Contract Law: Termination of Offers & Statute of Frauds

Termination of an Offer

• Revocation occurs when the offeror withdraws the offer.
• Acceptance of an offer removes the offeror's right to revoke.
• Options cannot be revoked under common law. An option is a contract where the offeree pays for the right to consider an offer for a certain period.
• A merchant's firm offer, made in a signed record by a merchant, can't be revoked for a specific time (up to 3 months).
• Rejection ends an offer and cannot be accepted again unless the offeror renews it.
• A counteroffer (under common law) invalidates the original offer.
• Under the UCC, adding non-material terms to an offer doesn't automatically invalidate it.
• An offer can terminate by expiration if a deadline is set, or by the death of the offeror.

Statute of Frauds

• Some contracts need to be in writing to be enforceable (e.g., sale of real estate, contracts not performed in a year).
• Certain UCC contracts ($5000 or more) also require written evidence.
• If the parties to an oral contract perform the contract, a court may enforce it even though it should be written.

Defenses to Contract Formation

• Capacity: Minors and those with impaired mental capacity can avoid contracts.
• Misrepresentation: A contract can be voided if one party was not given complete and accurate information.
• Fraud: Intentional misrepresentation or failure to disclose material information.
• Duress: Physical force or coercion.
• Undue Influence: Exploiting a relationship of trust or dependency to gain an unfair advantage.
• Illegality: Agreements violating laws or public policy are void.
• Unconscionable contracts: Contracts that are unreasonably unfair to one party.

Performance Excused

• Impossibility: Performance of a contract may be excused if it becomes objectively impossible.
• Commercial Impracticability: Performance is excused if circumstances are dramatically different than what was anticipated when the contract was made.
• Force Majeure: Excuses performance due to extraordinary events (e.g., war, economic crisis).

Remedies for Non-Performance

• Compensatory Damages: Damages to return the non-breaching party to the position they would have been in without the breach.
• Incidental Damages: Costs directly stemming from the breach (e.g., advertising costs).
• Consequential Damages: Lost profits due to the breach.
• Liquidated Damages: Pre-agreed damages in the contract.

Third-Party Rights in Contracts

• Third-Party Beneficiary: Someone who benefits from a contract, but is not a party to it.
• Assignment: Transferring the benefits of a contract to another party.
• Delegation: Transferring contractual duties to another party.

Credit Disclosure

• Federal laws require disclosure of interest charges and fees for loans.

International Contract Performance

• International contracts may have built-in performance guarantees (e.g., bills of lading, letters of credit).

Other Contract Concepts

• Implied-in-law contracts (quasi contracts): Contracts implied by law to prevent unjust enrichment.
• Parol Evidence Rule: Oral agreements not included in a written contract are inadmissible in court.
• Electronic Signatures: Electronic signatures are valid in many circumstances (ESIGN).
• Puffing: Opinions about the subject matter of a contract are not binding.
• Fair Credit Billing Act: Allows consumers to challenge billing errors.
• Bankruptcy Abuse Prevention and Consumer Protection Act: Guidelines for bankruptcy eligibility criteria.
• Fair Credit Reporting Act (FCRA): Protects consumers' rights regarding credit information.
• Promissory Estoppel: A promise made can be binding even without consideration if the other party relied on it.