lesson 2: intention, certainty, and privity Flashcards

1
Q

5 contract essentials

A

consensus, consideration, intent , legality, capacity

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2
Q

consensus is

A

offer + acceptance
and objectively

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3
Q

consideration

A

each party must receive something of value

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4
Q

intent

A

Parties must intend to create a legally binding contract

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5
Q

legality

A

contract myst be for a legal purpose

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6
Q

capacity

A

parties must have legal capacity to enter into a contract

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7
Q

letter of intent

A

Works as a framework with some binding/not binding components

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8
Q

3 elements of lack of certainty

A

Essential term missing (e.g., price).

Agreement to agree (future negotiation required).

Essential term too vague.

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8
Q

intention

A

people shouldn’t be legally bound if that wasn’t what they were intended

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9
Q

witnessed and legally signed document is a clear indication of

A

intention to be legally boudn

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10
Q

privity of contract

A

only parties to a contract have rights/ obligations under it

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11
Q

third parties generally …

A

cannot enforce a contract

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12
Q

in a business intent is bound or not bound?

A

intent to be bound is presumed unless explicitly excluded

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13
Q

in family and social agreements, intention is …

A

not assumed

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14
Q

courts interpret agreements to avoid …

A

uncertainty

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15
Q

3 scenarios when certainty becomes an issue

A
  1. essential term is missing
  2. it is an agreement to agree
  3. essential term is too vague
16
Q

agreement to agree is not a

17
Q

courts seem more likely to enforce a case where one party has acted in

18
Q

when the mechanism fails, courts hold that

A

there is no contract for lack of certainty or hold for a fair/ reasonable price

19
Q

courts will not make agreements for people but …

A

arbitrators can make agreements for parties

20
Q

2nd kind of uncertainty

21
Q

a signed contract…

A

binds a party even if unread

22
Q

parol evidence rule

A

no external evidence can contradict written terms

23
Q

written contracts supersede..,

A

prior discussions

24
some exceptions to the parol evidence rule:
fruad misrepresentation mistake lack of intent ambiguity rectification collateral agreements equitable remedy
25
entire agreement clause
to increase certainty and eliminate most of the exception to the parol evidence rule
26
privity of contract
third parties cannot sue or be sued on a contract
27
in order to be a party to the contract,
a promise must have been made to that person and that person must have provided consideration
28
6 exceptions to privity
agency -- agency may bind a principal trusts -- beneficiaries may enforce trust obligations specific performance -- exception in equity tort law -- third parties may sue under negligence statutory exceptions -- insurance and consumer laws may override privity principled expectation -- like limitiation clause, allow third parties to enforce contract
29
employees can claim protection under ran employers limitation of liability clause if 2 circumstances are met even though they are not parties to the contract:
1.contract must extend benefits to the third party 2. third party must act within scope of employment when the loss occurred
30
2 part test for third party enforcement
1. did the contracting parties intend to benefit the third party 2. were third party activities contemplated under the contract
31
third party enforcement only can be used ...
defensively not offensively
32
contracts for the benefit of third parties may be enforceable in...
equity