Memory tricks for offer, acceptance, consideration & breach
Contracts are the backbone of commerce and daily life. From the six elements of a valid contract to the defenses that void one, to remedies for breach — these memory tricks give you a fast, reliable framework for every contract law question on your exam.
Every enforceable contract requires all six elements. Miss one and you may have no contract at all. COLACC: Consideration (something of value exchanged) · Offer · Legality (lawful purpose) · Acceptance · Capacity · Consent (genuine, no duress or fraud).
Consideration
Each party must give something of legal value — a promise, act, or forbearance. Past consideration is not valid consideration.
Offer
Definite proposal showing intent to be bound. Must have definite terms: parties, subject matter, price, quantity.
Legality
Contract must be for a lawful purpose. Contracts for illegal acts (drug deals, bribery) are void and unenforceable.
Acceptance
Mirror image rule (common law): acceptance must match offer exactly. UCC is more flexible for merchants.
Capacity
Parties must be of legal age (18+) and sound mind. Minors may disaffirm contracts; mental incapacity voids them.
Consent
Genuine assent — no fraud, misrepresentation, duress, undue influence, or mutual mistake vitiating agreement.
Offer & Acceptance
MAIL = VALID on dispatch
Mailbox Rule — acceptance effective when sent, not received
The Mailbox Rule — When Is a Contract Formed?
Under the mailbox rule, acceptance is effective the moment it is sent — not when the offeror receives it. So if you mail acceptance Monday and the offeror mails a revocation Tuesday, you have a contract. Applies to acceptance only — not revocations or rejections.
Acceptance
Effective on dispatch (mailbox rule). Must use a reasonable medium of communication.
Revocation
Effective on receipt — offeror can revoke any time before acceptance is dispatched.
Rejection
Effective on receipt. If offeree rejects then tries to accept, the later acceptance is a counter-offer.
Exception
If offer specifies receipt as required, mailbox rule is overridden. Also does not apply to option contracts.
Consideration
PBFL
Past · Bargained-for · Forbearance · Legal value
What Counts as Consideration?
Consideration must be bargained-for and have legal value — a promise, an act, or forbearance (refraining from a legal right). PBFL reminds you what counts and what doesn't: Past consideration (already done) and moral obligation are NOT valid consideration.
Bargained-for
The consideration must be sought by the promisor in exchange for their promise — not a gift or past act.
Forbearance
Giving up a legal right counts as consideration. Hamer v. Sidway — nephew's forbearance from legal activities was valid.
Past consideration
Acts already performed before the promise was made are NOT consideration — e.g., "I'll pay you for saving me last week."
Adequacy
Courts generally don't inquire into adequacy — $1 for a car is valid consideration if genuinely bargained-for (peppercorn theory).
FUDMI covers the main defenses that knock out a contract. Fraud, duress, and undue influence make a contract voidable by the injured party. Mutual mistake and illegality can make a contract void from the start — as if it never existed.
Fraud
Intentional misrepresentation of a material fact, known to be false, relied upon to one's detriment. Voidable.
Undue influence
Improper pressure that overcomes free will — usually in confidential relationships (caregiver/elder). Voidable.
Duress
Threat of harm compelling agreement. Physical or economic duress both work. Voidable by the victim.
Mistake
Mutual mistake (both parties wrong about material fact) → void. Unilateral mistake → generally not a defense.
Illegality
Contracts for illegal purposes are void ab initio — courts leave parties where they found them; no enforcement.
Statute of Frauds
MY LEGS
Marriage · Year (over 1) · Land · Executor · Goods ($500+) · Surety
Contracts That Must Be in Writing
MY LEGS lists the six categories of contracts that the Statute of Frauds requires to be in writing to be enforceable. Oral contracts in these categories are unenforceable — though partial performance, estoppel, and admissions are exceptions.
Marriage
Contracts made in consideration of marriage (prenuptial agreements) must be in writing.
Year
Contracts that cannot be performed within one year from formation must be written.
Land
Any contract for the sale or transfer of real property (land, buildings) requires a writing.
Executor
Promise by an executor to pay estate debts from personal funds must be in writing.
Goods $500+
UCC §2-201: sale of goods for $500 or more requires a written contract (now $500+ under most state versions).
Surety
Promise to pay another's debt ("if they don't pay, I will") must be in writing. Main purpose exception applies.
Breach & Remedies
CEPS
Compensatory · Expectation · Punitive (not available) · Specific performance
Remedies for Breach of Contract
When a contract is breached, the goal is to put the non-breaching party in the position they would have been in had the contract been performed. CEPS: Compensatory damages · Expectation damages · Punitive damages are NOT available in contract (only tort) · Specific performance for unique goods/land.
Expectation damages
The default — put plaintiff in position as if contract performed. Includes direct loss + consequential damages (if foreseeable).
Reliance damages
Reimburse expenses incurred in reliance on the contract. Used when expectation damages can't be calculated.
Restitution
Prevent unjust enrichment — return benefit conferred on breaching party. Can exceed contract price.
Specific performance
Equitable remedy ordering contract performance. Only when money damages are inadequate — real estate, unique goods, art.
Duty to mitigate
Non-breaching party must take reasonable steps to reduce losses. Failure to mitigate reduces recoverable damages.
UCC vs. Common Law
GOODS = UCC · SERVICES = Common Law
Uniform Commercial Code governs sale of goods · Common law governs everything else
Which Law Governs Your Contract?
The threshold question in every contract problem: is this a sale of goods (UCC Article 2) or a services/real estate contract (common law)? Mixed contracts use the predominant purpose test. UCC is more flexible — merchants get stricter rules, firm offers are binding without consideration.
UCC applies
Sale of movable goods — cars, phones, furniture, crops. UCC Article 2 governs formation, performance, breach, and remedies.
Common law applies
Services, real estate, employment, insurance contracts. Classical contract rules: mirror image, consideration required for modification.
Key UCC differences
Battle of the forms (§2-207) · Firm offer (§2-205, no consideration needed) · Gap fillers for open terms · Perfect tender rule.
Merchant rules
UCC applies stricter rules to merchants (those who deal in goods of the kind) — written confirmation rule, implied warranty of merchantability.
Contracts don't always end in breach — FIMP covers lawful ways duties are discharged. Frustration of purpose and impossibility excuse performance when circumstances change dramatically. Mutual rescission cancels by agreement. Full performance is the most common — and best — ending.
Frustration
Purpose is destroyed by an unforeseen event — e.g., renting a room for a parade that gets cancelled (Krell v. Henry). Not mere hardship.
Impossibility
Performance becomes objectively impossible — death of a party in personal services contracts, destruction of subject matter.
Impracticability
UCC/modern common law: extreme and unforeseen difficulty excuses performance even if not strictly impossible.
Mutual rescission
Both parties agree to cancel — each gives up remaining rights. Must be executory (unperformed) on both sides to have consideration.
Third Parties
ABD
Assignment · Beneficiary · Delegation
Third-Party Rights in Contracts
Contracts can affect people outside the original agreement. ABD: Assignment transfers contractual rights to a third party · Beneficiary (intended) can enforce a contract made for their benefit · Delegation transfers duties, but the original party remains liable unless there's a novation.
Assignment
Transfers rights (not duties) to an assignee. Assignee steps into assignor's shoes. Generally allowed unless contract prohibits it or materially changes the obligor's duty.
Third-party beneficiary
Intended beneficiary (named or clearly intended) can sue to enforce. Incidental beneficiaries get no rights.
Delegation
Transfers duties to a delegate. Delegating party remains liable unless obligee accepts novation (substituting new party).
Novation
All three parties agree to substitute a new party for an original — fully releases the original party from liability.