PA Distinctions Flashcards
(22 cards)
Non-Compete Clauses
Generally enforceable;
May be unenforcable if they are extensively restrictive in protecting a valid business interest, or if the burden on the employee and injury to the public are greater than the employer’s needs to protect its valid business interest.
Extension of Time in Contracts
When parties agree to extension of time, but do not mention the length of the extension/ there is ambiguity, the presumption is that it is for a reasonable period of time.
*Consider the circumstances
Duress
Under Common Law when a party’s agreement is based on physical duress, the contract is void.
PA awknowledges economic duress or business compulsion as a type of duress that makes the contract voidable.
*Court will consider the circumstances and whether the injured party has an immediate legal remedy to make him whole without dismissing the contract.
Is consideration required when there is an express writing?
No, in PA the consideration requirement is met–even without consideration–when there is an express written statement that the signer intends to be legally bound by.
Effect of a Seal
PA supports a seal as a substitute for consideration; EXCEPT in a sale of goods case
Promissory Estoppel
Promissory esoppel/ equitible estoppel acts as consideration when a party relies on a promise that might reasonably induce reliance, and where injustice is avoided only by enfocing the promise.
Unconscionability
PA uses a 2 part test to determine unconscionability:
(1) Whether signing party had a meaningful choice in accepting an unfair contract or clause; and
(2) Whether the unfair contract or clause unreasonably favors the party asserting it
Exculpatory Clauses: What conditions must be met?
Three conditions must be met for it to be valid:
(1) Contract must be between persons relating completely to their own private affairs;
(2) Clause must not go against public policy; and
(3) Each party must be a free bargaining agent to the agreement so that the contract is not one of adhesion
Exculpatory Clauses: standards used in PA to interpret exculpatory clauses
PA uses four guiding standards to interpret exculpatory clauses:
(1) Contract language must be strictly construed
(2) Intention of the parties must be stated in the contract with great detail
(3) In cases of abiguity, contract must be construed against the party seeking immunity from liability
(4) Burden of establishing the immunity is on the party looking for protection under the clause
Third Party Beneficiaries to Warranties
In PA, a seller’s warranty extends to any person who is in the buyer’s family or household or a guest in the home if it is reasonable to expect that the gues would have interaction wiht the good
Incidental Beneficiaries
PA uses a two part test to determine if a beneficiary is incidental or intended:
(1) Whether recognition of the beneficiary’s right effectuates the intention of the parties;
(2) Whether performance satisfies the promisee’s obligation to pay the benficiary or her intention to provide the beneficiary with the promised performance
When do a beneficiary’s rights under a contract vest?
PA does not follow the majority rule.
Donee beneficiary’s rights vest immediately and cannot be modified unless the power to modify is expressly state in teh contract
Novation
In PA, the requirements for a novation are:
(1) Displacement and termination of a valid contract,
(2) Substitution of a valid new contract, either between the same parties or including a new creditor or debtor,
(3) Sufficient legal consideration for the new contract, and
(4) Mutual consent of the parties
Statute of Frauds: PA requirements for the writing
In PA, the writing must be a memoranfum
(1) signed by the parties to be charged,
(2) adequately designating the terms to avoid fraud by its enforcement,
(3) with terms of certainty,
(4) and including the intention of the parties to be bound by the contract.
Statute of Frauds applies to:
(1) Contacts for sale of goods worth $500 or more
(2) Leases for terms greater than 3 years
(3) Contracts for transfer of real property interest - includes mortgages; easements; contracts for sale of land by auction; and coal, surface rights, and rights of support
(4) Suretyship - unless the surety’s main purpose in agreeing to pay the debt of the principal is for the surety’s own exonomic advantage rather than the principal’s benefit
*PA does not have the requirement that contracts not performable in one year need to satisfy SOF
Exception to Parol Evidence Rule
Evidence may be admitted for the purpose of interpreting or clarifying ambiguity in an agreement
Forum Selection Clauses
PA recognizes forum selection clauses;
Presumption: valid and enforceable unless they are shown to be unreasonable given the circumstances
Anticipatory Repudiation
Under Common Law the doctrine of anticipatory breach is applicable when a promisor repudiates a promise before teh time for performance arises or elapses. Repudiation must be clear and unequivocal.
PA’s requirements are more stringent than common law, requiring: (1) an absolute and unequivocal refusal to perform; OR (2) a distinct and positive statement of an inability to do so
Emotional Distress Recovery
PA does not allow recovery for emotional distress damages, unless the breach leading to severe emotional distress is particularly likely to cause such a result
Lost Profits Damages
Recovery for lost profits is applicable if:
(1) Profits may be established by a reasonable certainty–can’t be speculative,
(2) Loss was a proximate consequence of the breach, and
(3) Loss was forseeable
*Frequently tested
Liquidated Damages
Follows CL rule
Liquidated damages must be: (1) reasonable, and (2) there must be difficulty in assessing the actual harm caused by the breach)
*Will not be enforceable if constued as a mere penalty provision
Punitive Damages
Not available in breach of contract suits in PA
