BLAW 2361 FINAL REVIEW

The parol evidence rule

Terms of a written agreement intended to be the final expression of parties' intentions cannot be contradicted by prior or contemporaneous agreements. Exceptions: consistent terms, course of dealing and trade.

Discharge by performance

The contract comes to an end when both parties fulfill their respective duties by performing the acts they have promised. Types of Performance: 1. Complete Performance 2. Substantial Performance (minor breach): one of the parties does most of what they had to do, but not everything **innocent party has right to sue; when breach is minor, you remain in contract 3. Performance to the Satisfaction of One of the Parties or a Third Party (personal services contracts v. other kinds of contracts) ex: professors boss wanted dog portrait, didn't meet "personal satisfaction", not legally required to pay for it

Material breach of contract

The nonperformance of a contractual duty. -occurs when there has been a failure of consideration. -Discharges the non-breaching party from the contract. *courts look at: did the party get most of what they bargained for? (minor) if it wasn't anything close (material) **YOU CAN SUE FOR ANY BREACH; you can only get off the hook it the breach was material

Commerce Clause

The part of Article I, Section 8, that gives Congress the power to regulate commerce with foreign nations and among states. -interstate commerce does not require that things travel from one state to another (Wickard v. Filburn- excess wheat growing)

When the rights of third-party beneficiaries vest

Third party's manifesting assent to the contract, OR Third party's materially altering position in detrimental reliance on the contract.

Mitigation of Damages

When breach of contract occurs, the innocent injured party is held to a duty to reduce the damages that he or she suffered. -Duty owed depends on the nature of the contract. (what's reasonable) ex- Trilogy Software ordered hardware from Japan -during transit, expensive hardware got covered in tar -would cost more to clean then to replace it= sues FedEX (mitigation wasn't reasonable) -FedEX had to pay costs

Requirements for Strict (product) Liability

a branch of tort law that imposes a much higher level of liability when harm results from ultra-hazardous acts or defective products Requirements (hold manufacturers liable) : 1. Product must be so defective that it is reasonably dangerous 2. Must be defective when sold (not while in transportation) 3. Must be normally engaged in the business of selling that product 4. Must incur physical harm to self or property 5. Defective condition must be proximate cause of the injury or damages 6. Must of been changed by the time the product was sold

Personal Jurisdiction

a court's authority to bind the defendant to its decisions

Kate buys a piece of land for a second music studio. Before construction, she discovers there are significant oil deposits under her property. Kate contracts with Shell Oil Company to drill for the oil and sell it. The oil is worth approximately $500,000. The deal between Kate and Shell Oil Company is governed by: a) Real property law only. b) The Uniform Commercial Code only. c) Both real property law and the Uniform Commercial Code. d) The CISG.

a) Real property law only.

Ethan is an employee of Kate's. In deciding whether Ethan is acting within the course and scope of his employment when he commits a tort against Ben, a court will not consider whether: a) The act is commonly one performed by employees on their employers' behalf b) Ethan made statements indicating that he was acting on Kate's behalf c) Kate authorized Ethan's act d) Kate furnished the means or instrumentality by which the injury on Ben was inflicted

b) Ethan made statements indicating that he was acting on Kate's behalf

If Kate learns that the builder of her studio will be two weeks delayed in construction, what is Kate's obligation? a) Micromanage the rest of the project b) Mitigate her damages c) Sue everyone involved in the project d) Go to arbitration

b) Mitigate her damages

Over the telephone, Kate orally contracts to sell $6000 of musical instruments to a studio in France. Assuming the oral contract includes all necessary terms, is it enforceable? a) No, because it is not in writing. b) Yes, because the CISG does not require contracts to be in writing. c) Yes, because the UCC does not require contracts to be in writing. d) Yes, because the offer is irrevocable.

b) Yes, because the CISG does not require contacts to be in writing.

Kate's agreement to build a music studio on the condition that she is approved for financing includes: a) A concurrent condition b) A condition precedent c) A condition subsequent d) An illegal condition

b) a condition precedent

The structure of the federal and Texas court systems

federal: U.S. District Court --> Court of Appeals --> Supreme Court texas:

Donee beneficiary

gift to them ex: life insurance contract including children

Contributory Negligence

if in any way the plaintiff made their injuries worst, you aren't allowed to recover money from defendant -Under common law, if Plaintiff if any way caused his injury, he was barred from recovery.

In Rem Jurisdiction

jurisdiction over the property in a dispute ex: no minimum contracts in TX; aunt dies and you receive property; fight with sibling for property

Condition Subsequent

may happen AFTER the parties start performing contract (and change happens = change obligations)

Fraudulent misrepresentation

means the owner knows that the statement is false, or that the speaker makes a reckless misrepresentation.

(The Litigation Process) As the first step in filing her lawsuit against Big Oil Company, Jennifer must file which document with the court? What elements must that document include? After she files this document, what next step must she take? And what should Big Oil Company do in response?

petition or complaint must include the facts of the case, the jurisdictional grounds, the standing of the plaintiff, the prayer for relief, the legal basis of the claim. After the petition is filed, Jennifer must serve process on the defendant. In response, Big Oil should file an answer within 20 days.

Assault

ruly afraid of getting hurt, doesn't have to have physical contact

International Sale of Goods (CISG)

similar to UCC, making it easy for U.S. *United Kingdom haven't signed CISG DIFFERENCE: Mirror Image Rule: CISG additional terms proposed are added to contract unless material (but doesn't have it) Irrevocable Offers: nothing needs to be in writing in CISG if you say never mind Statute of Frauds: no contracts need to be in writing to be enforceable under the CISG (oral) Necessity of a Price Term: under CISG the QUANTITY and PRICE must be confirmed (definite) Time of Contract Formation: affective when received (CISG doesn't have mail box rule)

Condition Precedent

some standard has to happen BEFORE the parties perform

Trespass to personal property

the intentional interference with another's use or enjoyment of personal property without consent or privilege. - Conversion (theft; taking with the intent to keep) - Disparagement of Property (reduced the value of someones property; saying/vandalism) - Slander of Title (lie about someones ownership interest) or Quality (lie about someones product)

Waiver of breach

-A pattern of conduct that waives a number of successive breaches will operate as a continued waiver. -Non-breaching party can still recover damages, but contract is not terminated. -Non-breaching party should give notice to the breaching party that full performance will be required in the future.

Discharge by operation of law

-Alteration of The Contract -Statutes of Limitations: if you wait too long to sue for breach of contract, the other party is off the hook (do not want!!) -Bankruptcy: student loans survive bankruptcy -Impossibility or Impracticability:

Formation of the Agency Relationship

-Consensual Agreement. -No consideration required. -Principal needs contractual capacity; Agent does not. -For any legal purpose.

Discharge by Agreement (especially novations)

-Discharge by Rescission -Discharge by Novation: two parties have a contract, new third party joins, and NEW contract is formed and extinguishing old obligation from one of the parties 1. Previous Obligation 2. All parties agree to new contract. 3. Extinguishment of old obligations 4. New Contract Formed -Discharge by Substituted Agreement -Accord and Satisfaction

Election of Remedies

-Doctrine created to prevent double recovery. -Non-breaching party must choose which remedy to pursue (although pleading in the alternative is allowed). -Note that the UCC rejects election of remedies. Cumulative in nature and include all the available remedies for breach of contract.

Reformation

-Equitable remedy allowing a contract to be reformed or rewritten to reflect the parties true intentions. -Available when an agreement is imperfectly expressed in writing. -Occurs most often when fraud or mutual mistake (like a clerical error) is present. -Reformation usually sought so that another remedy may be pursued as well.

Quasi-contracts (especially regarding recovery)

-Equitable theory imposed by courts to obtain justice and prevent unjust enrichment. -Party seeking quantum meruit must show the following: 1. A benefit was conferred to the other party. 2. Party conferring did so with the reasonable expectation of being paid. 3. The benefit was not volunteered. 4. Retaining benefit without paying for it would result in unjust enrichment of the party receiving the benefit.

A principal's liability for torts committed by independent contractor

-First determine whether worker is employee or independent contractor. *General rule: Employer is not liable for acts of independent contractors because Employer no right to control. -Exception: hazardous activities -Independent Contractor is liable for her own torts.

Non-assignable rights

-If the assignment is contrary to statute. -When a contract is personal in nature. -When assignment materially changes rights or duties of obligor. -If the contract stipulates the right cannot be assigned.

The Uniform Commercial Code (especially regarding the Sale of Goods)

-Model law intended to facilitate commercial transactions by providing a single, integrated framework. -Enables parties to contract quickly. -Has been adopted by the Texas Legislature in the Texas Business & Commerce Code -Recently revised; proposed amendments are awaiting adoption by states. -UCC Article 2: Sale of Goods 1. Modifies common law of contracts. 2. UCC preempts common law. 3. Where UCC is silent, common law governs. **does not apply to real estate UNLESS there is a "good" (something that can be touched) that can be severed by the seller **if the good is severed by the buyer, then Article 2 does NOT apply

Statute of frauds

-Sale of goods over $500 must have a signed writing to be enforceable. -Exceptions to this rule: 1. Specially manufactured goods. 2. Admissions by breaching party. 3. Partial performance. 4. Merchant doesn't object within 10 days. -Oral agreement enforceable after written confirmation between merchants.

Duties that are non-delegable

-When special trust has been placed on the obligor. (fiduciary duty) -When performance requires personal skill or talents. (ex: can't delegate architect to get to do job YOU were hired for) -When performance will vary materially from obligee expectations. -When the contract expressly prohibits delegation.

Hadley v. Baxendale (1854)

-late delivery= causing loss profit making the company not profitable -carrier assumed they had a spare crank shaft -no notice given to carrier of breach --> carrier wins (didn't know of loss)

Defenses to Negligence

1) Good Samaritan Statues 2) Assumption of Risk 3) Superseding Cause (unforeseeable) 4) Contributory Negligence 5) Comparative Negligence

sources of American law

1. Constitutions 2. Statutes 3. Equity Law 4. Common Law 5. Administrative Law 6. Executive Orders 7. Judicial Review

Factors that indicate that a third-party beneficiary is an intended beneficiary

1. Performance is rendered directly to 3rd party. 2. 3rd party's right to control contract details. 3. 3rd party expressly designated as beneficiary.

How a lawsuit progresses, from filing to resolution

1. Pleadings 2. Discovery 3. Pre-Trial 4. Trial 5. Post-Trial Appeals and Motions Enforcement and Collection of Judgment *Settlement may occur at any of these stages

Liquidated Damages

A contract provides a specific amount to be paid as damages in the event of future default or breach of contract. Penalties: specify a certain amount to be paid in the event of a default or breach of contract and are designed to penalize the breaching party. **NOT ENFORCEABLE; usually lump sum (if it is excessive the court won't enforce it)

Subject Matter Jurisdiction

A court's authority to hear a particular type of case -may be limited by the amount in controversy, the nature of the controversy, the basis for relief sought, and, in a criminal case, whether the crime alleged is a misdemeanor or felony. E.g., bankruptcy, family or criminal cases. General (unlimited) jurisdiction Limited jurisdiction

Undue influence

A relationship between the two parties either of trust or of domination, and Improper persuasion by the stronger party

Rescission

A remedy whereby a contract is canceled and the parties are restored to the original positions that they occupied prior to the transactions.

Diversity Jurisdiction

Applies when (1) the plaintiff and defendant are citizens of different states and (2) the amount in dispute exceeds $75,000

How assignments and delegations function

Assignment: Transfer of rights in bilateral contract to a third party Delegation: Contractual duties in a bilateral contract are delegated to a third party.

Restitution

Both parties must return goods, property, or money previously conveyed.

Types of Damages:

Compensatory Damages: For direct losses; the difference between what you were promised, and what you received. -Sale of Goods: difference between contract and market price. -Sale of Land: specific performance. -Construction Contracts: varies. Consequential Damages: Indirect and foreseeable losses; Breaching party must know, or have reason to know, that special circumstances will cause the non-breaching party to suffer an additional loss. -Hadley v. Baxendale (1854) Punitive Damages: Punish or deter future conduct; generally not available for mere breach of contract.*usually tort (e.g., fraud) is also involved. Nominal Damages: No financial loss; Defendant is liable but only a technical injury.

Original Jurisdiction vs. Appellate Jurisdiction

Courts of original jurisdiction - where the case is first brought to trial. Courts of appellate jurisdiction - hear appeals from lower courts.

Defamation

Employers may be liable when they give false references about an employee -generally, courts have held that employers do not have a legal obligation to disclose information about former employees. But in case of violence, courts are divided.

Specific Performance

Equitable remedy calling for the performance of the act promised in the contract. Remedy in cases where the consideration is: 1. Unique (land); 2. Scarce; or 3. Not available remedy in contracts for personal services. **never available in personal service contracts bc of slavery, not Gert full benefit/lack of effort (also can not be delegated)

Contract provisions limiting remedies

Exculpatory clauses: Provisions stating that no damages can be recovered. Limitation of liability clauses: Provisions that affect the availability of certain remedies.

Anticipatory Repudiation

If before performance is due, one party refuses to perform his or her contractual obligation, a material breach results. -The non-breaching party should not be required to remain ready and willing to perform when the other party has repudiated the contract. -The non-breaching party should have the opportunity to seek a similar contract elsewhere. -Time For Performance 1. innocent has right to immediately sue upon notice 2. innocent party can contact new and reduce damages (w/ different party) 3. reduce harm they are going to suffer (helps both the breacher and non-breacher)

A principal's liability for contracts formed by agent

If undisclosed Principal, Agent is not liable unless: -Principal expressly excluded. -Contract is a negotiable instrument. -Agent's performance is personal. -3rd party would not have contracted if he knew the Principal's identity.

The different models of ethical decision making, especially Kant and Mill

Immanuel Kant: believed that the dignity of human beings must be respected, and that the most ethical decisions are made out of a sense of obligation John Stuart Mill:

What is the difference between the civil and criminal burdens of proof?

In a criminal case, the prosecution must prove its case beyond a reasonable doubt. In a civil case, the plaintiff must prove its case by a preponderance of the evidence.

Standing

In order to bring a lawsuit, a party must have "standing" to sue. Standing is sufficient "stake" in the controversy; the party must have suffered a legal injury or the threat of a legal injury. Standing also requires there be a live, justiciable controversy - not one that is moot or hypothetical.

(Jurisdiction v. Venue) What is the difference? When would you move for dismissal based on lack of personal jurisdiction as opposed to requesting a change of venue?

Jurisdiction refers to a court SYSTEM's POWER over a case. For example, Texas courts have jurisdiction over Texas residents as well as nonresidents who have minimum contacts with the State of Texas. Venue refers to the PLACE for the lawsuit -- for example, the Texas state courts might have jurisdiction, but Hays County might be the appropriate venue for trial.

Condition

Possible future event, the occurrence or nonoccurrence of which will trigger the performance of a legal obligation or terminate an existing obligation under a contract. *no guarantee they will happen, but if they occur will trigger changes *can be expressed or implied

A principal's liability for torts committed by agent

Principal may be liable for Agent's torts if they result from: -Principal's own tort. -Principal's authorization of tort. -Agent's unauthorized but fraudulent conduct made within scope of agency.

Duties, Rights, and Remedies of Agents and Principals

Principal's Duties to Agent: -Compensation (Express or Implied). -Reimbursement and Indemnification. -Cooperation. -Safe working conditions. Agent's Duties to Principal: -Performance: reasonable diligence and skill (special skills) -Notification to Principal -Loyalty (no conflict of interest) -Obedience -Accounting Rights of Agents: -Right to compensation, reimbursement, indemnification and cooperation. -Agent can withhold performance and demand an accounting. -Agent can recover damages for past services and future damages, but no right of specific performance. Principal's Rights and Remedies: -Contract remedies for breach of fiduciary duty and performance. -Can sue in tort: libel, slander, trespass, deceit, fraud. -Constructive Trust - money/ property agent steals from Principal. -Avoidance of contract if agent does not do as told. -Indemnification

Venue

where is the most appropriate location for the trial? -Generally, proper venue is where the injury occurred, or where the defendant resides.

Required elements of Negligence

"carelessness that causes injury" 1. duty of care (responsibility) 2. Breach of that duty 3. (that breach) caused the injury 4. Damages

Employer/Employee Relationships

(chart in folder)

How to determine employee v. independent contractor

(chart in folder)

Scope of agent's authority (express v. implied v. apparent)

Agency by Express Agreement: Formed through express consent (oral or written). Example: Most real estate agent agreements; powers of attorney. "Equal Dignity Rule": If law requires written contract, Agent's authority must be in writing. Failure to comply with the rule renders contract voidable. Exceptions: Officer acting for Corporation, Agent acts in Principal's presence. Agency by Implied Agreement: Can be implied by conduct; Inferred or conferred by custom, Agent's position, or what is reasonably necessary to carry out express authority. -What the Agent reasonably thinks the Principal means. Apparent Agency Authority: -Agency by Ratification -Agency by Estoppel -Agency by Operation of Law: Necessaries for family; Emergency

Termination of agency (by the parties or by operation of law)

Agency can be terminated by: -An Act of the Parties; or -By Operation of Law. by Act of the Parties: -Lapse of Time -Purpose Achieved -Occurrence of a Specific Event -Mutual Agreement -Termination by One Party -Notice of Termination by Operation of Law: -Death or Insanity of either Principal or Agent: automatic -Impossibility -Changed Circumstances -Bankruptcy -War

Distinctions between the major schools of jurisprudential thought

Natural Law: Assumes that law, rights and ethics are based on universal moral principals inherent in nature discoverable through the human reason Legal Positivism: Law is the supreme will of the State that applies only to the citizens of that nation at that time; Law, and therefore rights and ethics, are not universal. The morality of a law, or whether the law is "bad or good," is irrelevant.

Junior owes creditor Craig $1000, which is due and payable on June 1. Junior has been in a car accident, and has missed a great deal of work, and consequently will not have the funds on June 1. Junior's father, Fred, offers to pay Craig $1100 in four equal installments if Craig will discharge Junior from any further liability on the debt. Craig accepts. Is this transaction a novation or an accord and satisfaction?

Novation; not accord&satisfaction because it isn't unliquidated, it's fixed (if debt was in dispute)

Comparative Negligence

both the plaintiff and defendants negligence are considered, and damages are appointed accordingly (%) --> jury's best determination 50% rule: plaintiff can recover damages from defendant if they are less than 50% responsible (if a plaintiff is MORE than 50% then they can't recover)

Kate decides she wants to buy the performance rights to a piece of music. Worried that the owners of the rights will increase the price if they know that Kate is the one buying them, Kate decides to hire an agent to act on her behalf and negotiate the deal. Kate asks her agent, Aaron, to represent that he is making the purchase for himself and not for anyone else. Kate is: a) A disclosed principal b) An partially disclosed principal c) An undisclosed principal d) A legally non-existent principal

c) An undisclosed principal

Austin Musicians, Inc. offers to buy from Kate $10,000 worth of violins. Without notifying Austin Musicians, Kate promptly ships violas instead. This shipment constitutes: a) An acceptance of Austin Musicians' offer b) A breach of the parties' contract c) Both an acceptance and a breach d) An accord and satisfaction

c) Both an acceptance and a breach

Assuming that Ethan was acting within the scope of employment while committing a tort against Ben, Ben can recover from: a) Kate only b) Ethan only c) Kate and/or Ethan d) Neither Kate nor Ethan

c) Kate and/or Ethan

Battery

completion of assault (contact physical)

Kate decides she wants to terminate her agency relationship with Aaron. What would be legitimate reasons for her doing so? a) Lapse of time b) Mutual agreement c) Achievement of the agency purpose d) Any or all of the above

d) Any or all of the above

Kate, an expert singer, contracts to give voice lessons to Sawyer. Kate's attempt to delegate her teaching responsibilities to Jack, a novice singer, will probably be: a) Permitted, because contracts may be freely delegated b) Permitted because the contract is concerned with teaching c) Prohibited because contracts may not be freely delegated d) Prohibited because Kate and Jack have different skill levels and the delegation would disappoint Sawyer's expectations

d) Prohibited because Kate and Jack have different skill levels and delegation would disappoint Sawyer's expectations

Impossibility or Impracticability (Discharge by operation of law)

objectively impossible, no one in your shoes could complete performance by... 1. death or incapacitation 2. destruction of subject matter 3. illegality in performance commercial impracticality: technically you could perform contract, but would result in a burden (circumstances are unforeseeable!!) Frustration of Purpose: fundamental reason for contract doesn't exist, then you aren't bound to it anymore (ex- hotel room leases of Mardi Gras) Temporary impossibility: you will be able to perform, just not right now; not foreseeable (ex- shipping contracts; delays because of pirates)

Bilateral Mistake

occurs when both parties negotiate based on the same factual error.

Duress

one party makes a threat that causes the victim to enter into a contract, with no reasonable alternative, the contract is voidable.

Creditor beneficiary

owed money, and will get it back ex: paint store?

Condition Concurrent

parties must perform at the SAME time

Federal Question Jurisdiction

the subject-matter jurisdiction of United States federal courts to hear a civil case because the plaintiff has alleged a violation of the United States Constitution, federal law, or a treaty to which the United States is a party. "Federal Question" cases - the rights or obligations of a party are created or defined by a federal law.