Blaw midterm 2

1. competent parties 2. agreement 3. consideration 4. lawful purpose 5. proper form

5 rules for contracts

Marriage

A contract in consideration of _____ must be in writing

executory contract

A contract that has not yet been fully performed.

Voidable Contract

A contract that may be legally avoided at the option of one or both of the parties.

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.

innocent misrepresentation

A false statement of fact or an act made in good faith that deceives and causes harm or injury to another.

Bilateral Contract

A promise made in exchange for another promise

contract

A promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.

Plain Meaning Rule

A rule of interpretation which states that words in a contract should be given their ordinary meaning.

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.

Surety

A third party who agrees to be primarily responsible for the debt of another. Contract to act as one must be in writing

Uniform Electronic Transactions Act (UETA)

A uniform state act providing a legal framework for electronic transactions giving electronic signatures and records the same validity and enforceability as manual signatures and paper-based transactions.

Construction against the drafter

Ambiguous provisions will be interpreted against the party drafting the provision on the basis that the drafter had superior knowledge of the subject matter and should have been more specific or accurate in the preparation of the provision.

click-wrap agreement

An agreement that appears on a user's computer screen when a user attempts to download software or purchase goods (also referred to as a license)

shrink-wrap agreement

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

Quasi Contract

An obligation or contract imposed by law (a court), in the absence of an agreement, to prevent the unjust enrichment of one party.

Fraudulent Misrepresentation

Any misrepresentation, either by misstatement or by omission of a material fact, knowingly made with the intention of deceiving another and on which a reasonable person would and does rely to his or her detriment.

No

Are fruits of the land and personal property covered by SOF

No, not unless cosigner

Are parents liable if their minor cannot pay a contract?

yes, either. Forbearance counts

Can consideration be a benefit or a detriment?

no

Can you use something from the past as consideration?

voidable

Contracts are ______ at the option of the infant

Contracts in Restraint of Trade

Contracts that tend to reduce competition for the provision of goods or services in a market; against public policy

"beyond all reason and understanding"

How intoxicated must you be to negate the contract?

Usage of the Trade Rule

Industry practice and terms will control over non industry practice and terms where applicable to the meaning of the contract.

common law: counteroffer must be identical to qualify as acceptance

Is mirror image rule UCC or common law?

"a mere peppercorn"

Necessary amount of consideration for any contract

Unilateral Mistake

Occurs when only one party enters a contract under a mistaken assumption

Negligent Misrepresentation

Occurs when the broker should have known that a statement about a material fact was false.

1. revocation 2. death or incompetence 3. rejection 4. destruction of subject matter 5. supervening illegality 6. passage of time

Offer can be terminated via:

No

Offer: yes or no? Solicitations to offer or commence bargaining

no

Offer: yes or no? advertisements

No, except if expert

Offer: yes or no? expressions of opinions

no

Offer: yes or no? statements of future intent

1. terms are unconscionable 2. one party gives up a legal right 3. terms are unreadable or inadequately communicated 4. inequality of bargaining power 5. discrimination

Other unenforceable contracts include:

course of dealing

Prior conduct between parties to a contract that establishes a common basis for their understanding.

Pre-existing duty rule

Promise to do something you are already legally obligated to do is not valid consideration

1. must be communicated to the other party 2. must be clear and unequivocal 3. must return as much of consideration as possible 4. available for a reasonable time after reaching majority age EXCEPTION: necessary goods

Rules for disaffirmance

1. Surety 2. Marriage 3. 1 year 4. Land 5. Executor $500

SMILE $500

wills, trusts, divorce decrees, eviction notices, insurance terminations, prenups

The following documents must be physically signed:

1. Infancy 2. Intoxication 3. Insanity 4. Illegality

The four I's

integrated document rule

The principle whereby a court will interpret a contested provision of a contract by looking at the meaning of the contract as a whole

True

True/false: Things firmly attached to land also count under the SOF as land

false: must have full legal description of the land

True/false: contracts for land require just an address of the property

false: has to be only goods, no services

True/false: sale of goods and services over $500 must be in writing

false

True/false: silence equals acceptance

Business-to-business (B2B)

UN convention on the Use of Electronic Communications authorized esignatures for which kinds of contracts?

1. Money 2. Goods 3. Services 4. Promises

What counts as consideration?

clear and convincing evidence

What kind of evidence is necessary to prove fraud

Fully Executed Contract

When all the conditions have been met, and carried out. It is considered performed or discharged

1 year

a contract that cannot be fully performed in _______ must be in writing.

Land

a contract that conveys and interest in ______ must be in writing

Valid Contract

a contract which will be enforced by the court

reasonable person standard

a measurement of the way members of society expect an individual to act in a given situation

Guarantor

a person who agrees to pay a debt if the primary debtor does not

cosigner

a person with a strong established credit history who signs the credit application and contract along with the borrower

rejection and counteroffer

an acceptance which changes the terms of original offer is actually a:

Covenants not to compete

an agreement in which one party agrees not to compete directly with the business of the other party; may be limited by geography or length of time

Void Contract

an agreement of no legal effect

no

are gifts or moral obligations consideration?

Consideration

bargained for exchange of something of value

UCC

code that contains contract law

course of performance

conduct between the parties concerning performance of the particular contract

1. value 2. legal 3. possible

consideration must have/be/be:

$500

contract for sale of GOODS over _____ must be in writing

option contract

contract to hold an offer to make a contract open for a fixed period of time

illegal

contracts where the subject matter is _____ are void ab initio

1. part of goods have already been accepted 2. buyer has already paid part of price 3. party admits there is a contract 4. goods are custom-made

courts will enforce ORAL contract for sale of goods over $500 if:

1. nature of the employment 2. length of time 3. geographic limitations 4. industries covered

covenants not to compete must be reasonable in regards to:

Yes, must have consideration for both elements

do option contracts need separate consideration?

ESIGN

does not preempt UETA, only provides electronic signature validity in case states don't

Ratification

express or implied, must be after age of majority

NY negotiable instrument law : late 1800s

first contract law in US

Any reasonable method

if no proper terms of acceptance are set by the offeror, what works?

state law

is contract law federal or state

Bilateral Mistake

mutual misunderstanding concerning a basic assumption on which the contract was made

Undue influence

occurs when one party to a contract is in a position of trust and wrongfully dominates the other party for personal gain

common law

original source of contract law

England 1677

original statute of frauds data and location

Executor

person designated to execute the terms of a will. If they wish to pay debts of deceased out of personal funds, it must be in writing

Unilateral Contract

promise in exchange for an act

Illusory Promise

promise that in fact does not impose any obligation on the promisor

either party can get rescission, unless mistake was about value (no remedy)

remedy for bilateral mistake

rescission, can often lead to civil liability for damages and criminal liability

remedy for duress

rescission and damages (proven loss) and maybe punitive damages (tort claims)

remedy for fraud

no damages, but can get rescission and reformation

remedy for innocent misrrepresentation

rescission PLUS damages

remedy for negligent misrepresentation

rescission PLUS damages, some states have punitive & statutory damages

remedy for undue influence

no right to relief unless other party knew and didn't correct it

remedy for unilateral mistake

competence

the ability to understand the obligations of the contract

acceptance is valid when mailed

the mailbox rule

offer

the manifestation of willingness to enter into a bargain

severability principle / blue pencil doctrine

the principle whereby a court can revise or remove part of a contract while leaving the rest still binding

Disaffirmance

the repudiation of, or election to avoid, a voidable contract

intent (reasonable person standard)

the test of both offer and acceptance

Acceptance

this act needs state of mind plus an act or manifestation of some sort

duress

threat of illegal force or harm

Personal service contracts

type of contract that can be nullified by loss of capacity

reasonable value of goods or services

what is the measure of relief for a quasi-contract?

not until actually communicated/recieved

when is revocation effective?