Quiz 4 Flashcards
When is an offer Made Accepted Rejected Revoked Counter offered
Made: by Offeror when sent to Offeree
Accepted: By Offeree when sent to Offeror
Rejected: by Offeree when offer is received
Revoked: by Offeror when offer is received
Counter offered: by Offeree when offer is received
Fraud
Innocent party induced to enter a contract by misrepresentation
Elements: Misrepresentation of a material fact Intent to deceive Innocent party justifiably relies Innocent party harmed in a real way
Undue Influence
Arises from relationships where one party can greatly influence another, taking their free will
Contract lacks voluntary consent and is voidable
Duress
Party who enters into a contract under fear/threat
Contract voidable
Threatened act must be wrongful/illegal and take their free will
Unconscionability
Contract’s terms are so oppressive that they can’t be enforced
Contract discharged by:
Rescission
Parties agree to cancel the contract
Parties return to pre-contract position
Contract discharged by:
Novation
New third party replaces one of the original contracting parties
Contract discharged by:
Settlement Agreement
Compromise arises out of a genuine dispute over obligations
Recognized as law
Contract discharged by:
Accord and Satisfaction
Parties agree to accept different performance than what was originally agreed upon
Impossibility of Performance
One of the parties to the contract dies/becomes incapacitated or,
Specific subject matter of contract is destroyed or,
When a change in law renders performance illegal
Commercial Impracticability
Parties excused from performance if it becomes a lot more difficult or expensive than originally expected
Frustration of Purpose
Contract discharged if supervening circumstances make it impossible to do what both parties had in mind when they made the contract
When is a contract subject to a condition?
Condition: qualification in a contract based on a future event
If condition isn’t satisfied, obligations of the parties are discharged
(Think about buying a house with a loan)
Three levels of performance of a contract
Complete: parties performed exactly as agreed, conditions satisfied
Substantial: party in good faith performs substantially all the terms, contract enforced as long as the non-breaching party received substantially the same benefits
(think about the finishes for a remodel)
Material Breach: performance not substantial
When is a contract void vs voidable?
Void: contract with no legal or binding effect (illegal contract)
Voidable: valid contract that can be legally avoided, cancelled or annulled
Mistake of fact occurs, parties have different understandings of facts related to performance
Undue influence or duress occurs
Bilateral vs Unilateral contract
Bilateral: Offeree accepts by promising to perform
(Promise for return promise)
Unilateral: Offeree can only accept the offer by doing the act required
(Promise for performance)
When does the Statute of Frauds apply?
(Contracts under this have to be signed in writing)
5 things
Contracts involving land
Contracts that can’t be performed within one year
Collateral contracts (like promises to guarantee another’s debt)
Promises made in consideration of marriage
Contracts for the sale of goods over $500
When does Promissory Estoppel apply?
5 items
Promissory estoppel: opposite of statute of frauds, bounding even without a binding contract
Clear and definite promise made
Promisee relies on promise
Promisee relied by acting or refraining from acting on something
Promisee’s reliance resulted in substantial detriment
Justice served by enforcing promise
Online offer should include:
7 things
Acceptance of terms
Payment
Return policy
Disclaimers
Limitations on Remedies
Privacy Policy
Dispute resolution
Identify an
Assignment
Delegation
Third-party beneficiary contract
These are all for when a third party has rights under a contract
Assignment: Rights to be received under the contract to another
Delegation: Duties owned under a contract to another to perform
Third Party Beneficiary: parties to a contract intend for the contract to benefit a third party
Compensatory Damages
Compensate for the loss of the bargain
Difference between contract price and price paid
Incidental Damages
Expenses incurred to obtain performance from another source
Awarded in addition to compensatory damages
Consequential Damages
Lost profits that were foreseeable at the time of contracting
Punitive Damages
Awarded to punish/deter future bad conduct
Not usually available for mere breach of contract
Nominal damages
Only awarded when parry suffered no financial loss
no other damages available
Mitigation of Damages
Innocent party’s duty to reduce the damages they suffered
Think about the tenant leaving before the lease is up. Landlord still needs to look for new tenant
Liquidated Damages
Specific amount agreed to be paid as damages when the contract was made in case of a breach
Penalties
Designed to penalize
Usually unenforceable
Liquidated damages that are excessive are deemed penalties
Equitable Remedies
4 total
Rescission: Cancellation of a contract in order to return the parties to their pre-contract position
Restitution: Returning of goods, property or funds previously conveyed
Specific Performance: Calls for performance of the act promised
only awarded when subject matter is unique
not rewarded for personal service contracts
Reformation: allows a contract to be rewritten (reformed) to reflect the parties’ true intentions
