Mississippi Law School 1L Study Guide for Contracts

I. Introduction to Contract Law

A. Definition of a Contract

A contract is a legally enforceable agreement between two or more parties that creates mutual obligations. The essentials of a contract include offer, acceptance, consideration, capacity, and legality.

B. Sources of Contract Law

• Common Law: Governs most contracts, particularly services.
• Uniform Commercial Code (UCC): Specifically Article 2, which governs the sale of goods.

C. Types of Contracts

• Bilateral vs. Unilateral
• Express vs. Implied
• Executed vs. Executory

II. Offer and Acceptance

A. Offer

The expression of a willingness to enter into a contract on certain terms.
– Objective Intent: Would a reasonable person conclude that an offer was made?
– Definiteness: The terms of the offer must be clear enough to provide a court with a basis for giving an appropriate remedy.
– Communication: The offer must be communicated to the offeree.

B. Acceptance

An expression of assent to the terms of an offer.
– Mirror Image Rule: Common law requires that the acceptance must exactly match the terms of the offer.
– Mailbox Rule: Acceptance is generally effective upon dispatch when the parties are communicating by mail.

C. Termination of Offer

• Revocation, rejection, counteroffer, lapse of time, death or insanity of the offeror or offeree, or destruction of the subject matter.

III. Consideration

A. Definition

Something of value given by both parties to a contract that induces them to enter into the agreement.
– Adequacy: Courts typically do not weigh the adequacy of consideration unless fraud, duress, or unconscionability is present.
– Preexisting Duty: Doing something one is already legally obligated to do is not valid consideration.

B. Promissory Estoppel

In some cases, a promise that the promisor should reasonably expect to induce action or forbearance on the part of the promisor and which does induce such action or forbearance is enforceable notwithstanding the absence of consideration.

IV. The Statute of Frauds

A. Overview

Certain types of contracts must be in writing to be enforceable.
– Contracts involving interests in land.
– Contracts that cannot be performed within one year.
– Promises to answer for the debt of another.
– Promises made in consideration of marriage.
– UCC contracts for the sale of goods over $500.

B. Mississippi Specific

Mississippi may have specific applications or exceptions to the Statute of Frauds, so students should review local statutes and case law.

V. Capacity and Legality

A. Capacity

The legal ability to enter into a contract.
– Minors, intoxicated persons, and mentally incapacitated individuals may lack capacity.

B. Legality

The subject matter of the contract must be legal at the time of execution.

VI. Contractual Defenses

A. Duress

When a party is forced into a contract through wrongful threats.

B. Undue Influence

Occurs when one party has taken advantage of their dominant position in a relationship to unduly persuade the other party.

C. Misrepresentation and Fraud

Contract is voidable if entered into based on an important false statement one party relied on.

D. Mistake

A mutual mistake may render a contract voidable if it goes to the heart of the bargain.

E. Unconscionability

An unfair contract that no reasonable person would agree to, and no fair person would offer.

VII. Performance and Breach

A. Complete Performance

Complete fulfillment of all contractual duties.

B. Substantial Performance

Completion of “nearly all” the terms, confers most of the benefits promised.

C. Material Breach

Failure to perform a contractual obligation that is so fundamental that it permits the other party to terminate the contract.

D. Anticipatory Repudiation

One party may treat a contract as breached if the other party indicates an intent not to perform.

VIII. Remedies

A. Damages

• Compensatory Damages: To cover the loss directly and necessarily incurred by the breach.
• Consequential Damages: Cover the loss not directly caused by the breach but were foreseeable.
• Liquidated Damages: Specific amount agreed to be paid in case of breach.
• Punitive Damages: Rarely awarded in contract cases, meant to punish the breaching party.

B. Equitable Remedies

• Specific Performance: Court orders the breaching party to perform the contract.
• Rescission: Cancellation of the contract.
• Reformation: Court rewrites the contract’s terms to reflect the parties’ actual intentions.

C. Mitigation of Damages

The non-breaching party has a duty to mitigate damages by taking reasonable steps to reduce the loss resulting from the breach.

IX. Case Law

A. Case Review Using IRAC Format

Lucy v. Zehmer (1954)

• Issue: Was the contract for the sale of the farm entered into seriously despite the defendants’ claim it was a jest?
• Rule: A contract is judged by the outward expression of a person as manifesting his intention rather than by his secret and unexpressed intention.
• Application: Zehmer’s actions and words indicated a serious intention to sell the farm.
• Conclusion: The contract was enforceable because Zehmer’s outward expressions showed intent to enter into a contract.

Hamer v. Sidway (1891)

• Issue: Is a promise to refrain from drinking, using tobacco, and playing cards until the age of 21 good consideration?
• Rule: Forbearance of a legal right at the request of another party is sufficient consideration for a promise.
• Application: The nephew’s forbearance was at the uncle’s request and thus valid consideration.
• Conclusion: The nephew’s forbearance constituted consideration, making the uncle’s promise enforceable.

Raffles v. Wichelhaus (1864)

• Issue: Does a mutual mistake about the subject matter of the contract (the ship’s name) prevent the formation of an enforceable contract?
• Rule: A contract cannot be enforced if there is a mutual mistake regarding a material fact at the time of agreement.
• Application: Both parties had a different ship in mind, thus no meeting of the minds.
• Conclusion: No contract was formed due to a mutual mistake about which ship was being referred to.

X. Conclusion

This study guide covers the fundamental principles in contract law that a 1L student at a Mississippi law school should understand in preparation for a final semester exam. Mississippi-specific laws were noted where relevant, but students should also review the Mississippi Code, local jurisprudence, and class materials for specific details and any recent changes in the law.