Category: Contract law

What is promissory estoppel?

Promissory estoppel is a doctrine which provides that, under certain circumstances, a person should be liable for breaking a promise, even if we don’t have all the elements necessary  to form a contract. Remember, contracts require, among other things, consideration.  By consideration, courts mean each party gives something and each party gets something in exchange.  If A promises to pay $100 and B promises to sell his watch, the parties are exchanging promises.  We have a contract because there is an agreement and consideration.   But what happens if we have a gratuitous promise?  For example, let’s say A promises B $100 but doesn’t ask for anything in return.  This is not a contract.  If B asks for the money A can tell B he changed his mind and there is no liability for the broken promise. So far so good.  But what if the situation becomes unjust because B relied on A’s promise.  For example, let’s say Uncle Unkind tells his nephew, who is working a tough job and going to school, that he’ll give him $100,000.  And let’s say Uncle Unkind should reasonably expect that the nephew will quit his job to focus on his studies based on this promise. If the nephew quits his job and asks the Uncle for money, what is the result? Keep in mind that the Uncle made a gratuitous promise.  He didn’t say, “If you agree to quit...

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What is an Offer?

An offer, together with acceptance and consideration, is one of the elements needed  to form a contract under US law.  The offer provides a counterpart  (sometimes called an offeree) with the power to accept a deal and to form an agreement. To identify an offer  make sure that one party, the offeror, is unambiguously communicating his intention to enter into a deal if the offeree agrees.  If Mr. A offers $100 to Mr. B to paint his fence, this should be an offer because if B agrees, we would have an agreement to paint a fence.  On the other hand, if A is simply thinking of offering B $100, that’s not an offer, because it hasn’t been communicated. Also, If Mr. A tells Mr. B that he’s thinking about hiring someone to paint his fence and would consider paying around $100, that’s also not an offer.  Mr. A sounds like he’s trying to negotiate with Mr. B.  Below is a video on the offer.  I have more content up already on Udemy....

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When is duress a defense in a contract case?

Very rarely! A party can argue that he does not have to perform a contract if he was forced to sign the contract.  A simple example would be if a salesperson pointed a gun at a customer and said, “Sign the contract or I’ll shoot you.”  Obviously that should not be a contract. The customer did not have a meaningful choice to sign the contract or not so he is not legally bound by his promise. If one party makes an improper threat, and the other party does not have a choice, we say there was duress.  Sometimes an economic threat is less obvious than pointing a gun but can still be improper.  For example, let’s say Mr. B is in a bad financial position and desperately needs his job to support his family.  Let’s say Mr. A can cause Mr. B to lose his job.  Now Mr. A threatens Mr. B that if he does sign a contract t he’ll cause Mr. B to lose his job.  This sounds like duress because Mr. B did not have a meaningful choice but to sign the contract and Mr. A improperly threatened to cause Mr. B to lose his job. Don’t confuse economic duress with someone trying to get the possible deal for himself.  If I own a classic car and I know you really want to buy the car...

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What is “past performance” or “past consideration” in contract law?

Every contract needs consideration.  For example. in a  bilateral contract each party must promise to do something that he was not already required to do, or to agree to not do something he was allowed to do.  For example, A promises to pay B $100 if B agrees to clean A’s car.  B agrees.  Now we have consideration.  Both parties are promising to do something they otherwise would not be required to do. But something a person already did – – an act prior to negotiating the contract – – is not considered consideration. Courts call this “past performance” or “past consideration”. Let’s say A cleans B’s car and B says, “Great job!  I’ll pay you $50.”   Is there a contract?  Probably not.  B does not have a contractual obligation to pay A. Why? Because A’s act occurred in the past.  A & B never agreed that that A should clean B’s car.  B might be grateful and could feel a moral obligation towards A but there is no contract.  To have legal consideration the parties must reach an agreement as to what each party will give and what each party will get. Get a Civ Pro Quiz Ebook! 101 Civ Pro Questions and Explanations...

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What is the mailbox rule?

The common law mailbox rule is a frequent topic on bar and law school exams.  The rule governs when an offer is accepted.   The law only applies to communciations by mail or by some type of delivery service.  Your state may have law determining whether and how the mailbox rule applies to emails and texts.  The law does not apply to face-to-face discussions or telephone calls. The rule is this:  An offer is accepted once the offeree sends his acceptance by mail, provided he addresses the acceptance correctly.  That’s it.  There’s one exception where the offeree sends more than one communication and I talk about that below.  Everything else in the exam is meant to confuse you.  The mailbox rule does not apply to anything except for mail or courier service and only applies to acceptances – – not revocations, counteroffers, etc. Let’s say Oliver sends a letter to Alan in which he offers to paint Alan’s fence (does anyone send letters like this?).  Maybe Oliver tells Alan in the letter that Alan has until January 16 to accept the offer.  Alan sends a properly addressed letter back to Oliver accepting the offer sometime before January 16.  Say he sends the letter January 15.  Good.  The offer was accepted on January 15.  That is the mailbox rule.  Even if the letter doesn’t reach Oliver, the offer was accepted...

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