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23 Cards in this Set
- Front
- Back
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Legal Sufficiency |
A promise in exchange for a promise
Another party must do something they had otherwise had no prior obligation to do, or must forgo from doing something they otherwise could have |
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Preexisting Obligations |
You cannot use a preexisting obligation to form a new contract
-Created by law -Created by contract |
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Created by LAW |
Ex: Andy has a preexisting obligation to not smoke weed - the law precluded him from doing this already, so it is technically a "preexisting obligation" |
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Created by CONTRACT |
When you add to an original contract (add obligations to it) there is no consideration |
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Common Law/UCC Modification to contract... requires new consideration? |
Common Law - a modification requires new consideration UCC - no new consideration required as long as the modification is done in good faith (business etc.) |
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Restatement |
Not actual law until court starts using it Created by academics and experts in that field -More business-oriented -Modification does not require new consideration as long as the modification is fair and equitable in light of unforeseen circumstances |
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Settlements of Undisputed Debts |
Modification to a contract will be unenforceable because it lacks consideration -Moderation is enforceable because the dispute lies in how much is owed |
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Settlements of Undisputed Debts |
Some kind of debt that is not specifically defined at the time of contract. Dispute arises over how much is actually owed. --> When Shapiro is owed 20,000$ but Andy gives him 3,000$ and Shapiro takes the money knowing he's owed more, the act of performance is acceptance.
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Bargained for Exchange |
As long as parties are having a discussion about what the price or payment is supposed to be, then Bargained for Exchange is satisfied.
Past consideration does not form the basis for bargained for exchange. |
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Moral Obligation to create consideration? |
You cannot use a preexisting moral obligation to create consideration. There is no bargaining if you have an obligation to do it anyway (aka save someone's life in exchange for money) |
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Charitable Contribution |
When giving a gift, the party receiving the gift isn't incurring a detriment so cannot be considered consideration.
Ex: Alumni offers university 20mil and doesn't do it... promissory estoppel b/c there was reliance by the University but they would only receive money for damages, not the 20mil. |
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Adequacy of Consideration (Is there amount that "qualifies" a detriment?) |
Court does not care how much the detriment is Law does not inquire into this
"Any detriment is a detriment" |
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Illusory Consideration |
Shapiro: "Mow my lawn, Andy" Andy: "I'll do it when I have the time"
No consideration because the promise is illusory - he isn't incurring any detriment at the moment |
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Consent When can you disaffirm a contract? |
- Must disaffirm within a reasonable amount of time. Time starts when you first learn the basis of dissafirmance
-When you do this in a reasonable amount of time, you "Ratify the Contract" |
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Rescission |
Word for voidable contract When you disaffirm, the parties are put back in the position they would have been had no contract ever been made (basically the detriment gets returned and that's it) |
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When do you have Misrepresentation? (4) |
1. There must be an untrue statement of fact 2. Materiality (must be about something that matters) based on the reasonable person's standard 3. Reliance on the untrue statement of fact 4. Reliance must be justified 5.*** Intent to deceive - "Scienter" (only for fraudulent) |
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Concealment/Non-disclosure Must be an untrue STATEMENT of fact
When is it considered a statement? |
-- Fiduciary relationship btw buyer and seller - failure to disclose a fact will make it an untrue statement -- Obligation to correct half-truths -- Must correct statements made false by later events -- Obligation to disclose known defect when acting in good faith & fair dealing (i.e. real estate) |
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Must be an untrue statement of FACT
When is it considered a fact? |
-- Where statement of opinion comes from someone in relationship of trust (doctor, lawyer).. their advice is considered a fact -- If the statement is made to someone unusually susceptible to statements of opinion --When there is reliance of superior skill or judgment |
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Mistake (3) |
1. Basic assumption upon which the contract is made that is incorrect 2. Assumption must be about something that is material 3. Adversley affected party does not bear the risk of mistake
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"Bearing the Risk of Mistake" |
-Occurs when they know they don't know the nature of the thing but they still enter into the transaction -Someone who is an expert in the field of the subject of transaction is the one that bears the risk. -Someone who enters into an "as-is" contract
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Where only one person is incorrect about the nature of a thing... Unilateral |
-Occurs when they know they don't know the nature of the thing but they still enter into the transaction -Someone who is an expert in the field of the subject of transaction is the one that bears the risk. -Someone who enters into an "as-is" contract 4. Non-mistaken party knows or has reason to know of the other party's mistake |
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Duress -- Improper Threat (Berardi Restaurant Case)
1. Improper Threat 2. Must be no reasonable alternative but to enter into the contract (must overcome the free will of a party) |
-- Threat of physical violence is improper threat (contract is void) --Threat to invoke criminal authorities (give me 500$ for car or I'm telling police you're a drug dealer) -- Threat to impose civil lawsuit ($$) is NOT an improper threat (500$ and i'll forgive the debt you owe me or I'm going to sue you) -- Threat to pursue civil proceedings that is baseless can be an "abuse of process" and IS an improper threat (500$ or I'm going to tell child services you beat your kids) |
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Undue Influence (Annoying step-brother case) |
1. Unfair persuasion 2. Persuador must be in a position of dominance as to the other person in a confidential relationship |
