BLS 342 exam 3

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  1. Basic Requirements of a contract
    • Agreement
    • between competent parties
    • genuiness of assent
    • consideration
    • legal
    • in proper legal form, if any
  2. Bilateral contract
    Exchange of promises
  3. privity of contract
    people are in a contract, and if one party doesn't live up to their expectations the other party can sue
  4. Promise
    • Express (oral, written)
    • Implied (based on conduct)
  5. Consideration
    • bargained for legal detriment
    • (giving up something, even a promise counts)
  6. agreement
    offer + acceptance
  7. Unilateral contract
    promise for an act
  8. general rule in unilateral contracts
    you have to complete the act
  9. Express contract
    oral or written
  10. implied contract
    based on the conduct of the parties
  11. Quasi-contract
    • missing one or more of the requirements of a contract
    • courts will enforce it based on unjust enrichment (get reasonable value)
  12. Defense to quasi-contracts
  13. Valid contract (definition)
    good binding contract that meets all six requirements
  14. Void contract (definition)
    not a contract, usually because the contract is illegal
  15. Voidable contract (definition)
    can get out of the contract, but you might get stuck with it if you ratify it
  16. elements of fraud
    • misrepresentation
    • of a material fact
    • knowledge or reckless indifference to the truth
    • intent to deceive
    • reliance
    • injury
  17. Equitable remedy of recission
    parties return to status quo ante (original positions before the contract)
  18. If fraud was committed
    plaintiff must disaffirm within a reasonable time, otherwise it is implied ratification
  19. ratification
    agreed to contract (express or implied)
  20. Executed contract
    both parties completed performance
  21. Executory contract
    • neither party has completed performance
    • (contract exists but neither party has done anything yet)
  22. Partially Executory/executed contract
    only one party has completed performance
  23. Offer
    • present, serious contractual intent
    • sufficiently definite
    • communicated to the offeree
  24. Situations that aren't offers
    • future offers (needs to be present)
    • offers made in jest
    • preliminary negotiations
    • invitations
    • invitations to offer
    • inquiry
    • answers to inquiries
  25. Things that can happen to an offer
    • Accepted by offeree
    • rejected by offeree
    • revoked by offeror
    • terminated
  26. Revocation general rule
    an offer can be revoked at any time prior to acceptance
  27. Exceptions to revocation general rule
    • option contract (common law or sales contract)
    • Firm offer (sales law)
  28. Sale
    present transfer of title to goods (tangible personal property)
  29. Common law contracts
    • contract for sale of real property
    • contract for sale of intangible
    • contract for services
    • contract for sale of business
  30. Option contract
    When you promise to keep an offer open for some consideration from the other party
  31. Firm offer
    • offer
    • promise to keep offer open
    • in writing
    • for 3 months or less
    • made by a merchant (person in the business of selling things)
    • ????????? missing 6th piece?

    Don't need consideration
  32. Types of offer rejections by offeree
    • flat rejection (say no)
    • counteroffer (offer something else)
    • qualified acceptance (when offer and acceptance aren't identical)
  33. Things that terminate offers
    • revocation
    • rejection
    • lapse of time
    • condition subsequent
    • death of offeror or offeree
    • subsequent illegality
    • impossibility
  34. Offer is effective when:
  35. rejection is effective when:
  36. revocation is effective when:
  37. Acceptance is effective when (general rule):
    • sent
    • exceptions: offer states otherwise, implied agency rule, acceptance following prior rejection
  38. Doctrine of consideration
    a promise is not binding unless supported by consideration
  39. exceptions to doctrine of consideration
    • promissory estoppel
    • promises made to charitable institutions
    • composition agreements
    • promises made after the statute of limitations has run
    • promises made after a discharge in bankruptcy
    • unforseeable difficulties rule
    • modification of sales contract
  40. Preexisting duty rule
    you already have the duty to carry out what you are offering as new consideration, so it isn't consideration
  41. Requirements for unforeseeable difficulties rule
    • construction contract
    • unforeseeable event
    • promise to pay additional amount
  42. Modification of sales contract
    both parties have to agree but only one has to give new consideration
  43. Situations that are not consideration
    • preexisting duty rule
    • past consideration
    • illusory promises
  44. forbearance
    promise to do nothing or refrain from doing something
  45. Defenses to genuineness of assent
    • mistake
    • misrepresentation
    • concealment
    • fraud
    • duress
    • undue influence
    • unconscionability
  46. Unilateral Mistake
    one party is mistaken
  47. Bilateral mistake
    both parties are mistaken
  48. Three types of mistakes
    • fact
    • laws
    • expectations
  49. unilateral mistake of fact general rule
    • has no effect on contract (caveat emptor)
    • exception: other party knows of the mistake and says or does nothing, then contract is voidable
  50. unilateral mistake of law general rule
    • no effect on contract (ignorance of the law is no excuse)
    • sometimes laws get treated as facts, so you have the same exception as a mistake of fact
  51. unilateral mistake of expectation
    no effect on contract
  52. bilateral mistake of fact
    contract is voidable by either party
  53. bilateral mistake of law
    no effect on contract
  54. bilateral mistake of expectation
    no effect on contract
  55. innocent misrepresentation
    contract is voidable, plaintiff can get equitable remedy of recission, but no damages
  56. concealment general rule
    no duty to disclose
  57. exceptions to concealment general rule
    • one person knows the other person is walking into a trap (K is voidable)
    • statutory (some laws make you disclose info)
  58. Duress (threats)
    • extreme duress (contract is void)
    • mild duress (contract is voidable)
    • threat of a civil suit or economic duress (no effect on contract generally)
  59. Undue influence
    • (K is voidable)
    • confidential relationship between parties
    • one person is in a dominating position
    • dominating person takes advantage of the other person
  60. Unconscionably (catchall)
    • situations where K doesn't fall in other categories but is fundamentally unfair (e.g. unequal bargaining power)
    • contract is void (in rare cases it's voidable)
  61. Things you can do with voidable contracts
    • dissafirm
    • avoid
    • recission
    • ratification
  62. Lack of capacity
    • minors (<18)
    • insane
    • too intoxicated
  63. Total incapacity: Minors
    <7 years old
  64. Total Incapacity: Insanity
    adjudged insane, has appointed guardian
  65. Partial incapacity:minors
    7-17 years old
  66. Partial incapacity: insanity
    only insane in certain occasions, and the contract involved that occasion
  67. Partial incapacity: intoxication
    you were so drunk you don't know what you signed
  68. duty of restoration
    • party brings back whatever they can of the object and they can get back their consideration
    • e.g. minor purchasing non-neccesary and destroying it
  69. duty of restitution
    • get back the current value of the item you bought when you return it
    • e.g. minor lied about age, crushed motorcycle, then disaffirmed contract
  70. Illegality
    • Lottery (gambling)
    • Usury
    • Licenses
    • Contracts in restraint of trade
    • exculpatory clause
    • Contract in violation of statutes
    • Contract in violation of public policy
  71. Lottery
    • Prize
    • Chance
    • Consideration
  72. Exceptions to Usury
    • small loan association
    • installment payments
  73. Licenses primarily for revenue raising
    contracts are valid even though you don't have the license
  74. Licenses primarily to protect the public
    if you don't have the license then the contract is void
  75. Anti-competitive covenants (contracts in restraint of trade) are legal if:
    • ancillary
    • consideration
    • reasonable as to time and space
  76. Exculpatory clauses are legal if:
    • clear and unequivocal
    • consideration
    • equal bargaining power
  77. exceptions to general rule of illegality
    • voidable by statute
    • executory contract and party to perform backs out before performance
    • parties are not in pari delicto (not equally at fault)
  78. Statute of Frauds (time when oral contract must be evidence by writing in order to be enforced)
    • contract for sale of land or an interest therein
    • contracts that cannot be completed within one year
    • promise to pay the debt or default of another
    • promises made in consideration of marriage
    • promises made by an executor/executrix or administrator/trix to pay the debts of hte estate out of his/her own pocket
    • contract for the sale of goods over $500
  79. Promise to pay debt or default of another
    • oral promise
    • made to creditor
    • secondary promise (not you promising to pay their debt)
  80. Primary purpose exception
    if the promise to pay debt of another was made primarily to benefit themselves then the promise does not have to be in writing
  81. Written evidence
    • memorandum
    • written contract
    • letter of confirmation
    • letter to third party
    • check
    • invoice
    • etc.
  82. 6 exceptions to statute of frauds
    • part performance doctrine
    • primary purpose exception
    • goods received and accepted
    • money received and accepted
    • specially manufactured goods
    • admissions in court or in pleadings
  83. Part performance doctrine (majority view)
    • buyer puts money down
    • buyer moves onto the property
    • buyer makes substantial improvements
  84. uniquivocably referrable doctrine (minority view ohio)
    • you wouldn't do what you did if you hadn't bought the property
    • courts will look at the parties behavior
  85. Third party contract (when C can sue for breach of contract even though they aren't in privity of contract themselves)
    • a third party beneficiary
    • or
    • Assignments
  86. 3rd party beneficiary
    • donee beneficiary
    • creditor beneficiary
  87. Test of third party beneficiary
    was it in the contemplation of both parties at the time the contract was entered into to directly benefit the third party?
  88. Assignment
    transfer of a right or multiple rights
  89. times an obligor can prevent the assignment or delegation
    • contract states otherwise
    • personal contract
    • substantial change in performance
  90. Voidable contracts (12)
    • Illegality
    • Intoxicated
    • Minor
    • Insane
    • Fraud in the inducement
    • Undue violence
    • mutual mistake of fact
    • unconscionably (rare)
    • duress
    • misrepresentation
    • unilateral mistake of fact
    • concealment
  91. Void Contracts (6)
    • Illegality
    • Minor
    • Insane
    • Fraud in the execution
    • unconscionability
    • duress
  92. Unenforceable contracts (9)
    • statute of frauds
    • Illegality
    • minor
    • insane
    • fraud in the execution
    • statute of limitations
    • unconscionability
    • duress
    • bankruptcy
  93. No contract (2)
    • lack of agreement
    • lack of consideration
  94. Discharge (2)
    • Bankruptcy
    • Discharge
  95. Discharge (how you get out of a contract)
    • Performance
    • Agreement
    • Conditions
    • Implied Condition subsequent
  96. Performance (general rule)
    total performance
  97. exception to performance
    • substantial performance
    • deviation from contract is relatively trivial and unintentional (<3%)
  98. Agreement
    • mutual recission
    • substituted contract or agreement
    • novation (substitution of parties)
    • waiver (voluntarily give up rights)
    • Accord and satisfaction
  99. Conditions
    • express or implied
    • precedent (triggers obligation)
    • subsequent (obligation ends when something happens)
    • concurrent (happens at the same time)
  100. Implied condition subsequent (doctrine of impossibility)
    • destruction of the subject matter
    • personal contract and party to perform dies
    • subsequent illegality
  101. Remedies
    • Legal (damages): ordinary
    • equitable: extraordinary
  102. Types of damages
    • compensatory damages (out of pocket loss)
    • consequential damages (reasonably foreseeable loss)
    • nominal damages
    • punitive damages (designed to punish)
    • liquidated damages (anticipate breach of contract)
  103. doctrine of impracticability (sales contract)
    • sales contract
    • unforseeable event
    • at least ten times as expensive to perform
  104. Mitigation of damages
    duty of plaintiff to hold damages down as much as possible
  105. Equitable remedies
    • injunction (stop you from doing something)
    • Recission (cancel contract)
    • Specific performance
    • reformation (reform contract)
Card Set:
BLS 342 exam 3
2013-04-24 19:07:14
Becker Miami University

business law
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