Business Law Exam (Chapters 9-16)

______ ______ only works sometimes and has to be reasonable reliance.

Promissory Estoppel

History and Purpose of Statute of Frauds (written contracts)

Statute of Frauds was originally passed in the 17th Century England to prevent fraud and prejury.

Concealment

Taking active steps to prevent another from learning the truth.

There needs to be ________ consent for contracts.

voluntary

A contract must be between parties who have ______ to contract.

capacity

UCC (Uniform Commercial Code): Alternative Means of Satisfying the Statute of Frauds:

-Confirmatory memorandum between merchants -Part payment of part delivery -Admissions in pleading or in court -Specially manufactured goods

Statute of Frauds includes:

-Contracts for an interest in realty -Contracts for the sale of goods for $500 + -Contracts in consideration of marriage -Contracts that cannot be performed in one year -Promises to pay the debt of another -Executors promises to pay the decedents debt after death

Misrepresentation or fraud includes:

-Material fact misrepresented -Intent to deceive -Justifiable reliance

Modifications of Existing Sales Contracts

-Modifications of existing sales contracts fall within the statue of frauds IF the modification is priced at $500 or higher.

The importance of writing in Contract Law:

-No general requirement that contracts be in writing -Written contracts are preferable to oral ones

Effect of Violation of Statute of Frauds

-The Statute of Frauds applies only to executory contracts. -Contracts that fail to comply with the Stature of Frauds are unenforceable.

Promissory Estoppel and the Statute of Frauds

-The doctrine of promissory estoppel has been used to enforce oral contracts that would be otherwise unenforceable under the statue of frauds.

Nature of the Writing Required

-The memorandum must provide written evidence that a contract was made. (examples: letters, telegrams, receipts)

Unilateral Contract involve how many people?

1 (Example buy one, get one free)

Bilateral Contracts involve how many people?

2

Consideration

A basic requirement for an enforceable agreement under traditional contract principles, defined as legal value, bargained for and given in exchange for an act or promise.

Exculpatory Clause

A clause in a contract or trust instrument that excuses a party from some duty.

Merger Clause

A contract clause providing that the written contract is the complete expression of the parties; agreement.

Unilateral Contract

A contract formed by an offer or a promise on one side for an act to be done on the other, and a doing of the act by the other by way of acceptance of the offer or promise; that is, a contract wherein the only acceptance of the offer that is necessary is the performance of the act.

Contract of Adhesion

A contract in which a stronger party is able to dictate terms to a weaker party, leaving the weaker party no practical choice but to adhere to the terms. If the stronger party has exploited its bargaining power to achieve unfair terms, the contract is against public policy.

Bilateral Contract

A contract in which the promise of one of the parties forms the consideration for the promise of the other.

Specific Performance

A contract remedy whereby the defendant is ordered to perform according to the terms of his contract.

Liquidated Debt

A debt that is due and certain. That is, one that is not the subject of a bona fide dispute either as to its existence or the amount that is owed.

Accord and Satisfaction

A legally binding agreement to settle a disputed claim for a definite amount

Emancipation

A parent's waiver of his rights to control and receive the services of his minor child.

Disaffirmance

A party's exercise of his power to avoid a contract entered before the party reached the age of majority; a minor's cancellation of his contract.

Offeree

A person to whom an offer is made.

Offeror

A person who makes an offer.

Ancillary Covenant not to Compete

A promise that is ancillary to (part of) a valid contract whereby one party to a contract agrees not to compete with the other party for a specified time and within a specified location. (aka: noncompetition clause)

Offer

A proposal by one person to another that is intended to create legal relations on acceptance by the person to whom it is made.

Parol Evidence-

Any oral or written words outside the four corners of a written contract.

Parol Evidence Rule-

A rule that says if a written contract is a complete and final statement of the parties' agreement, any prior or contemporaneous oral or written statements that alter, contradict, or are in additional to the terms of the written contract are in admissible in court regarding a dispute over the contract.

Option

A separate contract in which an offeror agrees not to revoke her offer for a stated period of time in exchange for some valuable consideration.

Deceit

A tort involving intentional misrepresentation or cheating by means of some device.

Total was $75,000 but I only sent $60,000 because I was dissatisfied. This is an example of ________.

Accord and Satisfaction

Legal

According to the principles of law; according to the method required by statute; by means of judicial proceedings; not equitable.

Promissory Estoppel

An equitable doctrine that protects those who foreseeable and reasonably rely on the promises of others by enforcing such promises when enforcement is necessary to avoid injustice, even though one or more of the elements normally required for an enforceable agreement is absent.

Voidable

Capable of being made void; not utterly null, but annullable, and hence that may be either voided or confirmed.

If you get hurt, that's your problem.

Exculpatory Clauses

You are in the ______ stage when everything is said and done.

Executed

When you are in the process of signing but keys are not handed over yet, you are in the _______ stage.

Executory

When something is clear, spelled out, or explicit (usually in writing) it is _____.

Express

Flow of Contract

Formation (getting in) --> Breach --> Remedies Formation--> Performance--> discharge (over or executed) Formation--> Excuse--> Discharge

Pumping gas, eating at a restaurant with no prices on the menu are examples of ______ contracts.

Implied

Material

Important.

Scienter

In cases of fraud and deceit, the word means knowledge on the part of the person making the representations, at the time when they are made, that they are false. In ac action for deceit, scienter must be proved.

Unconscionable

In contract law, a contract that is grossly unfair or one-sided; one that "shocks the conscience of the court."

Contract Enforcement

In some situations, an otherwise valid contract can be unenforceable b/c it was NOT in writing.

Sitting down to renegotiate is called ________ and it is only enforceable if ________.

Modification it is in writing

A person under age might not be protected because of __________.

Necessaries

Underage people have responsibilities for ________.

Necessaries

I will employ you when I feel fit. (Contract or no?)

No Contract

After job is already done the landscaper wants to make a deal. (Contract or no?)

No Contract (cannot make agreement after already done)

Promissory Estoppel means

No contract, just promise

Can I pay someone for a job they are already paid to do?

No. Pre-Existing duty.

Executory

Not yet executed; not yet fully performed, completed, fulfilled or carried out; to be performed wholly or in part.

Can I raise price halfway through a project?

ONLY if it is in contract (usually w/ a cap)

A commitment containing definite terms is a ______.

Offer

Basic Elements of Contract

Offer Acceptance Consideration

A court can grant __________ so that a minor has to pay for a car they totaled (not the seller).

Recission

Necessaries

That which is reasonably necessary for a minor's proper and suitable maintenance, in view of the income level and social position of the minor's family.

Capacity

The ability to incur legal obligations and acquire legal rights.

Acceptance

The actual or implied receipt and retention of that which is tendered or offered

Ratification

The adoption or affirmance by a person of a prior act that did not bind him.

Quasi-Contract

The doctrine by which courts imply, as a matter of law, a promise to pay the reasonable value of gods or services when the party receiving such goods or services has knowingly done so under circumstances that make it unfair to retain them without paying for them.

Adjudicated

To adjudge; to settle by judicial decree

Merchants

Under the Uniform Commercial Code, one who regularly deals in goods of the kind sold in the contract at issue, or holds himself out as having special knowledge or skill relevant to such goods, or who makes the sale through an agent who regularly deals in such goods or claims such knowledge or skill.

Unliquidated Debt

Undetermined in amount.

A contract that is NO good, or ILLEGAL is ______.

Void

If a contract is not signed, the person is under legal age, or the contract was supposed to be in writing but is not, then the contract is _________.

Voidable

Parol Evidence

Where a written contract exists, evidence about promises or statements made prior to or during the execution of the writing that are not contained in the written contract.

I will represent you but I can cancel with 3 days notice. (Contract or no?)

YES, Contract.

In order for the consideration requirement to be met, each party must give _____________.

consideration

The legal value of a contract is called _____.

consideration (involves both sides)

If a person is underage they can _______ contract.

disaffirm

______ is a wrongful coercion that induces a person to enter or modify a contract.

duress

If the offeror dies the contract ___.

is NO good.

Accord means to ______ and satisfaction means _____

pay less, satisfied

Estoppel means _____

prevention

If person becomes of age, they only have a reasonable amount of time for ratification (option to void), but if not voided, they will be ____________

stuck in or binded to contract.

In a contract for the sale of land, how close must the terms of the acceptance be to the terms of the offer, in order to form a contract?

they must be identical or almost identical