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25 Cards in this Set

  • Front
  • Back

By agreeing to refrain from drinking booze,using tobacco, and playing billiards and cards for money until he turned 21,did grandson provide sufficient consideration to his grandfather?

Hamer v. Sidway


- Example of Consideration

- Invloves how much consideration is given


- Measures whether bargain was fair


- Typically not courts as long as consideration is legally sufficient

Consideration: Adequacy

Agreements that Lack Consideration




A remedy where a contract is cancelled and the parties are returned to the positions they occupied before contract was entered into.

Rescission

Agreements that Lack Consideration




Promises made in return for actions or events that have already take place are unenforceable

Past Consideration


- Bargained-For Exchange is missing

Agreements that lack consideration




When promisor has not definitely promised to do anything even though it appears he or she has made a promise



Illusory Promise


- Like an Illusion

Settlement of Claims




o Acommon means of settling a disputed claim, whereby a debtor offers to pay a lesseramount than creditor purports to be owed

Accord and Satisfaction

Settlement of Claims




Agreement under which one party promises to giveor perform, and the other party to accept, in satisfaction of a claim,something different from what the parties originally agreed

Accord

Settlement of Claims




Performance (usually payment) which takes place after the accord is executed

Satisfaction

Settlement of Claims




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

Release


- Prohibits any further recovery beyond the terms stated in the release


- Generally Binding if: Given in good faith, Stated in a signed writing, or accompanied by consideration

Doctrinethat can be used to enforced a promise when the promise has justifiably reliedon it and when justice will be better served by enforcing the promise

Promissory Estoppel ("Detrimental Reliance")


- Allows a party to recover on a promise even tho that promise was made without consideration.

Capacity required by the law for a party whoenters into a contract to be bound by that contract

Contractual Capacity


- Legal ability to enter into a contractual relationship


- Intoxication


- Mentally Incompetent Persons



Contract entered into by an intoxicated person might be voidable at that person's option; he/she must return all consideration received

Intoxication

Contract made by mentally incompetent persons can be void, voidable, or valid

mentally incompetent persons

If court has previously determined that a personis mentally incompetent and has appointed a guardian to represent the person,only guardian can enter into binding contract on that person’s behalf

Void

§ If court hasn’t previously judged a personmentally incompetent AND the person didn’t know he was entering contract/didn’t have mental capacity to comprehend the contract (Only voidable bymentally incompetent; not other party)

Voidable

If person was competent when contract was formed

Valid

If the object or performance of a contract is rendered illegal by statute after the contract has been formed, the contract is considered to be discharged (made illegal)

Contracts contrary to Statute

o Tobe enforced, contract must be formed for a legal purpose



o Contractto do something prohibited under federal or state statutory law is illegal,void and unenforceable from outset

Legality

Charging an illegal rate of interest on a transaction.

Usury


- Gambling

- Contract not enforceable because of negative impact it would have on society


- Contracts in restraint of trade


- Covenant not to compete

Contracts Contrary to Public Safety

Contractual promise of one party to refrain fromconducting business similar to that of another party for a certain period oftime and within a specified geographic area

Covenant not to Compete

o Contractor clause that is void on basis of public policy because one party was forcedto accept terms that are unfairly burdensome and unfairly benefit strongerparty

-Proceduralunconscionability


- Substantiveunconscionability

Unconscionable

o Aclauses that releases a contractual party from liability in the event ofmonetary or physical injury, no matter who is at fault

Exculpatory Clauses

- GeneralRule: Neither party to an illegal bargain can sue for breach and neither partycan recover for performance rendered




- SeverableContract

Effect of Illegality

Contract that is divisible because it consistsof distinct parts that can be performed separately, with separate considerationgiven for each party

Severable Contract