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IHUM 201 > Test 2 > Flashcards

Test 2 Flashcards

1
Q

Contract Elements

A
  • Agreement/ “Mutual Assent”
  • Consideration
  • Capacity
  • Legality of Object
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2
Q

Contract Defenses

A
  • Assent is Genuine (No uress, undue influence, misrep, or mistake)
  • Statute of Frauds - (mus be written)
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3
Q

If contract involves products and other?

A

Governing law depends on the predominate factor (goods or other)

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4
Q

Classify Contracts

Bi vs Uni

A

Bilateral - Mutual promises

Unilateral - One party promises, other actions by action or refraining from action

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5
Q

Classify Contracts

Express v Implied

A

Express – both parties manifest assent by word
• Implied (“Implied in Fact”) – Conduct indicates a
contract.
• Elements:
• The P provided property or services to the D
• The P expected to be paid by the D for the property or services
and did not not provide the property or services gratuitously.
• The D was given an opportunity to reject the property or
services provided by the P but failed to do so.

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6
Q

Classify K

Valid….

A

Valid – All elements met.
• Void – Essential elements missing – Not a K.
• Voidable – Defective Contract – Still a K, but “may” be
voided by one or both parties.
• Examples: Fraudulent Misrepresentation, Duress
• Unenforceable - It is not void or voidable, but there is a
legal defense to the enforcement.
• Statute of Frauds, Statute of Limitations

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7
Q

Mutual Assent

A

An agreement between the parties.
Classic: Offer and Accept (Words or Conduct)
Objective Standard!
• Assent, agreement, or intention of a party as it reasonably
appears from words or conduct.

Not Valid if - Duress, Undue, Influence, Fraud, Nonfraud Misrep

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8
Q

Offer Elements

A

Intent (Joke Excited, or Frustration - RP Obj Std)
Communication - OR to EE (Advertised reward for lost watch - Offeree must know of offer to accept)
Definitiveness

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9
Q

Lucy V Zehmer

A

Farm case - specific performance because to an RP, this constituted a contract - included revision so that wife could sign it, etc.

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10
Q

Offers, Invitation for Offers, Ads

A

Valid Offer: •“I will buy your car for $25,000.”
•Invitation for an Offer/Preliminary Negotiations:
•“Would you be interested in selling me your car for $25,000?”
•Frodo tells Sam that he is thinking of selling his textbook and asks if Sam would pay $100 for the book.
Ads - Generally solicitation for offer, unless ULTRA specific. Unilat Offer if includes a reward in the advertisement (fuzzy socks to first 20 in line)

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11
Q

Termination of Offers

A

Operation of Law (Destroyed, Death, Later Illegal, Lapse of Time)
Parties’ Actions: - Revocation
-Rejection (expressed or implied word, conduct, silence)
-Counteroffer
-Accept (K)

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12
Q

Revocation

A

Free to revoke anytime b/f accept
even if told by 3rd party
Exceptions:
Option Contract ($$ to OR to keep offer open)
UCC: Firm Merchant Rule (UCC - if merchant says in writing that offer will be held open, must honor offer for RP time)
Irrevocable Offers of Unilateral K - Unilat, can revoke before thy start, but once they start, must give them RP time to complete

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13
Q

Acceptance

A

Dispatch. - Show willingness to enter K
Unilat - Performance with intent of accept
Bilat - Communication (grumbling accept counts)
Generally silence is not accept, unless you agree (Netflix)

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14
Q

Acceptance Alters Offer

A

Common Law - Services
Mirror Image Rule - If diff at all, it’s reject and counter

UCC: If essential terms are agreed upon (Price, Quant, Deliv) K is formed unless Acceptance Form must be agreed upon in Entirety

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15
Q

Mailbox Rule

A

Offer, Rej, Rev: Effective upon receipt
Acceptance: Effective upon dispatch
Three Exceptions where Accept is effective on Receipt:
-OR states such in offer
-EE sends Rej, then Accept. First to arrive wins.
-Sent by unreasonable means

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16
Q

Means of Acceptance

A

-EE must use means required; if EE uses a diff means it =rejection and counteroffer
If no means stated: Reasonable means - effective on dispatch. Unreasonable - Effective upon receipt.

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17
Q

Consideration and Elements

A

something of legal value exch for a promise.

  • Legal Sufficiency- Value (Money, Promise not to smoke, Promise to put a scholarship in someone’s name)
  • Bargained-for Exch - intentionally entering a BFE of promise. (No include Gift promise until transferred, No past consideration)
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18
Q

Legal Sufficiency

A

-Preexisting legal duty - NO
-Modification - Common Law says mod must have new consid. UNLESS unforeseeable.
UCC says new consid not need, but both in GOOD FAITH

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19
Q

Settlement of Dispute

A

Undisputed - must have mutual new consideration if discount given (paid a week earlier) to be binding
Disputed - pay less than agreed to (PIF) - If A accepts, it’s binding, both waive right to sue - accord and satisfaction

20
Q

Legal Sufficiency: Illusory Promise vs. Conditional

A

Illusory - Not a K, except Satisfaction Clause = Personalized - taste. Other - RP

Conditional - K - based on outside factors, effective K when entered, not when condition is met

21
Q

Promissory Estoppel / Detrimental Reliance

A

Promissory Estoppel NEVER MAKES A K.
Exception to Consideration - based on injustice, equitable request to enforce the promise.
Elements:
-OR makes promise to EE
-OR should reasonably expect EE to rely on promise
-EE actually relies on it to their detriment
-Injustice would be caused if promise not enforced

22
Q

Conduct Invalidating Assent:

Fraud

A
  • Fraud in Inception - don’t know you’re signing a contract, you’re told it’s a petition
  • Fraud in induce or Fraud Misrep - VOIDABLE by innocent party if Fraud or Material
23
Q

Elements of Fraud Misrep

A 
False rep
Of Fact
Material (Big Deal)
Intention to deceive (knew it was a lie)
Rep is justifiably relied upon - don't have to investigate
Innocent party injured

-Includes denial of knowledge
Doesn’t count as Fraud misrep if the truth is in the K. Watch out for TOO GOOD TO BE TRUE deals - check K

24
Q

Nonfraud Misrep

A

-Material, false factual stmt that induces another to justifiably rely - made without scienter ( lacks intent to deceive)
-Voidable because it has to be material
Includes Negligent Misrep (careless in ascertaining truth) and Innocent Misrep (no knowledge of falsity, no carelessness)

K is reversible if FRAUDULENT or MATERIAL. Damages if both.

25
Q

Duress and Undue Influence

A

Duress - Blackmail. any wrongful or unlawful act or threat that overcomes free will of a party. Two types
Physical Duress: Gun to head, K is void
Improper threats or act: compel a person to enter K - Duress must be from other party, VOIDABLE, no reasonably alternative. Subjective std - did threat really induce assent?

Undue - unfair persuasion of a person by party in a relationship of trust - VOIDABLE, Subj std, whether submission was induced

26
Q

Legality

A

Gambling Statutes are contract, not legal in every state

General Rule - If in illegal K, court will leave you as it finds you, won’t enforce K.

27
Q

Contrary to Public Policy

A

Exculpatory Clause
Negligent - must be obvious, prevents being sued
Trade Restraint - Noncompete. enforceable with proper limits (Line of biz, area, time). Sales of biz, During and After Emp (After courts hesitant)
Unconscionable
Usury Statutes - Max rate of int, etc.

28
Q

Statute of Frauds

A

K must be in writing for MYLEGS and exceptions:
Marriage (not on test)
Year (when entered, if AT ALL possible to be performed in a year, verbal K is valid, year start at contract date)
Land (Except Part Perf $ AND Detrimental Reliance improved)
Executor
Guarantor/Collateral (Except Main Purpose Doctrine)
Sale of Goods (500 Lease 1000) - Except 1) Admits in litigation or Special Manuf Goods, substantially begun, could not resell

29
Q

Parol Evidence and Exceptions

A 
Prior written or verbal negotiations and same time verbal agreements that change K are excluded if K is "final" and has integration clause
Exceptions:
Ambiguous Terms (Bring OUtside Evidence)
Typo (8% vs 18%)
Undue Influence
Modification (After signing)
30
Q

3rd Parties

A

Assignment - Assign away the good / benefit
Delegation - delegate the duty

Usually requires permission from both parties
Intentional Ben - stated/intended a 3rd party to ben - Legal rights
Incidental Ben - just so happens that K affects another positively - no legal right

31
Q

Breach Vs. Condition

A

Breach - Violation of a duty or covenant under K

Condition - event required to happen before the other party is oblig. under K

32
Q

Discharge of a K

Agreement

A
  • Mutual Recission
  • Substitued K
  • Novation (Both parties agree to sub a new party for a current party, all agree)
  • Accord and Satisfaction (settle a disputed k)
33
Q

Discharge of a K
Impossibility
Commercial Imprac

A

Impossible - Obj, Must show that no one else could have performed the K, HARSH
Commercial - Softens Impossible rule, TEST - Unforeseen and Unjust Hardship can relieve duty

34
Q

Discharge of a K
Completion
Breach

A

Comp - All is right in the world.
Breach - Common Rule
Material breach (Inferior performance): Discharges nonbreaching party
Minor/Immat. Breach (Subst. Perf) Does not discharge the nonbreaching party
Can sue for damages with both
UCC RULE - Perfect Tender - Any breach discharges nonbreaching party

35
Q

Discharge of a K

Anticipatory Repudiation

A

A tells B they’ll breach, B can sue immediately, but make sure their statement of breach is in writing

36
Q

Equitable Remedies

A

Equitable Remedies - recover in equity when damages will not adequately compensate

Reformation - rewrite a contract
Specific Perf - court command a party to fulfill K (Unique Prop and Real Prop, NOT Pers Services - slavery)
Injunction - Stop a party from acting (noncompete, mining, will also stop pers services)

37
Q

Compensatory Damages

A

Compensate party for LOSS OF VALUE - COST AVOIDED + INCIDENTAL DMG + CONSEQ DMG

38
Q

Liquidated Dmg

A

Two Tests: more challenging to calc dmg AND reasonable amt

Otherwise it’s a penalty = party can seek actual dmg

39
Q

Damages for Misrep

Benefit of the Bargain vs Out of Pocket

A

Used in Fraud and Neg Misrep
Awarded dmg based on what you bargain for in contract
Out of Pocket : Innocent Misrep, award dmg based on actual loss

40
Q

Limits to Legal Dmg

A

Foreseeability - Parties must know or have had reason to know of damages at time parties entered (let other party know of all possible dmg)
Certainty - Prove dmg with certainty
Mitigation - Non-breaching has oblig to mitigate dmg, dmg that coul dhave been mititgate is deducted from dmg amt

41
Q

Limits to Legal Dmg

A

Foreseeability - Parties must know or have had reason to know of damages at time parties entered (let other party know of all possible dmg)
Certainty - Prove dmg with certainty
Mitigation - Non-breaching has oblig to mitigate dmg, dmg that coul dhave been mititgate is deducted from dmg amt

42
Q

Restitution / Quasi Contract

A
  • Ben conferred to D from P
  • D knows of ben
  • Accept or retent of ben by D would be unjust without compensating P
    Examples:
    Rescind a contract
    Party injured by breach
    Party who cannot enforce a K due to SoF
    Party in Default - PROCEEDS
43
Q

Intentional Interference w contractual Relations Elements

A
  • Valid enforceable K between parties
  • 3rd Party Knowledge of K
  • 3rd Party inducement of breach (threats or better K)
44
Q

Fixtures

A

Formerly pers prop, attached to land or bldg, becomes real prop. Upon sale, all real prop goes to buyer.
1 - K governs, if silent NOT specific enough
2 - Easy removal? No, fixture. Yes, look to next part
3 - Purpose of item - Peculiar? Pers. Unless prop purchased on this basis

45
Q

Bailment

A

Borrowing/lending, absolute duty to return prop.
Bailor - Owner. If sole ben, bailee owes low care
Bailee - Borrow. If sole ben, bailee owes high care
Commercial - Mutual ben, RP Standard

Bailor must prove bailment and dmg, then
Presumption of fault is on bailee, must show they used right care.

46
Q

Leases

A

Assignment (sell, both have duty to landlord) vs sublease (now, subtenant no duty to LL)
Termination: Adequate notice is full period if less than a year, 6 months if a full year.
Leaseholder must pay rent & not dmg.
LL must allow quiet enjoyment. Constructive eviction - give LL opp to correct breach before abandoning.

47
Q

Recording

A

Recordation = delivere executed doc to recorders office in county. If you don’t a subsequent good faith purchaser will acquire the title superior to yours.
Record Deeds, Mortgages, Leases

IHUM 201 (3 decks)

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