South Dakota Law School 1L Study Guide for Contracts
- Offer and Acceptance
Offer and acceptance form the basis of a contract. In order for a contract to be formed, there must be a clear offer and an unqualified acceptance of that offer.
Case: Lucy v. Zehmer (1954). This case illustrates the objective theory of contracts and that a party’s secret, subjective intent is irrelevant if their actions would lead a reasonable person to believe a contract was intended.
- Consideration
Consideration is the legal value in a contract. Each party must give and receive some kind of value (which can be a promise) for a contract to be enforceable.
Case: Hamer v. Sidway (1891). This case established the principle that a promise to refrain from a legal activity can be a valid consideration.
- Capacity
The parties must have the legal ability to enter into a contract. Capacity refers to the competency of the parties to enter a contract.
Case: Hawkins v. McGee (1929). This case established that a person must have the mental capacity to understand the terms and conditions of the contract, and the consequences of entering into it.
- Mutual Assent
Mutual assent, also known as a meeting of the minds, is achieved when the parties involved agree to the terms of a contract.
Case: Raffles v. Wichelhaus (1864). This case addressed the issue of mutual mistake and whether or not it negates mutual assent.
- Legality
The subject matter of the contract must be legal. An agreement to perform an illegal act is not a valid contract.
Case: Bovard v. American Horse Enterprises (1988). This case established that a contract for illegal activity is not enforceable in court.
- Implied Contracts
An implied contract is a contract that is not written or spoken, but is created by the actions of the parties involved.
Case: Vokes v. Arthur Murray (1968). This case demonstrated that an implied contract can still be binding.
- Defenses to Enforcement
Certain defenses may prevent a contract from being enforced, such as fraud, duress, undue influence, or unconscionability.
Case: Williams v. Walker-Thomas Furniture (1965). This case highlighted the concept of unconscionability as a defense against contract enforcement.
- Discharge of Contracts
A contract can be discharged or ended due to various reasons including performance, agreement, impossibility, or breach.
Case: Taylor v. Caldwell (1863). This case established the principle of impossibility as a valid reason for discharging a contract.
- Remedies
A party who has suffered a loss due to a breach of contract may be entitled to certain remedies, such as damages, specific performance, or restitution.
Case: Hadley v. Baxendale (1854). This case set the standard for foreseeability in contract damages.
- Third Party Rights
Third parties may have rights or obligations under a contract, depending on the terms of the contract.
Case: Lawrence v. Fox (1859). This case established the principle of third-party beneficiary rights.
Studying these topics, along with the relevant case law and principles, will provide a solid foundation for understanding contract law as it is taught in South Dakota’s law schools.