Delaware Law School 1L Study Guide for Contracts

Delaware Law School 1L Study Guide for Contracts

I. Introduction to Contract Law

Overview of a Contract:

  • Definition: A contract is an agreement creating obligations enforceable by law.
  • Essential elements: Offer, Acceptance, Consideration, Capacity, and Legal Purpose.
  • Types of Contracts: Bilateral vs. Unilateral; Express vs. Implied; Executed vs. Executory.

Sources of Contract Law:

  • Common Law: Governs most contracts, especially services.
  • Uniform Commercial Code (UCC): Primarily governs sales of goods, adopted in some form by all 50 states, including Delaware.
  • Restatement (Second) of Contracts: Although not binding, it’s frequently cited by courts for general principles of contract law.

II. Formation of Contracts


  • Definition: A promise to act or refrain from acting, which is made in exchange for a return promise.
  • Requirements: Intent to be bound, definiteness, and communication to the offeree.


  • Definition: An assent to the terms of the offer.
  • Mirror Image Rule (Common Law): Acceptance must be the exact terms of the offer.
  • UCC Section 2-207: A definite expression of acceptance or a written confirmation operates as an acceptance even if it states terms additional to or different from those offered.


  • Definition: Something of value exchanged for a promise.
  • Adequacy of consideration is generally not questioned so long as it is legally sufficient.
  • Past consideration is not sufficient for a current promise.
  • Delaware courts follow common law principles regarding consideration.


  • Definition: The legal ability to enter into a contract.
  • Certain groups may lack capacity, including minors, the intoxicated, and the mentally incapacitated.

Legal Purpose:

  • The objective of the contract must be lawful. Delaware courts, like others, will not enforce contracts for illegal activities.

III. Defenses to Formation


  • A contract is voidable if one party was forced into it by the wrongful act of another.

Undue Influence:

  • Unfair persuasion of a party who is under the domination of the person exercising the persuasion.

Misrepresentation and Fraud:

  • A contract may be voidable if it was entered into based on an innocent misrepresentation or fraud (intentional misrepresentation).


  • Mutual mistake allows a contract to be voided if both parties were mistaken about a basic assumption on which the contract was based.


  • Delaware courts may refuse to enforce a contract, or clause within a contract, that is found to be unconscionable at the time it was made.

IV. Contract Interpretation

Parol Evidence Rule:

  • Courts will not admit evidence of prior or contemporaneous negotiations or agreements that contradict, modify, or vary contractual terms if the written contract is intended to be a complete and final expression of the parties.

Integration Clause:

  • Delaware courts recognize an integration clause as evidence that the contract is intended to be complete and exclusive.

V. Performance and Breach


  • Complete Performance: Fulfillment of all contract terms.
  • Substantial Performance: Completion of nearly all terms, good faith effort to complete the rest, and no willful departure from the terms.

Breach of Contract:

  • Material Breach: Significant failure to perform that permits the other party to be discharged from their duties.
  • Anticipatory Breach: An unequivocal indication that the party will not perform when performance is due.

Remedies for Breach:

  • Expectation Damages: Puts the non-breaching party in the position they would have been if the contract had been performed.
  • Reliance Damages: Reimburse the non-breaching party for loss caused by reliance on the contract.
  • Specific Performance: Court order requiring the breaching party to perform the contract, usually in unique goods or property transactions.

VI. Third Party Issues

Assignment and Delegation:

  • Assignment: Transfer of rights under a contract.
  • Delegation: Transfer of duties under a contract.
  • Third parties can be beneficiaries, assignees, or delegates, but their rights are typically subject to the agreement between the original contracting parties.

Third-Party Beneficiary:

  • Someone who was not a party to the contract but stands to benefit from its execution.

VII. Contract Termination

Discharge by Agreement:

  • Mutual Rescission: Both parties agree to discharge each other from their obligations.

Discharge by Performance:

  • Tender of Performance: An offer by one party to perform their obligations.

Discharge by Impossibility or Impracticability:

  • The contract can be discharged if a party’s performance is made impossible or impracticable by factors not the fault of either party.

Statute of Limitations:

  • In Delaware, a breach of contract claim must be brought within three years of the breach.

VIII. Case Law

Sherwood v. Walker (IRAC Example)

  • Issue: Is a contract voidable when both parties are under a mistaken belief about a material fact at the time of agreement?
  • Rule: A mutual mistake about a material fact can render a contract voidable.
  • Application: In Sherwood v. Walker, the parties contracted for the sale of a cow believed by both to be barren. When the cow was later discovered to be fertile, the value changed significantly. The court held that the contract was voidable due to a mutual mistake regarding a material fact of the contract.
  • Conclusion: The contract was voidable, and the buyer was not obligated to proceed with the purchase.

Hammer v. Sidway (IRAC Example)

  • Issue: Is a promise to refrain from something legally sufficient consideration for a contract?
  • Rule: Forbearance of a legal right can serve as sufficient consideration.
  • Application: In Hammer v. Sidway, an uncle promised his nephew a sum of money if he refrained from drinking, using tobacco, and playing cards until the age of 21. The nephew did so, and the court held that the forbearance was sufficient consideration for the uncle’s promise.
  • Conclusion: The promise was enforceable, and the nephew was entitled to the money.

This study guide provides a general outline of contract law principles, but students should supplement this guide with detailed notes from class, case briefs, and specific Delaware statutes and cases. It’s important to review rules and exceptions and practice applying them through hypotheticals and past exams.

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