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SGMA 395 > M3: Contracts > Flashcards

M3: Contracts Flashcards

1
Q

What is a contract

A

agreement between 2+ parties enforceabl in law

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2
Q

Does a contract need to be in writng?

A

NO

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3
Q

Qualities of a contract

A
  1. 2+ competent parties (adults not disabled)
  2. Mutual Consideration
  3. Act voluntarily
  4. enforceable judicially
  5. not necessarily in writing
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4
Q

pros of contracts

A

CERTAINTY

defines rights and obligations <3 can be specific or general

Binding promises to create certainty so each party receives what they bargained for

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5
Q

Why make a contract?

A

so no need to go through litigation

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6
Q

Is every agreement a contract?

A

NO!

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7
Q

What are the legal ingredients of a contract?

A
  1. intention to create a legal relationship: both must want to enter a relationship that binds them in law
  2. offer and acceptance: requires one party offr to do something that other part accept the offer
  3. Mutual consdieration: both parties should gain some value!
  4. Legality: must conform to the law
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8
Q

What makes a valid offer?

A

an offer is a promise to enter into a contract on specified terms as soon as it is accepted

express/implied identification of:
- parties
- product
- price

other stuff can be general

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9
Q

what is acceptance?

A

Accetance: willingenss to enter into a cntract
-> when offer is uncondiitonalyl accepted!

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10
Q

how is acceptance communicated?

A

if specificed method, that method is mandatory! if not specified than any reasonable communication is allowed

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10
Q

acceptance can also be indicated by conduct!

A

not true in every case but typically true

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11
Q

MUTUALity of itnention

A

for contract to arise there must be a meeting of minds on essential terms, consensus ad idem

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12
Q

court test for mutuality of intention

A

REASONABLE PERSON TEST! understand what the parties said to each other and from what they did following contractual formation

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13
Q

consideration

A

both must exchange something of value

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14
Q

how dos the court assess consideration?

A

not HOW much value is exchanged, just any value has exchanged

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15
Q

what if one party does not exchange any value?

A

unilateral contract which is not enforceable agreement

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16
Q

gratuitious promise

A
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17
Q

consideration: forebearsnec

A

a promise NOT ot do something 9something is being exchanged)

contract: if you pay me 10K i wont sure you for brekaing my leg

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18
Q

how can offers be terminated

A

If offer is revoked befre acceptd: no contract

REVOCATION: withdrawl at any time, as long as communicated before it is accepted, contract doesnt exist

LAPSE: offer expires on a specified time, or reasonable amount of time

REJECTION: offerree rejects it! only be accepted if revied by offeror with a new or revised offer. If the offerree rejects it and then later reopens it IT WILL BE A NEW OFFER! NO LONGER THE SAME

COUNTEROFFER: this is an implied rejection! any change of a material term is a counteroffer that changes the offer

DEATH/INSANITY: if either offeror/offeree dies, contract is assumed to be dead. but if deceased was not anticiapted then their estate can continue the contract

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19
Q

is not reading the terms of the contract, does the contract become void?

A

NO! you have to abide it

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20
Q

what are exceptions to contracts?

A
  • unequal relationship (balance of power)
  • misrepreseentation of details
  • defects in the contract etc.
21
Q

what is void vs voidable

A

VOID: CONTRACT SO FLAWED THAT IT WAS NEVER VALID! did not ever give rights/obligations; typically a statute is against this

VOIDABLE: Contract with a flaw but not a super serious one that voids the whole contract; when it is rescinded then it is treated as if it never existed; reasons: misrepresentation, undue influence, etc.

22
Q

Voidable contract, 2 options:

A
  1. void it: it is treated as not valid from the start
  2. ratify it: it is treated as valid from the start, notwithstanding flaw
23
Q

Recission vs repudiation

A

Recission: validly and lawfully renouncing the contract; parties allowed to treat contract as if it was void from beginning, AND NO ONE IS PENALIZED! parties are entitled to be put in og position pre-contract. THERE MUST BE A PROPER LEGAL REASON

Repudiation: Unlawful renunitaion of a contract that puts you in the wrong/ Basiclaly this is a party without a proper legal basis decides not to be bound by a contract so THEREFORE THIS IS UNLAWFUL

24
Q

minors are not bound to any contracts that could e deterimental to them

only bound by contracts for essentials + beneficial contracts of employment

A
25
Q

3 categories of misrepresentation

A
  1. fraudulent: deliberate intent
  2. negligent: only actionable when special relationship between speaker and plaintiff (requries proof of duty of care)
  3. innocent: no intent to decieve so no right to claim dMges
26
Q

remedies to types ofmisrepresentation

A

fraudutent: RESCISSION + DAMAGES
negligent: RESCISSION + DAMAGES
innocent: RESCISSION IN CONTRACT

27
Q

Mistake + 3 types

A

mistake may prevent parties reaching an agreement consensus ad idem; even though there is a meeting of the minds

  1. Common mistake: same mistake- so void or voidable
  2. Mutual: both parties msitaken about a term(s) cuz diff facts; VOID; NEVER a meeting of minds
  3. Unilateral: an error made by one party and they dont do anything to enlighten other party
28
Q

Rectification

A
29
Q

Illegality

A
  1. common law: contrary to public policy
  2. statuatory: contrary to statue
30
Q

what contracts need to be in writing

A
  1. contracs dealing with land
  2. contracts dealing with guarantees
31
Q

how to manage the risks of unenforceability

A
32
Q

4 reasons why contractual relationship may end

A
  1. performance: completed contract
  2. mutual agreement: b4 contract is formed the parties voluntarily end
  3. breach: serious breach may release innocent party from contract
  4. frustration: incapable of performance; prevention is force majora clause
33
Q

Performance

A
  • all contractual obligations (express and implied) are carried out entirely
  • EXACTLY as in the contract
  • any failure to perform exactly and precisly: can result in damages for breach
34
Q

Mutual agreement

A
  1. end all rights and obligations
  2. assign rights/onligations to athird party
    (transfer of property, interest, or rights from one person to another, like a debtor)-> doesnt require consent of all parties
  3. novate rights and obligations under contract (new contract is in place for an exisitng one)-> requires consent of all parties
35
Q

breach of contract: condition or warranty

A

condition: improtrant term, if breached, gives sinnocent party right to terminate contract and claim damages

warranty: minor term, if breached gives innoecnt party right ot claim damages only

36
Q

how many damage types

A

6 tyoes

37
Q

boilerplate clauses

A

common clauses that are repeated a lot

38
Q

steps

A
  1. title & intro
  2. preamble/recital: explains what contract is about
  3. definitions and interoreationsL defined terms
  4. body of contract
  5. price
  6. conditions`
  7. representations and warranties
  8. boilerplate provisions
39
Q

quantum merit- equitable remdy WHEN NO CONSIDERATION

A

provide remedy whn no express or implied contract’ where work has been preformed

Paid reasonable amount

40
Q

offer acceptance and consideration: 3 hallmarks of contract

A

without this contract doesnt exist

41
Q

promissory estoppel

A

typically a gratuitious promise is NOT enforceable but…

but if one of the parties does actions to their own detriment due to grat promise

then a contract exists

42
Q

equitable princples

A

-quantum meriut
-Promissory Estoppel

43
Q

privity of contract

A

only party to the contrat are bound by it

basically 3rd parties like benficiaies cant sue on anothers behalf

44
Q

assignment

A

benefits in contract being transferred

45
Q

steps to contract law

A
  1. was a contract formed?
    ->what was the offer, was there acceptance, were parties legal, legal requirements ( see the slide)

for case study number 2, it’s going to be even easier, because contracts are.

Once you identify the issue, you just need to figure out the legal tests and analogy of facts is less relevant, more so. How you go about assessing what happened
through the legal test is easier. So.
whereas with negligence you were trying to find something more similar in terms of facts here it’s even less
important because the way the courts apply legal tests and contract principles. You’ll see it’s
it’s a bit easier.

But identifying the issue.
Once you’ve identified the issue, go to the CD go to contracts, click and view influence, and there it is magic.

46
Q

rules of construction & interpretations

A

society functions on promises made & promises kept! if contract has offer acceptance and consideration then courts iwll bend over backwards to enforce them

There are many rules of construction

47
Q

RoC: Express Terms
Implied Terms
Ambiguity

A

-> plain contextual meaning of the words in terms of the contract

-> words that arent written but implied by necessity and contract because it is common sense (business efficacy, established custom, previous dealings, stat requirements like sale of goods act)

-> 2 ossible interpretations of the law; court allows for additional info (like parole evidence rule)considering full text

48
Q

anticipatory breach

A

type of breach occurs before

49
Q
A

SGMA 395 (11 decks)

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