Contracts Exam - Legal
What factors make an agreement enforceable under the principle of quasi-contract?
- the enriched party knows about the benefit and keeps it - one party is being enriched at the expense of the other
What is an example that qualifies as a "good" under Article 2 of the UCC?
a commercial freezer unit (pretty much any physical product)
Executed Contract
a contract that has been fully performed on both sides
Executory contract
a contract that has not been fully performed by either or both sides
Mitigation of damages
a party has the responsibility to do everything they can to reduce or lessen their damages in case of a breach of contract
Liquidated damages
a provision in a contract in which both parties agree that if one of the parties breaches they will pay a predetermined amount of money to the nonbreaching party (must be reasonable, NOT a punishment)
Exculpatory clause (hold harmless agreement)
a provision in a contract or a separate contract in which one party agrees to hold the other party harmless (not responsible) for injuries caused by that parties negligence
If an individual shopping for groceries opens a bottle of water from their cart and drinks it before they have paid for their items:
a quasi contract has been created
Statute of limitations
is the number of years you have to file a lawsuit or bring criminal charges (barred otherwise from bringing it)
What does an anticipatory breach/repudiation do for the non-breaching party?
it allows them to prep for the breach
What is a contract for necessity? (minor's contracts)
it is a contract that can void but must return collateral AND pay reasonable value for benefit received
What can the non-breaching party do in an anticipatory breach/repudiation?
- they can immediately sue for anticipatory breach - wait for date of performance and then sue for breach
When showing prior course of dealing or industry practice (parole evidence rule exception)
- this applies to when people have dealt with each other before and shouldn't have to "spell it out" all the time - industry/companies always do something a certain way, don't need to always state or clarify then
What function does a severability clause serve?
- it preserves the rest of the contract if one part is unenforceable - it specifies what will happen with a potentially unenforceable part of a contract
Contracts can be voidable due to:
- misrepresentation (innocent) - fraud (intentional) - duress - undue influence - mutual mistake of fact
What characteristics must an item possess to be classified as a "good"?
- must be tangible - must be moveable
Two types of irrevocable offers
- option contracts - firm offer (UCC)
What are two things to watch out for with consideration?
- past performance/consideration - pre-existing obligations
What factors are used to judge if consideration is adequate to ensure a fair bargain?
- promises must be made with voluntary consent - promises exchanged may not be a preexisting duty
What remedies are available in the case of a unilateral mistake in making a contract?
- recission - reformation
What factors must be present to prove fraudulent misrepresentation in a contract?
- the innocent party has justifiably relied on the misrepresentation - a misrepresentation of a material fact has occurred - there has been an intent to deceive
What factors may overturn a minor's right to disaffirm a contract?
- the minor ratifies the contract after reaching the age of majority - the contract is for necessaries - the minor misrepresented the minor's age while engaging in business as an adult
You own an apartment building and one of your tenants moves out unexpectedly. You also have a list of waiting people wanting to move in. What does mitigation of damages allow you to sue for, if at all?
- you have to have someone move in, despite if you have to lower the rent or not. - you can sue the tenant that left for the difference in rent
Communication to offeror (in acceptance)
can be any reasonable means (over the phone, email, mail) UNLESS STATED OTHERWISE
Exception to the parole evidence rule
can introduce the rule IF: - it is to prove misrepresentation, fraud, duress, undue influence, mutual mistake or lack of capacity - to clarify an ambiguity - to show prior course of dealing or industry practice
Silence as acceptance
cannot be used as acceptance UNLESS the parties have used it before
Option contracts
contract that binds offeror to keep an offer open for a specified time in exchange for consideration
What is the difference between legal remedies and equitable remedies for breach of contract?
legal remedies are monetary while equitable remedies are non-monetary
Contractors are constructing something and end up being late and off schedule, their contract states they must pay a specified amount of $ per day or for being late in total. What is this an example of?
liquidated damages (contractors breached the contract by being late)
Bilateral offer
promise for a promise (both parties sign the contract and promise performance)
What is the test for whether a contract is governed by the Statute of Frauds because of the one-year rule?
the contract must be objectively impossible to perform within one year
Quasi contract
the court implies a contract in order to prevent unjust enrichment by one party
Rejection
the offeree rejects and says no to the offer
A contract for an illegal purpose is _____.
void
If a company creates personalized or specialized goods for a customer and the customer cancels the order while it is still in progress, does the customer still have to pay?
yes, because of the exception to statute of fraud states that there is partial or substantial performance. they must pay for what has been done so far.
Is there a contract? - offer received: may 1 - rejection sent: may 2 - acceptance sent: may 3 - acceptance received: may 4 - rejection received: may 5
yes, the acceptance was received first over the rejection
Parole evidence rule
you cannot introduce, in court, evidence of any prior or contemporaneous oral/written statements for the purpose of changing a written contract (once the contract is signed, nothing else can get in)
Modifying a contract (common law)
you need new consideration to modify a contract
Assignment of contracts
"giving away" - you assign away your rights - delegate your duties
Ahmir agrees to purchase a shipment of oriental rugs from Oriental Rug Company for the price of $50,000, to be delivered on August 15. On July 15, Ahmir notifies Oriental that he no longer wants to purchase the rugs. Oriental spends $1,000 to advertise the rugs and obtains a new purchaser who buys the rugs for $40,000. Oriental then sues Ahmir for breach of contract. If Oriental is successful in its breach of contract suit against Ahmir, Oriental may receive:
$11,000 from Ahmir ($50-40K + $1K ads)
You go to Publix and buy groceries. You pay for the groceries and Publix gives them to you. What is this an example of?
Bargain for exchange
(T/F) Anyone can accept the offer given.
False, only the offeree of the offer can accept
Otto orally agrees to install three wells for Green Space Energy over the next eighteen months. When the three wells are completed, Green Space Energy will pay Otto $10,000. After the first well is completed, Green Space Energy tells Otto that it does not want any more wells. Green Space Energy refuses to pay Otto for the first well, claiming that the contract was not in writing and, therefore, not enforceable. If Otto sues Green Space Energy to enforce the contract:
Green Space Energy will have to pay Otto a reasonable price for the one well that was installed
Mulligan Pro Shop agrees to provide 10,000 grade AAAAA golf balls to Golf Kingdom each month for the next four months. For the first three months, Mulligan delivers 10,000 grade A golf balls instead, and Golf Kingdom accepts the delivery. In month four, Mulligan again delivers 10,000 grade A golf balls to Golf Kingdom, and Golf Kingdom rejects the shipment. If Mulligan sues Golf Kingdom for breach of contract:
Mulligan will win, because Golf Kingdom accepted the prior noncomforming shipments
There are two different types of offers, what are they?
Unilateral Bilateral
Secure transaction
a lien on personal property
Uniform Commercial Code (UCC)
body of laws governing commercial transactions in the United States - not federal law
(T/F) If you delegate your duties and assign away your contract, you are no longer responsible at all
false, you are still obligated to make sure that the contract still gets performed
A contract for a purpose that causes the parties to violate a law is:
illegal and void
What is the primary purpose of the Statute of Frauds?
requiring written evidence of agreements concerning important transactions
Restitution
return something to its original owner; repayment
Recission of a contract will:
return the parties to the position they were in before the contract was formed
(T/F) you can freely assign a contract
true, unless the contract says otherwise
Elements of a contract
-valid offer -valid acceptance -consideration -legal capacity
Are you legally obligated to buy groceries from Publix?
No, there is no legal detriment (until Publix take $, then they have to give you groceries)
Most contracts are counted as what?
a bilateral offer, unless it is actually unilateral
Owen offers to sell his motorcycle to Julian for $5,000. After he makes the offer, Owen has second thoughts. Owen can revoke the offer to sell his motorcycle to Julian:
as long as Julian has not yet accepted the offer
UCC rule for modifying contracts
(ONLY UCC CONTRACTS) a good faith modification is allowed without new consideration
What types of contracts violate public policy?
- a candidate for public office paying his competitor to retire - employment contracts that forbid membership in a union - conducting trade with a country that is an enemy to the United States
Valid offer
- intent to contract - has essential and definite terms - the legal activity is proposed - there is communication to offeree (reasonable)
A buyer makes an offer to purchase a house and gives seller 1 week to accept the offer. (will take off $5K off the asking price) What is this an example of?
An irrevocable offer
If you have intent to contract, what does that mean?
Any reasonable person can believe that you intended to contract
Huseyin and Ashish are negotiating the details of a new garage that Ashish plans to build on Huseyin's property. They agree on the building specs, the delivery date, and a price of $25,000. Ashish draws up the contract and sends it to Huseyin to sign. Huseyin reviews the contract and notices the price is listed as $2,500 instead of $25,000. Elated at the unbelievably low price, Huseyin quickly signs the contract and sends it back to Ashish, who signs it as well. If Ashish later tries to rescind the contract due to the mistaken price:
Ashish will be successful, because it is a mathematical mistake that Huseyin was aware of
Quon decides to sell his antique roadster, so he places an ad on Craigslist. He lists the roadster as a 1957 Mercedes Benz 300SL Roadster, describes it as in good working condition, and states that no reasonable price will be refused. Fern responds to the ad and offers to pay $25,000 to Quon for the car, which Quon agrees to. In this scenario, who is the offeror?
Fern is the offeror
Gavin and Allison are having drinks after work. After several rounds, the topic of Gavin's sports car comes up. Gavin is extremely proud of his sports car and brags about it all the time. To impress Allison, Gavin offers to sell Allison his expensive sports car for $5,000. Allison jumps at the deal, because she knows the car is worth much more than $5,000. They even write the "deal" down on a napkin, and both Gavin and Allison sign the napkin. The next morning, when Allison brings $5,000 to purchase the sports car, Gavin explodes. Gavin tells Allison that he was just kidding and that he would never sell his expensive sports car for such a low price. When Allison tries to enforce the deal:
Gavin can either rescind the contract based on incapacity or ratify the contract
Mailbox rule exception
If there is a rejection sent out with an acceptance, then it is whichever is received first that counts
There is an ad in the store for an iPad sale of $700. You go in and try to buy at that price but the store says it was a printing mistake and it's actually $900. They won't let you buy it at $700. What is this an example of?
Invitation to offer! They are rejecting your offer for $700 and it is because an advertisement isn't a contract
Bryan owns Snow Country, a business that leases out snow cone stands. Kaylee agrees to lease one of the snow cone stands for $500 per month. Kaylee and Bryan sign a written contract that states the monthly lease amount is $5,000. When Kaylee refuses to pay the $5000 for the first month's rent, Bryan sues for breach of contract. If Kaylee tries to introduce evidence in court that shows that the amount stated in the written contract is incorrect:
Kaylee will be allowed to introduce the evidence under the parole evidence rule
Koko purchases a ski boat from Marina Boating Supply for $24,000 cash. Koko has not yet completed the arrangements for her slip in the local harbor where she will dock the boat, so Koko arranges with Marina to keep the boat at Marina's facility until Koko can make arrangements. Koko promises Marina that she will pick up the boat within two weeks. One week later, a hurricane destroys the boat. The risk of loss of the ski boat falls on:
Marina Boating Supply
Your friend said that for going to their wedding and giving them a nice gift, they are offering you a job at their work. Is there a contract?
No, because there is no bargain for exchange (you weren't expecting anything for going to their wedding)
Irrevocable offers
Offers that cannot be withdrawn by the offeror
Ruby, a seventeen-year-old, purchases a car from Smitz Used Auto Sales and agrees to pay for it over a period of twenty-four months. Ruby makes the payments for four months but then decides the car payment is too much for her limited budget. Ruby tells Smitz that she wants to stop making payments and that she wants out of the contract completely. The contract between Ruby and Smitz can be canceled by:
Ruby, because she is minor, but Ruby must return the car
If you give music lessons through a company that finds you clients, and you end up leaving after a while. The company is going to ask you to sign a contract to not work with any of the clients after you leave. What is this an example of?
a covenant not to compete (noncompete agreement)
What is the term for when a merchant gives a written, signed assurance that he or she will not revoke an offer for a stated period of time?
a firm offer
Exception to modifying a contract (common law)
a good faith modification in response to UNANTICIPATED conditions
Firm offer (UCC)
a merchant agrees, in writing, to hold an offer open for a specified period of time not exceeding 90 days (sales contracts only)
Bargain for exchange
agreeing to do OR not do something because you expect something in exchange for it
Legal detriment
agreeing to do something you're not legally required to do OR not do something you have a legal right to do
Good
an item that is movable and tangible
What happens when there is a recission of contract?
any consideration is returned to both parties, so that they are left in the same position they were in before the contract was entered into
Recission of contract
both parties agree to cancel the contract (all requirements for contract were met but they both just agreed to cancel)
Dakotah is the cheerleading coach for Northfield High School. Dakotah places an order by telephone with Cheerleader Supply Inc. for thirty cheerleader uniforms. Each uniform is to be emblazoned with the Northfield High emblem and a cheerleader's name. The total cost of the uniforms is $900. Two weeks after placing the order, Dakotah realizes she ordered the wrong style of uniform, so she contacts Cheerleader Supply and attempts to cancel the order. Cheerleader Supply at this time is almost through completing the work on the order. Cheerleader Supply:
can enforce the contract, even though it is not in writing, because it is for specially manufactured goods
Marie and Molly enter into a written contract to sell Marie's home to Molly. At the time the contract is executed, Marie tells Molly that for the last six months she has been sharing the home with a family of extraterrestrial beings. Marie states that she has asked the extraterrestrials to move out, but they won't; therefore, she is selling the family home to get rid of them and is willing to sell the home to Molly for well below market price. After the sale of the home is complete, Marie's children challenge the sales contract on the grounds that Marie did not have the mental capacity necessary to enter into a contract, even though Marie has not been declared incompetent by the courts. The contract between Marie and Molly can be rescinded:
if Marie's children can prove that Marie lacked the mental capacity to comprehend the nature, purpose, and consequences of the contract
What is the admission in court (for statute of frauds)?
if there is admission in court that there is a contract then it is just a disagreement of the terms of the contract
The legal capacity of someone is debated on what standards for a contract?
if they are: - mentally competent - of legal age
Sal has ordered 100 pounds of shrimp for his restaurant from Sam every Friday for 5 years and has always paid that week's market price. One Friday, Sal decides to take a vacation but doesn't tell Sam. Sam claims they have a contract, even though it was never written down. What kind of contract do they have?
implied-in-fact
When a party whose whose personal performance is essential to the completion of the contract dies or becomes incapacitated to performance, what is this an example of?
impossibility of performance
Promissory Estoppel
is a substitution for consideration
Harold offers to sell Emma his farmland in Bryson County. After discussing the sale at length in front of their friends Nicole and Jackson, Harold and Emma orally agree on a price of $120,000 for the land. The next day, Emma goes to the bank and withdraws $120,000 to pay Harold for the land. When Emma presents the $120,000 to Harold, Harold tells Emma he was just joking and does not wish to sell the land. Emma tries to enforce the deal, and Harold continues to refuse by saying that the deal was not in writing, and, therefore, it is unenforceable. The contract between Harold and Emma for the sale of the land:
is not enforceable because it violates the statute of frauds (it was not written down, must be to be enforceable)
Is there a contract? - offer received: may 1 - rejection sent: may 2 - acceptance sent: may 3 - rejection received: may 4 - acceptance received: may 5
no, because the rejection was received first over the acceptance
If you are offered to live in an apartment for the rest of your life, does it have to be in writing according to statute of frauds?
no, because you can die within a year
Anticipatory breach/repudiation
one party in a contract will notify the other party that they will not be performing (breaching) the contract
You can lease a car or house and there is the option to buy it at the end. What is this an example of?
option contract
Unilateral offer
performance as acceptance (you accept the offer by performing the tasks in the contract)
What is the principle that is applied to determine how much compensation a party receives in a quasi-contract settlement?
quantum meruit
Specific performance is a remedy which is always available in?
real estate contracts
Merchant (UCC)
sells goods of the specific type, subject to the contract
When an agreement fails to qualify as an enforceable contract, but one of the parties breaches the agreement, the non-breaching party can?
sue for unjust enrichment
You're looking at houses and one is $250K so you ask what is being left in the house upon sale. You're told a lot (furniture, the light chandeliers, appliances, curtains and such, etc.) You go ahead and sign contract agreeing and upon move in you realize only couch is left, an older refrigerator, and simple light fixtures (not the chandeliers), etc. You ask the realtor why and looking at the contract, everything is stated in "layman's terms." (light fixtures and window treatments, instead of chandeliers, etc.) Can you sue?
technically no, the conversation with the realtor before signing the contract does not apply because of the parole evidence rule. (HOWEVER, ambiguity can be argued)
Milo is the owner of a sporting goods store that has only been open for three months. The holiday season is coming up, and Milo realizes that he will need extra help. Milo asks his friend Jess to help him out at the store. Milo and Jess agree that Jess will work during the months of November and December. However, because Milo is unsure how much help he will need and how much he will be able to pay, they agree to decide each week on the hours that Jess will work for the following week, and to decide the hourly rate after Jess has worked two weeks before she receives her first paycheck. Just before November 1, Jess takes a job at another store. If Milo tries to sue Jess for breach of contract, the court will probably decide:
that the parties had no contract because the terms of the offer were not definite
Mirror image rule
the acceptance MUST mirror the terms of the offer otherwise it's a counteroffer
If both the rejection and acceptance has been sent, when is the acceptance effective?
the acceptance must be received BEFORE rejection in order to be effective
Implied contract (implied-in-fact)
the conduct of the parties, rather than their words, creates and defines at least some of the terms of the contract
What does it mean when a contract is voidable?
the contract can be disaffirmed (backed out of)
Mentally competent capacity
the contract is VOID if one of the parties is not mentally competent (capable of understanding the legal implications)
What is the result of a contract in which both parties are wrong about a material fact of the contract?
the contract is voidable
Larue owns a horse ranch. Larue enters into a contract with Dora for the purchase of thirty saddles for his ranch to be delivered on a specific date. If the price of the saddles is not included in the contract, under the U.C.C.:
the court will determine a reasonable price at the time for delivery
When might a contract made by a mentally incompetent person be enforceable?
the incompetent person was lucid at the time the contract was made
Revocation
the offeror is taking back the offer
Accord and Satisfaction
the original obligor performs a new obligation in satisfaction of a pre-existing obligation under the original contract
Novation
the original party substitutes assignee for the assignor and releases assignor from obligations (gets out of assignment of contracts)
Recission (of a contract)
the parties cancel their contract and are returned to the positions they occupied prior to the contract formation
Who is the party to be charged?
the party you want to enforce the contract against
What is the only required term for a valid sales contract under UCC?
the quantity of good being sold is stated
Under the Uniform Commercial Code (UCC), which term in a written contract for the sale of goods is essential?
the quantity of items being purchased
A quantum meruit remedy is equivalent to?
the reasonable value of the agreement
What does it mean when a contract is void?
there is no contract
What is the partial or substantial performance (for statute of frauds)?
there is some or substantial performance involved
What does "in writing" mean?
there is written evidence of the terms of the agreement AND it is signed by the party to be charged
What is the big decision that the non-breaching party must think about when dealing with an anticipatory breach?
they have to weigh out both of their options, BECAUSE there is still a chance the breaching party can perform
Mutual mistake of fact (voidable contracts)
this allows either party to back out of the contract and mutually leave if there was something stated as a fact and turns out it was mistaken
Undue influence (voidable contracts)
this requires a special relationship of trust and loyalty - the dominant person mentally coerced person into contract - the subordinate person can back out if it's proven they were coerced
Courts may reform a contract:
to reflect the parties' true intentions
Ambiguity
uncertainty or inexactness of meaning in language, NOT BEING SPECIFIC IN CONTRACTS
If Ramona changes her will at age 88 to leave the bulk of her fortune to her home health care nurse instead of her children, what factor will the courts consider in judging whether or not her will is valid?
undue influence
What type of contract exists when at least one party has the option of cancelling it?
voidable
Impossibility of performance
when the parties in a contract could not have reasonably foreseen, at the time the contract was formed, the event or events that rendered performance impossible
Elements of firm offers
- cannot be more than 90 days - sale of goods - has to be in writing - does NOT need exchange of consideration - you have to be a merchant
Misrepresentation (voidable contracts)
- awarded compensatory damages which compensates "wrong done" party - it is not realized that it is being done or isn't aware
Restitution is an appropriate remedy when:
- a contract has been rescinded - a contract has been breached - when the parties never had a contract
What are some contracts that should be in writing?
- those made in consideration of marriage - the sale of goods of $500+ - those that transfer an interest in real estate - those that require more than one year to perform (on day entered into contract) - contracts to answer for the debt of another (where the guarantor pays)
When are covenants not to compete in employment contracts considered to be against public policy?
- when the specific time of restraint is excessive - when the geographical restriction is too broad
Evan offers to sell his 2016 John Deere Tractor to Jorge for $30,000. Jorge accepts and promises to meet Evan on Saturday to make the exchange. On Thursday, a fire on Evan's farm totally destroys the tractor. Jorge is upset, because the price of the tractor was really good, and he knows he cannot get another one for that price. If Jorge sues Evan for breach of contract, the likely result will be that:
Evan's performance under the contract will be excused due to impossibility of performance
Danny hires Evelyn to install a swimming pool at Danny's home for $40,000, to be completed by June 1. Evelyn completes the job on time. When Danny inspects the pool, he discovers that Evelyn used a vinyl lining, and the contract called for a fiberglass lining. Danny refuses to pay Evelyn, stating that Evelyn breached the contract because the contract was not completed according to the specifications stated in the contract. If Evelyn sues Danny for the contract price:
Evelyn will probably receive the contract price less the cost to replace the pool liner with a fiberglass liner
Mailbox rule
acceptance is effective upon dispatch, UNLESS specified in the offer otherwise
If you cannot pay rent, but you tell the landlord that you will take care of maintenance or the lawn and fix the plumbing in exchange, what is this an example of?
accord and satisfaction, can't meet obligation so a new one is created to satisfy. (if new one isn't met, then still have to pay rent!)
Examples of invitations to make an offer
ad flyers, catalogs, advertisements, demonstrations (not all invitations are offers!)
Maryanne offers to sell her 2015 Mustang convertible to April for $15,000, and April agrees to those terms. April brings the $15,000 to Maryanne, and Maryanne promises to deliver the Mustang to April the next day after she has it detailed. At this point, Maryanne and April have:
an executory contract (April brought $15K but Maryanne still hasn't delivered the Mustang because she is getting it detailed)
Ryan, a small business owner, needs an accountant to complete his tax return. He drops by a local accountant's office, explains his situation to the accountant, and learns what fees she charges. The next day, he returns and gives the receptionist all of the necessary documents to complete his tax return. Then he walks out without saying anything further. What is this an example of?
an implied contract (their conduct is to be implied that she must perform the tax return and she will get paid)
What is an equitable remedy for breach of contract?
an order for specific performance
Jones Construction Company is building a series of new subdivisions in Newtown over the next two years. Jones enters into a verbal agreement with Harley Concrete Inc. to construct all the driveways and sidewalks in the subdivisions that Jones will be building. Jones and Harley agree on a price of $130 per cubic yard and that Jones will pay Harley at the end of each project. Harley completes the first project, which is four sidewalks and sixteen driveways, and bills Jones for the project. Jones decides that the price is too high and refuses to pay, claiming that they have no obligation to pay because the parties did not have a valid contract. If Harley sues Jones for payment the court would probably:
apply quasi contract theory and award the fair market value of the work that Harley completed
You lease an apartment for $800/month (Aug. to Aug.) However, you end up needing to move and choose to sign the lease over to your friend in May. You move and live life. Well, your friend doesn't pay rent and it starts adding up. What happens?
because of assignment to contract, the lease is still under your name but you have no rights anymore. so you cannot kick your friend out and you must still pay
Javier offers to buy Ann's smartphone for $200. Javier tells Ann that he will give her the cash for the phone on the following Friday, when he gets paid. Ann accepts Javier's offer and promises to give him the phone when he pays her on Friday. What is this an example?
bilateral contract
Forcing a party to agree to the terms of a contract through the use of threats or blackmail is called?
duress
What are waivers an example of?
exculpatory clause (hold harmless agreements)
When party A and B form a contract and both parties fully perform, the contract is considered:
executed
Quon and Bert have signed a contract for Bert to mow Quon's grass every week in June, July, and August for a price of $40 per week. They have agreed to all the necessary terms, but Bert has not yet mowed because it is still May. What type of contract do they have?
executory
If one party has fully performed but the other has not, the contract is said to be
executory (one side = executory / one side = executed) (ruled as executory!)
Mia contracted with Greencare Lawn Service for a pest treatment on Mia's lawn for $1,000. Pat lives next door to Mia. Greencare mistakenly treats Pat's lawn instead of Mia's. Pat watched them perform the treatment while looking through the window of his living room, but did not go outside and stop them. When Greencare seeks payment from Pat, Greencare can probably receive:
from Pat an amount less than the contract amount that will reimburse Greencare for expenses incurred, in order to avoid unjust enrichment (quasi contract)
Zayn boards the Big Rock Metro to ride downtown to his job. Zayn gives his money to the driver and takes his seat. Neither the driver nor Zayn says anything. Zayn and the bus driver:
have an implied contract
When is a noncompete agreement allowed?
if it is reasonable in: -time (how long) -scope (what are you agreeing to) -geographic region (where exactly)
UCC exception to the mirror image rule
if the acceptance does not mirror the terms of the offer, the acceptance is still effective but new terms may or may not become part of the contract
Legal age capacity
if the party is not of legal age, the contract is voidable by the minor (they can disaffirm or back out)
If you are trying to buy a boat from someone, but a hurricane comes while in the middle of the sale and ends up destroying the boat. They continue on with the sale, not knowing and later find out. What happens to the contract and sale?
it is a mistake of fact because they did not know it was destroyed and that this would occur. the contract is voidable.
If the contract made with a minor is not disaffirmed, then what?
it is ratified and is fully enforceable (not voidable)
What is an exception to the statute of limitations?
it will restart in debt collection if you can get the debtor to acknowledge the debt (by paying slightly some)
Statute of Frauds
requires certain contracts to be in writing (or it is not enforceable)
(T/F) A minor may enter into any contract an adult can, except for contracts that are expressly prohibited
true
You need to have a valid offer and acceptance, consideration and legal capacity in order to have a contract. (T/F)
true
If an elderly person is watched by a caretaker and the caretaker convinces them to put the caretaker in the will, sell their house or perform any other manipulative action, what can they sue under?
undue influence for a voidable contract
What is the term for a contract agreement in which an offeror promises to pay after the occurrence of a specified act, and the offeree is not required to respond in words?
unilateral contract
Reese says to Kay, "if you drive my car from NY to LA, I'll give you $1,000. What is this an example of?
unilateral contract (only on completing the act, driving the car to LA, can she accept the offer and receive the $1,000)
Brindley has an old shed on her property that needs to be removed. She posts the following ad on Facebook: "Shed needs to be gone. You take down and haul away. (Much of the wood is reusable.) $100 to the first person to show up and haul this away." This is an example of a(n):
unilateral contract ("performance as acceptance")
Contests, lotteries, and competitions with prizes are common examples of:
unilateral contracts (performance as acceptance; if they have the numbers or perform the task - they win the award)
If you promise to give $ to charity and you end up not giving it to them, can the charity sue?
yes, because of promissory estoppel. breach of contract!
Duress (voidable contracts)
you have to prove that you signed the contract while under harm and/or threat
Jordynne was the manager of Pets-R-Us, a pet store in Southern Valley Mall. Pets-R-Us had a one-year lease, and rent payments were $2,000.00 per month. Five months into the lease, Jordynne found a better site for the pet store. She notified Southern's manager, vacated the mall, and moved her store to its new location. After two months, Southern was able to re-lease the premises to another retail store, but at a reduced rent of $1,800.00 per month. If Southern successfully sues Pets-R-Us, Southern will likely receive:
$5,000 in damages (two months of missed rent $2K & 5 months of $200 difference in lowered rent)
Promissory estoppel elements
- a promise is made - is reasonably relied upon by the other party - the reliance is foreseen - the promissee will suffer substantial injury if the promise is not enforced
Implied contract (implied-in-fact) requirements
- the plaintiff furnished some service or property - the plaintiff expected to be paid for that service or property, and the defendant knew or should have known that payment was expected - the defendant had a chance to reject the services or property and did not
If you go rock wall climbing and sign a waiver to hold harmless but the wall is not maintained. It has holes or the surface is not safe for human use, can you sue?
yes because there is a certain standard to uphold even with the waiver in place
Selma wants to buy Matilda's house. Selma has been admiring the house for a long time and has asked Matilda repeatedly to sell the house to her, but Matilda has always refused. Finally, Selma tells Matilda that if Matilda does not sell Selma the house, Selma will kill Matilda's daughter. Afraid for her daughter's life, Matilda signs the contract to sell the house to Selma. If Matilda later tries to rescind the contract:
Matilda may rescind the contract on the grounds that she signed the contract under duress
Tyler (16) drops out of school and his parents kick him out of the house. He leases an apt from Jan 1 - Dec 31 where he pays the first and last month's rent and rent is $1K/month. He wants to leave his lease in June. Can he?
yes he can because of the legal age capacity (being a minor). he will only owe the 6 months left because it is a necessity (the reasonable value)
What is a contract for non-necessity? (minor's contracts)
it is a contract that can void but must return collateral and that is it. nothing else is owed
Shania offers to sell her lakefront property to Tonya for $150,000, and Tonya agrees to buy it. Tonya and Shania both sign the real estate contract, but, before they close the deal, Shania learns that a new resort is being opened on the lake. The opening of the resort will drive property prices up in the area, so Shania believes she can sell her property to someone else and get a better price on the deal. Shania tells Tonya that she has decided not to sell the property to Tonya. If Tonya sues to enforce the contract, a court will likely:
require Shania to go through with the sale
Solicitation of additional offer
usually counteroffers or additional offers given instead of acceptance, the offer is still valid (NOT A REJECTION)
If one party has fully performed, can you rescind a contract?
usually no, unless additional consideration is given (performing party needs something)
Alvin's Department Store agrees over the telephone to purchase $1,000 worth of blankets from Blanket Emporium. Blanket Emporium sends an invoice for the blankets before shipping them, and Alvin's Department Store refuses to go forward with the deal, saying their deal is not a valid contract. The oral agreement between Blanket Emporium and Alvin's Department Store for the purchase of $1,000 worth of blankets:
violates the statute of frauds, and is, therefore, unenforceable (not in writing)
What type of contract is created by an agreement that is oral when it is required by the Statute of Frauds to be in writing?
voidable
With a unilateral offer, at what point can you sue?
when the performance offered is finally performed
Exception to exculpatory clause
when the person signing did not know what they were signing
Wilson and Everett have a contract under which Everett is to supply to Wilson 5,000 sets of bicycle spokes by September 15. The contract provides that any lawsuit for breach of contract must be brought within three months of the breach. Everett delivers the 5,000 bicycle spokes to Wilson on September 15. Wilson refuses the delivery, however, because half of the spokes are broken. Everett refuses, after repeated requests from Wilson, to replace the shipment. On January 10, Wilson files a lawsuit against Everett for breach of contract. Wilson's lawsuit against Everett for breach of contract:
will not be dismissed because parties cannot reduce the period for bringing such a lawsuit to less than one year.
A guy goes hiking and collects rocks/gems on his trip. However, he doesn't want to carry them anymore so he stops at a shop to see how much they'll give him for them. He ends up selling them. The store later goes on the news reporting they have a RARE gem and this hiker realizes it is one of the gems he sold them. He goes back and says that it is his, wanting it back but the store won't give it back. Can he sue?
yes he can sue and use mistake of fact as evidence and reason. however, he must prove that the store did not know it was worth that much, despite them arguing saying they knew (arguments being he only asked how much they'd pay him - had he asked how much it was worth and they lied, it would be fraud)
Your dad is cosigned on a car with you. You can't continue to make the payments and you decide to transfer the title and everything over to your dad. Are you still required to make sure it gets paid?
yes! because of assignment of contracts, you are still obligated to make sure the contract is fulfilled/performed (no rights to car but note is still in your name)
When ambiguity in a contract's language exists, a court will what?
- interpret the terms against the drafting party - consider extrinsic evidence of the language
Elements of option contracts
- it can be more than 90 days - sale of anything - does not need to be in writing - must have exchange of consideration - anyone can do an option contract
Benefit of accord and satisfaction
- it gets someone out of a contract without needing to perform - this is b/c when you can't meet an obligation, it creates a new one to satisfy
What is the exception to the mirror image rule?
- if at least one of the parties is not a merchant the new terms do not apply unless both parties - if both parties are merchants, the new terms become part of the contract
Exception to statute of frauds
- if there is partial or substantial performance - if there is admission in court
Valid Acceptance
- intent to accept needed - communication to offeror of acceptance
Reformation
correction of a written contract so it reflects the true intentions of the parties
Fraud (voidable contracts)
- awarded compensatory and punitive damages which compensates party and punishes wrongdoer - it is misrepresentation but they realize what they're doing is wrong
What types of contracts must be in writing under the requirements of the Statute of Frauds?
- collateral promises to pay the debt of another person - promises made in consideration of marriage - contracts for the sales of land
Types of minor's contracts
- contracts for necessities - contracts for non-necessities
What elements are required for courts to apply the doctrine of promissory estoppel?
- enforcement of the promise is necessary to avoid injustice to the promisee - there was a detrimental result from reliance on the promise - the promise must be definite and relied upon
Lupita enters into a contract with Faith to purchase a used car. At the time they sign the contract, Lupita appears to be very intoxicated. Faith notices this but signs the contract anyway. If Lupita later decides she wants to get out of the contract:
Lupita can raise the defense of lack of contractual capacity due to intoxication
Tanya is in the business of selling rubber mats. Ralph is in the business of selling real estate. Logan is in the business of selling stocks and bonds. Article 2 of the U.C.C. governs the sale of the items sold by:
Tanya only
Only the offeree to whom an offer is directed can accept the offer (T/F)
True! and they have to be aware of it
You are having a pool built and have a balance of $14K left that is due on completion. The workers say that they need an additional $5K for construction because of the foundation. You didn't want to but agree and sign the addendum. Do you have to pay the $14K or $19K upon completion?
You only need to pay $14K because there is no new consideration and no new legal detriment from pool company. (they must add something additional to the pool for the $5K extra)
Nadia needs help running her bakery. Nadia contacts her friend Zoey, who has baking experience but lives in another state, and offers Zoey a job. Nadia orally promises Zoey that she will employ Zoey for at least two years. Zoey quits her job in the other state, moves her family, and begins to work for Nadia. After three months, Nadia terminates Zoey's employment. Zoey sues Nadia, claiming they had a contract for two years. If Nadia defends the lawsuit by claiming the contract could not be enforced because it violates the statute of frauds, the court will likely hold in favor of:
Zoey, under the theory of promissory estoppel
Covenant not to compete (noncompete agreement)
contract that is seen mainly in employment, independent contractors and when selling a business (know what you are/aren't allowed to do and what you're agreeing to)
Police officer catches a criminal that has a reward on them if caught. Can he or can he not collect the reward?
no he cannot. He has a legal detriment of catching the criminal (pre-existing obligations)
Merchant (regular)
sells goods in general
The weekly Kroger advertisement states that 5-pound chubs of ground chuck are available for $0.89 per pound. Arlene sees the advertisement; she realizes that ground chuck has not been priced this low in quite some time, so she hurries to the store to purchase some. Arlene loads 7 chubs of ground chuck in her shopping cart. When she goes to the checkout to pay, however, the cashier informs Arlene that the price in the advertisement is a typo and that the correct price is $1.89 per pound. Arlene insists that the store must honor the price listed in the advertisement, because it is an offer that she has just accepted. The cashier calls the store manager for a decision. The store manager will likely explain to Arlene:
that advertisements are not offers, but merely a request for offers
Say you want to buy a car and find one that is sale by owner for $8K and has $4k bank payments owed. It is a 3yo car in good condition and said to have just gotten a new engine. Well the "new" engine dies a week later and you go to a mechanic where they tell you it isn't a new engine, just painted to look new. The person who sold it to you didn't know they got lied to when the engine was replaced. What is the verdict and can you sue?
yes you can sue for misrepresentation. it was "innocent" because they didn't know.
Sarah is shopping at Sylvia's thrift store, and notices that the inside of the store needs repainting. Sarah offers to paint the store for $400. Sylvia does not respond to Sarah's offer. Later that day, Sarah returns to the store with painting supplies in hand and begins painting the store. When Sarah is finished, she demands payment of $400 from Sylvia. Will Sylvia have to pay Sarah for painting the store?
yes, Sylvia will have to pay Sarah for painting the store, even though she did not verbally agree to the contract (quasi contract)
An adult baseball league is occurring and during a game one of the players gets a head injury. A player from the other team is a doctor and performs CPR and an ambulance is called. The injured player is saved at the hospital. Does that player have to pay the ambulance and the doctor that saved his life?
yes, because he received the benefits of the ambulance and doctor despite having a choice or not
Tyler (16) drops out of school and his parents kick him out of the house. He leases an apt from Jan 1 - Dec 31 where he pays the first and last month's rent and rent is $1K/month. He also buys a TV, wave machine and speakers ($5K) He has a party and everything he bought gets ruined. He goes and returns it all to the store. Can he?
yes, he can return it all because of legal age capacity (being a minor). he owes nothing because it is all non-necessities, just has to return collateral
A child goes to a store where they sell baseball cards. He sees one that he likes and asks about the price, where the guy behind the counter says $25 after looking at the tag. The kid has just enough money and buys it, going home. The owner comes in later and asks who ended up buying it, the guy says it was the child. The owner freaks out because the tag was actually $2500 and it was misread. The owner goes to parents and child asking for card back. Can the store owner sue if they say no?
yes, he can sue and use mutual mistake of fact but he must prove that the kid actually did not know the value of the card.
Manuel contracts to sell a painting that was painted by his deceased grandmother, then has a change of heart and decides to hang it in his own bedroom. He notifies Nadine, the person who had planned to buy it. Can Nadine have the contract enforced?
yes, it can be enforced under the equitable remedy of specific performance
Publix buys strawberries from Wish Farms all the time but recently a freeze ruins the entire crop. It lets Publix know that there will be no strawberries and Publix chooses to sue, can they and why?
yes, mitigation of damages requires them to go buy strawberries from another farm to not suffer that many losses because it is a grocery store. if Publix has to pay more for these strawberries, they can sue Wish Farms for the difference in price
LaVon contracts with Nathan for Nathan to sing at her comedy club every Friday night in July. The first Friday, the crowd loved Nathan. The second Friday, they booed him. The next week, Nathan got a better offer, so he hired his twin brother Ethan to fill in for him at LaVon's club. Can LaVon compel Nathan to perform?
yes, she can compel him under the equitable remedy of specific performance
Is there a contract? - offer received: may 1 - revocation sent: may 2 - acceptance sent: may 3 - revocation received: may 4
yes, the acceptance is effective on dispatch while revocation is effective on receiving (acceptance > revocation)
Say you want to buy a car and find one that is sale by owner for $8K and has $4k bank payments owed. It is a 3yo car in good condition and said to have just gotten a new engine. Well the "new" engine dies a week later and you go to a mechanic where they tell you it isn't a new engine, just painted to look new. The person who sold it to you had known but they didn't tell you. What is the verdict and can you sue?
yes, you can sue for fraud. the previous owner knew what was wrong with the car and didn't tell you
You own a bakery and decide to sell it after a while to someone else. If you sign a noncompete agreement, what will that probably entail?
you cannot open a bakery within a certain distance of the one you just sold so it doesn't take the customers
