ARE 18 midterm 2

pre existing duty

Under most circumstances, a promise to do what one already has a legal duty to do does not constitute legally sufficient consideration. A sheriff, for instance, cannot collect a reward for information leading to the capture of a criminal if the sheriff already has a legal duty to capture the criminal

voidable, dissaffirmance

if someone is lacking mental capacity but the other party knows it, transaction may be ______________ and there is an option for ___________________ for a reasonable times upon sobriety

Enforceable

if the consequences are understood while intoxicated, the contract is _________________

Contractual Capacity

minors and infants do not have _______________ ______________

enforceable

mistakes of value: contract is ________________ if mistake concerns future market value

variable

mistakes of value: value is ________________

justifiable ignorance of facts

one party's lack of knowledge regarding a provision of the agreement that would make it illegal courts won't enforce contract, but allow parties to return to original positions

implied ratification

takes place when the minor, on reaching the age of majority, behaves in a manner inconsistent with disaffirmance.

contract definition

agreements that can be enforced in court

Commercial Impracticability

extreme difficulty or cost was unforeseeable when contract was formed

f

t/f: to create a valid delegation of duties, there must be a special form filled out

f

t/f: writing is required when the "main purpose" rule is applied

release

An agreement in which one party gives up the right to pursue a legal claim against another party. can be a contract in itself

shrink wrap agreement

An agreement whose terms are expressed in a document located inside a box in which goods (usually software) are packaged.

Quantum Meruit

"as much as deserved" term for quasi contracts

substantive

"you can't sue us even if we mess up" is an example of ____________________ unconscionability

choice of law clause

A clause specifying that any dispute arising out of the contract will be settled according to the law of a particular jurisdiction, such as a state or country.

exculpatory clauses

A clause that releases a contractual party from liability in the event of monetary or physical injury, no matter who is at fault.

mailbox rule

A common law rule that acceptance takes effect, and thus completes formation of the contract, at the time the offeree sends or delivers the acceptance via the communication mode expressly or impliedly authorized by the offeror.

mirror image rule

A common law rule that requires that the terms of the offeree's acceptance adhere exactly to the terms of the offeror's offer for a valid contract to be formed.

standard measure

(of compensatory damages) the difference between the value of the breaching party's promised performance under the contract and the value of that party's actual performance. This amount is reduced by any loss that the injured party has avoided.

consequential damages

(special damages) Foreseeable damages that result from a party's breach of contract but are caused by special circumstances beyond the contract itself. harder to predict than compensatory

legally sufficient value

1. a promise to do something that one has no prior legal duty to do 2. the performance of an action that one is otherwise not obligated to undertake 3. the refraining from an action that one has a legal right to undertake (called a forbearance)

enforceable, voidable, and unenforceable

3 kinds of valid contracts

forum selection clause

A clause indicating the place (such as a court or jurisdiction), where any disputes arising under the contract will be resolved.

discharge by settlement agreement

A compromise, or settlement agreement, that arises out of a genuine dispute over the obligations under an existing contract will be recognized at law parties can agree to a new contract with different terms than the first

conditions precedent

A condition in a contract that must be met before a party's promise becomes absolute.

condition subsequent

A condition in a contract that, if it occurs, operates to terminate a party's absolute promise to perform.

implied contract

A contract formed in whole or in part from the conduct of the parties. the more conduct, the more solidified

express contract

A contract in which the terms of the agreement are fully and explicitly stated in words, oral or written.

privity of contract, does not

A contract is a private agreement between the parties who have entered into it, and traditionally these parties alone have rights and liabilities under the contract. This principle is referred to as ___________ ________ ___________. A third party—one who is not a direct party to a particular contract—normally does / does not have rights under that contract

formal contract

A contract that by law requires a specific form, such as being executed under seal, to be valid.

informal contract

A contract that does not require a specified form or formality in order to be valid.

covenant not to compete

A contractual promise of one party to refrain from conducting business similar to that of another party for a certain period of time and within a specified geographical area.

frustration of purpose

A court-created doctrine under which a party to a contract will be relieved of their duty to perform when the objective purpose for performance no longer exists due to reasons beyond that party's control. -decreases in value aren't what you bargained for

Promissory Estoppel

A doctrine that applies when a promisor makes a clear and definite promise on which the promisee justifiably relies; such a promise is binding if justice will be better served by the enforcement of the promise.

impossibility of performance

A doctrine under which a party to a contract is relieved of the duty to perform when performance becomes objectively impossible or totally impracticable.

click on

A group of Chinese-speaking Uber drivers filed a breach of contract suit against the company. Uber responded with a motion to compel arbitration, which a federal district court granted. The plaintiffs had downloaded the Chinese version of the Uber App and could read the arbitration provision in their native language. Each had clicked on the button and agreed to arbitrate any disputes (whether or not they had actually read the clause). Thus, the arbitration clause was enforceable, and the lawsuit was dismissed. this is an example of a ____________________ agreement

condition subsequent

A law firm hires Julia, a recent law school graduate. Their contract provides that the firm's obligation to continue employing Julia is discharged if she fails to pass the bar exam by her second attempt. This is a _____________ ______________ because a failure to pass the exam—and thus to obtain a license to practice law—will discharge a duty (employment) that has already arisen.

neglegent misrepresentation

A misrepresentation that occurs when a person makes a false statement of fact because the person did not exercise reasonable care or use the skill and competence required by the person's business or profession.

innocent misrepresentation

A misrepresentation that occurs when a person makes a false statement of fact that the person believes is true.

bilateral mistake of fact

A mistake that occurs when both parties to a contract are mistaken about the same material fact. contract may be reformed

unilateral mistake of fact

A mistake that occurs when one party to a contract is mistaken as to a material fact.

substantial performance

A party who in good faith performs substantially all of the terms of a contract can enforce the contract against the other party under the doctrine of ___________ _______________

discharge in bankruptcy

A proceeding in bankruptcy attempts to allocate a debtor's assets to the creditors in a fair and equitable fashion. Once the assets have been allocated, the debtor receives a ___________ ______ ______________

limitation on remedies

A provision specifying the remedies available to the buyer if the goods are found to be defective or if the contract is otherwise breached. Any limitation of remedies should be clearly spelled out.

condition

A qualification, provision, or clause in a contractual agreement, the occurrence or nonoccurrence of which creates, suspends, or terminates the obligations of the contracting parties.

collateral promises

A secondary promise to a primary transaction, such as a promise made by one person to pay the debts of another if the latter fails to perform.

adhesion contract

A take-it-or-leave-it offer made by a party who holds most of the power in a bargaining session (Ex: parking tickets)

objective theory of contracts

A theory under which the intent to form a contract will be judged by outward, objective facts (what the party said when entering into the contract, how the party acted or appeared, and the circumstances surrounding the transaction) as interpreted by a reasonable person, rather than by the party's own secret, subjective intentions.

can, justifiable ignorance of facts

A trucking company contracts with Gillespie to carry crates filled with goods to a specific destination for a normal fee of $5,000. The trucker delivers the crates and later finds out that they contained illegal goods. Although the shipment, use, and sale of the goods are illegal under the law, the trucker, being an innocent party, can/ can not normally still legally collect the $5,000 from Gillespie. this is due to

prenuptial agreement, in writing

An agreement made before marriage that defines each partner's ownership rights in the other partner's property. Prenuptial agreements must be ______ _____________ to be enforceable.

impossible

A-1 Farm Equipment agrees to sell Gunther the green tractor on its lot and promises to have the tractor ready for Gunther to pick up on Saturday. On Friday night, however, a truck veers off the nearby highway and smashes into the tractor, destroying it beyond repair. Because the contract was for this specific tractor, A-1's performance is rendered _______________ owing to the accident.

click on agreement

An agreement that arises when an online buyer clicks on "I agree" or otherwise indicates assent to be bound by the terms of an offer.

yes, reduce moving to places nearby, restrict connections, restraint of trade, move states

ARE EXPANSIVE NONCOMPETE AGREEMENTS REDUCING WORKER MOBILITY? how?

misrepresentation by conduct

Actor Tom Selleck contracted to purchase a horse named Zorro for his daughter from Dolores Cuenca. Cuenca acted as though Zorro were fit to ride in competitions, when in reality the horse was unfit for this use because of a medical condition. Selleck filed a lawsuit against Cuenca for wrongfully concealing the horse's condition, and a jury awarded Selleck more than $187,000 for Cuenca's ___________________ ________ ____________

discharge by mutual rescission

An agreement between the parties to cancel their contract, releasing them from further contractual obligations. The object is to restore the parties to the positions they would have occupied had no contract ever been formed.

Discharge by Accord and Satisfaction

An agreement between two parties to accept performance that is different from what was promised in the original contract. After the performance has been completed, the obligation is discharged.

anticipatory repudiation of contract

An assertion or action by a party indicating that the party will not perform a contractual obligation.

after

An assignment or a delegation occur _______________ the original contract is or was made.

E-sign Act

An electronic signature is just as valid as a signature on paper, and an e-document can be as enforceable as a paper one

specific performance

An equitable remedy in which a court orders the parties to perform as promised in the contract. This remedy normally is granted only when the legal remedy (monetary damages) is inadequate.

temporary impossibility

An occurrence or event that makes performance temporarily impossible operates to suspend performance until the impossibility ceases. Once the temporary event ends, the parties ordinarily must perform the contract as originally planned

tender

An unconditional offer to perform an obligation by a person who is ready, willing, and able to do so. pressures non performing party to perform

consideration

Anita says to her neighbor, "If you paint my garage, I will pay you $800." Anita's neighbor paints the garage. The act of painting the garage is the __________________ that creates Anita's contractual obligation to pay her neighbor $800.

this contract is void because Annabelle had been mentally incapacitated her whole life

Annabelle Duffie was mildly intellectually disabled and, at age seventy, had the beginning of dementia. For her entire life, she had lived with her brother, Jerome. When Jerome died, he left Annabelle his property, including 180 acres of timberland near Hope, Arkansas, valued at more than $400,000. Less than three months later, Annabelle signed a deed granting her interest in the tract to Charles and Joanne Black. The Blacks agreed to pay Annabelle $150,000 in monthly payments of $1,000. Later, Annabelle's nephew, Jack, was appointed to be her legal guardian. On her behalf, Jack filed a lawsuit in an Arkansas state court against the Blacks, seeking to void the land deal because of Annabelle's lack of mental competence. Is this contract valid? why/why not?

shrink wrap

Arial orders a new iPhone from Best Electronics, which ships it to her. Along with the iPhone, the box contains an agreement setting forth the terms of the sale, including what remedies are available. The document also states that Arial's retention of the iPhone for longer than thirty days will be construed as an acceptance of the terms. This is an example of a/an _____________________ agreement

prohibited by statute, personal services (tutoring, marriage), significantly changes the risk or duties of the obligor, contract prohibits assignment

As a general rule, all rights can be assigned. Exceptions are made, however, under certain circumstances, including:

special trust on obligor, depends on the personal skill or talents of the obligor, performance by a third party will vary materially from that expected by the obligee, contract expressly prohibits delegation.

As a general rule, any duty can be delegated. There are, however, some exceptions to this rule. Delegation is prohibited in which circumstances?

restitution

As previously discussed, rescission is essentially an action to undo, or cancel, a contract—to return nonbreaching parties to the positions that they occupied prior to the transaction. Generally, to rescind a contract, both parties generally must make _____________ to each other by returning goods, property, or funds previously conveyed

pre existing duty

Bauman-Bache, Inc., begins construction on a seven-story office building and after three months demands an extra $75,000 on its contract. If the extra $75,000 is not paid, the firm will stop working. The owner of the land, finding no one else to complete construction, agrees to pay the extra $75,000. The agreement is not enforceable because it is not supported by legally sufficient consideration— this is because Bauman-Bache had a _________________________ to complete the building.

damages

Because substantial performance is not perfect, the other party is entitled to ______________ to compensate for the failure to comply with the contract

prenuptial agreement

Before marrying country singer Keith Urban, actress Nicole Kidman entered into a ______________ __________________ with him. Kidman agreed that if the couple divorced, she would pay Urban $640,000 for every year they had been married, unless Urban was using drugs. In that event, he would receive nothing.

preliminary agreements

Binding contract if parties have agreed on all essential terms, and no disputed issues remain to be resolved

can, the misrepresentation is material

Bryant submits an application for no-fault automobile insurance with State Farm in which he states that he has not received any traffic citations for three years. State Farm accepts the application, and Bryant pays the premium. Soon thereafter, State Farm discovers that, one year and eight months earlier, Bryant had been cited for operating a motor vehicle while impaired. If Bryant's misrepresentation on the application is an innocent mistake, State Farm can / cannot void the insurance contract and return the premium. why?

counteroffer

Burke, a beet farmer, offers to sell her product to Lang, the owner of the Lang's Roadside Veggie Stand, for $1.70 a pound. Lang responds, "Your price is too high. I'll offer to pay $1.30 a pound for your beets." Lang's response is a __________________ because it rejects Burke's offer to sell her beets at $1.70 a pound and creates a new offer by Lang to purchase the beets at $1.30 a pound.

concurrent conditions

Conditions that must occur or be performed at the same time—they are mutually dependent. No obligations arise until these conditions are simultaneously performed.

cannot, misrepresentation of law

Cameron has a parcel of property that she is trying to sell to Levi. Cameron knows that a local ordinance prohibits building anything higher than three stories on the property. Nonetheless, she tells Levi, "You can build a condominium one hundred stories high if you want to." Levi buys the land and later discovers that Cameron's statement is false. Levi generally can/cannot avoid the contract, because under the common law, people are assumed to know state and local laws. this is an example of _______________ _______ __________

benefit for herself

Carrie contracts with Custom Manufacturing Company to have some machines custom made for her factory. She promises Newform Supply, Custom's supplier, that if Newform continues to deliver the materials to Custom for the production of the custom-made machines, she will guarantee payment. This promise need not be in writing, even though the effect may be to pay the debt of another, because Carrie's main purpose is to secure a ______________ _________ _____________

usury

Charging an illegal rate of interest

yes, justifiable reliance on the misrepresentation

Clifford Cronkelton negotiated with Patrick Shivley to buy a car wash in Ohio that had closed down due to bankruptcy. Cronkelton inspected the property and knew that he would have to replace some of the equipment, but he was concerned that the property needed to be winterized to protect it from damage. Shivley assured Cronkelton that the winterizing would be done. Shivley contacted Guaranteed Construction Services, LLC, which hired Strayer Company to winterize the property. Strayer told Shivley that the only way to avoid problems was to leave the heat on at the car wash, but Shivley knew that the bank had shut off the heat. Later, the car wash was damaged by freezing. Although Shivley informed the bank about the damage, he did not tell Cronkelton, who did not become aware of the damages until after he had he bought the car wash. Cronkelton sued Guaranteed and Shivley for fraud. Should he win? why/why not

reform, illegal

Cole signs an employment contract that is valid but includes an overly broad and thus illegal covenant not to compete. In that situation, a court might find the employment contract enforceable but ___________ the unreasonably broad covenant by converting its terms into reasonable ones. Alternatively, the court could declare the covenant____________ (and thus void) and enforce the remaining employment terms.

no, valid exculpatory clause

Colleen Holmes participated in the Susan G. Komen Race for the Cure in St. Louis, Missouri. Her signed entry form included an exculpatory clause under which Holmes agreed to release the event sponsors from liability "for any injury or damages I might suffer in connection with my participation in this Event." During the race, Holmes sustained injuries when she tripped and fell over an audiovisual box left on the ground by one of the sponsors. She filed a negligence suit against the sponsor whose employees had placed the box on the ground without barricades or warnings of its presence. The court held that the language used in the exculpatory clause clearly released all sponsors and their agents and employees from liability for future negligence. Could Holms sue for the injuries she sustained during the race? why/why not?

Construction contracts, Sale of goods, Loan contracts, Contracts with entertainers and professional athletes

Common Uses of Liquidated Damages Provisions

profits, costs incurred

Construction contracts: If the owner breaches during performance, the contractor can recover the ____________ plus the __________ ____________ in partially constructing the building.

Exculpatory clauses, Limitation-of-liability clauses

Contract Provisions Limiting Remedies

undue influence

Contract lacks voluntary consent and is voidable One party dominates the other unfairly

mistake

Contract law allows a contract to be avoided based on _____________

the one year rule

Contract performance requiring more than a year must be in writing Parties' memory unreliable after a year Time period starts the day after the contract is formed Contract must be objectively impossible to perform within one year

quasi contracts

Contracts implied in law Fictional contracts that courts can impose an "as if" actualcontract Equitable rather than legal contracts Imposed to avoid unjust enrichment Quantum meruit—extend of compensation owed

void, voidable, valid

Contracts made by mentally incompetent persons can be ________, __________, or __________

compensatory damages

Damages that compensate the nonbreaching party for the loss of the bargain. they give benefit of the bargain

the court dismissed the case because Dana was unaware of the no soliciting rule

Dana Clement was an administrator with Compassus, a hospice care provider in Houston. She left, taking a number of colleagues with her, to form a new branch of Crossroads Hospice in the same city. Compassus brought a number of claims, including conspiracy, against Crossroads, relying primarily on a covenant in Compassus's contract with Clement that forbade her from soliciting Compassus workers for employment elsewhere. what was the outcome?

neglegent misrepresentation

Dirk, an operator of a weight scale, certifies the weight of Sneed's commodity. If Dirk knows that the scale's accuracy has not been checked for more than three years, his action may constitute _______________ __________________

yes, a lack of description would cause confusion, the home address

Does the Statute of Frauds require that a contract for a sale of land contain a sufficient description of the property? why? In the Sloop V. Kiker case, what was the description that counted as sufficient?

yes, even though she made a unilateral mistake she is bound by the contract

Elena intends to sell her jet ski for $2,500. When she learns that Chin is interested in buying a used jet ski, she sends him an e-mail offering to sell the jet ski to him. When typing the e-mail, however, she mistakenly keys in the price of $1,500. Chin immediately sends Elena an e-mail reply accepting her offer. Is Elena bound by this contract? why/why not?

difficult, reasonable, excessive

Enforceability of liquidated damages: • When the contract was formed, it is apparent that damages would be _______________ to estimate in the event of a breach • The amount set as damages is ______________ and not ______________

quasi contract

Ericson contracts to build two oil derricks for Petro Industries. The derricks are to be built over a period of three years, but the parties do not create a written contract. Therefore, the writing requirement will deem the contract unenforceable. After Ericson completes one derrick, Petro Industries informs him that it will not pay for the derrick. Ericson can sue Petro Industries under the theory of __________ __________

rescinded, undue influence

Erik is the guardian for Kinsley, his ward. On her behalf, he enters into a contract from which he benefits financially. If Kinsley challenges the contract, the court will likely presume that the guardian has taken advantage of his ward. To rebut (refute) this presumption, Erik has to show that he made full disclosure to Kinsley and that consideration was present. He must also show that Kinsley received, if available, independent and competent advice before completing the transaction. Unless the presumption can be rebutted, the contract will be _______________. This is an example of __________ _______________

discharges

Fred, a famous dancer, contracts with Ethereal Dancing Guild to play a leading role in its new ballet. Before the ballet can be performed, Fred becomes ill and dies. His personal performance was essential to the completion of the contract. Thus, his death _______________ the contract and his estate's liability for his nonperformance.

specific performance

Harmony Development agreed to sell seven acres of a planned subdivision to Jerry Davis for $1.5 million. The contract required Harmony to spend $1.85 million improving the property so that Davis could construct a health club on it. After Harmony made the improvements, Davis informed the company that the subdivision no longer "fit in harmony" with his plans and refused to complete the purchase. Harmony sued for breach of contract. The Wyoming Supreme Court granted _______________ ______________, calling the remedy "a means of compelling [Davis] to do precisely what he should have done without being coerced by a court.

the evidence of a faxed document including the details of the ride showed an intent to be bound

How did intention affect the outcome of a lawsuit between Six Flags and the manufacturer of a water ride?

he is bound because it was not within a reasonable time

Ian Norred was a seventeen-year-old minor when he started working as a server at a Cotton Patch Café in Texas. Norred electronically signed a document that contained a mutual arbitration agreement for all disputes arising out of his employment. Seven months later, Norred turned eighteen. Ten months after that, Norred left his job and filed a compensation lawsuit against Cotton Patch alleging violations of federal labor law. At the same time, Norred attempted to disaffirm the terms of his original employment contract. Is Norred able to dissafirm or is he bound? why?

are, am not

If I sell you my car and don't tell you the car doesn't work and pressure you to buy it, you are/are not entitled to have it and I am / am not entitled to full value

tendering performance

If Janet promises to pay for goods when HP, Inc., delivers them, the parties' promises to perform are mutually dependent. Janet's duty to pay for the goods does not become absolute until HP either delivers or tenders the goods. Likewise, HP's duty to deliver the goods does not become absolute until Janet tenders or actually makes payment. Therefore, neither can recover from the other for breach without first __________ ___________.

admissions

If a party against whom enforcement of an oral contract is sought "admits" under oath that a contract for sale was made, the contract will be enforceable.

enforce, damages, in pari delecto

If an illegal contract is executory, neither party can ______________ it. If it has been executed, neither party can recover ______________. this is because of ________ ______ __________

reasonable time

If no time for performance is stated in a contract, a ________________ _______________ is implied

absolute

If one party's performance is substantial, the other party's duty to perform—for instance, to make payment—remains _____________

good faith means something different to everyone

If parties agree on certain major terms but leave other terms open for further negotiation, a preliminary agreement is binding only if parties have committed themselves to negotiate undecided terms in good faith to reach a final agreement what is the grey area with this?

minor

If the breach is ________________(not material), the nonbreaching party's duty to perform may sometimes be suspended until the breach is remedied, but the duty is not entirely excused. Once the breach is cured (corrected), the nonbreaching party must resume performance of the contractual obligations.

entire contract price plus interest

If the owner breaches after construction has been completed, the contractor can recover the __________ _________ ________, plus ___________

illusory

If the terms of the contract express such uncertainty of performance that the promisor has not definitely promised to do anything, the promise is said to be ________________—without consideration and unenforceable.

duress

Illegal threats, blackmail, extortion to induce consent a defense to contract enforcement and grounds for rescission

discharged, substantially burdensome

In 1942, actor Gene Autry was drafted into the U.S. Army. Being drafted rendered his contract with a Hollywood movie company temporarily impossible to perform, and it was suspended until the end of World War II in 1945. When Autry got out of the army, the purchasing power of the dollar had declined so much that performance of the contract would have been substantially burdensome to him. Should the contract stay intact or is it discharged? why?

both

In business contracts, mistakes that can exist are: Mistakes of value Mistakes of fact Neither Both

latent defect

In general, if the seller knows of a serious potential problem that the buyer cannot reasonably be expected to discover, the seller may have a duty to speak. Normally, the seller must disclose only a __________ ________

absolute promises

In most contracts, promises of performance are not expressly conditioned or qualified. Instead, they are ___________ ____________ They must be performed, or the parties promising the acts will be in breach of contract.

procedural unconscionability

In the case of Lianna Saribekyan who deposited her diamonds in BANA and when the bank shut down, they dismantled the box without her knowledge. The courts limited BANA's payout to $2,460 because the bank's Safety Deposit Rules and Regulations capped damages for negligence at ten times the safety deposit box's annual rent. However, when it was appealed, the courts found that this provision was "buried" in small print. BANA was eventually found liable for the missing goods because this was an example of __________________________

executed, executory

Jackson, Inc., agreed to buy ten tons of coal from the Northern Coal Company. Northern has delivered the coal to Jackson's steel mill, but Jackson has not yet paid. At this point, the contract is _____________ on the part of Northern and _______________ on Jackson's part. After Jackson pays Northern, the contract will be executed on both sides.

browse wrap terms

James McCants bought dietary supplements over the Internet that allegedly seriously damaged his liver. When he sued the seller, Vitacost.com, Inc., the company moved for arbitration based on a clause in terms and conditions. To see the arbitration clause, a purchaser would have had to scroll to the bottom of the seller's Web page and click on a hyperlink labeled "Terms and Conditions." The court held that these _______________________ were not part of the sales agreement and were thus unenforceable

past consideration

Jamil Blackmon became friends with Allen Iverson when Iverson was a high school student who showed tremendous promise as an athlete. Blackmon suggested that Iverson use "The Answer" as a nickname in the league tournaments, and said that Iverson would be "The Answer" to the National Basketball Association's declining attendance. Later, Iverson said that he would give Blackmon 25 percent of any proceeds from the merchandising of products that used "The Answer" as a logo or a slogan. Because Iverson's promise was made in return for _________________________ (Blackmon's earlier suggestion), it was unenforceable. In effect, Iverson stated his intention to give Blackmon a gift.

bilateral mistake, reform

Jason Allen was injured in a work-related automobile accident. Allen's employer had workers' compensation insurance with Accident Fund Insurance Company of America. After a series of disputes and negotiations, Allen and Accident Fund entered into a voluntary payment agreement (VPA) under which the insurance company consented to pay Allen $264.53 per week for 54.2 weeks. Neither side noticed, however, that the arithmetic of the VPA was wrong. Accident Fund should have been paying Allen $264.53 per week for 131.7 weeks, not 54.2 weeks. This is an example of a ______________ ______________ and the court was able to _____________ the contract to the terms that it should have been

does not, misrepresentation by silence, fraudulent misrepresentation

Jude is selling a car that has been in an accident and has been repaired. He does/does not need to volunteer this information to a potential buyer this is an example of ____________ _______ __________ If, however, the buyer asks him if the car has had extensive bodywork and he lies, Jude has committed _______________ ________________

restitution

Katie contracts with Mikhail to design a house for her. Katie pays Mikhail $9,000 and agrees to make two more payments of $9,000 (for a total of $27,000) as the design progresses. The next day, Mikhail calls Katie and tells her that he has taken a position with a large architectural firm in another state and cannot design the house. Katie decides to hire another architect that afternoon. Katie can obtain restitution of the $9,000. This is an example of ____________________

scienter

Knowledge on the part of a misrepresenting party that material facts have been falsely represented or omitted with an intent to deceive.

contracts in restraint of trade, covenants not to compete and sale of ongoing business, covenants not to compete in employment contracts

Legality: contracts contrary to public policy

express, disaffirm, implied

Lindsay posts an ad on Craigslist offering to sell her grandmother's Yamaha grand piano for $6,000. Axel, who is seventeen years old, agrees to purchase the piano by making monthly payments of $200 over the next two and a half years. Axel does not disaffirm the contract, and six months into the agreement, he turns eighteen (the age of majority in his state). When Axel stops by Lindsay's house to make his seventh payment, he states, "I love the piano and will continue making payments." Axel's oral statement to Lindsay is an _______________ ratification of their contract. He can no longer ______________ it. Even if Axel never expressly tells Lindsay he will continue making payments but continues to do so well after reaching the age of majority, this would be a/an ________________ ratification

no, substantial performance

Magic Carpet Ride (MCR) purchased a used airplane from Rugger Investment Group. The contract required the airplane to be free from liens, or legal claims against it. In fact, though, the airplane was burdened with a lien at the time of the sale. The two sides amended their contract, giving Rugger an additional ninety days to remove the lien or pay MCR a $90,000 penalty. Rugger obtained the lien release eight days too late. MCR sued for breach of contract to recover the $90,000 penalty. A California appeals court found that Rugger had tried in good faith to meet the ninety-day deadline and that MCR had received all bargained-for benefits. Should the court make Rugger pay the $90000? why?why not

acceptance

Marabel's restaurant routinely receives shipments of produce from a certain supplier. That supplier notifies Marabel's that it is raising its prices because its crops were damaged by a late freeze. If the restaurant does not respond in any way, the silence may operate as an _______________, and the supplier will be justified in continuing regular shipments

performance to the satisfaction of another

Mason signs a contract with Jen to mount a new heat pump on a concrete platform to her satisfaction. Such a contract normally need only be performed to the satisfaction of a reasonable person. this is an example of

yes, temporary impossibility

Mindy and Lyn contract to rent a sailboat from Key West Rentals for a month-long trip. The day before their trip is scheduled to begin, Hurricane Irma hits the coast where the boat is docked, causing damage. The hurricane makes performance temporarily impossible, and Mindy and Lyn postpone their trip. Once repairs are made to the dock and the boat, will Key West be required to perform the contract? why/why not

emancipation

Minority status may also be terminated by a minor's ______________, which occurs when a child's parent or legal guardian relinquishes the legal right to exercise control over the child

all of the above

Mistakes in contracts allow it to be avoided reformed rescinded all of the above

anticipatory repudiation, material breach

Mobile X enters into an e-contract to manufacture and sell 100,000 smartphones to Best Com, a global telecommunications company. Delivery is to be made two months from the date of the contract. One month later, three inventory suppliers raise their prices to Mobile X. Because of these higher prices, Mobile X stands to lose $500,000 if it sells the smartphones to Best Com at the contract price. Mobile X immediately sends an e-mail to Best Com, stating that it cannot deliver the 100,000 phones at the contract price. Even though you may sympathize with Mobile X, its e-mail is an ________________ ________________- of the contract. Best Com can treat it as a ___________ ______________ and immediately pursue remedies, even though the contract delivery date is still a month away.

effective

Motorola Mobility, Inc., offers to sell 144 Moto G8 Power smartphones to Call Me Plus phone stores. The offer states that Call Me Plus must accept the offer via FedEx overnight delivery. The acceptance is _______________ (and a binding contract is formed) the moment that Call Me Plus gives the overnight envelope containing the acceptance to the FedEx driver.

offer

Must be serious, objective intention by the offeror Offer must be communicated to offeree

Displaying the Offer online

Netquip sells a variety of heavy equipment, such as trucks and trailers, online at its website. Because Netquip's pricing schedule is very complex, the schedule must be fully provided and explained on the website. In addition, the terms of the sale (such as any warranties and the refund policy) must be fully disclosed. this is an example of:

contracts for personal services

Nicole contracts with a surgeon to remove a tumor on her brain. If he refuses to perform the surgery, the court will not compel (nor would Nicole want) him to perform. A court cannot ensure meaningful performance in such a situation this is an example of

primary obligation, secondary obligation

Nigel tells Dr. Lu, an orthodontist, that he will pay for the services provided for Nigel's niece. Because Nigel has assumed direct financial responsibility for his niece's debt, this is a _____________ _____________ and need not be in writing to be enforceable. In contrast, if Nigel commits to paying his niece's orthodontist bill only if her mother does not, it is a ____________ _______________. In that situation, Lu must have a signed writing or record proving that Nigel assumed this obligation for it to be enforced.

b

Nintendo of America, Inc. contacts Play 2 Win Games and offers to sell "one to twenty-five new gaming systems for $75 each. State number desired in acceptance." Play 2 Win agrees to buy twenty systems. This is a. a counteroffer. b. an enforceable contract. c. an invitation to negotiate. d. a revocable offer.

disaffirm

To _______________, a minor must express, through words or conduct, the intent not to be bound to the contract. The minor must demo this for the entire contract, not merely a portion of it

bilateral mistake

Offshore Energy Services (OES) contracted with companies to provide workers at offshore oil drilling operations. In its contract with rig operators, OES had an indemnity provision stating that it would insure the companies for tort claims filed against them by an OES employee. Raylin Richard, an OES employee, was injured while working on an oil rig. Richard filed a personal injury suit against Anadarko Petroleum, the head of that drilling project. OES paid $2.5 million to Richard to settle the lawsuit, but OES's insurance company, Liberty Mutual, denied coverage. Liberty took the position that the indemnity clause in the contract between OES and Anadarko explicitly covered "subcontractors" but did not mention "contractors" like Anadarko. Both OES and Anadarko had thought that the indemnity provision applied to subcontractors and contractors, so they claimed that there had been _________________ ________________ where they had mutually reasonably interpreted terms differently

fraud, duress, or undue influence

Often, one party to an illegal contract is more at fault than the other. When one party uses fraud, duress, or undue influence to induce the other party to enter into an agreement, the second party will be allowed to recover for the performance or its value. Victimized party allowed to recover for performance or its value

the offer was never communicated to them

On the advice of her attorney, Jeffrey Aronsky, Gyabaah signed a release (a contract forfeiting the right to pursue a legal claim) to obtain the settlement funds. The release, however, was not sent to Rivlab or its insurer, National Casualty. Moreover, Gyabaah claimed that she had not decided whether to settle. Two months later, Gyabaah changed lawyers and changed her mind about signing the release. Her former attorney, Aronsky, filed a motion to enforce the release so that he could obtain his fees from the settlement funds. The court denied the motion because

third party beneficiary

One for whose benefit a promise is made in a contract but who is not a party to the contract.

compensatory damages

Owens Community College lost its accreditation from the National League for Nursing Accreditation Commission (NLNAC) in July. The college did not inform its nursing students of this development until after classes had started in the fall. Carianne Baird and sixty-one other students from the program filed a breach of contract suit against Owens. An Ohio appeals court determined that a contract existed in which the students paid their fees in exchange for a degree from an NLNAC-accredited institution. By losing that accreditation, Owens breached the contract. The court also recognized the probability that this breach would harm the plaintiffs' career prospects. Therefore, _______________ _______________could be determined by measuring the difference between their future earnings capacity as graduates of an NLNAC-accredited nursing college and their future earnings capacity as graduates of now-unaccredited Owens.

value, fact, no, mistakes of value do not warrant rescission

Pablo buys a violin from Bev for $250. Although the violin is very old, neither party believes that it is valuable. Later, however, an antiques dealer informs the parties that the violin is rare and worth thousands of dollars. Here, both parties were mistaken, but the mistake is a mistake of ____________ rather than a mistake of ___________. Can Bev rescind the contract? why/why not?

absolute promise

Paloma Enterprises contracts to sell a truckload of organic produce to Joel for $10,000. The parties' promises are unconditional: Paloma will deliver the produce to Joel, and he will pay $10,000 to Paloma. The payment does not have to be made if the produce is not delivered. this is an example of

Kennedy was in violation of the restrictive covenants and The Shave had legitimate business interest in protecting itself

Patricia Kennedy worked as a master barber for The Shave, a barbershop in the Virginia-Highland neighborhood of Atlanta, Georgia. Under the terms of her employment contract, Kennedy agreed that, after leaving her employment, she would not work in the men's grooming industry "within a three (3) mile radius of any SHAVE location" for two years and would not solicit customers of The Shave for one year. Less than a month after quitting her position, Kennedy opened a new salon, "PK Does Hair," two miles from The Shave. She solicited customers through social media accounts on which she posted photos originally posted on social media by The Shave. The Shave filed a suit in a Georgia state court against Kennedy, alleging a breach of the noncompete provision of her employment contract. Kennedy argued that the geographic restriction in the noncompete provision was "unreasonable and uncertain." The court ruled in favor of the shave. Why?

equitable remedy

Sometimes, damages are an inadequate remedy for a breach of contract. In these situations, the nonbreaching party may ask the court for an ______________ _______________

past consideration

Promises made in return for actions or events that have already taken place are unenforceable. These promises lack consideration in that the element of bargained-for exchange is missing. In short, you can bargain for something to take place now or in the future but not for something that has already taken place. Therefore, _____________________ is no consideration.

dispute resolution

Provisions relating to dispute settlement, such as an arbitration clause.

market prices

Quite often, an anticipatory repudiation occurs when performance of the contract would be extremely unfavorable to one of the parties because of a sharp fluctuation in ___________ __________

extent admitted, admissions

Rachel, the president of Bistro Corporation, admits under oath that an oral agreement was made with Commercial Kitchens, Inc., to buy certain equipment for $10,000. A court will enforce the agreement only to the ____________ ____________ , even if Commercial Kitchens claims that the agreement involved $20,000 worth of equipment. This is an example of

1,000, find another job

Randall contracts to perform certain services exclusively for Hernandez during the month of March for $4,000. Hernandez cancels the contract and is in breach. Randall is able to find another job during March but can earn only $3,000. He can sue Hernandez for breach and recover $_____________ as compensatory damages. Randall can also recover from Hernandez the amount that he spent to __________ ____________ ___________

has not

Ray offers to buy Fran's digital pen for $100. Fran responds, "Is that your best offer?" A reasonable person would conclude that Fran has/has not rejected the offer

performance to the satisfaction of another

Reasonable Person Standard: for most contracts, unless contract explicitly states third party approval.

Conditions Precedent

Restoration Motors offers to buy Charlie's 1959 Thunderbird only if an expert appraiser estimates that it can be restored for less than a certain price. Thus, the parties' obligations are conditioned on the outcome of the appraisal. If the condition is not satisfied—that is, if the appraiser deems the cost to be significantly above the specified price—their obligations are discharged. This is an example of

unlikely, he has exhibited an intent to deceive

Richard applies for a position as a business law professor two weeks after his release from prison. On his résumé, he lies and says that he was a corporate president for fourteen years and taught business law at another college. After he is hired, his probation officer alerts the school to Richard's criminal history. The school immediately fires him. If Richard sues the school for breach of his employment contract, he is likely / unlikely to succeed. why?

the contract could have been performed in one year

Robert and Lynette Knigge owned a B&L Food Store in Redfield, South Dakota. When Robert was diagnosed with brain cancer and given five months to live, he entered into an oral contract with his brother, David, to manage the store. Robert died five months after the date of the contract. Lynette terminated David's employment two months later. David filed a suit in a South Dakota state court against his sister-in-law. He claimed that, under his oral contract with Robert, he was entitled to a severance payment if he lost the job at the store. A state court dismissed David's suit, but the South Dakota Supreme Court reversed and remanded. Why were they able to do this?

discharged, illegal therefore impossible

Russo contracts with Playlist, Inc., to create a website through which users can post and share movies, music, and other forms of digital entertainment. Russo commences the work. Before the site is operational, however, Congress passes the No Online Piracy in Entertainment (NOPE) Act. The NOPE Act makes it illegal to operate a website on which copyrighted works are posted without the copyright owners' consent. can the contract be enforced or is it discharged? why/why not

accord

Shea obtains a judgment of $8,000 against Marla. Later, both parties agree that the judgment can be satisfied by Marla's transfer of her automobile to Shea. This agreement to accept the auto in lieu of $8,000 in cash is the ________________

cannot

Skylar contracts orally to sell his property in Fair Oaks to Beth. If he later decides not to sell, under most circumstances, Beth can / cannot enforce the contract.

counteroffer, performance

Sonja Brown made a written offer to Lagrange Development to buy a particular house for $79,900. Lagrange's executive director, Terry Glazer, penciled in modifications to the offer—an increased purchase price of $84,200 and a later date for acceptance. Glazer initialed the changes and signed the document. Brown initialed the date change but not the price increase, and did not sign the revised contract. Nevertheless, Brown went through with the sale and received ownership of the property. When a dispute later arose as to the purchase price, a court found that Glazer's modification of the terms had constituted a __________________, which Brown had accepted by ______________. Therefore, the contract was enforceable for the modified price of $84,200.

sales contracts

Special exceptions to the applicability of the Statute of Frauds exist for ____________ ____________

marriage, armed services, misrepresent

State courts and legislatures have carved out several exceptions to the minor's right to disaffirm. Some contracts, such as _________________ contracts and contracts to enlist in the ___________________, cannot be avoided. These exceptions are made for reasons of public policy. Also, a growing number of states have enacted laws to prohibit disaffirmance when minors ___________________ their age

member of a protected class

Statutes prohibit certain employees (such as flight attendants or pilots) from working more than a specified number of hours per month. An employee who is required to work more than the maximum can recover for those extra hours of service. This is because they are a _____________________________

browse wrap terms

Terms or conditions of use presented when an online buyer downloads a product but to which the buyer does not have to agree before installing or using the product.

no, material breach of contract

The Yuma County (Arizona) Airport Authority (YCAA) leased commercial space to Lux Air for the purpose of refuelling airplanes. On September 4, YCAA sent Lux Air a letter warning that certain outstanding debts must be covered by October 1 or YCAA would "exercise all of its remedies" under the lease agreement. Lux Air acknowledged receipt of the letter but failed to pay rent on October 1, as required. Three weeks later, YCAA evicted Lux Air. Lux Air sued YCAA for breach of contract. In Arizona, a landlord may terminate a lease only if there has been a material breach by the tenant. Lux Air claimed that its breach was not material because YCAA, in the September 4 letter, did not clearly state the consequences of failure to pay rent. Should the courts allow the eviction? why/why not?

measure of damages

The _____________ ________ _____________ is the cost to bring the object of the contract into compliance with its terms, if that cost is reasonable under the circumstances. If the cost is unreasonable, the measure of damages is the difference in value between the performance that was rendered and the performance that would have been rendered if the contract had been performed completely

unequivocal acceptance

The acceptance cannot impose new conditions on—or change the terms of—the original offer.

ratification

The acceptance or confirmation of an act or agreement that gives legal force to an obligation that previously was not enforceable.

performed in good faith, performance can't vary greatly from the performance promised, performance creates substantially same benefits as promised

The basic requirements for performance to qualify as substantial performance are as follows:

discharge by performance

The contract comes to an end when both parties fulfill their respective duties by performing the acts they have promised

timely

The general rule is that acceptance in a bilateral contract is ____________ if it is made before the offer is terminated.

illusory promise

The president of Tuscan Corporation says to his employees, "All of you have worked hard, and if profits remain high, a 10 percent bonus at the end of the year will be given—if management thinks it is warranted." This is a/an ____________________, because performance depends solely on the discretion of the president (the management). There is no bargained-for consideration. The statement declares merely that management may or may not do something in the future.

material alteration of contract

The law allows an innocent party to be discharged when the other party has materially altered a written contract without consent (change prices etc)

construction contracts

The measure of damages in a building or construction contract depends on which party breaches and when the breach occurs

2-3, 4-5

The period for bringing lawsuits for breach of oral contracts is usually ________-________ years and for written contracts, ______-______ years

Unforeseen Difficulties

The preexisting duty rule is intended to prevent extortion and the so-called holdup game. Nonetheless, if, during performance of a contract, _______________________ arise that were totally unforeseen at the time the contract was formed, a court may allow an exception to the rule.

discharge

The termination of an obligation. In contract law, discharge occurs when the parties have fully performed their contractual obligations or when events, conduct of the parties, or operation of law releases the parties from performance. In bankruptcy proceedings law, the termination of a debtor's obligation to pay their debts.

mitigation of damages

The requirement that a plaintiff do whatever is reasonable to minimize the damages caused by the defendant's breach of contract.

previous valid obligation, agreement by all of the parties to a new contract, discharge of the prior party, new, valid contract.

The requirements of a novation are:

tolling provisions

The statute of limitations is tolled when the running of time period is suspended by the law until some event takes place (e.g., if it is a minor who has to bring suit, the time limit is generally postponed till she/he reaches the age of majority)

novation

The substitution, by agreement, of a new contract for an old one, with the rights under the old one being terminated. substitutes a third party for one of the original parties

assignment

The transfer of a contractual right to a third party

delegation

The transfer of contractual duties to a third party is known as a

party dies, specific subject matter destroyed, change in law renders performance illegal

Three basic types of situations may qualify as grounds for the discharge of contractual obligations based on impossibility of performance

unilateral

promise for an act. the action makes it binding

UETA

To remove barriers to e- commerce by giving the same legal effect to electronic records and signatures as given to paper documents and signatures

novation

Union Corporation contracts to sell its pharmaceutical division to British Pharmaceuticals, Ltd. Before the transfer is completed, Union, British Pharmaceuticals, and a third company, Otis Chemicals, execute a new agreement to transfer all of British Pharmaceuticals' rights and duties in the transaction to Otis Chemicals. As long as the new contract is supported by consideration, the ______________ will discharge the original contract (between Union and British Pharmaceuticals) and replace it with the new contract (between Union and Otis Chemicals).

ratified

What constitutes a "reasonable" time may vary. If an individual fails to disaffirm an executed contract within a reasonable time after reaching the age of majority, a court will likely hold that the contract has been ________________

specific performance

When a contract has been partially performed and the parties cannot be returned to their positions prior to the contract's formation, a court may grant ______________ _____________. It is an equitable remedy that requires that a contract be performed according to its precise terms. The parties still must prove that an oral contract existed, of course

complete performance

When a party performs exactly as agreed, there is no question as to whether the contract has been performed

members of protected classes

When a statute is clearly designed to protect a certain class of people, a member of that class can enforce a contract in violation of the statute even though the other party cannot.

nominal damages

When no actual damage or financial loss results from a breach of contract and only a technical injury is involved, the court may award _____________ _____________to the innocent party. They are often small, such as one dollar, but they do establish that the defendant acted wrongfully. Most are brought as a matter of principle under the theory that a breach has occurred and some damages must be imposed regardless of actual loss

yes

When two persons place an illegal bet on the outcome of a boxing match, can either withdraw from the wager?

protect the public

Whether a contract with an unlicensed person is legal and enforceable depends on the purpose of the statute. If the purpose is to _________ _______ _________ from unauthorized practitioners, then a contract involving an unlicensed practitioner is generally illegal and unenforceable

B

Which is true about quasi- contracts? A.It's both express and implied B.It's legal fiction C.It's not an equitable remedy D.None of the above

voidable, valid

Without court, minor incompetent when contract formed, then _______________. Contract ___________ if capacity present when contract formed

adequacy of consideration

______________ _______ _____________ involves how much consideration is given. This is where courts look at what a reasonable person would do or think

statute of frauds

_________ _______ _________ defends enforcement of oral contract for land sale

voluntary consent

_________ _________ may be lacking because of mistake, fraudulent misrepresentation, undue influence, or duress.

quasi- contractual recovery

____________ _____________ _____________ is often granted when one party has partially performed under a contract that is unenforceable

court

____________ determines mental incompetence

substitution method of acceptance, dispatch

______________________ is where the offeror authorizes a particular method of acceptance, but the offeree accepts by a different means. In that situation, the acceptance may still be effective if the method serves the same purpose as the authorized means. Acceptance is not effective on _____________, though. No contract will be formed until the acceptance is received by the offeror.

void

a ____________ contract is where no contract exists, or there is a contract without legal obligations

voidable

a _____________ contract is valid, but any party can ratify or relocate at any time

enforceable

a _______________ contract is a valid contract that can be enforced because there are n legal defenses against it

valid

a contract that has the necessary contractual elements: agreement, consideration, legal capacity of the parties, and legal purpose

$500

sale of goods above _____________ requires writing UCC

lease

an example of a voidable contract would be a _____________

promissory estoppel

an oral promise can be enforceable, notwithstanding the Statute of Frauds, if the promisee has justifiably relied on the promise to the promisee's detriment. The promisee's reliance must have been foreseeable to the person making the promise, and enforcing the promise must be the only way to avoid injustice

material, damages

anticipatory repudiation is a ________________ breach and non breaching party is able to get ________________

statement of opinion

are generally not subject to claims of fraud. Statements such as "This land will be worth twice as much next year" and "This car will last for years and years"

consideration

both parties benefit

material

breach is __________________ when performance is not at least substantial. Urgent and affects the other party greatly

cosign

businesses require parents to ___________ for liability

clean leaf energy vs invenergy

case example of the objective theory of contracts (in a contract that stated invenergy couldn't sell a large portion of their company without leaf's consent, but they did anyway. leaf sued and won

lapse of time, destruction of the subject matter, death or incompetence of the offeror or offeree, illegality

circumstances of termination by operation of law

bring a suit directly against a promisor

classic case : The case involved three parties—Holly, Lawrence, and Fox. Holly had borrowed $300 from Lawrence. Shortly thereafter, Holly loaned $300 to Fox, who in return promised Holly that he would pay Holly's debt to Lawrence on the following day. When Lawrence failed to obtain the $300 from Fox, he sued Fox to recover the funds. The court had to decide whether Lawrence could sue Fox directly (rather than suing Holly). The court held that when "a promise [is] made for the benefit of another, he for whose benefit it is made may bring an action for its breach." therefore, that gave third party beneficiaries the right to _________ ________ _________ ________ _________ __________ ___________

pain and suffering, time out of work

consequential damages account for __________________ and ______________

profits they would have made

construction contracts: If the owner breaches before performance has begun, the contractor can recover only the _____________ _________ _______ _______ _________

severable or divisible contracts

contract performance can be completed in parts or whole

remedial costs

costs incurred to fix the problem

do not violate public policy, reasonable, do not protect parties from paying damages for intentional misconduct

courts can enforce exculpatory clauses if:

unconscionability, public policy

courts dismiss exculpatory clauses due to ________________ if they violate _______________ _____________ (rental agreements/employment)

reform

courts only _____________ contracts to prevent undue burdens or hardships

material alteration of contract, statutes of limitations, bankruptcy, impossibility of performance, commercial impracticability, frustration of purpose

discharge by operation of law

misrepresentation of material fact, intent to deceive present, innocent party justifiably reliant on misrepresentation, party must harmed to collect damages

elements of fraudulent misrepresentation

in pari delecto

equally guilty (both parties at fault)

waiver

erases past breach contract continues as if breach never happened

main purpose rule

exception to a Statute of Frauds provision making a third party liable for an oral promise to pay another's debt if the main purpose of the promise serves the promisor's own interest

partial performance, admissions, promissory estoppel, special exceptions under UCC (sales contracts)

exceptions to the statute of frauds

contract price and market price

for the sale of goods, compensatory damages are the difference between _______________ and ____________

punitive damages

generally are not awarded in lawsuits for breach of contract. Because they are designed to punish the wrongdoer and set an example to deter similar conduct in the future, they have no legitimate place in contract law more for tort, negligence, fraud

liquidative damages

if you breach, you pay even if damages are more than what was stated in the contract, only have to pay what the contract called for

unilateral

if you mow my lawn, I will give you $20 is an example of a ____________ contract

unenforceable

illegal contracts are _________________

is not, is

in a unilateral contract, communication of acceptance is/is not necessary in a bilateral contract, communication of acceptance is/is not

quantity, intentions, sought

in contracts for the sale of goods, you only need to specify ________________ term. Both parties' __________________ must be reflected. and it must be signed by party against whom enforcement is ________________

yes, determining damages would be difficult if not impossible

in the KENT STATE UNIVERSITY V. FORD case, was the liquidated damages enforceable? why?

writing

in the Lucy vs Zehmer case, Lucy won because the offer made was complete and in ________________ signed by both husband and wife

Yes, he accepted the contract by buying the ticket

in the case of Bailey V Kentucky Lottery Corp., did Brett Bailey accept the letters online contract terms and was he bound by those terms? Explain

consequential, damages were reason ably foreseeable

in the case of HDAV Outdoor LLC Vs. Red Square Holdings , LLC the damages are __________________. why?

bargained for consideration

in the case of Rachel Thomas who had issues with her insurance during her pregnancy and the Doctor promised to contact the insurer, the court ruled in favor of the doctor because they found that there was no evidence that the doctor sought any consideration of the doctor's promise. thus, there was no __________ ______ _____________

soil, buildings, fences, trees

land includes

contracts to commit a crime, usery, gambling, licensing statutes for certain professions

legality: contracts contrary to statute

statutes of limitations

limit the period during which a party can sue on a particular cause of action. After the applicable limitations period has passed, a suit can no longer be brought

assignment of all rights

may create both an assignment of rights and a delegation of duties

all , benefits

noncompete enforceability laws vary state by state california prohibits __________ noncompete covenants Texas only considers it if the employee receives ______________

Unconscionability

not illegal, but burdensome that the court wants o relieve the group affected

express ratification

occurs when the individual, on reaching the age of majority, states orally or in writing an intention to be bound by the contract

E-contract

offers clearly spelled out terms that govern transactions Ex: When Lauren downloads an app on her smartphone, she has to select "I agree" several times to the terms and conditions under which she will use the software. After she agrees to these terms (the licensing agreement), she can use the application.

Procedural Unconscionability

often involves inconspicuous print, unintelligible language ("legalese"), or the lack of an opportunity to read the contract or ask questions about its meaning. This type of unconscionability typically arises when a party's lack of knowledge or understanding of the contract terms deprives the party of any meaningful choice this type of situation often involves an adhesion contract

compensation

omission, variance, or defect in performance is considered minor if it can easily be remedied by __________________ (monetary damages).

implied

on a construction project, Hopkins and Lamar often made slight changes to the job without updating the contract. One day, Hopkins asked Lamar to use durable blocks instead of cinder, but did not change the contract in writing. The durable blocks ended up being more expensive than the cinder, and Hopkins wouldn't pay the difference because it wasn't in the contract. Lamar sued and won because in this case, the two companies had a/an _________________ contract

Substantive Unconscionability

oppressive or harsh provisions of a contract

necessaries

parents are legally required to provide ___________________

objective impossibility

performance cannot be done by anyone; generally discharges the promisor

bilateral

promise for a promise

function of contracts

provide the essential conditions for the existence of a market economy

liquidated damages

provision in a contract specifies that a certain dollar amount is to be paid in the event of a future default or breach of contract. (means determined, settled, or fixed.)

t

t/f: The risks that prices will fluctuate and values will change are ordinary business risks for which the law does not provide relief.

t

t/f: a contract must be valid for it to be enforceable

Necessaries

required to maintain a standard of living, such as food, shelter, clothing, and medical attention.

agreement, consideration, contractual capacity, legality

requirements of a valid contract

definite promise, promisor should have expected that the promisee would rely on the promise, promisee reasonably relied on the promise by acting or refraining from some act, promisee's reliance resulted in substantial detriment, Enforcement of the promise is necessary to avoid injustice

requirements of promissory estoppel

yes, the act wasn't completed

seiko agrees to buy bob's boat if bob drives it from sf to Newport. bob sets sail, but before he makes it to Newport, seiko backs out of the deal. in this case, was the revocation of the unilateral contract valid? why?

rare

silence as acceptance is ________

common law, uniform commercial code

sources of contract law

section 2-204 of the UCC

states that any contract for the sale of goods "may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract."

restatement of contracts

states that parties may agree to a contract "by written or spoken words or by other action or by failure to act."

land, performance requiring more than a year, collateral or secondary contracts, marriage, sale of goods above $500

statute of frauds that require writing

Any confirmation, Invoice, Sales slip, Check, Fax, Email, combination

sufficiency of the writing or electronic record

t

t/f A collateral promise normally must be in writing to be enforceable.

f

t/f Courts always permit avoiding contracts due to intoxications.

t

t/f The essential feature of undue influence is that the party being taken advantage of does not exercise free will in entering a contract

f

t/f parents are liable for contracts made by minor acting on their own

t

t/f since it is difficult to prove impaired judgement causing misunderstanding, courts rarely permit avoiding contracts due to intoxication

t

t/f: A unilateral promise to make a monetary payment or to give property in consideration of marriage must be in writing.

t

t/f: Most courts do not require a showing of harm in an action to rescind a contract

t

t/f: Substantial performance allows a party to enforce a contract even though they technically breached it. This protects the breaching party who is very close to complete performance so that they're still compensated.

f

t/f: The doctrine of commercial impracticability provides relief from such events as ordinary price increases or easily predictable changes in the weather.

counteroffer

termination by action of the offer

Revocation

termination by action of the offeror

definite

terms of an offer must be reasonable certain or ______________ so that parties and court can ascertain terms of contract

UCC

the ______________ incorporates unconscionability in provisions

legality

the contract must be for a lawful purpose (will be void if it's an illegal request

bargained-for exchange

the element of consideration that it must provide the basis for the bargain struck between the contracting parties. The item of value must be given or promised by the promisor (offeror) in return for the promisee's promise or performance. distinguishes contracts from gifts

contractual capacity

the legal ability to enter into a contractual relationship (kids, mentally incapacitated, coerced people do not have)

subjective impossibility

the promisor - but not all promisors - cannot perform; does not discharge the promisor

recission

the unmaking of a contract so as to return the parties to the positions they occupied before the contract was made

legally sufficient value, bargained for exchange, adequacy of consideration

three parts to consideration

bilateral, unilateral, informal, formal, express, implied

types of contracts

compensatory, consequential, punitive, nominal

types of damages

click on, shrink wrap, browse wrap terms

types of online acceptances

unenforceable

under a _______________ contract, you can't hold the other side responsible

The other party to the contract knows or should have known that a mistake of fact was made, and the error was due to a substantial mathematical mistake

what are the two exceptions that make a unilateral mistake unenforceable?

identification of parties, identification of the object or subject matter of the contract (and quantity), work to be performed, identification of goods, services, and land, consideration to be paid, time of payment, delivery, or performance

what makes the definiteness of an offer?

Essential terms, Voluntary agreement, Specified quantity of goods (UCC), Signatures of party being enforced, Parties' names, Subject matter, Consideration, Price for land and clear description of real property

what must be included in a written contracts?

Acceptance of terms, Payment, Return policy, Disclaimer, Limitation on remedies, Privacy policy, Dispute resolution, Forum-selection clause, Choice-of-law clause

when displaying the offer online, the provisions to include would be:

agreement to agree to the material terms of a contract in future, if both parties intend to be bound by the agreement, emphasis on the parties' intent rather than on form

when is there an agreement to agree

opinion, future intent, certain preliminary negotiations, Invitations to bid, Advertisements and price lists, auctions

when might intent be lacking?

bilateral

you bring the phone and I'll bring the money is a ___________ contract

revocation

• Express repudiation of the offer • Performance of acts that are inconsistent with the existence of the offer, and are made known to the offeree • Option contract