Contracts Mnemonics & Memory Aids

The Statute of Frauds requires certain contracts to be evidenced by a signed writing to be enforceable. MY LEGS covers all six categories tested on the bar and law school exams.

• Marriage — contracts made in consideration of marriage
• Year — contracts that cannot be performed within one year from the date of making
• Land — contracts for the sale of an interest in land
• Executor — promises by an executor to pay estate debts from personal funds
• Goods — contracts for the sale of goods $500 or more (UCC 2-201)
• Surety — promises to answer for the debt of another

Every enforceable contract requires these five elements. Missing any one element means no valid contract was formed.

• Consideration — bargained-for exchange of legal value
• Offer — manifestation of present contractual intent with definite terms
• Acceptance — assent to the terms of the offer
• Legal capacity — parties must have capacity (age, mental competence)
• Legality — the subject matter and purpose must be legal

Even if a valid contract exists, these defenses can render it voidable or unenforceable. Useful for issue-spotting on contracts essays.

• Mistake — mutual or unilateral mistake of material fact
• Unconscionability — procedural (unfair surprise) or substantive (oppressive terms)
• Duress — improper threat that leaves no reasonable alternative
• Illegality — contract for an illegal purpose is void
• Statute of Frauds — required writing is absent

The parol evidence rule bars prior or contemporaneous agreements that contradict a written contract. MIMIC lists the exceptions where extrinsic evidence is still admissible.

• Mistake — evidence of mistake in the writing (reformation)
• Inconsistency with a partially integrated agreement (additional consistent terms allowed)
• Modification — subsequent modifications to the contract
• Illegality — evidence that the contract is illegal or was procured by fraud
• Condition precedent — evidence of a condition that must occur before the contract becomes effective

The four main categories of contract remedies. The default remedy is expectation damages; the others are available in specific circumstances.

• Expectation damages — put the non-breaching party in the position they would have been in had the contract been performed
• Reliance damages — reimburse expenditures made in reliance on the contract
• Restitution — restore benefits conferred on the breaching party to prevent unjust enrichment
• Specific performance — equitable remedy when money damages are inadequate (unique goods, land)

An offer can be terminated before acceptance in five ways. Once terminated, any purported acceptance is a counteroffer.

• Revocation — offeror revokes before acceptance (effective when received)
• Expiration — lapse of time stated or reasonable time
• Law — operation of law (death, incapacity, destruction of subject matter, supervening illegality)
• Insanity or death of offeror
• Counteroffer — rejection and counteroffer by offeree terminates original offer

Understanding conditions is critical for analyzing performance obligations and excuses for non-performance.

• Subsequent — condition that discharges an existing duty (insurance policy time limits)
• Precedent — condition that must occur before a duty to perform arises
• Express — explicitly stated in the contract
• Concurrent — conditions that must occur simultaneously (closing on a house)
• Satisfaction — performance must satisfy a party (subjective vs. objective standard)

Under the UCC, contracts for the sale of goods can be enforceable even with open terms. The UCC supplies reasonable gap fillers.

• Price — reasonable price at time of delivery if not specified
• Place — seller's place of business is the default delivery location
• Delivery — single lot delivery is the default
• Time — reasonable time for performance if not specified

When there is no consideration, promissory estoppel can serve as a substitute to enforce a promise. All elements must be met.

• Promise — a clear and definite promise
• Reasonable and foreseeable reliance by the promisee
• Injustice — enforcement is necessary to avoid injustice
• Detriment — the promisee actually relied to their detriment
• Expectation — the promisor should have expected reliance

Distinguishing between types of third-party beneficiaries determines whether the third party has enforcement rights.

• Intended beneficiary — has enforcement rights once rights vest
• Creditor beneficiary — promisee owed a debt to the third party
• Only intended beneficiaries can sue on the contract
• No rights for incidental beneficiaries — those who benefit only as a side effect

Ways a party's contractual duties can be discharged other than by full performance or breach.

• Frustration of purpose — supervening event destroys the purpose of the contract (Krell v. Henry)
• Impossibility — performance is objectively impossible (destruction, death in personal service contracts)
• Novation — substitution of a new party with consent of all parties, discharging the original obligor
• Discharge by agreement — mutual rescission, accord and satisfaction, release