Chapter 12 Ls

Front 1

contract rules reduce market costs in three important ways.

Back 1

by providing a clear and reliable sanction for breach.
by prohibiting such things as fraud and duress
provides a set of standard terms that become part of exchange without the parties discussing them.

Front 2

Courts will not, however, enforce contracts that are:

Back 2

either too indefinite or procured through fraud or duress.

Front 3

a promise or set of promises for the breach of which the law gives a remedy.

Back 3

contract

Front 4

is a communication of intent to do or not do something in the future.

Back 4

promise

Front 5

Four elements of a contract

Back 5

agreement, consideration, capacity, and legality

Front 6

consists of an offer and an acceptance.

Back 6

agreement

Front 7

must involve an exchange, or quid pro quo (this for that) where each party give something of legal value to the other.

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consideration

Front 8

all parties must have legal capacity to contract; they must be of sound mind and of legal age (18 in most state).

Back 8

Capacity

Front 9

the contract must not have an illegal effect, such as the commission of a tort or a crime, or violation of public policy. ILLEGAL STUFF WON'T WORK

Back 9

legality

Front 10

contract law recognizes two sets of defenses:

Back 10

reality of assets, faulty writing

Front 11

defense where if a contract was agreed to because of misrepresentation, duress, undue influence, mutual mistake, or unconscionable conduct, there is no true assent and the contract is not enforceable

Back 11

reality of asset

Front 12

defense where the law requires that some types of contracts to be in writing.

Back 12

faulty writing

Front 13

a contract that has all four elements and to which neither defense applies

Back 13

valid

Front 14

no contract at all because one of the element is missing

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void

Front 15

if all four elements are present, bu the contract fails for lacking of a writing

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unenforceable

Front 16

contracts agreed to because of misrepresentation or other negotiation impropriety

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voidable

Front 17

means to terminate or end the obligation

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discharge

Front 18

valid contracts can be discharged in one of the five ways:

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performance, breach, operation of law, change in circumstances, and agreement of the parties

Front 19

most common way to discharge a contract

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fulfilling or performing one's promises

Front 20

is a doctrine that permits judges to make decisions based on fairness and ethics

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equity

Front 21

implied-in-law contract or an equitable contract, arises when there is no valid legal contract, but fairness considerations dictate that a party should have a contract right

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quasi contract

Front 22

in such a case of a quasi contract, a court may use the doctrine of quasi contract to grant a remedy under which doctrine?

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quantum meruit (as much as he deserves)

Front 23

two elements of quasi contract based on unjust enrichment:

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1) a benefit is conferred from one party to another
2) it would be unfair to let the party who benefited enjoy the benefit without paying for it.

Front 24

Exhibit 12-2: Maxims of equitable contracting

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1) equity will not suffer a right to exist without a remedy
2) equity looks to substance rather than to form.
3) one seeking the aid of an equity court must come to the court with clean hands.
4) when there is equal equity, the law must prevail.
5) equity does justice by the wholes, not by the halves

Front 25

Case 12-1 Legality
Gene Taylor and Sons plumbing co. v W and W Construction co.

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Taylor did plumbing work and it cost 18891, but he did not have a license. W and W refuse to pay. They won. Taylor Appealed.
Reversed and remanded. Recover some. Significant because contractor should have known regulation.

Front 26

If the promisee takes action or forbears from action, and the promiser breaks the promise, courts can use the what equitable doctrine to protect the promisee even though there was no valid contract.

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promissory estoppel

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four elements of promissory estoppel

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1) a clear and direct promise is made.
2) the promisee reasonably relies on that promise.
3) the promisor knows or has reason to know that the promisee will rely on the promise.
4) it would be unfair to allow the promisor to break the promise without compensating the promisee.

Front 28

provides the rules for contracts for the sale of goods. It is a state statute that is largely uniform, or common, to all the states.

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Uniform Commercial Code

Front 29

is a transfer of title from seller to buyer for a price.

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sale

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is tangible personal property

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good

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is one that has a corporeal (physical) presence, like inventory or a fleet of cars.

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tangible

Front 32

Case 12-3
Advent System v. Unisys Corp.

Back 32

Apply UCC-b/c its more uniform and predictable.

Front 33

express contract - is one in which all the essential terms of the agreement are fully stated in words, either orally or in writing

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express contract

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when one or more of the essential terms of the agreement is inferred from the conduct of the parties..conduct*

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implied contract

Front 35

one party makes an offer and the other party accepts. Most offers can be accepted with a return promise. No actual performance, such as delivery or payment, is needed to form this contract

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bilateral contract

Front 36

sometimes the offeror specifies that an offer can only be accepted through an action. This form this contract.

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unilateral contract

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once both parties have fully performed their contractual obligations

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executed

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before full performance by both party, the contract is considered?

Back 38

executory