Contracts Flashcards

Under common law contract principles, which of the following is required for a valid contract?

Answer: Offer, acceptance, consideration, and mutual assent

A valid contract requires offer, acceptance, consideration, mutual assent (meeting of the minds), and capacity; a writing is only required by the Statute of Frauds for certain contracts.

The mailbox rule provides that an acceptance is effective:

Answer: When the offeree deposits it in the mail

Under the mailbox rule, acceptance is effective upon dispatch — when properly mailed — not upon receipt by the offeror.

Under Article 2 of the UCC, a merchant's written offer to buy or sell goods stating it will be held open is irrevocable for the stated period (up to three months) without consideration. This is called a:

Answer: Firm offer

UCC § 2-205 creates the firm offer rule, making a signed written offer by a merchant irrevocable for the stated time (not exceeding three months) without requiring consideration.

Which of the following contracts is within the Illinois Statute of Frauds and must be in writing to be enforceable?

Answer: A two-year employment contract

Contracts that cannot be performed within one year of formation — such as a two-year employment contract — must be evidenced by a writing under the Statute of Frauds.

Promissory estoppel allows enforcement of a promise without consideration when:

Answer: The promisee reasonably and foreseeably relied on the promise to their detriment

Promissory estoppel requires a clear promise, foreseeable and actual reliance by the promisee to their detriment, and injustice that can only be avoided by enforcement.

Under the common law perfect tender rule for services contracts, substantial performance doctrine allows recovery if:

Answer: The breaching party performed in good faith and the defect is minor

Substantial performance allows a party who has performed in good faith, with only minor and unintentional defects, to recover the contract price minus damages for the shortfall.