Nevada Law School 1L Study Guide for Contracts
I. Introduction to Contract Law
A contract is a legally enforceable agreement between two or more parties. It can be written or oral. The basic elements required for the formation of a legally binding contract are an offer, acceptance, consideration, mutual assent, and legal purpose.
II. Offer
An offer is a promise to act or refrain from acting, which is made in exchange for a return promise. For an offer to be valid, it must be communicated to the offeree, manifest an intent to be bound by the offer, and be sufficiently definite.
- Restatement (Second) of Contracts § 24
- Lucy v. Zehmer, 196 Va. 493 (1954): In this case, the court held that an agreement to sell land that was made in a seemingly jovial and drunken setting was enforceable because the objective outward expression of intent to contract was present, even if one party had a subjective intent not to agree.
III. Acceptance
Acceptance is the manifestation of assent to the terms of the offer in the manner invited or required by the offer. It must be unequivocal and communicated to the offeror.
- Restatement (Second) of Contracts § 50
- Carlill v. Carbolic Smoke Ball Co., [1893] 1 QB 256: This case addressed the issue of whether an advertisement could be considered an offer and whether buying the product and using it as directed constituted acceptance of that offer. The court held that it could be an offer if it showed a clear intention to be bound.
IV. Consideration
Consideration is something of value exchanged between the parties. It can be a benefit to the promisor or a detriment to the promisee.
- Restatement (Second) of Contracts § 71
- Hamer v. Sidway, 124 N.Y. 538 (1891): In this landmark case, the court found that foregoing a legal right (in this case, the right to drink and gamble) constituted sufficient consideration for a promise to pay money.
V. Mutuality of Obligation
Both parties must be bound to perform their promises, or the law will not enforce the agreement.
- Restatement (Second) of Contracts § 79
VI. Legal Purpose
A contract must have a lawful purpose to be enforceable.
VII. Defenses to Contract Formation
Certain defenses can prevent the formation of a contract or make an otherwise valid contract unenforceable. These include incapacity, duress, undue influence, misrepresentation, and mistake.
- Restatement (Second) of Contracts §§ 14, 15, 16, 164, 175
VIII. Statute of Frauds
The Statute of Frauds requires certain types of contracts to be in writing to be enforceable. These typically include contracts for the sale of land, contracts that cannot be performed within one year, and contracts for the sale of goods over a certain amount per the Uniform Commercial Code (UCC).
- Nev. Rev. Stat. § 111.205 (for land transactions)
- Nev. Rev. Stat. § 104.2201 (UCC for goods)
IX. Performance and Breach
Performance is the fulfillment of a contractual duty. When a party fails to perform, it may constitute a breach. The types of breach include minor breach and material breach, which determines the remedies available.
- Restatement (Second) of Contracts §§ 235, 237, 241
X. Remedies
The primary remedies for breach of contract are damages, specific performance, and rescission.
- Restatement (Second) of Contracts §§ 346, 359, 373
- Hawkins v. McGee, 84 N.H. 114 (1929): In this “hairy hand” case, the court awarded damages based on the expectation interest of the plaintiff, which was the difference between the value of a good hand (as promised) and the actual result of the surgery.
XI. Third Party Rights
Third parties can acquire rights in contracts through being named as third-party beneficiaries, or their rights can be affected through assignment and delegation.
- Restatement (Second) of Contracts §§ 302, 317, 322
XII. Parol Evidence Rule
The Parol Evidence Rule prohibits the introduction of evidence of prior or contemporaneous negotiations and agreements that contradict, modify, or vary contractual terms if the written contract is intended as a complete and final expression of the parties’ agreement.
- Nev. Rev. Stat. § 133.030
XIII. UCC Article 2
UCC Article 2 governs contracts for the sale of goods and introduces concepts such as the battle of the forms, warranties, and risk of loss rules which may not align with common law principles.
- Nev. Rev. Stat. § 104.2101 et seq.
XIV. Nevada-Specific Considerations
- In Nevada, certain gaming debts and casino markers are enforceable as contracts under specific circumstances (Nev. Rev. Stat. §§ 463.361, 205.130).
- Nevada also recognizes the enforceability of certain agreements limiting the right to sue for malpractice, provided they comply with statutory requirements (Nev. Rev. Stat. § 41A.045).
When studying for a Nevada law school contracts exam, it is crucial to understand both the common law principles and the specific statutes and applications relevant to Nevada law. Always consult the latest legal texts and statutes as laws may have changed after the knowledge cutoff date.