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.
Offer & Acceptance
MAIL = VALID on dispatch (Mailbox Rule — acceptance by mail effective when posted, not when received)
Mailbox Rule — acceptance effective when sent, not received
Mailbox Rule — acceptance effective when sent, not received
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.
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."
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.
Statute of Frauds
MY LEGS (M=Marriage, Y=Year, L=Land, E=Executor, G=Goods over $500, S=Surety) — Statute of Frauds categories requiring written contracts
Marriage · Year (over 1) · Land · Executor · Goods ($500+) · Surety
Marriage · Year (over 1) · Land · Executor · Goods ($500+) · Surety
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.
Compensatory · Expectation · Punitive (not available) · Specific performance
Compensatory · Expectation · Punitive (not available) · Specific performance
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.
UCC vs. Common Law
GOODS = UCC (Uniform Commercial Code) · SERVICES = Common Law
Uniform Commercial Code governs sale of goods · Common law governs everything else
Uniform Commercial Code governs sale of goods · Common law governs everything else
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.
Discharge
FIMP (F=Frustration of purpose, I=Impossibility, M=Material breach, P=Performance) — ways a contract can be discharged
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.
Third Parties
ABD (A=Assignment of rights, B=Beneficiary third parties, D=Delegation of duties) — third party contract rights
Assignment · Beneficiary · Delegation
Assignment · Beneficiary · Delegation
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).
🎓 Common Exam Questions
Q: What does COLACC stand for and what are the six elements of a valid contract?
A: COLACC (Capacity, Offer, Legality, Acceptance, Consideration, Consent): Capacity: parties must have legal capacity — adults (18+), not adjudicated mentally incompetent, not so intoxicated they cannot understand. Minors' contracts are voidable (minor can disaffirm); necessities exception. Offer: a definite proposal with intent to be bound. Must have definite terms (common law requires definite price, parties, subject matter, quantity, time). Acceptance: at common law, must be mirror image of offer — any variation is a rejection and counteroffer. Under UCC, a definite expression of acceptance operates as acceptance even with additional terms (Battle of the Forms under UCC 2-207). Legality: illegal contracts (contracts for criminal activity, against public policy) are void. Consideration: a bargained-for exchange of something of legal value — a promise for a promise, act, or forbearance. Past consideration and pre-existing duty are NOT sufficient. Consent: absence of fraud, misrepresentation, duress, or undue influence.
Q: What does MY LEGS stand for and what happens if a Statute of Frauds contract is oral?
A: MY LEGS (Marriage, Year, Land, Executor, Goods over $500, Surety): if a contract falls within these categories and is not in writing, it is generally unenforceable — but not void. The non-breaching party cannot recover damages or enforce the contract. However, exceptions prevent injustice: part performance (for land contracts — if buyer paid, took possession, and made improvements, equity may enforce the oral contract). Promissory estoppel (detrimental reliance may overcome the Statute of Frauds in some jurisdictions). Merchant confirmatory memo rule (UCC): between merchants, if one sends a written confirmation within a reasonable time and the other does not object within 10 days, the non-signing merchant is bound. Main purpose rule (surety exception): if the surety's primary purpose is their own benefit, the promise need not be in writing. Quantity is the key term under UCC — must be stated in writing.
Q: What are the contract defenses (FUDMI) and which make a contract void vs. voidable?
A: FUDMI (Fraud, Undue influence, Duress, Mistake, Incapacity): Fraud: intentional misrepresentation of material fact, known to be false, made to induce reliance, with justifiable reliance and resulting damages. Makes contract voidable by the defrauded party. Fraudulent misrepresentation = void. Undue influence: improper persuasion by a person in a position of trust that overcomes the free will of another. Makes contract voidable. Duress: improper threat that leaves no reasonable alternative but to agree. Physical duress = void. Economic duress = voidable. Mistake: bilateral (mutual) mistake about a basic assumption on which the contract was made = voidable. Unilateral mistake generally not a defense (unless non-mistaken party knew). Incapacity: minors' contracts are voidable (minor can disaffirm up to and shortly after reaching majority). Contracts with mentally incapacitated persons are voidable or void depending on adjudication. Void contracts have no legal effect from the start; voidable contracts can be ratified or disaffirmed.
Q: What is the UCC vs. Common Law distinction (GOODS vs. SERVICES) and when does it matter?
A: GOODS = UCC (Uniform Commercial Code), SERVICES = Common Law: the threshold question in every contracts problem. Goods: tangible, movable personal property. UCC governs all aspects. Services: common law applies. Mixed contracts: predominant purpose test — if the dominant purpose is goods, UCC applies (even if services are included, like a software installation contract dominated by the software). Key differences: Offer and acceptance: UCC allows gap-filling and accepts additional terms in acceptance; common law requires mirror image. Consideration: UCC requires good faith modification, no consideration needed; common law requires consideration for contract modification. Statute of Frauds: UCC requires writing for goods $500+; common law for year, land, suretyship, marriage, executor. Warranties: UCC implies warranties of merchantability (goods fit for ordinary purpose) and fitness for particular purpose; common law requires express warranties. Remedies: UCC provides specific remedies for buyers and sellers (cover, resale, market price damages).
Q: Explain promissory estoppel — when can a promise be enforced without consideration?
A: Promissory estoppel (detrimental reliance): an equitable doctrine that enforces a promise even without consideration when: (1) a promisor makes a clear and definite promise, (2) the promisor should reasonably expect the promisee to rely on the promise, (3) the promisee actually and detrimentally relies on the promise, (4) injustice can only be avoided by enforcement. Classic example: employer promises employee a pension, employee retires in reliance, employer breaks the promise — promissory estoppel may enforce the promise. Damages under promissory estoppel: may be limited to reliance interest (out-of-pocket costs in reliance) rather than full expectation interest (what the promisee would have gained from full performance). Promissory estoppel is not a contract — it is a quasi-contractual remedy to prevent unjust enrichment or injustice. Also used to overcome the Statute of Frauds in some jurisdictions where a party detrimentally relies on an oral promise within MY LEGS.