Legal Test 3

what if someone doesn't have a license to do business—are their contracts enforceable?

NO - regulatory contracts are voidable - someone playing doctor without license YES - business tax contracts are enforceable - open // carry on business - strictly to raise money

exculpatory clauses

a provision in a contract or separate contract in which one party agrees to hold the other party harmless (not responsible) for injuries caused by that parties negligence - hold harmless agreements - frowned on by courts but might be upheld

sue for damages

a remedy for breach of contract where a party sues the breaching party for cash damages

preliminary negotiations

a request or invitation to negotiate is not an offer - "will you sell your three bedroom house" - "i wouldn't sell my car for less than $8,000" - invitation to submit bid is not an offer

pre-existing duty rule example

a sheriff cannot collect a reward for information leading to the capture of a criminal if the sheriff already has a legal duty to capture the criminal - if a party is already bound by contract to perform a certain duty, that duty cannot serve as consideration for a second contract

contract example

a student put out a $100,000 hit on instagram for a teacher they don't like - is this a valid contract? - NO - this is an illegal activity so there could never be a valid contract

cover for mitigation of damages

a way to mitigate damages in a goods contract - if party supplying the goods breaches, other party can obtain goods elsewhere and recover any difference in price from breaching party

misrepresentation

innocent misrepresentation - compensatory damages - when party misrepresents a material fact that is reasonably relied upon by another party when entering the contract

when does the mailbox rule not apply?

instantaneous forms of communication - face-to-face, phone, and e-mail communication - e-mail is considered sent when it either leaves the control of the sender or is received by the recipient

fraud

intentional fraud - compensatory and punitive damages - when party intentionally misrepresents a material fact that is reasonably relied upon by another party when entering the contract

counteroffer example

jessica offers to sell her home to bradley for $225,000, and bradley says, "the price is too high. i'll pay $200,000." - bradley's response is a counteroffer - it terminates the original offer and creates a new offer

admission in court example

john and jane made an oral . john says he is going to paint jane's house next week, and jane is going to pay you $1,000. john breaks the contract, and jane sues john in order to enforce the contract - what's is the defense going to be? - john will argue that contract is unenforceable because it wasn't written down and jane didn't sign it - however, john confesses under oath that there was an oral contract

modification of contracts

- common law contracts - UCC contracts

unilateral contract example

- contests, lotteries, and other competitions for prizes - i will pay you $35 *IF* you walk my dog today -- you don't pay if the dog doesn't get walked

minors contracts

- contracts for necessities - contracts for nonneccessities

liability of assignee

responsible for ascertaining the status of the assignor's rights and duties under the contract

duress example

rob store because someone kidnapped brother and made you

repudiation example

"i withdraw my previous offer of october 17"

option contracts

(1) exchange for consideration (2) by anyone (3) oral or written (4) no time limit (5) anything - offeror promises to hold an offer open for a specified period of time in exchange for consideration

can an offer be revoked?

(1) is it in writing? (2) was consideration present? - if not in writing and no consideration the offer is revocable

definiteness of terms

(1) know what you are buying/selling (2) obligations (3) timeline (4) price - UCC only needs to know what you are selling - common law needs to know everything

firm offer

(1) no consideration required (2) only by merchant (3) written (4) less than 90 days (5) sale of goods - UCC

if both parties are merchants, the new terms become part of the contract unless...

(1) offer limits acceptance to terms stated in offer (2) offeror notifies offeree of objection to new terms (3) new terms materially change contract -- something important to us that makes or breaks a deal

elements of consideration

(1) something of legally sufficient value must be given in exchange for the promise (*legal detriment*) (2) must be a *bargained-for exchange*

undue influence example

*subordinate* - 45 year old woman - husband recently died - didn't finish high school and works at a telephone company *dominant* - 55 year old man - wealthy - woman moves to alabama but has to sell all of her things - on way to church to get married, they stop at attorney. she is asked to sign papers and he says that they're papers making sure that they're marrying for love and not money - should have had separate attorney there to advise - conflict of interest for only him being there and telling her to sign papers - the wife starts working at the husbands store - husband commits suicide - paper that wife signed was a prenup - says that everything that belongs to him is his and everything that belongs to her is hers - could the prenup be voided? potentially undue influence case

invitations to negotiate

- *advertisements, catalogues, circular letters* - *price lists*: invites buyer to offer to buy at that price - *live auction*: bidder is offeror, auctioneer is the offeree

assignment of contracts

- assigning away rights - delegating duties

why have exculpatory clauses?

- avoid dumb lawsuits - slows down court process

option contract examples

- i will keep the contract open for 5 days if you give me $100 -- have to keep it open until after the 5th day - go to car dealership. there is a used car for $2,500 and the dealer says that he will hold the car for 3 days while you get the money to buy it. you come back and it was sold -- if this had of been stated in writing it could be considered a firm offer, but since there was no exchange of consideration there is *NO CONTRACT*

necessary elements for a valid acceptance

- intent to accept - communication to offeror - mirror image rule

necessary elements for a valid offer

- intention - definiteness of terms - communication - legal activity proposed

legal capacity

- mentally competent - legal age

voidable contracts

- misrepresentation - fraud - duress - undue influence - mutual mistake of fact

damages

- mitigation of damages - liquidated damages - compensatory damages - punitive damages - specific performance

mailbox rule example

- offer is received by the offeree on may 1 - rejection is sent by the offeror on may 2 - rejection is received on may 4 - acceptance is sent by the offeree on may 3 - acceptance is received on may 5 this is *NOT* a contract because you received the rejection first before the acceptance was ever received - mailbox rule wouldn't apply (mailbox rule exception)

mailbox rule example

- offer is received by the offeree on may 1 - revocation is sent by the offeror on may 2 - acceptance is sent by the offeree on may 3 - revocation is received on may 4 this is a contract because a revocation is not effective until received and the date of contract was may 3 (when acceptance was sent), which is before the revocation date of may 4

irrevocable offers

- option contracts - firm offers

exceptions to statute of frauds

- partial or substantial performance - admission in court

what controls if there is a conflict?

- printed words, typed words, or handwritten words - the numerical numbers or number in words?

examples of specific performance

- readily available goods (wheat, corn) - rare or unique goods (painting, parcel of land)

termination by action of parties

- revocation - rejection - counteroffer

termination of offer

- time specified - revocation - counteroffer - rejection - death of either party before acceptance - supervening illegality - bankruptcy of offeror - destruction of subject matter - lapse of reasonable time

types of offers

- unilateral - bilateral

every contract must have

- valid offer - valid acceptance - consideration - legal capacity

what is required for a "writing"?

- written evidence of terms of the agreement - signed by the party to be charged

example of contract for nonnecessity

16 year old moves out of house and drops out of school. rents an apartment for 1 year starting on october 1. rent is $600 a month. pays $1,200 first and last month to move in. needs television and music for moving in party he is having. goes to best buy because you can buys items on credit with no money down and no payments until february. buys on credit a 60-inch LED tv for $850 and a bose wave machine for $2,500 and speakers for $500. after the party, find baseball bat sticking out of tv and tub is filled with water and the bose wave machine is in it. speakers are stacked on top of each other and used as steps. bring it all back to best buy and tells them he doesn't want them anymore. does best buy have to take them back? - can cancel credit card contract and he wouldn't have to pay because it is a contract of nonnecessity

intent to contract example

2 men are talking at a bar (joe & ben). joe says that he doesn't want to die on his farm and discusses going to a tropical island. makes the comment that he would love to go but doesn't have the money to do so and would have to sell the farm. ben says that he would buy the farm. joe then states that he would sell for $250,000. ben tells joe to have the paperwork ready so that he can purchase the home. a week later, joe says that he is not going sell because wife doesn't know so ben sues because they "had a deal". case is brought to trial. there was a napkin that had the rough plans of the contract outlined. the court now has to decide if a reasonable person would enter into the contract - nothing was signed - talked about a note and interest - wouldn't make his own contract without talking to someone else about making the actual contract - unusual to go into that much detail which shows some intent - however, this is *NOT* a contract

time

2 to 3 years would be reasonable

are attorney's fees recoverable in a breach of contract case?

YES - but only if specifically stated in a provision of a contract

covenant not to compete

a contract that provides that a seller of a business or an employee will not engage in a similar business or occupation within a specified geographical area for a specified time following the sale of the business or termination of employment - noncompete clause

invitation to make an offer

a general rule that states that an advertisement for the sale of goods, even at a specific price, is treated as an invitation to make an offer and not an offer

firm offer example

a merchant agreeing in writing to sell one hundred units of a certain good at a fixed price of $50 for a period of 60 days

promissory estoppel

a person who has reasonably relied on the promise of another can often obtain some measure of recovery all of these elements are required - promise is made - reasonably relied upon by other party - reliance is forseen - promissee will suffer substantial injury if promise not enforced

mailbox rule

acceptance of an offer becomes effective on dispatch - rejection (offeree) takes affect when received by offeror - revocation (offeror) takes affect when received by offeree - if the authorized mode of communication is via the U.S. mail, then an acceptance becomes valid when the offeror sends it and not when the offeror receives it

ratifying a contract

act of approving the terms and conditions that are being spelled out in the document

legal age

age of majority in the state you are in - typically 18 - if not of legal age, contract voidable by minor and they can disaffirm

bilateral contract example

agree to do lawn service on a month to month basis for $35 per month - if lawn doesn't get mowed the lawn service can be taken to court - they will be fined to do the service because there is a contract

legal detriment

agreeing to do something that you are not legally obligated to do, or agreeing not to do something you have the legal right to do

bargained for exchange

agreeing to do something/not do something because you expect to get something in return

how are compensatory damages determined?

amount of compensatory damages is the difference between the value of the breaching party's promised performance and the value of his or her actual performance - amount is reduced by any loss that the injured party has avoided

specific performance

an equitable remedy requiring exactly the performance that was specified in a contract - not granted unless the party's legal remedy (monetary damages) is inadequate

partial or substantial performance

an exception to the statute of frauds in which the performance of portions of an unwritten agreement by one or both parties can constitute proof that an oral contract exists between the parties - depositing a check without signature - liking a payment in venmo

admission in court

an oral contract can be enforced without meeting the requirements of a statute of frauds if the other party admits under oath that the oral contract was made

UCC exception to mirror image rule

applies to the sale of goods - if the acceptance does not mirror the terms of the offer it is still effective - new terms may or may not become part of the contract

scope

as narrow as possible

duress

being threatened financially or in some other way

invitation to make offer example

best buy is willing to sell you a 60 inch tv for $100 - however, it rings up for $1,100 + tax - they say it is a misprint in ad - if the ad was an offer and you went in, you are accepting that offer and they would have to sell it to you for $100

mirror image rule example

bob (offeror) - buys house for $250,000 - $25,000 down - closing on march 3 john (offeree) - agrees to buy house for $250,000 - agrees to $25,000 down - wants to close on may 3 is there a contract? - NO - counteroffer - changed the terms (date moved from march 3 to may 3)

mutual mistake of fact

both parties are mistaken about a material fact - have a contract to buy a yacht - before closing on the yacht it is destroyed - neither party knows that the yacht was destroyed

example of covenant not to compete

brown insurance agency hires tami to provide marketing analysis. before her first day of work, tami signs a covenant not to compete. this agreement prohibits tami from working with a brown competitor for ten years after she leaves her position with brown. after six months, tami leaves brown for medical reasons. three years later, she takes a job with the langley group, a brown competitor. brown sues tami for breach of contract. is brown's covenant not to compete enforceable? - no - brown's time requirement of waiting ten years after leaving a job with the company is unreasonable - tami can work for the langley group and is not liable under the brown covenant not to compete

liquidated damages example

buyer backs out of a contract - down payment of $10,000 for a $100,000 house - considered a punishment if you aren't given that money back

how does the court interpret ambiguous or vague terms?

court will construe ambiguous contract terms against the drafter of the agreement (party who wrote contract) - this rule only applies where one contracting party is in a superior bargaining position, usually either as a result of greater experience or the assistance of counsel

general rule of acceptance

can accept through any reasonable means unless offer specifies otherwise - if accepted through writing, then must be done in writing

what if offer is made to the public?

can be revoked in the same manner in which the offer was originally communicated

written evidence

can be written anywhere - doesn't have to be formal - napkin, scratch paper, invoice, receipts - can use pencil, pen, crayons, paint, tablet

contract for necessity

can void contract but must return collateral and pay reasonable value for the benefit received - things needed to survive (i.e. food, clothing, shelter)

contract for nonnecessity

can void contract, return remaining collateral, and owe nothing more - do not need to survive

exculpatory clause example

carnival for church - can buy beer or wine - had to implement armbands - signed an assumption of risk which releases church from liability

past consideration example

cleaned someones yard but you weren't expecting anything in return - you come back later and the person says that they will take you to dinner, but they end up not upholding that promise - can't hold them to that because you weren't expecting anything

writing or no writing?

construction contract to build commercial office building and will take a minimum of 10 months to build - no - say it can be done in a minimum of 10 months - since it is possible that it can be done in 10 months it is not more than a year and doesn't have to be in writing

statue of frauds

contracts should be in writing (1) contracts made in consideration of marriage (i.e. prenuptial agreements) (2) contracts for the sale of goods of $500 or more (3) contracts to transfer an interest in real estate (4) contracts that require more than one year to perform (5) contracts to answer for the debt of another - denies enforceability to certain contracts that do not comply with its requirements - *primary purpose*: prevent harm to innocent parties by requiring written evidence of agreements concerning important transactions

quasi-contract

court implies a contract in order to prevent unjust enrichment by one party - not true contracts - do not arise from any agreement - cannot be invoked by a party who has conferred a benefit on someone else unnecessarily or as a result of misconduct or negligence - used when we have a problem proving a contract -- contract could have been verbal

irrevocable

incapable of being changed or called back

what about silence?

generally not considered acceptance - can use silence as acceptance if you have used with a party before - how can you use it if it's not usable? happens by accident

will new terms become part of the contract?

depends on: - if one of the parties is not a merchant, the new terms don't apply unless *BOTH* parties agree to them - if both parties are merchants, the new terms become part of the contract, but there are exceptions (*see next card*)

serious intent

determined by what a reasonable in offeree's position would conclude that the offeror's words and actions meant - offers made in anger, jest, or undue excitement *do not* meet serious intent

subleasing

different than assigning - not signing rights away - land lord to whoever is subleasing

mitigation of damages example

don't have strawberries to give to customers - have to go out and find another supplier to provide strawberries to customers - *breach of contract*: new supplier is 10 cents more so they can sue the old supplier for difference in price

writing or no writing?

enter into a lease for 12 months for real estate - no - just a lease and not more than a year

who has to sign?

everyone involved or it can't be enforced against them // can't be sued

do courts consider adequacy of consideration?

generally, courts do not inquire whether the deal between two parties was monetarily fair - merely that each party passed some legal obligation or duty to the other party - the dispositive issue is presence of consideration, not adequacy of the consideration

promissory estoppel example

giving a pledge to an organization and agree to pay $5,000. you haven't paid them and you really don't want to. was feeling good when you made pledge - *NOT A CONTRACT*; it is a gift - no bargain for exchange and not getting anything in return so no contract can they sue for $5,000? - forseen reliance - substantial injury - promise (pledge) was made - can sue under promissory estoppel

example of legal detriment & bargained for exchange

go to the grocery checkout and put them on the counter. you don't have to buy the groceries at that store. groceries cost $125 in total - you have no obligation - if you agree to pay for them (*legal detriment*) and expect to get groceries (*bargain for exchange*)

modification of contracts: UCC

good faith modification allowed without new consideration

exception to common law rule

good faith modification in response to unanticipated conditions

cosigning

has to be in writing to be enforceable

assigning away your rights example

have a lease on an apartment that is for 12 months (nov 1 to nov 1) - you are graduating in april and will want to terminate lease - have the contract in writing (technically don't have to because it is a 1 year contract) - landlord says that he won't let you out of the lease so you have to *assign* your lease to your best friend for the remaining time - if they don't pay lease payments that will be on you but you have no further rights to that apartment - if they are evicted, you will have to pay the rest of the lease payments

delegating duties example

hire me to remodel your kitchen. i am planning to do all of the work myself, but i am not a painter. paint fumes give me a headache. i am planning to delegate the painting to my friend, pam. i am still responsible for the kitchen remodel, and you'll pay me when I'm finished. the contract is between you and me. pam is only responsible for the painting

writing or no writing?

hired on a job for a 3 year contract - yes - more than a year

writing or no writing?

hired with no term and end up working for 5 years - no - when they hired you they could have fired you within the year

statue of frauds example

house for sale and jane is looking to buy a house - for sale by owner (john) for $250,000 - agrees to purchase for $10,000 down - writes check and john puts the check in desk drawer - on sunday, jane has a change of heart and doesn't want the house anymore so she stops payment on the check - if john sues does he have a good chance of winning? YES; there is written evidence and jane signed name on check -- written terms in the memo of check too

what is the bad of the option contract?

if at the end of an option contract you have say you are here to buy and they sold the item yesterday = *breach of contract* - can only sue for damages if they have breached the contract

anticipatory breach/repudiation

if one party indicates inability or lack of desire to perform the contract before the performance of a contract takes place - anticipate the breach - have to notify if you are breaching so that you aren't sued and you give the opportunity for mitigation

exception to mailbox rule

if rejection has already been sent, the acceptance must be received before the rejection in order to be effective - acceptance has to be received before the rejection - whatever gets there first is what counts

when are covenants not to compete enforceable?

if they are reasonable in: - time - scope - geographic region

exculpatory clause example

if you go on a cruise you sign an agreement and can't sue the cruise line for anything - bad cruise and you get hurt - if the cruise line is grossly negligent than court will not uphold and they will be sued - if not grossly negligent = upheld

quasi-contract example

just graduated college. have degree in accounting so you decide to open your own accounting practice. first client is a business that sells goods from other countries. you do all of their bookkeeping. you do the work but don't get around to talking about income tax. send in quarterly payroll tax. then you wonder if you need to start doing taxes in march, but you can't get a hold of the business. do you file the tax return? ( if you think they think you're supposed to) or do you not do it because it was never discussed? - if you choose to do taxes you send a bill for having done taxes - gets the bill and will pay it OR says they never asked you to do it and so they're not going to pay it - refuses to pay you so you sue for breach of contract - got taxes filed = no penalties or fees so he is unjustly enriched if he doesn't pay you for doing taxes

mutual mistake of fact example

kid buys a baseball card and when he goes and asks what the card costs, the clerk says it is $2.50. kid buys it but then later on the owner asks who bought the card because it actually was being sold for $2,500. the clerk says the kid bought the card but thought it was only $2.50 - owner says that he wants the card back and will give him his $2.50 back - could argue mutual mistake of fact - kid could say that he knew card was actually worth that much but took the $2.50 because it was a good deal - not mutual since clerk was the only one mistaken

acceptance example

lottie makes an offer to paul. paul is not interested, but paul's friend josé says, "i accept the offer." - no contract is formed.

ucc exception example

macy's - *subject matter*: 500 jeans - *price*: $80 each - *payment terms*: credit 2/10 net 30; pay invoice within 30 days, but if you pay in 10 days you get a 2% discount - *delivery date*: dec 1, 2008 - *delivery method*: ups - *shipping terms*: fob destination - *warranty*: 90 days - *other*: throw in 400 free hats, advertising materials, hangars, stickers jennifer lopez inc. - *subject matter*: 500 jeans - *price*: $150 each - *payment terms*: COD (cash on delivery) - *delivery date*: dec 1, 2008 - *delivery method*: fedex - *shipping terms*: fob shipping - *warranty*: 30 days - *other*: deals with 2 merchants - acceptance does not mirror offer - have a contract, but not sure of the terms - new terms are the new contract unless: (1) price is a material change (2) payment terms is a material change (3) shipping terms is a material change

compensatory damages example

mary is hired to perform certain services during august for $3,000. mary's employer breaches the contract, and she finds another job that pays only $500 - mary can recover $2,500 as compensatory damages

promissory estoppel example

michael scott promised young kids to pay their college tuition (scott's tots) - kids were expecting money - relied upon by kids ("we will now be able to go to college") - *forseeable* (wealthy people pay tuition all the time) - *substantial injury* ( not being able to go to college because they aren't getting that tuition money anymore)

disaffirming a contract

minor can disaffirm contract (back out of a contract) - if legal the contract is ratified

compensatory damages

monetary award equivalent to the actual value of injuries or damages sustained by the aggrieved party - compensate the injured party only for injuries actually sustained and proved to have arisen directly from the breach of contract

punitive damages

monetary damages that may be awarded to a plaintiff to punish the defendant and deter similar conduct in the future - very seldom awarded in lawsuits for breach of contract

consideration

money

modification of contracts: common law

must have new consideration

ambulance ride

no contract because of no capacity - quasi contract - unjustly enriched if you don't pay for the ambulance ride

lapse of reasonable time

no specified time for termination - will end at a reasonable time

expression of opinion

not an offer - does not evidence intention to enter into binding agreement

mentally competent

not declared by court to be incompetent - if not mentally competent = contract void

modified contract for the sale of goods

now is greater than $500 and has to be in writing

what if the promisor attempts to revoke the offer after the promisee has begun performance but before the act has been completed?

offer becomes irrevocable once performance has begun

communication

offer has to be communicated to the offeree so they know it has been made

time specified

offer open for 3 days then expires

mirror image rule

offeree must accept without adding or changing any terms - if acceptance is subject to new conditions, or if terms of acceptance materially change original offer, the acceptance may be deemed a *counteroffer*

intent to accept

offeree must show objective intent orally, by conduct, or in writing that he or she is willing to be bound by the terms of the offer - would a reasonable person believe that you had intent to accept?

solicitation of additional offers

offeree responds to offer with words, but not clearly an acceptance - "i am starting a lawn service and will landscape and mow the lawn for $50" - someone thinks that seems high and that another person was going to do it for $40 - pawn brokers // negotiating

novation

one party transfers all its obligations and benefits under a contract to a third party - a third party successfully substitutes the original party as a party to the contract - substitutes assignee for assignor and release assignor from obligations - releases you from obligations

what can the non-breaching party do in the case of anticipatory repudiation?

only if not notified - can immediately sue for anticipatory breach - wait for date of performance and then sue for breach

who can accept an offer?

only the offeree

option to buy a house

option contract - lease with option to buy at the end of the lease term - house will not be sold out from under you - you are opting into the lease and paying rent and doing everything that is required (consideration) so you will have the option to buy at end of lease - if you *DO NOT* comply with terms than the option can be taken away

misrepresentation & fraud example

owe some money on a car still ($2,000). you are moving so you are selling the car for $5,000. you also had car trouble and you take it to the mechanic who replaced the engine. you are telling people that the car has a new engine and finally someone agrees to buy and give you $2,000 (promissory note for the remaining $3,000). you sign the deed over and a week later the car stops running and has to be towed back to lakeland. the person who bought the car is told that it needs a new engine - the engine that was put in the car wasn't new - made misrepresentation of the car but you didn't know (innocent) - the buyer can back out of the contract - mechanic defrauded you so you can sue for the tort of fraud because it was intentional fraud - if you had of known that the engine was not new and was just painted to look real then you would have partaken in intentional fraud too

mitigation of damages

parties in contract are required to mitigate (lesson) damages in the event of a breach by the other party

offeror

party making offer

offerree

party to whom the offer is made

party to be charged

party you want to enforce the contract against - if you are the only one to sign it, it can only be enforced against you

unilateral

performance as acceptance - can't be taken to court - no contract until there is some kind of performance - not paying unless service is rendered - accept offer by *DOING*

modification example

pool contract - *construction cost*: $15,000 - *down payment*: $1,000 - *balance due*: $14,000 -- due on completion - *additional cost*: $5,000 - *new balance*: $19,000 details of contract - dirt isn't holding up to the shape that the pool is supposed to be - will take longer - have to bring in more dirt - additional $5,000 for total of $19,000 - don't want to pay the additional because you agreed to $14,000 - they say they will walk off if you don't pay the $19,000 -- can sue for breach of contract and specific performance - when you hire the pool company you expect that they know ground conditions (should have been anticipated) - you can either sue or agree to pay - pay, but only $14,000 - they lose because they modified the contract; $5,000 is *new consideration* for person getting the pool, but the company has a pre-exisiting obligation to build pool - with additional $5,000 still obligated to buy pool so no new consideration

printed words, typed words, or handwritten words

printed words are already in contract, typed words are those that are added to the blanks in a contract, and handwritten words are added to the margins of a contract - handwritten prevails because it is the very last thing to happen - then it would be typed over printed

bilateral

promise for a promise - most contracts are bilateral - courts favor a bilateral contract

offer

promise or commitment to perform or refrain from performing some specified act in the future

pre-existing duty rule

promise to do something you are already legally obligated to do is not valid consideration - negates legal detriment

liquidated damages

provision in contract where both parties agree that if one of the parties breaches, they will pay a predetermined amount of money to non breaching party - only upheld if reasonable and not a punishment

supervening illegality

put offer out and before it can be accepted the activity in the offer becomes illegal

rejection

refusal to accept - can be rejected by words or conduct - inquiring about an offer does not constitute rejection

counteroffer

rejection of the original offer with making of a new offer - original offeror is now the offeree and has the *power of acceptance*

what is it called if it is not a contract?

release of obligation

liability of assignor

remains liable unless there is an agreement to the contrary by the other party to the contract

example of contract for necessity

same example as above, but now you have been in the apartment for 3 months and you don't want to live there anymore so you move out a month later (4 total months). can the landlord make him pay for remaining 8 months? - no - he is not receiving a benefit anymore and already paid for the months that he was living there

intention

serious intention on part of offeror - would a reasonable person believe that offeror intended to get in the contract based on what they said - intention to be bound by offer has to be *OBJECTIVELY* clear to others

definiteness of terms example

soccer warehouse e-mails eastport athletic store and offers to sell "from one to twenty-five kwik goal heavy-duty anchor bags for $200 each state the number desired in acceptance." - in an e-mail reply, eastport's general manager agrees to buy one dozen of the bags - because the quantity is specified in the acceptance, the terms are definite - the contract is enforceable

mutual mistake of fact example

someone goes on vacation and goes rock climbing. they collect rocks and minerals and then go to a store to sell them. they get $50 for them and then see the news. the news is saying that those rocks and minerals are rare and that they have been valued at $50 million - realizes those are the rocks and minerals he sold to the store - not mutual - the person who sold the rocks and minerals had no clue that they were worth that much

merchant

someone who sells goods - regularly deals in the selling of goods that are involved in the contract or offer

past consideration

something that has been performed in the past and cannot be consideration for a promise made in the present - lack consideration because the element of bargained-for exchange is missing - negates bargained-for exchange

the numerical numbers or number in words?

spelled out // written out prevails (number in words) - if you have the number 10 but have written out one hundred, the one hundred prevails because it is spelled out and it is known the 10 was a mistake

revocation

taking a contract back - can revoke anytime before accepted unless it is irrevocable - can revoke the offer by expressly repudiating it or by performing acts that are inconsistent with the existence of the offer and are made known to the offeree - option contract - firm offer

death of either party before acceptance

terminates a revocable offer - if they accepted and then die, the contract is still active and heirs have to deal with it

power of acceptance

the party to whom the offer was made has the power to bind the offeror to the contract

assigning away rights

transferring contract to someone else - giving away

delegating your duties

transferring contract to someone else - putting someone else in your place for awhile

considertation

value (i.e. money) given in return for a promise (bilateral contract) or in return for a performance (unilateral contract)

parol evidence example

want to buy a house and there is a realtor that is discussing about furnishings that will be included. says that to her knowledge furnishings for windows and living room will be included (has to be stated in contract -- sofa, side chair, coffee table, end table, refrigerator, washer/dryer, ceiling fans). in the space that you sign on the real estate contract it includes window treatments, fans, washer, living room chairs, light fixtures. you move in and most of the stuff that was said to be included is not there. everything has been cheapened (no chandelier, cheap fans, etc.) - breach of contract? can you speak to agent to get original things added to contract? - no, prior statement made for purpose of changing contract

novation example

when a tenant passes the lease over to another person making him or her responsible for rent payments and any property damages according to the original lease contract

when is rejection effective?

when received by the offeror

when is a revocation effective?

when the offeree or offeree's agent actually receives it - a revocation sent via fedex on april 1 and delivered at the offeree's residence or place of business on april 3 becomes effective on april 3

undue influence

when you have 2 parties (a dominant and a subordinate) and one person is taking advantage of a position of power over another person - special relationship between parties (i.e. husband/wife, doctor/patient, coach/athlete)

communication to offeror

whether the offeror must be notified of the acceptance depends on the nature of the contract - *unilateral contract*: full performance of some act is called for so acceptance is usually evident, and notification is unnecessary - *bilateral contract*: communication of acceptance is necessary because acceptance is in the form of a promise. acceptance must be timely and the general rule is that acceptance is timely if it is effective before the offer is terminated

when can you assign?

you can freely assign a contract unless the contract says otherwise

exception to parol evidence rule

you can introduce the evidence & do the following: (1) prove misrepresentation, fraud, duress, undue influence, mutual mistake, or lack of capacity (2) clarify an ambiguity (something not being clear) (3) show prior course of dealing or industry practice

parol evidence rule

you cannot introduce, in court, evidence of any prior or existing oral or written statement for the purpose of changing a written contract - if you have written contract all of important terms need to be in that contract because you can't add them in later in court

communication example

you own a watch, but you put it down in the caf and forget and walk out. you can't find it and so you post a lost and found on social media with a $300 reward. someone finds the watch and they watch around. that person hasn't seen the post but they come to your door. you have the watch back so you slam the door in the person's face. that person then sees the reward online and comes back wanting the reward - *NOT* obligated to give reward because they didn't see reward to begin with