Law for Fleet Professionals Flashcards
What are the three types of contracts classified by formation?
Express contracts – formed by language, oral or written
Implied contracts – formed by conduct
Quasi Contracts – not actual contracts. Intent to avoid unjust enrichment
What are the two types of contracts classified by acceptance?
Bilateral contracts – traditional form of contract and involve an exchange of mutual promises
Unilateral contracts – involves a promise/offer by one party and a performance by the other party. Completion of the performance concludes the contract.
What is a unilateral contract?
Unilateral contracts – involves a promise/offer by one party and a performance by the other party. Completion of the performance concludes the contract.
What are void, voidable, and unenforceable contracts?
Void contracts – totally without legal effect from the outset
Voidable contracts – one or both parties may elect to avoid the contract (contract for minors etc.)
Unenforceable contracts – otherwise valid contract that is not enforceable due to various defenses (statute of limitations, statute of frauds)
What is mutual assent?
Negotiation between two parties with one party making a proposal (offer) and the second party agreeing to it (acceptance)
Contract formation requires three elements, explain these elements.
Offer – creates power of acceptance in the offeree and corresponding liability on the part of the offeror
Acceptance – agreement by the offeree to the offer terms. Acceptance must be communicated to the offeror
Consideration – what separates a contract from being a gift or other unenforceable agreement. There must be a bargained for exchange between the parties. There must be legal value to what is bargained for.
What three questions will a Court use to judge whether an offer was made?
- Was there a promise or commitment to enter into a contract?
- Was there certainty and definiteness to the essential terms? Offer must be definite and include enough essential terms that allow the contract to be enforced.
- Was there communication to the offeree? Offeree must have the ability to accept the offer
How can an offer be terminated?
Offeror may terminate the offer by communicating renovation of the offer prior to its acceptance. Offeror cannot terminate the offer if the offeree has detrimentally relied on the offer.
How can an offeree accept a contract?
Acceptance must be communicated to the offeror
What are the two elements of consideration?
There must be a bargained for exchange between the parties. There must be legal value to what is bargained for.
What is promissory estoppel?
Acts as a substitute for the requirement to have legal consideration. It holds that a promise is enforceable to the extent necessary to prevent injustice.
What are 4 categories of reasons that prevent contracts from being formed?
- Absence of mutual assent – parties are mistaken about facts relating to the agreement
- Absence of consideration
- Public policy considerations
- Lack of capacity
What is the statute of frauds?
Certain agreements by statute must be in writing. Non compliance with the statute of frauds renders the contract unenforceable at the option of the party to be charged.
What is unconscionability?
Refers to contracts that contain terms that are especially onerous for one party.
What is misrepresentation?
A false statement of fact made by one party to another with the intent to induce the other party to enter into a contract. Can be expressed in words or by conduct.
What is fraud in fact and fraud in the inducement?
Fraud in fact - A legal defense to contract formation where the misrepresentation causes one to enter into a transaction without realizing the risks.
Fraud in the inducement – equitable defense where both parties know they are entering into a contract but one party materially misrepresents a material fact that the other party is fraudulently led to believe is true in order to induce that party to enter a contract.
Can a contract be put aside due to mistake by one party?
No, certain specific cases where mistake is a justification to alter or void a contract. If one or more parties to a contract are mistaken about a material term or condition, the contract may be invalidated by the courts as there was not a meeting of the minds.
What three questions do courts ask in order to determine if a party is a third party beneficiary?
What contracts cannot be assigned?
- Personal services contracts where the service being contracted is unique
- Requirements and output contracts
- The promisors risk would be substantially altered by the assignment
- Assignments prohibited by law
- When the contract contains an express provision barring assignment
Describe when contractual duties cannot be assigned to a third party?
- Duties involving personal judgement and skill
- Special trust in delegator
- If delegation would materially change the obligee’s expectations
- If the contract expressly restricts delegation. Delegations may be oral or written
What are the common rules of contract construction?
- The contract is construed as a whole
- Courts will construe words according to their ordinary meaning
- Custom and usage in particular business will be applied
- Ambiguities will be construed against preparer
What is the Parole evidence rule?
- No other prior or contemporaneous agreements or expressions will be permitted to modify the language of the written contract
- Vendor verbally offers to include an extra product but the product is faulty and affects the other services. Offeree is unable to remedy because the product isn’t in the contract.
What is the difference between a condition and a promise?
Condition: an event that will create, limit or extinguish the duty of a contracting party to perform. Classified according to the time occurrence – conditions precedent, conditions concurrent and conditions subsequent
Promise: a commitment to do or refrain from doing something
Differentiate between conditions precedent, concurrent and subsequent.
Conditions precedent – must occur before an absolute duty of immediate performance arises
Conditions concurrent – those that occur at the same time and if both do not occur, there is no contract and no breach of contract.
Conditions subsequent – one that occurs after an existing duty of performance becomes absolute which then terminates that duty.
How can a contract be discharged?
The most common method of discharge is performance. Can also occur by condition subsequent. May also be discharged by rescission.
What is a minor contract breach?
The breach does not substantially affect the promisee’s benefit of the bargain.
What is a material contract breach?
The promisee does not receive the substantial benefit of the bargain as a result of the failure of the promisor to perform the terms of the contract.
What is a force majeure clause?
Contract cannot be completed due to an act of god.
What is a tort?
A Tort is a civil wrong. Tort law includes negligence, intentional torts, defamation, strict liability, products liability and nuisance.
What is negligence?
Most common tort.
What four elements must a plaintiff prove to prove negligence?
- Existence of a duty on the defendant to conform to a standard of conduct. For the protection of the plaintiff against an unreasonable risk.
What is a duty of care?
When a person engages in an activity, that person is under a legal duty to act as an ordinary, prudent, reasonable person would act.
What is a breach of duty?
To prove breach of duty, two elements are required: (1) it must be shown what in fact happened; and (2) it must be shown from these facts that the defendant acted unreasonably.
What is the difference between Actual Cause and Proximate Cause?
Actual cause – an act or omission is the cause in fact of the injury or several causes join to cause the injury
Proximate Cause – legal cause of the injury. The defendant will be liable for all injury resulting from the normal incidents within the increased risk created by the defendants acts.
