BSAD 117 Exam 2

nominal damages

VERY small damages

disaffirm

a minor can disaffirm/cancel at any time before turning 18

ratification

a minor who does not disaffirm after reasonable time "ratifies the contract" (no more right to disaffirm, contracts is no voidable)

parol evidence rule

a party cannot vary the plain terms of a written contract by introducing evidence of terms allegedly agreed prior to (or at the same time) as the written contract (ie. sign contract to buy land then get in dispute and bring case to court but one party says "but we also agreed on [blank] the day before", this info is not honored)

forbearance to Sue

a promise not to file a lawsuit in exchange for a promise to pay money or some other consideration (promise not to sue is giving up a legal right)

charitable contributions (consideration acception)

a promise to make a gift to charity is not enforceable unless the institution relies on the promise

UCC acceptance

a seller may accept a buyers offer by shipping the goods or promising to ship them

implied contract

agreement is clearly reached by acts of parties but not expressly stated (ie. it is implied that you will have to pay a bill after going in to see a doctor)

executed contract

all parties have performed their duties

gifts may not be disguised to look like contracts

an agreement to pay $100 in exchange for $500 is not consideration

a contract is unenforceable if it is

an illegal act or of improper form (ie. real estate contracts must be in writing)

mailbox rule

an offer is accepted once the acceptance is sent, when it is in the mail is is accepted (not when it gets to the other party)

acceptance for a bilateral contract

an offeree may expressly accept or accept by doing something that implies agreement

illegality

an otherwise valid contract is unenforceable if its performance is illegal

non-authorized means of communication (for acceptance)

anything reasonable that is no authorized (acceptance valid when offeror receives it)

What article in the UCC applies to the sale of goods?

article 2

exception to the battle of the forms

does not apply if offeror specifically says "no changes"

void contract

does not have all 3 elements

promissory estopple

enforce good faith promise to prevent injustice even if there is no contract that meats legal rules, reliance to detriment (ie. UNH promises dean position (only oral promise), and professor sells house, court would enforce contract)

compensitory damages

entitled to be put in the position you would have been in if the other party had fully performed (done with monetary damages)

battle of the forms

exception to the "mirror image rule" involves merchants where there is no "material" changes and it is in writing

options are exceptions to revocation

exclusivity arrangement (pay $$ to keep offer open, which is its own contract by itself)

material breach of contract inferior performance

failure to perform, if there is an anticipatory breach you don't meed to wait for breach you can sure for damages immediately

Laissez-faire

free market

an offer is terminated when the offeree rejects it by

giving a counter offer or attempting to change the material terms

regulatory statutes

goal is to make the state money and protect the public from dishonest/unskilled people (but for like an interior designer even if they don't have an up to date licence these contracts are enforceable)

complete/satisfactory performance (example)

higher someone to mow your laws, they must mow the whole lawn

dissatisfaction must be honest, then you don't need to provide compensation (example)

ie. designer sketches home and you don't like it

ignorance of fact

if both parties did not know that there was some sort of illegal notion in the contract, there may be some recovery (ie. NH cleaning service cleaning VT house but did not renew out of state working licence.

exception to the exception to the battle of the forms

if it is marked up even though offeror says "no changes" and the offeror starts to act accordingly with those markup then there is a contract

equitable remedies

if money alone is not enough (ie. can force the completion of a real estate sale or uneque iten like are

punitive damages

if one party had ill-intent

divisible contracts

if only part of a contract is illegal, and the non legal part can still be carried out it will be

necessaries (example)

if private 3rd party can supply necessaries (if parents can't) then there is an implied contract that can not be disaffirmed saying the minor is responsible for returning the value of the necessaries once they are 18

consequential damages

if the contract allows it (ie. lost profit one party may suffer if they are not provided parts)

a minor's right to disaffirm a contract may be affected if the adult proves the minor lied about his/her age

if the minor lies they must restore the other party in status quo (non minor party can also sometimes sue)

a delegation of duties does not let you off the hook for being responsible except

if the other two parties enter into a novation (new contract)

adjudicated insane

if there is a legal court order saying you don't have mental capacity then the contract is immediately void (not legal, contract never existed)

exceptions to the parol evidence rule

if they add supplemental info, but do not go against the terms of the contract

rights of protected parties

if you get service from a doctor that you later find out has had their licence revoked, patience gets to decide what action they want to take

usury laws

laws that impose an upper limit on the interest rate that lenders can charge

contract

legally enforceable promise

unenforceable contract

meets basic elements of a contract but is not enforced because of another legal rule or condition

what type of writing is required with a stature of frauds

memorandum (very limited, can even be on a napkin)

bilateral contract

promise for promise (both parties make a promise and act)

donee benegiciaries

purpose of the contract was for the 3rd party to get some benefit (ie. life insurance policy)

what is acceptance

reflects a genuine willingness of parties to enter into an agreement

quasi contract

requires a defendant to act as if they promised to pay for a benefit voluntarily taken (ie.mower mows wrong lawn for 2 months. homeowner must pay *reasonable compensation*)

unequal bargins (example)

signing contract to sky-dive, you are not actually baring for it (could not use this contract in court)

statute of frauds

some contracts are required in writing

liquidated damages

specify in advance a sum of money that would be recovered if the contract was breached (ie. confidentiality agreement)

wagering statutes

states prohibit or regulate gambling which is different from risk-shifting and speculative bargaining agreements

economic duress (example)

supplier shutting off supply until the other business signs a contract creating actual economic harm

condition precedent

the even must occur before the party's duty to perform arises (ie. must put a certain amount of money down, or must relocate)

condition subsequent

the happening of a condition discharges an arises duty to perform (ie. house insurance required certain amount of smoke detectors, if fire happens and you don't have smoke detectors insurance company does not need to perform)

acceptance for a unilateral contract

the oferee must perform the requested act or make the required promise

mirror image rule

the offer and acceptance must be the exact same

what type of contracts are not assignable

-assignment that would materially alter a promisor's duties -contracts involving people (employment) -contracts that forbid assignment (ie. shipment contract, promisor will ship steel on a monthly basis but business closes and no longer needs steel so they assign the contract to another business but it is 5X further away, this is not assignable)

an offer is terminated when one of four things happens

-death or insanity of parties -destruction of subject matter -intervening illegally (the performance of a proposed contract becomes illegal after the offer but before acceptance) -contract can explicitly say offer is good for 10 days then it is terminated

non-performaces impossibility (4)

-illness/death -illegality -destruction of subject matter -commercial impracticability

memorandum must include

-involved parties -subject matter -consideration

5 ways their may be lack on voluntary consent

-missrepresentation -fraud -duress -mistake of fact -undue influence

authorized means of communication (for acceptance)

-stipulated (exactly what the offeror specified) -implied (same as the offer delivery method

fraudulent if contract is assigned to many parties (american vs. english)

-the first assignee has the rights (American rule) -the first assignee that contracts the promisor has the rights (English rule)

what contracts must be in writing (5)

-transfer of land -contracts by one person to answer for the debt of another person -bilateral contracts that will take longer then one year (ie. construction contracts) -UCC sale of goods over $500 -prenuptial agreement

creditor beneficiaries

3rd party has something owed to them and the person who owes enters a contract to satisfy it (ie. go to car dealership and they don't have what you need so they contract with another party to get you the car)

time is of the essence

A phrase in a contract that requires the performance of a certain act within a stated period of time.

illegality is

void

contracts entered into without voluntary consent are

voidable

delegation

when duties are transferred

firm offers are an exception to revocation

when offeror promises to hold offer open for a period of time

assignment

when rights are transferred

when is silence as acceptance allowed

when the person accepting says "if you don't hear from me in 1 week then assume I accept"

mutual mistake (example)

you ask me to buy my car for $5,000 and you come to pick it up and I though you were talking about a different car then i thought (either party may in this case withdraw from the contract)

estoppel may prevent revocation of an offer

(UNH example), if your cant revoke you only need to pay damages, you are never forced to maintain the contract

substantial performance (example)

basically complete (ie. a building the diverges slightly from the original plan)

novation

both parties decide to scrap old contract and make a new contract because original contract is non feasible because of unforeseeable circumstances

discharge by agreement

both parties mutually agree to discharge

contracts to influence fiduciaries (example)

bribing someone to vote a certain way

caveat emptor

buyer beware

unilateral mistake (example)

buying a paining you thought was an original but it wasn't

incidental beneficiaries

cannot enforce contracts as a third party (ie. town signs contract to. pave road which would benefit you, if you trip on bad pavement you cant recover)

discharge by alteration

change in contract without consent from other party, first party does not need to preform

executory contract

contract has not been performed in full

For a contract to exist there must be:

offer acceptance consideration

lapse of time

offer remains open for the time period specified or, if no time is stated, for a reasonable period of time if there is history between 2 parties whatever tine frame had been used in the past is considered reasonable (depends on subject matter: buying real estate compared to buying a stock)

past consideration is no consideration (example)

offer to watch dog and then 1 month after ask for $100 compensation even through you said you'd do it for free

discharge by waver

one party does not fully complete performance and other part waves the rest (implied and explicit)

unilateral contract

one party makes a promise and another party acts (ie. find dog get $100 reward add in the paper)

discharge by stature of limitations

one party who fails to perform a duty is discharged if the other party doesn't sue in a reasonable time

voidable contract

one/both parties may cancel and make it void (not valid) because they don't have capacity

non-performance prevention (example)

other party is not allowing you to perform (ie. builder is not given architectures drawings)

express contract

parties directly state their intentions

undue Influence

parties have pre-existing relationship causing consent (ie. telling Grandma its a good idea to sign contract)

promissory estoppel

party may recover on the basis of a promise made when the party's reliance on that promise was reasonable

contracts injurious to public policy (example)

pay police to take more time enforcing the law on your street

agreement to perform pr-existing duty (example)

paying bully $100/moth to not get beaten up, bully already legally can't beat you up (not legally enforceable)

risk-shifting / speculative bargaining agreements (example)

this is legal, car insurance risk shift if they think you will file a claim or not

duress

threatening harm to force someone into a contract (does not need to be actual injury)

ads for sale of goods at a specific price are an invitation to negotiate, not an offer

true

lack of voluntary consent can be used as a defense to breach of contract cases (as long as it is quickly after the contract is signed)

true

offerors may revoke (revocation) the offer any time prior to receiving acceptance as long as it is communicated and proof of other party receiving the revoke (3 exceptions)

true

sellers at an auction are making an invitation to offer, people who submit bids are treated as offerors

true

you don't need consideration for an assignment

true

oral contracts that come within the provisions of the stature of frauds are

unenforcable

missrepresentation

usually non-intentional