Semester One Final Flashcards
What must be in a contract?
Offer and acceptance, genuine assent, legality, consideration, capacity, proper form
Offer and acceptance
both parties agree on terms without changes
genuine assent
no deceptions or unfair pressure
legality
can’t be a crime
capacity
legal ability to contract for themselves
proper form
some contracts need to be in writing
requirements of an offer
contractual intent must be present, offer must be communicated to the offeree, essential terms must be complete and definite
jests
a reasonable person decides if an offerer of offeree is joking
preliminary negotiations
information communicated merely to induce someone to initiate bargaining
complete term
identify price, subject matter, quantity (directly or indirectly)
Definite
each essential term must be identified clearly
offeror
a person who makes an offer
offeree
person to whom the offer is made
consideration
promisor demands and generally must receive in order to make their promise legally enforceable
executed contract
fully performed both sides complete
executory contract
not been fully performed one side or both aren’t complete
implied in fact contract
terms, not expressly stated but can be inferred from the party’s acts or conduct
unilateral contract
offeror promises something in return for the offeree’s performance and indicates that his performance is the way acceptance is to be made
bilateral contract
formed by a mutual exchange of legally binding promises
How can offers be ended?
Revocation by the offeror, time stated in the offer, rejection by the offeree, counteroffer
revocation by the offeror
right to withdraw an offer before it’s accepted
counteroffer
I refuse your offer but here is my proposal
firm offer
contractual proposal in writing by the merchant on how long the offer is to stay open
What is required of an acceptance
only offerees may accept, the acceptance must match the offer, and acceptance must be communicated to the offeror
acceptance must match to offer
mirror image rule
acceptance must be communicated to the offeror
promises as acceptance, performance as acceptance, when acceptance is effective
when acceptances are effective
using certain communication methods to accept time
acceptance
occurs when a party to whom an offer has been made
mirror image rule
requires that the acceptance must exactly match the terms continued in the offer
Duress includes
threats of illegal or tortious conduct, threats to report crimes, threats to sure, economic threats
valid
legally binding and enforceable contract
genuine assent
true and complete agreement
voidable
cancel or avoid if no genuine assent
recession
get back what has already been put into the contract
ratification
acting towards the contract as one intends to be kept by it
duress
when someone threats
undue influence
pressuring someone to do bad things
contractual mistakes
misrepresentation, fraud, and remedies for fraud
misrepresentation
statement that is material to the transaction or is fraudulent
untrue statement of fact
active concealment
Fraud and remedies for fraud
misrepresentation must be intentional or reckless, misrepresentation or concealment must injure
punitive damages
big money
unilateral mistake
occurs when one party holds incorrect beliefs about facts or law related to the contract making it still valid
mutual mistake
both parties have incorrect beliefs about an important fact or law not valid
material facts
important facts that influence the party’s decisions about the contract
innocent misrepresentation
party to the contract doesn’t know a statement they made is untrue is voidable
fraudulent misrepresentation
party to contract knows a statement is untrue is voidable
fraud
misrepresentation but with 2 elements
consideration
person demands must receive to make her promise legally binding, must include promise, contract exchanges and legal value
promise, act, or forbearance
refrain from doing something
contract exchanges
promise and promissee
nominal consideration
token amount identified in the written contract when parties either cannot or don’t wish to state the amount precisely ex: put one dollar
consideration definition
distinguishes a contract promise from a promise to make a gift
gift
transfer of ownership without receiving anything in return
legal value
change in the legal position of a party as a result of a contract
illusory promise
a contract contains a clause that allows you to escape the legal obligation (if I have time)
existing duty
promise to do something already obligated to by law or prior contract
liquidated debts
parties agree that debt exists and the amount of the debt
release
party settles a claim at the time the tort occurs the liability is unliquidated because the extent of damages is uncertain
past performance
contractual bargaining takes place in the present for immediate future performance by both parties and cannot serve as consideration for a later promise
exceptions to their requirements of consideration
promissory estoppel
promissory estoppel
prevent promises from stating in court that didn’t receive consideration or their pormises “a promise to make a gift generally isn’t legally enforceable”
What is capacity?
under disaffirmance protect party is to receive whatever they have put into it
contractual capacity
ability to understand the consequences of a contract
age of majority to contract
age that entitled to manage their own affairs
minor
under the age of majority usually 18
necessaries
things needed to maintain life
emancipation
serving parent relationship
scope of authority
within the range of contractual acts for which organizations have authorized them to be responsible
Disaffirmance
refusal to be bound by previous legal commitments
loss of value
most states if minors are unable to return exactly what was received under contract they can still get everything back they gave
Contracts that cannot be disaffirmed
court approved contracts
Revenue license
purpose is to raise revenue rather than protect the public contracts can be valid
Which agreements are illegal?
agreements made without a required competency license, agreements that affect marriage negatively
recessions prior to an illegal act
party rescinds before the illegal act occurs then restitution will be liable
divisible contracts
separate consideration given for the legal and illegal party of the contract court can uphold legal parts
unconscibolabe
grossly unfair that parties under ordinary circumstances wouldn’t accept it ex: take it or leave it, no liable alternative, overwhelming bargaining power
statute of frauds
a law stating that certain agreements aren’t enforceable in court they are evidenced by signed writing
Statute of fraud requirements
name of the parties, subject matter description, price, quantity, signature, and other essential items including time or method of delivery or financing
types of contracts within the statute of fraud
contract for the sale of goods for $500 or more, contract to sell an interest in real property, contracts that require more than one year to complete, contracts to pay a debt or answer for another’s debt, contract in which the consideration is marriage
contract for which consideration is marriage
signed writing is required for agreements in which one party promises to marry in return for something more than the other’s promise to marry
How are contracts interpreted?
acknowledgment of final agreement, parol evidence rule, specific rules of interpretation where conflicting terms the later portion will guide court like added handwritten stuff
parol evidence rule expectations
clarify ambiguities in a written agreement, a written agreement wasn’t intended to be a complete agreement, a condition necessary to the existence of the contract never occurred, if fraud forgery, or mistake occurred
The transfer of contract rights and duties
assignable rights, non-assignable rights
assignable rights
the party gave contractual duties to another person getting the same outcome
non assignable rights
contractual rights may not be assigned if performance requirements could be materially changed as a consequence
discharge of contractual obligations
by performance, by subsequent agreement, operation of law
novation
everyone has to agree to change the contract
assignment
legal action where a party to a contract transfers to another person their rights to the benefits of a contract
breach of contract
failure to provide complete performance
substantial performance
just about all the duties are performed but minor duty remains
alteration
a material change in terms of a written contract without the consent of the other party to discharge the contract alteration must be materially made intentional
Remedies possible for breach
remedy for a minor breach, remedies for a major breach, money damages like compensatory, punitive, nominal, spefiic performance
recission and restituion
canceling the contract and returning whatever has been received under it
factors affecting choice of remedy
conflict of remedies, the duty to mitigate, waivers, the statute of limitations, bankruptcy
duty to mitigate
tame steps to minimize the harm done
