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B Law > Test 2 > Flashcards

Test 2 Flashcards

0
Q

What 4 categories are governed by the common law of contracts

A

Services, real estate, employment, insurance

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1
Q

Common law governs all contracts except when…

A

It has been modified or replaced by statutory law Or administrative agency regulations……………….I.e. Uniform commercial code

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2
Q

What contracts are governed by the UCC

A

Contracts for the sale and lease of goods

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3
Q

Contract law is designed to provide ….. For both buyers and sellers in hue market place

A

Stability, predictability, and certainty

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4
Q

Contract law assures the parties to private agreements that the promises they make will…..

A

That the promises they make will be enforceable

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5
Q

Why do many people keep promises

A

Because the parties involved

  • feel a moral obligation
  • it is in their moral self interest
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6
Q

Who is the person making the promise

A

The promisor

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7
Q

Who is the person to whom the promise is made

A

The promisee

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8
Q

In business law why are the rules of contract law often followed

A

To avoid potential disputes

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9
Q

Contract law is necessary to…

A

Ensure compliance with a promise or to entitle the innocent party to some form of relief

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10
Q

A contract is

A

An agreement that can be enforced in court

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11
Q

Who forms contracts

A

Two or more parties who agree to perform or to refrain from performing some act now or in the future.

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12
Q

What might happens if the contract is not followed

A

Party is subject to sanctions of the court
Might have to pay damages
May have to perform the promised act

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13
Q

How is intent determined..

A

By the objective theory of contracts, not by the belief of a party

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14
Q

A party’s intention to enter into a contract is judged by a reasonable person and what 3 objective facts

A

1) what the party said when entering Ito the contract
2) how the party acted or appeared (intent may be manifested by conduct as well as by oral or written words)
3) the circumstances surrounding the transaction

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15
Q

Underlying motive is not important

A

….

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16
Q

What are the four requirements of a valid contract

A

1) agreement
2) consideration
3) contractual capacity
4) legality

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17
Q

An agreement is

A

An agreement to form a contract includes an offer and an acceptance. One party must offer to enter into a legal agreement and another party must accept the terms of the offer

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18
Q

Describe consideration

A

Any promises made by the parties to the contract must be supported by legally sufficient and bargained for consideration (something of value received or promised such as money to convince a person to make a deal )

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19
Q

Describe contractual capacity

A

Both parties entering into the contract must have the contractual capacity to do so. The law must recognize them as possessing characteristics that qualify them as competent parties.

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20
Q

Describe legality

A

The contracts purpose must be to accomplish some goal that is legal and not against public policy.

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21
Q

If all the requirements of a contract are met can a contract still be unenforceable?

A

Yes

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22
Q

What are defenses to enforceability of contracts

A

1) Voluntary consent

2) form

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23
Q

Describe voluntary consent

A

The consent of both parties must be voluntary

If a contract was formed as a result of fraud undue influence mistake or duress the contract may not be enforceable

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24
Q

Describe form as a defense

A

Th contract must be in whatever form the law requires

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25
Q

The party making the offer

A

Offeror

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26
Q

Party to whom the offer is made

A

Offeree

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27
Q

Whether the contract is classified as bilateral or unilateral depends on

A

What the offeree must do to accept the offer and bind the offeror to a contract

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28
Q

Describe a bilateral contract

A

When the offeree can accept simply by promising to perform
I.e. A promise for a promise
- no performance need to take place for its formation
Comes into existence the moment the promises are exchanged

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29
Q

Describe a unilateral contract

A

It is formed at the moment when the contract is performed
I.e,promise for an act
For example.. If you do this I’ll give u …

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30
Q

Contests, lotteries, and other competitions involving prizes are examples of what type of contracts

A

Unilateral contracts

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31
Q

What is revocable mean

A

Capable of being taken back or canceled

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32
Q

Once performance has been substantially undertaken the offeror cannot revoke the offer

A

….

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33
Q

What problem arises in unilateral contracts

A

When the promisor attempts to revoke ( cancel) the offer after the promisee has begun performance but before the act has been completed. I.e. Boat example

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34
Q

What are formal contracts

A

Contracts that require a special form or method of creation (formation) to be enforceable

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35
Q

What are negotiable instruments

A

Formal contracts
They include checks, drafts,promissory notes, bills of exchange, and certificates of deposit.
They are formal because a special form and language are required to create them

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36
Q

What are letters of credit

A

A type of formal contract often used in international sales contracts
Agreements to pay contingent on the purchasers receipt of invoices and bills of lading

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37
Q

What are bills of lading

A

Documents evidencing receipt of and title to goods shipped

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38
Q

What are informal (simple) contracts

A

Contracts that are not formal.
They require no special form except those that just be written
Usually based on substance not form

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39
Q

Why do business persons typically put their contracts in writing

A

To ensure that there is some proof of a contract in case a dispute arises

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40
Q

What happens in an express contracts, describe it.

A

The terms of the agreement are fully and explicitly stated in words, oral or written
I.e,. A signed lease is an expressed written contract
If a classmate agrees over the phone to buy your books that is an express oral contract

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41
Q

Describe an implied contract

A

A contract that is implied from the conduct of the parties

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42
Q

How does an implied contract differ from an express contract

A

The conduct of the parties rather than their words creates and defines the terms of the contract

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43
Q

What are the requirements for an implied contract

A

1) the plantiff furnished some service or property
2) the plaintiff expected to be paid for hat service or property, and the defendant knew or should have known that payment was expected
3) the defendant had a chance to reject the services or property and did not

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44
Q

If you drop off all your tax forms at the accountants office and do not say nothing to the accountant what type of contract are you entering

A

An implied contract

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45
Q

Can a contract be both express and implied ?

A

Yes

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46
Q

Give an example of an implied and express contract

A

A homeowner asking the builder to make changes in the original specifications

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47
Q

What is an executed contract

A

A contract that has been fully performed on both sides

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48
Q

What is an executors contract

A

A contract that has not been fully performed by the parties

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49
Q

Some executory contracts are executed on one side and executory on the other

A

…..

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50
Q

A valid contract has…

A

Elements necessary to entitle at least one of the parties to enforce it in court

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51
Q

What elements make a contract valid…

A

….

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52
Q

Valid contracts maybe what…(3)

A

Voidable, unenforceable, void

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53
Q

Describe a void able contract

A

A valid contract where a party has the option of avoiding or enforcing the contractual obligation
If avoided both parties are released from it
If ratified both parties must fully perform their respective legal obligations

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54
Q

Give an example of a voidable contract

A

One with a minor, intoxicated or mentally incompetent person …it is voidable at their option
Under fraudulent conditions at he option of the defrauded party
Under legally defined duress or undue influence

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55
Q

What is an unenforceable contract

A

A valid contract that cannot be enforced because of a legal defense . It is unenforceable by some statue or law.
Not because a legal requirement of a contract (has nothing to do w that)
I.e. It not being in writing

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56
Q

What is a void contract

A

This is no contract at all …no contract exist or there is a contract without legal obligations
I.e court determines one of the parties mentally incompetent or the purpose of the contract was illegal

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57
Q

What is an enforceable contract

A

A valid contract that can be enforced because there are no legal defenses against it

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58
Q

What is ratify

A

Make valid

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59
Q

What are quasi contracts

A

Contracts implied in law, not actual contracts
Fictional contracts that courts can impose on the parties “as if” the parties had entered into an actual contract.they are equitable rather than legal contracts

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60
Q

What are quasi contracts imposed

A

To avoid the unjust enrichment of one party at the expense of another

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61
Q

Theory of unjust enrichment

A

Individuals should not be allowed to profit or enrich themselves inequitably at the expense of others

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62
Q

When the court imposes a quasi contract a plantiff may recover in..,

A

Quantum meruit

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63
Q

What is quantum meruit

A

As much as he or she deserves

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64
Q

Describe a limitation on quasi contractual recovery

A

Enrichment is not consider unjust when the company has retained a benefit that they have paid for
I.e, cell phone company selling insurance illegally but making commission on it . This is okay because he customers did get the insurance

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65
Q

When an actual contract exist can the doctrine of quasi contract be used

A

Generally no
Because a remedy already exist the nonbreaching party can sue the breaching party for breach of contract
Example:fung delivering the couch to grant who has be unjust enriched because Cameron didn’t follow the contract him and fung had

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66
Q

What does the plain meaning rule say

A

Meaning of the terms in a contract must be determined from the face of the instrument
The words and their plain ordinary meaning determine the intent of the parties at the time that they entered the contract

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67
Q

In what situations(4)will the court consider a contract ambiguous

A

1) when the intent of the parties cannot be determined from the contracts language
2) when the contract lacks a provision on a disputed term
3) when a term is susceptible to more than on interpretation
4) when there is uncertainty about a provision

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68
Q

What might a court do if a contract term is ambiguous

A

Consider extrinsic evidence

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69
Q

What is extrinsic evidence

A

Any evidence not contained in the document itself

I.e. Testimony of parties and witnesses,additional agreements or communication, or other relevant info

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70
Q

What happens if the court determines the terms of the contract are clear from the written doc alone

A

The plain meaning rule will apply and he contract will be enforced to what it clearly states

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71
Q

When a contract is clear and unambiguous can a court consider extrinsic evidence

A

No

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72
Q

What is the primary purpose of the rules of interpretation

A

To determine he parties intent from the language used in their agreement and to give effect to that intent

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73
Q

What rules does the court use to interpret contractual terms

A

1) as far as possible a reasonable lawful and effective meaning will be given to all of a contracts terms
2) a contract will be interpreted as a whole-all parts interpreted together
3) terms that were the subject of separate negotiation will be given greater consideration than standardized terms and terms that were not negotiated separately
4) a word will be given its ordinary, commonly accepted meaning and a technical word or term will be given its technical meaning unless the parties clearly intended something else
5) specific and exact wording will be given greater consideration than general language
6) written or typewritten terms will prevail over printed ones
7) a party who uses ambiguous express is held responsible for the ambiguities
8) evidence of usage of trade course of dealing and course of performance may be admitted to clarify meaning

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74
Q

Order of terms given the most weight

A 
express terms
Course of performance
Course of dealing
Custom
Usage of trade
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75
Q

What 2events evidence an agreement

A

Offer and acceptance

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76
Q

Both parties must manifest their assent or voluntary consent to the same bargain

A

….

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77
Q

What is an offer

A

A promise or commitment to do or refrain from doing some specified action in the future

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78
Q

What are the three elements necessary for an offer to be effective

A

1) the offeror must have a serious intention to become bound by the offer
2) the terms of the offer must be reasonably certain or definite so that the parties and the court can ascertain the terms of the contract
3) the offer must be communicated to the offeree

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79
Q

How is intention determined

A

By a reasonable person

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80
Q

What about offers made in anger, jest, or undue excitement

A

They do not meet the -serious and objective intent test -because a reasonable person would realize that a serious offer was not being made.
Therefore no agreement

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81
Q

What case is an example of the objective theory of contracts

A

Lucy v. Zehmer in which the plaintiff Lucy won.
-about them being drunk and signing a contract and the wife even came in and agreed to the contract it was talked about for 45 min. Lost at trial court and appealed in the Supreme Court in which Lucy won.

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82
Q

Is an expression of opinion an offer

A

No

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83
Q

What an example of when an expression of option is made

A

A doctor saying you will probably heal in a week when you don’t heal for much longer

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84
Q

Is a statement of future intent an offer

A

No

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85
Q

What’s an example of statement for future intent

A

Saying I plan on doing something because that means I am just thinking about it not promising to do it

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86
Q

Is a request or invitation to negotiate an offer

A

No, it only expresses a willingness to discuss the possibility of entering into a contract

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87
Q

Is the invitation to submit bids an offer

A

No

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88
Q

Are the bids that are submitted offers

A

Yes and therefore if accepted can bind the person in a contract with the person who invited them

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89
Q

How are advertisements treated?

A

They are treated as invitations to negotiate not offers

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90
Q

What type of advertisement might be seen as an offer opposed to an invitation to negotiate

A

One offering a reward for the return of a lost dog

Because they had definite terms that invited acceptance

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91
Q

What are price list usually

A

Invitations to negotiate

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92
Q

Offers to sell an item via online auctions are what…

A

Invitations to negotiate

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93
Q

Who is the offeror and offeree in a a live auction

A

The bidder is the offeror and the auctioneer is the offeree

The offer is accepted when the auctioneer strikes the hammer, up until the bidder may revoke there offer

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94
Q

What happens When the auctioneer accepts a higher bid

A

he or she rejects all previous bids terminating here offers

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95
Q

What are the types of auctions

A

Those with a reserve and this without a reserve

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96
Q

Describe an auction with reserve

A 
The seller (through the auctioneer) may withdraw the goods at any time by announcement or by the fall of the hammer 
Sales of goods are not final until the seller confirms
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97
Q

What are all auctions assumed to be

A

Those with reserve

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98
Q

Describe an auction without reserve

A

In this auction goods cannot be withdrawn by the seller and must be sold to the highest bidder

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99
Q

Are agreements to agree enforceable contracts

A

Yes if it is clear that the parties intended to be bound by the agreements . The emphasis is on the parties intent.

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100
Q

What are agreements agree

A

Agreements to agree to Material terms of a contract at some future date

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101
Q

Can a preliminary agreement be a contract

A

Yes

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102
Q

When does a preliminary agreement constitute a binding contract?

A

If the parties have agreed on all essential terms and no disputed issues remain to be resolved

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103
Q

When does a preliminary agreement not constitute a binding contract?

A

If other terms are left open for further negotiation

Parties are bound only in the sense that they have committed he selves to negotiate he undecided terms

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104
Q

An offer must have reasonably definite terms

What are the definite terms dependent upon

A

The yep of contract

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105
Q

What are he general definite ness terms and where are they

A

1) identification of the parties
2) the identification of the object or subject matter of the contract (also quantity when appropriate) including the work to be performed, with specific identification of such items as goods, services, and land
3) the consideration to be paid
4) the time of payment, delivery, or performance

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106
Q

Can acceptances make contracts definite

A

Yes, an offer may invite an acceptance to be worded in such specific terms that the contract is made definite
I.e. When A quantity being specified in the acceptance, the terms are definite and the contract is enforceable

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107
Q

If parties have clearly manifested an intent to form a contract what might a court do if needed

A

Supply a kissing term in a contract

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108
Q

If a parties expression of intent is too vague or uncertain what will a court do to help

A

Nothing, they will not rewrite a contract

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109
Q

Communication is important for an offer . The offer must be communicated to the offeree…..
Give an example…

A

A person returns a lost cat without knowing of the reward, usually the person cannot recover the reward because an element of the contract is communication and the one that claims the reward must have known it was offered.

Some states would allow recovery of the reward but not under contract principles , they could recover because it would be unfair to deny the person just because they did not know of the reward.

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110
Q

An effective offer to an offeree gives the offeree what power

How long does the power last

A

The power to turn the offer into in a contract if they accept it

Not forever, if can be terminated

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111
Q

How can an offer be terminated

A

Operation of law or action by The parties

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112
Q

What are the three ways an offer can be terminated by action of the parties

A

1) revocation
2) rejection
3) counteroffer

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113
Q

What is revocatio

A

The offer ors act of withdrawing an offer

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114
Q

When can an offeror revoke an offer and when can’t they

A

As long as the revocation is communicated to the offeree before the offeree accepts

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115
Q

What ways can revocation be accomplished

A

1) express repudiation of the offer (such as “I withdraw my previous offer of oct 17”)
2) performance of acts that are inconsistent with the existence of the offer and are made known to the offeree (for instance selling the offered property to another person in the presence of the offeree).

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116
Q

When does revocation become effective

A

When the offeree or the offeree a agent actually receives it

I.e. Not when it’s placed In the mail

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117
Q

How must an offer to the general public be revoked

A

In the same manner that the offer was originally communicated

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118
Q

When might the court refuse to allow an offeror to revoke an offer

A

When the offeree has changed position because of justifiable reliance on the offer

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119
Q

What is an irrevocable offer

A

An offer that cannot be withdrawn

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120
Q

What is an example of an irrevocable offer

A

“Firm Offers” made by merchants

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121
Q

What is an option contract

A

It is created when an offeror promises to hold an offer open for a specified period of time in return for payment (consideration) given by the offeree

I.e, used in real estate

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122
Q

Describe rejection

A

When an offeree rejects the offer by words or conduct.. Then the offer is terminated

Only effective when received by offeror or offeror’s agent

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123
Q

What if someone rejects and offer and then try’s to get it back, describe the situation

A

Roles switch, now the offeree is the offeror and the original offeror has the power of acceptance

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124
Q

What is a counteroffer

A

A rejection of the original offer and the simultaneous making of a new offer

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125
Q

Describe the mirror Image rule

A

A common law that requires the offered avceptance to match the offeror’s offer exactly -mirror the offer

Any change in or addition to the terms of the original offer automatically terminate the offer and substitutes the counteroffer

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126
Q

What are the events for termination by operation of law

Can be any 4

A

1) lapse of time
2) destruction of the specific subject matter of the offer
3) death or incompetence of the offeror or the offeree
4) supervening illegality of the proposed contract(a statute or court decision that makes an offer illegal automatically terminates the offer.)

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127
Q

When does a lapse of time occur

A

When the period of time specified in the offer has passed
If open il particular day , at midnight on that day

Time period begins when the offeree receives it

If no time specified it terminates at the end of a reasonable time

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128
Q

What is a reasonable time for contract to end based on

A

It depends on the subject matter of the contract, business, and market conditions and other relevant circumstances

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129
Q

Describe destruction of the subject matter

A

An offer is automatically terminated if the specific subject matter of the offer is destroyed before the offer is accepted

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130
Q

A death or incompetence of the offeror or offeree terminates a contract unless…

A

The offer is irrevocable

I.e. If someone entered a option contract and dies before time is up the offer is not terminated because it is irrevocable

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131
Q

Can a revocable offer be passed on to heirs guardians or estates

A

No because those offers are personal. This applies whether or not the other party had notice of the death or incompetence

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132
Q

A state or court decision that makes an offer illegal automatically terminates the offer

Talk about an example

A

If a statue is enacted after the offeree accepts the offer a valid contract is formed but the contract may still be unenforceable

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133
Q

What is acceptance

A

A voluntary act by the offeree that shows assent (agreement ) to the terms of an offer by words or conduct.

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134
Q

What must acceptance be (2 things)

A

Unequivocal and communicated to the offeror

Generally only the agent or offeree can accept

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135
Q

Describe unequivocal acceptance

A

It is the mirror image rule

-the offeree can be be dissatisfied and ask for a better price as they accept
For example “I accept, but can I get a better price”
The key is they accepted

No new conditions or change terms can be imposed

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136
Q

If someone say I accept if …what is this

A

A counteroffer

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137
Q

If someone says I accept. Please send documentation this is an ….

A

Acceptance , he acceptance still valid without the documentation

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138
Q

In what instances is silence acceptance

A

1)when an offeree takes the benefit of offered services even though he or she had an opportunity to reject them and knew that they were offered with the expectation of compensation

2)when the offeree has had prior dealings with the offeror.
I.e. Usually send defect products back so both r use to that but one time does not do that. So that’s acceptance

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139
Q

In a bilateral contract what form is acceptance in

A

A promise (not performance )

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140
Q

Is acceptance necessary for a bilateral contract

A

Yes because it is formed when the promise is made rather than when the act is performed

However it might not be necessary if the offer dispenses with the requirement or if the offer can be accepted by silence

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141
Q

Describe acceptance needed for a unilateral contract

A

Acceptance is usually evident and notification is therefor unnecessary
However acceptance might be necessary when the offeror requests notice of acceptance or has no way of determining whether the requested act has been performed

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142
Q

In a bilateral contract acceptance must be timely

…what does timely mean

A

Made before the offer is terminated

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143
Q

Describe the mailbox rule

A

Acceptance takes place at the time the offeree sends or delivers (dispatches) the communication via the mode expressly or implied lay authorized by the offeror

Not when it is received by the offeror

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144
Q

What is another name for the mailbox rule

A

Deposited acceptance rule

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145
Q

When does the mailbox rule not apply

A

When the parties are using instantaneous forms of communication

I.e. Face to face, telephone, fax, email

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146
Q

When is an email considered sent what acts states said rule

A

The uniform electronic transactions act .

Email is considered sent when it either leaves the control of the sender or it is received by the recipient

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147
Q

What is it when an offeror specifies how acceptance should be made

A

Express authorization

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148
Q

What if the offeree uses a mode of acceptance other than what is specified

A

The contract is not formed

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149
Q

What if the offeror does not expressly authorize a certain mode of acceptance

A

Acceptance can be made by any reasonable means

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150
Q

How do courts determine reasonable means for offeree acceptance

A

They look at prevailing business usages and the surrounding circumstances

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151
Q

If an offeror offers a certain mode of acceptance does that mean it is the only one the offeree can use

A

No, it usually means they can use the same or a faster means of acceptance

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152
Q

What is someone uses a substitute method that serves the same purpose

A

The acceptance by a substitute method is not effective on dispatch, no contract will be formed until acceptance is received by the offeror

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153
Q

What’s is e-contract stand for

A

Electronic contract

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154
Q

What are the requirements for an econtract

A

The same ones for paper contracts

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155
Q

What things might online contracts be formed for

A

Sale of goods, services, and licensing

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156
Q

Online terms should be what two things

A

Conspicuous and easy to view

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157
Q

How should websites display there offer

A

There website should include a hypertext link to a page contains the full contract in a readable format. The provisions should be reasonably clear.

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158
Q

What is the important rule to keep in mid when it comes toe contracts

A

The offeror (seller) controls the offer and thus the resulting contract

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159
Q

What provisions should an online offer include at minimum (7)

A

1) acceptance of terms
2) payment
3) return policy
4) disclaimer
5) limitation on remedies
6) privacy policy
7) dispute the resolution

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160
Q

Describe what acceptance of terms should include

A

A clause that clearly indicates what constitutes the buyers agreement to the terms of the offer such as a box containing the words I agree

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161
Q

Describe a payment provision

A

A provision specifying how payment for goods including any applicable taxes must be made

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162
Q

Describe return policy provision

A

A statement of the sellers refund and return policy

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163
Q

Describe a disclaimer provision

A

disclaimer for certain liability for certain uses of the goods

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164
Q

Describe limitation on remedies provision

A

A provision specifying the remixes available to the buyer if the goods are found to be defective or if the contract is other wise breached. Any limitations should be clearly spelled out.

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165
Q

Describe privacy policy provisions

A

A statement indicating how the seller will use the information gathered about the buyer

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166
Q

Describe dispute resolution provision

A

Provisions relating to dispute settlement such as an arbitration clause or a forum selection clause

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167
Q

What does a forum selection clause indicate

A

The forum or location such as court or jurisdiction in which contract disputes will he resolved

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168
Q

What does a choice of law clause specify

A

It specifies that any contract dispute will he settled according to the law of a particular jurisdiction such as state or countr

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169
Q

What does restatement (Second) of contracts state

A

It states that parties may agree to contract “by written or spoke words or by action or failure to act”

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170
Q

What is a click-on agreement

A

The act of clicking on a box indicating “I accept” or “I agree” to accept an online offer

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171
Q

What is another name for a click-on agreement

A

click-on license

click-wrap agreement

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172
Q

What is a shrink-wrap agreement/license

A

When the terms are expressed inside the box in which the goods are packages. i.e. one agrees by opening or keeping what is in the wrapping

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173
Q

who is the shrink-wrap agreement usually between

A

the manufacturer and the ultimate buyer-user of the product

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174
Q

When might a shrink-wrap agreement not be enforced

A

When the buyer purchases over the phone and is not informed of certain clauses. If the buyer discovers after they have entered into a contract it might not be enforceable.

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175
Q

How do browse -wrap terms differ from click-on agreements?

A

Browse-wrap terms do not require internet users to assent to the terms before downloading or using certain software

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176
Q

Are browse-wrap terms often enforceable

A

No because they do not satisfy agreement requirement of contract formation.

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177
Q

What is an e-signature

according to UETA

A

an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record

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178
Q

What does E-Sign Act stand for

A

Electronic Signatures in Global and National Commerce Act

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179
Q

What does the E-Sign act say

A

an electronic signature is as valid as a signature on paper and an e-document can be as enforceable as a paper one

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180
Q

What contracts and documents are exempt from the E-sign Act

A

court papers, divorce decrees, evictions, foreclosure, health-insurance terminations, prenuptial agreements, and wills

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181
Q

What is a partnering agreement

A

When a seller and a buyer who frequently do business with each other agree n advance on the terms and conditions that will apply to all transactions subsequently conducted electronically.

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182
Q

What is good about a partnering agreement

A

it reduces the likelihood that disputes will arise because partners have agreed in advance to the terms and conditions that will accompany each sale.

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183
Q

What is a record

A

information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form

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184
Q

What is the Uniform Electronic Transactions Act (UETA)

A

a signature may not be denied legal effect or enforceability solely because it is in electronic form

it is adopted by at least 48 states

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185
Q

What is the purpose of UETA

A

to remove barriers to e-commerce by giving them the same legal effect to electronic records and signatures as is given to paper documents and signatures

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186
Q

To what does UETA apply

A

only electronic records and electronic signatures relating to a transaction

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187
Q

What is a transaction

A

interaction between two or more people relating to business, commercial, or government activities

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188
Q

What specifically does UETA not apply

A

wills or testamentary trusts or to transactions governed by the UCC other than those covered by article 2 and 2A

transaction where the parties did not agree to conduct by electronic means (can be explicit or implied)

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189
Q

Can a party opt out of terms of UETA

A

Yes but, if they do not then UETA apples

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190
Q

What does UETA say about forgery or agents signing

A

it does not contain provisions about what constitutes fraud or whether an agent is authorized to enter a contract. State laws control this.

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191
Q

Does UETA require the use of security procedures

A

No it encourages it

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192
Q

What if a record was received but, no individual is aware of the receipt

A

it is still considered received

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193
Q

What are the two international treaties related to e-contrcts

A

The united nations convention on the use of electronic communication in international contracts

Hague convention on the choice of court agreements

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194
Q

What is consideration

A

The value (such as cash) given in return for a promise (in a bilateral contract) or in return for a performance (in a unilateral contract)

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195
Q

What are the two parts of consideration

A

1) something of legally sufficient value must be given in exchange for the promise
2) there must be a bargained for exchange

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196
Q

Something of legally sufficient value may include (3)

A
  1. A promise to do something that one has no prior legal duty to do
  2. The performance of an action that one is otherwise not obligated to undertake
  3. The refraining from an action that has a legal right to undertake ( called forbearance)
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197
Q

What is forbearance

A

the refraining from an action that one has a legal right to undertake

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198
Q

Each ___ constitutes consideration

A

Promise

i.e. in bi lateral contracts each promise is a consideration and in unilateral contracts one promise

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199
Q

Give an example of a forbearance

A

In return for a promise to pay a person refrains from pursuing a harmful habit i.e. tobacco usage

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200
Q

What is a case about consideration describe it and its outcome

A

The case Hamer v. Sidway
It was about the nephew who was represented by Hamer who provided legal sufficient consideration by giving up smoking, drinking, swearing, and gambling due to a promise of 5,000 from his uncle now represented by Sidway. Sidway said it was not considerate but Hamer won.

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201
Q

What distinguishes contracts from gifts

A

element of bargained for exchange

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202
Q

What if you do not have to give the offeror something of legal value in return for their promise

A

there is no bargained-for exchange (meaning there is no contract)

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203
Q

What is the bargained for exchange element state

A

The item of value must be given or promised by the promisor (offeror) in return for the promisee’s promise, performance, or promise of performance

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204
Q

What does adequacy of consideration concern

A

the fairness of the bargain

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205
Q

What doctrine do courts use that say parties decide what something is worth and parties are usually free to bargain as they wish

A

the doctrine of freedom of contract

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206
Q

What can indicate fraud, duress, or undue influence when it comes to consideration

A

inadequate consideration

i.e. when there is a large disparity in the amount or value of consideration exchanged

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207
Q

Describe preexisting duty

A

A promise to do what one already has a legal duty to do does not constitute legally sufficient consideration

it is meant to prevent extortion and the hold up game

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208
Q

When might the court allow an exception to the preexisting duty rule

A

when there are unforeseen difficulties

the court must find that the modification is fair and equitable in view of the circumstances not anticipated by the parties when the contract was made

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209
Q

What is rescission

A

the unmaking of a contract so as to return the parties to the position they occupied before the contract was made

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210
Q

What does rescind mean

A

to cancel

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211
Q

How can rescission make applying the rule of preexisting duty difficult

A

Sometimes the parties rescind a contract and make a new contract at the same time making it difficult to determine whether there was consideration for the new contract or whether the parties had a preexisting duty under the previous contract …

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212
Q

What if a new contract is made and the old one was rescinded and there was preexisting duty in the previous contract

A

the new contract is invalid because there was no consideration

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213
Q

Are promises made in return for actions or events that have already taken place enforceable

A

no

because they are missing the element of bargained for exchange

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214
Q

You can bargain for something to take place now or in the future but not for something that has already taken place

what rule is this

A

…

that of past consideration

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215
Q

What is past consideration

A

it is not consideration

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216
Q

What is a noncompete agreement

a.k.a. a convenant not to compete

A

When an employee agrees not to compete with the employer for a certain period of time after the employment relationship ends

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217
Q

What does illusory refer to

A

a promise lacking consideration and that is unenforceable

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218
Q

A promise is illusory when ..

A

it fails to bind the promisor

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219
Q

If the terms of the contract express such uncertainty of performance that the promisor has not definitely promised to do anything this is a ____promise

A

illusory

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220
Q

What if the promisor has the option to cancel the contract before performance has begun

A

the promise is illusory

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221
Q

What might an option to cancel contract look like

A

It might say reserving the right to cancel the contract at any time

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222
Q

how could an option to cancel contract be changed to a valid contract

A

it might say the promisor reserves the right to cancel the contract at any time after Chris has begun performance by giving Chris thirty day’s notice

if he fires him after 1 month has to pay him for 2 months

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223
Q

Describe a requirements contract

A

a buyer and a seller agree that the buyer will purchase from the seller all of the goods of a designated type that the buyer needs or requires

any french fries u need u will buy from me

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224
Q

Describe an output contract

A

a buyer and a seller agreed that the buyer will purchase from the seller all of what the seller produces or the sellers output

you will buy all the french fries i make

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225
Q

Uncertainty of performance is a characteristic of what contracts

A

requirements and output contracts

this has to do with consideration problems

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226
Q

What three agreements lack consideration

A

1- preexisting duty
2-past consideration
3-illusory promises

227
Q

In what two ways are claims often settled

A

1) An accord and satisfaction

2) the signing of a release or a convenant not to sue

228
Q

Describe an accord and satisfaction

A

a debtor offers to pay and a creditor accepts, a lesser amount than the creditor originally claimed was owed

229
Q

What is an accord

A

An accord is an agreement in which one party undertakes to give or perform and the other to accept something other than that on which the parties originally agreed

230
Q

What is satisfaction

A

the performance (usually payment) that takes place after the accord is executed

231
Q

Can there be satisfaction with no accord

A

no

232
Q

What must occur for an accord and satisfaction to occur

A

the amount of debt must be in dispute

233
Q

If a debt is liquidated can an accord and satisfaction take place

A

no

234
Q

what is a liquidated debt

A

one whose amount has been ascertained, fixed, agreed on, settled, or exactly determined

when both parties know the precise amount of the total obligation

235
Q

What is an unliquidated debt

A

the amount of the debt is not settled, fixed, agreed on, ascertained, or determined, and reasonable persons may differ over the amount owed

236
Q

What is a release

A

A contract in which one party forfeits the right to pursue a legal claim against the other party

237
Q

What three requirements make a release binding

A
  1. The agreement is made in good faith (honesty)
  2. The release contract is in a signed writing ( required in many states)
  3. The contract is accompanied by consideration
238
Q

describe convenient not to sue

A

parties simply substitute a contractual obligation for some other type of legal action based on a valid claim

239
Q

What are three promises that may be enforced despite the lack of consideration

A
  1. promises that induce detrimental reliance, under the doctrine of promissory estoppel
  2. promises to pay debts that are barred by a statute of limitations
  3. promises to make charitable contributions.
240
Q

Describe promissory estoppel (detrimental reliance)

A

a person who has reasonably and substantially relied on the promise of another may be able to obtain some measure of recovery

241
Q

What (5) elements are required for promissory estoppel

A
  1. There must be a clear and definite promise
  2. the promisor should have expected that the promisee would rely on the promise
  3. the promisee reasonably relied on the promise by acting or refraining from some act
  4. the promises reliance was definite and resulted in substantial detriment
  5. Enforcement of the promise is necessary to avoid injustice
242
Q

What happens to the promisor if promissory estoppel is used

A

the promisor will be estopped (prevented ) from asserting the lack of consideration as a defense

243
Q

What doctrine is promissory estoppel similar to

A

the doctrine of quasi contract because both impose contract obligations on the parties to prevent unfairness even though no actual contract exist

244
Q

What is the difference between the quasi contract and promissory estoppel

A

with a quasi contract no promise was made at all

With a promissory estoppel a promise was made and relied on but was unenforceable

245
Q

Case example of promiser estoppel

A

Teresa suing her parers for not providing her with the deed after they encouraged her, she won

246
Q

What is a charitable subscription

A

a promise to make a donation to a religious, educational, or charitable institution

sometimes promissory estoppel wins others consideration might be found in regard to other donations

247
Q

A debtor who promises to pay a previous debt even though recovery is barred by the statue of limitations makes an enforceable promise that needs no consideration..

A

….

248
Q

What is contractual capacity

A

the legal ability to enter into a contract

249
Q

What is another name for minors in legal terminology

A

infants

250
Q

can a mentally incompetent person form a legally binding contract

A

no if they are determined to be so by the court

251
Q

what is the definition of the age of majority and what age is it usually

A

when a person is no longer a minor

18

but 21 for other purposes i.e. alcohol consumption

252
Q

when does emancipation occur

A

When a child’s parent or legal guardian relinquishes the legal right to exercise control over the child

253
Q

What are minors who leave home to support themselves typically considered

A

emancipated

254
Q

Several jurisdictions permit minors themselves to petition a court for emancipation

A

…..

255
Q

Can a minor enter into any contract that an adult can

A

Yes except contracts prohibited by law for minors i.e. purchase of alcohol

256
Q

A contract entered into by a minor is voidable at the option of that minor

(subject to exceptions)

A

…..

257
Q

What must a minor do to avoid a contract

A

manifest (clearly show) an intention not to be bound by it

258
Q

How must a minor avoid a contract / what is it called

A

disaffirming

259
Q

What is disaffirmance

A

the legal avoidance or setting aside of a contractual obligation

260
Q

What must a minor do to disaffirm

A

express his or her intent through words or conduct not to be bound to the contract

261
Q

Can a minor disaffirm a portion of a contract

A

No they must disaffirm the entire contract

262
Q

Would a minor win a case against a company if they signed the waiver to partake in the activities

A

Yes , if they disaffirm the waiver

i.e. kelly v. the marines

263
Q

Can an adult who entered into a contract with a minor avoid his or her contractual duties like the minor

A

No they are bound unless the minor disaffirms the contract

264
Q

Once a minor disaffirms can they recover any property that he or she transferred to the adult as consideration even when the possession is in that of a third party

A

yes

265
Q

Considering minority how long does a contract have to be disaffirmed

A

at any time during minority or for a reasonable period after reaching majority

266
Q

reasonable time when it comes to minor disaffirmation may vary

A

vary

267
Q

What do most states hold as the obligation on disaffirmance

A

the minor need only return the goods (or other consideration) subject to the contract, provided the goods are in the minor’s possession or control.

268
Q

What if the minor returns the goods in a damaged state when disaffirming

A

Even if the minor returns damaged goods the minor often is entitled to disaffirm the contract and obtain a full refund of the purchase price.

269
Q

What are more states starting to say about disaffirmance

A

The minor must restore the adult party to the position she or he held before the contract was made… i.e. they might be held responsible for damage and depreciation values

270
Q

What contract can’t minors disaffirm

A

marriage contracts, contracts to enlist in armed services, ones where they misrepresented their age (in some states), and contracts for necessaries

271
Q

Does misrepresentation of age make it so a contract cannot be disaffirmed

A

it depends on the state

272
Q

What are necessaries

A

Basic needs such as food, clothing, shelter, and medical services

273
Q

What about a minor who enters into a contract for necessaries

A

They may disaffirm the contract but remain liable for the reasonable value of the goods.

274
Q

What is ratification

A

Act of accepting and giving legal force to an obligation that previously was not enforceable

275
Q

What are the two ways a minor who has reached the age of majority can ratify a contract

A

expressly or impliedly

276
Q

Describe express ratification

A

when the individual on reaching the age of majority, states orally or in writing that he or she intends to be bound by the contract

277
Q

Describe implied ratification

A

When the minor on reaching the age of majority indicates an intent to abide by the contract

278
Q

If a minor fails to disaffirm a contract within a reasonable time after reaching the age of majority then the court must determine whether the conduct constitutes …

A

ratification or disaffirmance

279
Q

Generally Courts presume that executed contract (fully performed) are ratified

A

….If a minor fails to disaffirm a contract within a reasonable time after reaching the age of majority

280
Q

Generally Executory contracts (not yet fully performed by both parties) are disaffirmed

A

…If a minor fails to disaffirm a contract within a reasonable time after reaching the age of majority

281
Q

When are parents liable for contracts made by minor children

A

When they are required to cosign

Not when the minor is acting alone

282
Q

What is intoxication

A

A condition in which a person’s normal capacity to act or think is inhibited by alcohol or some other drug

283
Q

Is a contract entered to by an intoxicated person enforceable… why…

A

Yes because it is either voidable or valid

284
Q

When might a contract entered into by an intoxicated person be voidable

A

If the person was sufficiently intoxicated to lack mental capacity

285
Q

If intoxicated an the person understood the legal consequences of the agreement the contract will be

A

enforceable

286
Q

Are many contracts avoided because the person was intoxicated…why

A

No because it is difficult to prove how impaired the person’s judgement was

287
Q

If a contract is voidable because one party was intoxicated what can the intoxicated person do if they want out

A

They have the option of disaffirming it while intoxicated and for a reasonable time after becoming sober. They must return all consideration received unless the contract involved necessaries.

288
Q

What about contracts involving necessaries for intoxicated people

A

they are voidable, but the intoxicated person is liable in quasi contract for reasonable value of the consideration received

289
Q

What may an intoxicated person after becoming sober do

A

Ratify a contract expressly or impliedly

290
Q

Describe implied ratification for an intoxicated person

A

The intoxicated person fails to disaffirm the contract in a reasonable time after becoming sober

291
Q

What if the intoxicated person in a contract disaffirm and then continue to say use the property discussed in the voidable contract

A

the contract will become ratified

292
Q

Contracts made by mentally incompetent persons can be

A

void, voidable, or valid

293
Q

When might a contract be void for a mentally incompetent person

A

If the court has previously determined the person is mentally incompetent. The court appoints a guardian to represent the individual for legal obligations

294
Q

When might a contract be voidable for a mentally incompetent person

A

If the court has not previously determined the person to be mentally incompetent. but the person was incompetent at the time the contract was formed. Or if the person did not know he or she was entering into the contract or lacked the mental capacity to comprehend its nature, purpose, and consequences. This is at the option of the mentally incompetent person not the other party

295
Q

When might a contract be valid for a mentally incompetent person

A

If the person had capacity at the time the contract was formed ( whom a court ha not previously declared incompetent)

296
Q

Do some people have temporary times of competence ..explain

A

if incompetent due to age or illness some people have lucid intervals temporary periods of sufficient intelligence, judgement, and will (they have legal capacity to enter contracts during said intervals)

297
Q

What type of contracts are illegal

A

Ones to do something that is prohibited by federal or state statutory law and those to commit a tortuous act is contrary to public policy and therefore illegal.

298
Q

Any contract to commit a crime is in violation of a statute and thus…

A

unenforcable

299
Q

What if the object or performance of a contract is rendered illegal by a statute after the parties entered into the contract

A

the contract is discharged by law

300
Q

what is it called when a lender makes a loan at an interest rate above the lawful maximum

A

usury

301
Q

Describe usury

A

what is it called when a lender makes a loan at an interest rate above the lawful maximum

302
Q

What do courts do when usury is found

A

it varies although usury contracts are illegal most states simply limit the interest that the lender may collect on the contract to the lawful maximum interest rate in that state. In some states the lender can recover the principal amount of the loan but no interest

303
Q

Is usury sometimes allowed

A

Yes, sometimes to facilitate business transactions

304
Q

What is gambling

A

creation of risk for the purpose of assuming it

305
Q

Gambling contracts are

A

illegal

306
Q

When might a contract about an unlicensed individual be deemed illegal and unenforceable

A

When the statue’s purpose is to protect the public from the unauthorized practitioners

307
Q

When might a contract about an unlicensed individual be enforceable and just cause the person to get a fine

A

If the statues purpose is merely to raise government revenues

308
Q

What is a contract not enforceable because of the negative impact it has on society called

A

contrary to public policy

309
Q

what is a contract contrary to public policy

A

a contract not enforceable because of the negative impact it has on society

310
Q

What about contracts that are in restraint of trade (anticompetitive agreements)

A

They adversely affect the public policy that favors competition in the economy and violate federal or state antitrust statutes

311
Q

When might anticompetitive agreements be ok

A

when they are reasonable and contained in an ancillary (secondary or subordinate clause in a contract ) for say a sale of an ongoing business or employment contract

312
Q

What is a covenant not to compete

A

a restrictive covenant (promise)

313
Q

What is it called when a seller of a store agrees not to open a new store in a certain geographic area surrounding the old business

A

a covenant not to compete ( restrictive covenant)

314
Q

Describe a noncompete agreement in an employment contract

A

when an employee agrees not to work for competitors or not to start competing business for a specified period of time after termination of employment (specified period of time and geographic restriction must be reasonable)

315
Q

what is considered reasonable restriction for a noncompete agreement for employment

A

the restrain on competition must protect a legitimate business interest and must not be any greater than necessary to protect that interest

316
Q

What is a common rule concerning covenants not to compete in state like Texas

A

The employee must receive some benefit in return for signing the noncompete agreement or the covenant is not enforceable

317
Q

What state prohibits the convenient not to compete

A

California

318
Q

How might a judge get involved in a noncompete covenant

A

when they reform it (to more reasonable terms)

The judge is now a party to the contract

319
Q

Do courts do reformation to contracts a lot

A

no only when necessary to prevent undue burdens or hardships

320
Q

what is an unconscionable bargain

A

a contract that is so unscrupulous or grossly unfair as to be void of conscience

321
Q

what do you call a contract that is so unscrupulous or grossly unfair as to be void of conscience

A

unconscionable

322
Q

under what provisions is unconscionable bargains

A

the uniform commercial code (UCC) its provisions in regard to sale and lease of goods

323
Q

What are the two grounds for being unconscionable

A

procedural or substantive

324
Q

What does procedural unconscionability involve

A

inconspicuous print, unintelligent language (legalese), or the lack of an opportunity to read the contract or ask questions about its meaning

325
Q

When does procedural unconscionability often arise

A

When a party’s lack of knowledge or understanding of the contract terms deprived him or her of any meaningful choice or when a weaker party;s consent is not voluntary

326
Q

What is a contract written exclusively by one party and presented to the other on a take it or leave it basis ( the party to whom the contract is presented has no opportunity to negotiate its terms)

A

adhesion contract

327
Q

Are all adhesion contacts unconscionable

A

No only those that unreasonably favor the drafter

328
Q

What is is called when contracts or portions of contracts are oppressive or overly harsh

A

substantive unconscionability

329
Q

When does substantive unconscionability occur

A

when contracts or portions of contracts are oppressive or overly harsh

330
Q

What do exculpatory clauses do

A

release a party from liability in the event of monetary or physical injury no matter who is at fault

331
Q

This release a party from liability in the event of monetary or physical injury no matter who is at fault

A

exculpatory clauses

332
Q

What exculpatory clauses are often unenforceable because they go against public policy

A

those for residential property leases and those of employers

333
Q

When do courts usually enforce exculpatory clauses

A

When they are reasonable, don’t violate public policy, do not protect parties from liability for intentional misconduct, does not use ambiguous language, and parties have relatively equal bargaining power

334
Q

What businesses use exculpatory clauses and for what

A

Those where their services are not essential. they do so to limit their liability for patron injuries

Also loan docs, real estate contracts, and trust agreements might include them

335
Q

Describe a discriminatory contract

A

A contract in which a party promises to discriminate on the basis of race, color, national origin, religion, gender, age, or disability

336
Q

Are discriminatory contracts enforceable explain

A

No, they are contrary to both statute and public policy and thus unenforceable

337
Q

In general how do courts see illegal contracts

A

void and to never have existed –thus they will not aid either party

338
Q

What is is called for illegal contracts when both parties are considered to be equally at fault

A

in pari delicto

339
Q

Describe in pari delicto

A

when both parties are considered to be equally at fault concerning an illegal contracts

340
Q

What if an illegal contract is executory or not yet fulfilled

A

neither party can enforce it

341
Q

What if an illegal contract has been executed

A

neither party can recover damages

342
Q

Why do courts not care about someone being unjustly enriched at the expense of another in an illegal contract

A

A plaintiff who has broken the law by entering into an illegal bargain should not be allowed to obtain help from the courts

343
Q

what is it called when a courts hopes that a plaintiff who suffers a loss because of an illegal bargain will presumably be deterred from entering into a similar illegal bargain in the future

A

hoped-for deterrent effect

344
Q

hoped-for deterrent effect

A

when a courts hopes that a plaintiff who suffers a loss because of an illegal bargain will presumably be deterred from entering into a similar illegal bargain in the future

345
Q

What if in an illegal contract one of the parties is relatively innocent (has no reason to know that the contract is illegal)

A

That party can often recover any benefit conferred in a partially executed contract, courts will not enforce the contract but will allow the parties to return to their original positions or permit an innocent party who has fully performed under the contract to enforce the contract against the guilty party

346
Q

what if a statute is clearly designed to protect a certain class of people …what can a member of that class do

A

enforce a contract in violation of the statue even though the other party cannot

i.e. an employee who is required to work more than the max. can recover for those extra hours of service.

347
Q

What if the illegal part of a bargain has not yet been performed

A

The party rendering performance can withdraw from the contract and recover the performance of its value

348
Q

Often one party to an illegal contract is more at fault than the other what can the other party do

A

They are allowed to recover for the performance or its value

349
Q

What does a contract that is severable or divisible consist of

A

distinct parts that can be performed separately with separate consideration provided for each part

350
Q

Describe an indivisible contract

A

It is when complete performance by each party is essential even if the contract contains a number of seemingly separate provisions

351
Q

What if a contract is divisible into legal and illegal portions

A

A court may enforce the lego portion but not the illegal one so long as the illegal portion does not affect the essence of the bargain

352
Q

What if a contract includes a clause stating that the parties intend the contract terms to be enforced to the “fullest extent possible”

A

The clause indicates the parties regard their contract as divisible, and in the event of a dispute want the court to strike out the illegal terms and enforce the rest

353
Q

why might voluntary consent be lacking

A

because there is no true “meeting of the minds” or because of a mistake, misrepresentation, undue influence, or duress

354
Q

Generally what can a party do if they can demonstrate that they did not agree to a contract

A

choose either to carry out the contract or to rescind (cancel) it

355
Q

What types of mistakes make a contract voidable

A

mistakes of fact

356
Q

What is a material fact

A

a fact that a reasonable person would consider important when determining his or her course of action

357
Q

For a contract to be voidable when it comes to mistakes it must have

A

a mistake of fact and some material fact

358
Q

Give an example of a mistake of value

A

when someone sells something for cheap when it is really worth a lot

359
Q

what are the two forms of mistakes of fact

A

bilateral and unilateral

360
Q

Describe a unilateral mistake

A

it is made by only one of the parties

361
Q

Describe a bilateral (mutual) mistake

A

made by both of the contracting parties

362
Q

is a unilateral mistake normally enforceable

A

yes, it does not give the mistaken party any right to relief from the contract

363
Q

Give an example of an unilateral mistake

A

a typo of a price sent out by the offeror to the offeree

364
Q

What are the two exceptions to a unilateral mistake making it unenforceable

A

1) The other party to the contract knows or should have known that a mistake of fact was made
2) error was due to substantial mathematical mistake that was made inadvertently and without gross( extreme) negligence

both situations must in love some material fact

365
Q

Give an example of a bilateral contract

A

If a word or term in a contract that is subject to more than one reasonable interpretation and both parties interpret it wrong

366
Q

Describe a mistake of value

A

The mistake concerns the future market value or quality of the object of the contract…it is normally enforceable

367
Q

Why is a mistake of value normally enforceable

A

Value is variable
Parties should have assume the risk that value will change in the future or prove to be different from what he or she thought

368
Q

Why can an innocent party who is fraudulently induced to enter a contract avoid it

A

Because the party has not voluntarily consented to its terms

369
Q

What can the innocent party do when fraudulently induced

A

1) rescind the contract and be restored to his or her original position
2) enforce the contract and seek damages for any harms resulting from the fraud

370
Q

What 4 elements make up fraudulent misrepresentation

A

1) A misrepresentation of a material must occur
2) There must be an intent to deceive
3) The innocent party must justifiably rely on the misrepresentation
4) To collect damages, a party must have been harmed as a result of the misrepresentation

371
Q

Give an example of misrepresentation

A

this art was made by Michelangelo

372
Q

Describe and give an example of misrepresentation by conduct

A

party takes a specific action to conceal a fact that is material to the contract

i.e. hiding the fact that the horse you are selling is sick

373
Q

what is not usually covered by fraudulent misrepresentation

A

statements of opinion and representations of future facts (predictions) unless it is that of an expert then innocent party entitled to recession i.e. the dance class example

374
Q

Does misrepresentation of the law ordinarily entitle a party to relief from a contract

A

No people are assumed to know state and local laws

375
Q

What is an exception to the misrepresentation of the law general rule

A

if the misrepresenting party is in a profession that is known to require greater knowledge of the law than the average citizen i.e. real estate broker

376
Q

Describe misrepresentation by silence

A

No party has a duty to come forward and disclose facts

unless asked about it, if asked about and lie that is fraudulent misrepresentation (misrepresentation by conduct)

377
Q

What are defects that can not be readily ascertained

A

latent defects

378
Q

latent defects

A

What are defects that can not be readily ascertained

379
Q

What is a relationship of trust, such as partners, physician and patient, or attorney and client in which there is a duty to disclose material facts in which they have a duty to speak

A

fiduciary relationship

380
Q

What is a fiduciary relationship

A

a relationship of trust, such as partners, physician and patient, or attorney and client in which there is a duty to disclose material facts

they have a duty to speak

381
Q

What is scienter

A

guilty knowledge

382
Q

What is the name for guilty and what does it mean

A

scienter

intent to decieve

383
Q

When does scienter exists

A
  • if a party knows a fact is not as stated
  • party makes a statement that he or she believes is not true or makes a statement recklessly, without regard to whether it is true or false
  • party says or implies that a statement is made on some basis such as personal investigation when it is not
384
Q

when is a person guilty of innocent misrepresentation

A

When a person makes a statement that she or he believes to be try but that actually misrepresents material facts

385
Q

What is it called when a person makes a statement that she or he believes to be try but that actually misrepresents material facts ..give an example

A

innocent misrepresentation

i.e. said the house was on 250 acres when it was actually 215 acres

386
Q

What can the aggrieved part do when someone has committed innocent misrepresentation

A

rescind the contract but cannot seek damages

387
Q

Describe negligent misrepresentaion

A

Party did not exercise readable care in uncovering or disclosing the facts or use the skill and competence that her or his business or profession requires

388
Q

negligent misrepresentation is equal to

A

scienter, fradulent misrepresentation

389
Q

Gie an example of negligent misrepresentation

A

certifying an elevator even though it has not been checked in years

390
Q

What is a receiver, trustee

A

an independent impartial party appointed by a bankruptcy court to manage property in bankruptcy and dispose of it in an orderly manner for the benefit of the creditors

391
Q

What does recession do

A

it returns the parties to the position they held before the contract was made

392
Q

When the action is to rescind the contract does the court require a showing of injury

A

no

393
Q

To recover damages caused by fraud what is required

A

proof of harm

measure of damages equal to the value had it been delivered as represented, less actual price

394
Q

in fraud actions courts may award

A

punitive damages

395
Q

When does undue influence arise

A

From relationships in which one party can greatly influence another party thus overcoming the partys FREE WILL

396
Q

This relationships arises in when one party can greatly influence another party thus overcoming the partys FREE WILL

A

undue influence

397
Q

What are instances when undue influence usually occur

A

guardians inducing young or elderly wards and fiduciary relationships

398
Q

When does a presumption of undue influence arise

A

when the dominant party in a fiduciary relationship benefits from that relationship

399
Q

When might the court issue a presumption of undue influence

A

If the non dominant party challenges the contract

400
Q

How does one challenge the presumption of undue influence

A

show consideration to non dominant party

show the non dominant party received, if available, independent and competent advice before completing the contract

401
Q

What is duress

A

the use of threats to force a party to enter into a contract i.e. blackmail or extortion

402
Q

The use of threats to force a party to enter into a contract is called i.e. blackmail or extortion

A

duress

403
Q

To establish duress there must be

A

proof of threat to do something that the threatening party has no right to do and must render the person incapable of exercising free will

404
Q

what is economic duress

A

if the party exacting the price also creates the need… i.e wait to the last minute to offer something so person has to use you

405
Q

What are contracts that are written exclusively by one party and presented to the other party on a take it or leave it basis

A

adhesion contracts

406
Q

What are standard-form contracts

A

Contracts that contain fine-print provisions that shift a risk ordinarily borne by one party to the other

407
Q

Contracts that contain fine-print provisions that shift a risk ordinarily borne by one party to the other

A

standard form contracts

408
Q

To avoid enforcement of standard form contracts plaintiff must

A

show contract or particular term is unconscionable

409
Q

This statute stipulates what contracts must be in writing

A

Statue of frauds

410
Q

What must happen for statue of frauds

A

The party or parties against whom enforcement is sought must have signed the contract

411
Q

What is the purpose of the statue of frauds

A

to prevent harm to innocent parties by requiring written evidence of agreements concerning important transactions

412
Q

What if a contract is oral when required to be in writing

A

it is usually voidable by the party who does not wish to follow through with it

413
Q

What contracts must be in writing

A

1) contracts involving interests in land
2) contracts that cannot by their terms be performed within one year from the day after the date of formation
3) Collateral, or secondary contracts such as promises to answer for debt or duty of another and promises by the administrator or executor of an estate to pay a debt of the estate personally-that is, out of her or his own pocket
4) Promises made in consideration of marriage
5) Under the uniform Commercial Code contracts for sale of goods priced $500 or more

414
Q

What is land

A

real property and includes all physical objects that are permanently attached to the soil, i.e. building fences, trees, and soil

415
Q

What must a contract about land do

A

describe the property being transferred with sufficient certainty for it to be identified

416
Q

What is the one-year rule

A

contracts that cannot by their own terms be performed within one year from the day after the contract is formed must be in writing to be enforceable

417
Q

When does the time period for the one-year period begin

A

the day after the contract is made

418
Q

If performance is possible (doesn’t matter if it is likely) within one year, under contract terms ….

A

it does not fall under the statue of frauds and thus not be in writing

419
Q

What if contract says provide services as long as business needs them does it need to be in writing

A

no because it is possible to perform within a year because the business could go out of business in 12months

420
Q

Is an oral contract for lifetime employment fall under the statue of frauds …explain

A

no because the employee could die within in a year

421
Q

What is a collateral promise

A

one made by a third party to assume the debts or obligations of a primary party to a contract if that party does not perform …must be in writing

422
Q

What is a primary obligation

does it need to be in writing ..

A

third party’s promise to pay another person’s debt ( or other obligation) that is not condition on the person’s failure to pay (or perform) i.e. i’ll pay for my brothers hair cut

don’t have to be in writing

423
Q

What is a secondary obligation

does it need to be in writing..

A

A promise to pay another’s debt only if that person fails to pay

yes it needs to be in writing

424
Q

what is a person who makes a secondary obligation called

A

a guarantor

425
Q

what is the main purpose rule

A

An oral promise to answer for debt of another is covered by the statue of frauds unless the guarantor’s main purpose in incurring a secondary obligation is to secure a personal benefit

need not be in writing

426
Q

If guarantor’s main purpose is to get a personal benefit in incurring a secondary loan does it need to be in writing

A

yes

427
Q

Describe promises made in consideration of marriage

does it need to be in writing

A

A unilateral promise to make a monetary payment or give property in consideration of a promise to marry

must be in writing

428
Q

What are prenuptial agreements

do they need to be in writing

A

agreements made before marriage that define each partner’s ownership rights in the other partner’s property

must be in writing

429
Q

Contracts for the sale of goods priced at $ 500 or more

need to be in writing?

A

yes

written evidence or an electric record

430
Q

A contract need only state the quantity term

wil a written memorandum or series of communication evidencing a contract suffice

A

Yes as long as the party against who, the enforcement is sought has signed.

writing does not have to show designation, terms or price

431
Q

What is specific performance

A

equitable remedy that requires performance of the contract according to precise terms

432
Q

When might partial performance arise

A

when the purchaser has paid part of the price, taken possession of the property, and made permanent improvements to it

433
Q

Describe admissions

A

If a party against whom enforcement of an oral contract is sought “admits” under oath that a contract for sale was made the contract is enforceable to the extent of the quantity admitted

434
Q

With oral promises they can be enforced due to promissory estoppel explain

A

promisee must have justifiably relied on it to her or his detriment, and the reliance must have been foreseeable to the promsior must be no way to avoid injustice except to enforce the promise

435
Q

What constitutes a signature

A

any signature in the contract, can be initals

the docs can just refer to other docs or just physically attached

436
Q

What must be contained in the writing

A

essential terms of the contract
indication parties voluntarily agreed to the terms

in most states..
name of parties, subject matter, consideration

for land.. price and sufficiently clear description f the land

437
Q

What it oral evidence called

A

parol evidence

438
Q

Describe parol evidence

A

testimony or other evidence of communication between the parties that is not contained in the contract itself

439
Q

What is the parol evidence rule

A

if a court finds hat a written contract represents the complete and final statement of the parties agreement, it will not allow either party to present parol evidence

440
Q

When can parol evidence not be presented

A

if the evidence contradicts or varies the terms of the written contract

441
Q

if the contract says this is the entire agreement can prior negotiations or other parol evidence be brought in

A

no just like with Gwen and the TKS, Inc situation

442
Q

What are the 6 exceptions to the parol evidence rule

A

1) Contracts subsequently modified
2) voidable or void contracts
3) Incomplete Contracts
4) Prior dealing, course of performance , or usage of trade
5) Contracts subject to anomaly agreed-on condition precedent
6) Contracts with an obvious or gross clerical( or typographic) error that clearly would not represent the agreement of the parties)

443
Q

What does contracts subsequently modified mean

A

evidence of any subsequent modification (oral or written) of a written contract can be introduced in court

444
Q

Parol evidence can be introduced to show a contract was void or voidable

A

…

445
Q

Parol evidence can be introduced to incomplete contracts

A

…

446
Q

Parol evidence can be introduced to

show how customary practices develop ( prior dealings, course of performance, usage of trade)

A

…

447
Q

What is it when parties agree that a condition must be fulfilled before a party is required to perform the contract

A

condition precedent

448
Q

Describe condition precedent

A

parties agree that a condition must be fulfilled before a party is required to perform the contract

449
Q

if a condition precedent is oral it can be used as parol evidence but

A

it only affects enforceability of the contract it does not change anything

450
Q

If there is typographic error is parol evidence allowed to correct the mistake

A

yes

451
Q

What is a contract called when outside evidence is excluded

A

an integrated contract

there are partially and completely integrated contracts

452
Q

What evidence is allowed for partially integrated contracts

A

only that , that adds to the terms not that, that contradicts the writing

453
Q

do most contracts internationally have to be in writing

A

no , due to the contracts for the International Sale of Goods

454
Q

What is an assignment

A

the transfer of contractual rights to a third party

455
Q

what is a delegation

A

the transfer of contractual duties to a third party

456
Q

the transfer of contractual duties to a third party

A

delegation

457
Q

the transfer of contractual rights to a third party

A

assignment

458
Q

What instance is assignments used in give an example

A

many business financing situations

i.e. a bank may transfer (assign) its rights to receive payment to another firm

459
Q

What is an assignor

A

party assigning the rights to a third party in an assignment i.e. bank

460
Q

What is an assignee

A

party receiving the rights in an assignment

i.e. mortgage company

461
Q

What is an obligee

A

the person to whom a duty or obligation is owed

i.e. mortgage company

462
Q

what is an obligor

A

the person who is obligated to perform the duty

i.e. loan taker

463
Q

the person to whom a duty or obligation is owed

A

obligee

i.e. mortgage company

464
Q

the person who is obligated to perform the duty

A

obligor

i.e. loan taker

465
Q

What rights does the assignee have

A

All the rights the assignor originally had

466
Q

If there is a problem with the item when it has been assigned to someone else who does the obligor go to

A

the original person and they do not have to provide the right of payment to the new assignee

467
Q

What form can assignments be in

A

oral or written but it is best to be in written form

468
Q

What 4 rights cannot be assigned

A

1) The assignment is prohibited by statute
2) the contract is personal
3) the assignment significantly changes the risk or duties of the obligor
4) the contract prohibits assignment

469
Q

State statute prohibits the assignment of future workers compensation benefits

A

…

470
Q

What if a contract is for personal services can the right be assigned to someone else

A

no unless all that remains is a monetary payment because it would change the nature of the obligation

471
Q

What is the prohibition of the transfer of land ownership ( real-estate rights)

A

alienation

472
Q

What are the 4 exceptions to the general rule that a contract can prohibit assignments

A

1) A contract cannot prevent an assignment of the right to receive funds. This exception exists to encourage the free flow of funds and credit in modern business settings
2) The assignment of rights in real-estate cannot be prohibited because it is contrary to public policy
3) The assignment of negotiable instruments such as checks and promissory notes cannot be prohibited)
4) In a contract for the sale of goods, the right to receive damages for breach of contract or payment of an account owed may be assigned even though the sales contract prohibits such an assignment

473
Q

Who should notify who during an assignment

A

The assignee should notify the obligor of the assignment

474
Q

when is an assignment effective

A

immediately , whether or not notice is given

475
Q

What two issues arise when notice is not given

A

Priority issues and Potential for discharge by performance to the wrong party

476
Q

describe priority issues for notice of assignment

A

if the assignor assigns the same rights to two different people who has priority….in the u,s, usually the one who is first assigned the english rule is who gives notice to the obligor

477
Q

describe potential for discharge by performance to the wrong party

A

Obligor can discharge his or her obligation by performance to the assignor discharging the assignee..however, one the obligor receives proper notice only performance to the assignee can discharge the obligors obligations…however the assignee still has a claim against the assignor

478
Q

Party delegating duties

A

delegator

479
Q

What is the delegator

A

party delegating duties

480
Q

party to whom duties are delegated

A

delegatee

481
Q

What is a delegate

A

party to whom duties are delegated

482
Q

is the delegator relieved when they delegate their duties to the delegatee

A

no, a delegation of duties does not relieve the delegator of the obligation to perform in the event that the delegatee fails to do so

483
Q

What makes an delegation effective

A

when the delegator express an intention to make the delegation, they do not even have to use the word delegate

484
Q

When can duties not be delegated (3)

A

1) When duties are personal in nature
2) When performance by a third party will vary materially from that expected by the obligee
3) When the contract prohibits delegation

485
Q

Describe when duties are personal in nature

A

When performance depends in personal skill or talents

it will only be okay when the obligee consents to it

486
Q

What do you call a delegation that is not personal in nature

A

one that is routine and non personal and nature

487
Q

What is an example of when a delegation is not allowed because performance by a third party will vary materially what is expected by the obligee

A

a company asking someone they trust to pick recipients and the person they trust delegates the duty to someone not trust worthy example 17.10

488
Q

What is it called that prohibits delegation in a contract (hint…clause)

A

antidelegation clause

Cannot delegate to anyone at all not even if they are in the same firm

489
Q

obligee must accept performance from the delegatee

A

obligee can only refuse if the duty is one that cannot be delegated

490
Q

what if the obligee never gets what is owed to them do they sue the delegator or delegatee

A

They can sue both

491
Q

An assignment of all rights may create

A

both an assignment of rights and a delegation of duties

492
Q

what are the rights of a third party beneficiary/intended beneficiary

A

they have legal rights and can sue the promisor directly for breach of contract

493
Q

what is a third party beneficiary

A

a third party that benefits from the contract or contract performance is rendered to them

494
Q

If there is a problem who does the third party sue

A

the promisor

When a promise is made for the benefit of another he or for whose benefit it is made may bring an action for its breach

i.e. plaintiff won because it was clear fox owed the money
Lawrence v. Fox

495
Q

What beneficiaries acquire legal rights in a contract

A

intended beneficiaries

496
Q

What are the two types of beneficiaries

A

intended and incidental

497
Q

what are the types of intended beneficiaries

A

creditor beneficiary

donee beneficiary

498
Q

What is a creditor beneficiary

A

They benefit from a contract in which one party (the promisor) promises another (the promisee) to pay a debt that the promisee owes to a third party(the creditor beneficiary)

499
Q

Describe a donee benficiary

A

When a contract is made for the express purpose of giving a gift to a third party , the third party (the donee beneficiary) can sue the promisor directly to enforce the promise

i.e. life insurance

500
Q

What beneficiaries can sue to to enforce contracts made for their benefit

A

intended beneficiaries

501
Q

What does vested mean

A

rights have taken effect and cannot be taken away

502
Q

Describe an incidental beneficiary

A

They benefit from a contract even though their benefit is not the reason the contract was made, there benefit is unintentional

503
Q

how to determine if one is an intended or incidental beneficiary use ..

A

the reasonable person standard and the following factors

1) perfomance is tended directly to the third party
2) the third party has the right to control the details of performance
3) the third party is expressly designated as a beneficiary in the contact

504
Q

What is impossibility of performance

A

When supervening events (such as a fire) make performance impossible in an objective sense

505
Q

When is performance impossible (3)

A

1) When one of the parties to a personal contract dies or becomes incapacitated
2) When the specific subject matter of the contract is destroyed
3) When a change in law renders performance illegal

506
Q

What does discharge mean

A

to terminate one’s contractual duties

507
Q

Whats the most common way to discharge a duty

A

by performance

508
Q

what are promises that must be performed or the parties promising the acts will be in breach of contract

A

absolute promises

509
Q

Describe absolute promises

A

promises that must be performed or the parties promising the acts will be in breach of contract

510
Q

What is a condition

A

a qualification in a contract based on possible future event

511
Q

Conditions are classified as either…

A

express or implied

512
Q

What are the three types of conditions

A

conditions precedent, condition subsequent, concurrent conditions

513
Q

Describe condition precedent

A

Its when a condition precedes the absolute duty to perform.

A condition must be fulfilled before a part’s performance can be required

514
Q

Describe condition subsequent

A

When a condition operates to terminate a party’s absolute promise to perform i.e. if u fail the test u can no longer work here

515
Q

Describe concurrent conditions

A

each part’s performance is conditioned on the other party’s performance

i.e. ill pay you when you deliver the goods

516
Q

Describe complete (strict) performance

A

Conditions expressly stated in the contract must fully occur in all respects

Any deviation breaches the contract and discharges the other party’s obligations to perform

517
Q

A breach of contract is…

A

the nonperformance of a contractual duty

518
Q

What is the nonperformance of a contractual duty

A

A breach of a contract

519
Q

What if performance is not at least substantial when it comes to a breach of contract

A

it is a material breach

520
Q

What happens when there is a material breach

A

non breaching party is excused from the performance of contractual duties. that party can also sue the breaching party for damages resulting from the breach

521
Q

What is a minor breach called

A

a non material breach

522
Q

What happens to the non breaching party when breach is nonmaterial

A

their duty to perform can be suspended until breach is remedied but duty to perform is not entirely excused they must resume performance once breach has been cured their

523
Q

Any breach entitles the non breaching party to sue for damages

A

…

524
Q

only a material breach discharges the non breaching party from the contract

A

….

525
Q

What is the material alteration of a contract rule state

A

If a party alters a contract without knowledge or consent of the other the innocent party can be discharged

526
Q

Impossibility of performance

A

discharges a contract

527
Q

What is the difference between objective and subjective impossibility

A

objective-“impossible for anyone to perform”
subjective -
“impossible for me to perform–does not discharge a contract –this s breach of contract

528
Q

Describe what happens when temporary impossibility arises

A

performance is temporarily impossible and suspends performance until the impossibility ceases

529
Q

what if the lapse of time and circumstances surrounding the contract make it substantially more burdensome for the parties to perform the promised acts

A

the contract is discharged

530
Q

What is a remedy

A

relief provided for an innocent party when the other party has breached the contract. It is the means employed to enforce a right or redress an injury.

531
Q

What is the relief provided for an innocent party when the other party has breached the contract.

A

A remedy

It is the means employed to enforce a right or to redress an injury

532
Q

What are the two types of remedies

A

remedies at law and remedies in equity

533
Q

What is the remedy at law

A

monetary damages

534
Q

What are equitable remedies

A

rescission and restitution, specific performance, and reformation

535
Q

damages compensate the breaching party for the loss of the bargain

A

….

536
Q

innocent parties are to be placed in the position they would have occupied had the contract been fully performed

A

…

537
Q

collecting damages through a court judgement requires litigation

A

…

538
Q

What are the four types of damages

A

1) Compensatory (to cover direct losses and cost)
2) Consequential (to cover indirect and foreseeable losses)
3) Punitive (to punish and deter wrong doing)
4) Nominal(to recognize wrongdoing when no monetary loss is shown)

539
Q

What are compensatory damages

A

they compensate the non breaching party for the loss of the bargain

they are said to make the person whole

540
Q

What type of damages is it when one obtains performance from another source i.e. had to go find another house to paint

A

incidental damages

541
Q

What is the measure of compensatory damages for the sale of goods

A

difference between the contract price and market price

542
Q

if buyer breaches and seller has not produced goods what are the compensatory damages

A

lost of profits on the sale

543
Q

What is the remedy for a seller’s breach of contract for a sale of real estate

A

specific performance

-buyer is awarded the parcel of property for which they bargained for

544
Q

what is the remedy when the buyer is in breach during the sale of land

A

damages is the difference between the contract price and market price

545
Q

When the seller breaches the contract for sale of land by selling the proper to someone one else

A

damages is the difference between the contract price and market price

546
Q

What is the minority state rule when it comes to breach of contract for sale of land and it is non intentional

A

the perspective buyers damages are a refund of any down payments made plus any expenses incurred

547
Q

these type of damages occur when there is no actual damage or financial loss from the breach of contract , only a technical injury is involved

A

nominal damages

548
Q

nominal damages are only rewarded when

A

there is only technical injury involved

they are often small an establish the defendant acted wrongfully

549
Q

What does mitigate mean

A

to reduce

550
Q

mitigation of damages

A

landlord must seek new tenant

employe must take a similar job if one is available

(employer must prove said job existed)

551
Q

What are liquidated damages

A

certain dollar amount to be paid in the event of a future default or breach of contract

552
Q

what is a penalty

A

it specifies a certain amount to be paid in the event of a default or breach of contract it is designed to penalize the breaching party, not make the innocent party whole.

553
Q

What is rescission

A

an action to undo or terminate a contract -to return the contracting parties to the positions they occupied prior to the transaction

554
Q

What entitles one to rescind

A

failure of one party to perform

rescinding party must give prompt notice to the breaching party

555
Q

What is restitution

A

returning proper, good, or funds previously conveyed or equal dollar amount if said items were consumed.

556
Q

What is the remedy of specific performance

A

performance of act promised in the contract

557
Q

Contracts for the sale of goods rarely qualify for specific performance

A

the legal remedy of monetary damages is ordinarily adequate

558
Q

specific performance for the sale of goods contracts is only enforced opposed to monetary damages when the item is

A

unique or rare

559
Q

does specific performance apply to land

A

yes because all land is unique only if the land is already sold will monetary damages be awarded

560
Q

No enforced specific performance for personal service

A

…

561
Q

what is reformation

A

When parties have imperfectly expressed their agreement in writing. it allows a court to rewrite the contract to reflect the parties true intentions

562
Q

When might reformation occur

often happens before another remedy is sought

A

1-when fraud or mutual mistake is present
2-written contract incorrectly states the parties oral agreement
3-covenants not to compete

563
Q

What is a waiver

A

when a non breaching party is willing to accept defective performance of a contract

564
Q

What are the consequences to the waiver of a breach

A

contract continues as if the breach never occurred

waiver extends only to the matter waived and not the whole contract

565
Q

What are limitations-of-liability clauses

A

provisions that affect the ail ability of certain remedies

566
Q

provisions that affect the ail ability of certain remedies

A

limitations of liability clauses

B Law (2 decks)

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