Business Law - Chapter 13

When voluntary consent may be lacking

raises a red flag that something may have been involved such as fraud, complicated legal language

covenant not to sue

substitute a contractual obligation for some other type of legal action based on a valid claim

The general rule

the determination of value is chosen by ppl entering in the contract, something need not be of similar financial or economic value

Rescission

the unmaking of a contract so as to return the parties to the positions they occupied before the contract was made

requirements and output contracts

uncertainty of performance (a buyer or seller agree that the buyer will purchase from the seller all of the goods that are required) (the buyer and seller agree that the buyer will purchase from the seller all of what the seller produces)

Illusory promises

uncertainty of performance that the promisor has promised to do anything, no promise at all (ie. if ___,then ___ only if management agrees)

release

a contract in which one party forfeits the right to pursue a legal claim against the other party 1. made in good faith 2. release contract is signed writing 3. the contract is accompanied by consideration

Promissory estoppel (detrimental reliance)

a person who has reasonably and substantially relied on the promise of another may be able to obtain some measure of recovery

Legally sufficient value

1. promise to do something that one has no prior legal duty to do 2. performance of an action that one is otherwise not obligated to undertake 3. refraining from an action that one has a legal right to undertake (forbearance)

Exceptions to the consideration requirement

1. promises that induce detrimental reliance, under the doctrine of promissory estoppel 2. promises to pay debts that are barred by a statute of limitations (pay off debt in a certain time) 3. promises to make charitable contributions

Consideration

1. something of legally sufficient value must be given in exchange for the promise 2 there must be a bargained for exchange (the item of value must be promised)

requirements for promissory estoppel

1. there must be a clear and definite promise 2. promisor should have expected that the promise would rely on the promise 3. promisee relied on promise and acted on it 4. promisee's reliance was definite and resulted in substantial detriment 5. enforcement of promise is necessary to avoid injustice

option-to-cancel clause

canceling before performance without liability, no contract or promise at all, (thirty days notices are not illusory)

Accord and satisfaction

debtor offers to pay, and a creditor accepts, a lesser amount than the creditor originally claimed was owed

Adequacy of consideration

essentially concerns the fairness of the bargain

Liquidated debts

one whose amount has been ascertained, fixed, agreed on, settled, or exactly determined

unliquidated debts

opposite of a liquidated debt, not settled or fixed or agreed upon

Agreements that lack consideration

preexisting duty, unforeseen difficulties, rescission and new contract, past consideration (bargaining for something that has happened in the past), non-competes when someone is already employed