BLAW Exam 3

undue influence

unfair persuasion of a person by a party in a dominant position based on a confidential relationship law very carefully scrutinizes contracts between those in relationship of trust and confidence that is likely to permit one party to take unfair advantage of the other relationship: guardian-ward, trustee-beneficiary, agent-principal, spouses - parent child,

authorized means

when the language in the offer or the circumstances do not otherwise indicate, an offer to make a contract shall be construed as authorizing acceptance in any reasonable manner authorized means is usually any reasonable means of communication

uniform written obligations acts

written promise will be enforceable absent consideration if it "contains an additional express statement... that the signer intents to be legally bound - only in PA

basis of the bargain

- If statements, promises, descriptions, samples, or models are part of the buyer's assumption underlying the sale, reliance by the buyer is presumed. - Statements or promises made by the seller subsequent to the sale may become express warranties.

tort reform

More than half of the states have limited the punitive damages that a plaintiff can collect in a product liability lawsuit.

unenforceable contract

- if breached, law provides no remedy statute of frauds

intent

- to have legal effect, an offer must manifest an intent to enter into a contract - intent of an offer is determined objectively from the words or conduct or the parties - beware of jokes, excited utterances, and invitations for offers (based upon what a reasonable person in the other party's position would have believed)

types of warranties

- warranty of title - express warranty - implied warranty

firm offers under the UCC

- written promise not to revoke an offer for a specified period of time - merchant is bound to keep an offer to buy or sell goods open for a stated period not exceeding three months if the merchant gives assurance in a signed writing that the offer will be held open - enforceable even if not consideration is given to the offeror for that promise

Lefkowitz v. Great Minneapolis Surplus Store

Advertisement listed rabbit furs for a $1.00. First come, first serve. RULE: an advertiser has the right to modify its offer. HOWEVER, it does not have the right to impose new conditions AFTER a party has already accepted - binding contract, he successfully sued the store - sues store for breach of contract (they say they only sell fur to women)

violations of public policy

Agreements having a tendency to be injurious to the public or the public good are contrary to public policy.

corrupting public officials

Agreements that may adversely affect the public interest through the corruption of public officials or the impairment of the legislative process are unenforceable.

gambling statutes

All states have legislation on gambling or wagering. Courts generally refuse to recognize the enforceability of a gambling agreement. Some states have regulated gambling. - Lottery - Horseracing - Casinos

Illegal Bargains

An essential requirement of a binding promise or agreement is legality of objective. When the formation or performance of an agreement is criminal, tortious, or otherwise contrary to public policy, the agreement is illegal and unenforceable.

plaintiff's conduct

Contributory negligence of the buyer is no defense to an action against the seller for breach of warranty. Voluntary Assumption of Risk -If the buyer discovers a defect in the goods that may cause injury and nevertheless proceeds to make use of them, he will not be permitted to recover damages from the seller for loss or injuries caused by such use.

bargained for exchange

Each party intentionally gives the other party something in a mutually agreed-upon exchange for his promise or performance.

In RE L.B. trucking, inc.

Facts • Durham owns a farm and he met with Thomas from Southern States Cooperative about the application of herbicides to the Dunham's fields • Durham relied on Thomas's advice on which herbicide to use • The applicator for Southern States Cooperative used the wrong chemical and several weeds had survived • Southern States attempted to fix it, but the harvest was still not good • Durham's filed for bankruptcy and Southern States tried to bring a claim against the estate to collect payment for the services • The trustee for the estate brought counterclaims for negligence and breach of warranties in the application of herbicides that damaged the Durham's crop Decision • Judgment for the trustee (Durhams win) Interpretation • They breached both express and implied warranties • In a contract for a sale of goods, it is possible to breach multiple warranties

Hamer v. Sidway

Facts: A man promised his nephew that if he stopped drinking, smoking, and gambling until he was 21 that he would pay him $5000. When the nephew completed this agreement the uncle told him that he would hold onto the money and let it collect interest. When the uncle died Sidway, the executor to the uncles estate would not pay the money to Hamer, who now own the claim to the money, under the fact that he did not have consideration. Issue: did the original agreement show any consideration. in a agreement one must give up something. Decision: the court ruled in favor of Hamer because the legal rights given up by the nephew are enough to satisfy consideration.

I send you a letter offering to sell you my computer for $1,000. Before the letter arrives, you send me a letter offering to buy my computer for $1,000. My letter reaches you, and your letter reaches me, on the same day. Do we have a contract?

No contract

I say, "I want to sell my house." You say, "I want to buy it." Do we have a contract?

No, because details matter and not mutual assent`

Prior to the game, a student foolishly made a bet with me that the wolverines would beat the Nittany lions. the student agreed to pay me 25 if the nittany lions won, and I agreed to pay the student 25 in the highly unlikely event that the nittany lions lost. Do we have a contract?

No, because you cannot sports bet (must be legal)

effect of fault upon mistake

One who assents to a writing is presumed to know its contents and cannot escape being bound by its terms merely by contending that she did not read them. --Her assent is meant to cover unknown and known terms.

I own a paper company, and I have had a very bad day. I say to you, my top salesperson, "I offer you this entire business for 25." you say, "I accept your offer." do we have a contract?

No, not mutual assent

I send you an unsolicited email offering to sell you my Saquon Barkley autographed jersey for $400 and stating that if I do not hear from you by Thursday, I am assuming that you have accepted my offer. You read the email and delete it. I don't hear from you by Thursday. Do we have a contract?

No, silence is not a valid acceptance

defective condition

Plaintiff must prove a defective condition in the product. Plaintiff must show that, at the time she was injured, the condition of the product was not substantially changed from the condition in which the manufacturer or seller sold it.

Montz v. Pilgrim Films & Television, Inc.

Plaintiff pitched idea to NBC and was rejected -> NBC created Ghost Hunters -> sued for breach of implied-in-fact contract to pay for the use of the reality show concept "as a result of cases like Montz, some firms are wary of accepting unsolicited product ideas unless a clearly defined contractual relationship exists"

voluntary assumption of risk

Plaintiff's express or implied consent to encounter a know danger. defendant must show that: - plaintiff actually knew and appreciated the particular risk or danger the defect created - plaintiff voluntarily encountered the risk while realizing the danger - plaintiff's decision to encounter the known risk

procedural v. substantive

Procedural Unconscionability - Was the negotiation process fair? - Fine print or legal jargon Substantive Unconscionability - Courts examine the actual terms of the contract for oppressive or grossly unfair provisions - Exorbitant prices or limitations on contractual remedies

Klein v. Pyrodyne Corporation

Pyrodyne Corp was hired to do a fireworks display, a mortar fell over and was fired into the crowd injuring 3 people, including Klein. (Strict Liability, all of the elements created strict liability for pyrodyne corp)

Article 2 of the Uniform Commercial Code

Sale of personal property (goods) - sale consists of the transfer of title to goods from seller to buyer for a price - goods are tangible personal property

description, sample, and model

Seller can create an express warranty by use of a description of the goods that becomes a part of the basis of the bargain. -Seller expressly warrants that the goods shall conform to the description. When a sample or model is a part of the basis of the bargain, the seller expressly warrants that the goods sold shall conform to the sample or model. -Sample is a good that is actually drawn from the bulk of goods that is the subject matter of the sale. (ex: sampling ice cream) -Model is offered for inspection when the subject matter is not at hand; it is not drawn from the bulk.

plaintiff's conduct

Seller cannot defend a strict liability lawsuit on the basis of a plaintiff's negligent failure to discover a defect or to guard against its possibility. In comparative negligence states, damages may be apportioned.

definiteness

The terms of a contract, all of which offer usually contains, must be reasonable certain so as to provide a court with a basis of determining the existence of breach and for living an appropriate remedy - the more terms that the parties leave open, the less likely it is that they intended to form a contract most important material term: quantity

Sheriff example where Jesse James robs the town's bank and Wyatt posts a notice saying "Wanted Dead or Alive - reward $5,000" and the next day you find Jesse James and kill him, was there a contract?

This is NOT a contract can only enter into contracts if its legal

misrepresentation of fact

To constitute fraud, there must be a misrepresentation of a fact. - Fact is an event that actually took place or a thing that actually exists. Actionable fraud can rarely be based on a statement of opinion. - Opinion expresses only the uncertain belief of the representer as to the existence of a fact or his judgment as to quality, value, authenticity, or other matters of judgment - Not fraud. - Sales puffery refers to exaggerations and commendations of products offered for sale - Not fraud. - Relief may be granted to individuals who have sustained loss due to reasonable reliance on expert evaluation. - Predictions are not normally regarded as factual statements. - Promissory statements ordinarily do not constitute a basis for fraud because a breach of a promise does not necessarily indicate that the promise was fraudulently made. -- A promise that the promisor, at the time of making, had no intention of keeping is a misrepresentation of fact.

knowledge of falsity and intention to deceive

To establish fraud, the misrepresentation must have been known by the one making it to be false and must be made with an intent to deceive. This element of fraud is known as scienter. Knew it was a lie or should have known it was a lie knowledge of falsity can consist of: - actual knowledge - lack of belief in the statement's truthfulness - reckless indifference as to its truthfulness

effect of illegality

Unenforceability - neither party may recover under an illegal agreement where both parties are in equal fault. Exceptions - permit one party to recover payments - Party Withdrawing Before Performance - Party Protected by Statute - Party Not Equally at Fault - Excusable Ignorance - Partial Illegality

improper threats

Use of improper threats or acts to compel a person to enter into a contract is illegal. Threat may be explicit or may be inferred from words or conduct. It must leave the victim with no reasonable alternative. The agreement is voidable at the option of the coerced party. Test is subjective - Did the threat actually induce assent on the part of the person claiming to be the victim of duress? Acts need not be criminal or tortious to be wrongful - simply contrary to public policy or morally reprehensible.

I say, "I am selling my car for $10,000." You say, "I will buy it. Here's a check for $10,000." Do we have a contract?

Yes because you have written a check - consideration (payment or performance)

I say to you, "If you paint my house on Saturday, I will pay you 1,000." You don't respond, but on Saturday, you come by, and paint my house. Do we have a contract?

Yes this is a contract - valid offer without saying a word (actions speak louder than words)

I send you a letter on Tuesday offering to sell you my motorcycle for 2,000 giving you until Saturday to accept or reject my offer. The letter reaches you on Wednesday. On SUNDAY, I am killed in an auto accident. On MONDAY, not knowing that I have died, you deposit in a mailbox a letter that indicates acceptance of my offer. is there a contract?

Yes, this is a binding contract because the person was still alive whenever the it was received to the other person

output contract

agreement of a buyer to purchase a seller's entire output for a stated period ex: GMC and michelin got into a contract, and GMC promised to buy all the tires they make, now anyone who wants Michelin tires has to go to GMC

requirements contract

agreement of a seller to supply a buyer with all their requirements for certain goods ex: Hilton hotels and carpet company

Statutory Irrevocability

certain offers are made irrevocable by statute

contributory negligence (the south)

conduct on the part of the plaintiff that is a contributing cause of injuries; a complete bar to recovery of damages. - contributory negligence jurisdiction (in the south): if they find that the plaintiff even has 1% of fault, the defendant pays nothing

legal sufficiency

consideration for the promise must be either a legal detriment to the promisee or a legal benefit to the promisor

destruction of subject matter

destruction of the specific subject matter of an offer terminates the offer

subsequent alteration

liability exists only if the product reaches the user or consumer without substantial change in the condition in which it is sold

mistake in the meaning of terms

no manifestation of mutual assent in cases in which the parties attach materially different meanings to their manifestations and neither party knows or has reason to know the meaning attached to the other if blame can be ascribed to either party, that party will be held responsible if neither party is to blame or both are to blame, there is not contract; the agreement is void

quasi contract - contract implied in law definition:

obligation, not a contract, that is imposed to avoid injustice

promissory estoppel requirements

promise made under circumstances that should lead the promisor reasonably to expect that the promise would induce the promisee to take definite and substantial action, and the promisee does take such action

contracts without consideration

promises to perform prior unenforceable obligations

revenue license

- does not seek to protect against incompetent or unqualified practitioners but serves simply to raise money - cosmetologists - agreements for unlicensed services are enforceable

Anderson v. McOskar Enterprises, Inc.

- fitness center - women went in on her first day to this fitness center and signed a membership agreement - exculpatory clause listed right in the membership agreement - 10 min later she suffers from serious injuries - she sues fitness center for negligence - the fitness center won because the women had signed the exculpatory clause and it was conspicuous

Sherrod v. Kidd (Duration of Offers)

- Kidd's dog bit Sherrod (child) - Sherrod's GAL made claim - Kidd's offer settlement of 31,843 - Arbitrator awarded 15,000 - Sherrod's GAL accepted Kidd's offer one year later - Court said offer hadn't been withdrawn - Supreme court said offer expired when arbitrator announced the award - Trial Judge's decision REVERSED

Steinberg v. Chicago Medical School

- Steinberg applied to school, paid application $, was rejected - Steinberg claimed: school did not evaluate his application according to brochure criteria, therefore breached contract it created when it accepted his application $ - looking for applicant from wealthy families Court held: - Steinberg & school entered into enforceable contract, & accepting Steinberg's application fee bound the school to fulfill its promise (in brochure) - An agreement meeting all of the requirements of a contract is binding & legally enforceable

Denney v. Reppert (Preexisting Obligation)

- The sole question presented in this case is which of several claimants is entitled to an award for information leading to the apprehension and conviction of certain bank robbers. - Multiple people wanted reward. - Employees of bank -> performed a duty to the bank and the public, for which they cannot claim a reward. - Certain random witnesses who did not comply with terms -> a claimant of a reward must comply with the terms and conditions of the offer of reward. - Police Officers -> it was the duty of the state policemen to apprehend the criminals. Under the law they cannot claim or share in the reward and they are interposing no claim to it - Tilford Reppert -> the only claimant qualified and eligible to receive the reward. (off duty police for another county) - Judgment of the circuit court = he is entitled to receive payment of the $1,500.00 reward. - The judgment is affirmed.

Payroll Advance, Inc. v. Yates

- Yates worked for Payroll Advance - Yates was fired and then started working for a competitor - Payroll sued her breach of contract - agreed to not work for a competitor for a year in the agreement or within 50 miles of any Payroll location - meant she couldn't work in 126 cities in the US - Payroll never defined the competition in the contract

implied warranty of fitness for particular purpose

- applies to ANY seller, whether they are a merchant or not - arises if at the time of contracting the seller had reason to know the buyer's particular purpose and to know that the buyer was relying on the seller's skill and judgment to select suitable goods - specific purpose not ordinary purpose ex: asking for snow ski's the the store selling you water ski's

notice of breach of warranty

- buyers are required to notify the seller of any breach of warranty, express, or implied, as well as any other breach, within a reasonable time after they have discovered the breach or should have discovered it

examples of abnormally dangerous activities

- collecting water or sewage - storing explosives or flammable liquids - blasting or pile driving - crop dusting - drilling for oil - emitting noxious gasses or fumes into community

third parties

- consideration to support a promise may be given to a person other than the promisor if the promisor bargains for that exchange - consideration may be given by some person other than the promisee

bilateral contract

- contract is formed by an exchange of promises - each party is under a duty to the other (promisor, promisee) - (two promises) when unclear, courts presume a bilateral contract

express assumption of risk (words)

- contract, terms must be clear and unequivocal - written agreement, express oral agreement, or conduct that creates an implied-in-fact contract

common law

- contracts are primarily governed by state common law - everything outside the scope of the UCC - employment contracts, service contracts, insurance contracts, contracts involving real property, and contracts for the sale of intangibles such as patents and copyrights

voidable contract

- defective, but the law permits one or more of the parties to avoid the legal duties the contract creates (you have the option to void the contract) - if contract is voided, both parties no longer have legal duties under the agreement

regulatory license

- designed to protect the public from unqualified practitioners - doctors, lawyers, construction - person cannot recover for professional services unless they have the required license

void contract

- does not meet all of the requirements of a binding contract - no contract - no legal effect (no choice)

Bourton v. Byers

- law professor - dad offers her to quit her job and work on the ranch, and once he dies she will own it - dad dies and gives ranch to someone else - transfers of real estate (they have nothing in writing) - she relied on her dads promise and had quit her job and work on the ranch instead - she won the case because her father made her quit her job to work on the ranch

conduct invalidating assent

- law requires that agreement be voluntary and knowing - if these requirements are not met, then the agreement is either voidable or void

strict liability

- liability based on the nature of the activity - person may be held liable for injuries they have caused even though they have not acted intentionally or negligently

unreasonably dangerous

- liability only applies if the defective product is unreasonably dangerous to the user or consumer - contains a danger beyond that which would be contemplated by the ordinary consumer who purchases it with common knowledge of its characteristics

Palumbo v. Nikirk

- mailman comes to door, as door opens dog comes out and bites the mailman - owner is not found liable

Vanegas v. American Energy Services

- man started business with only handful of employees - makes employees a promise that if he ever sells his company, he will give them 5% of the sales - sells the company - doesn't give employees 5% of the sales - its an illusory promise - employer is not obligated to do anything - but the second he sells the company, that illusory promise becomes binding - provided valid consideration

kelso v. bayer corporation

- man uses the nasal spray - had severe nasal damage for using it for 2-3 years - tried to sue them - but on box it says to not use for more than 3 days straight, if symptoms worsen see a doctor

implied warranty of merchantability

- merchant seller makes an implied warranty of merchantability of goods that are of the kind in which they deal - provides that the goods are reasonably fit for the ORDINARY purposes for which they are used

disclaimer of warranties

- must be positive, explicit, unequivocal, and conspicuous - seller cannot provide an express warranty and then disclaim express or implied warranties - warranty of title may be excluded only by specific language or certain circumstances - to exclude or modify an implied warranty of fitness for a particular purpose of the buyer, the disclaimer must be in writing and conspicuous

advertisements

- no offer when merchant announces that they have goods for sale, describes the goods and quotes prices - general advertisements are not offers because: they do not contain a promise, and they leave unexpressed many terms that would be necessary to the making of a contract - seller is not free to advertise goods at one price and then raise the price - may constitute an offer if it contains a definite promise of something in exchange for something else

implied warranties

- not found in the language of the sales (words) contract or in a specific statement or promise by the seller - arises out of the circumstances under which the parties enter into their contract and depends on factors such as type of contract or sale enter into

undisputed debts

- obligation that is not contested as to its existence of its amount - common law: payment of a lesser sum of money than is owed in consideration of a promise to discharge a fully matured, insufficient debt is legally insufficient to support the promise to discharge can't negotiate a smaller amount

disputed debts

- obligation whose existence or amount is contested - promise to settle a validly disputed claim in exchange for an agreed payment or other performance is supported by consideration

revocation

- offer generally may cancel or revoke an offer at any time prior to it acceptance - notice may be given by any means of communication and effectively terminates the offer when received by the offeree - offer made to the general public is revoked only by giving the revocation publicity equivalent to that given to the offer

communication

- offeree must know about the offer - offeror must communicate the offer in an intended manner - offer need not be communicated by words - offer may be made to the general public

lapse of time

- offeror may specify the time within which the offer is to be accepted - if the offer does not state the time within which the offeree may accept, the offer will terminate after a reasonable time

unilateral contract

- only one of the parties has made a promise - results from the exchange of a promise either for performing an act or from refraining from doing an act

sources of express warranties

- oral representations - contracts - catalogs - brochures - blueprints - product manuals - packaging and labels

mutual assent

- parties typically demonstrate mutual assent via an OFFER and ACCEPTANCE - one party makes a proposal by words or conduct to the other party, who agrees by words or conduct to the proposal - contract exists if both parties' actions indicate a recognition by each of them of the existence of a contract - courts apply an objective standard to determine assent

duress

- person should not be held to an agreement that they have not entered into voluntarily - law will not enforce any contract induced by duress - duress is any wrongful or lawful act or threat that overcomes

abnormally dangerous (ultrahazardous) activities

- person who carries on an abnormally dangerous activity is subject to strict liability for physical harm resulting from the activity - dangerous if it is foreseeable and highly significant risk of physical harm

Comparative Fault/Negligence

- pure comparative negligence (damages divided between parties in proportion to the degree of fault), benefits the plaintiff - modified comparative negligence (plaintiff recovers as in pure comparative negligence unless their contributory negligence was equal to or greater PA - plaintiff 51% at fault, defendant pays nothing

covenant not to compete enforceable if the

- purpose of the restrain is to protect a property interest of the promisee and - the restraint is no more extensive than is reasonably necessary to protect that interest

Alcoa Concrete & Masonry v. Stalker Bros.

- stalker bros. (general contractor) hired alcoa concrete - paying $50,000 - Stalker bros. says they wont pay alcoa after they completed the concrete because not all Alcoa employees had regulatory licenses - Stalker bros. is required to pay

New England Rock Services, Inc. v. Empire Paving, Inc.

- starts drilling on the contractor sight and finds water - so they have to use a much more extensive process to drill - they didn't anticipate to have to control the water - entitled to more compensation - other contractor said no, so they sued - this is an example of restatement modification of a contract

essentials of an offer

1. Communication 2. Intent 3. Definiteness offer need not take any particular form to have a legal effect

requirements of strict liability in tort

1. Defendant was engaged in the business of selling a product such as the defective one; 2. Defendant sold the product in a defective condition; 3. Defective condition made the product unreasonably dangerous to the user or consumer or to his property; 4. Defect in the product existed when it left the defendant's hands; 5. Plaintiff sustained physical harm or property damage by using or consuming the product; and 6. Defective condition was the proximate cause of the injury or damage.

requirements of a contract

1. Mutual Assent - valid offer and acceptance 2. Consideration - payment or performance 3. Legality of Object 4. Capacity - no minor has capacity some contracts must be in writing - statute of frauds (most oral agreements are binding and enforceable) must be an absence of invalidating conduct (duress, undue influence)

defenses to negligence

1. intentional tort defenses are available 2. contributory negligence 3. comparative negligence 4. assumption of risk

ways in which an offer may terminate other than by acceptance:

1. lapse of time 2. revocation 3. rejection 4. counteroffer 5. death or incompetency of the offeror or offeree 6. destruction of the subject matter to which the offer relates 7. subsequent illegality of the type of contract the offer proposes

settlement of debts

1. undisputed debts 2. disputed debts

exclusive dealing contract

A contract in which a manufacturer of goods grants to a distributor an exclusive right to sell its products in a designated market implied obligation is imposed on the manufacturer to use its best efforts to supply the goods

offer

A definite undertaking or proposal made by one person to another indicating a willingness to enter into a contract. - when it is received, the offer confers on the offeree the power to create a contract by acceptance, which is an expression of the offeree's willingness to comply with the terms of the offer - outstanding offer creates no rights or duties until it is accepted

defective acceptances

A late or defective acceptance does not create a contract. after the offer has expired, it cannot be accepted

assumption of risk of mistake

A party who has undertaken to bear the risk of mistake will not be able to avoid the contract even though the mutual or unilateral mistake would have otherwise permitted the party to do so.

justifiable reliance

A person is not entitled to relief unless he has justifiably relied on the misrepresentation. There is no fraud if the complaining party's decision was in no way influenced by the misrepresentation.

conditional promises

A promise the performance of which depends upon the happening or nonhappening of an event not certain to occur sufficient consideration unless the promisor knows at the time of making the promise that the condition cannot occur ex: will mow your lawn, as long as it doesn't rain tomorrow (if it rains, he wont go)

Neugebauer v. Neugebauer

Farm land Two sons One(Lincoln) takes advantage of mom Family finds out Mom(pearl) won Mom: Pearl 84 years old has 6-7 children Youngest child wanted to buy her farm Son got with his lawyer and asked the mom to buy her farm, she sold it for $117,000 (originally $700,000) Mom agrees to sell it to her son, and would receive the payment over the next 30 years Other children sued this contract is voidable (moms choice)

preliminary negotiations

If a communication creates in the mind of a reasonable person in the position of the offeree an expectation that his acceptance will conclude a contract, then the communication is an offer. If it does not, then the communication is a preliminary negotiation. - offeror must demonstrate an intent to enter into a contract, not merely a willingness to enter into a negotiation

buyer's examination or refusal to examine

If the buyer inspects the goods before entering into the contract, implied warranties do not apply to defects that are apparent on examination. No implied warranty on defects that an examination ought to have revealed when the buyer has refused to examine the goods.

stipulated provisions in the offer

If the offer specifically stipulates the means of communication the offeree is to use, the communication of acceptance must conform to the specification in the offer in order to be effective (via email etc.) effective moment is when the offeror receives the acceptance

statute of repose

Laws limit the period for which a manufacturer is liable for injury caused by a defective product. -Typically 6 to 12 years. After the time period has elapsed, a manufacturer ceases to be liable for such harm.

merchant sellers

Liability is imposed only upon a person who is in the business of selling the product involved. Does not apply to an occasional seller. Strict liability also applies to the manufacturer of a component that is used in a larger product if the manufacturer of the finished product has made no essential change in the component.

Maroun v. Wyreless Systems

Maroun employed by wyreless, promised that he would make a ton of money After a couple of months, they weren't making that money Maroun tried to sue not fraud in the inducement

misuse or abuse of the product

Misuse or abuse occurs when the injured party knows, or should know, that he is using the product in a manner the seller did not contemplate. Misuse or abuse must not be foreseeable by the seller. - If foreseeable, seller must take measures to guard against it.

I send you a letter on Tuesday offering to sell you my motorcycle for 2,000 giving you until Saturday to accept or reject my offer. The letter reaches you on Wednesday. On Friday, I am killed in an auto accident. On Saturday, not knowing that I have died, you deposit in a mailbox a letter that indicates acceptance of my offer. is there a contract?

No, even though they accepted the offer, since they died it terminates

unilateral mistake

Occurs when only one party enters a contract under a mistaken assumption relief will be granted in cases inw hich the nonmistaken party knows, or reasonably should know, that such a mistake has been made or in cases in which the mistake was caused by the fault of the nonmistaken party

Reed v. King (material example)

Old lady bought house family was murdered in (but didnt know until later) Judgment is reversed Let the buyer beware has little effect in California Can't determine if she can prove the loss of value

variant acceptances

One that contains terms different from or additional to those in the offer. receives different treatment under common law and the UCC

failure to warn

Seller is under a duty to warn of a product's possible danger, to provide adequate directions for its safe use, and to package the product safely. Cannot escape liability with a warning if the product could have been made or designed safer in a cost-effective manner. Duty to give a warning arises from a foreseeable danger of physical harm that could result from the normal or probable use of the product and from the likelihood that, unless warned, the user or consumer would not ordinarily be aware of such danger or hazard.

statement regarding the value

Statements regarding the value of the goods or the seller's opinion or recommendation of the goods does not create a warranty. Express warranty may be created if seller states the price at which the goods were purchased from a former owner or in which she gives market figures relating to sales of similar goods. Expert seller's opinion may create an express warranty.

acceptance following a prior rejection

When an acceptance follows a prior rejection, the first communication received by the offeror is the effective one.

open terms

With respect to agreements for the sale of goods, the Code provides standards by which omitted terms may be determined, provided the parties intended to enter into a binding contract. - offer for the purchase or sale of goods may leave open particulars of performance to be specified by one of the parties

nonfraudulent misrepresentation

a material, false, statement that induces another to rely justifiably but is made WITHOUT scienter negligent misrepresentaion - false representation that is made without due care in ascertaining its truthfulness to obtain relief for nonfraudulent misrepresentation, all of the other elements of fraud must be present and the misrepresentation must be material voidable agreemnt

promise to pay debt barred by the statute of limitations

a new promise by the debtor to pay the debt renews the running of the statute for a second statutory period

voidable promises

a new promise to perform a voidable obligation that has not been previously avoided is enforceable

assumption of risk

a plaintiff who voluntarily enters into a risky situation, knowing the risk involved, will not be allowed to recover

moral obligation

a promise made to satisfy a preexisting moral obligation is generally unenforceable for lack of consideration

substituted contracts

results when the parties to a contract mutually agree to rescind their original contract and enter into a new one three separate contracts - original contract - contract of rescission - substitute contract

covenant not to compete

agreement to refrain from entering into a competing trade, profession, or business

common law rule

an acceptance must be positive and unequivocal it may not change, add to, or subtract from, or qualify in any way the provisions of the offer it must be the mirror image of the offer any communication that attempts to modify the offer is not an acceptance but a counteroffer, which does not create a contract

tortious conduct

an agreement that requires a person to commit a tort is unenforceable

preexisting public obligations

public duty does not arise out of a contract; it is imposed on members of society by forced on the common law or by statute public officials are under a preexisting obligation to perform their duties by virtue of their public office preexisting contractual duty

mistake

belief that is not in accord with the facts where the mistaken facts relate to the basis of the parties.......

communication of acceptance

bilateral: offeree's acceptance must be communicated to the offeror unilateral: notice of acceptance is typically not required unless the offeree has reason to know that the offeror has no adequate means of learning of the offeree's performance with reasonable promptness and certainty

definition of a contract

binding agreement that the courts will enforce promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law, in some way, recognizes a duty all contracts are promises; not all promises are contracts

past consideration

element of exchange is absent where a promise is given for an act already done

employment contracts

employees frequently sign employment contracts prohibiting them from competing with their employers during their employment and for some additional period of time after their termination

fraud in the execution

consists of misrepresentation that deceives the defrauded person as to the very nature of the contract occurs when a person does not know, or does not have reasonable opportunity to know

implied in fact contract

contract formed by conduct - actions

common law restraint of trade

contract or agreement that eliminates or tends to eliminate competition or otherwise obstructs trade or commerce

executed contract

contract that has been fully carried out by all the applicable parties

executory contract

contracts that are partially or not entirely performed by one or more of the parties

counteroffer

counterproposal to an offer that generally terminates the original offer operates as a rejection and a new offer conditional acceptance

promissory estoppel remedy

court will enforce the promise to the extend necessary to avoid injustice

quasi contract - contract implied in law requirements:

court will impose a quasi contract when 1. the plaintiff confers a benefit upon the defendant 2. the defendant knows or appreciates the benefit 3. the defendant's retention of the benefit is inequitable

unconscionable contracts

courts may refuse to enforce an unconscionable contract or any part of the contract that it finds to be unconscionable permits the courts to resolve issues of unfairness adhesion contracts: - standard form contract prepared by one party - not automatically unenforceable but are subject to greater scrutiny

implied warranty (action)

created by circumstances under which the sale is made ex: when you buy a car, it is implied that the car will work

warranties

creates a duty on the part of the seller to ensure that the goods that they sell will conform to certain qualities, characteristics, or conditions - sellers are not required to warranty goods - buyer may reject or revoke acceptance of the goods

sale of a business

seller frequently promises not to compete in that particular type of business in a defined area for a stated period of time

design defect

despite the product being produced as specified, the product is dangerous or hazardous because its design is inadequate design of the product is evaluated based on the dangers that the manufacturer could have known at the time they produced the product ex: Ford Pinto car engine

promissory estoppel definition

doctrine enforcing some noncontractual promises

legal detriment

doing something th epromisee was under no prior legal duty to do refraining from something that the promisee was under no prior legal duty to refrain from

acceptance of offer

essential to the formation of a contract once an effective acceptance has been given, the contract is formed acceptance of an offer for a bilateral contract is some overt act by the offeree that manifests their assent to the terms of the offer if the offer is for a unilateral contract, acceptance is the performance of the requested act with the intention of accepting

usury statutes

establish a maximum rate of interest for a transaction to be usurious, courts usually required evidence of the following factors: - a loan - of money - that is repayable absolutely and in all events - for which an interest charge is exacted in excess of the interest rate allowed by law

licensing statutes

every jurisdiction has laws requiring a license for those who engage in certain trades, professions, or businesses. Some licensing statues require schooling and/or examination, while others require only financial responsibility and/or good moral character.

exculpatory clauses

excuses one party from liability for her own tortious conduct cannot relieve a person from tort liability for harm causes intentionally or recklessly only negligence has to be conspicuously placed in the contract and clearly written

express warranties (words)

explicit undertaking by the seller with respect to the quality, description, condition, or performability of the goods statement of fact or a promise that relates to the goods, a description of the goods, or a sample or model of the goods - oral or in writing

UCC battle of the forms

focuses on the intent of the parties if offeree does not expressly make their acceptance conditional upon the offeror's assent to the additional or different terms, a contract is formed if both are merchants, such additional terms may become a part of the contract provided that they do not materially after the agreement and are not objected to either in the offer itself or within a reasonable period of time

promissory estoppel

gratuitous promises are enforceable to the extend necessary to avoid injustice applies when a promise that the promisor should reasonably expect to induce detrimental reliance does induce such action or forbearance - charitable subscriptions

subsequent illegality

if the performance of the contract becomes illegal after the offer is made, the offer is terminated

dram shop acts

imposition of strict liability upon tavern owners for injuries to third parties caused by their intoxicated patrons - bartender serving someone who is visibly intoxicated and causes harm to other people, you are liable

consideration

inducement to make a promise enforceable promises are enforced only in cases in which the parties have exchanged something of value in the eye of the law consideration occurs only when the parties intend to exchange consideration exchanged for a promise may be an act, a forbearance to act, or a promise gratuitous promises are made without consideration and are typically not legally enforceable

fraud in the inducement

intentional misrepresentation of a material fact by one party to the other, who consents to enter into a contract in justifiable reliance on the misrepresentation requisites for fraud in the inducement: 1. false representation 2. of a fact 3. that is material and 4. made with the knowledge of its falsity and the intention to deceive 5. which representation is justifiability relied on

Belden, Inc. v. American Electronic Components, Inc.

j- Belden provides AEC with wires - AEC goes into a contract with Belden - Belden says they'll receive these insulated wires for them - Belden decided to switch to a different insulation provider - this new insulation was cracking - AEC sued Belden for breach of express warranty - course of deal

adequacy

legal sufficiency has nothing to do with the adequacy of consideration items or actions do not need to have the same value, just have some value no concern whether the deal was good or bad

rejection

manifestation by the offeree of their unwillingness to accept offeree is at liberty to accept or reject the offer as they see fit communicated rejection terminates the power of acceptance

promise to pay debt discharged in bankruptcy

may be enforceable without consideration

Liebeck v. McDonalds

mcdonaolds coffee case plaintiff = liebeck, defendant = mcdonalds old lady liebeck purchases drive thru coffee. she puts it between her lap to get cover off it spills and she is badly burned coffee very hot at this place because truck drivers 1. duty - to not harm customers 2. breach - must analyze 3. causation - but for hot coffee no burns, it is foreseeable that coffee this hot can burn someone if spilled 4. damages - yes for breach go through standard practice it was 10 degrees to hot if use hand can see that even though p is small it will be higher than b because b is 0, os there is a breach of duty there were many punitive damages (3 times compensatory) mcdonalds can sue back for contributory 1. duty - to keep self safe 2. breach - yes, spilled coffee 3. causation - yes yes 4. damages yes court says she is 20% responsible

legal benefit

means the obtaining by the promisor of that which he had no prior legal right to obtain

valid contract

meets all of the requirements of a binding contract

strict liability in tort

merchant sellers are liable for personal injuries and for property damage that result from selling a product in a defective condition, unreasonably dangerous to the consumer, even though the seller has exercised all possible care in the preparation and sale of their product

false representation

misleading conduct or an assertion not in accord with the facts made through a positive statement concealment is an action intended or known to be likely to keep another from learning a fact they otherwise should have learned silence or nondisclosure alone does not generally amount to fraud when the parties deal at arm's length - arms length transaction is one in which the parties owe each other no special duties and each is acting in their self-interest

materiality

misrepresentation is material if - it would be likely to induce a reasonable person to manifest assent ?????????????

modification of a preexisting contract - restatement

modification of an executory contract is binding if it is fair and equitable in the light of surrounding facts that the parties had not anticipated when the contract was made set of recommendations

modification of a preexisting contract - common law

modification of an existing contract must be support by new mutual consideration beyond that which is already owed under the original contract ex: you want a pay raise, both parties must provide new consideration

You bring the dead body of Jesse James to Wyatt's office and on the way out you see the reward poster for the first time, was there a contract?

mutual assent offer wasn't made till after the performance (so not entitled to the reward)

mutual mistake

mutual mistake occurs when both parties are mistaken as to the same set of facts if mistake relates to a basic assumption on which the contract is made and has a material effect on the agreed exchange, then it is voidable

promissory estoppel

noncontractual promise may be enforced when it is made under circumstances that should lead the promisor reasonably to expect that the promise will induce the promisee to take action in reliance on it compared to the hail mary in football

modification of a preexisting contract

occurs when the parties to a contract mutually agree to change one or more of its terms

manufacturing defect or production defect

occurs when the product is not properly made it fails to meet its own manufacturing specifications

death or incompetency

of either the offeror or the offeree terminates the offer the offeror no longer has the capacity to enter into a contract; thus all outstanding offers are terminated terminates the offer

duration of offers

offer confers upon the offeree a power of acceptance, which continues until the offer terminates

effective moment

offer, a revocation, a rejection, and a counteroffer are effective when they are received acceptance is generally effective upon dispatch (sent) - mailbox rule

silence as acceptance

offeree is generally under no legal duty to reply to an offer silence or inaction does not indicate acceptance of the offer by custom, usage, or course of dealing, however, the offeree's silence or inaction may operate as an acceptance, and a contract is formed happens over course of deal

option contracts

option is a contract by which the offeror is bound to hold open an offer for a specified period of time must comply with all of the requirements of a contract, including the offeree's giving of consideration of the offeror only binding offer consideration

modification of a preexisting contract - UCC

parties can effectively modify a contract for the sale of goods without new consideration if both parties intend to modify the contract and act in good faith

express contract

parties manifest assent in words oral or in writing

express and implied contracts

parties to a contract may indicate their assent either in words or by conduct implying such willingness both contracts are equally enforceable

offeror

person making the proposal

offeree

person to whom the proposal is made

physical compulsion

physical duress occurs when one party compels another to manifest assent to a contract through actual physical force renders the agreement void

tort reform

places a cap on the damages that plaintiffs may be awarded

quasi contract - contract implied in law remedy:

plaintiff recovers the reasonable value of the benefit they conferred upon the defendant

implied assumption of risk (action)

plaintiff who voluntarily proceeds to encounter a known danger

fraud

prevents assent from being knowingly given

warranty of title (ownership)

seller implicitly warrants that: - title conveyed is good and its transferable, and - goods are subject to no security interest or other lien of which the buyer did not know at the time of contracting ex: buying a car or house

illusory promises

statement that is in the form of a promise but imposes no obligation upon the maker of the statement - not a binding contract - not consideration for a return promise

Output and Requirements Contracts

such agreements are enforceable by the application of an objective standard based upon the good faith of both parties

Osprey L.L.C. v. Kelly-Moore Paint Co., Inc.

the use of "Shall" vs. the use of "May" in lease documents - shall means it had to be kelly moore had a lease with osprey that had two renewal periods osprey required six months notification if they were going to renew kelly moore faxed it the last day of their lease at 5:28 pm (they were supposed to send by mail, not fax) osprey tried to evict them but court ruled in kelly moore favor

keeping of animals

those who possess animals for their own purposes do so at their peril and must protect against harm those animals may cause to people and property

unauthorized means

traditional rule is that acceptance is effective when and if received by the offeror, provided that it is received within the time during which the authorized means would have arrived

irrevocable offers of unilateral contracts

where the offer contemplates a unilateral contract - promise for an act - injustice to the offeree may result if revocation is permitted after the offeree has started to perform the act requested in the offer and has substantially but not completely accomplished it ex: mowing only the front yard but paid for both the front and back yard to be mowed