Chapter 14 Bus Law

Exculpatory clause

A clause that releases a contractual party from liability in the event of monetary or physical injury, no matter who is at fault.

Yes, he was an innocent party

A trucking company contracts with Gillespie to carry crates filled with goods to a specific destination for the normal fee of $5,000. The trucker delivers the crates and later finds out that they contained illegal goods. Can the trucker still collect his money from Gillespie despite the law?

Yes, this was not to protect legitimate business interests and required for employment which should not be allowed

An insurance firm in New York City, Brown & Brown, Inc., hired Theresa Johnson to perform actuarial analysis. On her first day of work, Johnson was asked to sign a nonsolicitation covenant. The covenant prohibited her from soliciting or servicing any of Brown's clients for two years after the termination of her employment. Less than five years later, when Johnson's employment with Brown was terminated, she went to work for Lawley Benefits Group, LLC. Brown sued to enforce the covenant. Was this suit able to follow through despite the covenant? Why or why not?

Annabelle's brother, Jack because the court found that Annabelle could not make complex financial decisions because of her retardation

Annabelle Duffie was mildly mentally retarded and, at age seventy, started suffering from dementia. For her entire life, she had lived with her brother Jerome. When Jerome died, he left Annabelle his property, including 180 acres of timberland near Hope, Arkansas, valued at more than $400,000. Less than three months later, Annabelle signed a deed granting her interest in the tract to Charles and Joanne Black. The Blacks agreed to pay Annabelle $150,000 in monthly payments of $1,000. Later, Annabelle's nephew, Jack, was appointed to be her legal guardian. On her behalf, Jack filed a lawsuit in an Arkansas state court against the Blacks, seeking to void the land deal because of Annabelle's lack of mental competence. The court ordered the Blacks to return the property to Annabelle. They appealed. Who won?

Make the clause reasonable by changing it, deeming it illegal and thus void

Cole signs an employment contract that includes an overly broad and thus illegal covenant not to compete. What are the courts two options?

Kelly, usually liability waivers are absolute, but Kelly is able to disaffirm them as she is a minor

Fifteen-year-old Morgan Kelly was a cadet in her high school's Navy Junior Reserve Officer Training Corps. As part of the program, she visited a U.S. Marine Corps training facility. To enter the camp, she was required to sign a waiver that exempted the Marines from all liability for any injuries arising from her visit. While participating in activities on the camp's confidence-building course, Kelly fell from the "Slide for Life" and suffered serious injuries. She filed a suit to recover her medical costs. The Marines asserted that she had signed their waiver of liability. Kelly claimed that she had disaffirmed the waiver when she filed suit. Who did the court rule in favor of, why?

He would dissafirm by stating or stopping to make payments

Lindsay posts an ad on Craigslist offering to sell her grandmother's Yamaha grand piano for $6,000. Axel, who is seventeen years old, agrees to purchase the piano by making monthly payments of $200 over the next two and a half years. Six months into the agreement, Axel turns eighteen (the age of majority in his state). When Axel stops by Lindsay's house to make his seventh payment, he states, "I love the piano and will continue making payments." Axel's oral statement to Lindsay is an express ratification of their contract. He can no longer disaffirm it. Alternatively, if Axel does not expressly tell Lindsay he will continue making payments but continues to do so well after reaching the age of majority, he impliedly ratifies the contract. How would Axel cancel the contract as he turns 18?

Any time before payment occurs, even if they lose the bet

Sam and Jim decide to wager (illegally) on the outcome of a boxing match. Each deposits cash with a stakeholder, who agrees to pay the winner of the bet. At this point, each party has performed part of the agreement. When can the parties withdrawal from the deposit?

Yes, but only receives the fair market value of a truck rather than a whole refund

Sixteen-year-old Paul Dodson buys a pickup truck from a used-car dealer. The truck develops mechanical problems nine months later, but Dodson continues to drive it until it stops running. Then Dodson disaffirms the contract and attempts to return the truck to the dealer for a full refund. Dodson lives in a state that imposes a duty of restitution on minors. Can he disaffirm? What will he receive if he does?

Recover for those extra hours of service

Statutes prohibit certain employees (such as flight attendants and pilots) from working more than a certain number of hours per month. What can an employee do who is required to work more than the maximum hours?

The United Arab Emirates won because Strudza was not a licensed architect and licensing requirements are necessary t ensure the safety of those who work in and visit buildings in the DOC

The United Arab Emirates (UAE) held a competition for the design of a new embassy in Washington, D.C. Elena Sturdza—an architect licensed in Maryland but not in the District of Columbia—won. Sturdza and the UAE exchanged proposals, but the UAE stopped communicating with her before the parties had signed a contract. Later, Sturdza learned that the UAE had contracted with a District of Columbia architect to use another design. She filed a suit against the UAE for breach of contract. Sturdza argued that the licensing statute should not apply to architects who submit plans in international architectural design competitions. Who won? Why?

Ratification

The act of accepting and giving legal force to a obligation that previously was not enforceable

Contractual Capacity

The legal ability to enter into a contractual relationship

Disaffirmance

The legal avoidance, or setting aside, of a contractual obligation

Monterey because the arbitration clause was enforceable, tiffany just made a bad decision signing up for those classes on her own merit

Tiffany Brinkley committed to take six real estate investment training sessions at a cost of $4,195. She paid $850 and signed a retail installment contract promising to pay monthly payments on the balance to Monterey Financial Services. The contract contained an arbitration agreement. When a dispute arose, Brinkley stopped making payments and filed a lawsuit against Monterey in a California state court. Monterey filed a motion to arbitrate, which the trial court granted. Brinkley appealed. She argued that the arbitration clause was procedurally unconscionable because it was part of an adhesion contract. Who won? Why?

A state court held that their agreement was an illegal gambling contract and therefore void

Video poker machines are legal in Louisiana, but their use requires the approval of the state video gaming commission. Gaming Venture, Inc., did not obtain this approval before agreeing with Tastee Restaurant Corporation to install poker machines in some of its restaurants. when Tastee allegedly reneged on the deal by refusing to install the machines What happened

Age of majority

When a person is no longer a minor (18 years)

Contract Reformation

an equitable remedy that allows the courts to "rewrite" contract provisions

Necessaries

basic needs, such as food, clothing, shelter, and medical services

Usury

the practice of lending money at exorbitant rates

Unconscionable Contracts

unfair or unduly harsh agreements are not enforceable

Emancipation

when a child's parent or legal guardian relinquishes the legal right to exercise control over the child