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Flashcards in Contractual Relationships I Deck (34)
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1

Why do contracts exist?

To make business matters more predictable

2

Judicial Restraint

A court taking a passive role and requiring the parties to fulfill whatever obligations they agreed to, whether the deal was wise or foolish. Makes the law less flexible but more predictable.

3

Judicial Activism

A court will ignore certain provisions of a contract, or an entire agreement, if the judge believes that enforcing the deal would be unjust. Will sometimes artificially create a contract to avoid injustice. Makes law more flexible but less predictable.

4

Agreement

One party must make valid offer, and the other party must accept it

5

Consideration

There has to be bargaining that leads to an exchange between parties

6

Legality

The contract must be for lawful purposes

7

Capacity

The parties must be adults of sound mind

8

Four Elements to a Contract

Agreement, Consideration,
Legality, Capacity

9

Consent

Neither party may trick or force the other into the agreement

10

Written Contracts

Some contracts must be in writing to be enforeable

11

Third Party Interests

Some contracts affect people other than the parties themselves

12

Performance and Discharge

If a party fully accomplishes what the contract requires, his duties are discharged

13

Remedies

A court will award money or other relief to a party injured by a breach of contract

14

Contract

A promise that the law will enforce

15

Non-competition Agreement

One party (usually employee) agrees not to enter into or start a similar profession or trade in competition against another party (usually employer)

16

Bilateral Contract

Both parties make a promise. Promise for a promise

17

Unilateral Contract

One party makes a promise that the other party can accept only by doing something (lawn mowing example)

18

Express Contract

The two parties explicitly state all important terms of their agreement

19

Implied Contract

The words and conduct of the parties indicate that they intended to and agreement

20

Executory Contract

When one or more parties has not fulfilled its obligations

21

Executed Contract

When all parties have fulfilled their obligations

22

Valid Contract

One that satisfies all of the law's requirements. A court will therefore enforce it.

23

Unenforceable Contract

Occurs when the parties intend to form a valid bargain but a court declares that some rule of law prevents enforcing it.

24

Voidable Contract

Occurs when the law permits one party to terminate the agreement.

25

Void Agreement

One that neither party can enforce, usually because the purpose of the deal is illegal or because on of the parties had no legal authority to make a contract.

26

Remedy - Promissory Estoppel

No contract made BUT defendant made a promise that the plaintiff relied on

27

Remedy - Quasi-contract

No contract made and defendant did not make any promise, BUT did receive a benefit from the plaintiff.

28

Promissory Estoppel is enforceable if...

Defendant made promise knowing plaintiff would likely rely on it, the plaintiff did rely on promise, and the only way to avoid injustice is to enforce promise.

29

Quasi-contracts compensate plaintiff if...

Plaintiff gave some benefit to the defendant, plaintiff reasonably expected to be paid for the benefit and the defendant knew this; and defendant would be unjustly enriched if he did not pay

30

Qantum Meruit

Damages awarded in a quasi-contract, meaning plaintiff gets "as much as he deserved".