Bus 250 Final

Quantum Meruit

"As much as he deserves"—the damages awarded in a quasi-contract case

Stare Decisis

"Let the decision stand," that is, the ruling from a previous case Makes the law more predictable

Mailbox Rule

Acceptance is generally effective upon dispatch. Terminations are effective when received

Offer

All contracts begin when a person or a company proposes a deal, but only proposals made in certain ways amount to a legally recognized offer An act or statement that proposes definite terms and permits the other party to create a contract by accepting those terms Two questions that determine whether a statement is an offer: Do the offeror's words and actions indicate an intention to make a bargain? Are the terms of the offer definite? If they are vague there is no contract, even if the offeree accepts, because the court does not have enough information to know what to enforce

Jointly and Severally Liable

All members of a group are liable. They can be sued as a group, or any one of them can be sued individually for the full amount owed. But the plaintiff cannot recover more than the total she is owed

Administrative Law Judge (ALJ)

An agency employee who acts as an impartial decision maker

Compensation

An agency relationship need not meet all the standards of contract law An agency agreement is valid even if the agent is not paid

Duty to Provide Information

An agent has a duty to provide the principal with all information in her possession that she has reason to believe the principal wants to know She also has a duty to provide accurate information

Duty of Loyalty

An agent has a fiduciary duty to act loyally for the principal's benefit in all matters connected with the agency relationship The agent has an obligation to put the principal first, to strive to accomplish the principal's goals An agent may not receive profits unless the principal knows and approves Agents are not allowed to compete with their principal in any matter within the scope of the agency business Unless otherwise agreed, an agent may not act for two principals whose interests conflict If a principal hires an agent to arrange a transaction, the agent may not become a party to the transaction without the principal's permission

Appropriate Behavior

An agent may not engage in inappropriate behavior that reflects badly on the principal This rule applies even to off-duty conduct

Duty of Care

An agent must act as a reasonable person would, under the circumstances Under some circumstances, an agent is held to a higher—or lower—standard than usual An agent with special skills is held to a higher standard because she is expected to use those skills

Executed

An agreement in which all parties have fulfilled their obligations

Executory

An agreement in which one or more parties has not yet fulfilled its obligations

Voidable Contract

An agreement that may be terminated by one of the parties

Express Contract

An agreement with all the important terms explicitly stated

Subpoena

An order to appear at a particular place and time

Natural Law

An unjust law is no law at all Henry David Thoreau felt that war was unjust and therefore refused to pay his taxes when the US declared war on Mexico. Thoreau felt that there was a higher law than the law of the land The notion of civil disobedience is founded on this principle Vague and sometimes difficult to determine

The Takings Clause

A clause in the Fifth Amendment that ensures that, when any governmental unit takes private property for public use, it must compensate the owner

The Equal Protection Clause

A clause in the Fourteenth Amendment that generally requires the government to treat people equally

Noncompetition Agreement

A contract in which one party agrees not to compete with another

Unilateral Contract

A contract in which one party makes a promise that the other party can accept only by actually doing something

Void Agreement

A contract that neither party can enforce, because the bargain is illegal or one of the parties had no legal authority to make it

Judicial Restraint

A court's attitude that it should leave lawmaking to legislators and nullify a law only when it unquestionably violates the Constitution

Judicial Activism

A court's willingness to decide issues on constitutional grounds

Counteroffer

A different proposal made in response to an original offer

Contract Law

Based on the notion that you are the best judge of your own welfare For the most part, you are free to enter into any agreement you want, subject to whatever rules you choose, and the law will support you However, this freedom is not limitless, as the law imposes certain contract requirements Varies from state to state In the twelfth and thirteenth centuries, promises were not binding unless a person made them in writing and affixed a seal to the document. This was seldom done, so most promises were unenforceable

Common Law

Judge-made law Law made when judges decide cases and then follow those decisions in later cases Predictability and flexibility are the most important goals Still predominates in contract law, agency law, and tort law

Consumer Protection Statute

Laws protecting consumers from fraud

The Supremacy Clause

Makes the Constitution, and federal statutes and treaties, the supreme law of the land If there is a conflict between a state and federal law, generally the federal law will prevail For a state law to be valid, Congress does not intend to dominate the issue and there is no conflicting federal law

Control

Principals are liable for an agent's acts because they exercise control over that person If principals direct their agents to commit an act, it seems fair to hold the principal liable when that act causes harm

The Commerce Clause

The part of Article I, section 8, that gives Congress the power to regulate commerce with foreign nations and among states The "dormant" aspect of this is also known as the "negative" aspect and it holds that a state statute that discriminates against interstate commerce is almost always unconstitutional Create a unified voice for regulating commercial relations with foreign governments Stop the states from imposing harmful taxes and regulations Bring coordination and fairness to trade among the states

Capacity

The parties must be adults of sound mind The ability of a party to enter a contract in the first place

Defendant

The party being sued

Plaintiff

The party who is suing

Jurisprudence

The philosophy of law The theory and study of law. It strives to answer questions such as, what is law? What is the real nature of law? Can there be such a thing as "illegal" law

Judicial Review

The power of federal courts to declare a statute or governmental action unconstitutional and void The power of federal courts to review state and federal legislative and executive action

Veto

The power of the president to reject legislation passed by Congress

Achieving a Purpose

The principal and agent can agree that the agency relationship will terminate when the principal's goals have been achieved

Formal Agreement

The principal and agent need not agree formally that they have an agency relationship So long as they act like an agent and a principal, the law will treat them as such

Damages

The principal can recover from the agent any damages the breach has caused

Duty to Cooperate

The principal must furnish the agent with the opportunity to work The principal cannot unreasonably interfere with the agent's ability to accomplish his task The principal must perform her part of the contract; once the agent has successfully completed the task, the principal must pay him, even if the principal has changed her mind and no longer wants the agent to perform

Sovereign

The recognized political power, whom citizens obey

Baby M Case

The surrogacy suit between Mary Beth Whitehead and William and Elizabeth Stern The New Jersey court declared the surrogacy contract illegal and void However, the court awarded the baby to the Sterns, saying that it was in the baby's best interests to live with them.

Precedent

The tendency to decide current cases based on previous rulings Earlier decisions by the state appellate courts on similar or identical issues

Fiduciary Relationship

The trustee must act in the best interests of the beneficiary The beneficiary places special confidence in the fiduciary who, in turn, is obligated to act in good faith and candor, doing what is best for the beneficiary, rather than acting in his own best interest Agents have a fiduciary duty to their principals

Termination by Agent and/or Principal

The two parties-principal and agent-have these choices in terminating their relationship: -Term agreement -Agency at will -Wrongful termination Either party always has the power to terminate; they may not, however, have the right If one party's departure from the agency relationship violates the agreement and causes harm to the other party, the wrongful party must pay damages If the agent is a gratuitous agent (i.e., is not being paid), he has both the power and the right to quit any time he wants, regardless of the agency agreement

Consideration

There has to be bargaining that leads to an exchange between the parties The inducement, price, or promise that causes a person to enter into a contract and forms the basis for the parties' exchange Two basic elements: bargained-for exchange and value Requires a legal benefit to the promisor or a legal detriment to the promisee

Creating an Agency Relationship

To create one, there must be: -A principal -An agent -Mutually consenting that the agent will act on behalf of the principal and -Subjecting to the principal's control -Creating a fiduciary relationship

Adjudicate

To hold a formal hearing about an issue and then decide it

Davis v. Mason

Typical of disputes at that time The court took a laissez-faire approach, declaring that parties had freedom to contract and would have to live with the consequences The law had gone from ignoring most promises to enforcing nearly all The court cited the following factors as the basis for its ruling on non-competition agreement: 1. The public was unlikely to be injured by the agreement 2. The terms were not necessarily unreasonable. 3. The parties exchanged fair consideration

Gap-Filler Provisions

UCC rules for suppling missing terms

Elements Not Required for an Agency Relationship

-Written agreement -Formal agreement -Compensation

Substantive Due Process

A form of due process that holds that certain rights are so fundamental that the government may not eliminate them

Statutes

A law created by a legislature

Contract

A legally enforceable agreement

Letter of Intent

A letter that summarizes negotiating progress Sometimes binding

Agent

A person who acts for someone else

Principal

A person who has someone else acting for him Has substantial liability for the actions of their agents

Promissory Estoppel

A possible remedy for an injured plaintiff in a case with no valid contract, when the plaintiff can show a promise, reasonable reliance, and injustice A plaintiff show in order to prevail in a promissory estoppel claim The defendant made a promise to the plaintiff, The plaintiff did rely on the promise, The only way to avoid injustice is to enforce the promise, and The defendant knew the plaintiff would likely rely on the promise It allows a party to recover without a contract in certain circumstances, but these types of claims rarely succeed in court

Quasi-Contract

A possible remedy for an injured plaintiff in a case with no valid contract, when the plaintiff can show benefit to the defendant, reasonable expectation of payment, and unjust enrichment

Wrongful Termination

A principal and agent have a personal relationship If an agency relationship is not working out, the courts will not force the agent and principal to stay together

Respondeat Superior

A principal is liable for certain torts committed by an agent

Bilateral Contract

A promise made in exchange for another promise

Bill

A proposed statute, submitted to Congress or a state legislature

Duty to Indemnify

As a general rule, the principal must indemnify the agent for any expenses she has reasonably incurred These reimbursable expenses fall into three categories: -A principal must indemnify an agent for any expenses or damages reasonably incurred in carrying out his agency responsibilities -A principal must indemnify an agent for tort claims brought by a third party if the principal authorized the agent's behavior and the agent did not realize he was committing a tort -The principal must indemnify the agent for any liability to third parties that the agent incurs as a result of entering into a contract on the principal's behalf, including attorney's fees and reasonable settlements

Commercial Speech

Communication, such as advertisements, that has the dominant theme of proposing a business transaction

Consent

Certain kinds of trickery and force can prevent the formation of a contract Refers to whether a contracting party truly understood the terms of the contract and whether she made the agreement voluntarily

Common Law

Changed very slowly By the fifteenth century courts began to allow some suits based on a broken promise but only if one party had paid some money to the other Agreements made without any money changing hands were still unenforceable unless they were written and sealed This finally changed in 1602 when courts began enforcing contracts in which neither party had given the other anything but each made a promise to do something in the future Elements: Quasi-contract, implied contract, promissory estoppel Many contract lawsuits continue to be decided using common-law principles developed by courts Offers must be definite

Pure Power Boot Camp, Inc. v. Warrior Fitness Boot Camp, LLC

Did Belliard and Fell violate their duty of loyalty to Pure Power? All employees, even those without a contract, must act in good faith and with loyalty to their employer A worker may make plans to compete with his employer while still on the job, but not in a way that harms the employers

The Uniform Commercial Code (UCC)

Drafted in an effort to facilitate the easy formation and enforcement of contracts in a fast-paced, interconnected world Every state has adopted at least part of it to govern commercial transactions within the state Contracts made can be indefinite Makes the law of sales more flexible There are several areas of contract law where imperfect negotiations may still create a binding agreement under this, even though the same negotiations under the common law would not have yielded a contract Under this, two parties can make a contract for the sale of goods and omit the price and the contract will still be upheld Organizations can prevent accord and satisfaction within 90 days of cashing a "full payment" check, repaying the same amount to the debtor, and /or Notifying debtors that offers to settle for less than the full debt must be made to a particular official Requires the signature of the defendant and the quantity of goods being sold in a contract Does not require all of the specific terms of the agreement to be in writing Looks for an indication that the parties reached an agreement Their purpose is to make sales easier while still preventing fraud Courts balance the formality of the writing requirement with their own commonsense, and view the situation as a whole to determine if there is enough evidence that the parties contracted

Terminating an Agency Relationship

Either the agent or the principal has the right to terminate the agency relationship at any time (although there may be financial consequences) In addition, the relationship sometimes terminates automatically

Basic Questions When Analyzing Contracts

Is it certain that the defendant promised to do something? If she did not promise, are there unusual reasons to hold her liable anyway? If the defendant did promise, is it fair to make her honor her word?

UCC Article 2

Governs the sale of goods In a mixed contract, it governs only if the primary purpose is the sale of goods

Profits

If an agent breaches the duty of loyalty, he must turn over to the principal any profits he has earned as a result of his wrongdoing

Equal Dignities Rule

If an agent is empowered to enter into a contract that must be in writing, then the appointment of the agent must also be written

Rescission

If the agent has violated her duty of loyalty, the principal may rescind the transaction

Term Agreement

If the principal and agent agree in advance how long their relationship will last, they have a term agreement -Time -Achieving a purpose -Mutual agreement

Agency at Will

If they make no agreement in advance about the term of the agreement, either principal or agent can terminate at any time

Written Agreement

In most cases, an agency agreement does not have to be in writing An oral understanding is valid, except in one circumstance-the equal dignities rule According to this rule, if an agent is empowered to enter into a contract that must be in writing, then the appointment of the agent must also be written

Mutual Agreement

No matter what the principal and agent agree at the start, they can always change their minds later on, as long as the change is mutual

Acceptance

Once a party receives an offer, he must respond to it in a certain way

Nonphysical Tort

One that harms only reputation, feelings, or wallet Whether intentional or unintentional are treated like a contract claim: The principal is liable only if the employee acted with express, implied, or apparent authority

Affirmed

Permitted to stand

Civil Law

Regulates the rights and duties between parties

Remedies

Relief a court will award to a party injured by a breach of contract

Mirror Image Rule

Requires that acceptance be on precisely the same terms as the offer Means that an acceptance that adds to or contradicts an offer is generally considered a(n) counteroffer and it rejects the original offer

Subpoena Duces Tecum

Requires the person to produce certain documents or things

Fundamental Rights

Rights so basic that any governmental interference with them is suspect an likely to be unconstitutional

Fallsview Glatt Kosher Caterers, Inc. v. Rosenfeld

Section 2 of the UCC makes it clear that it is more important that the contract specify the quantity of goods at issue, rather than the price of the goods The court states that a contract of the type disputed in this case would not be expected to specify a quantity of any goods, so this is not a contract for the sale of goods

Third-Party Interests

Some contracts affect people other than the parties themselves

Subagents

Someone appointed by an agent to perform the agent's duties

Gratuitous Agent

Someone not paid for performing duties Held to a lower standard because he is doing his principal a favor Liable if they commit gross negligence, but not ordinary negligence

Intermediary Agent

Someone who hires subagents for the principal

Confidential Information

The ability to keep secrets is important in any relationship, but especially a fiduciary relationship Agents can neither disclose nor use for their own benefit any confidential information they acquire during their agency

Procedural Due Process

The doctrine that ensures that before the government takes liberty or property, the affected person has a fair chance to oppose the action

Eminent Domain

The government's right to take private property for public use upon just compensation to the owner The government may take property from a private citizen and give it to a private party in order to stimulate economic development in the area

Legal Positivism

The law is what the sovereign says it is Leaves no room for question of morality

Writing

While verbal agreements are often contracts, some types of contracts must be in writing to be enforceable

Legal Realism

Who enforces the law is more important than what is in writing Argues that lawmakers can overcome personal bias

Performance and Discharge

if a party fully accomplishes what the contract requires, his duties are discharged