Chapter 9

Voidable contract

a contract in which at least one party has the option to void his or her contractual obligation. Both parties are released from their obligation under the contract. If the party with the option chooses to ratify the contract, both parties must fully perform their obligation. With certain exception, contract may be voided by minors; insane influence, or fraud; and in case involving mutual mistake.

Actual contract

may either be express or implied-in-fact

Valid Contract

meets all the essential element to establish a contract 1) consists of an agreement between two parties 2) is supported by legally sufficient consideration 3) is between parties with contactual capacity 4) accomplished a lawful object. Is enforceable by at least one of the parties

e-licenses

is usually of computer and software information

Equity

1) an award of money damages "at law" would not be the proper remedy 2) fairness required the application of equitable principles. The judge decides the __________________ issure; there is no right to a jury trial in ________ action.

Restatement(Second) of Contracts

"A contract is a promise or a set of promises for the breach of which the law gives a remedy or the performance of which the law in come way recognizes a duty.

Executed contact

A completed contract -- that is, one that has been fully performed on both sides

Recognizance

A party acknowledges in court that he or she will pay a specified sum of money if a certain event occurs

Consideration

A promise must be supported by a bargained-for ----------- that is legally sufficient. Money, personal property, real property, provision of services, and the like, qualify as_________________.

Informal contracts (simple contracts)

All contracts that do not qualify as formal contracts are called_____________________. The term is a misnomer. Valid _________________ ( leases, sales contracts, service contracts) are fully enforceable and may be sued on if breached. Because no special form or method is required for their creation. Parties can use any words they choose to express their contract. The majority of the contracts entered into by individual and business are________________.

Implied-in-law contract (quasi contract)

Allows a country to award monetary damages to a plaintiff for providing work or service to a defendant even though no actual contract existed between the parties. Recovery is generally based on the reasonable value of the service received by the defendant. Is intended to prevent unjust enrichment and unjust detriment. It does not apply where there is an enforceable contract between the parties. Is imposed where 1) one person confers a benefit on another, who retain the benefit 2) it would be unjust not to require that person to pay for the benefit received.

Contact Law

Common law of contracts Uniform Commercial Code Restatement(Second) of Contracts

Executory Contract

Contract that has not be performed by both sides. Or contracts that have been fully performed by one side but not the other

Chancery Court (Courts of equity)

Developed a set of maxims based on fairness, equality, moral rights, and natural law that were applied in settling disputes.

Uniform Commercial Code

First drafted by the National Conference of Commissioners on Uniform State Law in 1952, has been amended several times. Goal is to create a ___________________________ among the 50 states. Normally takes precedence over the common law of contracts.

Two defenses may be raised to the enforcement of contracts

Genuineness of assent Writing and form

Void Contract

Had no legal effect. Its as if no contract had even been created. A contract to commit a crime is _______. If a contract is ________ then neither party is obligated to perform the contract and neither party can enforce the contract.

Offeree

Has the power to create a contract by accepting the offeror's offer.

bilateral contract

If the offeror's promise is answered with the offeree's promise of acceptance. Is a "promise for promise". The exchange of promises created an enforceable contract. No act of performance is necessary to create.

Restatement of the Law of Contracts

Is a compilation of contract law principles as agreed on by the drafter. (Is not a Law) Lawyers and judges often refer to it for guidance in contract disputes because of its stature.

Contract

Is an agreement that is enforceable by a court of law or equity. (Created if the offer is accepted)

Offeree

Is the party to whom the offer is made.

Offeror

Is the party who makes an offer to enter into a contract.

Article 2 (sales) (Sales Contracts)

Prescribes a set of uniform rules for the creation and enforcement of contracts for the sales of goods. These contracts are often refereed to as ____________________ Ex: Sales of equipment, automobiles, computer, clothing, etc..

Article 2A (Lease Contracts)

Prescribes a set uniform rules for the creation and enforcement of contracts for the lease of goods. Ex: Leases of automobiles, aircrafts, etc...

Incomplete or Partial Performance

Problems can arise if the offeror in a unilateral contract attempt to revoke an offer after the offeree has begun performance. Generally, an offer to create a unilateral contract can be revoked by the offeror any time prior to the offer's performance of the requested act. However, the offer cannot be revoked if the offeree has begun or has substantially completed performance.

Offeror

Promises to do- or refrain from doing- something.

Genuineness of assent

The consent of the parties to create a contract must be_______. If the consent is by stress, undue influence, or fraud, there is no real consent

Writing and form

The law required that certain contacts be in ________ or in a certain ________. Failure of such contract to be in writing or to be in proper form may be raised against the enforcement of the contract.

Lawful Object

The object of a contract must be lawful. Contracts that have an illegal object are void and cannon be enforced.

Contractual capacity

The parties to a contract must have_________________________. Contract cannot be enforced against parties who lacked contractual capacity when they entered into the contracts.

Common law on contracts

There is a limited federal common law of contracts that applies to contracts made by federal government. The larger and more prevalent body of common law has been developed from state court decisions. Variation from state to state.

Agreement

To have an enforceable contract, there must be ------------ between the parties. This requires an offer by the offeror and an acceptance of the offer by the offeree. (There must be mutual assent by the parties)

Objective theory of contracts

Whether a reasonable person viewing the circumstance wold conclude that the parties intended to be legally bound. Ex: The statement "I will buy your building for $2million" is valid offer because it indicates the offeror's present intent to contract Ex2: A statement such as "are you interested in selling your building for $2million" is not an offer. It is an invitation to make an offer or an invitation to negotiate. Offers that are made in jest, anger, or undue excitement are not included

Letters of credit

an agreement by the issuer of the letter to pay a sum of money on the receipt of an invoice and other documents. Are governed by the UCC

Implied-in-fact-contracts

are_____ from the conduct of the parties Following must be established: 1) The plaintiff provided property or services the the defendant 2) The plaintiff expected to be paid by the defendant for the property or services and did not provide the property or services gratuitously 3) The defendant was given an opportunity to reject the property or services provided by the plaintiff but failed to do so.

E-commerce

has create problem for forming_____________ one the internet, enforcing _______,and providing consumer protection. Many situation, traditional contracts rules apply

Unilateral Contract

if the offeror's offer can be accepted only by the performance of an act by the offeree. There is no contract until the offeree performs the requested act. An offer to create a unilateral contract cannot be accepted a promise to perform. It is a "promise for an act"

Negotiable instruments

includes checks, drafts, notes, and certificates of deposit, are special forms on contracts recognized but the UCC. They require a special from and language for their creation and must meet certain requirements for transfer

Express contract

is stated in oral or written words. Most personal and business contracts are express contracts

Formal contracts

require a special form or method of creation

Unenforceable contract

there is some legal defense to the enforcement of the contract. If a contract is required to be in writing under the Statue of Frauds but is not, the contract is unenforceable. The parties may voluntarily perform a contract that is unenforceable.

Contract under seal

type of contract is one to to which a seal (usually a wax seal) is attached. Although no state currently requires contracts to be under seal, a few states provide that no consideration is necessary if a is made ______________.