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33 Cards in this Set

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Contract (definition)
Promise or set of promises under which the law recongnizes a duty to perform and for breach of which the law gives the aggrieved party a remedy
Offer
A definite proposal by one person to another indicating a present intention to enter a contractual relationship; has to say what you will do, not what you won't do
Objective Test to see if Offer is made
1. Language is present commitment
2. more dfinite the terms, more likely it is one
3. communication to specific person is more likely to be seen as an offer
Required elements for a Contract
1. Offer
2. Acceptance
3. Consideration
4. Capacity
Termination of Offers
1. Lapse of time (either specified or a reasonable amount of time)
2. Revocaton (can be revoked by offerer at any time - up until acceptance)
3. Rejection (offeree can reject which will negate offer)
UCC firm offer
Sale of goods, offeror is a merchant, irrevocable w/o condieration, written offer signed by offeror, irrevocable for resonable time (but not more than 3 months)
Acceptance
1. Express
2. Implied by Action (offeree acts in way inconsistant with offeror's ownership of property - silence is not an acceptance)
Consideration
something of legal value, which is bargained for and given in exchange for an act or a promise. (promise important, exchange of $$ not important)
Rules relating to consideration
1. Courts will not inquire into adequacy of consideration
2. no consideration when party promises to do somtheing he's already obligated to do
Rules for modification of contracts
UCC Rule: New condieration is not required for a modificaiton; Common Law: an agreement modifying an existing contract must be supported by new consideration
Legal Capacity and mentally impaired people
party operating under such a mental capacity that he or she is unable to act in a resonable manner
Defenses (3 illegal agreements)
1. agreements violate statute
2. agreements violate public policy
3. Unconsionable agreements
Elements of a mutual mistake
1. Both parties made mistake as to basic assumption about vital fact about contract
2. mistke has a material effect on agreed upon exchange
Misrepresentation
one party has been:
Induced by justifiable reliance on the other party's misrepresentation of a material fact
Fraud
same as misrepresentation plus scienter (knowledge of, trying to decieve)
When reliance on an opinion = a fact
1. fiduciary relationship
2. relying party is unusually vulnerable
3. reliance on someone with superior skill or judgment
No duty to disclose EXCEPT
1. to prevent serious harm
2. fiduciary relationship
3. to prevent concealment of material fact (Real Estate)
4. some others by statute
Duress (elements)
(1) the contract was induced by improper threat,(2) victim had no reasonable alternative but to enter contract
contracts covered by statute of fraud
(must have written evedence)1. marriage
2. years (contract which cannot be performed within one year
3. land (any interest in land)
4. goods costing more than $500
5. suretyship - contract to perform financial obligations of another person
Types of Conditions (within contract)
conditions precedent - act or event which creates a duty of performance
express condidtion - condition which must be strictly performed before other party's obligation
Types of Breaches
Material - failure to give substantial performace (results in duty to perform DOES NOT arise in other party)
Minor - substantial, but not all performance is given (duty to perform by other party DOES arise)
Excuses of performance
1. Impossible
2. Commercial Frustration: value of contract is frustrated
3. Commercial impracticability: UCC equivilent to above
Goal for court in breach of contract
put plaintiff in smae position that they would have been if the contract had been performed
Once breach is shown, plaintiff must also show (to be awarded damages)
1. prove losses with resonable certainty
2. can only recover losses forseeable to DEFENDANT at time of contract
3. plaintiff has duty to mitigate (find another company to step in and perform)
Types of Damages
1. Compensatory Damages
2. Consequential damages (additional losses as result)
3. Liquidation damages
Equitable Remedies
get something other than money (usually when plaintiff can not mitigate)
Injunction
court order requiring a person to do something (or not do something)
specific performance
one type of equitable remedy; court orders you to perofrm duties of contract
Recision
contract is canceled
Restitution
court orders parties to give back what they got from other (fraud cases)
Reformation
equitable remedy used when contract mistakenly fails to conform to what parties agreed to
You can lie and it is NOT misrepresentation or fraud if...
not an important fact
not relying on a particular lie
Modification of sale of good contract (according to UCC)
no need for consideration when change is made (only good for sales of goods)