Blaw midterm 2
1. competent parties 2. agreement 3. consideration 4. lawful purpose 5. proper form
5 rules for contracts
Marriage
A contract in consideration of _____ must be in writing
executory contract
A contract that has not yet been fully performed.
Voidable Contract
A contract that may be legally avoided at the option of one or both of the parties.
Promissory Estoppel
A doctrine that applies when a promisor makes a clear and definite promise on which the promisee justifiably relies; such a promise is binding if justice will be better served by the enforcement of the promise.
innocent misrepresentation
A false statement of fact or an act made in good faith that deceives and causes harm or injury to another.
Bilateral Contract
A promise made in exchange for another promise
contract
A promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.
Plain Meaning Rule
A rule of interpretation which states that words in a contract should be given their ordinary meaning.
objective theory of contracts
A theory under which the intent to form a contract will be judged by outward, objective facts (what the party said when entering into the contract, how the party acted or appeared, and the circumstances surrounding the transaction) as interpreted by a reasonable person, rather than by the party's own secret, subjective intentions.
Surety
A third party who agrees to be primarily responsible for the debt of another. Contract to act as one must be in writing
Uniform Electronic Transactions Act (UETA)
A uniform state act providing a legal framework for electronic transactions giving electronic signatures and records the same validity and enforceability as manual signatures and paper-based transactions.
Construction against the drafter
Ambiguous provisions will be interpreted against the party drafting the provision on the basis that the drafter had superior knowledge of the subject matter and should have been more specific or accurate in the preparation of the provision.
click-wrap agreement
An agreement that appears on a user's computer screen when a user attempts to download software or purchase goods (also referred to as a license)
shrink-wrap agreement
An agreement whose terms are expressed in a document located inside a box in which software are packaged.
Quasi Contract
An obligation or contract imposed by law (a court), in the absence of an agreement, to prevent the unjust enrichment of one party.
Fraudulent Misrepresentation
Any misrepresentation, either by misstatement or by omission of a material fact, knowingly made with the intention of deceiving another and on which a reasonable person would and does rely to his or her detriment.
No
Are fruits of the land and personal property covered by SOF
No, not unless cosigner
Are parents liable if their minor cannot pay a contract?
yes, either. Forbearance counts
Can consideration be a benefit or a detriment?
no
Can you use something from the past as consideration?
voidable
Contracts are ______ at the option of the infant
Contracts in Restraint of Trade
Contracts that tend to reduce competition for the provision of goods or services in a market; against public policy
"beyond all reason and understanding"
How intoxicated must you be to negate the contract?
Usage of the Trade Rule
Industry practice and terms will control over non industry practice and terms where applicable to the meaning of the contract.
common law: counteroffer must be identical to qualify as acceptance
Is mirror image rule UCC or common law?
"a mere peppercorn"
Necessary amount of consideration for any contract
Unilateral Mistake
Occurs when only one party enters a contract under a mistaken assumption
Negligent Misrepresentation
Occurs when the broker should have known that a statement about a material fact was false.
1. revocation 2. death or incompetence 3. rejection 4. destruction of subject matter 5. supervening illegality 6. passage of time
Offer can be terminated via:
No
Offer: yes or no? Solicitations to offer or commence bargaining
no
Offer: yes or no? advertisements
No, except if expert
Offer: yes or no? expressions of opinions
no
Offer: yes or no? statements of future intent
1. terms are unconscionable 2. one party gives up a legal right 3. terms are unreadable or inadequately communicated 4. inequality of bargaining power 5. discrimination
Other unenforceable contracts include:
course of dealing
Prior conduct between parties to a contract that establishes a common basis for their understanding.
Pre-existing duty rule
Promise to do something you are already legally obligated to do is not valid consideration
1. must be communicated to the other party 2. must be clear and unequivocal 3. must return as much of consideration as possible 4. available for a reasonable time after reaching majority age EXCEPTION: necessary goods
Rules for disaffirmance
1. Surety 2. Marriage 3. 1 year 4. Land 5. Executor $500
SMILE $500
wills, trusts, divorce decrees, eviction notices, insurance terminations, prenups
The following documents must be physically signed:
1. Infancy 2. Intoxication 3. Insanity 4. Illegality
The four I's
integrated document rule
The principle whereby a court will interpret a contested provision of a contract by looking at the meaning of the contract as a whole
True
True/false: Things firmly attached to land also count under the SOF as land
false: must have full legal description of the land
True/false: contracts for land require just an address of the property
false: has to be only goods, no services
True/false: sale of goods and services over $500 must be in writing
false
True/false: silence equals acceptance
Business-to-business (B2B)
UN convention on the Use of Electronic Communications authorized esignatures for which kinds of contracts?
1. Money 2. Goods 3. Services 4. Promises
What counts as consideration?
clear and convincing evidence
What kind of evidence is necessary to prove fraud
Fully Executed Contract
When all the conditions have been met, and carried out. It is considered performed or discharged
1 year
a contract that cannot be fully performed in _______ must be in writing.
Land
a contract that conveys and interest in ______ must be in writing
Valid Contract
a contract which will be enforced by the court
reasonable person standard
a measurement of the way members of society expect an individual to act in a given situation
Guarantor
a person who agrees to pay a debt if the primary debtor does not
cosigner
a person with a strong established credit history who signs the credit application and contract along with the borrower
rejection and counteroffer
an acceptance which changes the terms of original offer is actually a:
Covenants not to compete
an agreement in which one party agrees not to compete directly with the business of the other party; may be limited by geography or length of time
Void Contract
an agreement of no legal effect
no
are gifts or moral obligations consideration?
Consideration
bargained for exchange of something of value
UCC
code that contains contract law
course of performance
conduct between the parties concerning performance of the particular contract
1. value 2. legal 3. possible
consideration must have/be/be:
$500
contract for sale of GOODS over _____ must be in writing
option contract
contract to hold an offer to make a contract open for a fixed period of time
illegal
contracts where the subject matter is _____ are void ab initio
1. part of goods have already been accepted 2. buyer has already paid part of price 3. party admits there is a contract 4. goods are custom-made
courts will enforce ORAL contract for sale of goods over $500 if:
1. nature of the employment 2. length of time 3. geographic limitations 4. industries covered
covenants not to compete must be reasonable in regards to:
Yes, must have consideration for both elements
do option contracts need separate consideration?
ESIGN
does not preempt UETA, only provides electronic signature validity in case states don't
Ratification
express or implied, must be after age of majority
NY negotiable instrument law : late 1800s
first contract law in US
Any reasonable method
if no proper terms of acceptance are set by the offeror, what works?
state law
is contract law federal or state
Bilateral Mistake
mutual misunderstanding concerning a basic assumption on which the contract was made
Undue influence
occurs when one party to a contract is in a position of trust and wrongfully dominates the other party for personal gain
common law
original source of contract law
England 1677
original statute of frauds data and location
Executor
person designated to execute the terms of a will. If they wish to pay debts of deceased out of personal funds, it must be in writing
Unilateral Contract
promise in exchange for an act
Illusory Promise
promise that in fact does not impose any obligation on the promisor
either party can get rescission, unless mistake was about value (no remedy)
remedy for bilateral mistake
rescission, can often lead to civil liability for damages and criminal liability
remedy for duress
rescission and damages (proven loss) and maybe punitive damages (tort claims)
remedy for fraud
no damages, but can get rescission and reformation
remedy for innocent misrrepresentation
rescission PLUS damages
remedy for negligent misrepresentation
rescission PLUS damages, some states have punitive & statutory damages
remedy for undue influence
no right to relief unless other party knew and didn't correct it
remedy for unilateral mistake
competence
the ability to understand the obligations of the contract
acceptance is valid when mailed
the mailbox rule
offer
the manifestation of willingness to enter into a bargain
severability principle / blue pencil doctrine
the principle whereby a court can revise or remove part of a contract while leaving the rest still binding
Disaffirmance
the repudiation of, or election to avoid, a voidable contract
intent (reasonable person standard)
the test of both offer and acceptance
Acceptance
this act needs state of mind plus an act or manifestation of some sort
duress
threat of illegal force or harm
Personal service contracts
type of contract that can be nullified by loss of capacity
reasonable value of goods or services
what is the measure of relief for a quasi-contract?
not until actually communicated/recieved
when is revocation effective?
