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  1. What is a Contract
    • 1) A bargine for exchange
    • 2) Agreement wich the law can enforce
    • 2 parties exchanging something
  2. Objective Standard
    What would a reasonable person viewing the situation think the parties meant
  3. Offorer
    Person making the offer
  4. Offoree
    Person accepting the offer
  5. Elements of Contract
    • 1) Offer
    • 2) Acceptance
    • 3) Consideration
    • 4) Capacity
    • 5) Legal Purpose
  6. Acceptance
    Offoree need to accept the offer being made
  7. Consideration
    • Legal term for things being exchanged
    • Undertaking a Detriment: If you give up somthing that you have a legal right too, like give up legal right to sue for certain amout of $
  8. Contractual Capacity
    • The offoree must have sufficent understanding.
    • Adult of sound mind
    • Minors: can get out it because they are minors
  9. Legal Purpose
    • Msut be a contract that is legal, that the law can enforce
    • Ex. Can't hire a hit man
  10. Sources of Contract Law
    • Common law
    • Uniform Commercial law
  11. Common law
    Realestate or servicres or anthing else that does not involve goods of service
  12. Uniform Commercial Code
    For sales of goods
  13. Express or Implied
    • Express: One where offer and acceptance spelled out in so many words. It is expressed you sell a bike
    • Implied: Offer and acceptance from stating and beavior. May not be said but resonable person would believe it like buying groceries
  14. Bilateral or Unilateral
    • Bilateral: Involves 2 promises. Offoror offers and Offoree accepts. Promise for a Promise
    • Unilateral: Promis for perfomace. Offoree must preform in order to recieve what is being offored. Like lost cat
  15. Level of Performance
    • Executory: Contract made but neither side perfomed yet
    • Partially Executed: Partially performed so one side has followed through
    • Fully Executed: When complete contract has been satisfied and performed
  16. Legal Status
    • Valid: On that satifies all lega requirments. don't need to validate it
    • Voidable: At least one pary has right to get out of contract without being liable for breach, even if it was fully executed. Ex. Minors
    • Unenforceable: If contract has not been preformed you don't have to be forced to go through contract. Ex. Statue frauds
    • Void: No leaga affect. Aggreement viewed as violating tor or infringemnet of law
  17. Quasi Contract (Contract implied in law)
    • Not real contract at all
    • WHere someon gave benefit to another and trying to collect payment on that benefit
    • Exist when don't have real contract
  18. Unjust enrichment
    Someone getting something for free that does not seem fair
  19. What needs to be shown for Quasi Contract
    • 1) Recieved some benefit
    • 2) Accepted when could have denied it
    • 3) A reasonable person would expect ot pay for benefit
  20. Requirements/Terms of Offer
    • 1) Intent to contract
    • 2) Reasonably Certain terms
    • 3) Offere mustg be properly communicated to offereee
    • 4) Offer may specify offeree's identity
    • 5) Offer may specify manner of acceptance
  21. Intent to contract
    • Juge from the objective reasonable person standard
    • Some people are stupid and sign without reading it
    • Cognovit or Confession of judgment: if you sign one with this you are agreeeing upfromt hat if dispute happens you are in the wrong no matter what
  22. Reasonably Certain terms
    • Must have enough specifics. Be able to know the measures
    • Must have subject matter identified
    • If not specific time then in reasonable amount of time
    • If don't say place, according UCC it's seller's place
    • Price can be implied if market for object
    • "Some" is not specific
  23. UCC 2-306
    • Requiments contract: Somone offerting to buy all they required form a certain good, certain time, certain seller
    • Output contract: Agree to sell entire output, considering do not know how much it will be
  24. Offer must be communicated to offeree
    • Can not be sent to 40 other people through email.
    • It must go to the person it is intended to go to
  25. Specify Offeree;s identity
    • Must be made directly tto offeree's, not somone else
    • By characteristic, like to person who brings cat back
  26. Offer may specify manner of acceptance
    • You can only accept it by the way that they tell you to accept it
    • It can be left open, which then you accept in a resonalby way
  27. Distiguishing preliminary negotiations
    • Really careful about exact words being used
    • Make sure not a question like, "wana buy my bike"
    • Distiguish between question and offer
  28. Advertisements
    • They are invitations to public to come make an offer
    • Not an offer, just an invitation
    • Exception: Worded in such a way that it's askfing for actual perfomance like first person here gets free coat
  29. Rewards
    • Unilaterly offers
    • If you do somethiing like find cat you get reward mentioned
  30. Bids
    Offer that came in response for someone requesting them
  31. Auctions
    • You raise paddle, you make an oferr
    • Don't bid unless you mean it because you make an offer then you buy it
  32. Revocation
    • Take it back, change their mind.
    • Anytime before acceptance is made, you can revoke offer
  33. Exceptions: Firm offer/ UCC2-205
    • From sales of Good contract
    • 1) must be a merchant/business transaction
    • 2) Made in signed writing to be firm offer
    • 3) Assuance will be open for period time specified otherwise max 3 months
  34. Exceptions: Option
    • A contract to keep offer open
    • Offoree gives consideration for exchange of offer open
    • Ex. The consideration given if just to give up right to revoke so oferor keeps regardles accept or not
  35. Exceptions: Promissory Estopple
    • 1) Offeror/promisor makes a promise which he should reasonalby expect offeree will rely on, and
    • 2) Offeree/promisee does reasonably rely on the promise to his detriment
  36. Exceptions: Unilateral offers
    • These depend since on perfomrance alone
    • 1) General rule: Not finished, not accepted (same rule as rest)
    • 2) Substantial performance: If offoree has substantial aoumt of completions (3/4 or 2/3) then must be given reasonable amount time to finish and accept
    • 3) Started performance: If they ahve begun it then they must be given reasonable time to complete it
  37. Indirect Revocation
    • No communication between offoree and offerer but offoree gets reliable info that is inconsistand with the offer. Then is revoked
    • If the offoree does not get info and accpets anyways, the offorer is in trouble
  38. Revoking a public offer
    • When a offer is made to the public, you do not know who has seen it
    • You must revoke offer same way that you made it
    • It is revoked weather offoree sees it or not
  39. Rejection/Counteroffer
    • You must say, I offer....
    • It can not be a question of "will you..."
  40. Lapse of time
    • If you say you offer until a cettain time, the it is terminated pasts that time frame
    • No time frame, then asume a reasonable amount of time
  41. Destruction of subject matter
    If it is ruinimed before you accept it then offer is terminated
  42. Death or Incompetency
    • If person dies then offer ends
    • Option: if there is statment open 30 days and person dies, you are still entitled by their estate for them to sell it if you accept
  43. Illegality
    If ilega then cant sell anymore of course
  44. Acceptance
    Saying or doing somthing to show they are agreeing to whats being offered.
  45. Acceptance of Unilateral offer
    You must actually perform the act
  46. Acceptance of bilateral offer
    You will make the second part of the two way promise
  47. Silence as Acceptance
    • General rule: don't say somthing, then not excepting
    • Exceptions:
    • 1) Offer states that silence is acceptance
    • 2) offeree accepts a benefit he had a chance to reject
    • 3) Previous dealings where a pattern is established and always do the same thing unless otherwise stated.
  48. Communicatin the Acceptance
    • 1) Directions may be specified so then you must accept in that exact way!
    • 2) If does not specify then:
    • a) Use same type as offorer
    • b) Use a better, faster more reliable
    • c) Customary uner circmstances like faxing or somthing
  49. Timing of acceptance
    When it takes affect, you have a binding contract
  50. Mailbox Rule
    • If mail is valid way to accpet, then it is leafaly affective when it is mailed.
    • Do not need to wait for it to be recieved.
  51. Exception to Mialbox rule
    If offoree sends accpetance and rejections then go by the first that is recieved.
  52. Rejections and Revocations
    THey are not affective untill recieved
  53. Mirror Image rule
    • For common law
    • Acceptance must bre on same terms as offer or else is it considered a counter offer
    • You can't change anything
  54. UCC2-207
    • This is for salees of goods only
    • Accceptance with additonal or different terms is still an acceptance unless worded as a counter offer
  55. Exapmles of counter offers
    • But only
    • on condition
    • as long as
    • if you do this
  56. Under UCC2 Contract what terms?
    • Stays on original terms of offer, at sellers EXCEPT Between merchants
    • 1) original offer stated otherwise
    • 2) Terms materially alter the contract like distance between companies
    • 3) offeror objects to additional terms with reasonable time
  57. Consideration
    In General, congtract inovles exchange between two and the consideration is the thing being exchanged
  58. Defining Consideration
    • 1) Benefit to which one had no prior legal entitlement, also promise to give benefit
    • 2) Undertaking a detriment or burden one is not otherwise obligated to incur, like giving up rights in exchange for money
    • Forbearing to sue is not really consideration because you are not giving them somthing
  59. Consideration- Legal adequcy
    • The meaning of valuable
    • It must be legally adequate which is up to offerer
  60. Consideration issues
    • 1) Lack of mutualilty
    • 2) Pre-existing legal duty
  61. Lack of Mutuality
    • Can't exchange for love, affection, being good
    • Illusory Promises: be sure and distinguish from outpt/requiment contracts. they don't really benefit other.
    • Also wants and desires are not consideration
    • Wanting widgets is not contract
  62. Pre-excisting Legal duty
    • If you already legally obligated to some somthing you can't use it for consderation becaues you have to do it anyways
    • 1) Public obligations like police officers can't get reward for catching robber
    • 2) Contractual duty, if already stated cant be consideration like debt
  63. Exceptions to Contractual duty
    • 1) Unliquidated debt: there is a disagreement about how much owed so make a reasonable amount. But I.O.U or promisory note is unliquidated and can't get out of it
    • 2) New Consideration: giving a new consideration to pay off, like 800 and ipod to pay off 1000
    • 3) Early Payment: If pay early, drop some is consideration
    • 4) Bankrupt: you get some but not all and you have to agree to be ok with that
  64. Past Consideration
    If you already did somthing, you can't use that as consideration so no barginng element
  65. Contracts inforced without Consideration
    • New promis to pay old dept
    • 1) Discharged by statue of limitations: time period ran course so decide dto write it off
    • 2) Discharged by bankruptcy
    • If person comes back and says I will pay you now, that is binding and they must pay without consideration
  66. Promisory Estoppel
    • It is a substitue for actual consideration
    • 1) Promisor makes a promise which is in place of consideration
    • 2) Promisor should expect promisee will rely on the promise
    • 3) Promisee does reasonably rely on promis to promisees detriment- had some loss becaues of promise made
  67. Charitable Subscriptions
    • 1) Statutory exception: statue says don't need consideration
    • 2) Promissory estoppol: makes plans based on your pledge
    • 3) Nominal consideration: a token or somthing but it is legal because you are getting something
  68. UCC 2-209
    • If you have existing sales of good contract, a modification of excisting contract does not need consideration.
    • Ex. Car and radio. They don't have to throw it in but since they did promise extra they have to do it
  69. Capacity
    Ddi the person in questiona the the time of making the contract understand the nature and consequences of the transaction entering into
  70. 4 Factors effecting Capacity
    • 1) lack of capactiy: drunk, brain injury, mentally ill
    • 2) Timing: illness that worsens at different times
    • 3) Adjudicated incompetents: after declared this anything you do is considered void
    • 4) Liabilty for necessaries: could be held quazi contract. In this situation, was it necisarry for person to get this
  71. Minors/infants
    • Under age state has set for contracts capacity
    • General rule: Can make contracts but are voidable with option of minor. Means it can be set aside even after fully executed
  72. Minors power to disaffirm
    • 1) What: have right to weasle out without breaching contract
    • 2) How: say or do anything show don't intendt to be bound by contract
    • 3) when: at anytime while they are a minor
    • 4) Minor's duty: return consideration back in whatever condition if still have it
    • 5) Duty of other party: return minors full consideration
  73. Effect of minor misrepresentaion age
    • 1st view: Still can disafirm but may be liable for a tort of fraud
    • 2nd view: can disaffirma and it is not liable in tort if it would therefore enforce the contract
    • 3rd view: Some say they can not dissafirm
  74. Statutroy Rules
    • Contrcts Minors Can't disaffirm
    • 1) Insurance
    • 2) Banks
    • 3) Contracts made to fulfill legal dutty (realestate, mom)
  75. Ratification
    • Saying or doing anything that shows you intend to go on with the contract.
    • Done by saying something, taking things, or making payments
    • You then loose your right to disaffirm
  76. Minors and Quasi Contracts
    • Did theyn have to have this or did they need it?
    • They are libaible for necessaries- use subjective test
  77. Contracts that Viloate a Stature
    • Wagers
    • Insurance
    • Licensing
    • Usury
  78. Wagers
    Gambling contrace is illegal unless it is specifiacally authorized by state statute
  79. Insurance
    Anyone taking out a policy on life of another must have an insurable interst in that person
  80. Licensing
    • When a licensing requirment is designed to protect the public, any contract made by an unlicensed worker is uneneforceable
    • When a licensing requirment is designed merely to raise revenue, a a contract made by an unlicensed person is generaly enforceable
  81. Usury
    Usury lawas prhibit charging excess interest on loans
  82. Contracts that Violage Public Policy
    • Restraint of Trade
    • Sale of busniness
    • Employment
  83. Restraint of Trade
    • To be valid, an agreement not to compete must be ancillary to a legitmage bargain.
    • Ancillary: meanst that the concompetition agreement must be part of a larger agreement
  84. Sale of a Business
    Whena noncompete agreement is ancillary to the sale of a business, it is enforceable if reasonable in time, geographic area, and scope of activity
  85. Employment
    A noncompete clause in an emploment contract is generally enforceable only it it is essential to the employer, fair to the employee, and harmless to the general public
  86. Contracts that Violate Tort law
    Excupatory clauses: a contract provision that attempts to release one party from liability inh the even the other is injured
  87. Exculpatory clause unenforcable when:
    • It attempts to exclude an intentianal tort or gross negligence
    • the affected activity is in the public interest, such as medical care, public transportation, or some essential service
    • The parties have greatly unequal bargaining power
    • Unless the clause is clearly written and readily visible
  88. Bailment Cases
    Bailment: giving possession and control of personal property to another person
  89. Unconscionable contracts
    • One that a court refuses to enforce becasue of fundamental unfairness
    • Must have factors of-
    • 1) oprression: one party uses its superior power to force a contract
    • 2) surprise: meaning weaker party did not fully understand teh consequences of its agreement.
Card Set:
2011-11-14 22:34:13

Blaw test 2
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