LEGL 2700 Chapter 8 Flashcards
what is a contract?
legally enforceable promise or exchange of promises
why do we perform under contracts?
to build a good reputation as well as for promise of compensation
what are the sources of contract law?
legislation and contract law
what is legislation?
contract for goods (Uniform Commercial Code)
what is common law?
all other contracts (judges decision)
what are the contract types?
bilateral v unilateral
express v implied
implied in law
executed v executory
what are bilateral contracts?
an agreement of mutual promises, both parties have a duty to perform when the contract is formed
what are unilateral contracts?
an agreement with one promise, only one party is obligated to perform
what happens it the party completing the actions does not sign any agreement but they complete the action within the contract for a unilateral contract?
the are owed what was in the contract for their services
what is an express contract?
the parties show their agreement in words, written or oral
what are implied in fact contracts?
arise from the conduct of the parties
what is an example of implied in fact?
if you order food, and you never said you would pay for it, but it is implied that once you eat the food you must then pay for it
what are implied in law/ quasi contracts?
judicial remedy to prevent party from receiving unjust enrichment.
when does the remedy apply in implied in law/ quasi contracts?
when no actual contract exists to cover the dispute
what are executed contracts?
the parties have performed all their promises
what are executory contracts?
the parties have not yet performed their promises
what are the terms of contracts?
valid
enforceable
unenforceable
void
voidable
what does valid mean?
all required elements are met
what does enforceable mean?
agreement will be held up in court
what does unenforceable mean?
a party has a justifiable reason for not performing
what does void mean?
agreement lacks an essential element
what does voidable mean?
at least one party can withdraw
what are the elements of an enforceable contract?
offer
acceptance
timing
consideration
capacity
what is an offer?
contains a specific promise and specific demand
what must the offerer intend to make to the offer?
the offer by making a commitment
the contractual terms must be what in order to make it enforceable?
specific and definite
what is the exception to requirement for definite terms (sale of goods)?
the parties may leave open a non-quantity terms to be determined later
what is under termination of an offer?
revocation
rejection
counteroffer
lapse of time
destruction of subject matter
offerors death of insanity
what is revocation?
the person that offers to buy the good/service off the other person decides to take back the offer before it was accepted
what is rejection?
terminates the buyers offer by the offer rejecting the offer
what is counteroffer?
new offer to sell or new offer to buy the good/service after the original offer
what is lapse of time?
if there is a designated amount of time for an offer and either person does not respond after this amount of time, it is void
what is destruction of subject matter?
if there is an offer on an object and then this object is destroyed
what is offerors death or insanity?
if the person make the offer dies or goes insane
when is a bilateral contract accepted?
when offeree has made the required promise
when is a unilateral contract accepted?
by performing requested act
what is the mirror image rule under acceptance?
acceptance must match the offer exactly to create a binding contract otherwise it is a counteroffer
what is the exceptions to the mirror image rule?
sale of goods, both parties are merchants and additional terms are treated as additions to the contract
what is timing?
when the offeree communicates the acceptance, that is when the acceptance is effective
when what is received timing is effective?
revocation
what happens when an offer is accepted under timing?
you can no longer revoke the acceptance
what is consideration ?
receipt of a legal benefit or the suffering of a legal detriment
what are examples of consideration?
promise to pay
promise to deliver goods or perform services
an agreement not to sue
a promise to keep an offer open
what is not consideration?
preexisting obligation
past consideration
promise to make a gift
what does preexisting obligation mean?
a contractor demanding more money for the same work
what does past consideration mean?
a company promises a retired employee a car
what does promise to make a gift mean?
a grandparent promises to give a grandchild a car on their bday
what are the exceptions to consideration ?
promissory estoppel
what is promissory estoppel?
a party who reasonably relies on gratuitous promise can ask a judge to award compensation for that reliance
when is promissory estoppel applicable?
when a party justifiably relies on a promise that is not supported by consideration
what is capacity?
a person’s ability to be legally bound by a contract
what are the general rules for capacity ?
minors cannot be bound and a contract is voidable at the minor’s option and
intoxicated and mentally incompetent persons cannot be bound and a contracts that they enter are voidable at their option
what is the exception to minors no being bound and it being voidable at the minor’s option?
contracts for necessaries
how does the court determine competence?
test: whether the adult was capable of understanding the nature and the purpose of the contract
what is legality ?
contracts that require commission of a crime or tor or violate accepted standards of behavior are void
what are the defenses to contract enforcement?
fraud or innocent misrepresentation
mistake
duress
undue influence
what is fraud?
a misrepresentation of fact with the intent to deceive that a party justifiably relies on and results in injury
what is the remedy for fraud?
the defrauded party has the option to void the contract and may enforce the contract and sue for damages (including punitive)
what is innocent misrepresentation?
a misrepresentation of fact without intent to deceive that a party justifiably relies on and results in injury
what is the remedy for innocent misrepresentation?
the injured party has the option to void the contract
what is a mutual mistake?
the parties reach an agreement based on an incorrect assumption of both parties
what is the remedy for mutual mistake?
rescission by either party
what is a unilateral mistake?
one of the parties to a contract is wrong about a material fact
what is the remedy for unilateral mistake?
usually none
what is duress?
action that compels another to do what he or she would not otherwise do
for duress the threat can be…
physical or economic
what is undue influence?
when one is take advantage of unfairly by a party who misuses a position of relationship or legal confidence
