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21 Cards in this Set

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what are the basic elements of a valid consideration for a bilateral K?
1. legal value (detriment to promisee or benefit to promisor) AND
2. bargained-for exchange

NOTE: benefit to promisor does not require economic benefit. Peace of mind or personal satisfaction is sufficient.
what is the consideration in a unilateral K?
the promisee's continued performance constiutes considerationin a unilateral K.

In a unilateral K, there's no obligation on offeree to perform; but if he does, offeror is obligated to perform.
what are the 2 basic types of legal detriment?
1. promisee does something that he is not obligated to do.

2. promoisee refrains from doing something he is entitled to do.
what do you call a promise that's not supported by consideration?
It depends on whether it's cloaked in terms that make it appear the promisor's committed himself. if it's just a naked promise ("i promise to give you my car") then it's a gratuitous promise. If it's cloaked in terms of commitment that make it seem like there's consideration ("i promise to give you my car unless i decide not to move australia in august"), but the promisor has a completely unrestricted right to renege on his promise, then it's an illusory promie.
what is an aleatory K?
it's a K that's conditional on the happening of a fortuitous event (one that may or may not occur). the most common ex. is an insurnace K. For ex. your car insurance company only pays if you get into an accident. the accident is considered a fortuitous event, triggering the duty to perform
does a moral obligation standing alone consitute consideration?
No.

NOTE: If a prior debt is uneforceable due to operation of law and the promisor subsequently promises to pay the debt anyway, the moral obligation will be enforceable
are promises to donate to charities enforceable?
Yes. Although it is said that other donees' donations are the consideration for each donation, the enforceability of such donations is firmly grounded in public policy.
does a seal have any effect under the UCC?
No. A seal is meaningless under the UCC, as well as in most states.
what is a conditional promise?
the obligation(s) of one or both parties is only triggered by the occurrence of a recited condition beyond the control of the parties
what are the elements of promissory estoppel?
1. someone makes a promise
2. which he should reasonably expect
3. will lead to the promisee's action or forbearace
the promisee does in fact justifiably rely on the promise to hise detriment, AND
4. injustice can only be avoided by enforcing the promise

NOTE: substitute for consideration
what are the major defenses to enforcing a K?
1. Incapacity (minor or mental infirmity)
2. Illegality
3. Unconscionability
4. Fraud or duress
5. Mistake
6. SOF

"MUFFIN I.D."
under non-compete agreements, one party agrees not to compete in business with the other party. under what circumstances are non-compete agreements valid?
they must be reasonable in terms of their time and place restrictions. otherwise they will be uneforceable as illegal restraints of trade.
can the illegal purpose of only one of hte parties prevent the innocent party from recovering under the K?
the general rule is that the innocent party cann recover, even if knew about the other party's illegal purpose, as long as the purpose doesn't involve serious moral turpitude or hte innocent party takes action to further the illegal purpose
in the context of Ks, what is fraud?
fraud occurs where one party obtains the other party's assent to a K by misrepresenting a material term.

EFFECT: voidable @ option of defrauded party
in the context of Ks, what is duress?
Duress occurs where one party's assent is induced by any wrongful act or threat, such that his assent wasn't a matter of free will.

There are 4 general classes of duress:
1. violence (or threats of it)
2. imprisonment (or threats of it)
3. wrongful seizing or holding the P's goods or land (or threats), and
4. anythng else (e.g. blackmail)

EFFECT: voidable
under what circumstances will the requirement of a writing be excused under the SOF (outside the UCC)?
a writing will not be required where there is:

1. full performance of both sides
2. seller conveys property to buyer
3. buyer pays all or part of the purchase price AND performs some act explainale only by the K's existence (e.g. constructing buildings on land)
4. promissory estoppel
5. waiver
6. admission in ct
what is required to constitute a sufficient "writing" under the SOF (outside the UCC)?
The writing must specify, with reasonably certainity:
1. K's subject matter
2. parties' identities
3. promises by whom and to whom made, and essential terms and conditions (stated with reasonably certainty)
4. signature of the party to be charged

"SIPS"

NOTE: only essential term under UCC is quantity
under what circumstances will a modification increasing payment be enforceable?
generally where there are:

1. unanticipated circumstances which
2. make a readjustment fair & equitable
let's say you own someone $2000 and you call them up, offering to pay $1500 as a final and complete payment. they agree and you pay. can they succesfully sue you for the reamining $500?
without additional facts- yes. the standard rule is that a modification to pay less $ as discharge of a debt is not binding on the creditor.

EXCEPTIONS:
1. different performance
2. honest dispute over existence of debt
honest dispute ove rthe amount of debt
do modifications have to comply with the SOF?
onlyi if the K as modified fits within the Statute
if a written K has a clause providing that modifications have to be in writing, will oral modifications to the K be enforceable (outside the UCC)?
yes- an oral modification implicitly means that the parties wanted to abandon the writing.

UCC VIEW: does uphold writing only requirements