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56 Cards in this Set

  • Front
  • Back
What is the Act for prevention of frauds and perjuries?
It was an english law that required that certain contracts be in writing or have written proof of terms. Each state now has their own rendition of these laws called the "statue of frauds"
What are the five contracts that fall under the statue of frauds?
1. cannot be completed within a year after the day after formation
2. Collateral (secondary) contracts
3. Sale of goods over $500
4. pertaining to interests of land (real property)
5. anything with consideration to marriage
Describe some details about contracts under the statue of frauds considering interests in land. What are its exceptions?
-includes all real property
- includes transfers of any interest in land (mortgages)
- must describe the land in detail and include price

(admissions, promissory estopel, partial performance)
Describe some details about contracts under the statue of frauds considering collateral. What are its exceptions?
-must be a secondary obligation
-only when a third party steps in to assume debt responsibility if a primary party does not perform agreed terms

(Main purpose rule, admissions, promissory estopel)
Describe some details about contracts under the statue of frauds considering marriage. What are its exceptions?
- applies to prenuptial agreements as well

None
What are the exceptions for contracts involving sale of goods over $500 under the statue of frauds
-customized goods
-between merchants
-admissions
-partial performance
What are exceptions under the statue of frauds when in reference to contracts involving promises that cannot be completed within a year of the day after formation?
-admissions
-promissory estopel
Explain the partial performance exception under the statue of frauds
court rulings depend on what damage will be done based on the ruling. In the case of sale of goods over $500, if goods are received and accepted, a written element does not have to be present for it to be enforceable in court.
Explain the admissions exception under the statue of frauds.
If one admits that an oral agreement was made, the agreement is enforced only up to terms given in admission.
Explain the promissory estoppel exception under the statue of frauds.
If the promisee relies on the promisor and the reliance is justifiable and foreseeable, the contract is enforceable in that is the only way to avoid injustice.
What constitutes a writing under the statue of frauds?
anything really. A bunch of documents binded together in some form (staple, envelope, etc.) can be used as a justifiable writing considered under statue of frauds. Also, if a writing is refereed to in any circumstance, it can be included as a document of proof.
What must a writing contain under the statue of frauds?
Usually- party names, subject matter, consideration, terms and signature of person getting sued
For sale of goods- quantity and signature
sale of land must have description.
What is the parole evidence rule?
It states that if a written agreement was intended to be the final and complete agreement, then all parole evidence against agreed upon terms is not allowed in court.
What are the seven exceptions to the parole evidence rule?
1. obvious type
2.subsequent modification
3. prior dealings
4. oral condition precedent
5. incomplete contracts
6. to prove contract is void or voidable
7. to explain ambiguous wording
What is a integrated contract?
a contract that is seen to be the final agreement terms. This can be complete or not complete, but regardless if all terms are included, the ones included are nonnegotiable.
What is privity of contracts?
the rights given to parties entered into a contract (third parties usually do not have any rights)
What are the two exceptions where third parties get rights to a contract?
-assignment and delegation
-third party beneficiaries
What is assignment? explain?
transfer of rights to a third party
-is assigned unconditionally, the assignor forfeits all rights
-assignee is subject tot he defenses and rights of the obligor.
- can be written or oral
-effective immediately even if notice is not given
When can rights not be assigned? (4)
-when a statue prohibits assignment
-personable in nature
-when it will significantly change the risks or obligations of obligor
-when a contract prohibits assignment
what are the exceptions to the right to prohibit assignment in contracts?
-when it deals with receiving funds
-alienation (transfer of land ownership)
-negotiable instruments
-breach of contracts can be assigned even if contracts prohibit it
what are two problems with not notifying obligor of new assignment?
1. if two are assigned some courts rule that the first that gives notice gets rights
2. IF no notice is given and obligor fulfills promise to assignor, then assignee gets nothing because the promise was fulfilled
What are delegations? explain?
transfer of duties
no special form is required
delegation to third parties does not relieve deligator or duties of the deletatee does not perform
When can duties not be delegated? (3)
1. personal in nature
2. when performance will materially vary from the obligee's expectattions
3. when a contract prohibits it
What is a third party beneficiary?
It is when a third party benefits from the contract and can therefore claim rights associated with contract
What is a credit beneficiary? a donee beneficiary?
credit- when the promisor promises to pay a debt to the promisee that the promisee owes to the credit beneficiary
donee-when a gift is suppose to be given to a third party
(both can sue directly)
What is vesting?
a third party beneficiary's rights care nonexistant until they are vested. before vesting, the promisor and promisee can make all of the changes they want without the permission of the 3rd party
What are incidential beneficiaries?
third parties that benefit form a contract but have no rights in the contract because the contract was not made in intent for their benefit. They cannot sure directly
what are three signs that the beneficiary is intended
1. performance is rendered directly
2. beneficiary has control over details of perfomance
3. if expressed in contract that they are a beneficiary
What is a condition and what are the three types of conditions that can be present in contracts?
a possible future event that upon the occurrence or nonoccurrence will trigger the performance of or termination of a promise in a contract.
(precedent, subsequent, and concurrent)
What is conditions precedent? Conditions subsequent? Concurrent conditions?
1. when a condition must happen before a performance can take place
2. When a condition can terminate a parties absolute power to perform
3. when the performance of two parties rely on the simotanious performance of the other
What does it mean when conditions are expressed? implied?
express means it is provided for by the parties agreement
implied means it is assumed, but not said in expressed language
What does it mean when a performance is tendered?
it is the unconditional offer to perform by a person who is willing, ready and able to do so.
What is a substantial performance?
when a party, in good faith, performs substantially enough of the terms to enforce the contract. This is only if the performance and benefits do not vary greatly from promised. The promisee can also collect the value difference in damages if wanted.
What is a material breach of contract? minor?
1. when performance is not substantial. This can release the non-breaching party of their duties according to contract.
2. this is a smaller breach and although they can still be sued, it does not release the nonbreaching company from their obligations
What is an anticipatory repudiation?
one parties refusal to perform before time of performance is expected. nonbreaching parties can sue immediately.
what does it mean by discharge by mutual rescission?
When both parties agree to terminate a contract, they must make another contract and both parties must resume conditions before the original contract was made
What does it mean by discharge by Novation. What are the requirements of this?
when both parties agree to bring in a third party to replace on of the original parties.
1. previous valid obligation
2. agreement by all parties
3. extinguish old obligation
4. make new valid contract
What does it mean to discharge by a settlement agreement.
Both parties agree on terms that differ from the original agreement and these new terms act as final terms. This is like novation except it does not involve a third party.
What does it mean to discharge by accord and satisfaction?
To accept performance that is different than the original performance promised.
What are six ways a contract can be discharged by operation of law?
Alteration
Statue of limitations (oral 2-4, recorded 4-5, recovery 10-20, and sale of goods/breach 4 yrs)
Bankruptcy
impossibility of performance
Commercial impracticability
frustration of purpose
What are 5 ways a contract can be discharged?
breach
agreement
performance
operation of law
failure of a condition
What are three ways a contract can be discharged under the impossibility of performance?
-a party dies or becomes incapacitated
-subject matter is destroyed
-a change in law makes it illegal
What is a remedy?
relief provided for an innocent party when the other party has breached the contract
what are the four types of damages?
1. compensatory
2.consequential
3. punitive
4. nominal
explain compensatory damages. what happens in the sale of land? sale of goods? contracts?
matches incidential damages. the direct losses and costs
SOG/SOL = market price-contract price
Contract= (owner= before-profits, during-profits and costs, after-contract price+interest)(contractor= before-cost of excess contract price, before completion- all costs)
what is consequential damages? punitive? nominal?
1. forseeable damages
2. to punish (are not rewarded in contract law)
3. if only technical damages apply. Usually awarded off of principle.
What is mitigation of damages?
the innocent party is required to mitigate or reduce damages. (a landlord finding a tenant)
Explain liquidated and penalty damages
a fixed amount is to be paid in the event of future breach (penalty is a high amount to cause damages and is usually not enforceable) Courts distinguish between the two by asking 1. were the damages cost foreseeable at time of entry and 2. is the number excessive or harsh
what are the four types of remedies available?
1. damages
2. rescission & restitution
3. reformation
5. specific performance
What are the four requirements of a quasi contract?
1. one party granted a benefit to another
2. there was a reasonable expectation of pay
3. the benefit was not given voluntarily
4. receiver was unjustly enriched by not paying
what does the election of remedies prevent?
double recovery
Explain Rescission and restitution
resc.- a contract is canceled and both parties return to positions help before the contract was made
rest.- when all gooda, funds, property etc is returned to who had it before the contract
explain specific performance
when courts order the promised performance to be completed. The only do this if monetary damages do no suffice (as in unique art, etc.) and they never do it for personal services
explain reformation
this is when the courts can reform or make changes to a contract to better show the true intent of both parties.
What is a waiver of breach?
the knowing relinquishment of a legal right
Explain:
1. exculpatory clauses
2. limitation of liabilities
1. states that no damages can be recovered
2. limits the options of remedies available