cases and assignments Flashcards
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- Name the seven steps to forming a contract and briefly explain each.
Offer: The act to presenting something for acceptance
Acceptance: communicating that we agree to the terms of an offer.
Consensus: General agreement, collective opinions. Parties to a contract must have reached a mutual agreement to commit themselves to a certain transaction. They are assumed to have negotiated the agreement.
Consideration: Must be a commitment by each party to do something or to abstain from doing something.
- Consideration is the price each is willing to pay to participate in the contract
- Consideration must be specific, but it need not be fair
- Courts will not review its adequacy
- A promise to do what you are already legally obligated to do in unenforceable
- Past consideration is no consideration
Capacity: The role in which one performs an act.
Legality: Nothing illegal.
Intention: The willingness to deliver the promises.
- Name three ways of interpreting contracts.
Express terms, The parole evidence rule and Implied Terms.
- How would a party to a contract go about terminating a contract?
By; Performance, Mutual Agreement, Frustration or Operation of Law
Explain consideration
Consideration must be a commitment by each party to do something or to abstain from doing something.
Consideration is the price each is willing to pay to participate in the contract
Consideration must be specific, but it need not be fair
Courts will not review its adequacy
A promise to do what you are already legally obligated to do in unenforceable
Past consideration is no consideration
- Explain the “Parole Evidence Rule” and explain the five subheadings.
The parole evidence rule is a rule preventing a party to a contract from later adding a term previously agreed upon by the parties but not included in the final written form of the contract
Dose the Document Contain the Whole Contract? Onus on party asserting that the written contract was not intended to contain the whole agreement.
Interpretation of the Contract: the parole evidence rule does not affect the interpretation of terms already in the contract.
Subsequent Oral Agreement: The parole evidence rule does not exclude evidence of an oral agreement that the parties may reach after they have entered into a written agreement. The subsequent oral agreement may change the terms of the written agreement or may even rescind the prior contract altogether.
Collateral Agreement: a separate agreement between the parties to a contract made at the same time as, but not included in, the written agreement.
Condition Precedent: any set of circumstances or events that the parties stipulate must be satisfied or must happen before their contract takes effect.–historical exception to parole evidence rule–Courts will admit evidence of an oral understanding about a condition precedent even when the written contract expressly states that the parties’ rights and duties are governed exclusively by the written terms.
- Name and briefly explain the different ways to discharge a contract.
Performance: All parties have performed their obligations in the contract and are then discharged.
Mutual Agreement: Parties in the contract agree to cancel said contract, they can also be cancelled, by agreeing to a new contract. Some contracts have foreseeable circumstances clauses.
Frustration: When the terms of a contract are impossible to complete.
Operation of Law: A contract may be discharged independently of the wishes of the parties, i.e., by operation of law. This includes discharge:
A) By death (in the case of contracts for personal service)
B) By insolvency (Bankruptcy)
C) By unauthorized alteration of the terms of a written agreement
D) By rights and liabilities becoming vested in the same person
- What is the difference between a breach of contract and a discharge of contract.
Breach of contract is where one party to a contract fails to abide by a contractual obligation. This occurs after the obligation to perform a certain act comes due.
Discharge is all parties have performed their obligations in the contract.
Explain in detail Privity of Contract
Remedies for Breach of Contract: Privity of Contract (must prove that there is a contractual relationship. Person who is not directly involved in the contract cannot take legal action)
Definition: privity of contract. (17c) the relationship between the parties to a contract, allowing them to sue each other but preventing a third party from doing so. ● the requirement of privity has been relaxed under modern laws and doctrines of implied warranty and strict liability, which allow a third-party beneficiary or other foreseeable user to sue the seller of a defective product. [Cases: Contracts 186; Sales 255.]
What are the grounds for challenging a contract and explain each
Fraud and misrepresentation are defenses to a contract. Misrepresentation is a false statement about a material fact relied on by a party to the contract. In the case of a misrepresentation, the injured party may rescind the contract. A misrepresentation is interpreted as an innocent misstatement of a fact whereas a fraud is a deliberate misstatement of a fact.
Mistake occurs where one or both parties to the contract believe a fact to be true when it is not true. If one party makes a mistake, the error is called a unilateral mistake. Generally, this type of mistake does not invalidate the contract. The law does not excuse negligence or inadvertence.
If both parties to a contract make a mistake, the error is called a bilateral mistake. This type of mistake generally voids the contract because there was no meeting of the minds or consent.
Lack of consideration is a defense to a contract. Consideration is what each side gives to the other in a contract. Consideration makes a contract different from a plain promise. For example, a promise to make a gift is ordinarily not enforceable as a contract.
The Statute of Frauds may be a defense to some kinds of contracts. The Statute of Frauds requires some contracts to be in writing.
Any illegal act can’t be in a contract
- How would a party to a bilateral contract go about discharging the contract.
- By mutual Agreement: Parties in the contract agree to cancel said contract
- Can also be cancelled by agreeing to a new contract
Explain “Caveat Emptor”
caveat emptor (emp-tor). [Latin “let the buyer beware”] A doctrine holding that purchasers buy at their own risk. ● Modern statutes and cases have greatly limited the importance of this doctrine. [Cases: Sales 41, 167, 269; Vendor and Purchaser 37.]
“Caveat emptor is the ordinary rule in contract. A vendor is under no duty to communicate the existence even of latent defects in his wares unless by act or implication he represents such defects not to exist.” William R. Anson, Principles of the Law of Contract 245 (Arthur L. Corbin ed., 3d Am. ed. 1919).
“This action of unfair competition is the embodiment in law of the rule of the playground — ‘Play fair!’ For generations the law has enforced justice. . . . The maxim caveat emptor is founded on justice; the more modern rule that compels the use of truth in selling goods is founded on fairness. It conflicts with the rule of caveat emptor.” Harry D. Nims, The Law of Unfair Competition and Trade-Marks 25 (1929).
How would a person start a claim when they find out that there has been a breach of the contract?
By filing a statement of claim.
