Chapter 10 Flashcards
Contract
a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law inn some way recognizes as a duty.
Objective Theory of Contracts
A theory under which the intent to form a contract will be judged by outward, objective facts as interpreted by a reasonable person, rather than by the parties’ own subjective intentions.
Statute of Frauds
A state statute under which certain types of contracts must be in writing to be enforceable.
Bilateral
Promise for a promise
Unilateral
Promise for an act
Express Contract
The terms of the agreement are fully and explicitly stated in words, oral, or written.
Implied Contract
Parties create and defines the terms of the contract and can arise from: 1. The plantiff furnished some service or property 2. the plantiff expected to be paid for that service or property, and the defendant knew or shown have known that payment was expected. 3. The defendant had a chance to reject the service or property and did not/
Executed
Both parties have fully performed their sides of the Contract.
Executory
Only one party has fully performed their duties in the K, but the other has not.
Valid
Contracts that have the necessary elements to entitle at least one of the parties to enforce it in court. Meets: Agreement, Consideration, Capacity, and Legality
Unenforceable
A contract that cannot be enforced because of certain legal defenses against it. EX- K is illegal.
Void
Contract is not a contract at all. None of the parties have any legal obligations if a K is void.
Agreement
Parties must agree on the terms of the contract and manifest to each other their mutual assent(agreement) to the same bargain. Evidenced by two events: an offer and an acceptance.
Offer
A promise or commitment to do or refrain from doing some specified action in the future. Three elements necessary: 1. The offereor must have a serious intention to become bound by the offer. 2. the terms of the offer must be reasonable certain, or definite, so that the parties and the court can ascertain the terms of the contract 3. the offer must be communicated to the offeree
Revocation
The withdrawal of a contract offer by the offeror. Unless an offer is irrevocable, it can be revoked at any time prior to acceptance without liability.
Option Contract
A contract under which the offeror cannot revoke the offer for a stipulated time period because the offeree has given consideration for the offer to remain open.
Counteroffer
Rejection of the original offer and the stimultaneous making of a new offer.
Mirror Image Rule
A common law rule that requires the terms of the offeree’s acceptance to exactly match the terms of the offeror’s offer for a valid K to be formed.
Termination by Operation of Law
Can be terminated through the occurance of any of these events: 1. Lapse of time 2. destruction of the specific subject matter of the offer 3. death or incompetence of the offeror or offeree 4. supervening illegality of the proposed contract
Acceptance
A voluntary act by the offeree that shows consent to the terms of the offer. Must be unequivocal and communicated to the offeror.
Mailbox Rule (Deposited Acceptance Rule)
If the authorized mode of communication is the mail, then an acceptance becomes valid when it is posted, properly addressed, and stamped.
Consideration
Usually defined at the value (such as cash) given in return for a promise (bilateral K) or in return for a performance (in a unilateral K). MUST be BARGAINED for. - Cannot be past consideration -exception- Promissory Estoppel -act or forbearance or promise or giving up a legal right.
Legally sufficient Consideration Must consist of:
- A promise to do something that one has no prior legal duty to do 2. the performance of an action that one is otherwise not obligated to undertake. 3. The refraining from an action that one has a legal right to undertake (Forbearance)
Promissory Estoppel
The legal priniciple that a promise is enforceable by law.
Rescission
A remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made.
Past Consideration
Something given or some act done in the past, which cannot oridinarily be considered for a later bargain.
Capacity
The legal ability to enter into Contracts. The threshold mental capacity required by law for a party who enters into a contract to be bound by that K. Trouble with: - Minors - Temporarily Insanity/ Insanity - Extreme Intoxication
Minors
Can enter a contract, but can also void it once they turn 18 if they choose to. - important to get a parent to co-sign a contract with a minor.
Disaffirmance
The legal avoidance, or setting aside, of a contractual obligation
Intoxication
Condition in which a persons’ normal capcity to act or think is inhibited by alcohol or other drugs.
Statute of Limitations
Law that sets a time limit within each legal proceedings that can be initated after an event occurs. Ex- in NC SoL for Assault is 2 year, meaning you have two years after the date of the assault to bring action to your assaulter.
Legality
For a K to be valid and enforceable, it must be formed for a legal purpose.
Contracts Contrary to Statute
Contracts to Commit a Crime Usury- charging and illegal rate of interest Gamling Licensing Statutes
Contracts Contary to Public Policy
Although K involve private parties, some are not enforceable because of the negative impact they would have on society. Restraint of Trade: Covenant not to Compete- refrain from competing with another party for a certain period of time and within a certain geographic area. Enforcement Problems
Reformation
A court-ordered correction of a written K so that it reflects the true intentions of the parties
Exculpatory Clause
A clause that releases a contractual party from liability in the event of monetary or physical injury, not matter who is at fault. (Apart of Legality- Enforcement Problems)
E-Contract
A contract that is formed electronically- also may be for the purpose of licensing.
Shrink-Wrap Agreements
an agreement whose terms are expressed in a document located inside a box in which goods (usually software) are packaged.
Click-On Agreements
An agreement that arises when an online buyer clicks “I agree” or otherwise indicates assent to be bound by the terms of the offer.
E-Signature
an electronic sound, symbol, or process attatched to or logically assiciated with a record and executed or adopted by a person with the intent to sign the record.
E-SIGN Act
The Electronics Signature in Global and National Commerce Act provides that no contract, record, or signature may be “denied legal effect” soley because it is in an electronic form.
Firm Offer
An offer (by a merchant) that is irrevocable without consideration for a period of time (no longer than 3 months). A firm offer by a merchant must be in writing and must be signed by the offeror. Ex- Rein Check- sign writing with sale price for offer.
CIGS
Contracts for International Sales of Goods - settles disputes between parties
Merchant
A person or company involved in trade often.
Non-Merchant
Someone who does not sell items as their job. Ex- someone selling a bike at a yard sale.
