Law of Contracts and Sales I

Ways to terminate an offer without being accepted

1. Lapse of time (reasonable time) 2. Death of either party (except for agent of a corporation) 3. Destruction of the subject matter 4. Rejection 5. Revocation

6 elements to a contract

1. Offer 2. Acceptance 3. Consideration 4. Genuine Assent 5. Competent Parties 6. A legal object

Duress

Any wrongful act or threat that prevents a party from exercising free will when executing a contract

Legal Object

Cannot enter into a contract for illegal items

Competent Parties

Cannot have minors, mentally ill people sign contracts Minors: Most states you have to be 18 to sign a contract. Most states do not automatically invalidate the contact., but instead allow the minor to "disaffirm" Mentally ill person is not valid

Statute of Frauds

Certain contracts must be written to be valid: A) Real estate contracts B) Contracts to pay the debt of another C) Contracts that cannot be performed in one year D) Promises to marry E) In some circumstances, contracts for the sale of goods 500$ or more

Genuine Assent

Each party's agreement must be genuine and voluntary. Cannot be given as a result of fraud, undue influence, duress, or mistake. Must be a "Meeting of the minds"

Consideration

Each side must suffer legal detriment Courts generally do not require consideration be significant

Fraud

Misrepresentation of a material fact Made with intent to deceive the other party The other party reasonably relies on that misrepresentation The other party is injured as a result of reasonably relying on the misrepresentation

Acceptance

Must demonstrate objective intent Must be communicated Must satisfy (mirror) the offer

Offer

Must show objective intent to enter into a contract by the offeror Must be definite Must be communicated

3 main elements

Offer Acceptance Consideration

Undue Influence

One party exerts wrongful mental coercion over the other (but not a threat of force) Soft of like duress light Usually involves a dominant/subservient relationship between parties This relationship allows one party to influence the other in a mentally coercive way

Mistake (Unilateral)

Only one party mistaken. Courts will not rescind unless the non-mistaken party knew or should have known the other party was mistaken

Non-Adequate Consideration Circumstances

Preexisting Duty: Party already had an obligation to do something. Party was already required to do it and is thus not a detriment. Illusory Promises: One party is not actually required to do anything. Illegal Consideration: Illegal acts cannot constitute valid consideration for a contract.

Mistake (Mutual

Where both parties enter into a contract based on incorrect information about the terms of the contract. Courts will rescind a contract for mutual mistake (parties could also agree to amend the contract without going to court)