BUL 4310 Exam 2
Acceptance
Must be clear and unqualified, and the offeree must accept in any manner required by the offer (the offeree must convey an intent to be bound by the contract) evaluated by the same Objective Intent Standard as for Offers. Who and what is reasonable used. Only the offeree may accept to form a contract so they can't assign it to someone else. Reasonable Person: 1. Descriptive: What parties knew or should have known at that time 2. Normative: to fill in the gaps, one may proceed from a personal (individual "reasonable person") standards to a communal standard (more recent alternative definition for purposes of contract law) pg: 231
Uniform Commercial Code (UCC)
Nearly universal nationwide law in the U.S. All states in some manner have adopted the UCC. UCC supersedes common law. If a UCC provision exists, UCC governs. If not, Common law governs. It covers a wide range of business transactions, from negotiable instruments to securities to the lease or sale of goods. pg: 207-209. 231
Legality
A contract cannot violate criminal law or otherwise be against public policy. It would be void and unenforceable pg: 187
Uniform Commercial Code Provision 2-201
A contract for the sale of goods for $500 or more is not enforceable unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his agent or broker. However, there are exceptions. Look at Statute of Frauds pg: 296
Million Dollar Comma Case
A contract was entered between cable company Rogers Communications and telephone company Aliant Telecom Inc. The contract stated that the agreement was for five years, unless terminated one year prior by either party. The comma made interpretations ambiguous, so Aliant exited the contract before five years because they gave a one year notice. However, Rogers used the French translation of the contract (Aliant is French) which had no confusion with commas. So, the Court overruled in favor of Rogers stating that the contract needs to at least be five years. pg: 196-197
Repairing the Driveway Case
A gravel roadway connected from the county street to the driveways connecting three houses. The three homeowners had an agreement to pay one third of maintenance and repairing costs of the roadway. Two of the homeowners demanded the third to pay one third of costs to a contractor. However, he was only required to pay what the gravel costed, not on improving it. (Language is important) pg: 195
Gift
Not a contract (no consideration from donee). Not binding Three elements include: 1. donor's intent to give 2. donor's communication of that intent to the donee 3. acceptance by the done, who takes delivery of the item pg: 185
Enemy Aliens
People from countries at war with the U.S. lack contractual capacity in some situations
Lesion
Refers to the loss caused to a party by the disproportion between the two sides of a contract (far too high a price paid for property sold); and which in a wider sense refers to any substantive unfairness in a contract's provisions
Mutuality of Assent
Did a party lie? Was there a misunderstanding? Was a party under duress or undue influence? Was there a mistake or fraud? Both parties must understand what they are agreeing to. pg: 186-187
Firm Written Offers
The UCC 2-205 requires that a merchant offeror keep his offer open for the period he stated or 3 months, whichever is less; the merchant must keep it open even though there is no consideration to do so. Ex: If Arnold is a merchant and creates a written offer, he has to follow through, but if he isn't a merchant he doesn't pg: 226
Novation
Replacement of one party to a contract with a new party. It completely removes the obligor from the contract and extinguishes all potential liability. All of the parties to a contract must agree for a valid novation to be made. Ex: Jack mows Jill's yard for $20. Jill tell's Sandra (who owes her $20) to pay Jack. Jill gets Jack's permission to create a novation to replace her with Sandra in the contract. Jack is the obligee, Sandra is the delegatee, and Jill is the delegator. If breach: Jack can sue Sandra for the breach, but not Jill. pg: 307
MYLEGS
The Statute of Frauds requires that some evidence be provided for certain forms of contracts. The Statute of Frauds applies to six kinds of contracts: Marriage: Contracts in consideration of marriage (prenuptial agreements) Years: Contracts that CANNOT be completed within one year. Land: Contracts (leases, mortgages, sales) involving land or interests in land. However, most states don't apply the statute of frauds, and thus will enforce an oral real estate lease if that lease is no longer than a year. Executor (or Guarantor) contracting to pay, personally, debts of the estate. But no writing is required if the contract's main purpose is the executor's own interests. Goods: Contracts to sell for a price of $500 or more. (Proposed to raise it to $5,000) Securities (or certain other personal property besides goods): contracts for their sale if the price is $5,000 or more. pg: 293-296
Tinker v. Des Moines Independent Community School District
The Supreme Court ruled that school administrators couldn't prohibit students wearing black armbands in school to protest the Vietnam War. This is symbolic speech. Schools can only limit students' free speech if they have a constitutional reason to do so.
Statute of Frauds
Requirement of written evidence (for some contracts.) The writing doesn't have to be the full agreement, just sufficient evidence that there was a contract. If the Statute isn't met, that renders the contract unenforceable. (Related to MYLEGS) This Statute is intended to prevent one side from fraudulently claiming there was a contract when there was none. Ex: One can gather proof from several documents. The court just needs some evidence of the contract, enough to assume there was a contract. For example, a napkin with writing and signed counts. Statute of Frauds Requires a writing that contains the following: 1. Identity of parties 2. Subject matter of the contract 3. Terms of the agreement 4. Consideration that supports the contract 5. Signature of the party against whom the contract will be enforced. Exceptions: Just because there's an exception, doesn't mean that the party claiming a contract automatically wins. The exception just signifies that the other side can't use Statute of Frauds as a defense. 1. Admissions: If a party admits there was a contract, he can't use Statute of Frauds 2. Promissory Estoppel: Even when a party can't enforce a contract because of the Statute of Frauds, a court may use promissory estoppel as relief. 3. Partial Performance if one has already started to pay or perform, one has admitted that the contract exists 4. Specially made goods: Under UCC 2-201, if a party provided specially manufactured goods, he can enforce a contract even if the contract price is more than $500 and there is no written agreement. 5. Oral contract between merchants: Under UCC 2-201, a merchant confirming the terms of an agreement for sale of good with another merchant counts as a contract, unless the merchant objects to it within 10 days of receiving it. pg: 292, 296
Family Medical Leave Act
Requires large employers to provide their employees with up to 12 weeks of unpaid leave per year for family or medical situations. The employee can't be terminated in this period and the employer must continue to provide group health benefits during the period.
Arbitration
Resolving the dispute without using the court. Litigation is costly and time consuming. Parties can agree to solve through arbitration.
Freedom of Association
Right of people to come together in order to express and promote common interests. The Supreme Court ruled that implicit in the agreement is the right to exclude individuals from a group. (the Boy Scouts could exclude a scoutmaster because he's gay)
Gratz v. Bollinger
Ruled that automatically granting points to every underrepresented minority applicant solely because of the applicant's race is not narrowly tailored to achieve the goal of educational diversity and fails to provide necessary individualized consideration of applicants. (Giving bonus points to minorities isn't allowed)
Safeway Example
Safeway told its employees to be extra friendly to customers. However, customers mistook female employees' friendliness with flirtation. Female customers complained and Safeway had to revise its policies, not discriminate by allowing only females to opt out.
UCC Article 2
Sale: a contract to transfer title to a good from a seller to a buyer for a consideration (a price). Concern present and future sales of goods (tangible, movable, personal property, not real estate and intellectual party). Services and land don't count. However, if it's a mixed transaction (involves both a service and good), Article 2 will govern if the value of the good is more than the value of the service UCC 1-102 notes that parties to a sale can alter or avoid any UCC provisions like pricing, rules for delivery, risk of loss, and delivery deadlines which might apply to their contract (NOT good faith though) pg: 208-209
Options
Separate contract to keep an offer open for a specified period. The offeror can't revoke the offer during the option period, as the option is itself a valid contract - one supported by consideration. (If the offeree pays money or other consideration to keep offer open, offeror is bound to follow through) pg: 226-227
Uniform Commercial Code 2-302
Sets forth the law on unconscionable sales:
Sexual Harassment Under Title VII
Sex-based discrimination is the second most litigated type of discrimination under Title VII Types of Sexual Harassment: 1. Quid pro quo (this for that): When an employer offers an employee a benefit/punishment for a sexual favor. 2. Hostile Environment: When an employer allows employees to be subjected to repeated unwanted sexual behavior from other employees or customers, the employer can also be held guilty. (A worker has nudes in his cubicle. Female workers complain to management. Management has to investigate it) (A single off-color joke doesn't generally constitute this, but repeated ones do) For further clarification, look at Comic Book Store and Safeway Example Employers can protect themselves from liability by: 1. Incorporating sexual harassment education into training programs 2. Promptly investigate complaints of sexual harassment 3. Take action, when necessary: taking preventative measures for the future
Silence as Fraud
Silence usually is NOT ground for a fraud claim. One way that such a duty might arise is if clarification or other information was sought (a real estate seller may be obliged to disclose information even if not asked) Ex: You ask a salesman to clarify how many previous owners had the car. He's gotta answer you, not just ignore your question pg: 258-259
Accord and Satisfaction
Situation in which a debtor buys his way out of an original debt usually for a lesser amount. (An accord is a new agreement that replaces the original debt, and satisfaction is the fulfillment of the original debt). An agreement to pay less than amount owed is usually unenforceable due to the pre-existing duty rule. However, when there's an honest dispute over the amount owed, an accord provides new consideration in the form of certainty and is thus an enforceable contract. Ex: Roy owes Tom $600, but realizes he isn't able to pay. Roy and Tom agree that if Roy water's Tom's trees every month, they'll call it even. Roy's watering is satisfaction, and Tom's new agreement with Roy is accord. pg: 318, Q: 8
Private Clubs
Some states like New York specifically prohibit private business clubs that exclude members of protected classes, such as women. However, a number of states have laws that allow this.
Incidental Beneficiary
Someone who stands to benefit from a contract that was not entered into with the intent of benefiting that person. Ex: John enters a contract with Tim to wash his car for $500. As part of the deal, Tim specifies that John must wash his car with Turtle Wax. John breaches by not washing the car. Turtle Wax company is an incidental beneficiary and has no right to sue John.
Intended Beneficiary
Someone who stands to benefit from a contract, which was entered into with the intent of benefiting that person. In this situation, the promisee provides some consideration to the promisor. The promisor then sends some kind of benefit to the intended beneficiary. Intended Beneficiary can either be: 1. Intended Creditor Beneficiary 2. Intended Donee Beneficiary
Past Consideration
Something given or some act done in the past, which cannot ordinarily be consideration for a later bargain. Ex: Lilly saw a kitten in a tree and saved it. She returned it to the owner, and he gratefully said you can eat at my restaurant for free. This is unenforceable and he doesn't have to follow through. Ex: If someone promises to give you a car today because you saved his life a year ago, you could not enforce that person's promise. pg: 243
Insurance
Special contract intended to allocate risks from the insured to an insurance company. The insurer issues an insurance policy covering a possible loss. For an insurance agreement to be enforced, it must meet usual requirements of a contract and the insured person must have an insurable interest in the subject matter (property, health, life) that is being ensured. One cannot just insure something or someone and hope for the worst! pg: 277-278
Privity of Contract
States that contracts only create rights between the two people or organizations who enter the contract. If one of the parties breaches, only the other party can sue. Exceptions: 1. Third Party Beneficiaries 2. Assignments 3. Delegations 4. Novations Ex: Bob finds his mother's will from 2010 that says he will get everything. Sue found a will in 2015 saying they both split. Carl, the mother's friend can't try to take Bob to court.
Zipper Clause
States that the terms of the written agreement represent the entire agreement, and that they can't be modified by parol evidence.
Injunctions
Stops an individual from doing something. It's an order compelling the losing party to take actions to conform with the terms of the contract (turn over the deed to the property, hand over the rare coin, sometimes pay him something to hold on to the rare coin) Ex: If an employee violates a non-compete clause with a former employer, a court can issue an injunction that if violated, can result in punishment for the employee like jail
Witnesseth
Technically not part of the agreement and not actually necessary to have. It is a preamble to the contract which states why the contract was formed and its purpose. The sections may clarify the meaning of a key term in the contract by giving context.
Grease Payments
They are like tips given to individuals who would normally perform a duty. Ex: It's acceptable for a corporation to tip a foreign official to speed up his performance of a duty, as long as he would normally perform that duty. But no special favors.
Course of Conduct
This is used when a judge examines the relationship between interactions of parties to a contract to glean their intent.
Duties
This section defines the duties of the parties under the contract. Vague terms should be clarified in the "definitions" sections.
Sexual Orientation
Title VII and federal law don't provide protection against discrimination based on sexual orientation. However, people can general file tort claims on general harassment, defamation, etc. and states and companies sometimes enact laws and policies to protect these people. Ex: Carla receives an offer from a law school. The law school finds out that she has a girlfriend and retract their offer. Technically, they are allowed to do this.
Exculpatory Clauses
To excuse and relieve you of liability. Usually contracting parties can exculpate negligent acts or omissions if the parties have roughly equal bargaining power (but can't exculpate gross negligence or intentional misconduct. Still leaves the little guy able to pursue the other party (the business) Exculpatory agreements are valid where they are 1. freely and fairly made 2. between parties who are in equal bargaining position 3. there is no social interest with which it interferes (no special duty to the public) 4. the parties' intention was expressed in clear and unambiguous language Ex: Albert signs a lease with small text saying the landlord isn't responsible for injuries in common area. Albert then gets shocked by a dangling wire in the common area. The exculpatory clause is unenforceable due to unconscionability. Ex: Melon Mart has a contract with Melon Farms. Melon Mart's contract states that Melon Mart isn't responsible for transit damage of melons. This is enforceable because it's between 2 businesses with likely equal bargaining power. pg: 286-287
Bailment
Transfer of possession, care, and/or control of an item of property for a limited time for a special purpose. Ex: Adam got himself into a bit of trouble. Now, Adam has to run out of his castle and ask his friend Luke to take care of a very important rose while Adam is away.
Minor
When a minor enters a contract, they can either hold the other party to the contract, avoid the contract, or ratify the contract once he turns 18, even if the other person didn't know he was a minor. (They have a reasonable time after turning 18 to disaffirm the contract) Small claims simply don't go to court. If a Wii was purchased for $250, the store may or may not give the child a full $250 refund. Exceptions: 1. Contract for Necessaries (Look at this term in quizlet) 2. Flagrant, intentional misrepresentation of age: Some businesses require buyers to sign forms verifying their age, but minors can sometimes still avoid the contract. There is a trend for protecting people who deal with minors.
Legal Clout
When a party uses a contract to ensure the other party will not back out. Contracts are useful when ethics alone aren't enough to guarantee a party will complete the contract. Ex: Abe knows Jean's ethics aren't influential enough for her to complete her job, so he makes her sign a contract pg: 184
Conditions Concurrent
When both sides of a contract perform at the same time, each party's performance is a condition concurrent to the other's performance. (Has implied conditions) Ex: I go to the gas station and buy a bar for $1. My obligation to give $1 is conditioned upon him giving me the candy bar. Likewise, the other way around. pg: 308
Waiver
Look at Discharge by Agreement of the Parties
Impossibility
Look at Discharge by Operation of Law
Impracticability
Look at Discharge by Operation of Law
Supervening Ilegality
Look at Discharge by Operation of Law
Statute of Limitations
Look at Unenforceable Contracts
Anticipatory Repudiation
Look at discharge by breach
Renunciation
Look at discharge by breach
Perfect Tender Rule
Look at discharge by performance, Tender of Performance, and Q: 204
Recession
Look at equitable relief quizlet term
Reformation
Look at equitable relief quizlet term
Nudum Pactum
Look at illusory promise
Mistake
Look at unilateral and mutual mistake
Conditions Precedent
"Doing before paying". Must occur before a party has the duty to perform. Heavily used in the business world with regard to insurance and rebates. (Has implied conditions) Ex: Gabi offered to tutor Ralph the rest of the semester if he moved a statue in her backyard in the next couple of days. Ralph's action is a condition precedent, so if he doesn't perform then she doesn't have to perform. Ex: Brandon's Uncle tells Brandon he will pay him $5,000 at the end of each semester as long as he continues to complete the pre-med course track. If Brandon follows through, it's enforceable. pg: 308
Private Individuals and Businesses
1st amendment only restricts governmental restrictions NOT individuals. So private individuals can do as they please within the confines of law. (An employer can restrict an employee's freedom of speech) Ex: If you are racist, your boss can still fire you for that reason Ex: Ricardo hired Ash. Ash keeps throwing away pictures Ricardo hangs up. This is not a violation of 1st amendment.
Habitual Drunkard Statutes
A habitual drunkard is a person who exhibits an involuntary tendency to become intoxicated as often as the temptation to do so is presented.If a court rules that the person lacks willpower, it will permanently relieve the person of his capacity to a contract. So a guardian will be appointed to handle things for the drunkard. pg: 272
Unconscionability
A matter of legality/public policy Requires BOTH elements to show unconscionability: 1. Gross unfairness: Terms of the contract must be so one-sided that it would be unfair to one of the parties to enforce the contract against him 2. Unequal bargaining power: The party against whom the contract is being enforced must have had significantly unequal bargaining power or information at the time the contract was made. (Related to Procedural and Substantive Unconscionablility) pg: 282-283
Mutual Mistake (bilateral)
A mistake by both parties to an agreement concerning a fundamental fact. Either side can void and thus can go back to the status quo ante (how it was before the contract was made) If one side knew or should have known that the opposing party had made a mistake, then the contract is interpreted in favor of the mistaken party. Courts don't recognize mistakes about value (like you paid $100 but realized it was actually worth $10), but recognize mistakes about identity (you just straight up bought the wrong thing thinking it was the right thing) as they may indicate a lack of mutuality of assent. If the mistakes are material, then mutual mistakes take the parties out of the contract. Ex: John sold a cow to Abe for $600 and both thought that it was infertile. However, it actually was fertile. As a result, John can go back to the status quo ante because it was a mistake of identity. pg: 247
Unilateral Mistake
A mistake by one of the parties, but not both, to a contract; not grounds for rescission or cancellation If the other side knew or should have known that the opposing party had made a mistake, then the contract is interpreted in favor of the mistaken party. One should not benefit from (be able to get out of a deal because of) ignorance or carelessness. Ex: Harry enters a contract with a Spanish speaker asking for 100 cases for $100 of Sopa. Harry thinks he's buying soap, but sopa means soup in Spanish. Harry can't avoid this contract. However, if Harry said in Spanish, I am using this for my bathrooms then he could avoid the contract. Ex: Lockheed Martin made a mistake with commas and decimal points when talking about sales price. This costed them millions because it wasn't obvious to the innocent. (If you make a mistake, make it huge and obvious) pg: 246-247
Ratification
A person's explicit or implicit approval or adoption of a prior act that did not bind him. Once a minor reaches 18, he may accept a contract and thus ratify it.
Bona Fide Purchase
A purchase made in good faith without notice of any defects (Ex: in title) Ex: Ashley sells a coin to James for $40. They both thought that it is just a replica. However, James finds out that it is legitimate so he sells it for $1500 to George. George is a bona fide purchaser and can't be sued for anything
Battle of the Forms
A purchaser submits a purchase order with unreasonable one-sided terms printed in small print on the back, and the seller sends an acknowledgement with equally unreasonable vendor friendly terms printed on the back. If one firm were to respond to an offer on a standardized form with a slightly different term than one found in the offer, no contract would be formed, even if key terms in the acceptance were the same as those in the offer. This Battle of the Forms is resolved by the UCC 2-207 To avoid Battle: 1. Limit acceptance to the terms of offer 2. Merchants should closely monitor the form of all acceptances pg: 234-235
Valid Contracts
A real contract, one that meets all requirements to be considered lawful and enforceable in a court. pg: 201
Comic Book Store
A regular customer comes into a comic book store every week and tells obscene sexual jokes to an employee. If another employee complains, the owner needs to do something about it.
Lefkowitz v. Great Minneapolis Surplus Store
A store placed an ad selling something first come first served for $1. Lefkowitz came to the store for the deal. The store refused because that offer was intended for women only. The store got sued because they cannot just modify the offer after acceptance like that. pg: 222
Lucy v. Zehmer
A.H. and Ida S. Zehmer contracted with brothers W.O. and J.C. Lucy to sell their farm. Both parties were drinking and before signing the contract. Zehmer disclosed that the contract was drafted in jest. However, the court followed the objective observer test. Undisclosed intent can't be proven in court, so it was deemed a serious transaction. If the words or other acts of one of the parties have but one reasonable meaning, his undisclosed intention is immaterial except when an unreasonable meaning which he attaches is known to the other party. pg: 192-194
Interview Questions
Acceptable Questions: 1. Applicant's full name 2. If spouse or relatives are employed by this employer 3. If applicant is a U.S. citizen (better to ask after hired) 4. How long they have lived in a particular state or city 5. If applicant is of legal age for employment 6. Person's qualifications and job experience 7. Fluency in languages 8. Schooling or past jobs (must be relevant) 9. Felony convictions 10. Organizations which he belongs and position (officer or member) (However, offer applicant option to omit answer if it regards a protected class) Unacceptable Questions: 1. Using "Miss" "Mrs." or similar terms asking about marital status 2. Asking where an applicant was born 3. Asking when an applicant was born 4. Asking about applicant's height or weight 5. Elicit info on disabilities like how it occured. You can discuss disabilities if job applicant asks for reasonable accommodation in hiring process. 6. How applicant learned foreign languages 7. Arrest record pg: 369, Q: 333
Standardized Forms of Contracting
Advantages: 1. Reduce transaction costs by relieving parties of the burden of individually negotiating and drafting contract provisions that regulate relatively routine exchanges 2. Reduce agency costs by limiting the contractual discretion of subordinates within a corporate hierarchy 3. Facilitate centralized control by harmonizing contracts throughout a firm's national or international business activities pg: 234
Implied Ratification
After attaining capacity, continuing to live in an apartment and paying rent for several more months (continuing to enjoy the benefits of the agreement)
Pregnancy Discrimination Act of 1978
Amended Title VII to prohibit discrimination on the basis of pregnancy, childbirth, or related medical conditions
Satisfaction
Look at Accord and Satisfaction
Counteroffer
An 'acceptance' that modifies the offer or attempts to get a better deal is treated in the law. Once a counteroffer is placed, the initial offer can no longer be accepted (Rejection of original offer and making a new offer) Ex: Tom says I'll be a clown at a party for $200. Sally says "No way, $150 and I'll hire you". Tom says no. Sally says "Okay, I'll give you $200. Tom can say no because of the counteroffer. He is not bound to an enforceable contract. Ex: Frank calls Thomas to paint his house for $500. In the offer Frank promises to use Glidden paint. Thomas agrees to all terms, but says to use Sherwin-Williams paint. Thomas' supposed acceptance was actually just a counteroffer and no contract has been formed. pg: 186
En Viager
An approach common in France and many other countries where someone pays a property holder's rent/mortgage/payment/utilities until a person dies, and then that property becomes the payor's property. pg: 278
Third Party Beneficiary
An individual who is to receive something under a contract even though he was not originally a party to it. In some cases, they have the right to sue. To sue, the third party beneficiary must be an intended beneficiary, and not an incidental beneficiary. (Related to intended and incidental beneficiary)
Retaliation
An unlawful employment practice in which the employer punishes an employee who has reported some other illegal employment practice (Easier to prove than discriminatory conduct) Ex: Lili files a complaint that her boss Jared makes inappropriate sexual remarks to her and other women in the company. Jared, overhearing that Lili did this fires her. Lili can file a retaliation claim.
Consideration
Any lawful alteration of responsibilities that is given in exchange for the other person's consideration. "something for something" The transaction must represent "bargained for exchange" where each party gives up something valuable (doesn't have to be money). Ex: A student accidentally slices a professor with a pen. The professor then says that'll be $9,000 please. The professor is asking for money in return for releasing the student from any claim of liability. Ex: TrueGreen offers Jason to pay $60 a month for their services for a year. In the middle of the contract, they say they need to actually charge him $70 a month and he agrees. However, there was no consideration to raise the price so Jason can still pay $60 a month. A court will not strike down an agreement for lacking consideration simply because the court feels the consideration is inadequate or unequal (unless there was no consideration at all or grossly inadequate consideration) Exceptions: 1. Firm written offers: A contract to keep an offer open doesn't require consideration under UCC 2-205 to be enforceable. 2.Agreements to repay past debts: If a debt was discharged by statute of limitations or bankruptcy and you later promise to to repay it, you may be held to your promise. 3. Good faith Modification: Under UCC 2-209, modification of a contract for sale of goods doesn't require consideration as long as it is done in good faith. Non-considerations include: 1. Past consideration 2. Illusory Promises 3. Love and Affection 4. Pre-existing Duties When Consideration is unnecessary: 245 pg: 238-240 SN: 31, 32
Void Contracts
As if there never were a contract (like an annulment). If one enters a contract that violates public policy (agrees to contractual terms that violate laws against racial and religious discrimination, or unduly restricts trade) the contract is void and treated like it never existed. pg: 201
Jones v. Dressel
At 17, Jones signed a contract that releases a defendant from liability. Jones was injured from the defendant's services. However, Jones later took it back claiming he signed it when he was a minor. However, the Court disagreed because Jones ratified the contract by using the defendant's services after turning 18.
Vokes v. Arthur Murray
Audrey wanted to be a dancer. A dance company got her to sign up for classes and keep spending money. They also encouraged her by saying how much she is improving. They openly lied to Audrey to milk money from her. The court deemed that the company was wrong. pg: 261-262
Specific Performance
Basically the opposite of injunction. The court orders for a party to do something. This is achieved through writ of mandamus (orders a party to take an action). Specific performance serves as a valuable post-judgement bargaining tool to induce a losing defendant to agree to a new contract more attractive to the plaintiff. This is only awarded when the subject matter of the contract is unique, and money damages can't compensate the non-breaching party. (Ex: Land, paintings, rare coins are considered unique for the purposes of determining if someone is qualified to specific performance) Ex: Tracy signed a contract to purchase House 1 for $2M with Jack. Knowing this, Jenna decides she will make Jack an offer for $3M for House 1. Jack agrees, and tells Tracy she can get House 2 for $1.75M. Under specific performance, Tracy will get House 1 for $2M if she decides to sue.
Intended Donee Beneficiary
Benefits as a third party from a contract between the promisee and promisor, even though the promisee has no pre-existing duty or obligation to him. Ex: Your parents want to give you a lamborghini. Your parents entered a contract with the dealer to send the car to you. Once you learn of the deal and rely upon it, then your rights exist and you can sue the dealer if they breach.
Usury
Charging consumers excessive interest rates on loans. If the creditor knowlingly breaks the usury law, the lender cannot sue on the loan contract. As a result, the creditor won't recover anything even the amount on the loan. If the violation is unintentional, then the creditor gets either: 1. nothing as if the violation were intentional 2. just the principal (no interest at all) 3. principal, plus the lawful maximum of interest (or some other judicially determined amount of interest) pg: 277
Duress
Coercion, either physical, mental, or economic that deprives a person of free will to make a contract. (Often voidable) Application of such pressure or constraint as compels man to go against his will, and takes away his free agency, destroying power of refusing to comply with unjust demands of another. Ex: Threatening to have police or prosecutors come after the debtor (threatening lawsuit is not duress) Ex: ESPN workers threatened to quit if they didn't get an extra $5,000 on their salary. Faced with no other choice, ESPN accepted reluctantly, but after the fact ended up not following through. ESPN is right because of economic duress. pg: 251-252
Mutual Recission
Look at Discharge by Agreement of the Parties
Commercial Speech
Commercial speech is much easier to restrict than private speech. Businesses can't make false claims about their products (they can use puffing though). To regulate commercial speech, there must be a need and it must narrowly tailor its restrictions. Commercial Speech can be Prohibited if: 1. There is a substantial government interest 2. The regulation accomplishes that interest 3. The regulation is the least burdensome means of accomplishing that interest Ex: Waist trainers have become popular through their ads of helping with weight loss. However, there are many side effects to using this. As a result, Congress forbids waist trainers from advertising on certain platforms. Congress can do this because it has an adverse effect on public health Ex: At first, lawyers couldn't advertise because it was thought to be detrimental to the profession. However, that's unconstitutional. So now they can do it, but are limited (Ex: they can't use celebrity endorsers in ads) pg: 342-343
Executed Contracts
Completed contract. When breached, remedy tends to be profit expectations (difference between what you bargained for and what you got) Ex: You hired Amir to clean and re-organize your garage. It becomes executed (at least on Amir's part) after Amir finished his work pg: 202
Comparable Worth
Concept not accepted at the federal level. Idea that men and women should receive the same pay for jobs that involve the same kinds of skills, effort, and responsibilities. (Title VII doesn't require comparable worth)
Procedural Unconscionability
Concerns assent and focuses on the bargaining process (formation of the contract): Did the parties actually bargain over the terms of the contract claimed to be unconscionable? Was there a very high degree of inequality in bargaining power or unfair surprise due to "hidden" terms in a contract that's lengthy, confusing, or both pg: 283
Regulatory Licensing
Concerns the competence and integrity of professionals. The primary purpose is to protect the consumer/client/patient. The result is the voiding of contracts regarding services by unlicensed professionals (lawyers, dentists etc.) Failure of a regulatory license renders a contract unenforceable. Ex: Kristen calls Roger who fixes teeth for $50. After getting her teeth properly fixed, she realizes that he doesn't have a dentistry license. She can refuse to pay him and no contract is enforced. pg: 279-280
Substantive Unconscionability
Concerns the fairness of the agreement. It may be present when there is an overly harsh allocation of risks or costs or a great price disparity (three to four times than or below the fair market value). Was the contract unfairly burdensome to the complaining party? pg: 283
Freedom of Speech (1st Amendment)
Congress shall make no law respecting an establishment of religion or prohibiting the free exercise thereof; or abridging freedom of speech, press, or right to peaceably assemble, and to petition government for a redress of grievances. The burning of a flag is okay because it is used as expressive conduct for free speech. Exceptions of Free Speech: 1. Writing a bad check: You can't write a check for an amount higher than you can pay and justify you're exercising the first amendment. 2. Sexual harassment 3. Private individuals and businesses: 4. Clear and Present Danger: There is a clear and present danger leading to an imminent lawless action. 5. Obscenity: 6. Defamation: 7. Fighting Words: 8. Expression-Plus: The government can require a license and to meet at a reasonable time and place to ensure that traffic and business can proceed as usual during a protest. pg: 338-341
Love and Affection
Consideration based on a family relationship or natural love and affection is insufficient to support an enforceable contract. Ex: A mother gives her son a car in consideration of his resemblance of his father. This is a gift and not a contract. pg: 242
Promissory Estoppel
Consideration substitute (an equity concept), with no real contract and no real acceptance (the offer is not revocable, because of the offeree's justifiable reliance on the offer) Device for enforcing promises without reciprocal consideration, such as some promises to make a gift, when the failure to enforce those promises would be unjust Elements: 1. Promisor intended to induce reliance on his promise 2. Promisor can foresee that the promise will induce justifiable reliance by the promise 3. Promisee justifiably relies on the promise and thereby substantially changes his position 4. Promisee thereby harmed 5. It would be grossly unfair to not enforce the Promisor's promise Ex: An employer makes an oral promise to an employee to pay him an annual amount of money throughout the duration of his retirement. If he retires on a reliance of the promise, the employer could be legally estopped from not delivering on his promise pg: 228
Voidable Contracts
Contract where a party can choose to either avoid or ratify it. A minor can elect to avoid a contract or hold the other party to it. Can usually be done by just one party, such as a minor or someone who has been defrauded. Potential problems tend to include mutuality of assent (mistake, undue influence, mental duress, fraud) or with capacity (contract with a minor) If one is defrauded (cheated) and agrees to a contract, the agreement is voidable. pg: 202
Yellow Dog Contracts
Contracts that force employees to agree not to join a union or participate in any union activity as a condition of employment.
Offeree's Rejection
Counteroffers cannot come back later and accept the initial offer after you have rejected it. Figuratively, the offeree slaps down the offeror's hand. pg: 225
Objective Theory of Contracts
Courts judge on what one can actually see, not what the parties thought or felt. It is what a reasonable person would believe. Objective facts include 1. What the party wrote or said when entering into a contract 2. How the party acted or appeared 3. Circumstances surrounding the transaction No contract is formed if the offer is not an objective indication that the offeror is willing to be bound to the contract. For example, if it is completely obvious that the offeror was joking, he can't be held liable because no offer was formed. pg: 190
Boilerplate Language
Courts rarely hold that prefatory (introductory) language in an agreement has created legally enforceable obligations, Nonetheless, courts recognize that in certain circumstances it may be used: 1. Contract provisions are ambiguous 2. To make sure of the parties' intent when interpreting the contract 3. To explain the circumstances surrounding the execution of the contract pg: 197-198
Gambling
Courts refuse to enforce gambling contracts because it is against public policy. Only state sponsored gambling is legal. Gambling occurs when an individual bets on an outcome he cannot control. If you bet someone that you can hit a 10 on a dart board, this isn't gambling. You bet on skill.
Liquidated Damages
Damages for breach of contract that are specified in the contract; these damages will be upheld in court if reasonable (not simply a penalty) Ex: A lease states that there is a $200 per day damages clause for late rent. This is unreasonable. Maybe $5 is reasonable. So $200 may not be enforced. pg: 332-333
Defamation
Damages the good reputation of someone (slander). Generally easier for private individuals to win suit than public figures. For public figure suits, the defendant must show actual malice (either knew that the defamatory information was incorrect or showed reckless regard for fact checking) Ex: CNN published an article that 2,500 incidents occurred where white officers killed unarmed minorities. In actuality, 936 occurred and it was by officers of different ethnicities. CNN showed reckless regard for fact checking. So this is "actual malice". Ex: The New York Times published an ad containing tons of factual errors against Sullivan. The lawsuit against New York Times would only work if it's proven that they knew their ad was false or displayed reckless regard for the truth.
Charities
Depend on donors. Traditionally, have been forgiving of unpaid promises as they fear bad public relations from suing people to fork over their money. Lately however, there have been incidents of suing from contributors not fulfilling their promises (this is promissory estoppel) pg: 229
Compensatory Damages
Direct costs of the breaching party's breach. Ex: Andy enters a contract to supply Bernard 1,000 lbs of pineapples at $4 per pound. Andy notifies Bernard that he can't follow through because of a drought, so Bernard contracts with Cameron to supply 1,000 lbs of pineapples at $6 per pound. Bernard can recover $2,000 from Andy in compensatory damages [1,000 *(6-4)]
Capacity
Do the parties know what is going on? Do they have mental capability? Do they understand key concepts (money)? If not, they lack the capacity to be bound to contracts. Parties lacking capacity include minors, mentally disabled, obviously drunk, drug abusers, addicts, convicts, illegal aliens, and enemy aliens (As long as you meet the definition generally, it's sufficient) Capacity isn't a question for the courts to answer by reviewing whether one side was more capable than the other. pg: 186
Employer's Right to Fire
Employees can fire any time for any reason at all, or even no reason at all. Exceptions: 1. Contractual Limitations: A company would need to ensure that policy manuals or job apps don't inadvertently turn into enforceable contracts. They need to ensure that they are "employees at will". Probational periods also work, where they test out an employee, and decide what they want to do. 2. Tort Limitations: Look at quizlet term 3. Statutory Limitations: There a number of federal statutes such as Title VII, False Claims Act, and Sarbanes-Oxley Act
Employee's Rights to Quit
Employees cannot be made to work against their will, unless it is like a punishment for their crimes. Ex: Natasha gets a job and they set up her office. If she quits, the company can't sue her. Likewise, even if Natasha signed a one year contract, she can still quit. However, a breach of contract may prevent her from working for a competitor if it was stated in the agreement.
Religious Discrimination Under Title VII
Employers are required to make reasonable accommodations for employees' religious beliefs. However, they aren't required if the religious practices imposes an undue hardship on the employer. A good-faith belief is required so people can't just make up bogus religions. Ex: An office worker is to be accommodated to pray alone 5 minutes a day. However, an air traffic controller who has to pray at a certain time everyday doesn't, because he could endanger hundreds of lives.
Condition
Event that either brings a party into a contract or removes a party's contractual obligation when it either occurs or doesn't occur. Conditions are classified as: 1. Express: stated either orally or put into writing 2. Implied: not stated orally or in writing, but implied under the circumstances based on the parties' intent (operates under good faith) 3. Constructive: Imposed by the court in order to achieve justice, fairness (custom, tradition may guide the court in reaching its determination) 4. Conditions Concurrent 5. Conditions Precedent 6. Conditions Subsequent
Parol Evidence Rule
Evidentiary rule that states that evidence of prior statements can't be introduced to modify terms of a written agreement, as long as the written agreement is an integrated agreement (intended to be the final/complete expression of the deal). To determine whether parol evidence applies: SN: 59 Exceptions: 1. Clarification of an ambiguity (or completion of an incomplete agreement): A party can introduce prior information that clarifies an ambiguity as it doesn't modify the written agreement. 2. Subsequent Modification: A party can introduce evidence to prove there was subsequent modification of the contract (This can be oral agreements). (It can't introduce conflicting terms before or during the formation of the written agreement. 3. Evidence that the Contract is Void: Evidence can be introduced that goes to prove the contract is voidable due to mistake, duress, undue influence, fraud, or incapacity. 4. Evidence of a Condition Precedent: A party can introduce evidence that shows there was a condition precedent to the formation of the contract. 5. Incomplete Agreement: Evidence to show that the agreement was incomplete, that a necessary or agreed upon part was omitted from the written evidence. Ex: Joe offers a laptop to Manny for $400. Before Manny accepts, Joe sends a voicemail offering it for $300. Before opening the voicemail, they agree and write up a deal for $350 with a zipper clause. After Manny opens the email, he demands it for $300. However, the Parol Evidence Rule prohibits it and follows the written agreement. Ex: Joe gave Manny a Dell instead of a Macbook. Manny introduces that in the voicemail, Joe said he was offering a Macbook. This is permissible as the introduction of prior information is to clarify an ambiguity in the written agreement. pg:299-302
Novation
Look at Discharge by Agreement of the Parties
Obscenity
Follows the Miller Test which helps courts decide if something is obscene. All 4 criteria must be present to claim as obscene. Criteria: 1. Go against Contemporary Community Standards: The speech must go against standards from the average adult in the community (can vary as communities vary) 2. Appeal to Prurient Interest: The material must be to arouse sexual desire 3. Present Explicit Content in a patently offensive way 4. Lack serious literary, artistic, political, or scientific value Ex: Porn isn't obscene, but child porn is. A shirt saying f*ck the draft doesn't demonstrate sexual desire, so it isn't obscene.
Adhesion clause
For an adhesion clause to exist, the party with superior bargaining power says "no bargaining allowed" concerning a contract provision. If the consumer could easily have obtained the same goods or services from another provider without being subjected to a similar adhesion contract, and if the consumer knew or should've known of that option, then most courts will find no unconscionability. pg: 290
Discharge by Operation of Law
Grab bag of reasons why the law automatically discharges parties' duties of performance. Supervening Illegality: If the subject matter of the contract is legal when the contract is formed, but becomes illegal, then the duties of the parties are discharged. Impossibility: If, after formation of the contract, something happens that renders performance impossible, the parties' obligations are discharged. (someone dies or subject matter of the contract is destroyed or becomes illegal) Impracticability: When an unforeseen event makes an obligation unreasonably difficult (though not impossible) to perform. (It has to be improbable and unforeseeable) pg: 318-320
Release
Look at Discharge by Agreement of the Parties
Prenuptial Agreement
HAVE TO BE IN WRITING. detail how assets will be divided if a marriage ends in divorce or the death of one of the spouses. It can cover things like alimony, child support, and inheritances. (Around 5% of marriages are preceded by a prenuptial agreement) To have the best chance of being enforceable, three conditions are met: 1. full disclosure is present 2. the bride and groom each had their own lawyer 3. the agreement was not signed under duress.
Henningsen v. Bloomfield Motors
Henningsen bought a car from Chrysler that was defected. He got into a crash and Chrysler paid for injuries. However, they had something in the contract that protected them from mechanical failures. The court however ruled the liability disclaimer to be unconscionable and in favor of Henningsen pg: 284
De Minimis Non Curat Lex
Holds that the law should not concern itself with trivial things. If a trivial case does wind up before a judge, he will throw it out. The non-breaching party is only entitled to recover money if it suffered some kind of actual injury or damages.
Seal
Hundreds of years ago, consideration wasn't required to form an enforceable contract. Parties used a seal or stamp. Today, there are very few instances using seals. Seals make it harder to challenge a contract and show that parties deemed a contract important, read it, and understood it. Seals can currently be used on some corporate documents, extend the statute of limitations, make it more difficult to change that a contract was made, or for formal contracts requiring a notary. pg: 238
Non-offers
ICECAPS = Invitations, Circulars, Emotional Statements, Catalogs (generally even if there are prices in them), Advertisements, Price Quotations, Social Invitations PROPS-BAAS = Plans, Requests for Bids, Opinions, Price Lists, Statements of Future Intent ("I plan to sell my stock"), Brochures, Agreements to Agree, Announcements, Summaries of Preliminary Negotiations pg: 220-221
Contract for Necessaries
If a minor goes to an inn, eats and sleeps in a comfy bed, she can't just claim the next day that she doesn't wanna pay because she's a minor. She is liable for the reasonable value of necessities. Businesses only get reasonable value, not necessarily a contract price (what the minor received/used and cannot return) pg: 270-271
Time Is of the Essence
If time is so material that the entire bargain is at risk, they can avoid the contract. (A specific date by which a stationary printer agrees to deliver wedding announcements to the bride's parents is "time is of the essence" without being expressly mentioned in the agreement. If the stationary printer delivers it a week late, the bride can reject the contract) pg: 313-314
Implied Covenant
Imposes on each party a duty not to do anything that will deprive the other party of the benefits of the agreement pg: 208
Blog
In blogs, employees must: 1. Display prominent disclaimers that the views are their own, not their company's 2. Not disclose confidential or proprietary company information or violating privacy of others 3. Employers are free to view and monitor employees' web page anytime without consent. 4. Not make statements about the company, coworkers, customers, competitors, etc. that could be harassing, threatening, or defamatory 5. web pages are subject to all other corporate policies 6. Employees can't post company logo, material, or trademarks without prior permission. 7. employees are subject to discipline and termination for violation. pg: 348
Required Disclosures
In some cases, the law requires parties to disclose certain facts even if the other party never asks about them. Ex: If the wood in the roof is rotten and the seller knows it, he has to disclose that fact to the buyer. (situation occurs a lot with real estate)
Promise
In the common law, we presume that in "social and domestic agreements" there is no intention to be legally bound in promises. However, there have been rare cases that went against this. pg: 198-199
Franchise Contract Case
In the intro statements of a contract, the franchisor states that they've developed a proven system, perfected system, or uniform system for operating a particular type of business. The franchisee tried to use this statement to bind the franchisor to ensure the success of the franchisee. However, courts ruled against this because the intro statements don't' create affirmative actions and are contradicted later in the contract. pg: 198
Consequential Damages
Incidental, or indirect costs of the breaching party's breach. (Ex: lost profits). Consequential damages are harder to prove than compensatory because it's speculative. Ex: Andy enters a contract to supply Bernard with pineapples on June 1. Andy notifies Bernard that he can't follow through because of a drought, so Bernard contracts with Cameron for pineapples on June 10. Bernard proves that he lost $1,250 in profits during the period between June 1 and June 10. The $1,250 are consequential damages.
Inquiry
Inquiries are not counteroffers. So, an inquiry does not invalidate the initial offer like counteroffers do. Ex: Tom says he'll be a clown at a party for $200. Sally says "would you do it for $150?". Tom replies no. Sally says okay I'll give you $200. Tom can't just say never mind. There is an enforceable contract
Convention on Contracts for the International Sale of Goods (CISG)
Involves sales of goods between merchants in different signatory nations. Parties can opt out of the law framework and in effect preempt (prevent) the CISG. Basically, the international version of the UCC. (CISG supersedes UCC when both apply) Adopted some common law, principles from UCC, and civil law. (80 countries) Only applies to business-to-business transactions, when: 1. Two businesses are engaged in the sale of goods with two different countries, and both which are signatories to the CISG. 2. Parties to an international transaction have FAILED to specify in writing the precise terms of the contract. pg:213-215
Delegations
Involves transferring the duties under a contract to a delegatee. A delegation can only occur after the contract has been entered. The delegator makes the delegation. The delegatee receives the delegation. The obligee is the person who benefits under the contract Ex: Jack enters a contract to mow Jill's lawn for $20. When it's time to pay, Jill tells Sandra (who owes Jill $20) to pay Jack. Jack is the obligee, Sandra is the delegatee, and Jill is the delegator. If breach: 1. Jack can sue Jill for breach of the original contract. 2. Jack can sue Sandra as a third party beneficiary for breach of her contract with Jill. When Delegations Can't Occur: There can't be a delegation if it changes the nature of the benefit received by the obligee. For example, if Will Smith entered a contract with UF to speak for them, he can't just delegate the speaking to Bob Ross. (Or like a performer's personal duty to act in a play) pg: 306
Tort Limitations
Involves wrongful discharge which prevents the wrongful termination of an employee when it is against public policy. Unacceptable Reasons to Fire: 1. Employee refuses to break the law 2. Employee refuses to give a statutory right (firing an employee because he had jury duty or filing a workers' compensation claim) 3. Employee who is a whistle blower 4. Employee who asks his superiors to obey securities, environmental, or consumer protection laws 5. Employee who is about to become entitled to a bonus Ex: Lisa refused to serve a client a burger that fell on the floor so her boss fired her. She can sue him. Ex: During a work retreat, supervisors shared about swimming naked and touching each other's genitalia. They encouraged Ann to participate, but she refused. She then got fired. Ann has a claim and can sue.
Force Majeure Clause
It allocates risk and provides notice to the parties of events that may suspend or excuse performance. Contractual clause that removes liability from one or both parties when an event such as war, strike, or natural disaster occurs. It doesn't cover negligence or other malfeasance of a party. (Ex: COVID19) Requirements: 1. Triggering event has occurred 2. Triggering event was unexpected & unforeseeable (not regular or infrequent) 3. Event made performance under the contract impossible/impractical 4. The triggering event's effects could not be mitigated through exercise of reasonable skill 5. A hurricane directly hitting a coast is foreseeable during hurricane season; but devastating effects of Hurricane Katrina may not have been foreseeable. pg: 320-321
Super Risk Bearer
It is relatively more efficient in preventing an event from occurring or in insuring against the risk of its occurrence. Ex: Unforeseen problems in constructing a building are more likely to be the builder's superior risk than the party that hired the builder. pg: 287
Restoration Duty
Jack is 16 and bought an egg souvenir. Jack broke the egg and is trying to return it. The shop must accept this because he is a minor. However, they can account for depreciation which would probably result in a very small amount for Jack. pg: 268-269
Substituted Agreement
Look at Discharge by Agreement of the Parties
Bona Fide Occupational Qualification
Job qualifications that although discriminatory is nevertheless necessary to carrying out the job. It must be reasonably necessary for a business' normal operation and no reasonable alternative that would have a lesser impact on a protected class. (Customer Preference doesn't count) Examples include height and weight requirements,a "speak English only in the workplace policy", and citizenship requirements. All are discrimination that could be okay if it's necessary. Ex: Bane got a Master's in education and philosophy. He applies to be a teacher of a Roman Catholic Church. The position serves as both a priest and teacher. The Church can deny him because he isn't Catholic. Ex: A job qualification requires people to lift 80 lbs off the ground. Heather, a woman can only life 15 lbs, so they reject her. They are allowed to do this.
Objective observer test
Law considers what the parties said and did, not what the parties thought (unless those thoughts were manifested to the other party) (U.S. uses this) (If an objective observer would find that a valid contract had been established, then a court must enforce it) pg: 192, 195
Lemon Laws
Laws that protect consumers from the consequences of buying a defective car. To avoid buying a lemon: 1. Ask the dealer if the vehicle is reacquired or previously bought back by manufacturer 2. Review the documents to see if it had past problems 3. Get an attorney to help you. pg: 343
Laesio Enormis
Legal doctrine in civil law countries where a contracting party can rescind an agreement if the price of exchange is less than a certain sum of its value. Ex: Amy offers to buy Bernie's $10,000 car for $1,000 and Bernie agrees. This doctrine allows Bernie to rescind the agreement because the value offered is much lower than the actual value of the car.
Insurable Interest
Legal or equitable interest in the subject matter such as insured benefits from its preservation and/or incurs a loss if it's destroyed or damaged. Insurable interests include property interests, one's interest in the life of a close family member, and one's interest in the life of a key employee (friends don't count). pg: 278
Mirror Image Rule
Legal principle under common law that the offer and acceptance, in order to form a contract, must mirror each other exactly - the terms must all be the same. If not the same, the acceptance functioned as a counteroffer and rejection, and no contract was formed. Incentives: 1. Encourages parties to read closely their forms and to individually negotiate terms that don't match (this drastically erodes the cost savings associated with form contracts) 2. rewards opportunistic behavior by allowing a party to reject a good faith genuine agreement when a party's true motive is to simply weasel out of an arrangement that has become less profitable than predicted Ex: Tad wants his car painted for $500 by 7 am. A body shop says they can do it, but by 8 am. Tad then gets his car painted elsewhere, and the body shop bought the paint for his car. Tad would win because the body shop rejected and counter offered, so Tad isn't bound. pg: 235
Quasi-Contract
Like a contract, but not a real contract; it is an obligation created by law to prevent unjust enrichment (Party A fulfills their part of the agreement, but Party B doesn't) Ex: A services provider could be entitled to reasonable compensation for treating a comatose person. The damages to be awarded are quantum meruit (as much as deserved). The person who benefits from these services may be unjustly enriched and thus ordered to pay quantum meruit. However, if the person wrote "Don't treat me" on their forehead, then the hospital doesn't get reasonable compensation. Ex: A man who mows lots of people's lawns in the neighborhood has been accidentally mowing your lawn. You didn't take action and do anything about, and instead let him just keep mowing your lawn. pg: 205-207
Private Exchanges
Link companies with a specially invited group of suppliers and "partners" over the web. These systems allow companies to automate their supply purchases and collaborate in real time with trusted suppliers without having to open sensitive information to unwanted eyes. pg: 210
Intended Creditor Beneficiary
Made a beneficiary in order to repay and extinguish a pre-existing debt owed by the promisee. Ex: John contracts to wash Tim's car for $500. John owes Ron $500, and directs Tim to just pay Ron the $500 instead. If Tim doesn't pay Ron, Ron can sue Tim.
Express Contracts
Mainly in words (oral, written, or both). Ex: A customer and a car dealer sign a lease agreement. pg: 204
Offeror
Master of the offer: can put in it whatever lawful terms he wants, how long offer is open, how offer is to be accepted, and to whom it is made. (Usually person-specific, like a specific offeree) pg: 223
Negligent Misrepresentation
May occur due to a statement by an expert. Involves opinions/statements by a person who holds himself out as having superior knowledge (a professional). Ex: An expert who provides an inaccurate statement negligently but without knowledge would be held liable for negligent misrepresentation if all other elements of fraud were present. pg: 261
Employment Discrimination Law
Mix of state and federal laws that places important limitations on employment at will doctrine to protect individuals from unfair treatment such as refusing to hire based on race, color, gender, national origin, pregnancy, handicap, religion, and age. (However, they can discriminate based on dress, tattoos, bad attitudes, or other changeable features) Steps to have a Claim 1. Write everything down (for either employee or employer) 2. Keep complaining: It's a good idea to file complaints periodically to "toll" the time period and improve the likelihood of tying any adverse employment action with complained-about activity.
Executory Contracts
Not completed contract. When breached, remedy usually is to return the parties to the status quo ante (the parties' previous position, before the contract was reached such as by paying back any deposits) (There are special rules for bankruptcy and probate) Ex: You agree to pay Amir $300 for cleaning and re-organizing your garage. At the time you reach an agreement, he brings a dumpster, and starts dumping and reorganizing, it is still executory pg: 202
Advertisements
Not typically offers, but usually considered invitations to deal (invitations to the public to make offers to the advertiser). Ex: Emerson saw an ad stating "Sears Paints Great American Homes". He went to Sears to accept the offer, but Sears states that he doesn't have a Great American Home. Emerson has no recourse because the ad wasn't an offer, but an invitation for Emerson to make a request. Ex: An ad offering a Kelly Clarkson CD for $2, first come first served. Someone came to buy it, but the store refused because she wasn't a Kelly Clarkson fan. The store is wrong because it is considered an offer. It's an offer because it is person-specific "first come first served" pg: 221-222
Undue Influence
Occurs when an individual takes advantage of a position of power of trust. Examples include family members, close friends, and fiduciaries. A contract formed through undue influence is voidable by the innocent person. Elements: 1. Taking advantage of another by reason of a position of trust in a close or confidential relationship. 2. Use of excessive pressure by the dominating person 2. Undue susceptibility in the compliant person. Ex: Alicia an elderly woman is leaving her will to her children. James, her caretaker wants it for himself, so he restricts his children from visiting and tells Alicia they don't care about her. Alicia's children can argue undue influence in court. pg: 251
Assignment
Occurs when someone transfers his rights to a contract after the contract has been entered into. The assignor makes the assignment. The assignee receives the assignment. The obligor delivers the benefits to the assignee. when one already has a contract (not just an offer), then an assignment is usually okay. It isn't normally permitted for the offeree to assign an offer he has received but not accepted (there is no contract yet). However, one can assign options (contracts to keep an offer open) Ex: Jack enters a contract to mow Jill's lawn for $20. After the job is done, Jack tells Jill to pay Rocco the $20. In this case, Jack is the assignor, Rocko is the assignee, and Jill is the obligor Exceptions: (Where assignment can't occur) 1. Personal Duties: An assignment can't affect the obligor's duties under the contract. (Like a singer or an athlete's duty to perform at a stadium can't be assigned) 2. Insurance Contracts: You can't assign an insurance policy that covers you to someone else because it would materially impact the obligor's duties. If I assign my insurance to a daredevil, he's supposed to cost more. 3. Credit pg: 223, 306-307
Standard of Proof
One must show the fraud by clear and convincing evidence. Fraud is thus often quite difficult to prove.
Tender of Performance
One party's promise to performance unconditionally (fully ready, able, and willing to perform). If the tender is rejected, it is still as if the party that made the promise had actually performed. pg: 310-311
Good Faith and Fair Dealing Principles
One should: 1. Refrain from imposing improper conditions on the negotiations. 2. Disclose enough about parallel negotiations to allow the other party to make a counter proposal. 3. Keep negotiating until an impasse or an agreement has been reached. pg: 274-275
Insane Persons
Ordinarily, a contract that an insane person enters into is voidable (by that person or someone acting on his behalf) until a reasonable time after the person acquires sanity; one still must pay for necessaries. pg" 272-273
Discharge by Breach
Party's obligation to perform is discharged when the other party materially breaches it. (A breaching party can't later assert a breach of contract claim against the non-breaching party who didn't perform) Anticipatory Repudiation: When one party CERTAINLY declares that he will not meet his obligation under the contract. (You contract with Joe's Construction to make you a house by March 2. Joe calls telling you that he won't be able to finish until October because he has a better business opportunity right now) Renunciation: When circumstances or party's actions indicate that he can't possibly meet his obligation under the contract. (Lonnie hires Joe's Construction to build his home by March 2. On February 28, the house hasn't even started construction) The non-breaching party can treat both situations as a breach and is obligated to mitigate damages as soon as there is indication of anticipatory repudiation or renunciation.
Discharge by Performance
Party's obligation to perform is discharged when the party has substantially performed (done almost everything called for under the contract. At common law, a person's obligation was not discharged until he made perfect tender (his performance could not deviate at all from what was stated in the contract) (Modern contracts are more flexible and allow deviation if it isn't material) The UCC 2-601 requires perfect tender of GOODS. However, the seller is given the right to cure an imperfect tender if it's rejected by the buyer. The standard used to judge whether a party substantially performed depends on either: 1. Objective Standard: Used for standardized transactions. Those mechanical, technical, expert, etc. measures used to determine whether a party substantially performed. (If someone sells you a plane without wings, they haven't substantially performed and you aren't bound by the contract) 2. Subjective Standard: Used for non-standardized transactions involving taste, comfort, or aesthetics. (You agree to buy a painting of your dog as long as it's realistic, so the painter's duty isn't discharged until you believe it's realistic. Has to be in good faith though) pg: 310-315
Foreign Corrupt Practices Act (FCPA)
Passed to encourage transparency and proper dealings between U.S. business people and foreign officials. Two major provisions: 1. Accounting requirements: Requires corporations to maintain good accounting records. They must monitor employees to ensure no unfair bribing is occurring 2. Anti bribery provisions: Prohibits businesses from obtaining an unfair advantage by bribing foreign officials or political parties.
Feinberg v. Pfeiffer Co.
Pfeiffer Co. decided to give Feinberg a raise and $200 retirement pay for the rest of her life. She didn't expect it and would've continued working regardless of this benefit. However, at 63 she was ill and relied on this retirement money. The court enforced the company's promise even though she gave no consideration for the promise because she showed that she relied on it. pg: 230
Rule of Law
Premised on the notion that one shouldn't have to depend on the kindness of individuals/businesses because there's a set of rules that govern regardless who leads
Mailbox Rule/Deposit Acceptance Rule
Principle of contract law that, unless the offer states otherwise, an acceptance using the same method of transmission as the offer is effective when the acceptance is sent (when the offeree places it in the mailbox or otherwise relinquishes control over it) (Only applies to mailbox, not telephone or fax) Mailbox rule DOES NOT apply to revocations Ex: Sarah sends Joe an offer on April 1. On April 5, Joe receives the offer and sends a letter accepting it. On April 10, Sarah revokes her offer. Joe can hold Sarah to the deal because Joe's acceptance was effective the day he dropped it in the mail (April 5), even if it got lost in the mail. Revocation Ex: John sends Tim an offer on July 1. On July 5, John regrets it and sends a letter revoking the offer. On July 10, Tim receives the initial offer and accepts it. John is bound by an enforceable contract with Tim. (The revocation is only effective when Tim receives it, so if he received it before he accepted it then he can't accept)
Age Discrimination in Employment Act of 1967
Prohibits age-based discrimination against individuals 40 years or older
Americans with Disabilities Act of 1990 (ADA)
Prohibits discrimination based on certain disabilities, and requires employers to make ONLY reasonable accommodations to make their facilities accessible to employees with disabilities (Ex: providing ramps) A disability is defined broadly as a "physical or mental impairment that substantially limits a major life activity" (Ex: clinically depressed) Exceptions (Where ADA doesn't apply) 1. Businesses with less than 15 people
Title VII of the Civil Rights Act of 1964
Prohibits employers from discriminating based on race, color, handicap, age, pregnancy, religion, sex, or national origin (If I'm Asian but look, sound, and act Latino and am being discriminated as a Latino, this counts) Title VII covers hiring, firing, promotions, compensation, advertising, testing, and employment benefits and is meant to remedy not punish. (Supervisors can't be liable under Title VII, only employers) Kinds of Title VII Discrimination Lawsuits: 1. Disparate Treatment 2. Adverse Impact 3. Pattern or Practice Defenses to Title VII Claims: 1. Necessity 2. Private Clubs 3. Bona Fide Occupational Qualifications Exceptions (where Title VII doesn't apply): 1. Businesses with less than 15 employees 2. Businesses run out of one's home, family farms, and closely held (family) businesses that hire only family members or friends. Steps for Employers to not be liable under Title VII: 1. Write everything down: Writing down instances where an employee smelled like smoke or fell asleep on the job. 2. Employee Reviews: Honest, nondiscriminatory feedback on performance is a good basis for firing 3. Communicate with Employees: Tell employees what is appropriate and inappropriate, and create precedence for others to report a case where they feel mistreated. 4. Insure your business: Companies offer insurance against losses from all sorts of lawsuits, including discrimination.
Offer
Proposal made by one person to another and intended to create a contract if the other party expresses his assent (expressed approval) (Related to Non-Offers) Offers are person-specific. So an offeree can't assign an offer to another person to accept. Only the offeree can accept himself. Offers must have objective intent, be sufficiently definite, and be communicated to offeree. Should include essential terms: subject matter, quantity (amount of property or service), price, and parties. Offers are invalidated if: 1. Time: The limit for acceptance passes. If no time limit was stated, the court determines a reasonable time for acceptance to not be allowed. 2. Destruction of subject matter: If a card collector offers to sell a card for $100 and the card burns in a fire, the offeree can't accept 3. Death or incompetence of a party: If offeror or offeree dies or becomes insane. The offer lapses automatically and doesn't need to be communicated to other party 4. Supervening Illegality: If the offer was legal, but later made illegal, the offer is terminated 5. Rejection by offeree: If offeree explicitly rejects or counteroffers, the offer is terminated and can no longer be accepted Ex: Hooters promised a Toyota for selling the most beer to customers in a month. The worker who sold the most got a toy Yoda which she sued. Hooters placed an offer not a jest. pg: 220, 223
Crime
Public wrongs for which a defendant may be punished via fines and imprisonment. Ex: Embezzlement, robbery, certain fraud, and arson pg: 179
Prior Restraints
Punishing individuals for their speech. The government cannot usually do this. They have a hard time controlling the content of the speech, but can restrict the time, place, and manner (Can prevent a loud rally at 4 am)
Revenue Licensing
Purpose is to mainly raise money through taxes, fees, or other charges. The idea behind the licensing is to use it to keep tabs on numbers - Demographics! Failure to render a revenue license doesn't impact the enforceability of a contract Ex: Liquor licenses are meant to generate revenue. Dmitry visits Boris who owns a Vodka Emporium. Dmitry buys vodka from Boris. After realizing he doesn't have a liquor license he refuses to pay. Boris can still force Dmitry to pay and the contract is enforced.
UCC 2-207
The UCC calls a truce by abolishing the mirror image rule. It isn't necessary for an offer and acceptance to match exactly in order for a contract for the sale of goods to exist. Adding or modifying terms doesn't make the acceptance a counter offer, as is true under common law. Exceptions: (Where terms don't become part of contract) 1. Offer expressly limits acceptance to the terms of offer 2. They materially offer it 3. Notification of objection given within reasonable time after notice of them being received Application of UCC: SN: 30-31 Criticisms: It may disadvantage merchants who don't read fine print. If two merchants deal with one another, and the offeror receives an acceptance form with non material differences, the offeror must abide by those differences unless he objects in a reasonable time. Many people don't read everything. Ex: Through fax, Carl offers 100 beer pong tables for $1,000 to Joe. Joe accepts on June 3, provided they make the delivery to Joe's store. Carl didn't respond. An enforceable contract with Joe's condition was formed on June 3. pg: 235-236
Fraud
The defendant is dishonest. Fraud is a tort usually arising in the context of a contract, although can be present when no contract is involved. To prove a fraud claim, ALL elements must be established: 1. Misrepresentation:material facts are significant (like saying that the car is new when actually owned by 10 people before). When one party is an expert with superior knowledge, opinions can count. Puffing isn't misrepresentation. Actions and words can be misrepresentation. 2. Knowledge: not just what you know, but what you should've known. Scienter keeps defendants from insisting on such a high standard when facts indicate the defendant must've/should've had requisite knowledge. 3. Intent: Courts don't accept people just claiming they didn't intend to deceive. Generally intent is easiest to prove. 4. Reliance: Was the source that the claimant allegedly relied upon the best source available to him? If a dealer tells you a car has AC, you test drive the car, then buy it realizing it doesn't have AC, you can't say you relied on him because you could've tested it out yourself. Reliance is the hardest to prove. 5. Damages: If all the sheep in a herd are actually wolves dressed in sheep's clothing, there is no real damage because they're all wolves. The innocent party must've suffered damages due to the misrepresentation. 6. Causation: There must be a link between the lie (misrepresentation) and the harm Remedies: 1. Rescission: Rescind the contract such that it is unenforceable. 2. Affirmation of the contract: May have the contract revised in his favor. 3. Sue for damages: Sue the perpetrator for damages 4. Maybe even seek punitive damages pg: 253-258
Necessity
The employer can assert that the discriminatory conduct is the least-restrictive means of achieving a legitimate business goal. Ex: A New York restaurant were looking for a world-class sushi chef, so it would be perfectly acceptable for it to publish ads in Japanese.
Remedies for Breach of Contract
The non-breaching party can: 1. Sue for damages 2. Self-Help Doctrine: Deduct the amount of damages due to the breaching party's breach from any funds that the non-breaching party owes the breaching party. (One is not allowed to commit a crime while engaging in self-help) 3. Can hold up delivery
Adverse Impact
The plaintiff asserts that an employment practice that appears neutral has an adverse impact on a protected group. This is wrong even if it's unintended. Employment tests must prove that it is necessary and reasonably related to future job performance. Ex: Police Department implemented a basic reading comprehension and math exam to qualify applicants. As a result, enrollment of minorities significantly decreased Ex: Duke Power Co. segregated blacks from whites. The Civil Rights Act banned segregation. However, Duke separated people based on having a high school degree which led to segregation of race.
Disparate Treatment
The plaintiff asserts that the employer took an adverse employment action with a direct discriminatory motive. The plaintiff must show this through statements or through different treatment of the protected class.
Pattern or Practice
The plaintiff asserts that the employer's standard operating procedures were discriminatory in practice (even if it's unintended). Generally, this is proven through statistics that indicate a protected group is underrepresented. Ex: The Supreme Court found that Teamster's union was guilty of this because African Americans and people with Spanish surnames were underrepresented in its membership.
Free on Board (FOB)
The risk and cost of loss is imposed on the buyer. Ex: If Nike ships everything FOB, then even if they get hijacked while transporting the goods to the buyer, the buyer is responsible for the costs.
Conditions Subsequent
The subsequent condition just takes the parties out of a contract. (Has implied conditions) Ex: The policyholder for insurance must make any claims and within 6 months after a loss; if he doesn't file a timely claim, there is conditions subsequent taking the parties out from the contract. pg: 308
Discharge by Agreement of the Parties
Two parties to a contract can agree to discharge their obligations, even though performance hasn't been completed Examples include: 1. Mutual rescission: A contract to end a contract; each party gives up its rights under the original contract in return for the other party giving up their rights. (like a bilateral executory agreement) 2. Novation: Completely substituting a new party for one of the original two parties to a contract 3. Substituted Agreement: The original, two parties each agree to a new performance by each of those two parties (in substitution for the performance called for by the old contract) 4. Release and/or Waiver: Knowlingly give up rights. These may result in acceptance of defective or incomplete performance. pg: 315-317
Contract Law
Two principles associated with an economic approach to contract law are: 1. respect for individual autonomy 2. maintaining or attaining a stable legal system Reduces transaction costs in at least 3 ways 1. Encourages the performance of voluntary agreements by providing a sanction for breach 2. Reduces negotiation costs by providing standard or customary terms for various types of transactions 3. Discourages misleading conduct in contract negotiations Intent is determined by the Objective Theory of Contracts (In common law, we presume that in social and domestic agreements, there is no intention to be legally bound) (Contract law is almost entirely state law, but informed with the UCC) pg: 183
Offeror's Revocation
Under common law offers ordinarily can be withdrawn until there is an acceptance. Generally, even an offer expressly stated to remain open for a specified time may nonetheless be withdrawn. Exceptions (Irrevocable Offers): 1. Firm written offers 2. Option Contracts 3. Unilateral Contracts 4. Promissory Estoppels (sometimes) Revocation occurs when the offeree receives that the offeror has withdrawn. (Figuratively, the offeror's taking back his hand before the offeree clasps that hand) pg: 225, 226
Employer Liability
Under the doctrine of respondeat superior, the employer can be held liable for an employee's actions within the scope of employment, even if those actions are unauthorized. pg: 350
Employment at Will Doctrine
Unless there are federal or state laws to the contrary, employers can hire and fire whomever they want for whatever reason. Likewise, employees can quit without any good reason. Exception is the employment discrimination law.
Express Ratification
Upon attaining capacity, declaring "That was a great contract I entered into while a drunk/child/lunatic; certainly I'll honor it!
Equitable Relief
Used when money damages are insufficient to compensate the non-breaching party. (No jury in equity cases) Most common kinds of Equitable Relief: 1. Recession: The court cancels the contract and generally awards restitution, to be paid by each party 2. Reformation: The parties didn't' properly document the deal they intended to make in the contract, so the Court can allow the contract to be reworded as it was supposed to be written. (Courts are reluctant to do this) 3. Injunctions: Look at Injunctions term 4. Quasi-Contract (Unjust Enrichment): Used when a party is unjustly enriched, but the other party can't recover under a contract. In this case, the party unjustly enriched must pay the other party the amount by which he was unjustly enriched. 5. Specific Performance: Look at specific performance term
Customer Preference
Using customer preference as an excuse doesn't work under the Bona Fide Occupational Qualification Ex: If Hooters went to court stating that their customers want women waiters and not men, they'd probably lose.
International Contracts
When doing business abroad, one must understand product/service markets, know about operation and distribution, deal with personnel and management issues, and deal with matters of location, currency, competition, and achieving local touch. One should look for a favorable socio-political and economic climate. Foreign law affecting international contracting matters include: 1. import/export costs and controls 2. foreign and domestic taxes 3. laws for forming, governing, and dissolving foreign business entities 4. securities, antitrust, and employment laws 5. exchange controls pg: 210
Implied in Fact Contract
When two parties manifest a contract through conduct and not writing or statements. Ex: Kit and Kat ran separate businesses. They decided to work together to create a combined product, but never drafted or signed a contract.
Fighting Words
Words expressed to incite hatred or violence that puts another in harm's way, without adding to public discourse. Ex: Ferris yells "Food Fight" in the cafeteria. The principal makes Ferris clean up the mess. He isn't protected by the 1st amendment. Ex: Chaplinsky called his town marshall a damned racketeer and fascist (back then it was considered an outrage to swear at someone)
Equal Employment Opportunity Commission (EEOC)
a federal agency with the power to investigate complaints of employment discrimination and the power to sue firms that practice it
Implied
based mainly on conduct (not just words). Ex: Tad visits Alice the accountant's office seeking help with his income tax return. Alice explains her services, cost, and information she will need. Tad says he will think about it. The next day, Tad comes and gives Alice's secretary the papers saying Alice will know what to do with it. In this situation, both are bound by the implied contract. They wouldn't be if they took action and properly informed the other person. pg: 204
Sarbanes-Oxley Act
covers fraud against publicly traded companies and is intended for those that destroy records, commit securities fraud or fail to report fraud to investors. It also protects whistle blowers
Silence as Acceptance
generally does not indicate acceptance of the offer. People can't be forced to take action (even if there's a note on the item telling you to take action if it's not yours and you experience the benefits) Ex: You get an Encyclopedia you never ordered and bring it to your house. The company could try to retrieve it or work something out for you, but they can't make you just pay for it. In general, silence is not acceptance. Exceptions: 1. Similar prior course of dealings/industry custom (If my insurance is automatically renewed every year, then when a fire burns down my house the insurance company should know that I expected to keep having my insurance renewed so they should cover it) 2. Offeree accepted benefits (If I receive a newspaper subscription I never ordered, me not EASILY notifying the newspaper company could be an argument for me having to pay. Even in this case, benefits must be substantial) 3. Parties agree to a "Silence as acceptance" arrangement pg: 233
Convicts
in some states, incarcerated (imprisoned) convicts may be unable to enter into contracts.
Public Policy
judicial determination of prevailing morality. Absolute freedom of parties to agree on a contract can be trumped by society's desire to prevent exploitation and potential harm to society. (such as banning prostitution) Ex: A woman pre-pays $49,000 for 10 months of one hour per day three days a week dance lessons. If she sues for this, there is unconscionability which is a matter of public policy because of the ridiculous price. pg: 273-274
In Pari Delicto
legal term used to refer to two persons or entities who are equally at fault, whether the malfeasance in question is a crime or tort Ex: Allen enters a contract with Bernie where Bernie will manage an illegal scheme on behalf of Allen for $10,000 per week. Bernie can't sue Allen to enforce the contract because Bernie has done something wrong (entered illegal activity) pg: 281-282
Unilateral Contracts
means one promise. (promise for performance) Only one side makes a promise. The offeree accepts the contract only by doing what the promise calls for him. (Tend to be reward scenarios) Ex: Climbing a flagpole to win a prize at a fair. Swimming the English Channel to win a sporting goods endorsement deal. Shoveling neighbor's snow for $20. (If a person simply accepts by doing it, the offeror is obligated to pay up because of consideration) Problems: 1. Difficult to figure out, because usually not in writing 2. There are no contractual rights until performance occurs (so the offer can be revoked until the offeree has fully performed) Four court approaches concerning the completion of unilateral contracts: 227 or SN 21-23 pg: 203
Bilateral Contracts
means two promises (a promise for a promise). Both sides make a promise. The offeree accepts by making a promise. Ex: Most written agreements, business deals, and executory contracts. Ex: Danielle says to Megan, if you pick me up this one time, I'll cook for you for an entire week. If Megan agrees, there is a bilateral contract. pg: 203
Punitive Damages
meant to punish defendant not necessarily compensate plaintiff. Much more common in tort cases. Courts almost never award the non-breaching party punitive damages because contract law is meant to make transactions efficient, not punish. pg: 323-324
Tort
non-contractual claims for which a civil defendant may be held liable such as negligence, fraud, battery, invasion of privacy, etc. pg: 179
Postal Reorganization Act (1970)
outlaws as an unfair trade practice the mailing of unordered merchandise (exceptions are free samples, mailings from charitable agencies, and mailing by mistake). Unsolicited merchandise sent by mail may be reclaimed, used, discarded, or disposed of without the individual incurring any obligation to the sender. pg: 232
Fiduciaries
persons who hold a position of trust, as in a guardianship - another person is dependent on the fiduciary to look after the dependent person's best interests. As a fiduciary owes a duty to his principal, it is generally easier to maintain a fraud claim against a fiduciary than against any other individual. Practice Advice to a potential fiduciary party: 1. Fully disclose your interests at the outset 2. Put disclosure in writing, in front of witnesses 3. Advise dependent person to get independent advise 4. otherwise provide evidence that any contract reached is an "arm's length" transaction and not undue influence. pg: 251
Sample Contract
pg: 215-219
Unenforceable Contracts
problem concerning an otherwise valid contract, such that courts will not enforce the contract. For example, the Statute of Frauds can require a signature for it to be enforced. So if it isn't signed, it's unenforceable. Three examples include: 1. Statute of Limitations: time period for bringing suit (time period after a wrong in which you are able to sue). In Florida, limitations usually are 4 years, unless stated otherwise. 2. Statute of Frauds: written evidence requirement 3. Bankruptcy pg: 202
Illusory Promise
promise that in fact does not impose any obligation on the promisor. They are indefinite, vague, or unidentifiable. (nudum pactum) Ex: You will receive all that I wish to provide, to be paid if we can afford it Ex: A promise to give employees a good bonus if we make a bundle this year. pg: 243-244
Pre-existing duty
promise to do what one already has a legal duty to do does not constitute legally sufficient consideration. Ex: A cop won't get a prize for capturing a criminal, because that's already a duty in his job. Ex: If you are contractually obligated to mow your neighbor's yard, his agreeing to pay you an extra $20 to do it is unenforceable. However, if you give something up like you mow it sooner, there is consideration. Exceptions: 1. Promisor takes on an additional duty that was not pre-existing 2. There is an honest dispute as to whether there was a pre-existing duty 3. The promisor faces an unforeseeable difficulty/hardship that is sufficient to discharge him from the duty.
Puffing
sales talk or exaggerating - is neither a misrepresentation for Fraud purposes, nor for Unfair Competition purposes (like deceptive advertising) Seller's privilege to lie his head off, so long as he says nothing believably specific, on the theory that not reasonable man would believe him or would be influenced by such talk. pg: 255
Time Lapses
time stipulated in the offer expired, or a reasonable period, under the circumstances, has passed. After a reasonable time lapse, the offer automatically dies. Ex: Penn owned a large oat farm. In June, Penn contacted Quaker and offered to sell his oats. Quaker accepted the offer in September, but Penn refused to ship the oats. Penn is right because a reasonable time to accept the offer had elapsed. pg: 225
Contract
type of private (consensual) law made by the parties themselves. It is a legal enforceable agreement by court. In breach, the non-breaching party generally gets restored like there was no breach. (Must have consideration) Elements include: 1. Offer 2. Acceptance 3. Consideration 4. Capacity 5. Mutuality of Assent 6. Legality of Purpose Contracts don't have to be written, but it's good because: 1. Writing process helps clarify terms hence makes contracts better 2. Written document serves as evidence there was a contract, that parties agreed, and written evidence remains existent Drafting your own document: Advantage: use your own language and have a lot of control Disadvantage: Ambiguity in contract usually is resolved in favor of party that didn't draft the agreement Should include essential terms: subject matter, quantity (amount of property or service), price, and parties. pg: 180, 185, 186, 189
Corporation by Estoppel
where a body assumes to be a corporation, and acts under a particular name, a third party dealing with it under such assumed name is estopped to deny its corporate existence Estoppel doctrine is based on there being a forming corporation, not a nonexistent corporation. So there is no estoppel, and a party is not bound to an alleged deal with a corporation if there was no corporation being formed. pg: 223-224