GE 400 Exam 2

warranty of title

"i own the goods and can pass the title free and clear"

express contract

"will you cut my grass for ten dollars?"

compensatory damages

1) put you in position you would have been in had they not breached 2) compensate for actual losses

UCC

Uniform Commercial Code-uniform system for sale of goods (NOT real-estate or services) across state boundaries. codified in all 50 states. very technical.

non-compete agreement

a clause under which an employee agrees not to enter into or start a similar profession or trade in competition against employer

public policy and contracts

a contract with subject matter that is harmful to society will not be enforced

counteroffers

a simultaneous rejection of the previous offer and the making of a new offer.

bilateral contract

a typical contract, between two sides

capacity to contract

ability for a party to enter into the contract - must be a legal entity, must not be legally incompetent

ways to terminate an offer

acceptance, revocation/withdrawal of offer, rejection, counteroffer, lapse of party, passage of time, material change in bargain

"accord and satisfaction"

agreement to accept substitute performance - alternate consideration. "instead of 10 dollars, i'll walk your dog for a week"

the corporate veil

agreement with a corporation is only binding on the corporation not the corporation's agent.

legally binding contract

an agreement, between at least two parties, enforced by a court

revocation

an offeror can revoke an offer at any time for any reason or no reason except when an offeree has paid to keep an offer open

implied warranty

arise for all product sales unless they are specifically disclaimed (UCC)

writ of execution

authorize sheriff to seize and sell off property

legally prevented from entering into agreement

bankrupt entities, under court order

restatement definition of offer

bargain must be clear - meeting of minds, understanding must be reasonable

objective reasonableness

based on custom, practice, communications, etc. created in the mind of the perceiver

what is much of contract law based on?

based on reasonableness. enforce what the parties reasonably agree to. honor expectations of parties, honor practice in industry.

ultra vires

beyond the powers. corporations used to be organized for very specific purposes and any agreement beyond those purposes could not be enforced.

meeting of the minds

both sides substantially understood all of the terms of the contract to mean the same thing

if goods are not conforming

buyer can reject entire shipment, accept some conforming goods, but deny remaining, and accept all goods, but sue for cost of non-conformance

solicitation of an offer

can't be accepted, ex: i would like to sell my car for $2k.

damages from intentional torts

compensatory or punitive may be dischargeable in bankruptcy or non-collectable due to homestead, pension, or trust

novation

completely replace one party with another

mutual mistake

contract is typically voidable by either party

liquidated damages

contract provisions spell out how much the damages would be in situations where it would be difficult to prove "for each day late, pay $1k)

what happens with a company once it enters bankruptcy?

court can modify or terminate a contract and debt may be discharged

injunctions

court orders them to do/not do something

specific performance

court orders them to go through with the deal, typically only for unique consideration

damages

court orders them to pay you money

piercing corporate veil

decision arises when corporation is not being treated like a separate legal entity.

when is performance excused?

destruction of essential element, unexpected hardship, death, frustration of purpose (contract no longer makes sense), prevention of performance by other side, waiver by other side

historic contract law

developed by the states in the state court system. interpretation arose from what local community found to be reasonable and repeatedly enforced

disclaimer

disclaim warranties. ex) "as is" no implied or express warranties

performance

doing what you have promised to do. fail to perform is breach

statute of repose

even if not discovered, you can't sue after X years

misrepresentation

false statement of fact transmitted from the seller to the buyer that induces the buyer to buy. an honest mistake. makes contract voidable by party misrepresented-to

purchase order

from buyer to seller. buyer: i want these goods under my terms. PO usually wins

invoice

from seller to buyer. seller: goods are provided under my terms.

case law

general practice over decades created a fairly uniform sample set of decisions so that you could generally predict what a court would enforce - statistical norms based on previous practice

situations lacking consideration

gifts, prior obligation

unenforceable

good parties, offer, and acceptance, but something prevents enforcement

merchantability

goods are of fair quality, fit for ordinary purposes, substantially uniform in quality, packaged and labeled, and conform to their labels

warranty

guarantee that is legally enforceable against the party making it

UCC counteroffers

if change in terms is modest, then it will likely be treated as acceptance

fitness for a particular purpose

if i tell you what i want, you have to sell me the right product

statute of frauds

if it's a big deal, get a record of it or the court is not going to enforce it when there is a dispute. big deal - anything involving land/real estate, can't be performed in a year, sale in excess of $500, involves marriage, agreeing to take on someone else's debt

"blue pencil"

if part of agreement is unenforceable, court may modify the remainder of agreement

assault

immediate apprehension of offensive contact

duress

improper pressure placed on the other party that deprives them of their free will

legally incompetent

infants (younger than 18), non compos mentis (insane, drunk)

intent to offer

intent is reviewed objectively rather than subjectively

contempt of court

jail them up to 6 months

Restatement of the Law of Contracts

lawyers from many states tried to agree on what was "reasonable" nationwide. non-binding, but implemented by many states. sometimes only partially implemented. very high-level, definitional law

intentional torts

liability arises from an intentional act by a tortfeasor - one who commits the tort

contracts with non-compete

most likely to be enforceable if limited in geographic scope, limited in time, higher up in employee chain

restatement counteroffers

must have complete agreement and any proposal for change in terms cancels original offer

are contracts always enforced in court?

no

does a contract have to be written on paper? does a contract need to say 'contract' at the top?

no

void (ab initio)

no good from the beginning (ex: contract to commit an illegal act)

voidable/non-binding contract

no meeting of minds, when agreement is not voluntary, voidable at option of aggrieved party only

extended warranty

offered by a seller to give buyer more confidence in the goods to induce purchase

method of acceptance

offeror can set method of acceptance. silence generally not sufficient unless face to face or under UCC

lapse of party/passage of time

offeror gives offer but dies before acceptance - no contract offeror gives offer but is insane - no contract offeror offers to pay for lawn cutting in June and you don't accept until december - no contract

material change in bargain

offeror offers to pay for lawn cutting but then all the grass disappears before acceptance - no contract. contract if grass disappears after acceptance.

mailbox rule

once contract placed in mailbox, irrevocable

duty to mitigate

once you become aware of damage happening to you, you must take reasonable steps to minimize your damages.

voidable

one or both of the parties may avoid the contract (ex - contract with minor)

undue influence

one party improperly exploits a position of power over another.

unilateral contract

one side sets all the terms (ex: cell phone company)

valid contract

one that is enforced by the courts

assignment

partly replace one party. someone other than an original party now has a duty or receives benefit

several liability

party 1 is only responsible for party 1.

joint liability

party 1 is responsible for party 2 and vice versa

attachment/lien

property can't be sold without paying Lien

offeror

proposes a contract

unilateral mistake

reasonable mistake - likely not bound by contract

offeree

receives offer and can decline, counter offer, or accept

false imprisonment

restraint of a person in a bounded area without justification or consent no time limit and can be any bounded area

fraud

seller makes a known to be false statement of fact to buyer to get them to buy. harder to prove than misrepresentation.

consideration

something of value, money goods and services, agreement to do or not to do something. consideration must be exchanged for a contract to be enforceable. must have value, must be legal, must be possible at the time agreement is made, must be present or future.

statute of frauds exceptions

something takes longer than expected, merchant confirmation if not disputed in 10 days, admission by other side

"time is of the essence"

takes away reasonableness factor. get it done by this day or breach

conforming goods

the UCC requires that a seller tender goods to a buyer by placing conforming goods at the buyer's disposal

special/consequential damages

their failure cost you more than just contract

punitive damages

they are evil and should be punished

statue of limitations

they know you breached, but don't sue for 10 years - governed by state law

express warranty

things that one party can't easily identify but wants to be essential to the agreement. often associated with liquidated damages

garnishment

third party holding their assets must give them directly to you

battery

unwanted touching

co-signer

usually jointly liable with signer.

quasi contract/quantum meruit

when a party to the contract is no more, so no contract can be created. recovery is in quantum meruit - you will get as much as you deserve

ratification

when a voidable contract becomes no longer voidable. can be ratified through behavior. ex: person is insane but then recovers

option

when an offeree has paid to keep an offer open. a contract to make an offer to form another contract unrevocable for a time.

ownership

when ownership of goods passes from one party to another, must transfer "title"

torts

wrongs. breach of a duty that society says that you owe to another. civil lawsuit = preponderance of the evidence designed to compensate the victim for the bad acts of another

implied contract

you've been asked to cut grass for several weeks for $10 each time, then you show up without being asked. you will be paid $10

intent

your intent typically does not matter - if it happens, you are typically liable