BLAW 3391 EXAM 3 (Ch 10-13, 14-18)

In general, certain terms must be included in contracts to satisfy the requirement of definiteness. What are the exceptions to this rule? (2)

- courts can complete a contract to supply some missing items - sales contracts under the UCC

A release will generally be binding if it meets the following requirements: (3)

- the agreement is made in good faith - the release contract is in signed writing - the contract is accompanied by consideration

made by the offeree

acceptance

the offeree's positive response to the offeror's proposed contract

acceptance

A common means of settling a disputed claim, whereby a debtor offers to pay a lesser amount than the creditor purports to be owed.

accord and satisfaction

A standard-form contract in which the stronger party dictates the terms.

adhesion contract

A mutual understanding or meeting of the minds between two or more individuals regarding the terms of a contract.

agreement

The transfer of title to real property (which "alienates" the real property from the former owner).

alienation

An assertion or action by a party indicating that they will not perform a contractual obligation.

anticipatory repudiation

A party to whom rights under a contract are transferred, or assigned.

assignee

The transfer to another of all or part of one's rights arising under a contract.

assignment

A party who transfers (assigns) their rights under a contract to another party (the assignee).

assignor

something of value exchanged by the offeror and offeree that distinguishes gifts from contracts

bargained for exchange

A type of contract that arises when a promise is given in exchange for a return promise.

bilateral contract

A mistake that occurs when both parties to a contract are mistaken about the same material fact.

bilateral mistake

The failure, without legal excuse, of a promisor to perform the obligations of a contract.

breach of contract

Terms or conditions of use presented when an online buyer downloads a product but to which the buyer does not have to agree before installing or using the product.

browse wrap term

An agreement that arises when an online buyer clicks on "I agree" or otherwise indicates assent to be bound by the terms of an offer.

click on agreement

A secondary promise to a primary transaction, such as a promise made by one person to pay the debts of another if the latter fails to perform. A collateral promise normally must be in writing to be enforceable.

collateral promise

A doctrine that may excuse the duty to perform a contract when performance becomes much more difficult or costly due to forces that neither party could have controlled or foreseen at the time the contract was formed.

commercial impracticability

the offeror must communicate the terms of the agreement to the offeree

communication

Conditions that must occur or be performed at the same time—they are mutually dependent. No obligations arise until these conditions are simultaneously performed.

concurrent conditions

A qualification, provision, or clause in a contractual agreement, the occurrence or nonoccurrence of which creates, suspends, or terminates the obligations of the contracting parties.

condition

A condition in a contract that must be met before a party's promise becomes absolute.

condition precedent

A condition in a contract that, if it occurs, operates to terminate a party's absolute promise to perform.

condition subsequent

Foreseeable damages that result from a party's breach of contract but are caused by special circumstances beyond the contract itself.

consequential damages

The value given in return for a promise or performance in a contractual agreement.

consideration

something of value exchanged by the parties that distinguishes gifts from contracts

consideration

what each party gives up under the contract

consideration

a legally binding agreement formed by two or more parties, each of whom agrees to perform or to refrain from performing some act now or in the future

contract

The capacity required by the law for a party who enters into a contract to be bound by that contract.

contractual capacity

An offeree's response to an offer in which the offeree rejects the original offer and at the same time makes a new offer.

counteroffer

A contractual promise of one party to refrain from conducting business similar to that of another party for a certain period of time and within a specified geographical area.

covenant not to compete

An agreement to substitute a contractual obligation for another legal action based on a valid claim.

covenant not to sue

A party to whom contractual obligations are transferred, or delegated.

delegatee

The transfer to another of a contractual duty.

delegation of duties

A party who transfers (delegates) obligations under a contract to another party (the delegatee)

delegator

The legal avoidance, or setting aside, of a contractual obligation.

disaffirmance

The termination of an obligation, such as occurs when the parties to a contract have fully performed their contractual obligations.

discharge

One party having more control, power, or strength of position over the other, weaker party.

disparity in control (or bargaining power)

2 things procedural unconscionability include

disparity in control and the form of the contract

Provisions relating to dispute settlement, such as an arbitration clause.

dispute resolution

A contract that is formed electronically.

econtract

In regard to minors, the act of being freed from parental control.

emancipation

A contract between an employer and an employee in which the terms and conditions of employment are stated.

employment contract

An electronic sound, symbol, or process attached to or logically associated with a record and adopted by a person with the intent to sign the record.

esignature

Barred, impeded, or precluded.

estopped

A clause that releases a contractual party from liability in the event of monetary or physical injury, no matter who is at fault.

exculpatory clause

Melissa felt pressured into signing a contract that released her employer from any liability if she is injured on the job. What prohibited behavior under public policy could this be?

exculpatory clause

a contract provision that attempts to release one party from liability in the event the other is injured

exculpatory clause

A contract that has been fully performed by both parties.

executed contract

means "still to be carried out"

executory

A contract that has not yet been fully performed.

executory contract

A contract in which the terms of the agreement are stated in words, oral or written.

express contract

Any evidence not contained in the contract itself, which may include the testimony of the parties, additional agreements or communications, or other information relevant to determining the parties' intent.

extrinsic evidence

The act of refraining from an action that one has a legal right to undertake.

forbearance

refraining from doing something that one has a legal right to do

forbearance

Small print and difficult-to-understand language, a lack of time to read it, no opportunity to ask questions.

form of the contract and delivery

An agreement that by law requires a specific form for its validity.

formal contract

A provision in a contract designating the court, jurisdiction, or tribunal that will decide any disputes arising under the contract.

forum selection clause

A court-created doctrine under which a party to a contract will be relieved of the duty to perform when the objective purpose for performance no longer exists due to reasons beyond that party's control.

frustration of purpose

Zayn boards the Big Rock Metro to ride downtown to his job. Zayn gives his money to the driver and takes his seat. Neither the driver nor Zayn says anything. Zayn and the bus driver have what kind of contract

implied

A contract formed in whole or in part from the conduct of the parties.

implied contract

A doctrine under which a party to a contract is relieved of the duty to perform when performance becomes objectively impossible or totally impracticable.

impossibility of performance

A third party who benefits from a contract even though the contract was not formed for that purpose. An incidental beneficiary has no rights in the contract and cannot sue to have it enforced.

incidental beneficiary

Damages that compensate for expenses directly incurred because of a breach of contract, such as those incurred to obtain performance from another source.

incidental damages

A contract that does not require a specific form or method of creation to be valid.

informal contract

A misrepresentation that occurs when a person makes a false statement of fact that they believe is true.

innocent misrepresentation

A written contract that constitutes the final expression of the parties' agreement. Evidence extraneous to the contract that contradicts or alters the meaning of the contract in any way is inadmissible.

integrated contract

A third party for whose benefit a contract is formed. An intended beneficiary can sue the promisor if the contract is breached.

intended beneficiary

the offeror must have a serious intention to enter into the agreement

intention

3 required elements for a valid offer:

intention; definiteness of terms; communication

A defect that is not obvious or cannot readily be ascertained.

latent defect

A provision specifying the remedies available to the buyer if the goods are found to be defective or if the contract is otherwise breached. Any limitation of remedies should be clearly spelled out.

limitation on remedies

An amount, stipulated in a contract, that the parties to the contract believe to be a reasonable estimation of the damages that will occur in the event of a breach.

liquidated damages

A debt whose amount has been ascertained, fixed, agreed on, settled, or exactly determined.

liquidated debt

A common law rule that acceptance takes effect, and thus completes formation of the contract, at the time the offeree sends or delivers the acceptance via the communication mode expressly or impliedly authorized by the offeror.

mailbox rule

A common law rule that requires that the terms of the offeree's acceptance adhere exactly to the terms of the offeror's offer for a valid contract to be formed.

mirror image rule

The requirement that a plaintiff do whatever is reasonable to minimize the damages caused by the defendant's breach of contract.

mitigation of damages

A misrepresentation that occurs when a person makes a false statement of fact because the person did not exercise reasonable care or use the skill and competence required by the person's business or profession.

negligent misrepresentation

The substitution, by agreement, of a new contract for an old one, with the rights under the old one being terminated.

novation

The view that contracting parties shall be bound only by terms that can be objectively inferred from promises made.

objective theory of contracts

One to whom an obligation is owed.

obligee

One who owes an obligation to another.

obligor

a statement or act by the offeror to the offeree promising to perform or refrain from performing some act

offer

an act or statement that proposes definite terms and permits the other party to create a contract by accepting those terms

offer

made by the offerer

offer

3 main requirements for a valid contract

offer; acceptance; consideration

A rule of contracts under which a court will not receive into evidence prior or contemporaneous external agreements that contradict the terms of the parties' written contract.

parol evidence rule

terms of a contract must include (4)

parties; subject matter of the contract; quantity/time of payment/delivery; terms of the performance

An agreement between a seller and a buyer who frequently do business with each other concerning the terms and conditions that will apply to all subsequently formed electronic contracts.

partnering agreement

Something given or some act done in the past, which cannot ordinarily be consideration for a later bargain.

past consideration

A sum specified in a contract not as a measure of compensation for its breach but rather as a punishment for a default. The agreement as to the amount will not be enforced, and recovery will be limited to the actual damages.

penalty

The fulfillment of one's duties under a contract—the normal way of discharging one's contractual obligations.

performance

An agreement made before marriage that defines each partner's ownership rights in the other partner's property. Prenuptial agreements must be in writing to be enforceable.

prenuptial agreement

A statement indicating how the seller will use the information gathered about the buyer.

privacy policy

This type of unconscionability focuses on the conditions surrounding the formation of the contract, resulting in one party not freely consenting to all of the terms and obligations of the contract.

procedural unconscionability

A declaration that binds a person who makes it (the promisor) to do or not do a certain act.

promise

A doctrine that can be used to enforce a promise when the promisee has justifiably relied on the promise and when justice will be better served by enforcing the promise.

promissory estoppel

laws and other governmental decision-making based on what is good for society

public policy

A Latin phrase meaning "as much as one deserves." The expression describes the extent of compensation owed under a quasi contract.

quantum meruit

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

quasi contract

The acceptance or confirmation of an act or agreement that gives legal force to an obligation that previously was not enforceable.

ratification

Information that is either inscribed on a tangible medium or stored in an electronic or other medium and is retrievable in visual form.

record

A court-ordered correction of a written contract so that it reflects the true intentions of the parties.

reformation

An agreement in which one party gives up the right to pursue a legal claim against another party.

release

A remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made.

rescission

An equitable remedy under which a person is restored to their original position prior to loss or injury, or placed in the position they would have been in had the breach not occurred.

restitution

Knowledge on the part of a misrepresenting party that material facts have been falsely represented or omitted with an intent to deceive.

scienter

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

shrink wrap agreement

An equitable remedy in which a court orders the parties to perform as promised in the contract. This remedy normally is granted only when the legal remedy (monetary damages) is inadequate.

specific performance

A state statute that requires certain types of contracts to be in writing to be enforceable.

statute of frauds

This type of unconscionability focuses on the terms of the contract. The terms are considered to be unconscionable if they are overly harsh or too one-sided.

substantive unconscionability

If the terms of an agreement seem to be very one-sided, which public policy could it be violating? (2)

substantive unconscionability and restraint of trade

An unconditional offer to perform an obligation by a person who is ready, willing, and able to do so.

tender

One who is not a party to the contract but who stands to benefit from the contract's performance.

third party beneficiary

an interaction between two or more parties relating to business, commercial, or governmental activities

transaction

Unscrupulous or grossly unfair. An unconscionable contract or clause that is void on the basis of public policy because one party was forced to accept terms that are unfairly burdensome and that unfairly benefit the other party.

unconscionable

a doctrine that describes highly unjust terms of a contract, which are in favor of a party with a greater bargaining power

unconscionable

Persuasion that is less than actual force but more than advice and that induces a person to act according to the will or purposes of the dominating party.

undue influence

A valid contract rendered unenforceable by some statute or law.

unenforceable contract

the set of uniform laws that govern commercial transactions

uniform commercial code (UCC)

A type of contract that results when an offer can be accepted only by the offeree's performance.

unilateral contract

A mistake that occurs when one party to a contract is mistaken as to a material fact.

unilateral mistake

A debt that is uncertain in amount.

unliquidated debt

Charging an illegal rate of interest.

usury

A contract that results when the elements necessary for contract formation (agreement, consideration, capacity, and legality) are present.

valid contract

A legal benefit or detriment of sufficient, measurable value promised by each party.

value

two elements of consideration

value and bargained for exchange

A contract having no legal force or binding effect.

void contract

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

voidable contract

Knowledge of and genuine assent to the terms of a contract.

voluntary consent