Contract Law 1L Mid-Year Recap: Formation (Offer, Acceptance, Consideration), Defenses, and Damages for Breach

Welcome to today's episode, where we examine the fundamental principles of contract law as covered in the first year of law school. This recap explores key themes, essential concepts, and critical cases that every law student needs to know.

Formation of a Contract

We begin with the basics: the three pillars of contract formation—offer, acceptance, and consideration. An offer is a clear and definite proposal that shows intent to be bound, while acceptance must mirror the offer's terms exactly under the "Mirror Image Rule." Consideration requires a bargained-for exchange of value, ensuring both parties receive a benefit or incur a detriment.

Special Considerations and Modes of Acceptance

We touch on unique scenarios, such as options that make offers irrevocable, the enforceability of unilateral contracts once performance begins, and why most advertisements—like in the famous Leonard v. Pepsico case—don’t count as offers. We'll also explore the "Mailbox Rule," electronic acceptance methods, and the various ways acceptance can occur.

What Counts as Consideration?

Valid consideration includes money, promises, or actions, but preexisting duties and past consideration don't qualify. We'll also break down related concepts like implied contracts, quasi-contracts, and promissory estoppel—important tools courts use to ensure fairness and prevent unjust enrichment.

Mistakes, Misunderstandings, and Types of Contracts

What happens when the parties get it wrong? We'll examine how mistakes and misunderstandings, like those in the Peerless case, can impact contract validity. We'll also cover the differences between void, voidable, and unenforceable contracts.

Key Defenses and Remedies

Next, we look at defenses to contract formation, including duress, fraud, and the all-important Statute of Frauds. When a breach occurs, remedies like expectation damages, reliance damages, and restitution step in to ensure justice. 

Special Topics: UCC 2-207 and Public Policy

The "Battle of the Forms" under UCC 2-207 is a critical area for merchant contracts, and we'll break down the "Knockout Rule" that resolves conflicting terms. Additionally, we'll explore why courts refuse to enforce contracts that violate public policy or are unconscionable.

Final Thoughts and Exam Tips

We close with practical advice for tackling contract law issues, from formation to breach and remedies. Whether you’re analyzing a mistake, applying the UCC, or identifying unconscionability, these tips will help you stay on track.

This episode offers a comprehensive yet approachable review of contract law fundamentals, perfect for students preparing for exams or anyone looking to refresh their knowledge. Thanks for tuning in to today’s episode—see you next time!

 Introductory Music for American Law Cafe. In Jazz Short by moodmode / Vlad Krotov.