NALA ACP Contracts cheat sheet

A contract requires offer, acceptance, consideration, capacity, and legality; missing any element defeats formation regardless of the parties' intent.

Offer = definite promise plus terms, communicated to an identified offeree; an invitation to treat (advertisement, price list, catalog) is not an offer.

Acceptance must be unqualified and communicated by the offeree; a counteroffer terminates the original offer (mirror image rule).

Under UCC Article 2, a merchant's firm offer is irrevocable without consideration if signed and in writing, for the stated period or a reasonable time, capped at three months.

Consideration = bargained-for exchange of legal detriment; past consideration and moral obligation are insufficient.

Mailbox rule: acceptance is effective on dispatch when mail is authorized; revocation of an offer is effective only on receipt.

Statute of Frauds: sale of goods $500 or more, land interests, and contracts not performable within one year must be in writing and signed by the party to be charged.

Parol evidence rule bars prior or contemporaneous oral statements that contradict a fully integrated written agreement; it does not bar evidence of fraud, mistake, or ambiguity.

Condition precedent must occur before a duty arises; condition subsequent cuts off an existing duty; simultaneous conditions require tender by both parties.

Interpretation order: express terms, course of performance, course of dealing, then usage of trade (UCC hierarchy); plain meaning controls over subjective intent.

Contra proferentem: ambiguous terms are construed against the drafter; in insurance, ambiguities favor the insured.

Material breach excuses the nonbreaching party's remaining performance and permits damages; minor breach permits suspension or cure but not discharge.

Expectation damages place the injured party in the position of performance; reliance damages restore the pre-contract position; restitution disgorges benefit conferred.

Consequential damages are recoverable only if foreseeable at formation (Hadley v. Baxendale) and not excluded by the agreement.

Duty to mitigate: nonbreaching party cannot recover losses avoidable by reasonable effort; mitigation expenses are recoverable.

Liquidated damages are enforceable if reasonable forecast of anticipated harm and not a penalty; otherwise courts strike them.

Specific performance is an equitable remedy limited to unique goods or land where money damages are inadequate.

Anticipatory repudiation permits the nonbreaching party to treat the repudiation as breach immediately or wait for performance, but cannot do both.

Void contract has no legal effect; voidable contract is enforceable until the party with the defense elects to rescind.

Mutual mistake of material fact permits rescission; unilateral mistake generally does not unless the other party knew or caused it.

Fraud in the factum makes the contract void; fraud in the inducement makes it voidable.

Duress requires improper threat leaving no reasonable alternative; undue influence requires a confidential relationship plus unfair persuasion.

Impossibility, impracticability (UCC 2-615), and frustration of purpose discharge duties; mere increased cost is not impracticability unless extreme and unforeseen.

Accord and satisfaction discharges a disputed claim when the obligee accepts a substituted performance in full satisfaction.

Third-party beneficiary rights vest when the beneficiary materially changes position, manifests assent, or brings suit; vesting cannot be undone without consent.

Delegation of duties is permitted unless the contract prohibits it or the obligee has a substantial interest in personal performance; delegation does not release the delegator.

Assignment of rights is valid unless it materially increases the obligor's burden, is barred by contract or law, or is a personal-services right.