L201 final

Voidable contract

Agreement otherwise binding, but due to circumstances, may be rejected at option of one party Ex. same contract, but I put a gun to your head to get you to sing it. Remedy: you have legal right to cancel)

Void contract

Agreement without legal effect because prohibited by law Ex. contract to murder someone. No legal obligations are created here

Heather and Jim form a contract in which Jim, a skilled carpenter, wil build and construct chairs for the table for $3000. Pursuant to contract, Jim will gather all materials needed and perform the work over a 4 week span. Heather sues jim. Will a court apply the UCC or common law to govern this contract?

Common law bc strict time limit and did not complete full service. The work of the skilled carpenter is predominating. Even tho at end of day you end with chairs (a good) ,k but without the carpenter (service) it wouldn't happen

Who is he offeror Who is the offeree

Offeror: makes offer ; has power to revoke it Offeree: has powerof acceptance or rejection of offer

two forms of authorty

actual and apparent

Causation: Causal link between alleged misconduct and injury requires

actual and proximate cuase

Duties of Agent to Principal

agent has duty of loyalty to principal so no conflict of interest or competing

Agency is a legal relationship in which an agent is authorized to act on behalf of, and under the control of, a principal.

true

Collateral Contracts

Contracts in which a person (guarantor) promises to perform an obligation of another person (principal debtor) to a third person (creditor) Ex. jason is personal guarantor on a loan from bank to jason's sister

Advertisements for a sale of goods at specified prices aren't considered offers, but are invitations to offer or negotiate . ex

Customer shows up and is making an offer. It is the customer manifesting intention to contract on definite terms in ad. The idea is that is is unreasonable for seller to intend to sell to everyone who sees the ad

Agency & Liability; Principal takes on ____ and ______ liability for their own acts or omissions Principal controls an agent, the principal is liable in ___ or _____breach for agents acts or omissions

tort and contract tort or contract

Agents may bind a principal on the basis of implied actual authority.

true

Agency is a

two party relationship in which one party (agent) is authorized to act on behalf of and under the control of another party (principal) Accountant can be agent for business Agent owes a fiduciary duty to principal

when is revocation effective: acceptance is effective?

upon receipt when sent out

Non instantaneous acceptances

mailbox rule

communication of acceptance, offerer or is the master of the offer. they have to specify

n specify precise time, place, manner in which acceptance must be communicated (aka stipulation) If there is a stipulation, offeree must respond in this way to create a valid acceptance

What if general manager pass by another restuarant location? They start negotiations for that and enterinto contract where they do that.. Not a discussion had with owner. Would there be implied authority to do so?

no

Jeweler offer to sell necklace for 4000. Offer in writing, signed by J, and expressly promises it will be kept open for a week. Can j revoke before the week is over? What if J made an oral offer? What if J promises in writing to keep offer open for 5 months?

no J can revoke. must be in writing to be firm offer. cant revoke but period is only 3 mo. J can revoke after 3

Dylan is 25 and applies for job , after process interview supervisor says we cant hire you going with someone else who is older than you with more experience. Dylan feels he was denied bc age and wants to pursue legal claim. will he be successful under ADA

no , adea age min is 40

Agency duties: they have to Obey Exercise Promptly communicate Duty to

obey principals reasonable instructions for agency business , Exercise degree of care and skill standard for the job Promptly communicate to principal ( keep principal informed of things they should reasonably be aware of) matters reasonably relevant or material to agency business Duty to account (receipts, records)

Offer and resulting contract must be definite and certain Offer cant be vague about major points Ex

"Ill paint your house until im tired" is vague. But "il finnish painting your house in 3 days " is definite

Duties of Principal to Agent:

(1) to compensate the agent (2) to reimburse the agent for money spent in the principal's service (3) to indemnify the agent for losses suffered in conducting the principal's business. ex Ex. if hav assistant enters into a contract for you, now it is binding on you, you as principal , the business wants to sue the agent. The agent isnt personally liable because they were acting on your behalf.

Elements of a contract

- Voluntary agreement made of an offer and an acceptance (mutual assent) Offer and Acceptance - Mutual Assent - Supported by consideration Tutors time , knowledge, expertise . Cleaning person gives time and energy to clean an apartment, you'd have consideration there. - Between parties with capacity to contract Capacity = Mentally sound (understand what you're doing) and majority age (being right age) - Made for lawful purpose = legal Must be legal

express authority

Authority that the principal directly communicates to the agent Said directly to the agent. Unquestionable very clear communication from principal to agent. "Here is what i want you to do for me" Can be written or verbal

Layla is employee and well liked, suffers from depression and has meds. one day she had an episode and needed a break to regroup. she has med records document conditions and employer allowed her breaks. her boss resigns and new boss removes all her breaks. Layla lashes out and new boss fires her saying she lost company money for losing customer. does Layla have legal claims against employer

yes ada covers Layla

Uncle want to give 5000 to kid for no drinking but didny give it tohim, breach of contract. If someone giving up right and induced to do so from their legal right, that creates contract?

yes, forbearance . Giving up of legal value must have been bargained for and given in exchange for the promise. This is what induces the promisor to make the promise

Daniel delivers groceries for a local supermarket, Foodtown. Daniel wears the Foodtown uniform while making deliveries and drives the company car. He follows a set schedule at designated times of the week. He is instructed only to use the car to make deliveries with no other stops elsewhere. Regular taxes are deducted from his biweekly paycheck. One day while driving back to Foodtown from a delivery, Daniel hits another car because he was negligently texting while driving. The driver of the other car, Bill, wants to sue Foodtown for his injuries. is Daniel an employee or IC? is bill able to pursue legal action against food town. is bill off work and hits someone can they take action against food town? is bill able to pursue legal action against Daniel? bill can sue who?

.Is Daniel an employee or an independent contractor? Employee Regular taxes. Uniform, set schedule, foodtown controls his actions 2.Is Bill able to pursue legal action against Foodtown Yes, bc Important bc anything he does wrong as an employee can be inputted back to the principal. He was controlled by foodtown . If a person is an employee, any negligence they have, the person injured by it can sue the principal. The law says anything your employees do can come back to you. 2a. If bill off work and hits someone, can they take against foodtow No bc not on the schedule for work 3.Is Bill able to pursue legal action against Daniel? Yes Daniel is the one who committed the negligence. He is the tortfeasor (person who committed the tort or negligence) he was driving and negligently textedd while doing so and will be responsible for it. He owes duty of care to other sand breached duty of care which caused problem. Bill can sue daniel. 4. Bill can also sue Foodtown AND daniel True

agent must

1. Avoid conflicts of interest with principal 2. Maintain confidentiality of information received from the principal (exception for whistleblowing)

Termination of Agency

At a time or event stated in the agreement When Agency was created to achieve a special purpose and purpose was achieved By mutual agreement of parties At option of either party Death of principal or agent

How is the agency created?

ABC = one person manifests assent to another that the agent will act on principal's behalf and subject to principals control Ultimately principal making decisions Agency is not created by contract

abc

ABC = one person manifests assent to another that the agent will act on principal's behalf and subject to principals control Ultimately principal making decisions Agency is not created by contract

Implied authority

Agent has implied authority to do whatevr it is reasonable to assume the principal wanted the agent to do given principles statements and surrounding circumstances Ex. person hired general manager in a restaurant will have broad authority to run business while person hired as cashier will have limited authority

Implied contract

Agreement not shown by words, but by acts and conduct of parties Ordering a coffee and barista fills your order. It is assumed you will pay for the coffee

Express contract

Agreement of parties manifested by words, written, or oral Buyer will purchase from seller the sellers house for a price of 220,000

implied authrioty

Assumed agent can take actions of what is reasonable expectations of what the job would entail.

Anna speaks to ben and offers to sell ben her house for 150,000. Anna says she will keep the offer open for 30 days if ben gives her 100 to hold the offer open, which he does.anna then revokes her offer after 10 days. Did she lawfully revoke

Bc he gave her 10 dollars she cant keep it open. Option contract = consideration being given from offeree to offerror

Beth offers to provide bookkeeping services for Martha's small business for $400 a month for 9 months. Beth is very familiar with Martha's business and accounting practices and feels confident about how long the work will take her. Martha accepts Beth's offer. After three months, Beth demands an extra $50 per month because the work is taking her more time than anticipated, which has occurred because Beth decided last month to start a side consulting business, which has exploded in interest and clientele. Martha, having nobody else to complete her bookkeeping, agrees. After 9 months, Martha refuses to give Beth the extra money. Beth claims Martha is breaching their contract. Is she correct?

Beth is not correct. Martha is going to be successful because beth had a preexisting duty to fulfil the contract as it had been agreed to. Aftr 3 months she demands more, that isnt consideration bc its a preexisting duty she already had.

valid contract

Binding and enforceable agreement Ex. (contract saying i will paint your house for 2000)

Actual cause in depth

But for test But for the breach of duty, the injury wouldn't have happened

Negligence

Conduct that creates an unreasonable risk of harm to others Occurs when tortfeasor (defendant, person who created the wrong) acted carelessly or unreasonably and someone was harmed or property was damaged No INTENT to harm

mailbox rule

Contract formed when acceptance is sent, provided it is done in an authorized form of acceptance If offer is sent by mail, there is implication that acceptance can also be sent by mail If an offeree is accepting by mail, acceptance is effective when acceptance is sent What if the offeree accepts in the meantime that offeror is decided to revocate. Revocation is on the way to them, but acceptance is effective when sent out. So offeree acceptance is right

Covered Contracts: One Year Rule

Contracts cannot be performed within on year from the date of their formation (one year rule) Is performance possible within year? If so, SOF doesnt apply

Four elements of a negligence claim are

Defendant owed a duty of care to plaintiff Defendant committed a breach of duty Breach was actual and proximate cause of the injury experienced by plaintiff Plaintiff suffered damages

1 element of negligence :duty of care

Defendant owes plaintiff duty of reasonable care if plaintiff would foreseeably be at risk of harm from defendants conduct

Negligence per se

Defendants' violation of laws may create breach of duty and may allow the plaintiff to win the case if the plaintiff... Was within the class of persons intended to be protected by the statue or other law and Suffered harm of a sort that the statue or other law was intended to protect against

andy, a manufacturer of radios, sends Bob a signed letter offering to sell Bob 100 radios at $5.00 each and states that it is a firm offer for 30 days. After 15 days, Sandy revokes the offer by selling the radios to another client. Bob then tries to accept but Sandy claims they have no contract. Did Sandy lawfully revoke the offer?

Did lawfully revoke bc all 3 elements of UCC met. There is sale of goods, signed offer, and shes a merchant

Jill offers to tutor ben for $15 per hour once a week for two months. Ben tells jill he rejects that offer and asks jill if she will tutor him for 13/hr. ( first offer gone now ) Jill says no and asks ben if she can tutor him for 14/hr. Ben says he needs time to think, jill sais okay send me an email by 5 tomorrow with ur answer. At 9am jill revokes her offer and texts ben to let him know but ben sees and ignores (he received revocation) At 12 that day, ben emails Jill saying i accept your offer to pay you 14/hr. Do jill and bill have a contract?

Did not Jill became an offer again after back and forth. She rejected. Doesn't matter guy didn't see it because she had the right to revoke before the acceptance. What rule did she use to revoke the offer? General rule (says u can revoke offer prior to acceptance as long as no firm offer or option of contract made) Revocation is effective upon receipt

3 element of negligence

Either personal injury or property damage must occur for plaintiff to claim negligence (damages is 4th element of negligence) Causation link

one year rule ex

Ex. Jack signs contract to consult with company x for fixed term of 13 months. Does SOF apply? Yes Jack orally agrees to finish job no later than or within 13mo. Does SOF apply? No

actual authority is expressed or implied

Express authority is created by principles actual works (written or oral) Ex. I want to hire you as my real estate agent to sell my house

contract modification

General rule is that an agreement to mjodify an existing contract requires mutual assent and new consideration

Contract liability of principal

Generally a principal is liable on a contract made by the agent if the agent had express, implied, or apparent authority to make the contract

Joe, accountant, makes signed written offer to sell sam his car for 3000 and promises to hold iffer open for 2 weeks. After one week, joe revoke offer. Sam, ignoring revocation, accepts offer before 2 weeks. Joe refuses to sell same car and same sues joe for breach of contract. Will same be successful?

Hes not a merchant because hes an accountant, he isnt speciflzied in the sale/production of goods. (UCC-205 offer wont work then). Is there consideration given by offeerree to joe? No. (so option contract wotn work). No sam wont be successful bc not firm offer, dont meet requirements for irrevocable offer, it can be revoked any time before acceptance.

2 element of negligence : breach of duty

If duty exist, question if defendant acted as a reasonable person of ordinary prudence would have acted under the same or similar circumstances = Reasonable person standard

civil procedure

In adversarial system, the plaintiff bears burden of proof to prove case by a preponderance of the evidence

Karen, a carpenter with 15 years experience makes a signed written offer to james to sell him oak chairs for 2000. In this offer, karen promises to hold offer open for 10 days. After 3 days , karen finds another buyer time, 2300 and sells chairs to im. On 9th day, james accepts karsens offer. Karsen refuses to deliver chairs and James sues her for breach of contract. Which party will be successful?

James is going to be successful bc its UCC - 205 firm offer. Karen is offeror and a merchant. The signed written promise to hold firm offer open yes there is. It is for sale of goods

Agency based cases may depend on if the person who contracts with principal is an employee (servant) or independent contractor. meaning

Meaning: The extent to which an employee can bind their boss is different from how an independent contractor can bind their principal.

Duty of confidentiality survives agency meaning

Means even if someone goes on to establish new agency relationship, they still have to keep confidentiality from pervious agency

Bill elderly and wants to provide for grandson Ethan's future. OVer dinner, bill ask ethan when he wants bill to leave him after he dies. Ethan said he was fond of the blueberry farm. Very well said bill, I will change my will to leave you the blueberry farm. Thanks grandpa. Ethan replied. Did bill and ethan form a valid contract obliging bill to amend his will to leave the blueberry farm to ethan?

No ,no valid contract because no exchange of legal value. No consideration. Ethan is not giving to the grandfather. Its a gift being given to him.

actual

Plaintiff wouldn't be hurt or property damaged "but for" defendants breach of duty (act or omission)

proximate

Plaintiff's injury or property damage was foreseeable consequence of defendants acts or omission

Dave Hiker is hiking through the woods when he suddenly steps on a thorn. He screams out in pain and falls to the ground. Stacey Samaritan walks by and sees that Dave is in pain. She decides to help Dave by removing the thorn. Dave, who feels immediate relief, says "Thank you so much! I promise to send you $50 a month for the rest of my life for the help you have given me." Is Dave's promise supported by consideration (is it a valid contract):?

No bc past consideration bc he did the act and then made the promise after. His promise not supported by consideration

In letter dated june 1 from steve to rachel, steve offers to perform consulting work for rachels firm for 450/wk 5 weeks. Offer gives rachel one week to accept or reject. Rachel gets letter on june 2. On june 4, rachel receives revocation of this offer. Ignoring it, she mails out an acceptance on june 5. Do rachel and steve have a valid contract?

No bc revocation upon receipt, she got it the day before she acceptance.

Colin throws his mother a birthday party. While everyone at the party is enjoying cake and ice cream, Colin writes on a piece of paper, "In consideration of today being the birthday of my wonderful Mom, I promise to make her dinner for the next month." Is Colin's promise enforceable

No because there is no exchange of values. There is no consideration,no exchange of legal value on both sides. Collin is offering something of legal value (work, time) but it is a gift to his mom

Acceptance: Courts look for evidence of three factors

Offeree intended to accept and enter the contract Offeree accepted on terms proposed Offeree communicated acceptance to offeror

Tim emails David offering to sell him a blue car for 1500. David texts Tim to ask if in the sale time could throw in his high quality helmet. Tim agrees by text. David responds to Tim's email saying "I accept your offer for 1200. Looking forward to riding around town on it" Tim refuses to sell David the car and David threatens to sue Tim for breach of contract. Do they have a contract?

Offeror : Tim Offeree : David No contract because it is not a valid acceptance. When david responds to tims email saying he accepts the offer, he is making a change to the offer. Violates the mirror image rule Is throwing in helmet a counter offer or mirror inquiry offer? More inquiring bc asking if he would throw helmet in. like hey would you mind to throw in the helmet to sweeten the day If said would you consider , then inquire If said " i will only accept if you throw in the helmet" then counter

General rule of termination

Offeror can revoke offer anytime prior to acceptance, even if they have promised to hold the offer open to a stated period of time

forebearance

Promise to give over something of value that promisee was not previously legallyr required to do or refraining from doing something she/he had a legal right to do (forebearance)

Rachel offers to sell dana coin collection for 200. Rachel verbally promises to keep the offer open for 4 days. On day 2, rachel revokes. On day 3, ignoring rachels revocation, dana accepts. Is there a contract?

Rachel is offeror. There is no contract because no valid offer in acceptance. An offer was made with a verbal promise but no evidence . Nothing is in writing. NO evidence Rachel is a merchant. Dana didn't give consideration to rachel to hold it open. Offeror can revoke before acceptance

apparent authority

Relations between an agent going into world interacting with third party. If it is reasonable for third party to think agent has authority to act, even if they dont have it, whatever the agent does to bind the principal with the third party will bind the principal.

Sandy, a manufacturer of radios, sends Bob a letter offering to sell Bob 100 radios at $5.00 each and stating that it is a firm offer for 6 months. After 4 months, Sandy revokes the offer. Bob then tries to accept but Sandy claims they have no contract. Did Sandy lawfully revoke the offer?

Revert to general rule since she revoked before bob accepted the offer. She did lawfully revoke the offer. Ucc 2-205 firm offers: only held open to a max of 3 months. Only can make offer up until that time. Sandy said its an offer for 6 months, so law only uphold for

When asking, is this person an employee or contractor? Ask:

Right to control physical details of work, skill required, location, schedule control, duration of relationship, payment method, benefits, tax treatment of hired party, unqiueness of work

An option contract: an offeror cant revoke an offer that he/she promised to keep open for a stated period of time only if the offeror has received some form of consideration from offeree Ex

S offers to sell B to her car for 400. B gives 10 for S promise to keep the offer open for a week. Can S revoke the offer after 3 days? no S offers to sell car to B for 400. S promises to keep the offer open for a week. B gives S no consideration. Can S still revoke? yes

Statue of Frauds

SOF states certain types of contracts need to be in writing to be enforceable If a covered contract does not satisfy requirements of SOF then contract is unenforceable

Susan offers lily temporary position at her marketing firm. Susant sends lily offer letter indicating job description, payment and start date oct 14. In the offer, susan asks lily to accept offer by meeting susant at the office on oct 11 at 4. Lyla running late from doc appt , reaches office by 4:30pm and susan already left for the day. Lily shows up to start work in morning of oct 14. Susan sees her and is surprised claiming Lily never accepted the offer. Are susan and lily in binding contract.

Susant master of the offer. She gets to specify time and manner for acceptance. It wasn't accepted as stipulated in that time bc lily late. So this is not a valid contract.

Fiduciary Duty

That duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over the latter by the slightest misrepresentation, concealment, duress or pressure.

Instead of the facts described above, suppose that, after eight months of Tim working at the company, James & Associates sends Tim an offer to pay him $8,000 if he promises not to work for any competitor within 20 miles of the company for one year after his employment ends. Tim agrees. Three months after Tim finishes his job at James & Associates, he begins working for a competitor company, Allen & Associates, which is located 15 miles from James & Associates. James & Associates finds out and threatens to sue Tim for breach of contract. Who will be successful?

Tim broke contract bc new consideration (8000 for his forbearance for not working at another company) bc he had legal right to work anywhere else but he is leting go of the legal value to work.

Tanya receives letter on Jan 2 from David offering to sell Tanya car for 400. On jan 4, tanya mails her letter of acceptance. On jan 5, tanya receive latter from david revoking offer. Is there a contract?

Yes there is contract. Bc in mail, so mailbox rule. Jan 4 she sent letter of acceptance which is the day contract is formed. Rule anyone revoking an offer is valid upon receipt but she didnt get that until the next day after acceptance already made

After graduation from IU, Tim got a job at a major international company in Chicago, James & Associates. Tim was hired for a period of one year for a salary of $100,000. Tim performed well and made many valuable contributions to the company. After working at James & Associates for eight months, the company asks Tim to sign a contract in which Tim promises that he will not work for a competitor within 20 miles of the company for one year after his employment at James & Associates ends on June 1, 2021. Tim agrees, signing the contract. Tim receives no new benefits or payment in connection with this non-compete agreement. Three months after Tim finishes his job at James & Associates, he begins working for a competitor company, Allen & Associates, which is located 15 miles from James & Associates. James & Associates finds out and threatens to sue Tim for breach of contract. Who will be successful?

Tim will be successful not the company. Because no new consideration. Look at past consideration, tim was hired and was induced to accept based on what was originally promised. Company wouldve had to have him sign and agree to it when he was signed onto the job.

Covered Contracts: $500 in Goods

UCC 2-201: contracts for the sale of goods for a price of $500 or more. Sales receipt is enough

exception to general rule of term: firm offer

Ucc 2-205 "firm offer": applies only to offers for sale of goods An offer cant be revoked for up to 3 months, even without consideration if: 1. It is for sale of goods Signed , written promise to keep offer open Offeror is a merchant All 3 elements must be present

Proximate cause in depth

Unfair to hold defendant liable for all injuries caused by breach so options are... Test "natural and probable consequences" Only liable for natural and probable consequences of your action "Scope of foreseeable risk"

Uniform commercial code (UCC), Article 2: applies to sale or lease of goods

What is a good? Moveable, tangible item Does Not apply to sale of services, intangible property (stocks, intellectual property), or real estate

Puala offers to knit sweater for Sara for 50. Sara ask how long itll take and puala says 2 weeks. Sra tells paula to send her all details in writing. Paulla writes up offer with terms and mails to sara on nov 1. Sara receives letter nov 3. On nov 4 paula starts to reconsider the offer and mails out revocation to sara. On nov 5 sara mails out acceptance of offer. On nov 6 sara receives pualas revocation. Confused, sara calls paula and claims they have a contract. Is she correct?

Yes, bc acceptance is effective when sent out. Revocation only effective upon receipt and wasnt received until after acceptance. Due to mailbox rule, contract formed nov 5

Two bodies of law govern contracts

common law and uniform commercial code (UCC)

Agency may be created unintentionally.

false

All employees are agents, and all agents are employees.

false

Only two ways to get subject matter jurisdiction

federal question and diversity jurisdiction

As soon as offeree says I accept, a contract is

formed

. Kara owns a small business that offers computer repairs. One day, Mike comes into her shop with a broken computer. Kara offers to repair Mike's computer for a fee of $300. Mike replies, "That is a little too pricey for me. Can you do it for $250?" Kara hesitates for a moment but then agrees, telling Mike that he should return in 3 days for his repaired computer. Can Mike enforce Kara's promise to fix his computer?

i. The exchange is he is going to pah 250 and one will do the work on computer. Consideration is met. It is a contract.

Apparent authority arises if

if communications by principal to third party creates reasonable appearance of authority in the agent Means : may have been discussion between principal and a third party that makes it look like agent in the middle has authority when they may not have been granted authority Protects third party

exception to general rule of termination :

option contract

Not every promise is legally enforceable Ex.

parents promise to buy a car upon HS graduation. Enforceable? No Friend offers to buy you dinner. Enforceable? No Gifts are never contracts

what isn't consideration

preexisting duties (promise to do what one already has legal right to do) past consideration (promises made in return for actions that already happened) illusory promise (ill give u 5 bucks if I feel like It)

Conflicts of interest include

self dealing competition with principal, or acting for another party These duties end after period of agency.

t or f Principals are liable for the torts negligence of their employees as agents but not for the torts of their independent contractors who are also agents but not controlled in the same way.

t

t or f Agent can bind (the actions agent is taking will be binding on the principal. So principal has to adhere to situation the agent has represented for them ) his principal only when agent has authority

t Principal hire real estate agent to help find house. Agreeing to take person on to help with house hunt (assent) and subject to your control bc you decide if you like the house and they have to listen to you, they can igve advice but its up to you, they cant take action on you rbehalf unless they have authority to do so.