Term
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Definition
| What is it?, Basis in Common Law, Elements, Classifications |
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Term
| Classifications of a Contract |
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Definition
| Bilateral v. Unilateral, Express v. Implied v. Quazi, Void v. Valid v. Voidable v. Unenforceable, Negotiated v. Adhesive |
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Term
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Definition
| legally binding agreement that is enforceable by the courts, its a private thing and courts only get involved when there is a problem. a K is a promise or set of promises for which the breach of one provides for a remedy. K's are common law which varies state to state |
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Term
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Definition
| determined by what is being sought by the proposer of the k |
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Term
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Definition
| an exchange of promises. ex. proise to paint my house I promise to give you 1000 dollars. Return of promise is what is being sought in proposed bilateral agreement. PROMISE for PROMISE |
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Term
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Definition
| PROMISE for PERFORMANCE- I promise to do something for you if you perform for me. ex. promise to pay if the house gets painted. |
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Term
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Definition
| fully stated, explicit terms verbally or in writing where both sides agree to expressed terms |
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Term
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Definition
| there isn't anything explicitly stated and we decide there is a contract based on their actions and we determine this based on reasonably inferring intentions based on behavior ex. buying food at a resaurant with expectation that you will pay |
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Term
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Definition
| not a contract, a fake a made up contract where you don't technically have a contract but when in court judge creates a contract so one party doesn't unjustly benefit at the expense of others |
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Term
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Definition
| k where not all the elements are present and thus it never legally existed. |
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Term
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Definition
| elements are present and enforceable against both parties |
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Term
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Definition
| k where all elements are present for one party but not all are present for the other party and thus the party without its elements met can walk away from elements legally |
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Term
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Definition
| starts out as a valid contract that at some point becomes unenforceable by some operation of law, it becomes impossible to complete the performance that was once valid |
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Term
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Definition
| if you just talk about and come to terms with an agreement; things that can be negotiated on |
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Term
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Definition
| take it or leave it contracts, ex. cell phone, generally situation where the writer of k has superior bargaining power. these are enforceable unless shockingly unfair to one side |
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Term
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Definition
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Term
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Definition
| 1) Intent to contract 2) Reasonable definiteness 3) Legal communication to offeree |
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Term
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Definition
| must have definite willingness to enter a binding k with another party as determined by reasonable person standard. Preliminary negotiations don't count as intent, and advertisements generally don't either b/c it is considered negotiation, unless store offers a limited number of a good. |
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Term
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Definition
| can be exception to advertisement offer, you have to actually respond to the offer cant just coincidentally be doing something |
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Term
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Definition
| you have to be able to reasonably determine what is being offered for this element to be valid. The general rule is that it covers all of the major material terms of this agreement and this constitutes reasonable definiteness. |
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Term
| Legal communication to offeree |
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Definition
| actual communication is not required always if offeror has made a reasonable attempt to communicate offer |
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Term
| 2 ways for termination of offer |
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Definition
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Term
| ways parties can terminate offer |
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Definition
| revocation, rejection, lapse of time |
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Term
| Revocation definition and 2 parts |
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Definition
| withdrawal of offer by offeror 1) must be legally communicated to offeree to be revoked 2) may occur at any time prior to acceptance |
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Term
| exception to revocation of k (option contract) |
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Definition
| where offeree lays their self time for a period in which offeror cant take back offer because offeree has offered something of value in return for extended decision time, offeror has to accept this potion contract and if accepted then there cannot be revocation of offer until period of time has elapsed (this is a k within an offer) |
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Term
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Definition
| done by offeree if offer is rejected it is over and does not exist anymore |
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Term
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Definition
| 1) rejects original offer 2) makes a new offer |
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Term
| termination of offer by lapse of time |
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Definition
| if you have a time dependent offer that expires after allotted time period |
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Term
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Definition
| if something becomes illegal after the offer has already been made |
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Term
| Acceptance (when does it take effect) |
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Definition
| acceptance will be valid after it is legally communicated, but can also be valid before legal communication via mailbox rule |
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Term
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Definition
| if offeree sends acceptance via reasonable medium such acceptance is valid the moment it is dispatched |
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Term
| reasonable mediums (mailbox rule) {4} |
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Definition
| 1) same medium used by offeror 2) medium used in past dealing between parties 3) one used in particular industry (usage of trade) 4) one that is implicitly authorized by the language of the offer |
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Term
| Exceptions to mailbox rule {3} |
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Definition
| 1) if offeror states he must actually receive the acceptance for it to be valid 2) if offeror states acceptance must come in a particular medium 3) offeree changes mind after dispatching acceptance and actually gets a rejection through to offeror before acceptance that was dispatched is received, then this serves as rejection |
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Term
| Acceptance of unilateral offer |
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Definition
| Notice: generally all offeree has to do is perform contracted act and doesn't have to notify offeror, Exception: 1) if OOR says notification is required 2) if OOR has no other reasonable way to find out, Revocation: traditional rule- can be made until moment of completion of requested act, but quasi contract is there for compensation, Modern rule- once OEE begins to perform the requested act, OOR right to revoke remains suspended for a reasonable amount of time |
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Term
| Elements of acceptance {3} |
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Definition
| 1) Definite present intent to be bond by the offer 2) Mirror Image rue (MIR) if offer is accepted then OEE cant change the offer in an material way, just improve language that doesn't change the meaning. This is common law 3) Legal communication to the offeror |
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Term
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Definition
| each side gives up something in return for what the other side gives up, not a gift. Each side suffers a legal detriment |
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Term
| reason something fails to count as consideration |
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Definition
| already obligated to do something, cant use this as consideration |
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Term
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Definition
| something I dont have to do which puts you in an economically disadvantaged state |
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Term
| exceptions to pre existing obligations |
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Definition
| if we both agree to rescind and start over after canceling K before it is finished being performed |
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Term
| Unforeseen difficulties exception |
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Definition
| if court finds one incurs unforeseen difficulties for performing promised actions and this leads t o ability to alter structure. ex. painting a house and earthquake destroys work which allows painter ask for more money |
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Term
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Definition
| increased cost, labor difficulties, loss of materials (difficulty is substantial and creates additional burden) |
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Term
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Definition
| both parties have consideration |
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Term
| exception to pre existing obligations |
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Definition
| scenarios where you change the terms of the contract without either party breeching |
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Term
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Definition
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Term
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Definition
| if you have absolute righto to cancel there is no k because you arent giving up anything, not real k |
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Term
| restricted right to cancel |
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Definition
| has any restriction placed on right to cancel ex. must be done by tuesday |
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Term
| exceptions to consideration |
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Definition
| 1) promissory estoppel ( justifiable reliance) generally gifts are not obligatory unless a reasonable promisee would hear a promise and justifiably rely on a promise to his detriment 2) promises made to charities 3) promises made after SOL has run its course |
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Term
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Definition
| after SOL debt is unenforceable unless person makes a promise to pay back debt |
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Term
| Exception to exception (revived debt) |
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Definition
| where promise to pay doesnt revive debt is if debts have been discharged by bankruptcy proceeding because the whole point of bankruptcy is to eliminate debt forever |
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Term
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Definition
| whatever you contract to do must be legal |
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Term
| two ways a contract can be void |
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Definition
| staute(criminal and non-criminal) and public policy 1) covenant not to compete 2) exculpatory clause (liability waver) 3) unconscionable |
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Term
| recourse for lack or occupational license while performing work |
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Definition
| if it is a license to protect the public then you don't get paid for performing work without it, if it is a license made to raise revenue then you get paid which you then direct towards getting your license |
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Term
| illegal k on grounds of public policy {3} |
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Definition
| 1) covenant not to compete 2)exculpatory clause (liability waver) 3) unconscionable |
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Term
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Definition
| when an employee signs agreement not to work for competitor after working or when someone sells a business and cannot open a new business to compete: requirements of valid CNTC 1) must be secondary- has to be part of a larger agreement 2) must be a legitimate business interest warranting temporary protection from competition 3) must be reasonable in scope (time and geography) |
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Term
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Definition
| generally court will rewrite the k more reasonably rather than scrap the whole agreement |
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Term
| exculpatory clause (liability waiver) |
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Definition
| if you sign this you cant sue for negligence that occurs. If service being provided affects public interest/health/safety then you cant get people to sign away the right to sue for negligence ex. hospital. But if you are doing something totally optional/recreational it can be ok to make people sign a liability waiver if they have elements 1 & 2 1) clause is conspicuously placed or called to attention of signer 2) obvious that the language releases the company from liability for basic negligence ( its obvious that its a waver) |
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Term
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Definition
| way a k becomes void if it is grossly unfair to one side, shocks the conscience, most courts require 2 types of unconscionability: Procedural- the process leading up to the signing of the k was grossly unfair, and Substantive- the terms of the k are grossly unfair. |
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Term
| reimbursement for performance of an illegal k |
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Definition
| generally the party that performs doesn't have to be reimbursed, exceptions include 1) protected parties- court feels one party has paid in and there would be justice in one party recovering some money. 2) parties not equally at fault- if one party doesnt know that it is illegal, if they have been deceived ex. of protected parties if you arent aware of geographic issues that would void a k, like an insurance policy. 3) severable k's- where there are multiple parts of the k and some are illegal and some are legal. when the legal portion of the agreement is not connected to the illegal agreement then you can throw out the illegal and keep the legal part, but generally k's arent severable |
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Term
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Definition
| lack of capacity and no real consent |
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Term
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Definition
| a minor who is in a k has voidability on his end of the k |
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Term
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Definition
| tender yr minors (void) minor (voidable) |
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Term
| reasons for lack of capacity |
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Definition
| minors, incapacity, intoxication |
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Term
| 2 types of mental impairment |
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Definition
| adjudicated insane (void) insane in fact (voidable) |
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Term
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Definition
| court legally declares someone not fit to go into k and your k's are void and court apoints you a legal guardian who along with insane person can enter into k on insanes behalf |
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Term
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Definition
| no court needed and at the time of k you just dont get it. These contracts are voidable upon emergence of mental infirmity, this is hard to prove |
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Term
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Definition
| receive the least protection by law because there is a chance you can still be bound by the k. after you reach the point where there is no understanding of k then contract becomes voidable |
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Term
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Definition
| adult of sound mind, not under influence but there still can be problems with a k that all lead to voidability 5 examples: 1) fraud- one party is tricked/deceived intentionally 2) innocent misrepresentation- no intentional deception but still false info 3) mistake both- both parties are mutually mistaken on their own one party is not misleading the other. if there is unilateral mistake by a party and other party doesnt do anything to inform thats not ok, but generally mistakes about value dont allow you to back out of k 4) duress- agree because you are threatened 5) often an elderly person gets taken advantage of by someone in a position of power |
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Term
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Definition
| which contracts must be in writing to be enforceable passed by Parliament in 1677 and still used today in US, in most states the list of things needing to be in writing include: 1) k's for sale of land EXCEPTION requires all 3 elements a) buyer pays all or part of price b) buyer takes possession of land & c) buyer makes substantial improvements to land 2) k's not performable within a year 3) promises made in consideration of marriage 4) promises to pay the debt of another a) executors k- someone in charge of administering someones will after they die and executor agrees to pay a debt of deceased- must be in writing b) guaranty k- someone pays anothers debt that they have no obligation to pay and this has to be in writing or else there is no k 3 requirements of guarantor k are one) secondary liability- one) promises to pay debtors debt if debtor doesn't pay and only in this event two) guarantor makes the promise for the benefit of debtor and not for selfish motives three) promise is made to creditor |
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Term
| what constitutes as "in writing" requirement in a k |
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Definition
| k- this needs to include all major material aspects of the agreement: names of parties, subject matter, consideration, all else material. also requires signature memo- legal memorandum- suffices as being in writing if put into legal memo after oral agreement, also must include signature |
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Term
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Definition
| can include a sales receipt, invoice, thank you note as long as it has the parties two name and terms of the k and what is previously unenforceable is now enforceable, memo confirms oral agreement |
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Term
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Definition
| can include a sales receipt, invoice, thank you note as long as it has the parties two name and terms of the k and what is previously unenforceable is now enforceable, memo confirms oral agreement. If you dont sign something that confirms an oral agreement it cant be used against you. |
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Term
| parol evidence rule (PER) |
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Definition
| you cant use things said before k was drafted as valid terms later on. in PER you cant contradict terms of k, but you can help clean up current agreement with previous terms including 1) if k is incomplete you can offer evidence to complete 2) correcting a mistake or typo is allowed 3) cleaning up an ambiguity 4) evidence of fraud or duress can be used |
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Term
| UCC (uniform commercial code) |
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Definition
| created to create uniformity across state lines and sales law was most successful part of it. when published it had no power but states thought it was a good thing so all state legislatures have adopted but not all have adopted the same parts of it. |
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Term
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Definition
| applies to sale of goods which involves passage of title from seller to buyer for a price |
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Term
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Definition
| 1) tangible and 2) movable- no real estate. a)minerals or structures? depends on who severs. if owner severs it is a good, if buyer of good severs then it is bound by common law b) crops or timber- always a good c) anything else attached to land- does removal cause material harm to underlying land? if it doesn't cause damage then its a goods k, if it damages land, then its a common law real estate k |
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Term
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Definition
| when goods and services are grouped together in a k, then you ask what is the predominant focus of this transaction and if it predominantly a good then UCC applies. If it is about a service then UCC doesn't apply. This is called predominant factor thrust and purpose test |
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Term
| UCC definition of a merchant |
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Definition
| if one of these applies you are a merchant 1) one who regularly deals in "goods of the kind" involved in the particular transaction (can be buyers or sellers) 2) one who by his occupation holds himself out as one with knowledge or skill peculiar to goods/ practices involved in the particular transaction. 3) one who hires or employs a person who meets criteria 1 or 2. Merchants must conduct their self to a higher standard of good faith because they have knowledge of skill not available to general public. |
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Term
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Definition
| rejects mirror image rule MIR and all that matters is that 1) court feels that the parties intended to go into a k and 2) there is enough there to award a remedy on things that can't be agreed upon. The only thing that has to be included is quantity. UCC statute of frauds- k's for the sale of goods greater than $500 |
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Term
| Defendants in court admission (UCC) |
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Definition
| anything that is part of a legal proceeding, agreements admitted to then become enforceable |
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Term
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Definition
| if seller substantially produces specialty goods then these goods if different than regular goods arent resaleable and cant be dumped upon seller |
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Term
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Definition
| applies only to merchants as between merchants, if within reasonable time a writing in confirmation of k and sufficient against the sender is received, and the party receiving it has reason to know its contents, it satisfied the SOF against such party unless written notice of objection to its content is given within 10 days after it is received. in merchant exception a writing can be used against you without you signing it but BOTH parties must be merchants |
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Term
| partial payment/ delivery and acceptance UCC |
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Definition
| You only pay for the part of the order that you accept delivery of |
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Term
| Statue of Frauds EXCEPTIONS |
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Definition
| 1) partial payment/delivery acceptance 2) defendant's in court admission 3) specialty goods 4) merchant exception |
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Term
| 4 types of parole evidence |
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Definition
| 1) first look at k and find answer to all ambiguities 2) course of performance- establishment of a pattern of behavior that gives an answer to a question left by the k 3) course of dealing- if you have a history of dealing with the particular party in a certain way 4) if both parties are in an industry and the industry has a way of dealing with that issue in a certain way |
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Term
| contracts for the international sale of goods (CISG) |
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Definition
| international version of the UCC, made in 1980 by UN. if commercial parties are from different nations whose countries have adopted CISG then it governs their k unless it is specified that a certain country's laws will prevail |
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Term
| 3 primary legal theories possible for injured consumers |
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Definition
| warranty- statutory theory from article 2, negligence- common law from courts 4 elements duty, breach, causation, and injury, strict liability- common law basis 2nd restatement of torts |
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Term
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Definition
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Term
| express warranty and 3 ways of creation |
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Definition
| created by the seller, there are 3 ways he can create it 1) seller can make a promise or affirmation of fact 2) description of good, it must be as described 3) sample or model, good must function as the sample or model does and sample is an even surer warranty because it is one from the lot to be sold. Express warranty must be basis of the bargain (BOTB) and the law presumes that any express warranty created is part of the BOTB unless otherwise proved |
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Term
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Definition
| both of these types are created by the act of purchase 1) merchantability- this is only a possibility if the one selling the good is a merchant of that particular good. safe or fit for ordinary or intended use. 2) fitness for a particular purpose- someone wants the object for a particular non normal use. the two conditions for fitness warranty are 1) seller is aware of buyers particular purpose & 2) the buyer is relying on the sellers skills or expertise to furnish goods for buyers particular purpose & seller knows it and these conditions must be met at time of sale |
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Term
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Definition
| you buy a good or goods and goods automatically come with 2 title warranties 1) promise of rightful ownership- seller promises he is rightful owner and has legal ability to transfer property and the clearest breach of this is selling someone elses good 2) free and clear- doesnt have any debt or lien held against it or is not being held as collateral when sold, nobody has the ability to rightfully take away property after it is sold |
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Term
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Definition
| valid unless unconscionable. express warranty disclaimer- dont want to create an express warranty dont do the things that create them. implied warranty disclaimer- 1) language to disclaim merchantability- oral or written and must use the word merchantability or phrase "as is" to disclaim 2) examination disclaimer- for byuer to examine. reasonably apparent then no implied warranty, if hidden defects then applied warranty 3) custom usage disclaimer- if you were part of a subset of a merchant community and it was customary in that industry not to have warranties, you see more of this at the wholesale level. disclaimers mean there was never a warranty in first place |
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Term
| breach of warranty repercussions |
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Definition
| BOTB damages- however much you are owed because product didnt do what it said it would is how much you get. consequential damages- if there is property or personal injury then those are remedied. liquidated damages- the UCC allows for clauses where seller states beforehand what the remedy will be so long as the remedy is adequate to a reasonable person. |
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Term
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Definition
| 1) design products safely 2) manufacture products safely 3) duty to inspect, this can extend beyond manufacturer to wholesaler or retailer possibly but there is no duty to inspect new goods. Everybody involved has the duty to warn of obvious dangers |
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Term
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Definition
| tort law theory where someone is held liable even when they are not at fault, to get recovery for personal injury plaintiff doesnt have to prove fault only that: 1) seller is a merchant 2) product was defective and unreasonably dangerous when product left sellers hands & 3) the product reached the consumer without substantial change from the condition in which it was sold |
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Term
| title warranty disclaimer |
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Definition
| if you disclose the rightful ownership of the property and title problems you are disclaimed from all title warranty |
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