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Definition
| contracts facilitate the planning that is necessary in a modern, industrialized society. |
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Term
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| the idea that contracts should be enforced because they are the products of the free wills of their creators, who should, within broad limits, be free to determine the extent of their obligation. |
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| Standardized Firm Contracts |
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Definition
| contracts that are preprinted by one party and presented to the other party for signing. |
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| Standardized firm contracts (power) |
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| the party drafting the contract typically has the most bargaining power |
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| only one party makes a promise. For example if a person promises to give u a free cup of coffee after u buy 10 cups. They are making you a promise but you are not obligated to buy the cups of coffee |
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| a contract in which both parties exchange promises. I promise to hold an apartment for you if you promise to rent it. |
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| meets all of the legal requirements for a binding contract |
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| one that meets basic legal requirements but not be enforceable due to another law. |
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| those in which one or more parties have the legal right to cancel their obligations under the contract. For example, a contract that induced by fraud or duress. |
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| agreements that create no legal obligations and for which no remedy will be given. |
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| the parties have directly stated the terms of their contract orally or in writing at the time the contract was formed. |
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| when the surrounding facts and circumstances indicate a contract. When you go for a doctors checkup you may not state the contract but it is clear that one exist. |
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| when a contract is performed |
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| until such duties have been fulfilled |
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| Usual remedy for breach of contract |
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Definition
| an award of money damages that will compensate the injured party for his losses. Legal remedy or remedy at law |
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| less frequently used, has their origins in courts of equity rather than in courts of law. |
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| defendant must pay the value of the benefits that the plaintiff has conferred upon him. |
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| Legal remedies can only be given for... (3) |
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Definition
1. those losses that he can prove with reasonable certainty.
2. a breaching party is responsible for paying only those losses that were foreseeable to him at the time of contracting
3. Plaintiff injured by a breach of contract have the duty to mitigate damages |
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Term
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Definition
| small damage awards that are given when a technical breach of contract has occurred without causing any actual or provable economic loss. |
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| Alternative Measure of damages |
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Definition
| this form of measurement is used when compensatory damages is not appropriate. A party has suffered losses by performing or preparing to perform, he might seek damages with the claim based on reliance of interest. |
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Term
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Definition
damages that oweed to a person who has been injured by a breach of contract. Usually include one or a combination of 1. loss in value
2. consequential damages
3. incidental damages |
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| starting point for compensatory damages, determines the loss in value of the performance that the plaintiff had the right to expect |
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| compensates for losses that occur as a consequence of the breach of contract |
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| compensate for reasonable costs taht the injured party incurs after the breach in an effort to avoid further loss. |
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| sum specified in the contract that will be recoverable if the contract is breached. |
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| damages awarded in addition to compensatory damages to punish a defendant for a particular behavior. Rarely awarded with contracts unless there is some separate statute that was broken or an independent tort |
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| can be granted if monetary remedies aren't adequate enough. Mainly consist of either specific performance and injunction |
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| court orders breaching party to perform task assigned in contract. This is not available to services. Also is limited to cases in which no substitute is available (land, or heirlooms) |
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Definition
| a court order requiring a person to do something (mandatory injunction) or ordering a person to refrain from doing something (negative injunction). can be invoked when other party threatens to breach a contract. This is used when the breach or threat is likely to cause irreparable injury. |
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Definition
| can be obtained either at law or in equity. when one partys performance or reliance has conferred a benefit on the other. A party restitution interest is protected by compensating him for the value of benefits he has conferred on the other person. |
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Term
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Definition
| legal value bargained for and given in exchange for an act or a promise. Thus a promise generally cannot be enforced against the person who made it unless they gave up something of legal value in exchange for promise |
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| a promise to do something without any consideration. Not legally binding |
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Term
| Two important aspects of consideration requirements |
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Definition
| requirement tends to limit the scope of a promisor's liability for his promise, by not making gratuitous promises binding and second the mechanical application of the law often created unfair results |
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| Adequacy of consideration |
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Definition
| courts tend not to meddle in the fairness of the contract as long as it is a legal one. Nothing against the law for being a poor bargainer |
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Term
| When adequacy of consideration matters |
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Definition
| if the inadequacy of consideration is apparent on the agreement then most courts see it as a disguised gift rather than a contract making it not legally binding. Fraud or duress can also matter, however pure inadequacy alone is not enough to cancel a contract |
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Definition
| when a promise really does not bind the promisee to do or refrain from doing anything, the promise lacks consideration and is illusory. |
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| Effect of cancellation or termination clause |
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Definition
| a promise that says both parties can cancel at any time for no reason is illusory unless an addition clause (not till after 90 days) is written with it |
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Term
| Effect of output and requirement contracts |
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Definition
| party promises to buy all of another parties goods. originally before ucc this was a legally binding contract because it was illusory, however now it is as long as the demand is done in good fairth and are not unreasonably disproportionate to any quantity estimate contained in the contract or to any normal prior out or requirements if no estimate is stated |
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| Effect of exclusive dealing contracts |
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Definition
| the code enforces this contract meaning both parties must do their best to uphold their promises. |
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Term
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Definition
| promising to do something that one is already obligated to do is not considered to be consideration |
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Term
| Preexisting contractual duties |
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Definition
| if a change is placed in a contract (such as 50k more to do the same job) their must be consideration on both sides for it to be binding. they are binding however with unforeseen circumstances and if the court believes that the agreement was made without coercion |
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Term
| preexisting duty with ucc |
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Definition
| no new consideration is required to make a change binding. if the original aggrement requires any modification to be in writing an oral mod is unenforceable; 2nd unenforceable if 500 or more unless statute of fraud is satisfied |
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Term
| preexisting duty and agreement to settle |
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Definition
liquidated debt (known debt)- only way this can be binding if someone pays less is if they pay it back in a way they weren't obligated to do and the offeror accepts it.
Unliquidated (debated debt)- settlement is known as accord and satisfaction. if debtor accepts lesser payment from debtee the contract is binding |
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Term
| preexisting duty and agreement to settle |
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Definition
liquidated debt (known debt)- only way this can be binding if someone pays less is if they pay it back in a way they weren't obligated to do and the offeror accepts it.
Unliquidated (debated debt)- settlement is known as accord and satisfaction. if debtor accepts lesser payment from debtee the contract is binding |
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Term
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Definition
| these agreements are when debtors promise to accept a percentage of the original debt in full. This type of agreement is binding although it violates the rules of liquidated debts. |
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| by promising not to sue in exchange for money... we create a legally binding contract... legalized extortion.... |
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Term
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Definition
| if someone offers you a reward for something you did in the past they are not legally obligated to give it to you cause there is no consideration |
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Term
| Exceptions to consideration requirement |
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Definition
1 promissory estoppel - this can be used in replacement of consideration if a promise is made that creates reliance by the other.
2. Promises to pay debts barred by statutes of limitation-
3. Promises to pay debts barred by bankruptcy discharge -
4. charitable subscriptions |
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Term
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Definition
| can be used to recind a contract. fraud is misrepresentation on purpose. can be sued for deceit in order to get punitive damages as well |
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Term
| Requirements for rescission |
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Definition
1 untrue assertion of fact was mae
2 the fact asserted was material or the assertion was fraudulent
3 the complaining party entered the contract because of reliance
4 the reliance was reasonable |
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| In order to win punitive damages with misrepresentation |
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Definition
| one must also prove injury |
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Term
| Requirement for mutual mistake |
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Definition
1 mistake relates to a basic assumption on which contract was made
2 has material effect on the agreed upon exchange
3 the party adversely affected by the mistake does not bear the risk of the mistake. |
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Term
| To win a case with unilateral mistake one has to prove the elements of mutual mistake and... |
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Definition
1 the nonmistaken party caused or had reason to know of mistake
2 it would be unconscionable to enforce the contract |
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Term
| Application of UCC and contract law |
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Definition
| applies to contracts for the sale of goods, but it does not apply to contracts for the sale of real estate or intangibles such as stocks and bonds, because those kinds of property do not constitute goods |
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Term
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Definition
| a test is done to see which is predominate to determine whether is falls under ucc or not |
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Term
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Definition
| imposed when one party confers a benefit on another who knowingly accepts it and retains it under circumstances that make it unjust to do so without paying for it |
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Term
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Definition
| a promise that the promisor should foresee is likely to induce reliance, relance on the promise by the promisee |
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Term
| Evidence of an acceptance |
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Definition
1 theofferee inteded to enter the contract
2 the offeree accepted on the terms propsed by the offeror
3 offeree communicated his acceptance to the offeror |
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| Mirror image law and common law |
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Definition
| originally any changes made to an offer was considered a counteroffer, but over time this has changed to only if material items were changed. |
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Term
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Definition
| an acceptance becomes binding once it is in the mailbox. does not need to be received. offeror can protect self by stipulating in offer that wont be binding until they receive it |
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| Common law and mailbox rule |
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Definition
| offer is accepted once sent as long as method is authorized. if method used is not authorized acceptance is completed only when received. |
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Term
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Definition
| main difference is if an acceptance is sent by "unreasonable" means it is effective on dispatch if it would be received in the same time frame as a reasonable means of acceptance |
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Term
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Definition
| isn't legally binding unless they have dealt with each ofter or if offeree states so. not offeror however |
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Term
| Things that fall under statute of fraud |
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Definition
1 marriage contracts
2 500 dollars or more
3 obligations to perform a task in replace of someone
4 obligation to pay debt of another
5 interest in land
6 takes more than a year |
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Term
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Definition
| when parties enter a written contract that they intend as a complete integration, a court will not permit the use of evidence of prior statements |
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