Business Law

Front 1

What are the requirments of an offer?

Back 1

1. Intent
2. Definiteness
3. Communication

Front 2

What is intent in an offer?

Back 2

There must be a serious, objective intention by teh offeror to become bound by the offer.

Front 3

What are the nonoffer situations?

Back 3

1. expression of opinion
2. Statements of intention
3. Preliminary negotiations
4. Generally, advertisements, catalogues, price lists, and circulars
5. solicitations for bids made by an auctioneer
6. traditionally, agreements to agree in the future

Front 4

What is definiteness in an offer?

Back 4

The terms of the offer must be sufficiently definite to be ascertainable by the parties or by a court.

Front 5

What is communication in an offer?

Back 5

The offer must be communicated to the offeree.

Front 6

What are the ways in which an offer can be terminated?

Back 6

1. By action of the parties
2. By operation of law

Front 7

How is an offer terminated by actions of the parties?

Back 7

1. revocation
2. rejection
3. counteroffer

Front 8

What is revocation?

Back 8

Unless the offer is irrevocable, it can be revoked at any time before acceptance without liability. Revocation is not effective until received by the offeree or the offeree's agent. Some offers, such as a merchant's firm offer and option contracts, are irrevocable.

Front 9

What is rejection?

Back 9

Accomplished by words or actions that demonstrate a clear intent not to accept the offer, not effective until received by the offeror or the offeror's agent.

Front 10

What is a counteroffer?

Back 10

A rejection of the original offer and the making of a new offer.

Front 11

How are offers terminated by operation of law?

Back 11

1. Lapse of time-the offer terminates (1) at the end of the time period specified in the offer or (2) if no time period is stated in the offer, at the end of a reasonable time period.
2. Destruction of the specific subject matter of the offer-automatically terminates teh offer.
3. Death or incompetence of the offeror or offeree-terminates the offer unless the offer is irrevocable.
4. Illegality-Supervening illegality terminates the offer.

Front 12

What are the conditions of acceptance?

Back 12

1. Can be made only by the offeree or the offeree's agent.
2. Must be unequivocal. Under the common law (mirror image rule), if new terms or conditions are added to the acceptance, it will be considered a counteroffer.
3. Acceptance of a unilateral offer is effective on full performance of the requested act. Generally, no communication necessary.
4. Acceptance of a bilateral offer can be communicated by the offeree by any authorized mode of cummunication and is effective on dispatch. Unless the offeror expressly specifies the mode of communication.

Front 13

What modes of communication are impliedly authorized?

Back 13

1. The same mode used by the offeror or a faster mode.
2. Mail, when the two parties are at a distance.
3. In sales contracts, by any reasonable medium.

Front 14

What are the elements of consideration?

Back 14

Consideration is broken down into two parts: 1) something of legally sufficient value must be given in exchange for the promise, and 2) there must be a bargained-for exchange.

Front 15

What is legal sufficiency and adequacy of consideration?

Back 15

Legal sufficiency of consideration relates to the first element of consideration-something of legal value must be given in exchange for a promise. Adequacy of consideration relates to "how much" consideration is given and whether a fair bargain was reached. Courts will inquire into the adequacy of consideration (whether the consideration is legally sufficient) only when fraud, undue influence, duress, or unconscionability may be involved.

Front 16

Name the situations in contracts when they lack consideration?

Back 16

1. Preexisting duty-consideration is not legally sufficient if one is either by law or by contract under a preexisting duty to perform the action being offered as consideration for a new contract.
2. Past Consideration-Actions or events that have already taken place do not constitute legally sufficient consideration.
3. Illusory promises-When the nature or extent of performance is too uncertain, the promise is rendered illusory (without consideration and unenforceable).

Front 17

What are the settlements of claims?

Back 17

1. Accord and satisfaction
2. Release
3. Covenant not to sue

Front 18

What is accord and satisfaction?

Back 18

An accord is an agreement in which a debtor offers to pay a lesser amount than the creditor claims is owed. Satisfaction may take place when the accord is executed.

Front 19

What is release?

Back 19

An agreement in which, for consideration, a party forfeits the right to seek further recovery beyond the terms specified in the release.

Front 20

What is a covenant not to sue?

Back 20

An agreement not to sue on a present, valid claim.

Front 21

What is promissory estoppel?

Back 21

The equitable doctrine of promissory estoppel applies when a promisor reasonably expects a promise to induce definite and substantial action or forbearance by the promisee, and the promisee does act in reliance on the promise. Such a promise is binding if injustice can be avoided only by enforcement of the promise. Also known as the doctrine of detrimental reliance.

Front 22

Acceptance

Back 22

A voluntary act by the offeree that shows assent, or agreement, to the terms of an offer, may consist of words or conduct.

Front 23

Agreement

Back 23

A meeting of two or more minds in regard to the terms of a contract, usually broken down into two events-an offer by one party to form a contract and an acceptance of the offer by the person to whom the offer is made.

Front 24

Offer

Back 24

A promise or commitment to perform or refrain from performing some specified act in the future.

Front 25

Revocation

Back 25

In contract law, the withdrawl of an offer by an offeror. Unless the offer is irrevocable, it can be revoked at any time prior to acceptance without liability.

Front 26

Option Contract

Back 26

A contract under which the offeror cannot revoke the offer for a stipulated time period. During this period, the offeree can accept or reject teh offer without fear that the offer will be made to another person. The offeree must give consideration for the option to be enforceable.

Front 27

Counteroffer

Back 27

An offeree's response to an offer in which the offeree rejects the original offer and at the same time makes a new offer.

Front 28

Mirror Image Rule

Back 28

A common law rule that requires that the terms of the offeree's acceptance adhere exactly to the terms of the offeror's offer for a valid contract to be formed.

Front 29

Mailbox Rule

Back 29

A rule providing that an acceptance of an offer becomes effective on dispatch (on being placed in an official mailbox), if mail is, expressly or impliedly, an authorized means of communication of acceptance to the offeror.

Front 30

Consideration

Back 30

Generally, the value given in return for a promise, involves two elements-the giving of something of legally sufficient value and a bargained-for exchange. The consideration must result in a detriment to the promisee or a benefit to the promisor.

Front 31

Forbearance

Back 31

The act of refraining from an action that one has a legal right to undertake.

Front 32

Recission

Back 32

A remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made, may be effected through the mutual consent of the parties, by the parties' conduct, or by court decree.

Front 33

Past Consideration

Back 33

An act that takes place before the contract is made and that ordinarily, by itself, cannot be consideration for a later promise to pay for the act.

Front 34

Liquidated Debt

Back 34

A debt for which the amount has been ascertained, fixed, agreed on, settled, or exactly dertermined. If the amount of the debt is considered unliquidated.

Front 35

Release

Back 35

A contract in which one party forfeits the right to pursue a legal claim against the other party.

Front 36

Contractual Capacity

Back 36

The threshold mental capacity required by law for a party who enters into a contract to be bound by that contract.

Front 37

Emancipation

Back 37

In regard to minors, the act of being freed from parental control; occurs when a child's parent relinquishes the legal right to excercise control over the child. Normally, a minor who leaves home to support themselves is considered emancipated.

Front 38

Disaffirmance

Back 38

The legal avoidance, or setting aside, of a contractual obligation.

Front 39

Necessaries

Back 39

Necessities required for life, such as food, shelter, clothing, and medical attention, may include whatever is believed to be necessary to maintain a person's standard of living or financial and social status.

Front 40

Ratification

Back 40

The act of accepting and giving legal force to an obligation that previously was not enforceable.

Front 41

Usury

Back 41

Charging an illegal rate of interest.

Front 42

Blue Laws

Back 42

State of local laws that prohibit the performance of certain types of commercial activities on Sunday.

Front 43

Employment Contract

Back 43

A contract between an employer and an employee in which the terms and conditions of employment are stated.

Front 44

Covenant not to compete

Back 44

A contractual promise of one party to refrain from conducting business similiar to that of another pary for a certain period of time and within a specified geographic area. Courts commonly enforce such covenants if they are reasonable in terms of time and geographic area adn are part of or supplemental to a contract for the sale of a business or an employment contract.

Front 45

Reformation

Back 45

A court-ordered correction of a written contract so that it reflects the true intentions of the parties.

Front 46

Unconscionable contract

Back 46

A contract or clause that is void on the basis of public policy because one party, as a result of disproportionate bargaining power, is forced to accept terms that are unfairly burdensome and that unfairly benefit the dominating party.

Front 47

Adhesion contract

Back 47

A standard-form contract, such as that between a large retailer and a consumer, in which the stronger party dictates the terms.

Front 48

Exculpatory Clause

Back 48

A clause that releases a contractual party from liability in the event of monetary or physical injury, no matter who is at fault.

Front 49

Blue Sky Laws

Back 49

State laws that regulate the offering and sale of securities for the protection of the public.

Front 50

What is a minor?

Back 50

A minor is a person who has not yet reached teh age of majority. In most states, the age of majority is eighteen for contract purposes. Contracts with minors are voidable at the option of the minor.

Front 51

What are the concepts of contractual capacity with a minor?

Back 51

1. Disaffirmance-The legal avoidance of a contractual obligation.
2. Ratification-The acceptance, or affirmation, of a legal obligation, may be express or implied
3. Parents' Liability-Generally, except for contracts for necessaries, parents are not liable for the contracts made by minor children acting on their own, nor are parents liable for minors' torts except in certain circumstances.
4. Emancipation-Occurs when a child's parent or legal guardian relinquishes the legal right to excercise control over the child. Normally, a minor who leaves home to support himself or herself is considered emancipated. In some jurisdictions, minors themselves are permitted to petition for emancipation for limited purposes.

Front 52

What are the characteristics of disaffirmance?

Back 52

1. Dissaffirmance can take place at any time during minority and within a reasonable time after the minor has reached the age of majority.
2. If a minor disaffirms part of a contract, the entire contract must be disaffirmed.
3. When disaffirming executed contracts an act of fraud will be denied the right to disaffirm by some courts.
4. A minor who has commited an act of fraud will be denied the right to disaffirm by some courts
5. A minor may disaffirm a contract for necessaries but remains liable for the reasonable value of the goods.

Front 53

What are the types of ratification?

Back 53

1. Express ratification-Exists when the minor, through a writing or an oral agreement, explicitly assumes the obligations imposed by the contract.
2. Implied ratification-Exists when the conduct of the minor is inconsistent with disaffirmance or when the minor falls to disaffirm an executed contract within a reasonable time after reaching the age of majority.

Front 54

What is the contractual capacity of a contract entered into by an intoxicated person?

Back 54

1. A contract entered into by an intoxicated person is voidable at the option of the intoxicated person if the person was sufficiently intoxicated to lack mental capacity, even if the intoxication was voluntary.
2. A contract with an intoxicated person is enforceable if, despite being intoxicated, the person understood the legal consequences of entering into the contract.

Front 55

What is the contractual capacity of a contract entered into by a mentally incompetent person?

Back 55

1. A contract made by a person previously judged by a court to be mentally incompetent is void.
2. A contract made by a mentally incompetent person whom a court has not previously declared to be mentally incompetent is voidable at the option of the mentally incompetent person.

Front 56

What are the characteristics of contracts contrary to statute?

Back 56

1. Usury-Usury occurs when a lender makes a loan at an interest rate above the lawful maximum. The maximum rate of interest varies from state to state.
2. Gambling-Gambling contracts that contravene (go against) state statutes are deemed illegal and thus void.
3. Sabbath (sunday) laws-These laws prohibit the formation or performance of certain contracts on sunday. Such laws vary widely from state to state, and many states do not enforce them.
4. Licensing statutes-Contracts entered into by persons who do not have a license, when one is required by statute, will not be enforceable unless the underlying purpose of the statute is to raise government revenues.

Front 57

What are the characteristics of contracts contrary to public policy?

Back 57

1. Contracts in restraint of trade-Contracts to reduce or restrain free competition are illegal and prohibited by statues. An exception is a covenant not to compete. It is usually enforced by the courts if the terms are secondary to a contract (such as a contract for the sale of a business or an employment contract) and are reasonable as to time and area of restraint. Courts tend to scrutinize covenants not to compete closely and, at times, may reform them if they are overbroad rather than declaring the entire covenant unenforceable.
2. Unconscionable contracts adn clauses-when a contract or contract clause is so unfair that it is oppressive to one party, it may be deemed unconscionable, as such, it is illegal and cannot be enforced.
3. Exculpatory clauses-an exculpatory clause is a clause that releases a party from liability in the event of monetary or physical injury, no matter who is at fault. In certain situations, exculpatory clauses may be contrary to public policy and thus unenforceable.

Front 58

What is the general rule of the effects of illegality of a contract?

Back 58

In general, an illegal contract is void, and teh courts will not aid either party when both parties are considered to be equally at fault. If the contract is excutory, neither party can enforce it. If the contract is excuted, there can be neither contractual nor quasi-contractual recovery.

Front 59

What are the exceptions to the general rule of illegal contracts?

Back 59

1. Jusifiable ignorance of the facts- When one party to the contracts is relatively innocent.
2. Members of protected classes-when one party to teh contract is a member of a group of persons protected by statute, such as employees.
3. Withdrawl from an illegal agreement-When either party seeks to recover consideration given for an illegal contract before the illegal act is performed.
4. Severable, or divisible, contracts-When the court can divide the contract into illegal and legal portions and the illegal portion is not essential to the bargain.
5. Fraud, duress, or undue influence-When one party was induced to enter into an illegal bargain through fraud, duress, or undue influence.

Front 60

What are the types of mistakes in contracts?

Back 60

1. Unilateral-Generally, the mistaken party is bound by the contract unless a) the other party knows or should have known of the mistake or b) teh mistake is an inadvertent mathematical error- such as an error in addition or subtraction- committed without gross negligence.
2. Bilateral (mutual)- When both parties are mistaken about the same material fact, such as identity, either party can avoid the contract.

Front 61

What are the elements of fraudulent misrepresentation?

Back 61

When fraud occurs, usually the innocent party can enforce or avoid the contract. The elements necessary to establish fraud are:
1. A misrepresentation of a material fact must occur.
2. There must be an intent to deceive.
3. The innocent party must justifiably rely on the misrepresentation.

Front 62

What is undue influence?

Back 62

Undue influence arises from special relationships, such as fiduciary or confidential relationships, in which one party's free will has been overcome by the undue influence exerted by the other party. Usually, the contract is voidable.

Front 63

What is duress?

Back 63

Duress is the tactic of forcing a party to enter a contract under the fear of a threat-for example, the threat of violence or serious economic loss. The party forced to enter the contract can rescind the contract.

Front 64

Name the contracts that fall under the statue of frauds and must be in writing to be enforceable.

Back 64

1. Contracts involving interests in land- The statute applies to any contract for an interest in realty, such as a sale, a lease, or a mortgage.
2. Contracts that cannot by their terms be performed within one year- The statute applies only to contracts that are objectively impossible to perform fully within one year from (the day after) the contracts formation.
3. Collateral promises- The statute applies only to express contracts made between the guarantor and the creditor that make the guarantor seconarily liable. Exception: the main purpose rule.
4. Promises made in consideration of marriage- The statute applies to promises to make a monetary payment or give property in consideration of a promise to marry and to prenuptial agreements made in consideration of marriage.
5. Contracts for the sale of goods priced at $500 or more

Front 65

What are the exceptions to the statute of frauds?

Back 65

1. Partial performance
2. Admissions
3. Promissory estoppel

Front 66

What is the sufficiency of the writing for the statute of frauds?

Back 66

To constitute an enforceable contract under the Statute of Frauds, a writing must be signed by the party against whom enforcement is sought, name the parties, identify the subject matter, and state the reasonable certainty teh essential terms of the contract. In a sale of land, the price and a description of the property may need to be stated with sufficient clarity to allow them to be determined without reference to outside sources. Under the UCC, a contract for a sale of goods is not enforceable beyond the quantity of goods shown in the contract.

Front 67

What is the parol evidence rule?

Back 67

The parol evidence rule prohibits the introduction at trial of evidence of the parties' prior negotiations, prior agreements, or contemporaneous oral agreements that contradicts or varies the terms of the parties' written contract. The written contract is assumed to be the complete embodiment of the parties' agreement. Exceptions are made in the following circumstances:
1. To show that the contract was subsequently modified
2. To show that the contract was voidable or void
3. To clarify the meaning of ambiguous terms
4. To clarify the terms of the contract when the written contract lacks one or more of its essential terms
5. Under the UCC, to explain teh meaning of contract terms in light of a prior dealing, course of performance, or usage of trade.
6. To show that the entire contract is subject to an orally agreed-on condition
7. When an obvious clerical or typographic error was made

Front 68

Collateral promise

Back 68

A secondary promise that is ancillary (subsidiary) to a principal transaction or primary contractual relationship, such as a promise made by one person to pay the depts of another if the latter fails to perform. A collateral promise normally must be in writing to be enforceable.

Front 69

Integrated contract

Back 69

A written contract that constitutes the final expression of the parties' agreement. If a contract is integrated, evidence extraneous to the contract that contradicts or alters teh meaning of the contract in any way is inadmissible.

Front 70

Prenuptial agreement

Back 70

An agreement made before marriage that defines each partner's ownership rights in the other partner's property. Prenuptial agreements must be in writing to be enforceable.

Front 71

Scienter

Back 71

Knowlege by the misrepresenting party that material facts have been falsely represented or omitted with an intent to deceive.

Front 72

What is an assignment?

Back 72

An assignment is the transfer of rights under a contract to a third party. The person assigning the rights is the assignor, and the party to whom the rights are assigned is the assignee. The assignee has a right to demand performance from the other original party to the contract.

Front 73

Generally, all rights can be assigned, except in the following circumstances:

Back 73

1. when assignment is expressly prohibited by statute.
2. when a contract calls for the performance of personal services
3. when the assignment will materially increase or alter the risks or duties of the obligor (the party that is obligated to perform).
4. When the contract itself stipulates that the rights cannot be assigned (with some exceptions).

Front 74

Notifying the obligor of the assignment avoids what two potential problems?

Back 74

1. If the assignor assigns the same right to two different persons, generally the first assignment in time is the first in right, but in some states the first assignee to give notice takes priority.
2. Until the obligor is notified of the assignment, the obligor can tender performace to the assignor. If the assignor accepts the performance, the obligor's duties under the contract are discharged without benefit to the assignee.

Front 75

What is delegations?

Back 75

A delegation is the transfer of duties under a contract to a third party, who then assumes the obligation of performing the contractual duties previously held by teh one making the delegation.

Front 76

As a general rule, any duty can be delegated, except in the following circumstance:

Back 76

1. When performance depends on the personal skill or talents of the obligor.
2. When special trust has been placed in the obligor.
3. When performance by a third party will vary materially from that expected by the obligee under the contract.
4. When the contract expressly prohibits delegation.

Front 77

When does a valid delegation of duties not relieve the delegator of obligations under the contract?

Back 77

If the delegatee fails to perform, teh delegator is still liable to the obligee.

Front 78

Third party beneficiaries

Back 78

contract is made for the purpose of benefiting a third party

Front 79

Intended beneficiary

Back 79

One for whose benefit a contract is created. When the promisor fails to perform as promised, the third party can sue the promisor directly. Examples of third party beneficiaries are creditor and donee beneficiaries.

Front 80

Incidental beneficiary

Back 80

A third party who indirectly benefits from a contract but for whose benefit the contract was not specifically intended. Incidental beneficiaries have no rights to the benefits received and cannot sue to have the contract enforced.

Front 81

Contract obligations may be subject to the following types of conditions:

Back 81

1. Condition precedent- a condition that must be fulfilled before a party's promise becomes absolute.
2. Condition subsequent- a condition that operates to terminate a party's absolute promise to perform.
3. concurrent conditions- Conditions that must be performed simultaneously. Each party's absolute duty to perform is conditioned on the other party's absolute duty to perform.

Front 82

What is discharge by performance?

Back 82

A contract may be discharged by complete (strict) performance or by substantial performance. In some instances, performance must be to the satisfaction of another. Totally inadequate performance constitutes a material breach of the contract. An anticipatory repudiation of a contract allows the other party to sue immediately for breach of contract.

Front 83

What are the ways parties can agree to discharge their contractual obligations?

Back 83

1. By rescission- The parties mutually agree to rescind the contract.
2. By novation- A new party is subsituted for one of the primary parties to a contract
3. By accord and satisfaction- The parties agree to render and accept performance different from that on which they originally agreed.

Front 84

Parties' obligations under contracts may be discharged by operation of law owing to one of the following:

Back 84

1. contract alteration
2. statutes of limitations
3. bankruptcy
4. impossibility of performance
5. Impracticability of performance
6. Frustration of purpose

Front 85

Alienation

Back 85

The process of transferring land out of one's possession.

Front 86

Anticipatory repudiation

Back 86

An assertion or action by a party indicating that he or she will not perform an obligation that the party is contractually obligated to perform at a future time.

Front 87

Breach of contract

Back 87

The failure, without legal excuse, of a promisor to perform the obligations of a contract.

Front 88

Commercial impracticability

Back 88

A doctine under which a seller may be excused from performing a contract when 1) a contigency occurs, 2) the contigency's occurrence makes performance impracticable, and 3) the nonoccurrence of the contingency was a basic assumption on which the contract was made.

Front 89

Concurrent conditions

Back 89

Conditions that must occur or be performed at the same time; they are mutually dependent. No obligations arise until these conditions are simultaneously performed.

Front 90

Condition

Back 90

A qualification, provision, or clause in a contractual agreement, the occurance of nonoccurrence of which creates, suspends, or terminates the obligations of the contracting parties.

Front 91

condition precedent

Back 91

In a contractual agreement, a condition that must be met before a party's promise becomes absolute.

Front 92

condition subsequent

Back 92

A condition in a contract that, if not fulfilled, operates to terminate a party's absolute promise to perform.

Front 93

delegation of duties

Back 93

The act of transferring to another all or part of one's duties arising under a contract.

Front 94

frustration of purpose

Back 94

A court-created doctrine under which a party to a contract will be relieved of her or his duty to perform when the objective purpose for performance no longer exists.

Front 95

impossibility of performance

Back 95

A doctrine under which a party to a contract is relieved of her or his duty to perform when performance becomes objectively impossible or totally impracticable.

Front 96

novation

Back 96

The substitution, by agreement, of a new contract for an old one, with the rights under the old one being terminated. Typically, novation involves the substitution of a new person who is responsible for the contract and the removal of the original party's rights and duties under the contract.

Front 97

privity of contract

Back 97

the relationship that exists between the promisor and the promise of a contract.

Front 98

tender

Back 98

An unconditional offer to perform an obligation by a person who is ready, willing, and able to do so.

Front 99

What are the common remedies available to nonbreaching parties?

Back 99

The legal remedy designed to compensate damages, the court tries to place the parties in the positions that they would have occupied had the contract been fully performed. The nonbreaching party frequently has a duty to mitigate (lessen or reduce) the damages incurred as a result of the contract's breach.

Front 100

What are the five categories of damages?

Back 100

1. compensatory damages
2. consequential damages
3. punitive damages
4. nominal damages
5. liquidated damages

Front 101

Compensatory damages

Back 101

damages that compensate the nonbreaching party for injuries actually sustained and proved to have arisen directly from the loss of the bargain resulting from the breach of contract.

Front 102

Consequential damages

Back 102

damages resulting from special circumstances beyond the contract itself; the damages flow only from the consequences of a breach. For a party to recover consequential damages, the damages must be the foreseeable result of a breach of contract, and teh breaching party must have known at the time the contract was formed that special circumstances existed that would cause the nonbreaching party to incur additional loss on breach of the contract. Also called special damages.

Front 103

punitive damages

Back 103

damages awarded to punish the breaching party. Usually not awarded in an action for breach of contract unless a tort is involved.

Front 104

nominal damages

Back 104

damages small in amount that are awarded when a breach has occurred but no actual injury has been suffered. Awarded only to establish that the defendant acted wrongfully.

Front 105

liquidated damages

Back 105

damages that may be specified in a contract as the amount to be paid to the nonbreaching party in the event the contract is breached in the future. Clauses providing for liquidated damages are enforced if the damages were difficult to estimate at the time the contract was formed and if the amount stipulated is reasonable. If the amount is construed to be a penalty, the clause will not be enforced.

Front 106

recission

Back 106

a remedy whereby a contract is cancelled and the parties who restored to the original positions that they occupied prior to the transaction. Available when fraud, mistake, duress, or failure of consideration is present. The rescinding party must give prompt notice of the rescission to the breaching party.

Front 107

restitution

Back 107

when a contract is rescinded, both parties must make restitution to each other by returning goods, property, or funds previously conveyed. Restitution prevents the unjust enrichment of the parties.

Front 108

What is specific performance?

Back 108

An equitable remedy calling for the performance of the act promised in the contract. This remedy is available only in special situations-such as those involving contracts for the sale of unique goods or land-and when monetary damages would be an inadequate remedy. Specific performance is not available as a remedy for breached contracts for personal services.

Front 109

Reformation

Back 109

An equitable remedy allowing a contract to be "reformed", or rewritten, to reflect the parties true intentions. Available when an agreement is imperfectly expressed in writing.

Front 110

What are the concepts of recovery based on quasi contracts?

Back 110

An equitable theory imposed by the courts to obtain justice and prevent unjust enrichment in a situation in which no enforceable contract exists. The party seeking recovery must show the following:
1. A benefit was conferred on the other party.
2. The party conferring the benefit did so with the expectation of being paid.
3. The benefit was not volunteered.
4. Retaining the benefit without paying for it would result in the unjust enrichment of the party receiving the benefit.

Front 111

Contract provisions limiting remedies

Back 111

A contract may provide that no damages can be recovered in the event the contract is breached. Clauses excluding liability for fraudulent or intentional injury or for illegal acts cannot be enforced. Clauses excluding liability for negligence may be enforced if both parties hold roughly equal bargaining power. Under the Uniform Commercial Code, remedies may be limited in contracts for the sale of goods.

Front 112

Election of remedies

Back 112

A common law doctine under which a nonbreaching party must choose one remedy from those available. This doctrine prevents double recovery. Under the UCC, remedies are cumulative for the breach of a contract for the sale of goods.

Front 113

Mitigation of damages

Back 113

A rule requiring a plaintiff to do whatever is reasonable to minimize the damages caused by the defendant.

Front 114

Online offers

Back 114

The terms of contract offers presented via the internet should be as inclusive as the terms in an offer made in a written document. The offer should be displayed in an easily readable format and should include some mechansism, such as an "I agree" or "I accept" box, by which the customer may accept the offer. Because jurisdictional issues frequently arise with online transactions, the offer should dispute-settlement provisions, as well as a forum-selection clause.

Front 115

Click-on agreement

Back 115

An agreement created when a buyer, completing a transaction on a computer, is required to indicate her or his assent to be bound by the terms of an offer by clicking on a box. The terms of the agreement may appear on the web site through which the buyer is obtaining goods or services, or they may appear on a computer screen when software is downloaded.

Front 116

Enforceability of a click-on agreement

Back 116

The courts have enforced click-on agreements, holding that by clicking on i agree, the offeree has indicated acceptance by conduct. Browse-wrap terms however, may not be enforced on the ground that the user is not made aware that he or she is entering into a contract.

Front 117

Shrink wrap agreement

Back 117

An agreement whose terms are expressed inside a box in which the goods are packaged. The party who opens the box is informed that, by keeping the goods that are in the box, he or she agrees to the terms of the shrink-wrap agreement.

Front 118

Enforceablility of shrink wrap agreements

Back 118

The courts have often enforced shrink-wrap agreements, even if the purchaser-user of the goods did not read the terms of the agreement. A court may deem a shrink-wrap agreement unenforceable, however, if the buyer learns of the shrink-wrap terms after the parties entered into the agreement.

Front 119

E-Signatures

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The Uniform Electronic Transactions Act defines an e-signature as "an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.

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E-signature technologies

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The two main categories of technology include digitized handwritten signatures and public-key infrastucture-based digital signatures.

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State laws governing e-signatures

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Although most states have laws governing e-signatures, these laws are not uniform. The UETA provides for the validity of e-signatures and may ultimately create more uniformity among the states in this report.

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Federal law on e-signatures and e-documents

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The electronic signatures in global and national commerce act of 2000 gave validity to e-signatures by providing that no contract, record, or signature may be "denied legal effect" solely because it is in an electronic form.

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Partnering agreements

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To reduce the likelihood that disputes will arise under their e-contracts, parties who frequently do business with each other online may form a partnering agreement, setting out the terms and conditions that will apply to all their subsequent electronic transactions. The agreement may also establish access and identification codes to be used by the parties when transacting business electronically.

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The uniform electronic transactions act

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The uniform act, which has been adopted at least in part by most states, was created by the national conference of commissioners on uniform state laws to provide rules to support the enforcement of e-contracts. Under the UETA, contracts entered into online, as well as other documents, are presumed to be valid. The UETA does not apply to certain transactions governed by the UCC or to wills or testamentary trusts.

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cybernotary

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A legally recognized authority that can certify the validity of digital signatures.

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forum-selection clause

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A provision in a contract designating the court, jurisdiction, or tribunal that will decide any disputes arising under the contract.

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partnering agreement

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An agreement between a seller and a buyer who frequently do business with each other concerning the terms and conditions that will apply to all subsequently formed electronic contracts.

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record

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According to the Uniform Electronic Transaction Act, information that is either inscribed on a tangible medium or stored in an electronic or other medium and is retrievable.