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42 Cards in this Set
- Front
- Back
Promissory Estoppel
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Substitute for Consideration
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What are the three criteria to enforce a claim of promissory estoppel?
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1) the promisor reasonably should have expected to induce action or forbearance on the part of the promisee 2) of definite and substantial character; and 3) the action or forbearance occurs
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Mutuality of Consideration
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1. Requirements and Output Contracts
2) Conditional Promises 3. Right to Cancel or Withdraw 4. Best Efforts Implied 5. Voidable Promises 6. Unilateral or Option Contracts 7. Choice of alternative contracts |
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What are contract defenses?
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1. lack of capacity
2. lack of consent 3. Mistake 4. Illegality 5. Unconscionability 6. Statute of Frauds 7. Third Party Beneficiary Contracts 8 Assignment of Rights 9. Assignment Requirements 10. Delegation of Duties 11. Attack on validity 12. To Clarify ambiguity 13. To refute consideration 14. Subsequent Modifcation 15. UCC Rule |
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What constitutes "lack of consent"
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Type of contract defense
1. Finding of duress 2. Undue influence 3. Misrepresentation 4. Fraud |
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Types of mistakes
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A type of contract defense
1. mutual mistake 2. unilateral mistake 3. mistake in transmission 4. mistake in value |
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What is a mistake (as a contract defense)?
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An assumption that is different from the facts.
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What is undue influence?
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A type of lack of consent
It results when the will of the dominant person is substituted for the will of the victim. Undue influence exists when a confidential relationship is used to create and unfair bargain for the victim. |
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What is misrepresentation?
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A type of lack of consent
The innocent or negligent misstatement of a material fact made by one party and relied upon by the other party as is basis for entering into an agreement to his or her damage. |
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What is fraud?
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type of lack of consent
an element of scienter required; if a defendant knows that what she says is false or if she recklessly disregards the truth or falsity of what she says |
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What is unconsionability?
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A contract defense
It is an equitable theory applied to contracts which are so unreasonable that they offen the conscious of reasonable people |
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What constitutes unconscionability?
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1. Hidden, Risk-shifting Provisions
2. Adhesion Contracts |
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What are types of Statutes of Fraud?
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1. Executor or Administrator
2. Debts of Another 3. In consideration of marriage 4. Interest in Land 5. Performance within one year 6. Goods Priced at $500 or more 7. Satisfaction of the Writing Requirement 8. Effect of Noncompliance |
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What is a Statute of Fraud?
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It is a statute enacted in most states that requires certain types of contracts to be in writing to be enforceable, even though all other elements of contract may be present.
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What is an adhesion contract?
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Type of unconscionability
Adhesion contracts are those that contain unconscionable provisions concerning procurement of necessary good, such as a car, when the buyer is unable to purchase similar items from any other seller without agreeing to a similar provision. Has no choice. |
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What are hidden, risk-shifting provisions?
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Type of unconscionability
1) add-on clauses that subject all property of the buyer to repossession if the buyer fails to pay for a newly-purchased item 2) unreasonable liquidated damage provisions 3) disclaimers of warranty provisions 4) confession of judgment clauses, which are illegal in most states |
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Executor or Administrator
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Statute of Frauds
An agreement by an e, a, or personal representative to pay the debts of the estate out of his own funds must be in writing |
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Debts of Another
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Statute of Frauds
A promise to answer for the debt of another must be in writing, such as a guaranty for a loan |
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In Consideration of Marriage
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Statute of Frauds
A promise made in inconsideration of marriage, as an inducement to marry, much be in writing |
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Interest in Land
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Statute of Frauds
A promise creating an interest in land must be in writing |
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Performance within one year
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Statute of Frauds
A contract which, by its terms, cannot be performed within one year must be in writing |
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Goods Priced at $500 or more
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UCC 2-201 requires that contracts for the sale of goods of $500 or more be in writing
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Satisfaction of the Writing Requirement
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To satisfy the requirement of a writing there must be the following: 1) identity of the parties; 2) identity of the subject matter ; 3) the essential terms; 4) recital of the consideration; and 5) signature of the party to be charged
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Effect of Noncompliance
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Noncompliance with the Statute of Frauds may render the contract unenforceable.
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What is an assignment of rights?
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When a contract has been created and when one of the parties subsequently seeks to transfer the rights under the original contract to a third party, this transfer is accomplished by assignment
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What are four exceptions of rights that cannot be assigned?
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1. Obligor's Duty Changed - if assignment of rights would alter the obligor's duty substantially, assignment would be prohibited
2. Obligor's Risk Changed - when assignment would alter the obligor's risk substantially, assignment will be prohibited without the obligor's consent 3. Assignment Prohibited by Law - a right cannot be assigned if the assignment is prohibited by law 4. Assignment Prohibited by Contractual Provision - the power to assign cannot be limited by contract; however, the right to assign can be. |
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Types of assignment that are required to be in writing
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1. assignments of wages
2. assignments of interest in land 3. assignments relating to sale of goods of $500 or more 4. Assignments of security interests under UCC's Article 9. |
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Partial Assignments
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Contract rights may be transferred to one assignee or they may be divided and transferred to more than one assignee.
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Revocability (with respect to assignments)
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If an assignment is given in exchange for consideration, it is irrevocable
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Effect of Assignment
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The effect of assignment is to establish privity of contract between the obligor and the assignee. The assignee replaces the assignor as the real party in interest; and the assignee is entitled to performance under the contract, subject to any defenses that the obligor may have against the assignor
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Successive Assignments
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When the first assignment is revocable (gratuitous); a subsequent assignment will revoke the first one.
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Promise versus Condition
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Promise - a commitment to do or to refrain from doing an act. A promise may be unconditional or conditional. When the promise is unconditional, the failure to perform will constitute a breach of the contract.
A condition is an event, other than the passage of time, the occurrence of which will create an absolute duty to perform and the nonoccurrence of which will extinguish any cuty to perform. |
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What is a constructive condition?
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A particular contract term may be a promise for one party and a condition for the other.
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In which situations is a party's duty to perform excused?
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1. Hindrance
2. Breach 3. Anticipatory Repudiation 4. Substantial Performance 5. Divisible Contracts 6 Waiver or Estoppel |
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What is an "excuse of condition"?
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If a party's duty to perform is conditional, there is no duty to perform until the condition occurs. However, there are situation that may exist that require performance even though the conditional has not occurred. In these situations, the condition is excused>?
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HINDRANCE -as excuse of condition
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If a party's duty is conditioned on the occurrence of an event and that same party wrongfully prevents the event from occurring, the occurrence of the event may be excused.
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BREACH - as excuse of condition
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A material breach of the contract when performance is due will excuse the non-breaching party's duty to perform.
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ANTICIPATORY REPUDIATION -as excuse of condition
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Anticipatory repudiation occurs when a party, prior to the time required for performance indicated that he or she will not perform when performance is due
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SUBSTANTIAL PERFORMANCE as excuse of condition
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The condition of full performance often may be excuse if a party gives substantial performance.
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DIVISIBLE CONTRACTS - as excuse of condition
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Where a party performs one of the units of a divisible contract, she is entitled to the agree equivalent for that unit even if she fails to perform the other units.
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WAIVER OR ESTOPPEL - as excuse of condition
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One who is to receive the benefit of a condition may manifest words or conduct to waive the condition. If the condition is waived and if the other party changes her position in reliance upon the waiver, the waiver will be binding (estoppel).
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What are some reasons for discharge of contract duties?
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1. Performance
2. Illegality 3. Impossibility 4. Impracticability 5. Frustration 6. Rescission 7. Modification 8. Substituted Contract 9. Novation 10. Accord and Satisfaction 11. Account Stated 12. Lapse 13. Operation of Law |