Exam 2 Halpern Book Terms Flashcards
(110 cards)
1
Q
Ch9
A
Pages 198-214
2
Q
Contract
A
Promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty
3
Q
Elements of a Contract
A
Agreement
Consideration
Contractual Capacity
Legal Object
4
Q
Agreement (Element of a Contract)
A
Offer by the offeror
Terms and conditions are set and presented to the other party (offeree)
5
Q
Consideration (Element of a Contract)
A
What each party gets in exchange of their promise
6
Q
Contractual Capacity (element of a contract)
A
The legal ability to enter into a binding agreement
7
Q
Legal Object (element of a contract)
A
Contract can not be illegal OR against public policy
8
Q
Defenses to Enforcement of a Contract
A
Lack of genuine assent
Lack of proper form
9
Q
Lack of Genuine Assent (defense to a contract)
A
Offeree claims that the agreement was secured through improper means such as duress, fraud, undue influence, or misrepresentation
10
Q
Lacks proper form
A
Means it lacks a writing
11
Q
Sources of contract law
A
UCC - Uniform Commercial Code
Case Law
CISG - Convention on Contracts for International Sales of Goods
12
Q
Restatement (second) of the Law of Contracts
A
Not the law itself
Judges frequently cite in in cases, it IS an authoritative statement of what the law is
13
Q
Uniform Commercial Code
A
A set of commercial laws that is applicable to all states. Adopted completely or partially by each state.
14
Q
Bilateral Contract
A
A promise in exchange for a promise
15
Q
Unilateral contract
A
Offeror WANTS a performance to from the contract.
Offeror wants the offeree to do something, not promise to do something.
Most common offer is a reward: $50 if you find my lost dog, only completed with PERFORMANCE
16
Q
Express contract
A
Terms are set forth in either written or spoken words
17
Q
Implied contract
A
Arise from conduct of the parties
18
Q
3 conditions of an implied contract
A
- Plaintiff provides some property or service
- Plaintiff EXPECTED to be paid
- Defendant HAD a chance to reject the property/service
19
Q
Valid contract
A
Contains ALL legal elements of a contract
20
Q
Unenforceable contract
A
A law prohibits courts from enforcing it
21
Q
Void contract
A
In effect, not a contract at all
Either its object is illegal, or has a major defect
22
Q
Voidable Contract
A
One OR both parties can withdraw from the contract OR enforce it
23
Q
How can a contract become voidable?
A
Errors in its formation
Person who can void the contract is the person whom the court is attempting to protect, or was taken advantage
Contracts entered into as a result of fraud, duress, or undue influence - a problem with the VALIDITY of the acceptance can be voided by the innocent party
24
Q
Executed contract
A
All terms FULLY performed
25
Executory contract
Some duties performed
26
First element of a contract is ___
agreement
27
Intent (elements of the offer)
First element
Offeror MUST be intent to be BOUND by the acceptance. Has to be expressed outward.
28
Auction with reserve
Typical
Seller expresses INTENT to RECEIVE offers
29
Auction withOUT reserve
Seller is treated as making an offer to accept the highest bid
30
Definite and certain terms (offer)
Terms of the offer must be definite and certain
All material terms are included. This allows damages to be determined in a breach.
31
Communication to the Offeree
Offeror = communicated to offeree or their agent
Offeree only one to accept. Agent CAN accept on BEHALF of the offeree.
32
5 Ways to terminate an offer
revocation
rejection
death/incapacity of offeror
destruction/illegality of subject matter
lapse of time or other conditions
33
Revocation by the offeror
CAN revoke at anytime, even if they said it would be open X time
34
Option contract
Agreement where the offeree gives the offeror a piece of consideration in exchange for the agreement to hold the offer open
No requirement for value of consideration
35
General rule for when revocation is effective
Received by the offeree
Offeror should personally deliver it to know it is revoked
36
2 ways offeree can manifest acceptance
Either do something OR say something
37
Silence as an acceptance?
As a general rule, NO
37
Circumstances where silence = acceptance
Offeree receives benefits with reasonable opportunity to reject them, knowing compensation was expected
Offeror TELLS the offeree silence or inaction = acceptance
Parties, by previous course of interactions, established a pattern where it is reasonable to assume that silence was intended
38
Mirror image rule
terms of acceptance mirror terms of offer
39
UCC Section 2-207 (with mirror image rule)
As a general rule, offeree may include in the acceptance additional terms or different ones as long AS:
Offeror did not explicitly state all terms must be accepted EXACTLY as proposed
Offeror does not promptly reject new terms on receipt of accetpance
Does not materially change terms of the offer
40
If a specific means of acceptance is given, can other be used?
NO
41
Mailbox rule
Acceptance IS valid when placed in the mailbox
Revocation valid WHEN received by the offeree
42
Define consideration
What a person receives in return for performing a contract obligation
43
Example for a benefit to the promisor
Stay in job until project is complete
44
A detriment to the promisee
Promise to a coach to refrain from riding motorcycle during season, even though you love it
44
Promise to do something
Promise to cook dinner for roommate for 6 months
44
A promise to refrain from doing something
Promise to stop drinking alcohol during exam week
44
Lack of Consideration (enforcement)
For a promise to be enforced, must be consideration
44
Promissory Estoppel
Legal enforcement of an OTHERWISE unenforceable contract due to a party's detrimental reliance on the contract
44
3 conditions Promissory Estoppel
1. Party makes a promise knowing the other would rely on it
2. Other party relies on the promise
3. Only way to avoid injustice is to enforce the promise
45
The court seldom considers adequacy of consideration
t or f?
true
Do not care if you made a good bargain
46
Illusory promise
A fake promise, not one at all
NOT consideration
47
Past consideration
NOT CONSIDERATION AT ALL
47
Capacity
3rd element of a legally binding contract
Mental ability to understand their rights/obligations under a contract, therefore will presumably be able to understand how to comply with the terms of the agreement
47
Persons suffering from a mental illness or deficiency have what capacity?
Full, limited, or none. Depends on nature of the contract, and obligations imposed.
48
Intoxicated persons and contracts (are they voidable?)
Contracts of an intoxicated person are voidable by the intoxicated person if the other party had reason to know that because of the intoxicated person's condition, that person was unable to understand the nature and consequences of the transaction or was unable to act in a reasonable manner in relation to the transaction.
If the intoxication merely caused poor judgement, the person's capacity is not affected.
48
If a party has no way of knowing the other was intoxicated at the time of agreement, and the agreement is fair, what happens?
Uphold
48
When sober the intoxicant can
ratify or disaffirm the contract, but courts are often unsympathetic to intoxicants.
if actions in morning are towards ratification, it is a BINDING contract.
48
If person is a minor the general rule is?
Voidable
48
If the person is suffering from mental deficiencies preventing them from understanding the contract they are entering? (general rule is)
Voidable
49
Does person's mental deficiency simply impair judgment about desirability, but not prohibit their understanding of their obligations? (general rule is)
VALID
50
Is the person adjudicated insane? (general rule)
VOID
51
Is the sober party aware that the person is so intoxicated they are UNABLE to understand their obligations? (general rule)
voidable
52
Is intoxication such that it impairs ONLY the intoxicated person's judgment but not their understanding of their contractual obligations? (general rule is)
VALID
53
Has the intoxicated person been adjudicated a habitual drunkard? (general rule is)
VOID
54
When contracts are against generally accepted public policy, these agreements are determined?
UNenforceable, NOT void
No remedy available for unenforceable agreements
55
Agreements for an illegal subject are?
Unenforceable
56
Mistake
Erroneous belief about the facts of a contract at the time that the contract concludes
57
Unilateral mistake
Does not void a contract (generally)
courts hesitant if one party understands the material facts and the other doesn't
58
Mutual Mistake
Both parties are mistaken about a current or past material fact, THEN either can rescind.
fair bc the agreement was an illusion
59
For mutual mistake to interfere with legal consent, must involve all the following (3 things)
1. basic assumption ab subject matter of contract
2. material effect on agreement
3. adverse effect on a party that did NOT agree to bear the risk of mistake at the time of agreement
60
Innocent misrepresentation
false statement about a fact material to an agreement, when the person making the statement BELIEVED it was true
61
Scienter
Intent or knowledge
62
Scienter in innocent misrep.
We say the person lacked scienter
63
Innocent misrepresentations and rescission
Permit the misled party to rescind the contract
Since no bad intent, can NOT sue for damages
64
Negligent misrepresentation
One party is negligent in the assertion of what they believe is a true statement.
Treated as if the intent to deceive was present
65
Fraudulent misrepresentation
ANY fraud on part of a party to a contract is basis for rescission. lacks genuine assent.
IS intentional, scienter is clear.
66
Concealment
ACTIVE hiding of truth about a material fact
Ex: removed 20k off odometer
67
Nondisclosure
Failure to provide important information about a projected contract
68
Courts find nondisclosure having the same legal effect as an actual false assertion under what 2 conditions?
1. Relationship of trust exists between the parties to the contract.
this means that the relationship provides reasonable expectation to not be defrauded
2. There is failure to correct assertions of fact that are no longer true in light of events that have occurred since the initial consent to the terms of agreement
69
Intent to deceive
Scienter present when part accused of making the fraudulent assertion believed the assertion was false
70
Undue influence
special relationships in which one has taken advantage of their position to PERSUADE the other to enter a contract
71
Questions to ask if undue influence exists:
Was dominant party rushing consent?
Did dominant party gain undue enrichment?
Non-dominant party isolated from advisers of agreement?
Is contract unreasonable because it OVERwhelming benefits the dominant party
72
Duress
One party FORCED into the agreement by wrongful act of another
73
Statute of Frauds does...
Addresses enforceability of contracts that fail to meet the requirements set forth in the statute
Protect promisors from poorly considered oral contracts by requiring certain ones in writing.
74
3 Main purposes of Statute of Frauds
1. Ease contractual negotiations, require sufficiently reliable evidence to prove contract
2. Prevent unreliable oral evidence from interfering w/ contractual relationship
3. Prevent parties from entering into contracts with which they do not agree
75
The type of contracts that fall in statute of frauds
1. Performance IMPOSSIBLE in 1 year
2. Promises made in consideration of marriage
3. Contracts for one party to pay debt of another, if initial fails to pay
4. Related to an interest in land
76
Prevent Possible Performance in 1 Year
Must be in writing
One year period begins day after creation, not when scheduled to begin
Test for compliance is likelihood of completion within one year
77
If a contract can possibly be performed within a year, even if such performance is highly unlikely, contract does/not need writing?
DOES NOT
78
Agreements regarding marriage where one is gaining something other than a promise to marry need writing?
yes
79
Mutual promise to marry does/not fall in statute of frauds?
does NOT
80
Prenuptial Agreement
Must be in writing to be enforceable
81
Equal dignities rule
If one party hires another to negotiate a contract, they MUST be in writing (SoF)
82
Exceptions to SoF
Admission
Partial Performance
Promissory Estoppel
Although not under the SoF, exceptions in UCC
83
Admission (exception to SoF)
Statement made under oath, in which a contract who the charges are against, admits that an oral contract existed, even though it was required to be in writing.
84
Partial Performance
An exception to the statute of frauds in which the performance of portions of an unwritten agreement by one or both parties can constitute proof that an oral contract exists between parties.
Can override statue's requirement for a written agreement
85
Promissory Estoppel (exception to SoF)
House example
You sell your house and rare coins to buy a new house, they knew you relied on the purchase and no written contract exist so they refuse to sell it to you.
Since they knew you relied, under your own detriment, you could win
86
Elements required for a writing to satisfy the Statute of Frauds (5)
1. Parties
2. Subject matter
3. Consideration given
4. All relevant contractual terms
5. Signature of AT LEAST the party AGAINST whom action is brought
87
Parol Evidence Rule
Designed to preserve the sanctity of a written contract and give parties the security of knowing that if they take the time and effort to place their fully integrated agreement into a written document, they can have confidence that the court will enforce that document, and NO evidence of any other prior or contemporaneous agreement that would contradict the terms of that written document WILL be recognized by the court.
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First 4 Exceptions to Parol Evidence Rule
1. Contracts are subsequently modified
2. Contracts conditioned on orally agreed terms
3. Contracts that are not final because they are part-written and part-oral
4. Contracts with ambiguous terms
89
Exceptions 4-8 to Parol Evidence Rule
5. Incomplete contracts
6. Contracts with obvious typographical errors
7. Void or voidable contracts
8. Evidence of prior dealings or usage of trade
90
Condition Precedent
Contract is conditioned on something occurring first. Evidence of the existence of a condition precedent agreed to orally is admissible, because enforceability is a question
91
Conditional Contracts
Contracts containing conditions affecting the performance obligations of the parties.
The conditions may be implied by law or expressly inserted into the contract by the parties.
92
Condition Precedent
A particular event that MUST occur for a party's duty to arise
If the event does not occur, no need to perform
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Condition Subsequent
Future event terminating the obligations of parties when it occurs.
Apartment lease for 5 years, conditioned on not being called to the National guard, if so the lease is discharged.
94
Concurrent Conditions
Each party's performance is conditioned on the performance of the other
Only occurs when parties are required to perform simultaneously
Legal effect is that each must offer to perform before being able to sue
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Express conditions
Explicitly stated in the contract and are usually preceded by words like provided that, if, conditioned on, OR when
96
Implied conditions
Not stated, but inferred from nature and language of the contract
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Discharge by performance (tender)
If a painter shows up with paint and ladders ready to start, they have tendered performance.
If the homeowner does not let them start, the painter can sue for material breach
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