, focusing on statute of frauds safeguards, memorandum sufficiency, and exceptions for specially manufactured goods, part payment, and unconscionable clauses.

Learn the parole evidence rule, which excludes prior or contemporaneous agreements that alter a final written contract. Apply a three-question framework to determine its applicability and collateral considerations.

Explain how the parole evidence rule applies to integrated writings and how merger clauses, or their absence, affect determining a final and complete agreement.

Explore the parole evidence rule and how prior or contemporaneous agreements are inadmissible to modify an integrated contract, while subsequent or collateral agreements may introduce new terms.

Explore the parole evidence rule: admissible to attack validity, interpret terms, or resolve ambiguities; include plain meaning, local meanings, and trade usage with UCC differences.

Explore third party beneficiaries in contract law, including intended vs incidental beneficiaries, standing to sue, and how assignment, delegation, and breach affect rights and duties.

Identify the two categories of intended beneficiaries and show how creditor beneficiaries arise when performance satisfies an obligation, then examine donor or gift beneficiaries and mixed-beneficiary scenarios.

Explore who can sue as an intended third-party beneficiary, distinguish intended from incidental beneficiaries, and examine how payment obligations and gift promises affect standing in U.S. contracts law.

Assess the validity of third party beneficiary contracts by examining formation defenses—consent, consideration, statute of frauds, capacity, illegality, misrepresentation, and rescission—and when these defenses apply to beneficiaries.

This lecture explains how a third party beneficiary defends against a promisor's breach by failure of condition, express or constructive conditions, and the vesting of rights for beneficiary categories.

Explain the rights of the promisee against the promisor and third-party beneficiaries against the promisee, noting creditors retain rights while donors have none, with specific performance as a remedy.

Explore assignment of rights as a key third party problem, distinguishing unilateral and bilateral contracts, and analyze standing to sue, valid contracts, and enforceable assignments.

Learn when a third party may sue as assignee by a valid contract, transferable right, and proper assignment, and distinguish personal versus impersonal rights under common law and the UCC.

Learn how a valid assignment transfers a present contractual right, distinguishing present transfer from future promises, and understand the legal effects, considerations, and formalities under UCC and common law.

Explore the revocation rules for gratuitous assignments, including written delivery, tangible tokens, detrimental reliance, and competing assignments, plus warranties and security interests under Article 9.

Analyze delegation and assumption of duties in contracts, assessing when duties can be delegated, the validity of delegation, and consequences for obligees, delegates, and assignees.