Requirements of a Contract  (Contract=legally binding)

5 elements

1. Mutual Assent- show agreement through words or conduct

            2. Consideration-legal benefit or ***legal detriment***

            3. Legality of Object

            4. Capacity- Kids, Drunks, Crazies cannot form contracts

5. writing (when required

Dual Court System: 2 main court houses – state and federal court house

US district court- where trials take place.  Where all the facts of the courts come out.  Judgment is entered.  Fact finding courts

US Court of Appeals – all fed court judges appointed by the prez of the us.  Florida 11 circuit. New York is part of the second circuit.  There was an prejudicial error in the law that was applied to the case. No new facts come out.  Opinions usually originate from the US Courts of Appeals. 

U.S. Supreme Court – get to choose whose appeal they take.  Extremely difficult to get case heard here.  Writ of certiorari- demand by the supreme court to get into the supreme court.  Chief Justice – John Roberts. Honorary roles

Subject Matter Jurisdiction

Exclusive federal jurisdiction cases – must go only to Federal Courthouse

1.    admiralty Cases (Law of the Sea) – open oceans

2.    copyright/ patents/ Trademarks Laws

3.    bankruptcy

4.    Federal Crime – kidnapping across state boarders, Rico – fed organized crime, counterfeit law

5.    Lawsuits vs U.S.

Concurrent Jurisdiction – either state or fed court.

1.    matters that ask a “federal Question” – any law that arises under the US Constitution, a federal statute or a treaty. “abridging my first amendment rights. 

2.    Diversity and $75k+ - no plaintiff and no defendant are from the same state.  Amount in Controversy is over 75k

3.     

Default – state court.

1. ∆ voluntarily subjects themselves

2. forum selection clause: if a dispute arises in the K, a forum may be predetermined; fail to challenge (30-60 days)

3. or ∆ is a resident

4. or ∆ is served with process while in the state

5. or ∆ is being served for activities they engaged in in the state

6. must have "sufficient minimum contacts between the defendant and the state"

CH9.

Promissory Estoppels (5 elements)

non-contractual

  a fairness doctrine- must meet five very strict and very specific requirements to get relief or damages

  1. A Non contractual promise

2. The defendant has to have induced or could have foreseen that the plaintiff would rely on that promise

3. The plaintiff reasonably relied on the promise

4. The plaintiff has to be harmed somehow or have given something up.

5.the whole situation has to seem unfair

Quasi Contract (3 elements)

non-contractual

 1. Benefit conferred upon the defendant by the plaintiff

2. The defendant knowingly accepts the benefits and fails to stop their receipt of information

3. Acceptance or retention of the benefit by the defendant 

 a theory that lets the group decide, look to the group to make the decision. The bad side is if the group of people are bad, then you are screwed.

•Industry standards. Management, corporate guidelines 

o   people are born with an inherent right to be free, the prize the right of freedom and that cannot and should not be taken away from you. They believe that the government is going against this idea by taking taxes from paychecks, they are stealing money from the paychecks that you worked for. If you don’t consent to the taking of taxes then its stealing. 

o   His rules is basically like the golden rule “do onto others as you would have them do onto you” . He believes that human beings are born with certain right, right to the integrity of our body, freedom of speech etc. he believes that people have inherit rights. “Act as if the maxim of they action would become the universal law” in others words act as if what you decide would be applied universally. However the con is that its difficult in practice, how would anything get done if you had to take into EVERYONES action. Example- pharmaceutical drugs, testing- some people die because they have allergies and such.

Virtue Ethics and Justice

You should make an ethical decision based on what you think/society thinks someone with good moral character would make. Judged by general consensus. People in developed societies have come to a consensus of generally what is good and what is bad (Aristotle). Sometimes you must do immoral things in order to make money for a certain situation- steal bread to feed your family. You must have to draw lines sometimes

Ch10 

Offer

·      a definite undertaking or proposal made by one person to another indicating a willingness to enter into a contract

o   Offeror: person making the proposal

o   Offeree: person to whom the proposal is made

1.    Communication

                                 i.     Made in the intended manner

                                ii.     Authorized by the offeror and made to the right person

                              iii.     Can be inferred from behavior

2.    Intent

                                 i.     Jokes/Excitement/Strain (not valid)

                                ii.     Preliminary Negotiations (not valid)

                              iii.     Advertisements—preliminary offers (not valid w/o exception)

                             iv.     Rewards (valid as long as the offeror knows about the offer)

                               v.     Auctions (w/o acceptance, not valid-“sold” is acceptance, valid)

3.    Definite and Certain

                                 i.     General rule

1.    No gaps are allowed

                                ii.     Open terms

1.    UCC (code): concerns sale of goods—missing open terms are sometimes okay

2.    The more material the terms are, the less likely you’ll be able to show intent to enter into a contract

3.    Quantity term is very important

                              iii.     Exceptions in which the quantity does not need to be specified:

1.    Output contracts: buyer buys entire output of factory in a specified period of time

2.    Requirements contracts: buyer will buy everything he or she needs during a specified period of time

Duration and Termination of Offers

·      1) Acceptance

·      2) Lapse of time: specified amount of time/reasonable amount of time passes

·      3) Revocation: offers (that have not been accepted) can be revoked at anytime

o   Revocation is only effective when received by the acceptor before the acceptance is made

o   Or else, a contract is made

§  (General rule)

·      4) Rejection

·      5) Counter-offer

o   Acceptance under changing of terms

o   Law sees it as rejection and a new offer

·      6) Death or incompetence of offeror or offeree

·      7) Destruction of subject matter

·      8) Subsequent illegality

Revocation of offers

2 exceptions

1. option contract

2. merchant's firm offer

 o   Revocation is only effective when received by the acceptor before the acceptance is made

o   Or else, a contract is made

§  (General rule)

o   Option contract: an irrevocable offer

§  The offeree pays the offeror to keep the offer open and not revoke it

§  (Exception)

o   Merchant’s Firm Offer: UCC, offers are irrevocable certain offers cannot be revoked if they meet the following criteria:

§  Offer has to be made by merchant

ú  Merchant: dealer of goods of a specific type

§  To buy or sell goods

§  In writing signed by the merchant

§  Not to exceed 3 months

ú  Merchants have to sell goods of their kind

 o   CISG: International sell of goods

§  1. Offer says irrevocable

§  2. Reasonable to believe it is irrevocable

Acceptance

·      Can silence be an acceptance?

o   Generally silence is not acceptance

o   Exceptions:

§  Unilateral contracts use behavior as acceptance

§  Activity completed or no communication within a period of a time (offeree says I am going to accept by silence)

§  Course of dealing or usage

·      Effective upon dispatch

o   Exceptions:

§  1) Offeror Specifies: Offerors can specify that acceptance is not effective until received

§  2) Authorized Means: Authorized means of acceptance (specify the means of communications needed to accept)

ú  Generally, the acceptance should take as much time as the offer was made

§  3) Acceptance Follows Rejections: revocation MUST occur before acceptance in order for offer to be invalid

ú  Rejection and Acceptance changes mailbox rule

·      1^st received: acceptance following rejection x

·      After OFFER and ACCPETANCEà DONE

 ·      The Battle of Forms

o   Fine print: Boiler plate

§  Warranties, arbitration, choice of law, where to send notices

Variant Acceptances

·      1) Common Law

o   Mirror image: if there is not a mirror image, there is no contract

·      2) The Code

o   New and Additional Terms in a Purchase Order (in form 2)

§  If both parties are merchants, the new terms are in the contract if

ú  They do not materially alter

·      (Almost everything materially alters the deal)

ú  Are not objected to

o   Question: Should the new terms in the 2 form be valid

§  Is there is only one merchant, new and additional terms are not considered a part of the contract

§  Considered a counter-offer

·      3) The CISG

                                 i.     Exceptions in which the quantity does not need to be specified:

1.    Output contracts: buyer buys entire output of factory in a specified period of time

2.    Requirements contracts: buyer will buy everything he or she needs during a specified period of time

o   4 big rules of law

1. duress

2. undue influence 

3. fraud

4. mistakes

Consideration is theinducement to make a promise enforceable. 

Elements: legal sufficiency and bargained-for exchange.

Gratuitous promises (gifts) made without consideration are not legally enforceable.

For consideration, both parties need to intend for an exchange. 

doing an act one is not legally obligated to do or not doing an act that one has legal right to do. 

, the consideration for the promise must be either a legal detriment to the promisee or a legal benefit to the promisor.

Explained: in return for the promise the promisee must give up something of legal value or the promisor receive something of legal value.  

Pre-existing contractual duty is a duty of which are neither doubtful nor the subject of honest dispute, is also legally insufficient consideration because the doing of what one is legally bound to do is neither a detriment to a promisee nor a benefit to the promisor. lacks consideration

Modification of a pre-existing contract

occurs when parties to a contract mutually agree to change one or more of its terms. (must be supported by mutual consideration)

-Common Law- (services) NEW consideration must exist

                        -UCC- (goods) NO new consideration is necessary

                        -CISG- (international goods) no new consideration is necessary

Modification of a pre-exisiting contract

UCC Exception

Common Law Exception

UCC rule- additional consideration is not necessary if the modification is made in “good faith”

Common Law exception- if substantial, unforeseen events arise that were not in the contemplation of parties…no new consideration required.