Contracts

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Author:
varciniega
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47639
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Contracts
Updated:
2010-12-08 20:24:00
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Contracts
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Contracts I
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  1. Define CONTRACT
    An agreement between two people or more to do or not to do a certain thing, which if breached, the law will give recovery.

    Requires a valid offer, valid acceptance and consideration.

    • Additional requirements:
    • 1. Parties having legal capacity to contract
    • 2. Mutual consent
    • 3. Lawful objective
    • 4. Sufficient Consideration
  2. Define CONSIDERATION
    Any act or forbearance that is a benefit to the promisor or a detriment to the promise that is bargained for in exchange.

    • Elements:
    • 1. Legal Detriment
    • 2. Bargain for Exchange
  3. Define LEGAL DETRIMENT
    Doing that which you are not obligated to do or refrain from doing that which you are entitled to do.
  4. Define BARGAIN FOR EXCHANGE
    The promise must induce the detriment and the detriment must induce the promise.

    Promisee must know of the promise and act in reliance on the promise.
  5. Define GRATUITOUS PROMISE
    A promise to make a gift in sometime in the future and is not in exchange for anything
  6. Defined CONSIDERATION
    • Any act or forbearance tha tis a benefit to the promisor or detriment to the promisee that is bargain for in exchange. It must arise in the context for a bargin for exchange.
    • POLICY: Courts do not want to enforce gratuitous promises.
  7. Define LEGAL DETRIMENT
    Doing that which you are not obligated to do or refraining form doing that which you are legally entitled to do.
  8. Define BARGAIN FOR EXCHANGE
    • The detriment must induce the promise and the promise must induce the detriment.
    • If the promise is bargained for, there is no further requirement of benefit to the promisor or a detriment to the promisee.
  9. Defined PRE-EXISTING DUTY RULE
    • Merely doing or promising to do that which one is already legally obligated to do is no cosideration. Performance of a legal duty owed to a promisor which is neither doubtful nor the subject of honest dispute is not consideration.
    • EXCEPTIONS: New promise to pay a past debt, Agreement to accept a smaller sum un non-liquidated damages, Contract Modification
  10. MORAL OBLIGATION
    • Generally does not support consideration.
    • A promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent injustice.
    • A promise is not binding under (above) if the promisee conferred the benefit as a gift or for other reasons the promisor has not been unjustly enriched; or to the extent that its value is disproportionate to the benefit.
  11. Define ILLUSORY PROMISE
    A promise conditioned upon the whim of the promisor, leaving the election of whether or not to perform solely to the promisor's whim.
  12. Define PROMISSORY ESTOPPEL
    • Where a promise foreseeably relies on a proimse and changes their position to their detriment as well as injustice can only be avoided by enforcement of the contract.
    • ELEMENTS: forseeability, reliance and injustice.
    • Can only recover reliance damages and not expectatio damages.
  13. Define OFFICIOUS INTERMEDDLER
    One who acts intrusively in conferring a benefit cannot get restitution form the recipient.
  14. Define QUASI-CONTRACT
    • An obligation created by law for the sake of justice.
    • ELEMENTS: D enriched or received a benefit, the rentention of such benefit without remuneration would be unjust, and at the time of rendering the benefit P expected payment form D.
  15. OBJECTIVE THEORY OF CONTRACTS
    • legal concept that a binding agreement exists between two (or more) parties if a reasonable person would judge from the outward and objective acts of the parties and the associated circumstances that an offer has been made and accepted.
    • ELEMENTS: agreement exist, object/outward acts of the parties and associated circumstances.
  16. Defined OFFER
    • A manifestation of willingness to enter in a bargain, which created in the offeree the power of acceptance.
    • ELEMENTS: Outward manifestation, intent (PKI), Definite and Certain in Terms (QTIPS), Communicated to Offeree
    • Quotes and Advertisement are presumed to be invitations to negotiate
  17. Define FIRM OFFER
    • an offer bya merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable for lack of consideration during that time.
    • if no time is stated then reasonable time
    • cannot exceed 3 months
  18. Define ACCEPTANCE
    • A manifestation of willingness to be bound the terms of the offer made in a manner invited or required by the offer.
    • Bilateral contracts - preparation v. beginning performance
    • Silence - along not acceptance except for previous relationship/dealings and offeree making use of consideration
    • Reasonable time to accept
    • certainty of terms: certain if can provide basis for breach and remedy
    • Notice can be dispensed of
  19. "MIRROR IMAGE RULE"
    • an acceptance which contains additional or different terms or which in any way varies form the terms the original offer operates as a rejection and counter offer.
    • an offeree's power of acceptance is terminated in the making of a counter-offer, unless the offeror has manifested a contrary intention or unles the counter-offer manifest a contrary intention of the offeree.
    • EXCEPTION: UCC 2-207
  20. UCC 2-207 "BATTLE OF THE FORMS"
    • Additional or different terms are treated as proposals for addiitonas to the contract
    • Between MERCHANTS the terms become part of the contract unless: (1) the offer expressly limits acceptance, (2) the terms materially alters the contract, or (3) notification of objection to additional terms is given in a reasonable time.
    • DIFFERENT TERMS: Majority states discrepant terms fall out and are replaced by suitable UCC gap-fillers.; Minority/CA states different terms are treated the same as additional terms (above).
  21. Define "MAILBOX RULE"
    • Acceptance is effective upon dispatch. Acceptance is deemed to be fully communicated when the offeree has placed the acceptance into the course of transmission to the offeror.
    • Offeror assumes the risk
    • Only applies if mail is the manner or medium invited by offer
    • EXCEPTION: Option contracts only effective when received
    • REJECTION/REVOCATION: Majority rule states effective upon receipt.; Minority/CA states effective upon dispatch.
  22. Define REVOCATION
    • An offer may be withdrawn at any time prior to acceptance.
    • ELEMENTS: Must be communicated to offeree, prior to acceptance.
    • Express Revocation: giving actual notice to the offeree
    • Implied or Indirect Revocation - next card
  23. IMPLIED OR INDIRECT REVOCATION
    • When the offeror takes action in consistent with keeping the offer open and the offeree received reliable information of the fact
    • ELEMENTS: actions inconsistent, reliable notice to the fact
  24. Define OPTION CONTRACT
    • A promise not the withdraw or revoke an offer for a stated period of time.
    • To be enforceable: (1) Consideration, (2) Merchant Firm Offer, (3) Detrimental Reliance, (4) created in Unilateral contract one performance has begun

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