Dynamic Business Law Exam 1

substantial impairment

- later revokes acceptance of the goods if the buyer can show that the defects substantially impair the value of goods - installment contract

exceptions to the perfect tender rule

- norms in the industry and previous dealings the parties had with one another - parties' agreement - is it possible for the seller/lessor to cure or correct the problems? - have the goods been destroyed? - what if nonconformity impairs the value of the goods? - what if unforeseen circumstances make contract performance commercially impracticable?

preexisting duty

- performance of a duty you are obligated to do under the law is not good consideration. - performance of an existing contractual duty is not good consideration.

requirements for a statute of frauds under the UCC

- quantity of goods - signature of defendant

capacity

- third element of a legally binding contract - this person has the legal ability to understand his or her rights and obligations under a contract and will presumably comply with the terms.

common law requirements of an enforceable contract

1. must have the four essential elements (acceptance, consideration, contractual capacity, and legal object) 2. Must have genuine assent; each party must have freely entered contract through proper means 3. Must have proper form; some contracts that lack a writing are not enforceable.

3 conditions when promissory estoppel can be used

1. one party makes a promise and either knows or should know that the other party will reasonably rely on it. 2. the other party does reasonably rely on the promise. 3. the only way to avoid injustice is to enforce the promise

3 conditions for an implied, or implied-in-fact, contract

1. plaintiff provided some property or service to the defendant 2. the plaintiff expected to be paid for such property or service and a reasonable person in the position of the defendant would have expected to pay for it. 3. defendant had an opportunity to reject the property or service but did not

3 elements for recovery in quasi-contract

1. a benefit conferred by the plaintiff upon the defendant 2. knowledge by the defendant of the benefit 3. retention of the benefit by the defendant under circumstances where it would be unjust to do so without payment

implied warranty of merchantability

1. be able to pass in the trade or market for similar goods 2. in the case of fungible goods, be of fair or average quality within the description 3. be fit for the ordinary purposes for which such goods are used 4. be produced, within the variations permitted by the agreement, of even kind, quality, and quantity within each unit and among all units involved. 5. be adequately contained, packaged, and labeled as the agreement may require 6. conform to the promises or affirmations made on the container or label, if any

four types of formal contracts

1. contracts under seal 2. recognizances 3. letters of credit 4. negotiable instruments

duties that cannot be delegated

1. duties that are personal in nature 2. duties for which the delegatee's performance will vary significantly from the delegator's 3. Duties in contracts that forbid delegations

implied warranties of title

1. has good and valid title to the goods 2. has the right to transfer title free and clear of any lien, judgements, or infringements of intellectual property rights of which the buyer does not have knowledge

creditor beneficiary

a third party who benefits from a contract in which the promisor agrees to pay the promisee's debt - ie. the obligation of one party is transferred to a new party (paying a debt)

good title

a title acquired from someone who already owns the goods free and clear

limited capacity

can only enter into voidable contracts

silence

cannot be used to form a contract

unforeseen circumstances

cause a party to make a promise regarding an unfinished project, that promise is valid consideration

voidable title

certain situations where the contract between the original parties would be void, but he goods have already been sold to a third party.

express contracts

clearly set forth in either written or spoken words. ie. Itunes agreement with the producers and artists of music it sells--an agreement to give a percentage of profits.`

Express conditions

conditions in the contract that are usually preceded by words such as provided that, if, when. If these conditions are not met, a party could be discharged from the contract

implied conditions

conditions that are inferred from the nature and language of the contract and are not explicitly stated. If the implied conditions are met, the part could be discharged from the contract.

incidental beneficiary

contracting parties do not intend to benefit someone but unintentionally do so, the third party is then the ... ie. building infrastructure that increases the value of surrounding property, unintentionally

the other party had reason to know that intoxication rendered the person unable to understand the nature and consequences of the transaction or unable to act in a reasonable manner in relation to the transaction

contracts of an intoxicated person are voidable if...

Marriage Year (cannot be completed within a year) Land Executor (to satisfy debt of someone's estate) Goods Secondary Obligation

contracts subject to statute of frauds

outward (objective) manifestations; reasonable

courts are concerned only with the party's ______________ of intent, not internal thought processes. the courts interpret the parties' words and actions the way a _________ person would interpret them.

not be sympathetic

courts tend to ______ to intoxicated people

material breach

discharges the nonbreaching party from his obligations under the contract. -Occurs when a party unjustifiably fails to substantially perform his obligations under the contract

material breach

discharges the nonbreaching party from his obligations under the contract. - when a party unjustifiably fails to substantially perform his obligations under the contract.

commercial impracticability

ie. government change in regulation that neither party contemplated forbids the import or export of a particular item the parties had agreed would be shipped.

common-carrier delivery

if a buyer and seller execute a contract and the seller subsequently places the goods with a common carrier for delivery to the buyer

exception to objective theory of contracts

if a mutual misunderstanding exists between the parties, there is no contract.

discharge by material breach

if a party fails to substantially perform his obligations, thereby justifying that the nonbreaching party be discharged from the contract.

discharge by performance

if a party performs the terms of the contract or makes a tender (an offer to perform), or if the party performs to the satisfaction of the contracting party

not valid

if an acceptance is received after a rejection, the acceptance is __________ because the rejection terminated the offer.

1. treat the contract as void 2. ask the seller for a reduction of the contract price and then accept the damaged goods

if goods are only partially destroyed, the buyer can inspect the goods and decide whether to...

discharge by the operation of law

if one of the following occurs: alteration of the contract. bankruptcy, tolling of the statute of limitations, impossibility, commercial impracticability, or frustration of purpose

discharge by conditions

if precedent, concurrent, implied, and express conditions are not met or subsequent condition occurs

different performance

if the credit card company accepts, regardless of the value, the debit is paid in full and the creditor may not sue for additional money. ie. offering a car to pay off a credit card bill

excused from performance

if the goods are destroyed, by no fault of either party, the parties are both ...

illegality

if the subject matter of the offer is destroyed or becomes illegal, the offer immediately terminates

void contract

in effect not a contract at all. Either its object is illegal, or it has some defect so serious that it is not a contract. ie. a contract to kill

installment contract

indicate that if a buyer/lessee rejects an installment of a particular item, that buyer/lessee may do so only if the defects substantially impair the value of the goods and cannot be cured

public disclosure test

"the television test" imagine that your actions are being broadcast on national television, would you make the same choice?

exceptions to the statute of frauds

- admissions (admits to oral contract, even if it should have been in writing) - promissory estoppel (due to party's detrimental reliance) - partial performance - oral contracts b/w merchants, oral contracts for customized (specially manufactured) goods - parole evidence rule (oral evidence of agreement made before or contemporaneously)

types of covenants not to compete

1. sale of an ongoing business, to keep the sale fair, and the person who sells the business agrees not to compete (business person would have built relationships within the community, etc.) 2. employment contracts, agreeing not to compete with his/her boss for a designated period of time within a designated geographic area.

elements of an offer

1. serious intent by the offeror to be bound to an agreement 2. reasonably definite and certain terms 3. communication to the offeree

accord and satisfaction three requirements

1. the debit is unliquidated 2. the creditor agrees to accept as full payment less than it claims is owed 3. the debtor pays the amount they have agreed on.

freedom

1. to act without restriction from rules imposed by other. 2. to possess the capacity or resources to act as one wishes 3. to escape the cares and demands of this world entirely

Efficiency

1. to maximize the amount of wealth in society 2. to get the most from a particular output 3. to minimize costs

security

1. to possess a large-enough supply of goods and services to meet basic needs 2. to be safe from those wishing to interfere with your property rights 3. to achieve the psychological condition of self-confidence to such an extent that risks are welcome

justice

1. to receive the products of your labor 2. to treat all humans identically, regardless of race, class, gender, age, and sexual preference. 3. to provide resources in proportion to need 4. to possess anything that someone else is willing to grant you

exceptions to the preexisting duty rule

1. unforeseen circumstances 2. additional work 3. UCC Article 2 (sale of goods)

liable

After the delegation, although the delegatee is bound to perform, the delegator remains _______ if the delegatee fails to perform

executory

As long as some of the terms have not yet been performed, the contract is:

convention on contracts for international sales of goods

CISG

USA v. Alfred Caronia (2008)

Caronia was marketing the drug, Xyrem, to physicians for extra purposes that were not approved by the FDA to increase sales and profits. Caronia's motion to dismiss his charges were denied.

Who

Consumers owners or investors management employees community future generations

fraud, duress, or undue influence

Contracts entered into as a result of ________________, may be voided by the innocent party.

Purpose

Freedom Security Justice Efficiency

2008 Federal Reserve bailout of AIG

Government paid a total of $182 billion, making it the largest federal bailout in U.S. history. However, it paid $165 million in bonuses two days before the bailout, and the bonuses were given to members of the unit that had caused the collapse. ---questions regarding ethics.

previous course of dealing

If a pattern of behavior whereby it is reasonably to assume silence communicates acceptance.

any reasonable means (telephone, mail, fax, email)

If no means of communicating the acceptance is specified

are not

Parents _______ liable for contracts entered into by their minor children.

How

Public Disclosure Universalization Golden Rule

valid

Sometimes a rejection is sent, but before it is received, the acceptance is communicated to the offeror. In this case, a ________ contract has been formed.

The Sarbanes-Oxley Act

The Corporate and Criminal Fraud Accountability Act. - signed by Bush in 2002 following several corporate accounting scandals - created the Public Company Accounting Oversight Board - requires companies to have a system in which employees can report suspicious unethical behavior - CEO and or CFO must personally vouch that the company's records are correct

perfect tender; substantial performance

The UCC requires _________ and common law requires the lesser standard of __________.

does not apply

The mirror-image rule that applies under common law ________ under the UCC

protect

Typically, the person who can void the contract is the person the court is attempting to _______, or the party the court believes might be taken advantage of by the other.

Uniform commercial code

UCC

any reasonable means of communication

Under the UCC, an acceptance may be made by _____________, and is effective when dispatched.

WPH process of ethical decision making

Who (Stakeholders) Purpose (Values) How (Guidelines) provides a practical process suited to the frequently complex ethical dilemmas that business managers must address quickly in today's society.

unconscionable

a term applied to a contract in which one party has so much more bargaining power than the other party that the powerful party dictates the terms of the agreement and eliminates the other party's free will.

donee beneficiary

a third party who benefits from a contract in which a promisor agrees to give a gift to the third party. - ie. collecting life insurance

communities

_________ have expectations for behavior of individuals, groups, and businesses.

adhesion contract

a contract created by a party to an agreement that is presented to the other party on a take-it-or-leave-it basis. Such contracts are legal, but are sometimes rescinded on the grounds of unconscionability and the absence of one party's free will to enter a contract

valid contract

a contract that contains all of the legal elements and is one that will be enforced.

not binding

a creditor's promise to accept less than owed, when the debtor is already obligated to pay the full amount is...

valid, yet unenforceable contract

a law prohibits the courts from enforcing it

emancipation

a minor's parents or legal guardians give up their right to exercise legal control over the minor - typically, when the minor moves out of the parents' house and begins support himself or herself.

delegation

a party to a contract (delegator) transfers her duty to perform to a third party (delegatee) who is not party of the original contract.

assignor

a person who transfers his or her rights under a third party

ethical dilemma

a problem about what a firm should do for which no clear, right decision is available.

bilateral

a promise + a promise offeror wants a promise from the offeree to form a binding contract ie. bidding process used by Ebay

unilateral

a promise + a requested action the offeror wants the offeree to do something. ie. a reward

contract

a 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. - a set of legally enforceable promises

a promise to do something

a promise to cook dinner for you roommate for the next six months

a benefit to the promisee

a promise to stay in a job until a particular project is complete (a benefit to the employer)

a promise to refrain from doing something

a promise to stop staying out late at night during exam week

a detriment to the promisor

a promise to your football coach to refrain from riding your motorcycle during football season, even though you love riding it

baum v. helget gas products, Inc.

a simple contract formed through the notes taken by an employer during his interview before being hired.

express ratification

after reaching the age of majority, the person states orally or in writing that he or she intends to be bound by the contract entered into as a minor.

complete performance

all aspects of the parties' duties under the contract are carried out perfectly.

either common law or the Uniform Commercial Code (UCC)

all contracts are governed by:

material terms

allow a court to determine damages in the event that one of the parties breaches the contract. Include subject matter, price, quantity, quality, and parties.

mailbox rule

an acceptance is valid when the offeree places it in the mailbox, whereas a revocation is effective only when the offeree receives it. Not applicable when there is instantaneous communication, such as over the phone, in person, or by telex.

letter of credit

an agreement by the issuer to pay another party a sum of money on receipt of an invoice and other documents. - governed by the UCC

Uniform Eletronic Transactions Act

an e-mail is considered received when it enters the information processing system designated by the recipient.

invitation to negotiate

an expression of possible interest in an exchange is not an offer because it does not express any willingness to be bound by an acceptance ie. a bid request from a form or government for construction projects. (the bids are offers, but the request is an ________)

agreement

an offer by one party (the offeror) and an acceptance of the terms of the offer by the other party (offeree).

counteroffer

an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer. - original offer is terminated

death or loss of legal capacity

an offer terminates immediately, even if the offeree does not know of the terminating event. - if an option contract had been entered into, teh administrator of the offeror's estate or the guardian of the offeror must old the offer open until it expires in accordance with the option contract

voidable

any contract entered into by a minor is ______ by the minor (and only the minor) until he or she reaches the age of majority or a reasonable time thereafter.

express warranty

any description of the good's physical nature or its use, either in general or specific circumstances, that becomes part of the contract - a material term of a contract (size, color, weight, etc.)

usage of trade

any practice that members of an industry expect to be part of their dealings

values and their alternate meanings

are often the foundation for different ethical decisions.

implied contracts

arise not from words, but from the conduct of parties. ie. dental emergency, dentist pulls your teeth, there is implied contract for payment

rights; duties

assignments transfer _______, delegations transfer ________.

revocation

available at any time, even if the offer states it will be open for a specified period of time. effective when the offeree receives it. - offeror should deliver personally

consideration

bargained-for exchange or what each party gets in exchange for his or her promise under the contract.

formation of the agreement

begins when the party initiating the contract, called the offeror, makes na offer to another party, the offeree.

simple delivery contract

buyer and teller typically execute an agreement, and the buyer leavers with the goods.

intent

first element of an offer - must show this to be bound by the offerees acceptance

cure

fix problems with nonconforming goods

bargaining and an exchange

for a promise to be enforceable, there must be

consideration

for a promise to be enforced by the courts, there must be

agreement consideration contractual capacity legal object

four elements necessary for a contract to exist

conforming goods

goods that conform to contract specifications

UCC Article 2A

governs contracts for the least of goods

UCC Article 2

governs contracts for the sale (exchange for a price) or goods (tangible, movable objects)

formal contracts

have a special form or must be created in a special manner.

contractual capacity

legal ability to enter into a binding agreement. - most adults over the age of majority have capacity; those under the age of majority, people suffering from mental illness, and intoxicated persons do not.

statute of limitations

mandates that an action for breach of contract must be brought within a set period of time, thereby limiting enforceability.

stakeholders

many groups of people affected by the firm's decisions.

express authorization

means by which the offeree can communicate acceptance to the offeror is expressly stated in the offer

should not

minors ________ have the right to disaffirm contracts for life insurance, health insurance, psychological counseling, the performance of duties related to stock and bond transfers and bank accounts, education loan contracts, child support contracts, marriage contracts, and enlistment in the armed services

disaffirm

minors can ________ contracts for necessities, but they will still be held liable for the reasonable value of the necessary.

reliance damages

money spent in reliance on an offer

additional work

more than what a contract requires - the promise to do it is valid consideration.

acceptance

must be a manifestation of intent to be bound by the acceptance to the contract, agreement to the definite and certain terms of the offer, and communication to the offer.

requirements of a statute of frauds

must indicate: - parties - subject matter/purpose - consideration given by both parties - significant terms (price, quantity, etc.) - signature of party plaintiff seeks to hold responsible under contract (ie. signature of defendant)

informal contract (simple contract)

no formalities required in making them. ie. Baum v. Helget Gas Products, Inc.

illusory promise

not consideration ie. "if i like it, I will pay for it"

past consideration

not consideration at all

void title

not true title

tender

offer of performance, in which parties discharge their duty by making an offer to perform and being ready, willing, and able to perform.

lack of genuine assent

offeror (proposer) secures acceptance through fraud, duress, undue influence, or misrepresentation. In this situation, there is no genuine assent, and the offeree may be able to use that as a defense to enforcement of the agreement.

executed

once all of the terms of the contract have been fully performed, the contract is:

voidable contract

one or both parties has the ability to either withdraw from the contract or enforce it. If one party chooses to have the contract terminated, both parties must return anything they had already exchanged under the agreement. ie. contracts by minors are usually voidable by the minor

Siemens AG

ordered to pay the largest Foreign Corrupt Practices Act (FCPA) fine in history after admitting to acts of bribery worldwide, going as far as to use bribery as "standard operating procedure" and "a business strategy." Faced a $1.6 billion fine and a forced restructuring.

accord and satisfaction

parties agree that one party will perform his or her duty differently from the performance specified in the original agreement; after the new duty is performed, the party's duty under the original contract becomes discharged.

mutual rescission

parties agree they both wish to discharge each other from their mutual obligations and therefore rescind or cancel the contract

unliquidated debt

parties either disagree about whether money is owed or dispute the amount.

silence will be an acceptance

parties must agree to this beforehand ie. membership that sends new book every month if the member does not send notification of rejection

values

positive abstractions that capture our sense of what is good or desirable. Ideas that underlie conversations about business ethics. Represent our understanding of the purposes we will fulfill by making particular decisions.

incapacity (incompetence)

possession of a mental or physical defect that prevents a natural person from being able to enter into a legally binding contract

quasi-contracts (or implied-in-law contracts)

prevents one party from being unjustly enriched at the expense of another, the courts impose contractual obligations on one of the parties as if the party had entered into a contract. -- painting house example, in which the homeowner hid and refused to pay

course of dealings

previous commercial transactions between the same parties

ethical guideline

provides one path to ethical conduct

exculpatory clause

releases one of the contracting parties from all liability, regardless of who is at fault or what inquiry is suffered

tender of delivery

requires the the seller/lessor have and hold conforming goods at the disposal of the buyer/lessee and give the buyer/lessee reasonably notification to enable him or her to take delivery.

covenant not to compete

restrict what an employee may do after leaving a company, and they often dictate where, when, and with whom an employee may work. - protect trade secrets, talent, and proprietary information. - most common in technology and sales

Delivery ex-ship (delivery from the carrying vessel)

risk of loss passes to the buyer when the goods leave the ship.

CIF or C&F (Cost, insurance, and freight; cost and freight)

seller puts the goods in possession of a carrier before the risk passes to the buyer. Contracts are usually shipment contracts rather than destination contracts

implied-in-fact contract

silence is acceptance, because the offeree receives the benefits of the offered services with reasonable opportunity to reject them and knowledge that some form of compensation is expected yet remains silent.

prevents "bait-and-switch" advertising

some states have consumer protection laws requiring advertisers to state in their ads either that quantities of the item are limited to the first X number of people or that rain checks will be available if the item sells out.

minor

someone under the age of 18 a person is given full legal capacity to enter into contracts when he or she becomes emancipated before reaching the age of majority.

exception to the perfect tender rule

sometimes, language in the contract may indicate that the seller has the opportunity to repair or replace nonconforming goods, this would classify as a ....

statute of frauds

state-level legislations that addresses the enforceability of contracts that fail to meet the requirements set forth in the statute; serves to protect promisors from poorly considered oral contracts by requiring that certain contracts be in writing

plain-meaning rule

states that if a writing, or a term in question, appear to be plain and unambiguous on its face, we must determine its meaning from just "the four corners" of the document, without resorting to outside evident, and give the words their ordinary meaning.

substituted contract

substituting a new agreement in place of the original, instead of canceling the contract

business ethics

the application of ethics to the special problems and opportunities experienced by business people.

seldom

the court ________ considers adequacy of consideration

satisfaction

the debtor's payment of the reduced amount

social responsibility of business

the expectations that the community imposes on firms doing business inside its borders. These expectations must e honored to a certain extent, even when a firm wishes to ignore them, because firms are always subject to the implicit threat that legislation will impose social obligations on them.

substantial performance

the following conditions have been met 1. completion of nearly all the terms of the agreement 2. an honest effort to complete all the terms 3. no willful departure from the terms of the agreement - discharges the party's responsibilities under the contract, although the court may require that the party compensate the other party for any losses caused by the failure to meet all standards

course of performance

the history of dealings between the parties in the particular contract at issue

promissory estoppel

the legal enforcement of an otherwise unenforceable contract due to a party's detrimental reliance on the contract.

accord

the new agreement to pay less than the credit claims is owed

lapse of time

the offer will expire after a reasonable amount of time, which depends on the subject matter of the offer, unless a specific time condition is given.

termination

the offeree can no longer accept it to form a binding contract. Can occur in 1 of 5 ways: 1. revocation by the offeror 2. rejection or counteroffer by the offeree 3. death or incapacity of the offeror 4. destruction or subsequent illegality of the subject matter of the offer 5. lapse of time or failure of other conditions stated in the offer

rejection

the offeree can reject the offer, terminating the offer.

option contract

the offeree gives the offeror a piece of consideration in exchange for holding the offer open for the specified period of time. ie. frequent in real estate contracts, in which people give money for a 30-day option to purchase. If purchased, the amount is deducted from the overall cost.

detrimental reliance

the offeree had reasonably relied on the offeror's promise to hold the offer open and had taken action in reliance on the offer, the courts may use the doctrine of promissory estoppel to estop, or prevent, the offeror from revoking his offer. Once significant partial performance in reliance has begun, courts require that the offeror give the offeree a reasonable amount of time to complete performance.

delegatee

the one receiving the transfer of duties under a contract

novation

the original parties and a third party all agree that the third party will replace one of the original parties and that the original party will then be discharged

discharge by mutual agreement

the parties mutually agree to discharge one another, substitute a new contract, substitute a party, or substitute a different performance.

condition subsequent

the party has a duty to perform until a future event occurs that discharges the party from the obligation

delegator

the party transferring her or his duties under the contract

condition precedent

the party's duty to perform arises after a particular event occurs; if the event never occurs, the party's duty to perform never arises and the parties are thus discharged from the contract

Condition concurrent

the party's duty to perform requires that each party perform for the other at the same time. If one party offers to perform his duty and the other party does not, he can sue the other for nonperformance.

implied warranty of trade usage

the performance of standards that are generally accepted in the trade of a certain product

assignee

the person who receives the transfer and is now entitled to enforce the rights

perfect tender rule

the requirement that a seller deliver goods in conformity with the contract, down to the last detail.

with reserve

the seller is merely expressing intent ot receive offers. The auctioneer may withdraw the item from auction at any time before acceptance of the bid. The bidder may also revoke the bid before that point. ie. antique car auctions

without reserve

the seller is treated as making an offer to accept the highest bid and therefore must accept it. Very few auctions

FAS (free alongside)

the seller, at seller's expense, delivers the goods alongside the ship before the risk passes the buyer

FOB (free on board)

the selling price includes transportation costs, and the seller carries the risk of loss to either the place of shipment or the place of destination

Ethics

the study and practice of decisions about what is good, or right.

mirror-image rule

the terms of the acceptance myst mirror the terms of the offer. If they do not, no contract is formed. Instead, the attempted acceptance is a counteroffer. - applies to bilateral contracts formed under common law

liquidated debt

there is no dispute that money is owed or how much

communication

third element of offer. only the offeree or his agent acting on his behalf can accept the offer.

undue influence

those special relationships in which one person takes advantage of a dominant position in a relationship to unfairly persuade the other and interfere with that person's ability to make his or her own decision

legal object

to be enforceable, the contract cannot be illegal or against public policy

1. where the expression is an advertisement 2. whether it refers to a specific product 3. whether the speaker has an economic motivation for speaking.

to determine whether a promotional activity is protectable as "commercial speech," a court must look to:

mitigation of damages

to prevent a non-breaching party from intentionally increase his damages, the plaintiff must demonstrate that he used reasonable efforts to minimize the damage resulting from the breach.

lack of genuine assent and lack of proper form

two defenses to the enforcement of a contract...

promissory estoppel and contracts under seal

two exceptions to the common law rule requiring consideration

negotiable instruments

unconditional written promises to pay the holder a specific sum of money on demand or at a certain time. ie. checks, notes, draffs, and certificates of deposit

definite and certain

under the common law, the terms of the offer must be, ____________. All the material terms must be included.

objective theory of contracts

we base the existence of a contract on the parties' outward manifestations of intent and we base its interpretation on how a reasonable person would interpret it. What matters is how their intent is represented through their actions and words. Courts look at objective words and behaviors

universalization test

what would the world be like were our decisions copied by everyone else?

when parents are liable for

when a child causes harm if it can be proved that the parent failed to properly supervise the child, thereby subjecting others to an unreasonable risk of harm.

assignment

when a party to a contract (assignor) transfers her rights to receive something under the contract to a third party (an assignee).

recognizance

when a person acknowledges in court that he or she will perform some specified act or pay a price upon failure to do so. ie. a bond used as bail in a criminal case

implied warranty of fitness for a particular purpose

when a seller or lessor knows or has reason to know 1. why the buyer or lessee is purchasing or leasing the goods in question 2. the buyer or lessee is relying on him or her to make the selection

substantive unconscionability

when an agreement is overly harsh or lopsided

duress

when one party is forced into the agreement by the wrongful act of another

unliquidated

when the debt is __________ the parties may enter into an accord and satisfaction

implied ratification

when the former minor takes some action after reaching the age of majority consistent with intent to ratify the contract.

contract under seal

will be enforced without consideration in 10 states - identified by the word seal or L.S.

proper form

writing meeting certain criteria that confirms the existence of the contract.

prevail

written worlds __________.