BUSINESS LAW FINAL EXAM
Land Mortgages
-Any land interest that is owned may be subject of a mortgage -Since a mortgage is a right in land it must be in writing -Adjustable rate mortgages have floating rates; typically start off very low -Seller financing may be obtained through a mortgage -Reverse mortgages typically occur after the original mortgage has been paid off and the owner borrows money to fund their retirement
Under the UCC prohibitions against assignment are ineffective against
-Assignment for rights of payment for goods sold or services rendered and -Assignment of rights to damages for a breach of sales contracts
Copyright Act
-Based upon the U.S. Constitution •Author, creator, or artist exclusive rights to use, reproduce and use the work •Unlawful for satellite carriers to capture signals from US network stations and broadcast them abroad •Copyrights of a person run for the persons life plus 70 years •Copyrights of a business run for either 120 years from the date of creation or 95 years from the date of publication, whichever is shorter •Once a copyright expires, the work is in the public domain and anyone can use it
Patents
-Based upon the US Constitution •Promote progress of science by securing for limited times to inventors the exclusive rights to their discoveries •Congress has left wide latitude for the Courts to construe what may be patented
Limitation of remedies
-Choice is to repair or replace a defective item or refund the price but no other damages -Both parties must submit any claims to arbitration as opposed to going to court
Conditional gift & EX
-Condition precedent - gift will be made if something happens -Condition subsequent - gift will be revoked if something happens »Engagement rings - if the marriage fails to occur the ring must be returned
Contracts-legality and public policy
-Contracts will not always be enforced -Public law will overrule private law in certain circumstances •Illegality •Contrary to Public Policy •Unconscionable
Descriptive
-Convey an immediate idea of the property - Sports Illustrated -Ordinarily geographical terms are not registrable - Boston beer was denied a trademark; -Exception when a geographic term has taken on a secondary meeting - Philadelphia cream cheese
Gifts-Tranfers to Minors
-Custodian holds the gift on behalf of the minor -Custodian can use the property for the support, maintenance, education or for the benefit of the minor
Recording of Deed
-Deeds may be recorded with a designated public official •Not required but it acts to give notice as to who the true owner of the property is to the public •When there are fraudulent actions the recording of the deed becomes vital -Some states say that first to record has good title; -Other states say that notice controls. The last good faith purchaser gets good title -Recording deeds is very important even though it isn't required
Remedies for Breach of Contract-Anticipatory Repudiation
-Do nothing. State that you expect performance at the proper time -Treat the contract as broken and commence a lawsuit, or -Treat the repudiation as an offer to cancel the contract. Either accept or reject the offer.
Effect of Violation for business's and contracts
-Effect of Violation •Some statutes expressly provide for the validity of the contract once the violation is cured -Failure to register a business name - once the name is registered all pre-existing contracts may be enforced
Other Ways to Transfer Real Property
-Eminent Domain •Government takes property for a public purpose -Is a revitalization of a neighborhood a public purpose •Fair market value of property must be paid to the owner - 5thAmendment of the Constitution
Employment Contracts for businesses
-Employers typically inform the new employee -Obtain a preliminary injunction
Breach of Contract and Remedies EX
-Example •A buys a truck from B for $65,000. A tells B that he must receive delivery of the truck by Labor Day because he will use it to bring in his crop from the fields before winter comes. Labor Day comes but there is no truck. After two weeks of going back and forth with the dealership, A buys the same truck from another dealer for $68,000 and rents a truck from the other dealer for $250 while the truck is being prepared. Because of the delay in getting the truck, 30% of the crop was damaged by the cold winter weather. The damage to the crop was worth $320,000. -Direct damages - $3,000 - difference in price of trucks -Incidental damages - $250 - cost to rent a truck -Consequential damages - $320,000 - loss of crop which was foreseeable since A told B why the delivery date was so vital -Mitigation of damages - B will have to show how A could have saved more of the crop
Exculpatory clauses
-Exculpates negligence - will not relieve liability if action is 'grossly' negligent or intentional
Trade Secrets
-Formula, device or compilation of information used in a business that give the owner a competitive edge over others in the business who do not have the information •Transmitting the wiring schematics used by Siemens for its desalination process to a new employer was a breach of confidentiality •Customer lists have limited protection. The ease of determining who needs the product is a controlling factor
What is gambling?
-Game of chance as opposed to skill -Fantasy sports have been found to be games of skill - Disney, CBS, Yahoo, etc. -Poker is working its way through many legislatures
Inter Vivos-Causa Mortis
-Gifts made in contemplation of death -Conditional gift - donor can take it back, if »The donor lives, »The donee dies before the donor, or »The donor revokes the gift before death
Gift-Inter vivos
-Gifts made while the donor is still living »Intent to make the gift »Delivery is made and the donee does not disclaim the gift within a reasonable period of timeafter learning that it has been made
Grantees Covenants
-Grantee may covenant that the land will only be used for certain purposes or that it wontbe used for certain purposes -These covenants stay with the property on future conveyances
Warranties of Title
-Grantor is deemed to make certain warranties when they transfer land •Guarantee that transferor owns the property interest they are transferring •Guarantees that they have the authority to make the transfer •Guarantees that the land isn't subject to a right of a third party •Guarantees that the possession of the land will not be disturbed by the transferor •Guarantees that the transferor will execute any additional documents necessary to transfer good title
Patentability-Non nature
-Human made microorganism'sare patentable »Oil eating bacteria - used to clean up oil spills
Bingo, lotteries, raffles are clearly gambling
-If no consideration is giventhen it isn't gambling -"no purchase is necessary" is often associated with games being offered to the public to help generate sales - McDonald's Monopoly game
Third Party Beneficiaries-Liability of Assignee
-If obligor could raise a defense against the assignorthen such defenses can also be raised against the assignee
Third Party Beneficiaries-Obligor's Assignment(s)
-If the obligor is given notice of the assignment, the obligor must make payments to the assignee -If the obligor is not given notice of the assignment, any payments made to the assignor reduce the amount owed by the obligor. The assignee must sue the assignor to recover such payments.
Plant Patent
-Inventors of asexually produced plants -Patents last for 20 years from date of filing
Nature of Real Property-License
-License •As opposed to an easement a license is not an interest in land. •A personal privilege to perform an act on the property of another -Watch a movie in a theater Licensor may terminate the license at will
Real property may be subject to liens
-Mortgage- real property is put up as collateral for the debt -Tax - county can sell the property to enforce taxes placed on the property -Mechanic's - persons furnishing labor and materials in the improvement of the property have a right to sell the property to collect the amount owed to them
Design Patent
-New and non obvious ornamental features of an article of manufacture -Patents last for 14 years -Apple - Samsung cases involved design patents
Utility Patent
-New and useful process, machine or compositions of matter -Patent lasts for 20 years from the date of filing
Bailee
-Only right is possession of the property -Title to the property does not pass to the bailee -May not sell the property
Fixtures
-Personal property attached to real property in such a way that it becomes real property »Examples: bricks, kitchen cabinets -Personal property adapted for the specific use of the building »Pipes for a church organ -Personal property that was intended to become part of the realty »Carpeting cut to size
Non patentable
-Phenomena of nature -Mental processes -Abstract intellectual concepts
Trademarks-Register a trademark
-Prevents competitors from using name -Protects consumers from imitators and inferior goods -Can be registered internationally
Computer Software
-Protected under copyright law •Are the most significant steps in the programs are similar -Patents •Patents have also been granted to some computer programs -Disadvantage is that the program is placed in the public records and may be easily copied -Trade Secret •If the program contains proprietary informationit may be protected as a trade secret as well
Factors to be used in Fair Use cases
-Purpose of the use - commercial -Nature of the work -Amounts and substantiality of the portion used -The effect of the use on the market for the copyrighted work -Review Cariou v Prince
Releases
-Release forms in sporting events that allow the sponsor, or operator of the event to escape damages resulting from its negligence signed by the participants are generally binding
Statute of Frauds EX: Agreement to sell land, buildings, or interests in land & taking over debt
-Statute of Frauds •Agreement to sell land, buildings, or interests in land -Leases must be in writing •Part performance may be a defense to the Statute of Frauds. A situation where part performance might be invoked arises when the purchaser has performed under the oral agreement to sell or transfer land yet the seller has not. The part performance exception prevents the seller from using the Statute of Frauds as a defense to negate the oral agreement. -Agree to sell and purchase a building under an oral contract. Buyer takes possession and makes improvements to the land. Under equitable grounds the contract may be enforced. •Promising to pay the debt of another must be in writing -Exception: if the promise to pay the debts of another is for the promisor's benefit, then the statute of frauds does not apply
Title-Multiple Owners
-Tenancy in Common -Joint Tenancy -Tenancy by the Entirety -Community Property
Liquidated damages
-The contract specifies the amount of damages that must be paid in case of breach »Many sales of homes have a liquidated damage clause if the buyer fails to complete the purchase »Penalties for each day an item is late is common as well •Liquidated Damages -Amount must not be excessive -Difficult to assess the actual damage -Once it is shown to be valid, neither party can assert what the actual damage was -If the amount is unreasonably large it will be held to be a penalty and will be void »If void, then a suit may be brought to recover the actual amount of damages suffered
Scope of Waiver
-The waiver only applies to that part of the contract, it does not show intent to ignore other parts of the contract -Some contracts state that its terms are not modified by any waiver of a breach. This means the waiver will not be given effect.
Intellectual Property
-Trademark -Copyright -Trade secrets -Patents
Trademarks-Life
-Trademarks have a perpetual life; international trademarks have rot be renewed every 10 years -They can only be challenged in their first five years -Can be obtained before a business is started; have t5hree years to establish the business
Third Party Beneficiaries
-When a contract between two people is entered into for the benefit of a third party that party is referred to as a third partybeneficiary. The third party may sue under the contract.
Trademarks-Form
-Word -Name -Symbol
Bailor
-entitled to the return of the property -does not have to be the owner of the property -only needs to have physical possession
Sources of Law (4)
1. Administrative regulations •Treasury, Securities and Exchange Commission -Congress can delegate its authority and such regulations have the force of statutes 2. Private law •Contracts create rights and obligations between private parties -Leases, purchases and sales of property 3. Case law •Interprets Constitution, statutes, contracts, etc. - decisions then have the power associated with the type of law being interpreted 4. Common law - law developed over time by communities and enforced by the courts
Name two types of contracts that have to be in writing.
1. Agreement to sell land, buildings or interests in land. 2. Leases.
Patentability-Four categories of subject matter:
1. Processes 2. Machines 3. Manufactures 4. Compositions of matter
Types of Bailments (3): How is the bailment expressed usually? EX of a bailment:
1. Service agreement bailments, whereby the bailee agrees to perform a service for the bailor (such as park or store a car). 2. Constructive bailment, whereby the bailee agrees to protect the bailor's asset (such as with a safe deposit box). 3. Gratuitous bailments, whereby the bailor doesn't receive payment from the bailee for the bailment (such as in free coat checks at a restaurant). Bailment almost always involves a written contract. Sometimes, that contract is printed on the back of a coat check stub or a claim ticket for valet parking. Bailment can occur without compensation, however. An EX of this would be parking your car in a paid parking lot. You would get the benefit of parking your car and the owner of the lot would get the benefit of the fee that is paid. A bailee can face liability for damaging the bailed items if they were negligent.
Three Types of Recording Statutes
1. Under a *race statute*, whoever records first wins. Thus, if Oscar purports to sell a piece of land to Al for $100,000, and the next day purports to sell exactly the same piece of land to Bob for another $100,000, then whichever of the two buyers is the first to reach the recording office and have the sale recorded will be deemed the owner of the property. Thus, if Bob is the first to record the conveyance, he will be the owner even if he knew about the prior conveyance to Al. Race statutes are extremely rare because it is generally viewed as unfair to protect a party who had actual notice of a prior conveyance. 2. Under a *notice statute*, a subsequent purchaser for value wins if, at the time of conveyance, that subsequent purchaser had no actual or constructive notice of the prior conveyance. In short, a subsequent bona fide purchaser wins. Thus, if Oscar purports to sell a piece of land to Al for $100,000, and the next day purports to sell exactly the same piece of land to Bob for another $100,000, then Bob will own the land so long as he was not aware of the prior sale to Al. However, note that if Al records his interest before Bob's purchase, this recordation will be deemed to give Bob constructive notice. If Bob purchases the land without notice, and Al then records his prior purchase before Bob records his own purchase, then Bob will still prevail in ownership of the land. The benefit of a pure notice statute is that it encourages Al to record quickly 3. Under a *race/notice statute*, a subsequent purchaser for value wins if (1) at the time of conveyance, that subsequent purchaser had no actual or constructive notice of the prior conveyance, and (2) the subsequent purchaser records before the prior purchaser. In short, a subsequent purchaser in good faith wins only if he records before the prior purchaser does. In this type of system, if Oscar purports to sell a piece of land to Al for $100,000, and the next day purports to sell exactly the same piece of land to Bob for another $100,000, then Bob will own the land only if he was not aware of the prior sale to Al, and if Bob actually records his interest before Al does.
Name 3 different ways of creating a written contract.
1: letters 2: emails 3: notes or memorandums.
We would all agree that a brick is personal property. Explain how a brick can become real property.
A brick could become a real property by being built into a brick wall. Then it would be immovable and a building type structure.
Deed Transfer of deed
A deed is the document that transfers ownership of real estate. It will identify the buyer (grantee) and seller (grantor), provide a legal description of the property, and be signed by the person transferring the property.
Prohibitions-Assignments for the Right to Receive Money
A direct prohibition against assignment stated in the contract is enforceable
Transfer by Deed
A living person may transfer real property by a deed. -A writing which evidences ownership of real estate -No consideration is necessary to make a deed effective •Was transfer a gift or a tool to avoid creditors -Creditors may be able to set the transfer aside -Quitclaim deed transfers the interest in the property to the transferee that the transferor owned
Reservation of Rights
Accept the goods or services under the contract but retain the right to sue for damages due to its breach
Contract
An agreement between two or more parties that create duties and obligations that are enforceable by law -The agreement can either be for a party to do a specific act or to refrain from doing specific acts
What is the difference between a license and an easement?
An easement is the right to use another's land. For example, the right to remove minerals. The owner of the easement may abandon the easement, but the grantor may not revoke it. A license, as opposed to an easement, is not an interest in land but a personal privilege to perform an act on the property of another. For example, watch a movie in a theater. Note, the licensor may terminate the license at will.
What is the difference and significance of being an (a) intended beneficiary of a contract and (b) an incidental beneficiary of a contract?
An incidental beneficiary is a third party who benefits from a contract between two other parties, but it is not intended that the third-party benefit. Therefore, the third party does not have any legal rights under the contract. Intended Beneficiary refers to a third-party beneficiary. Intended beneficiary benefits from a contract by acquiring rights under the contract. Intended beneficiary also has the ability to enforce the contract once those rights have vested. Intended beneficiary is also known as direct beneficiary.
Bridgette enters into an oral contract to purchase a tract of land from Bill. The land is considered worthless, but Bridgette feels that she has discovered a possible usage that would drastically increase the value of the land. To assure herself of the potential value of the land, Bridgette orally hires an attorney to investigate the title and records associated with the land in question. Before gaining any information from her attorney, Bridgette orally contracts with a builder to construct a huge building on the site. Because of the size of the project, it will take 14 months to complete the building. Bridgette now discovers that the land is indeed useless, a fact that she obtains through information from her attorney.Bridgette now refuses to honor her contracts with Bill, her attorney, and the builder. Must Bridgette honor her contractual agreements?
As per Statute of Fraud, following contract should be evidenced by writing to be legally enforceable: 1) Contract for the sale of interest in land and; 2) Contract that cannot be performed within one year from the date of contract. As Bridgette contract with Bill and Builder are oral but not in written and hence, are not legally enforceable. Bridgette might dishonor the contract and legal options are not available. Bridgette oral contract with Attorney, does not fall in the ambit of Statute of Fraud and hence, is legally enforceable. Bridgette must honor her contractual agreement with Attorney, though the same is oral.
Bailment
Bailment is a transfer of custody of a piece of property rather than a transfer of ownership of a piece of property.
What may be copyrighted?
Books, periodicals, musical and dramatic compositions, maps, works of art, motion pictures, architectural works and computer programs
Charities & Gambling
Charities have an exception for bingo, raffles, lotteries, etc.
What is conveyance?
Conveyance is the act of transferring an ownership interest in a property from one party to another. Conveyance also refers to the written instrument, such as a deed or lease, that transfers the legal title of a property from the seller to the buyer.
Why do the court's strictly limit the ability of parties to sue based upon a breach of contract as a third part beneficiary?
Courts limit he ability of 3rd parties to sue under a contract because they haven't given consideration nor do they have privity of contract. The courts also don't want hundreds or thousands of people suing on other peoples contracts.
Mark who was not licensed to practice law and never passed the bar exam opens up a business and holds himself out as a lawyer. He does excellent legal consulting for Dianne and sends Dianne a bill for $150,000. Dianne is about to pay the bill, because Dianne believed that the services rendered were excellent and well worth the fee. However, Dianne learns that Mark is not a licensed lawyer and refuses to pay him. Mark sues to recover the $150,000. Who wins? Why?
Dianne wins because they never had a valid agreement in the first place because he is not actually a lawyer. The contract was based on him actually being a lawyer which was a lie he told Dianne which was fundamental to why she agreed in the first place.
Patentability-New and not obvious
Duel's application for a patent relating to complementary DNA was at first disallowed as obvious. On appeal it was allowed as the Court found that it was not obvious
Trade Secrets-Defensive Measures
Enter into non disclosure agreements with employees
Good Faith
Every contract has the implied terms of using good faith - allows the other party to get what they bargained for
Breach of Contract
Failure to act in accordance with terms of contract
Procedural Unconscionability
Form of agreement - lengthy standardized forms given on a take it or leave it basis by party with far superior bargaining power - contracts of adhesion
Ace enters into a 3-year contract with Panasonic. The contract is in writing. The parties agreed that Ace would pay Panasonic $145,000 for its services in the first year of the contract and that for each subsequent year Ace would pay an additional amount, mutually agreed to by the parties, not to exceed a 6% increase. In the second year, the parties could not agree to the amount of the increase. Ace claims the contract is not enforceable in the second year because a material term is missing, the amount it has to pay. Panasonic claims that it is entitled to at least $145,000. You are the judge. How would you interpret the contract? Who wins the lawsuit?
I agree with Panasonic. They had a written contract that specified that Ace would pay Panasonic at least $145,000 per year plus an additionally amount that would be mutually agreed on as stated in the written contract. Therefore, I think Ace is still found to the terms of the contract.
Patentability-Passage of time
If an invention is in the public domain for over a year it may not be patented. An inventor can test his product before getting a patent but better not wait over 1 year
Under what circumstances can the rights and obligations of a contract be assigned without the other party's consent? When must the other party consent before the assignment can be made?
If the assignment does not increase the burdens to the other party it may be assigned without consent, otherwise consent must be obtained.
Briefly, explain the parol evidence rule?
In general, the parol evidence rule prevents the introduction of evidence of prior or contemporaneous negotiations and agreements that contradict, modify, or vary the contractual terms of a written contract when the written contract is intended to be a complete and final expression of the parties' agreement.
Barry brings his car to a mechanic to have it fixed. The mechanic informs Jerry that the cost to fix the car will be $500. Barry is told the car will be ready for pick up in two days. The car is kept in a locked garage and the garage is protected with burglar alarms. Nonetheless, the garage is broken into and the car is stolen. Barry sues the mechanic for the value of the car. The mechanic refuses to pay. Who wins the lawsuit? Why?
In this bailment the bailee, the mechanic, had a duty to return the goods to Barry, the bailor. The problem in this case is that the mechanic shop took every precaution and thus wouldn't be held liable for damages.
If a contract were found to be ambiguous, would you rather be the party who wrote the contract or the party who received the contract? Why?
It is a question of law as to whether a contract is ambiguous and for a judge to decide. Once a contract is found to be ambiguous, it is a question of fact as to what the parties intended, which is for the jury to decide. I would rather be the party who received the ambiguous contract because ambiguous terms are interpreted strictly against the party who wrote the contract.
Why is it important to record a deed with the appropriate government agency?
It is important to record a deed with the appropriate government agency because it gives notice as to who the true owner of the property is to the public and because it becomes vital when there are fraudulent actions. For example, some states say that first to record has good title while other states say that notice controls. The last good faith purchaser gets good title.
What duties does a landowner have to an invitee? A trespasser?
Landowners are only liable for intentional hard against trespassers. The exception is children in that case. Invitees are customers invited into a store for example. Landowners have a duty to know of the dangers and warm the invitees of any dangers. For example, landowners must rope off, fix, or put up a sign to warn of a slippery floor.
Mortgages
Loans where the real property serves as collateral for the loan
Coined
Made up name - Exxon, Cengage
Same facts as question 5, except Mark gave Dianne terrible advice. Dianne relied on the advice and lost $300,000. Dianne sues mark for malpractice and Mark argues that since he wasn't really a lawyer, the he can't be sued under the contract for malpractice. Who wins? Why?
Mark will be held to the same standards as a lawyer and can be held liable for malpractice. He could also be sued for fraud.
Mary is a CPA employed by Gary in his small CPA firm. Mary signs an employment agreement with Gary that states that Mary must give one month's notice if she wants to quit her job and Gary must give her 2 weeks' notice if he wants to fire her without cause. In addition, Mary agrees that if she quits she will not open a CPA firm within the United States for a period of 10 years. Assume Mary gave one day's notice and immediately opened her own CPA firm within 2 blocks of Gary's firm and Gary sued to enforce all of the terms of their agreement. You are the judge. Which is the most important issue in the lawsuit and who wins with respect to that issue? Why? If you were Mary's attorney, what would you have told her to do differently so she would have had a stronger case? If you were Gary's attorney, what would you have told him to do differently so he would have had a stronger case?
Mary would win. Thee terms of the contract with respect to the amount of time and the geography as to her not being able to compete are unconscionable. They will not be enforced.
Trademarks-Internet domains
May be registered and protected
Bailments-Agreement
May be written or oral
What is a mortgage?
Mortgages are loans where the real property serves as collateral for the loan.
Mortgages-Redemption
Mortgagor has a period of time, usually 6 months to satisfy the mortgage and reclaim the property
Transfer by Deed-Execution
Must be signed by a person having the capacity to do so
Arbitrary
Name that has no relation to product - Apple
Suggestive
Name that suggests through use of imagination, its use - Coppertone
You are a real estate agent, representing the seller, and a prospective buyer tells you she will buy the house but that her husband is out of town on business and will be returning in a week. She tells you that she has been sending him pictures of the house and he loves it and has also agreed to buy the house. She asks you to tell the seller to stop showing the house to anyone else. There are a number of witnesses who heard her say this to you. Do you tell the seller to stop trying to sell? Why or why not?
No, I would tell the seller to get her to put that in writing before taking action based off of what she said. Though, oral contracts are enforceable therefore if they made an oral agreement she would have to follow through especially with witnesses.
Trademarks-Abandonment
Other persons use the mark and the mark loses its character -Aspirin, thermos, cellophane, etc.
Form of Ownership-Remainder Interest
Owns the land after the person with the life estate dies
Promissory Estoppel
Promissory estoppel is the legal principle that a promise is enforceable by law, even if made without formal consideration when a promisor has made a promise to a promisee who then relies on that promise to his subsequent detriment. Overrules statute of frauds Plaintiff must prove: -Reliance on contract in a definite manner -Proof of an unconscionable injury or unjust enrichment -Very hard to prove
Personal Property
Property typically refers to an object. However, it also includes the right to use or control objects
Mortgages-Transfer of Property
Rather than take property subject to a mortgage the purchaser demands that the mortgage be paid off
Why is it important to record a mortgage with the appropriate government agency?
Recording a mortgage will set the priority of claims of various creditors who have mortgages on the same property. Failure to record your deed properly would mean that if you ever want to sell the house or refinance your mortgage etc. you would not be able to do so.
Breach of Contract and Remedies-Defective Contract
Remedies: Reasonable value of services performed or of goods sold as compensation Not based upon the price stated in the contract Defective Contract: Valid contract which lacks legal sufficiency due (for EX) to incorrect or incomplete following of a required or statutory procedure, and may not be enforceable by the courts. Valid but defective contract which cannot be enforced by the courts.
Effect of Being too Broad for businesses
Sometimes the court will narrow it to an acceptable level; other courts just find it void
Why was the Statute of Frauds enacted?
The Statute of Frauds was enacted in order to prevent fraud, through perjury, the statue requires that certain contracts must be in writing.
If the Statute of Frauds covers a contract, but the parties only have an oral agreement, what are the consequences?
The consequences are that the contract is unenforceable and that the reasonable value of goods delivered, or services performed may be recovered. Not under the terms of the contract but by their reasonable value. Only the parties to a contract can raise the defense that a contract was not in writing.
What are the consequences if only one-party signs the written agreement? Is the contract completely invalid?
The contract can only be enforced against the person who signed the contract.
Bob has a good friend, Jerry. Bob has always told Jerry that he will leave him his gold watch in his will when he dies. Bob prepares his will but instead of leaving the gold watch to Jerry, he leaves him his ½ interest in his home. He owns the home with his wife, Jill as tenants by the entirety. Under his will, all of his property except for his interest in the house goes to his wife. Bob tells Jerry about his will and he tells Jerry he will give Jerry his watch next week when they meet for lunch. Unfortunately, Bob dies before they have lunch. Both Jerry and Jill claim title to the watch and Bob's interest in the home. Who will get the watch? Who will get the interest in the home? Why?
The death of the donor before the gift is completed causes the gift to fail. The administrator or executor of the estate cannot complete the gift on behalf of the deceased party; therefore, Jerry will not get the watch because he died before the gift could be completed. Jill and Bob are tenants by entirety and thus neither spouse can transfer their interest. Thus, Bob can't transfer his interest of his house to Jerry.
Certain gambling is legal in Nevada and illegal in New York. I go to a club in NY and play craps and blackjack (gamble). I borrow $100,000 from the club and lose all of the money. I then go to Las Vegas, in Nevada, and do the same thing in a casino. I refuse to pay either back the $100,000. I live in NY and both the club and casino sue me. Do I win none, one or both of the lawsuits? Why? If you were the attorney for the casino, in which state would you sue me? Why?
The gambler would win the case in NY. The club lent him/her money so they could break the law. The debt can not be enforced in a court in NY.
Anatomical Gifts
The gift takes effect on the person's death
Patents-Notice
The patented item must be marked with the patent and list the patent number
Partially Illegal Contract/Agreement
The portion of contract that was illegal will not be enforced; remainder will be enforced
What is the purpose of the parole evidence rule?
The purpose is to prevent a party from introducing evidence of prior oral agreements that occurred before or while the agreement was being reduced to its final form in order to alter the terms of the existing contract.
Bella gives her granddaughter, Eleanor a car, because Eleanor was planning to take a cross- country vacation. Bella said that she gave her the car so she would enjoy her tip and Bella said that it was important that Eleanor drive safely. As it turns out, Eleanor received a dozen speeding tickets on her trip. Bella is demanding that Eleanor return the car because she did not drive it safely as Bella demanded. Eleanor refuses to give the car back. Who is entitled to the car? Why?
The real question is whether the gift was conditioned on Eleanor driving the car safely. That is too vague to be considered a condition so Eleanor keeps the car.
How is title to real property evidenced?
Title means (1) right to ownership of real property and (2) evidence of ownership by deed. Transfer by deed is a writing which evidences ownership of real estate.
Mortgages-Transfer of Property Assumption
Transferee assumes liability on the mortgage. The original mortgagor remains liable, the transferee is liableand the mortgagee can foreclose on the property. Typically the original mortgagor will have its personal liability extinguished
Mortgages-Transfer of Property Subject to
Transferee is buying the property but is not liable on the mortgage. Original mortgagor remains liable and the mortgagee has the right to foreclose if there is a default.
Usury Laws
Usury laws are regulations governing the amount of interest that can be charged on a loan. Usury laws specifically target the practice of charging excessively high rates on loans by setting caps on the maximum amount of interest that can be levied. These laws are designed to protect consumers. Usurious contracts refers to those which impose an interest on a debt at a rate that is in excess of that permitted by law or statute. In usurious contract, a lender receives more than the lawful rate of interest.
If a party delegates their duties under a contract, do they still have any liability with respect to the contract? If so, what is their liability? If not, why not?
Where the work being performed is standardized and nonpersonal it may be delegated, not material who performs the work. The contracting party remains liable for the work performed by the person doing the work. Contracts may prohibit the delegation of duties
Lien
a right to keep possession of property belonging to another person until a debt owed by that person is discharged.
Usury laws were enacted to protect the
borrower
Generic
never registrable if they describe a class of goods - cars, soap, cola, etc.
Elements of a Contract
offer, acceptance, consideration, legality, capacity, consent, writing •An agreement •Between competent parties •Based on the general assent of the parties •Supported by consideration •Made for a lawful objective, and •In the form required by law, if any
Bart was a self-made millionaire who had earned his fortune by dedicated hard work. Bart had worked so hard that he never had developed much of a social life. Bart met Linda and fell in love with her. When Bart proposed to Linda, she told him that she needed time before making such an important decision. Pressing her for a favorable response, Bart telephoned Linda and promised her $100,000 if she would marry him. Linda then accepted the proposal.Bart contracted with Quick Builders for the construction of a home Bart intended to move into with Linda after their marriage. Construction by Quick was not very quick because Quick was not paying subcontractors the sums that they were owed. They, in turn, were not completing their work. To expedite matters, Bart called the subcontractors and assured them that Bart would pay any sums that Quick Builders did not pay if they would complete the construction.Bart and Linda married and the subcontractors completed the work. Quick Builders did not pay the subcontractors in full. Bart failed to pay Linda the $100,000. Both Linda and the subcontractors sued Bart. Discuss the probable outcome of the lawsuits.
under the Statute of Frauds contracts made in respect of marriage must be in writing. Linda will not be successful. The guarantee of a debt of another usually must be in writing. However, when the guarantor benefits from the guarantee then it does not have to be in writing. Thwe subcontractors will be successful.
Types of Patents
utility, design, plant
Inter Vivos-Form of transaction controls EX
»A made a loan of $100,000 to her son B. b claimed that the $100,000 was really a gift but was structured as a loan to avoid gift tax. The transfer was upheld as a loan. The legal form controlled.
Inter Vivo-Death
»The death of the donor before the gift is completed causes the gift to fail »The administrator or executor of the estate can not complete the gift on behalf of the deceased party
Inter Vivo-Delivery
»Usually the actual property is delivered. »Delivering the keys to a house, or a car would be good delivery of the house or car itself. »Delivering the certificate of title to a car or boat would also be good delivery
Third Party Beneficiaries-Assignments for the Right to Receive Money
•A person who is entitled to receive money for the sale of goods or for work performed may assign such rights •In most cases, the obligor has no right to contest the assignment •A person may assign their right to receive money under a contract before the work is completed, or even begun
Copyright Notice
•AfterMarch 1, 1989no notice of copyright is mandated -Notice is recommended to fully protect the owner •Suit in the US may only be brought if the material has been registered with the Copyright Office in Washington D.C.
Exceptions to Parol Evidence Rule
•Ambiguity - contract may have two or more meanings •Fraud, duress, or mistake: Parol evidence is allowed to establish one of these items -Parol evidence may be admitted to show the meaning of the word used in the contract •Modification - parol evidence may be used to show that a contract was modified -May only occur after the contract has been signed and in place -Contracts often times will have a clause stating that all modifications must be in writing
Third Party Beneficiaries-Warranties of Assignor
•Assignors warranty that they have a valid right to assign •Assignor is the owner of the right being assigned •Assignor will not interfere with assignee in enforcement of the assignment
Bailments-Classification
•Bailments for mutual benefit -Care of the property is made for the receipt of money or other property »Parking garage •Gratuitous bailment -Care for the property only benefits one of the parties »Giving property to a museum to display •Constructive bailment -Lawful possession of property is taken -Not as a result of a bailment agreement »Police tow a car
Copyrights-Software
•Businesses hire people to create software -Employee creates software for the business. The copyright belongs to the business -Independent contractor creates the program and owns the copyright. The business licenses the use of the program. »This can be modified by contract between the independent contractor and the business
Copyrights-Digital Millennium Copyright Act
•Civil and criminal penalties imposed for anyone who circumvents encryption technology •The law also prohibits the manufacture, sale, or distribution of circumvention devices
Co-Ownership-Condominiums
•Common areas are owned by the group •Each apartment or office is owned individually •Everyone contributes to the cost of maintaining the common areas -Equal or based upon square footage of apartment, value, or other method agreed to by the owners -Owners association is created to manage the common areas •Failure to pay the common charges will giver the other owners a lien on the apartment or office of the non-payer •An injury to a third party in a common area becomes a liability of the condominiumas a whole notthe individual owners
Patents-Business Methods
•Consists of a series of steps related to performing a business application -Must have an inventive concept -Very hard to prove. Courts are regularly disallowing them -Tax ideas are being patented but very hard to enforce
Consequence of Violating Statute of Frauds
•Contract is unenforceable •The reasonable value of goods deliveredor services performed may be recovered. Not under the terms of the contract but by their reasonable value •Only the parties to a contract can raise the defense that a contract was not in writing
Substantive Unconscionability
•Contract terms are too one-sided that they shockthe conscience •Court can select which parts of the contract were unconscionable and still enforce the remainder
Criminal Act or Civilly Wrong Contract, what happens? & EX of each
•Contracts are void; includes contracts to obtain equipment to commit the illegal act - slot machines •Commission of a civil wrong may not be enforced - commit slander
Copyrights-Secondary Liability
•Contributory -Defendant knew of the infringing activity and encouraged the activity •Vicarious -Defendant had the ability to supervise the acts of the infringer and had a direct financial interest in the exploitation »Grokster Ltd. distributed free software that allowed computer users to share with each other directly. Grokster voiced the objective that the users utilize the software to download copyrighted works. Grokster profited by selling adds to the software users. Grokster was liable for infringement for both contributory and vicarious infringement.
Reformation
•Court may correct a contract when it does not correctly state the intent of the parties -Usually done when there is a unilateral mistake that the other party was aware of
Rules of Interpretation
•Courts will try to find the intent of the parties at the time the contract was entered into •Words are interpreted based upon their common meaning •Technical or trade terms are to be interpreted in such a manner •Other documents may be referenced to the contract and such other documents are treated as being part of the contract •Contract must be construed as a wholeand every part of the contract should be given effect
Bailments-Duties and Rights of Bailee
•Duty to care for the property -Level of care depends on the nature of the bailment »Gross negligence if bailment is solely for the benefit of the bailor •Leave books and furniture in your friend's house over the summer while school is out; no payment made »Slight negligence if bailment is solely for the benefit of the bailee •Lend a guitar for your friend to use, no payment made »Reasonable care when the bailment is for the benefit of both parties •Rent a car from Hertz
Bailments-Actions are based on Tort Principles
•Even though the bailment arose out of a contractual arrangement an action for a breach of duty is based on the principles of torts •Must show fault of the bailee, and the fault was the proximate cause of the injury •The injury is the damage to the property that was the subject of the bailment •The bailee will have to show that the damage wasn't caused by its lack of care required by law
Copyrights-Limitations
•Fair Use -News reporting -Criticism -Research •Parodies and caricatures are protected by the First Amendment -The Wind Done Gone was a parody of Gone With the Wind and was allowed tobe published
Dilution of Trademarks
•Famous trademark owners can bring actions to protect against their trademark from being overused even though no confusion would result -Buick shoes, Exxon shoes, etc.
Trademarks-Proving Infringement
•First to register •Another's use of the mark is likely to confuse the public -Factors courts consider: •Strength of plaintiff's mark •Similarity between the mark's •Similarity of products •Likelihood that plaintiff will enter the defendant's market •Extent of consumer confusion •Defendant's lack of good will •Quality of defendant's products •Sophistication of buyers
Agreements Contrary to Public Policy
•Hard to define public policy •Had for courts to apply; vague concept and restricts the parties to enter intocontracts -Court did find that a contract entered intofor personal services in exchange for financial support violated public policy when the only personal services were sexual relations
Incidental beneficiaries may not sue under the contract
•Hotel contracts with an exterminator to kill and remove bugs. B, a gust gets bitten by a bug. B is merely an incidental beneficiary and may not sue on the contract
Waiver of Breach & EX
•If one party breaches the contract but the other party accepts it, the contract continues as if the breach never occurred -A is performing ongoing services for B. B observes the performance of the work and does not object to the way it is being done. B can't wait until it is completed to first claim there was a breach.
Nature of Writing
•If part of the contract is typed or printed and another part is handwritten and the written part conflicts with either the typed or printed part the written part prevails. Likewise, the typed part will prevail over a conflicting printed part. •On a check or other contract if an amount is expressed in both numbers and words, the words prevail
Removal of third party beneficiary
•If the contract allows for a change of beneficiary without the consent of the beneficiarythen the beneficiary can be removed •If the contract does not allow for the change, the consent of the third party is required
Statute of Frauds: within 1 year condition
•If the contract cannot be performed within a year by its terms, it must be in writing -The year is measured beginning the day after the contract is entered into •If a contract may be terminated at will, the statute of frauds does not apply
Illegal Contract/Agreements & EX
•Illegal agreements are void •Normally, neither party can enforce the contract -Law was designed to protect one party. The protected party may recover amounts paid »Usury laws - borrower can recover excess interest payments •Examples -Sale of liquor - buyer didn't pay - seller can't enforce payment -Disability insurance claim based on salary earned while practicing law without a license. Couldn't recover anything from insurance company -Lease that violates a zoning ordinance can't be enforced
Implied Terms
•Implied terms - often timescontracts leave out some basic terms that are reasonable to imply. -Contract for services implies that the services will be performed properly •Every contract has an implied covenant of good faith -If a contract states that it is dependent upon A obtaining financing to fund the project, it is implied that A will attempt to get financing
America Invents Act
•In order to be protected the patent must be filed •The first to file as opposed to the first to invent gets the patent protection
Multiple Owners-Community Property
•In some statesproperty acquired during the marriage is the community property of the husband and wife •Some of those states provide for a right of survivorship, others allow the spouse to leave their share to their heirs
Trademarks-Remedies for Infringement
•Injunction - force the defendant to stop using trademark -If there won't be confusion infringement won't be found - Apple Air Conditioning Service •Damages - lost profits or other damages
Parole Evidence Rule Ambiguity
•It is a question of law as to whether a contract is ambiguous and for a judge to decide, •Once a contract is found to be ambiguous, it is a question of fact as to what the parties intended, which is for the jury to decide •Ambiguous terms are interpreted strictly against the party who wrote the contract
Real Property
•Land and things embedded in the land, such as oil tanks •Buildings, trees, etc.
Form of Ownership-Fee Simple Estate
•Lasts forever •Absolute owner of the entire land •Rights of owner -Transferable at will during life -Can be transferred by will -Passes to the ownersheirs if not specifically passed by will -Can be attached and used to satisfy debts of the owner »subject to homestead restrictions
License requirements
•License requirements -Certain licenses must be obtained before a business or profession may be run or performed »Law, medicine, liquor, real estate, life insurance, stock broker -Follow the law in the state that the services are being provided
Breach of Contract and Remedies-Mitigation of Damages
•Mitigation of Damages -The injured party is under a duty to mitigate damages if reasonably possible -Stop work on a project if you see it isn't being performed correctly -Buy goods elsewhere if the supplier fails to supply them -Employee damaged by breach by the employer should try to find alternative employment elsewhere -Landlord must attempt to lease premises -Seller of unique goods or goods that will expire (tickets to an event) must try to resell -Effect of not mitigating damage will result in a lower award to the plaintiff in the breach of contract action
Breach of Contract and Remedies-Monetary Damages
•Monetary Damages -Compensatory Damages - place the injured party in the same position they would have been if there had been no breach -Nominal Damages- no real damage occurred from the breach - award $1 -Punitive Damages - meant to punish the offending party - award damages well in excess of the compensatory amount - very rare -Direct Damages - those that flow naturally from the breach - lost profits -Incidental Damages - extra expenditures made by the non-breaching party to rectify the breach or to mitigate damages -Consequential Damages - not usual for the breach that happened but they did arise because of special facts. They had to be reasonably foreseeable
Restraint on Trade for businesses
•Monopolies •Agreements by Vendors to Fix Prices •Agreements not to Compete - generally disfavored but will be upheld if: -Very narrowly drawn as to protect legitimate business needs -Not unduly burdensome and allows the restricted party an opportunity to earn a living -Limited as to time Limited geographically
Mortgages-Default
•Mortgagee can foreclose on the property and sell the property •Mortgagor is still liable if sale proceeds are insufficient to satisfy the mortgage
Personal Property
•Movables, intangibles, intellectual property, etc. •Claims and debts
Nature of Real Property-Moveable objects
•Not fixtures if they can be removed without damaging property -Refrigerators, freezers, gas ranges, etc.
What is a Writing?
•Obviouslya written contract •Notes or memorandums may also satisfy the requirement -Note or memo must be signed by the party who is being bound by the contract »Party who signs the note will be bound but the other party would not be bound •Electronic signatures are given the same weight as handwritten signatures •Writing must contain all essential terms of the contract •A series of letters can be a writing,however they must be linked by either reference to each other or clearly covering the same material •E-mails are writings and can form contracts - Query whether the writer has toexplicitly sign the bottom or if the 'from' is enough?
Third Party Beneficiaries Assignments
•One party to a contract assigns its rights and obligations under the contract to a third person. The party exiting the contract is the assignor and the party taking on the contract is the assignee. The other party to the contract (obligor) must be given notice of the assignment. The assignee steps into the shoes of the assignor with respect to the contract. •A valid assignment takes effect immediately. The assignee should give notice to the obligor at the time the assignment is made.
Multiple Owners-Tenants by the Entirety
•Only applies to property owned by a husband and wife •Neither spouse can transfer their interest •The right of survivorship may not be destroyed •A creditor of only one of the parties may not touch the property to get their debt repaid; only creditors of both can reach the property •Divorce creates a tenancy in common
Parol Evidence Rule
•Oral or extrinsic evidence is not allowed to override, modify or contradict explicit terms of a written contract •Rationale for rule -Provide stability for written contracts
Trademarks-Trade dress
•Overall look of a product - packaging -Red and white design by Fridays •Shape of a product -Functionality cannot get trademark protection
Form of Ownership-Life Estate
•Owns the land for the persons life and then it reverts to a named other -Can't pass the land to its heirs •Has the right to transfer the land while alive, but transferee's rights terminate on the death of the transferor
Anticipatory Breach
•Party makes it clear that they will not perform the contract •Party asks for additional payment but will still perform under the contract is not an anticipatory breach
Patents-Infringement
•Patent holder has the exclusive right to make, use or sell the invention •Owner can sue if the patent is infringed for money damages and/or injunctive relief •Making minor changes to the invention will not be a valid defense to patent infringement
Bailments-Delivery and Acceptance of Property
•Personal property is delivered to the bailee and accepted by the bailee •Bailee must be aware that the property has been delivered and placed in the bailee's control
Third Party Beneficiaries-Nonassignable rights
•Personal services -Contract for golf instruction from Tiger Woods. Tiger may not assign the contract to another •Increasing Burden of Performance -A agrees to deliver goods to his neighbor, B. B can not assign his rights to have the goods delivered to someone who lives 50 miles away. •Credit Transaction -A sells property to B for payments in the future. B may not assign the contract because anyone else would have a different credit risk.
Promises in Consideration of Marriage
•Prenuptial agreements must be in writing - unless unconscionable they will be upheld
Donee beneficiary & EX
•Promisee intends for third party to get the benefit of the contract -Life insurance contracts
Title-Findings of Lost Property
•Property is lost when the owner doesn't know where the property is located but wishes to retain title •Finder of the property obtains possession but not title •Finder is not entitled to a reward •Public Place -Owner left property in a place where it is likely the owner will return to get the property - finder must give the property to the manger of the public place to give back to the owner. -Finderis allowed tokeep the property if the owner never comes to claim it
Title-Acquisition
•Purchase •Gift •Finding lost property •Occupation •Escheat
Trade Secrets-Criminal Sanctions
•Purposely stealing trade secrets is a criminal offense -Fines can range as high as twice the value of the information taken, plus up to 15 years of imprisonment
Cybersquatters
•Register domains with names that are identical or very similar to trademarks that belong to others -Hope to ransom the domain •Federal Anticypersquatting Consumer Protection Act -Prohibits registering a domain name that infringes on a trademark »Victoriassecrets.netwas a violation of the law •Before obtaining a domain name the name should be checked out
Regulation of Contracts for businesses & EX
•Regulation of Contracts -Some statutes actually state that certain provisions must be includedor the contract will not be enforceable by the party violating the regulation »Mortgages must disclose the APR rate
Nature of Real Property-Profits & EX
•Right to take part of the land that belongs to another -Minerals, water, etc.
Consequences of usurious agreements
•Some states don't allow any interest to be earned on the loan •Some states cap the interest at the highest rate allowed •Some states impose a penalty on the lender - refund the interest and pay a similar amount in addition to that charged
Semiconductor Chip Protection-Mask Work
•Specific form of expression embodied in chip design including the stencils used in manufacturing •Semiconductor chip products are protected for 10 years •Competitorsare allowed toreverse engineer the chip as long as the competitor used substantial study and analysis and didn't merely copy the semiconductor •Damages for infringement can be for actual damages, statutory damages up to $250,000, and/or the destruction of the chips
Does the Statute of Frauds apply to Executors of Estates?
•Statute of Frauds does not automatically apply to contracts made on behalf of the estate •Statuteof Frauds does applyto contracts made by the executor for the executor to make payments on behalf of the estate
Bailments-Renting of space
•Storage unit rented and person storing the property secures the area -Renter never takes control of property so there is no bailment of property •Storage unit rented and person rentingthe property secures the area -Bailment is created »Safe deposit box rental
Nature of Real Property-Land
•Surface of the earth. The land extends downward and upward. The space above the land may be used by others as long asthey do not interfere with the use of the land (airplanes)
Title-Occupation
•Taking and retaining possession may confer title -Wild animals - living in nature are not anyone's property -Person acquiring dominion and control becomes the owner -If an animal is captured or killed on the land of another, and the hunter was on the land without permission of the owner, the animal belongs to the owner of the land •Abandoned Personal Property -When the owner of the property abandons such property, title may be obtained by taking possession of the property
Trademarks-What is Registrable?
•The mark must be source identifying -Coined -Arbitrary -Suggestive -Descriptive, or -Generic
Characteristics of a mortgage
•The mortgagees interest is terminated by the satisfaction of the mortgage •Mortgagee has the right to foreclose on the property to enforce the mortgage •Mortgagor has the right to regain the property
Creditor Beneficiary & EX
•The promisee's primary goal is to discharge a debt owed to a third party -A sells her business to B. while operating the business A incurred debt to C which is still outstanding. Under the contract for the sale of the business, B agrees to pay off the remainder of the debt to C. C can sue B under this contract if B refuses to make the payments.
Easements
•The right to use another's land. Such as the right to remove minerals. -Creation »Easements must be in writing because they deal with land. »Implied easements - obvious from the situation. Pipes running under land. Part of the land is soldand part is retained. If the pipes run under the land sold an implied easement is created. -Termination »Owner of the easement may abandon the easement. Grantor of the easement may not unilaterally revoke it.
Transfer by Deed-Delivery and Acceptance
•The transferor must deliver the deed to the transferee •Acceptances are always presumed unless there is a disclaimer
Mortgages-Recording
•There is no requirement to record a mortgage -Recording a mortgage will set the priority of claims of various creditors who have mortgages on the same property •Responsibilities -Taxes are the liability of the owner of the property »Often timesmortgagees demand that the mortgagor pay the amount of taxes to them so they can pay the taxing authority -Insurance - neither party must insure »Often timesthe mortgagee demands that the mortgagor insure the property and name the mortgagee as the beneficiary -Damage to property - mortgagee can sue to recover for damages to the property caused by the mortgagor or third parties
Does the third party beneficiary have to be identified by name? & EX
•Thethird partybeneficiary does not have to be identified by name but rather by class -Promoter enters into a contract with an arena for a sporting event. All participants get paid a specific sum by the arena under the contract. Each participant is a third party beneficiary.
Title-Gift
•Title may be acquired by gift. Once the gift is completed title is transferred even though no consideration was given for the property
Adverse Possession
•Title may be taken by adversely possessing land for a statutorily prescribed amount of time •Possession must be: -Open -Continuous- typically between 10 and 20 years -Exclusive -Adverse, and -Notorious
Title-Purchase
•Title to property can be achieved by purchasing property - most common way to acquire title to property -Title is not acquired by theft. A purchaser of stolen property does not obtain title to the property because the seller never had title
Title-Escheat
•Transfer of property to the State •Unclaimed or abandoned securities are subject to escheat
Liability to third Person's Entering the Land Depends on the status of the person being injured
•Trespassers -Only liable for intentional harm -Exception for children »Owners of pools - fence property •Licensees -Must warn of non obviousdangers »'invisible' glass door if patio lights are on and house lights are off -Invitees »Customers invited into a store »Landowners have a duty to discover dangers and warn the invitees of the dangers •Slippery floor - landowner must fix the situation, rope it off, or give proper warning
Multiple Owners-Tenancy in Common
•Two or more people have an interest in the property •Each interest may be transferred or inherited by another
Multiple Owners-Joint tenancy
•Two or more people have an interest in the property •There is a right to survivorship -When one joint tenant dies the remaining joint tenants take title of the deceased's interest -The last remaining joint tenant takes title to all ofthe property -Some states require the words with rights of survivorship •If a joint tenant transfers the propertythe new owner becomes a tenant in common
Unconscionable Clauses
•Typically courts will not void a contract because it appears that one party received a better deal than the other •Penalties will not be enforced if they are too harsh •Avoidance of liability for gross negligence or intentional acts will not be enforcedFactoring into such decisions include the nature of the agreement, the possibility of unfair surprise, lack of notice, unequal bargaining power, and substantive unfairness. Courts often use the "doctrine of reasonable expectations" as a justification for invalidating parts or all of an adhesion contract: the weaker party will not be held to adhere to contract terms that are beyond what the weaker party would have reasonably expected from the contract, even if what he or she reasonably expected was outside the strict letter of agreement.
Do Usurious Agreements apply to corporations? What is interest?
•Typically does not apply to corporations •What is interest? -Appraisal fees -Credit investigation Interest = % of the loan
Attorney's Fees
•Typically not awarded in breach of contract lawsuits •May be allowed if stated in the contract -Court may still not allow it or reduce the amount on equitable basis
Oral Contracts
•Unless a written contract is mandated by law, oral contracts are binding
Breach of Contract and Remedies-Specific Performance
•When a contract is unique the court may order the breaching party to fulfill the contract. The concept is that monetary damages will not suffice. •Contract to buy an antique may be enforced by specific performance •Contract to buy land will also be subject to specific performance •If damages can be determined, then specific performance will not be ordered •Normally, specific performance for services rendered will not be enforced
Third Party Beneficiaries-Continuing Liability of Assignor what is novation?
•When a lease is assigned the assignee becomes primarily liablebut the assignor remains liable if the assignee defaults -Exception - novation - all three parties agree that the old lease is terminatedand a new lease now takes effect
Trade Secrets-Loss of Protection
•When a trade secret is made public it is no longer protected -When a secret is made known to a specific customer and the customer is told not to disclose it, then it is still a trade secret
Rescission
•When one party commits a major breach of contract the other party may rescind the contract •The breach must be so material that it makes the contract meaningless •Services performed by the injured party will be paid for based on a reasonable amount, not the amount stated in the contract •Rescission is meant to put both parties in the position they would have been if the contract was never made
Injunction
•Where the breach of contract consists of doing an act, the offended party may seek an injunction, stopping the other party from doing such act -Covenants not to compete are generally enforced by an injunction
Third Party Beneficiaries-Delegation of Duties
•Where the work being performed is standardized and nonpersonal it may be delegated - not material who performs the work •The contracting party remains liable for the work performed by the person doing the work •Contracts may prohibit the delegation of duties
