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BUL 4421 Final - FAU Gendler / Newest
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CHAPTER 13: Introduction to Contracts - ANSWER--CHAPTER 13: Introduction to Contracts
Four Elements of a Contract: CLAC - ANSWER--1. Contractual Capacity
- Legal Object
- Agreement (offer, acceptance)
- Consideration
classification of contract determines - ANSWER--when offeree is legally bound to perform
Bilateral Contract = - ANSWER--A promise + a promise.
-I'll pay you $1000 for you to paint my car.
-(My promise = $1000)
-(Your promise = Paint my car)
-Mutual exchange
Under bilateral contract, contract formed - ANSWER--as soon as promise exchanged
Unilateral Contract - ANSWER---a promise + a requested action
-Offerror wants something done, not a promise for something to be done.
-ex; find dog and ill pay reward
under unilateral contract, contract formed - ANSWER--once offerree begins performance; offeror must give reasonable amt of time to finish before voiding contract
Contract - ANSWER---A promise or set of legally enforceable promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty.
Agreement - ANSWER--(Offer & Acceptance)
Offer by Oferror to enter into a contract and acceptance of terms by offeree.
Consideration - ANSWER--i. The bargained-for exchange or what each party gets in exchange for his or her promise under the contract
(The something for something)
Contractual capacity - ANSWER--i. The legal ability to enter into a binding agreement
Implied Contract - ANSWER--Terms arise from conduct of the parties.
ex; dentist pulling tooth implies you will pay
3 conditions required for implied contracts (and recovery) - ANSWER--1- benefits conferred by plaintiff upon defendant
2- defendant has knowledge of benefit being bestowed on them, and
3- defendant retains benefit under circs which it would be unjust to do so without payment
Void Contract - ANSWER---Not a contract at all; unenforceable
-Either illegal or has some serious defect.
Death or incapacity of the offeror - ANSWER--terms immediately if offeror dies or loses legal capacity, even if offeree is unaware
exception to death or incapacity of offeror - ANSWER--parties had entered into an options contract; admin of estate or guardian must hold offer open until expiration in accordance with options contract
Destruction or subsequent illegality of the subject matter - ANSWER--If the subject matter of the offer is destroyed or becomes illegal, the offer immediately terminates.
-Ex: House for sale burns down.
Lapse of time - ANSWER--i. If the offer states it will be held open for only a certain time, it terminates when that time expires.
ii. In absence, offer will expire after reasonable amount of time.
Authorized Means of Acceptance - ANSWER--means by which offer can be accepted
when auth means of acceptance are stated in contract = - ANSWER--express authorization; no other means of acceptance is valid
if no means of acceptance is specified - ANSWER--any reasonable means is allowed; courts will determine by observing circumstances and communication of offer
Unauthorized Means of Acceptance - ANSWER--offer acceptance through invalid means
effect of Unauthorized Means of Acceptance - ANSWER--i. no contract formed until authorized means of acceptance used
unilateral exception to Unauthorized Means of Acceptance - ANSWER--only performance by the offeree constitutes a valid acceptance.
III. CHAPTER 15: Consideration - ANSWER--III. CHAPTER 15: Consideration
Voidable Contract - ANSWER---One or both of the parties has the ability to either withdraw from the contract or enforce it.
if choosing to terminate a voidable contract, both parties must - ANSWER--return anything already exchanged under the agreement; restore to conditions before contract
contracts can be voided if - ANSWER---entered into by a minor, fraud, or under duress
-court attempting to protect person believed to have been taken advantage of
-lapse of time or failure of another condition specified in the offer
Revocation - ANSWER--i. The offeror can cancel the offer at any time, regardless of how long it was said to be open
ii. Becomes effective when the offeree receives it, and should deliver personally if important to be known
Exceptions to revocation - ANSWER--option contract and detrimental reliance
Option Contract - ANSWER--The offeree gives the offeror consideration in exchange for holding the offer open for a specified period of time. (Deposit for option-to-buy; i.e. real estate).
-consideration can be anything; no value required
detrimental reliance - ANSWER--offeree reasonably relied on offerors promise to hold offer open and had taken action in reliance of offer.
may use promissory estoppel to prevent revocation
under detrimental reliance, once significant partial performance has begun - ANSWER--offeror must give offeree a reasonable amount of time to complete performance before revocation can take place
Rejection - ANSWER--Regardless of anything, once the offeree rejects it, it is terminated.
Counteroffer - ANSWER--i. An offer made by an offeree to his offeror relating to the same matter as the original and proposing a substituted bargain differing from that proposed in the original offer.
ii. A counteroffer terminates the original offer and the offeree becomes the offeror.
Consideration - ANSWER--What a person receives in return for performing a contract obligation.
Types of consideration (4): - ANSWER--1. A benefit to the promise
- A detriment to the promisor
Ex: Punch the promisor in the face
- A promise to do something
Ex: Face to face promise
- A promise to refrain from doing something
Ex: Promise to not punch the promisor in the face.
Adequacy of consideration - ANSWER--The court doesn't help you if you made a bad deal (paid $500 for a $100 TV).
Exception to Adequacy of consideration - ANSWER--if the court believes fraud or undue influence occurred, the court may look at adequacy of consideration.
Illusory Promise - ANSWER--i. Is not a promise at all
ii. This promise is not consideration
Ex: Shawn offers to sell Molly his skis for $300, and Molly responds "I'll look at them in the morning, and if I like them, I'll pay you."
Enforcement of Promise - ANSWER--For a court to enforce a promise, both parties must provide valid consideration, consideration by one party only is insufficient to support this:
Preexisting Duty Rule - ANSWER--i. Performance of a duty you are obligated to do under the law is not consideration.
ii. Performance of an existing contractual duty is not good consideration.
Unilateral mistake generally does - ANSWER--not void a contract; courts are hesitant to interfere when one of the parties has a correct understanding of the material facts of the contract.
Mutual Mistakes - ANSWER--Both parties have errors of material fact.
Unliquidated debt - ANSWER--The parties either disagree about whether money is owed or dispute the amount - the parties can settle for less than the full amount if they enter into an accord and satisfaction.
Accord & Satisfaction (used for Unliquidated debt) - ANSWER--Settling to pay an unliquidated debt for less than the full amount (requires 3 things).
3 Requirements for Accord & Satisfaction: - ANSWER--1. The debt is unliquidated
- The creditor agrees to accept less than it is owed as full payment.
- The debtor pays the amount they have agreed on
"accord" = - ANSWER--new agreement to pay less than creditor claims is owed
"satisfaction" = - ANSWER--debtor's payment of a reduced amount
under accord and satisfaction, the debt is - ANSWER--fully discharged
failure to pay under accord and satisfaction - ANSWER--creditor can sue for full amount of original debt
IV. CHAPTER 16: Capacity and Legality - ANSWER--IV. CHAPTER 16: Capacity and Legality
The third required element of a legally binding contract - ANSWER--Capacity
Capacity - ANSWER--the mental ability to understand his or her rights and obligations under a contract and therefore presumable to comply with the terms
incapacity or incompetence - ANSWER--mental or physical defect that prevents natural person from being able to enter into a legally binding contract
two types of incapacity - ANSWER--no capacity and limited capacity
no capacity - ANSWER--complete inability to enter into contracts
limited capacity - ANSWER--ability to form only voidable contracts (minors, insane persons, convicts, etc.)
minors - ANSWER--persons under 18 unless emancipated
(t or f) emancipated minors have full legal capacity to enter into contracts - ANSWER--true
Emancipation - ANSWER--This occurs when a minor's parents or legal guardians give up their right to exercise legal control over the minor, typically when the minor moves out of the parents' house and begins supporting himself or herself.
(t or f) a married minor is not considered emancipated - ANSWER--false; married minor = emancipated
an innocent, misled party may - ANSWER--rescind the contract.
an innocent, misled party may not - ANSWER--sue for damages; the other party had no intent to mislead
Negligent misrepresentation - ANSWER--In some contract negotiations, one party makes a statement of material fact that he thinks is true, but he could have known the truth by using reasonable care to discover or reveal it and fails to do so.
A party guilty of negligent misrepresentation is treated as if - ANSWER--he had intent to deceive; they should have known the truth using skill and knowledge of a person in their position/profession.
Any fraud on the part of a party to a contract provides a basis for - ANSWER--recission
A fraudulent/intentional misrepresentation is - ANSWER--A consciously false representation of a material fact intended to mislead the other party.
implied ratification - ANSWER--occurs when the former minor takes some action after reaching the age of majority consistent with the intent to ratify the contract
Contracts of a person with limited mental capacity can be - ANSWER--valid, voidable, or void, depending on the extent of the mental incapacity.
If a person suffers from delusions that may impair his judgment but he can still understand that he is entering into a contact and understand his obligations under the contract, his contract is - ANSWER-- Valid
if his delusions prevent him from understanding that he is entering into a contract or the nature and extent of his obligations under the contract - ANSWER--his contract is voidable
if a person has been adjudicated insane - ANSWER--contract is void
When the intoxicated person become sober, the contract can be - ANSWER--ratified or disaffirmed; however, the courts will fairly liberally interpret behavior that seems like ratifying the contract once the intoxicated person becomes sober
If the contract is disaffirmed on the basis of intoxicated persons - ANSWER--each party must return the other to the condition he or she was in at the time they entered into the contract.
Contracts cannot be for - ANSWER--illegal purposes or require illegal acts for performance.
Any agreement to commit a crimt or tort is - ANSWER--illegal, void, and unenforceable
Unconscionable contracts - ANSWER--Agreement in question is so unfair that it is void of conscience and may be unenforceable.
Unconscionable contracts require - ANSWER--procedural uncoscionability and substantive unconscionability
Procedural unconscionability - ANSWER--Conditions that impair one's ability to understand contract: tiny, hard-to-read-print, technical jargon, inability for time to read contract and ask questions; adhesion contracts
Substantive unconscionability - ANSWER--When an agreement is overly harsh or lopsided,, large differences between cost and price, one party vastly benefits, one party has no legal rights under contract, portion unrelated to either party's risk.
if damages are sought from fraudulent/intentional misrepresentation, defrauded party must - ANSWER-- have been injured by the misrepresentation
Undue influence - ANSWER--Refers to those special relationships in which one person takes advantage of a dominant position in a relationship to unfairly persuade the other and interfere with the person's ability to make his of her own decision.
Ex: disney exec
Courts may see the undue influence of the relationship as - ANSWER--interfering with the free choice required for an enforceable contract.
Contracts resulting from undue influence are - ANSWER--voidable
the essential element of undue influence is - ANSWER--the existence of a dominant-subservient relationship; make sure subservient person has independent advice before entering contract
Duress Occurs when - ANSWER--one party threatens the other with a wrongful act unless assent is given.
Assent under duress is - ANSWER--not legal; coercion interferes with the party's free will
When one party is forced to enter into a contract by the wrongful threat of another - ANSWER--the contract is voidable by the innocent party due to duress
One way parties can indicate their desire to create an integrated contract. - ANSWER--Merger clause
Merger Clause - ANSWER--Explicitly states that the written contract is intended to be the complete and final version of the contract between the parties and that other possible agreements between the parties besides the one in question, are not part of the final written agreement.
VII. CHAPTER 19: Third-Party Rights to Contracts - ANSWER--VII. CHAPTER 19: Third-Party Rights to Contracts
Obligor - ANSWER--Contractual party who agreed to DO something for the other party.
Obligee - ANSWER--Contractual party who agreed to receive something from the other party.
Assignment - ANSWER--The transfer of rights under a contract to a third party.
Assignor - ANSWER--the party to a contract who transfers his or her rights to a third party
Assignee - ANSWER--a party not in privity to a contract who is the recipient of a transfers of rights to a contract
assignments require - ANSWER--no special wording or forms to be valid
VI. CHAPTER 18: Contracts in Writing - ANSWER--VI. CHAPTER 18: Contracts in Writing
Statute of Frauds - ANSWER--State laws requiring certain types of contracts must be in writing to be enforceable.
Statute of Frauds is intended to: (3) - ANSWER--1. Ease contractual negotiations by requiring sufficient reliable evidence to prove the existence and specific terms of a contract.
- Prevent unreliable oral evidence from interfering with a contractual relationship.
the courts will consider the contract partially performed and this partial performance may amount to proof of the contract despite the lack of a formal writing sufficient to satisfy the statute of frauds.
Sufficiency of the writing generally requires (5) - ANSWER--1. The names of the parties to the contract
- The subject matter of the agreement
- The consideration given for the contract
- All relevant contractual terms
- The signature of at least the party against whom enforcement is sought
Land-sale contracts require additional terms such as: - ANSWER--identifying the land with a degree of specificity
to smooth transactions by limiting the types of evidence admissible in claims that contract writing is in some way deficient, courts rely heavily on - ANSWER--parol evidence rule
Parol Evidence Rule - ANSWER--A common law rule stating that oral evidence of an agreement made prior to or contemporaneously with the written agreement is inadmissible when the parties intend to have a written agreement.
the purpose of parol evidence rule is to - ANSWER--prevent evidence that substantially contradicts the agreement in its written form
under parole evidence rule, _______ are typically excluded - ANSWER--prior agreements and negotiations, as well as contemporaneous agreements and negotiations.
once a fully integrated agreement has been written - ANSWER--no oral evidence of any prior contemporaneous agreement can be admitted in court to change the terms of the agreement.
Parol evidence exceptions: (8) - ANSWER--1. contracts that have been subsequently modified
- contracts conditioned on orally agreed-on terms
- nonfinalized, partially written and partially oral contracts
- contracts containing ambiguous terms
- incomplete contracts
- contracts with obvious typographical errors
- void or voidable contracts
- Evidence of prior dealings or usage of Trage (UCC)
Integrated Contracts - ANSWER--Written contracts within the statute of frauds intended to be the complete and final representation of the parties' agreement thus precluding the admissibility of parol evidence other than in certain enumerated exceptions.
when courts deem the contract integrated - ANSWER--with the exception of the parol evidence exceptions, parol evidence is inadmissible
when an assignor transfers rights to an assignee - ANSWER--the assignor legally gives up all rights they had to collect on the contract
restrictions to assignments: - ANSWER--1. assignments covered by the statute of frauds must be in writing
- Assignee must agree to accept the assigned rights
- in some situations contractual rights cannot be assigned
an assignee may decline an assignment if - ANSWER---he has not legally agreed to it and
-he declines in a timely fashion after learning about the assignment and its terms
