BLS Exam 2

three main purposes of the statute of frauds

(1) ease contractual negotiations by requiring sufficient reliable evidence to prove the existence and specific terms of a contract (2) prevent unreliable oral evidence from interfering with a contractual relationship (3) prevent parties from entering into contracts with which they do not agree - the law assumes that these steps will allow time for careful consideration, thus the statute of frauds prevents hasty, improperly considered contracts

Under the UCC, writing in the statute of frauds must clearly indicate 2 things:

(1) the quantity to be sold and (2) the signature of the party being sued

what must be present for a mutual mistake to interfere w legal consent

1) basic assumption ab the subject matter of the contract 2) a material effect on the agreement 2) an adverse effect on a party who did not agree to bear the risk of mistake at the time of the agreement

Agreements in contradiction to public policy

1. contracts in restraint of trade 2. unconscionable contracts or clauses 3. exculpatory clauses

Is illusory promise consideration? Is past consideration considered consideration? Is a promise to do something you are already obligated to do consideration?

An illusory promise is not consideration Past consideration is no consideration at all a promise to do something you are already obligated to do is not valid consideration. (this is the preexisting duty rule)

T/F? a bilateral contract is essentially a promise for a promise

T

T/F? courts do not consider whether a contract involves a good deal unless it is believed fraud is involved.

T

t/f? Acceptance and an offer is NECESSARY to form a contract

T

Innocent misrepresentation

a false statement made about a material fact by a person who believed the statement was true - the person didn't know the claim was false, they lacked scienter - Innocent misrepresentation permits the mislead party to rescind the contract

Acceptance

a key factor in the agreement element of a contract; consists of the agreement of one party, the offeree, to the terms of the offer in the contract made by the other party, the offeror

a gift can or cannot be consideration?

cannot

Contractual capacity

the legal ability to enter into a binding agreement

Recognizance

(a formal contract ex) an obligation when a party acknowledges in court that he or she will perform some specified act and/or pay a price on failure to do so - ex: bond used as bail

Informal vs formal contract

(also called simple contract) requires no formalities in making them; payment can be demanded by the payee at any time (ie: checks) - any contract that is not formal - may be complex but called simple bc no formalities are required in making them. formal: contracts created in a specific manner

Negotiable instruments

(ex of a formal contract) a written document signed by a person who makes a promise to pay a specific sum of money on demand or at a certain time to the holder; an acceptable medium for exchanging value from one person to another ex: checks, certificates of deposit

Letter of credit

(ex of a formal contract) binding document that a buyer obtains from his/her bank to guarantee that payment for goods will be made to the seller extending credit

Intent

(first element of an offer) the intended purpose or goal of an action, especially in a contract - The offeror must show intent to be bound by the offerees acceptance - We interpret contracts using an objective standard, meaning the courts are concerned only w the party's outward manifestations of intent, not internal thought processes. - The courts interpret parties words and actions the way a reasonable person would interpret them

Rejection (or counteroffer by the offeree)

(form of termination of offer) termination of a contract that occurs when an offeree does not accept the offer or terms of the contract Regardless of how long the offer was stated to be open, once the offeree rejects it, it is terminated

Revocation (by the offeror)

(form of termination of offer) termination of a contract that occurs when an offeror takes back the initial offer and annuls the opportunity for the offeree to accept the offer the offeror is said to be "the master of his or her offer" and as such, can revoke it at any time, even if the offer states it will be open for specified period of time exception: entering into an option contract

Definite and certain terms

(second element of an offer) the requirement that a contract must include and clearly define all material terms

Communication to the offeree

(third element of the offer) the offer must be communicated to the offeree or the offeree's agent. only the offeree or his agent can accept the offer

Acceptance

- the requirements for a valid acceptance are the same as the requirements for a valid offer - there should be intent to be bound to the acceptance, agreement to the terms, and communication to the offeror a key factor in the agreement element of a contract

examples of what would trigger rescission on the grounds of duress

- threatening physical harm / extortion to gain consent to a contract - threatening to file a criminal lawsuit unless consent is given to the terms of the contract if the suit is frivolous - threatening another persons economic interests (ie economic duress) the injured party makes the case for duress by demonstrating that the threat left no reasonable alternatives and that the free will necessary for legal consent was removed by threat

contracts that violate state or federal statutes

-agreements to commit a crime or tort -licensing statutes (agreements made to protect public health etc) -usury -gambling -sabbath laws

8 exceptions to parol evidence rule when evidence (usually excluded) can be admissible in court

1) Contracts that are subsequently modified 2) Contracts conditioned on orally agreed-on terms 3) Contracts that are not final because they are partly written and partly oral 4) Contracts with ambiguous terms 5) Incomplete contracts 6) Contracts with obvious typographical errors 7) Voidable or void contracts 8) Evidence of prior dealings or usage of trade - almost always when parol evidence is admissible bc of these exceptions, it is to clarify the contract and fill important missing gaps or ambiguous terms, not to change any material or existing terms

****4 contracts falling w/i statute of frauds and required to be evidenced in writing 1 additional contract required in writing under UCC but not statute of frauds MY LEGS

1) Contracts whose terms prevent possible performance within one year 2) Promises made in consideration of marriage 3) Contracts for one party to pay the debt of another if the initial party fails to pay 4) Contracts related to an interest in land 1)Under the Uniform Commercial Code, contracts for the sale of goods totaling more than $500 - and further requirements specific to certain states M = marriage Y = year L = land E = executor G = goods S = suretyship (contracts involving secondary obligations or suretyships)

Promissory estoppel occurs when 3 conditions are met

1) One party makes a promise and either knows or should know that the other part will reasonable rely on it 2) The other party does reasonably rely on the promise 3) The only way to avoid injustice is to enforce the promise

3 elements to find fraudulent misrep what must happen in order to seek damages?

1) a false statement ab a past or existing fact that is material to the contract 2) intent to deceive, which can be inferred from the particular circumstances 3) justifiable reliance on the false statement by the innocent party to the agreement to seek damages, the defrauded party must have been injured by the misrep

Mistake of fact

1) a mistake that is not caused by the neglect of a legal duty by the person committing the mistake but, rather, consists of unconscious ignorance of a past or present material event or circumstance. 2) an affirmative defense in which the defendant tries to prove that she or he made an honest and reasonable mistake that negates the guilty-mind element of a crime erroneous belief ab the facts of the contract at the time the contract is concluded - legal assent is absent when mistake of fact occurs

briefly describe the 5 rules of consideration: 1) lack of consideration 2) adequacy of consideration 3) illusory promise 4) past consideration 5) preexisting duty

1) lack of consideration: A court will enforce one party's promise only if the other party promised some consideration in exchange. (must be a mutual exchange) 2) adequacy of consideration: the court does not care if you made a good bargain or not - you must do the research and not get the cheap end of the stick. they will only look into consideration if there may be fraud involved 3) illusory promise: not a promise or consideration. "X made an offer of his belongings to someone else. That person says I'll look tomorrow and if I like I'll pay you" at this point there is no commitment made 4) past consideration: for a court to enforce a promise, both sides must offer consideration ie there must be bargaining and an exchange (and it has to be present or future, it can't be past consideration) 5) preexisting duty: a promise to do something that you are already obligated to do is not valid consideration

what are the requirements of an enforceable contract

1) must have the four essential elements (agreement, consideration, contractual capacity, legal object) 2) must have genuine assent (each party must have freely entered contract through proper means) 3) must have proper form (some contracts that lack a writing are not enforceable)

5 elements needed to be present for a writing to constitute proper evidence of a written contract under the statute

1) name of the parties to the contract 2) the subject matter of the agreement 3) the consideration given for the contract 4) all relevant contractural terms 5) signature of at least the party against whom action is brought

3 requirements of an accord and satisfaction to be enforceable

1) the debt is unliquidated (the amount or existence of debt is in dispute) 2) the creditor agrees to accept as full payment less than it claims is owed 3) the debtor pays the amount they have agreed on under these circumstances the debt is fully discharged. the accord is the new agreement to pay less than the creditor claims is owed. the satisfaction is the debtors payment of the reduced amount If the debtor fails to pay the new amount, the creditor may sue for the full amount of the org debt

4 types of consideration

1. A benefit to the promisee (ex: a promise to stay in a job until a certain proj is done [this is a benefit to the employer]) 2. A detriment to the promisor (ex: a promise to your coach to refrain from riding your motorcycle during season even if you love to ride it) 3. A promise to do something (ex: a promise to cook dinner for your roommate for next 6 months) 4. A promise to refrain from doing something (ex: a promise to stop staying out late during exam week)

3 exceptions to the statute of frauds 2 exceptions under the UCC

1. admission 2. partial performance 3. promissory estoppel 1. oral contracts b/w merchants selling goods to one another need not be in writing 2. oral contracts for customized goods are enforceable, even if they would normally have to be in writing

ex of adhesion contract

A standardized contract offered to consumers on a "take it or leave it" basis without giving the consumer an opportunity to bargain for terms that are more favorable. o Buying a car or taking out a mortgage, tuition

A valid contract is one that has the following elements: (4)

Agreement. Consists of an offer by one party (offeror) to enter into a contract and an acceptance of the terms of the offer by the other party (offeree) Consideration. The bargained for exchange or what each party gets in exchange for his or her promise under the contract Legal object. To be enforceable, the contract cannot be illegal or against public policy Contractual capacity. Capacity is the legal ability to enter into a binding agreement (underage, mental illnesses, intoxicated etc. do not have capacity, but most adults do)

how can an offer be terminated?

An offer can be terminated by revocation by the offeror; rejection or counteroffer by the offeree; death or incapacity of the offeror; destruction or subsequent illegality of the subject matter of the offer; or lapse of time or failure of other conditions stated in the offer

_____ is something of value given in exchange for something else of value; it must be the product of a mutually bargained-for exchange

Consideration

Contracts that do not have a legal object are? Contracts that lack a legal object because they violate a statute or violate public policy are? When a contract is partly legal and partly illegal, if the illegal part can be severed, then the legal part will still be enforced, but if the contract is indivisible, it will be ?

Contracts that do not have a legal object are not valid Contracts that lack a legal object because they violate a statute or violate public policy are not valid When a contract is partly legal and partly illegal, if the illegal part can be severed, then the legal part will still be enforced, but if the contract is indivisible, it will be void and not enforced

Exception to past consideration

Exception: past consideration may be enforceable to the extent necessary to avoid injustice

Exceptions to preexisting duty

Exceptions: unforeseen circumstances, additional work, and sale of goods

_____ contracts are those whose terms have been fully performed, a contract is considered ____ when some of the duties have not yet been performed

Executed executory

T/F? consideration is what a person will receive in return for fulfilling a contract, it is not required in every contract

F

T/F? silcence can always be used as a form of acceptance?

F

T/F the court considers adequacy of consideration

F. the court seldom considers adequacy of consideration an exception to consideration

Legal Assent Mistake

If assent is not genuine, or legal, a contract may be voidable

____ ____ are written contracts within the statute of frauds intended to be the complete and final representation of the parties' agreement. therefore, besides the 8 exceptions, parol evidence is inadmissible

Integrated contracts

Natural persons over the age of majority are presumed to have the full legal capacity to enter into binding legal contracts A person has only limited capacity to enter in to a legally binding contract, and therefore can enter into only voidable contracts, if the person is either? A person has no capacity to enter into a contract if the person is either?

LIMITED CAPACITY - A minor - Suffering from a mental deficiency that prevents the person from understanding the nature and obligations of contracts - Intoxicated NO CAPACITY: - Has been adjudicated insane - Has been adjudicated a habitual drunkard - Has had a legal guardian appointed to enter into contracts on his or her behalf

____ is the master of the offer. ____ is not To be an offer, offerors proposal must invite ? the proposal must?

Offeror, Offeree acceptance from the offeree. the offeror proposal must be in terms to create a reasonable understanding that a contract will be created without any further approval

For a promise to be enforced by the courts, there must be consideration. Exception: ____ ____ which occurs when?

Promissory estoppel occurs when one party makes a promise knowing the other party will rely on it, the other party does rely on it, and the only way to avoid injustice is to enforce the promise even though it is not supported by consideration

T/F bc their contracts are voidable, minors have the right, until a reasonable time after reaching the age of majority, to disaffirm or void their contracts. However, it is only the minor who has the right, never the adult w whom the minor entered into the agreement

T

T/F? Covenants not to compete in conjunction w the sale of a bus are generally enforceable if they are for a reasonable length of time and involve a reasonable location

T

T/F? Under both the statute of frauds and the UCC, a writing may consist of multiple documents as long as they explicitly reference one another

T

T/F? once a fully integrated agreement has been written, no oral evidence of any prior or contemporaneous (of the same time) agreement can be admitted in court to change the terms of the agreement

T

T/F? the 3 elements of an offer include serious intent by the offeror, reasonably defined terms, and communication to the offeree

T

T/F preliminary negotiations, advertisements, and auctions are different then making an offer

True

T/F? an offer under the common law can be terminated by the offeror at any time before the offer is accepted by the offeree

True

lacks the proper form

Typically means is lacks a writing. Contract does not have to be in writing, but a writing meeting certain criteria that confirms the existence of the contract must exist

Merger clause

a clause in a written agreement within the statute of frauds which states that the written agreement accurately reflects the final, complete version of the agreement - merger clause seeks to blend other agreements either into the final agreement or into something explicitly identified as being outside the final agreement

Exculpatory clause

a clause that basically frees one party from all liability arising out of a contract; generally based on factors such as consumer ignorance or unexplained fine print that serves to deprive the less powerful party of a meaningful choice - bc tort law attempts to return the wronged party to a state they were in before, anything preventing this corrective mechanism is against public policy type of agreement in contradiction to public policy - the party seeking enforcement must not be a private bus or individual not imp to the public interest.

Parol evidence rule

a common law rule, states that oral evidence of an agreement made prior to or at the same time as a written agreement is inadmissible when the parties intend to have the written agreement be the complete and final version or their agreement purpose: prevent evidence that contradicts the agreement in its written form by a lot. therefore, evidence of prior agreements / negotiations as well as evidence from the same time is usually excluded under the parol evidence rule says they don't want outside info - they don't want to hear about it. They want to assume you know what you're doing and you've signed the contract

Adhesion contract

a contract created by a party on a take-it-or-leave-it basis. these contracts are legal but are sometimes rescinded on the grounds of unconscionability and the absence of one party's free will to enter a contract procedural unconscionability (unjust, one-sided) usually arises from this type of contract o Buying a car or taking out a mortgage, tuition

Indivisible contract

a contract that cannot be divided and must be performed in its entirety by both parties, even if it appears to contain multiple parts - cannot void only the illegal parts like severable contracts; must be enforced or rejected in its entirety

Simple contract

a contract that is not a formal contract

Severable contracts

a contract whose terms can be divided - a contract that contains several parts that can each be performed separately and for which separate consideration is offered (like several contracts in one) - courts can void only the illegal sections if they contain both

Executed vs executory contracts

a contract whose terms have been fully preformed a contract in which not all the duties have been preformed

Lack of genuine assent

a defense to the agreement of a contract in which the offeree claims that the offeror secured the agreement through improper means, such as duress, fraud, undue influence, or misrepresentation - Contract is supposed to be entered into freely by both parties, but sometimes there is fraud, misrepresentation etc. - In this case, there is no genuine assent to the contract, and the offeree (person who agreed/accepted) may be able to raise that lack of genuine assent as defense to enforcement of agreement

Fraudulent misrepresentation / intentional misrepresentation

a false representation of a material fact that is intended to mislead the other party (also called intentional misrepresentation) - SCIENTER IS CLEAR - the tort that occurs when a misrepresentation is made with intent to facilitate personal gain and with the knowledge that it is false tricked them into a contract that they did not voluntarily enter into therefore they can rescind intentional misrep: a civil wrong resulting from an intentional act committed on the person, property, or economic interest of another

Negligent misrepresentation

a false statement of material fact made by a person who thinks it is true.... but.... who would have known the truth about the fact if they had used reasonable care to discover / reveal it (didn't know it was false, but easily could have figured out that it was)

Offer

a key factor in the agreement element of a contract; consists of the terms and conditions set by one party, the offeror, and presented to another party, the offeree

Sabbath laws

a law that prohibits the performance of certain activities on Sundays

Bilateral vs unilateral contract

a promise exchanged for a promise a promise exchanged for an act common ex: a reward bc the offeree is under no obligation to preform an act for the offeror, the offeror may revoke the offer any time before performance - this caused probs bc they could revoke offer once someone was halfway through with completing, so, adjusted law to say that once an offeree begins performance, the offeror must hold the offer open for a reasonable time to allow the offeree to complete it

Contract

a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty o A set of legally enforceable promises o Almost all bus relationships created by contracts (even the most imp relationship - employer to employee)

Legal assent

a promise to buy or sell that the courts will require that the parties obey to make bus transactions smoother / dependable courts have developed rules ab when an assent to do something is legal assent and parties must obey

Preexisting duty

a promise to do something that one is already obligated to do. It is not considered valid consideration

Interpretation of Contracts o The plain-meaning rule ?

a rule of interpretation which states that words in a contract should be given their ordinary meaning o Courts have established rules to help interpret contracts so that they can ascertain and enforce the intent of the agreement o The plain-meaning rule requires that if a writing, or a term in question, appears to be plain and ambiguous, its meaning must be determined from the instrument itself, with the words given their ordinary meaning w/o resorting to outside evidence

Equal dignity rule

a rule requiring that contracts that would normally fall under the statute of frauds and need a writing, must be in writing even if negotiated by an agent it is all about agency and principle. If an agency enters into a c contract covered by the statue of frauds. That statue applied to the agent is the same applied to the principle

Illusory promise

a situation in which a party appears to commit to something but really has not committed to anything. It is not a promise and thus not consideration

Admission

a statement made in court, under oath, or at some stage during a legal proceeding, in which a party against whom charges have been brought admits that an oral contract existed, even though the contract was required to be in writing - exception to the statute of frauds

Unconscionable

a term applied to a contract in which one party has so much more bargaining power than the other party that the powerful party dictates the terms of the agreement and eliminates the other party's free will - agreement in question is so unfair that it is void of conscience type of agreement in contradiction to public policy

Unenforceable contract vs voidable contract

a valid contract that, because of law, cannot be enforced by the courts bc some law prohibits it a contract that one or both parties have the ability to either withdraw from or enforce because either its object is illegal or it has a serious defect - errors in the formation of a contract can make it voidable as well - ex: contracts by a minor, fraud, etc

Integrated contracts

a written contract intended to be the complete and final representation of the parties' agreement

An ____ is valid when a manifestation of intent to be bond to the terms of the offer is communicated to the offeror by the offeree

acceptance

Covenant not to compete

an agreement not to compete against a party for a set period of time within a designated geographic area restricts what an employee may do after leaving a company, and they often dictate where, when and with whom an employee may work o Type of employment contract type of agreement in contradiction to public policy

Prenuptial agreement

an agreement two parties enter into before marriage that clearly states the ownership rights each party enjoys in the other party's property. To be enforceable, it must be in writing bc it is w/i statute of frauds

Accord and satisfaction

an arrangement between parties where one party substitutes a different performance for their org duty in the contract. The promise to perform the new duty is the accord, and the actual performance of that new duty is the satisfaction The amount and existence of the debt is in dispute.

Promissory estoppel

an exception to the rule of requiring consideration the legal enforcement of an otherwise unenforceable contract due to a party's detrimental reliance on the contract ex: you receive a job offer across the country. you give up your appt, cancel all other job interviews, and move all belongings. upon arriving, you rent a new appt and show up for work. then you are told there is no job. you may sue the employer in most states under the theory of Promissory estoppel and may be able to recover reliance damages (money she spent in reliance on the job offer)

preliminary negotiations

an invitation to negotiate or an expression of possible interest in an exchange is not an offer ex: rachel asked bill whether he would sell her car for 5k, she is not making an offer, she is just inquiring about his willingness to sell

Counteroffer

an offer made by an offeree to the offeror that relates to the same matter as the original offer but proposes a substituted bargain that differs from the one proposed in the original offer - a counteroffer terminates the original offer for good

advertisements

an offer to make an offer ex: a store puts up a sign saying rocking chairs are 250 this month - the store is just inviting people to come to the store and offer 250 for it. bc no reasonable person would expect the store to be able to sell a rocking chair to every person who may see the ad, the court will not interpret the intent of the store as being to invite readers to make an offer •however, if the ad includes specific quantity and means by which the offer can be accepted, the courts will treat the ad as an offer (Lefkowitz v Minneapolis Surplus Store ex with 1$ coats)

Misrepresentation

an untruthful assertion by one of the parties about a material fact , and therefore it prevents the parties from having the mental agreement necessary for a legal contract They only appeared to agree, so there contract lacked legal assent

Duress

any unlawful act or threat exercised whereby a person is forced to enter into an agreement or to perform some other act against his or her will by another person - an active/visible interference with someones free will ex: someone holding a gun to your head. Forced to sign a contract under fear of your life.

mistakes

are erroneous beliefs about the material facts of a contract at the time the agreement is made. They may be either unilateral or mutual.

the law of contracts is primarily known as ____ ____

common law

For fraud misrep to be basis for a contract rescission, the statement of fact need not be an actual assertion. It can be an act of ___ or ___

concealment or nondisclosure

Act of hate

crime committed directed towards a gender / ethnic group / religion that is despised by the individual perpetrating the crime

scienter

deliberately or knowingly - present when the party making the fraudulent assertion believed it was false or had no regard for whether it was true or false when a person commits innocent misrep, aka they had no knowledge the claim they made was false, they lacked scienter (deliberately or knowingly)

Unilateral mistake generally does or does not cause a contract to be voidable?

does not

____ occurs when one party threatens the other with a wrongful act unless assent is given. Such assent is not legal assent because coercion interferes with the party's free will. For the courts to rescind the agreement, the injured party must demonstrate that the duress left no reasonable alternatives to agreeing to the contract

duone party threatens the other with a wrongful act unless assent is given. Such assent is not legal assent because coercion interferes with the party's free will. For the courts to rescind the agreement, the injured party must demonstrate that the duress left no reasonable alternatives to agreeing to the contractress

Necessaries surrounding ones ability or inability to enter into a contract

even if a party has the ability to disaffirm a contract, if the contract is for a necessary - food, clothing, or shelter - the party cannot completely disaffirm the contract; she will be held liable for the reasonable value of the necessary

An _____ contract has all the terms clearly set forth in either written or spoken words, an _____ contract arises from the conduct of the parties rather than their words

express implied

Express vs implied contracts

express: a contract in which all the terms are clearly formed in written or spoken words implied: arises from the conduct of the parties rather than their words - if you have a dental emergency and dentist pulls your infected tooth without prior negotiation about payment, or even mention of payment, you have an implied contract for payment for the doctors services

agreements in which parties pay consideration (money placed during bets) for the chance, or opportunity, to obtain an amount of money or property

gambling

Condition precedent

in a contract, an event that must occur in order for a party's duty to arise when an entire contract is conditioned on something else occurring first, that first event is known as a condition precedent Evidence of a condition precedent agreed to orally is admissible bc the contract is not modified by such evidence, rather, its enforceability is called into question

In pari delict

in equal fault by both parties (usually for a contract being named illegal therefore void)

Quasi-contracts

in order to prevent one party from being unjustly enriched at the expense of another, the courts impose contractual obligations on one of the parties as if that party has entered into a contract - court-imposed contractual obligation to prevent unjust enrichment - sometimes called implied-in-law-contracts, but not actually a contract

_____ is the possession of a mental or physical defect that prevents a natural person from being able to enter into a legally binding contract depending on nature/extend of defect, person may either have no capacity (complete inability to enter into contracts) or limited capacity (ability to form only voidable contracts)

incapacity or incompetence

3 types of incapacity

infancy, insanity, intoxication

5 rules of consideration

lack of consideration, adequacy of consideration, illusory promise, past consideration, preexisting duty

Defenses to the enforcement of a contract: (there are 2 categories of defenses if a contract has all four elements to get out of being legally binding)

lack of genuine assent lacks the proper form

promissory estoppel as an exception to statute of frauds

legal enforcement due to a party's detrimental reliance on the contract - to be in effect the parties reliance must be to her own detriment and the reliance must have been reasonably foreseeable

Contracts at their simplest level are ____ ____ ___

legally enforceable agreements

a quasi contract is not a true contract but rather a ?

liability imposed by courts in order to prevent unjust enrichment

In a _____ debt, there is no dispute that money is owed or the amount. In an ______ debt, the parties dispute either the fact that money is owed or the amount

liquidated unliquidated

___ ___ provides that an acceptance is valid when the offeree places it in the mailbox, but revocation is effective only when the offeree receives it

mailbox rule

Exception to the contracts for one party to pay the debt of another if the initial party fails to pay that is part of statute of frauds is the what rule?

main-purpose rule: if the main purpose for incurring a secondary obligation is to obtain a personal benefit, the promise does not fall w/i the statute of frauds / have to be in writing (NFL Cards ex)

this terms that allow a court to determine what the damages are in the event that one of the parties breaches the contract. what do they include?

material terms they include: the subject matter, quantity, price, quality, and parties

____ is an intentional untruthful assertion by one of the parties about a material fact. An innocent misrepresentation occurs when the party making the false assertion believes it to be true. The misled party may then rescind the contract. When a misrepresentation is fraudulent, any assent is gained by deceit and the courts permit rescission. In addition to requiring a false assertion and intent to deceive, fraudulent misrepresentation also requires the innocent party's justifiable reliance on the assertion.

misrepresentation

can you commit fraud by accident?

no

do mistakes in contract law result from untrue statements of a misrepresentation

no

if a contract can possibly be preformed w/i a year, even if it is highly unlikely, does it need to be in writing to be enforceable?

no - not under statute of frauds bc it COULD be completed

can fraud be committed by accident?

no, you have to intent to do it Pinto case alleged fraud: engineers internal memo that they knew there was a problem

Agreement

one of the four elements necessary for a contract; consists of an offer made by one party, the offeror, and the acceptance of the offer by another party, the offeree

in a unilateral contract, what is the consideration?

one part's consideration is the promise and the other part's consideration is the act (mutual exchange of something of value)

_____ ___ is when an offeree gives the offeror a piece of consideration to keep the offer open for a specific period of time

option contract

Problem arises w written contracts when a party asserts that the writing is in some way not enough, in order to smooth transactions by limiting the types of evidence admissible in such claims, courts rely on ?

parol evidence rule

Unliquidated debt

parties either disagree that money is owed or agree that some money is owed but dispute the amount they can enter into an accord and satisfaction to settle for less if 3 requirments are met

___ obligations do not require a writing, but ____ obligations do unless the ___ ___ rule applies and the main reason a person makes a secondary promise is to obtain a person benefit

primary obligations do not require a writing, but secondary obligations do unless the main purpose rule applies and the main reason a person makes a secondary promise is to obtain a person benefit

Mailbox rule

provides that an acceptance is valid when the offeree places it in the mailbox, whereas a revocation is effective only when the offeree receives it

One requirement of an offer is that the term from the offeror must be ?

reasonably certain (ie. must have a price)

ways to terminate an offer

revocation by the offeror, death or incapacity of the offeror, subsequent illegality of the subject matter, rejection or counteroffer by the offeree

sources of contract law

state common law and the Uniform Commercial Code. if the contract is for the sale of a good, it falls under article 2 of the UCC, if for anything else, falls under common law

Statute of frauds

state-level legislation that addresses the enforceability of contracts that fail to meet the requirements set forth in the statute serves to protect promisors from poorly considered oral contracts by requiring that certain contracts be in writing

The term _____ refers to various state laws modeled after the 1677 English Act for the Prevention of Frauds and Perjuries.

statute of frauds

Revocation of an offer is a way to ?

terminate the offer they withdraw the offer so there is nothing to accept

Concealment

the active hiding of the truth about a material fact ex: removing 20,000 miles from the odometer on your car before selling it - can be the basis for rescission of a contract from false assertion of fact aka fraudulent misrep Anytime you conceal something material to the deal is it concealment

Consideration

the bargained-for exchange, what each party gets in exchange for his or her promise under a contract - what a person will receive in return for performing a contract obligation - consideration is required in every contract

in a bilateral contract, what is the consideration?

the consideration for each promise is a return promise (mutual exchange for something of value)

what is the effect of negligent misrep and fraudulent misrep?

the effect of both is that the victim can either rescind the contract or keep the contract and sue for damages, whereas if the mistake is innocent, the victim can seek only rescission

Nondisclosure

the failure to provide pertinent information about a projected contract - can be the basis for rescission of a contract from false assertion of fact aka fraudulent misrep this will have the same legal effect as an actual false assertion under certain conditions: (in notes)

Capacity

the legal ability to enter into a binding contract - third element of a legally binding contract

Usury

the lending of money at an exorbitant or unlawful rate of interest occurs when a party gives a loan at an interest rate exceeding the legal maximum

Option contract

the offeree gives the offeror a piece of consideration in exchange for the offeror's agreement to hold the offer open for a specified period of time (an exception to revocation by the offeror. ie the offerors ability to terminate contract at any time)

Partial performance

the performance of portions of an unwritten agreement by one or both parties can constitute proof that an oral contract exists between the parties (they have partially begin doing something, indicating that both parties demonstrated agreemen) - exception to the statute of frauds

Termination

the point at which an offer can no longer be accepted to form an agreement, or if an offeree no longer has the power to form a legally binding contract by accepting the offer. can occur 1 of 5 ways: 1. revocation by the offeror 2. rejection by the offeree 3. death or incapacity of the offeror 4. destruction or subsequent illegality of the subject matter of the offer 5. lapse of time or failure of another condition stated in the offer

Undue influence

the situation in which one person takes advantage of their dominant position in a relationship to unfairly persuade the other person and interfere with that person's ability to make his or her own decision - taking advantage

Liquidated debt

there is no dispute b/w the parties about the fact that money is owed and the amount of money owed exception: if the debtor offers different performance (paying off your debt with a car)

Rescinded

to cancel a contract (a voidable contract that does not have legal assent may cause it to be Rescinded/canceled)

Procedural unconscionability:

type of unconscionable (unreasonable) agreement unconscionability that derives from the process of making a contract - describes conditions that impair one party's understanding of a contract, as well as the integration of terms into a contract usually arises in an adhesion contract type of agreement in contradiction to public policy

Substantive unconscionability

type of unconscionable agreement contract that is so one-sided, unjust, or overly harsh that the contract should not be enforced type of agreement in contradiction to public policy

____ ___ is is the persuasive efforts of a dominant party who uses a special relationship with another party to interfere with the other's free choice of the terms of a contract. Any relationship in which one party has an unusual degree of trust in the other can trigger concern about ____ ____

undue influence

when a law prohibits a court from enforcing an otherwise valid contract, it is considered?

unenforceable

A contract is ____ when some law prohibits the court from enforcing an otherwise valid contract, a contract is _____ if one or both of the parties has the ability to withdraw from the contract or to enforce it

unenforceable voidable

in 2000 was proposed and adopted by 49 states. Act circumvents the former requirements of the statute of frauds regarding the validity of online transactions. Decision: particular electronic transactions may constitute a "written copy" and therefore have legal significance despite the fact it technically wasn't on a written document. Ensured validity of online contracts

uniform electronic transactions act

Only under certain rare conditions are ____ mistakes a basis for rescinding a contract. If both parties to a contract are mistaken about a material fact, what is the case? The agreement was not based on a meeting of the minds, a basic criterion for a legal assent.

unilateral either can opt to rescind it

A _____ contract requires a performance in order to form a contract, a ____ contract consists of a promise in exchange for a promise

unilateral bilateral

mistakes can be unilateral OR mutual

unilateral: the result of an error by one party about a material fact, that is, a fact that is imp in the context of the contract error resulting by both parties about a material fact, and is imp in the context the contract

if the licensing statute is intended simply to generate revenue, then the contract of an unlicensed person is? if the purpose of the licensing statute is to protect publics health, safety, and welfare, the agreement of an unlicensed persons contract is?

valid illegal and unenforceable

A _____ contract is one that constrains all the legal elements of a contract, a contract is ____ when either its object is illegal or it has some defect so serious that it is not actually a contract

valid void

Void contract vs Valid Contract

void: a contract that is not valid because its object is illegal or it has a defect that is so serious that it is not a contract valid: a contract that includes all four elements of a contract and thus can be enforced

when a party is forced to enter into a contract by the wrongful threat of another, the contract is ____ by the innocent party due to ____

voidable, duress

Mirror-image rule

when a bilateral contract is being formed, the mirror image rule applies to the acceptance. rule says that the terms of an acceptance must mirror the terms of the offer. If the terms of the acceptance do not mirror the terms of the offer, no contract is formed and the attempted acceptance is a counteroffer

partial payment of debt may or may not be valid depending on ?

whether the debt is liquidated or unliquidated

can an express contract be oral? what about an implied contract?

yes. it can be written or oral an implied contract isn't written. the conduct of the parties indicates theres a contract

_____ is the basis of business - can't operate a business without them Consideration for a promise is ? Almost all considerations in a contract include a promise to ?

• Contracting the thing or a action someone wants in exchange for making the promise pay money in exchange for providing goods or services

Uniform Commercial Code (UCC)

•Drafted set of commercial laws that could be applicable to all states •Made it easier to tackle difficulties created by a patchwork of dif laws governing commercial transactions source of contract law that is applicable to transactions involving the sale of goods. The UCC was created in 1952 and adopted by all 50 states. it may be modified by each state to reflect the wishes of the state legislature

contract law is based on an objective theory of contracts. what is this?

•We base the existence of a contract on the parties outward manifestations of intent and we base its interpretation on how a reasonable person would interpret it comm •Under a limited number of circumstances is a subjective intent relevant •In determining whether parties intended to enter into a contract, courts look at their objective words and behavior and do not try to figure out what they might have been secretly intending

auctions

•usually auctions just mean that the seller is expressing intent to sell, not bonded to sell - this auction is WITH reserve •if an auction is WITHOUT reserve, the auctioneer must accept the highest bid, if it is with reserve, the auctioneer may refuse to sell the item if he or she is not satisfied w the size of the highest bid