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HM 203 > Test 2 > Flashcards

Test 2 Flashcards

1
Q

verbal contracts

A

enforceable

can be difficult to prove

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2
Q

written contracts

A

clearly lay out terms of the agreement

certain types of contracts MUST be in writing

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3
Q

bilateral contracts

A

each side makes a promise to do something

“a promise for a promise”

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4
Q

unilateral contract

A

one party makes a promise that the other party can only accept by doing something

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5
Q

express contract

A

both parties explicitly state the terms of the contact (can be oral or written)

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6
Q

implied contract

A

the words and conduct of the parties indicate an agreement even if no words are spoken or written

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7
Q

executory contract

A

a contract that has been formed, but not yet fully performed by one or more of the parties

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8
Q

executed contract

A

a contract that has been fully performed by all parties

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9
Q

valid contract

A

meet all seven of the criteria

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10
Q

unenforceable contracts

A

parties intend to form a valid contract, but some rule or law forbids enforcement

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11
Q

void contract

A

contracts that neither party can enforce

treated as if they never existed in the first place

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12
Q

voidable contract

A

contracts that may be defective, but are still enforceable by the election of one of the parties

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13
Q

criteria for a valid and binding contract

A 
offer
acceptance
consideration
capacity
legality
genuine consent
proper form
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14
Q

offeror

A

person making the offer

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15
Q

offeree

A

person to whom the offer is made

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16
Q

ways that an offer can be terminated

A 
outright revocation
lapse in time
rejection
counteroffer
destruction of the subject matter
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17
Q

revocation

A

an offer can be revoked at any time prior to being accepted

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18
Q

rejection

A

terminate an offer and the offeree then loses the ability to accept unless the offer is put back on the table

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19
Q

counteroffer

A

reject an offer and put a different offer on the table

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20
Q

acceptance

A

saying or doing something to accept an offer

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21
Q

the mirror image rule

A

the acceptance has precisely the same terms as the offer

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22
Q

the mailbox rule

A

the offer has been accepted once the offeree has “dispatched” it or “placed it in the mail”

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23
Q

consideration

A

if one side gets all the benefit and the other gets nothing, then an agreement lacks consideration and is not an enforceable contract

money
engagement ring

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24
Q

three rules to consideration

A
  1. both parties must get something of measurable value from the contract
  2. a promise to give something of value counts as consideration
  3. the two parties must have bargained for whatever was exchanged and struck a deal
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25
Q

gift promises

A

gratuitous promises are unenforceable because they lack consideration

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26
Q

illegal consideration

A

a contract cannot be supported by a promise to refrain from doing an illegal act

contracts based on illegal consideration are void

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27
Q

preexisting duties and past consideration

A

a promise lacks consideration if a person promises to perform an act or do something he or she is already under an obligation to do or act that they have already done

the promise is unenforceable because no new consideration has been given

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28
Q

capacity

A

the ability to understand the terms of the contract and appreciate that the failure to perform its terms can lead to legal liability

without capacity the contract is voidable

burden to prove incapacity is always on the person asserting the incapacity

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29
Q

minors

A

the infancy doctrine

the minor still has the duty of restoration meaning that is disaffirmed, the minormust return the goods in the condition they are in at the time of the disaffirmance

obligated to pay for the necessaries of life that they contract for

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30
Q

the infancy doctrine

A

allows minor to disaffirm (cancel) most contracts that they enter into with adults

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31
Q

ratification

A

upon reaching the age of majority, the person may also “accept” the contract that they previously entered into as a minor

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32
Q

mentally incompetent people

A

the law protects people suffering from substantial mental incapacity from enforcement of contracts against them

law requires a person to have been legally insane

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33
Q

legal insanity

A

a state of contractual incapacity as determined by the law

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34
Q

adjudged insane

A

judge says you are insane, need to be in a mental hospital

contracts are void

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35
Q

insane, but not adjudged insane

A

haven’t been in front of a judge

contracts are voidable

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36
Q

who can’t enter into a contract?

A

drunks
mentally incapacitated
minors

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37
Q

intoxicated person

A

contracts are voidable

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38
Q

legality

A

the object of every contract must be lawful

contracts with an illegal object are void and unenforceable

contracts contrary to statutes
contracts contrary to public policy

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39
Q

contracts contrary to statutes

A

federal and state legislatures have enacted statutes that prohibit certain types of conduct

contracts to perform an activity that is prohibited by statute are illegal

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40
Q

contracts contrary to public policy

A

contracts that have a negative impact on society or that interfere with the public’s safety and welfare

such contracts are void

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41
Q

covenant not to compete

A

contracts contrary to the public

courts will look at

  • line of businesses protected
  • geographic area protected
  • duration of the restriction
42
Q

non-compete agreements

A

employment
enforceable only to the extent necessary to protect trade secrets, confidential information and customer lists developed over an extended period

43
Q

unconscionable contract

A

some lawful contracts are so oppressive or manifestly unfair that they are unjust

to prevent to enforcement of such contracts, the courts have developed the equitable doctrine of unconscionability

44
Q

unconscionable contracts

-elements that must be shown to prove that a contract or clause is unconscionable

A
  • the parties possessed severely unequal bargaining power
  • the dominant party unreasonably used its unequal bargaining power
  • the adhering party had no reasonable alternative
45
Q

genuine assent (consent)

A

the requirement that a party’s assent to a contract be genuine or real

  • mistake
  • fraud and misrepresentation
  • duress
  • undue influence
46
Q

mistake

A

unilateral mistake: error made by only one party to the contract

mutual mistake: error made by both parties to the contract

47
Q

fraud

A

the wrongdoer made a false representation of material fact

voidable at the option of the innocent party

48
Q

material misrepresentation

A

BIG lie

can void contract

49
Q

puffery

A

“puffing up” or making your product or services look more attractive
not fraud

50
Q

innocent misrepresentation

A

occurs when a person unintentionally makes an assertion that is not in accord with the facts

the innocent party may rescind the contract but cannot recover damages

not fraud

51
Q

duress

A

occurs when one party threatens to do some wrongful act unless the other party enters into a contract

52
Q

undue influence

A

one person takes advantage of another person’s mental, emotional, or physical weakness and unduly persuade that person to enter into a contract

53
Q

proper form

A

although many oral contracts are valid and enforceable, common law has traditionally required certain contracts to be in writing

statute of frauds

failure to adhere makes a contract unenforceable

54
Q

statute of frauds

A

if the contract deals with certain things it needs to be in writing

  1. contracts regarding interests in land
  2. contracts that cannot be performed within one year
  3. contracts to pay another person’s debt if that person fails to pay (guarantee contract)
  4. contracts for the sale of more than $500 in goods
55
Q

promissory estoppel

A

equitable doctrine that prevents the application of the statute of frauds

it permits the enforcement or oral contracts that should have otherwise been in writing under the statute of frauds to prevent injustice pr unjust enrichment

56
Q

internet contracts

A

internet contracts are as enforceable as their “land-based” counterparts

“click-on acceptance” -generally considered to be signed consent

57
Q

the parole evidence rule

“four corners rule”

A

if there is a written contract, any prior contemporaneous oral or written statements are inadmissible as evidence to alter or contradict the terms of the written contract

can’t look beyond the 4 corners of the document

58
Q

privity

A

the state of two specified parties being in a contract

contracting parties have a legal obligation to perform the duties specified in their contract

can sue for breach if one party fails

59
Q

intended beneficiary

A

a third person who the parties intend to benefit from the contract
life insurance
health insurance
“gift” contracts

60
Q

incidental beneficiaries

A

cannot sue to enforce a contract entered into by others

61
Q

assignment

A

giving someone else the benefit of your contract. you can only assign rights arising from the contract

transfers of contractual rights by the obligee to another party

62
Q

delegation

A

giving someone else the responsibility to perform the contract on your behalf. only duties are delegated

63
Q

assignor

A

the obligee who transfers the right

64
Q

assignee

A

the party to whom the right has been transferred

65
Q

delegation

A

a transfer of contractual duties by the obligor to another party for performance

66
Q

delegator

A

The obligor who transferred his or her duty

67
Q

delegatee

A

the party to whom the duty has been transferred

68
Q

discharge by agreement

A

the parties agree to cancel the contract

69
Q

discharge by impossibility

A

the contract is cancelled due to the complete inability of one party to perform

70
Q

force majeure clauses

A

the parties may agree in their contract that certain events will excuse nonperformance of the contract

natural disasters
labor strikes
shortages of raw materials

71
Q

breach of contract

A

the failure of one or both parties to perform the duties owed to the other party under the contract

72
Q

statute of limitations

A

you do not have an unlimited amount of time to file a lawsuit

you must file your lawsuit within the limitations period for your state or else you will be forever precluded from bringing the suit

73
Q

remedies for breach

A

when one party breaches, the other party may have several different interests

74
Q

expectation remedies

A

designed to put the non-breaching party in the position they would have been if the contract had been fully performed

compensatory damages
consequential damages
you cant get punitive damages

75
Q

compensatory damages

A

award of money intended to compensate a non-breaching party for the loss of the bargain

76
Q

consequential damages

A

forseeable damages that arise from circumstances outside the contract

77
Q

mitigation of damages

A

a plaintiff seeking to collect damages for breach on contract must prove that he attempted to mitigate the loss

78
Q

mitigate

A

to reduce or lessen

79
Q

equitable remedies

A

available if there has been a breach on contract that cannot be adequately compensated by a legal remedy

80
Q

specific performance

A

situation where the court will compel the breaching party to uphold his end of the contract

most often used when the subject matter of the contract is unique

land contracts is the most common type

81
Q

injunctions

A

court requires ones party to refrain from doing something

82
Q

UCC (the uniform commercial code)

A

designed to simply, modernize and ensure consistency in the enforcement of certain contracts

sale of goods and warranties on the sale of goods

83
Q

goods

A

any movable physical object other than money or securities

84
Q

merchants

A

persons who routinely deal in particular goods

held to a higher standard than non-merchants under the UCC

85
Q

contract formation under the UCC

A

protects people from merchants

allows merchant to merchant transactions to be easy

86
Q

statute of frauds

A

generally common law rules

$500.00 or more must be in writing

writing must be signed by defendant

quantity of goods must be clear in the contract

87
Q

breach on contract remedies under the UCC; cover

A

right of the buyer to obtain substitute conforming goods when necessary and then sue for the difference between the original contract price and the cover price plus any incidentals

88
Q

warranty

A

seller’s assurance to the buyer that the goods meet certain standards of quality

89
Q

express warranty

A

created when a seller or lessor makes an affirmation that the goods he is selling or leasing meet certain standards of quality, description, performance, or condition

particular item meets a particular need

affirmation of fact or promise “these tires will last for at least 150,000 miles”

descriptions “made of genuine leather”

models or samples

90
Q

implied warranty of merchantability

A

when a merchant sells goods that are of average quality and fir for the ordinary purpose for which they are sold

does not apply to sales or leases by non-merchants or casual sales

91
Q

foreign substance act

A

if the object that causes the injury is not normally found or could not expect to be found associated with the dish

92
Q

reasonable expectation test

A

court must determine based on the totality of all of the circumstances if it was “reasonable” for the item to be found in the dish

93
Q

implied warranty of fitness for a particular purpose

A

a warranty that arises where a seller warrants that the goods will meet the specific needs of the buyer as told to them

applies to both merchant and nonmerchant sellers

94
Q

warranty disclaimers

A

warranties can be disclaimed or limited

if an express warranty is made, it can only be limited if the disclaimer and the warranty can be reasonably construed with each other

all implied warranties of quality may be disclaimed by expressions like as is, with all faults, or other language that makes it clear to the buyer that there are no implied warranties

95
Q

warranties can only relate to a breach of contract

A

breach of contract: you have to be in the contract

tort case: you dont need to have a relationship or contract with the other person

96
Q

strict products liability

A

related to torts

must prove:
defendant sold product in defective condition
plaintiff was injured
injury was caused by the defect

97
Q

strict liability chain of distribution

A

all parties in the chain of distribution are strictly liable

sue everyone

defects in manufacture
defects in design
defects in packaging
failure to warn

98
Q

debtor

A

the borrower in a credit transaction

99
Q

creditor

A

the lender in a credit transaction

100
Q

unsecured debt

A

debt that doesnt require any security/collateral to protect the payment of the debt

101
Q

secured debt

A

debt that requires some thing of value to secure payment of the loan

102
Q

commercial paper

A

a contract to pay money

notes: promisory note
2 party contract

draft: check
3 party

HM 203 (2 decks)

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