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56 Cards in this Set
- Front
- Back
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elements of a contract
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OFFER -must be intentional
ACCEPTANCE-effective when recvd CONSIDERATION -must be bargained for, legally sufficient TERMS - *must be definite, may be implied *Clear agreement as to SUBJ matter, QTY, PRICE, and TIME of performance |
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acceptance of an offer
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creates a K
mirror rule - must accept all terms & conditions of offer early acceptance rule (mail box rule) - GENERALLY EFFECTIVE WHEN SENT - BUT, OFFEROR MAY SPECIFICALLY SAY ACCEPTANCE IS EFFECTIVE ONLY WHEN RECVD |
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revocation of an offer
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*by the OFFEROR to TERMINATE the offer, not discharge the K
*an offeror can revoke the offer at any time prior to acceptance of offeree *effective when received *also effective when offeree learns that the offeror already sold the subj of offer - acceptance ineffective |
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counteroffer
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late acceptance = counteroffer
-if involves real estate, common law applies - replies rejecting original offer are counteroffers thus terminating original offer -by agreeing to buy the house at a price different from the original offer the buyer is rejecting the original offer and is making a counteroffer |
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terminate an offer
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-EXPIRATION
-REVOCATION-unless option k, consideration paid to keep offer open, effective when recvd -REJECTION-must be recvd by offeror -COUNTEROFFER -rejection from offeree, valid when recvd -OPERATION OF LAW -death or insanity, destruction, illegality of subj matter |
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K - IMPLIED IN FACT
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behavior of 2 parties makes clear what terms of the agreement are
(i.e. call for a pizza, price is not discussed b/c implied in fact) |
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K - IMPLIED IN LAW
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courts decide that parties should be treated as if they had an agreement, even though they did not, in order to avoid one party being unjustly enriched at the expense of the other
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CONSIDERATION
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-act or promise which is offered by one party and accepted by the other
as an inducement to enter an agreement -must be BARGAINED FOR -BOTH parties must have consideration as a result of K -must be LEGALLY SUFFICIENT (valid consideration) -paying or lending $ -transferring or lending property -rendering services -relinquishing the right to receive cash, property, services -waiving the right to take certain actions |
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QUASI - K
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court defined
-the law creates a K when there is no binding agreement present to keep the unjust enrichment from occurring |
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ADVERTISEMENTS
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invitations to negotiate deals
not offers |
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COVENANT NOT TO COMPETE
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agreement not to open a competing business
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MODIFYING A K
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(i.e. employment contract, services)
-you already have an existing K between 2 parties -BOTH PARTIES must provide NEW CONSIDERATION (common law) to be legally binding |
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NOT A VALID K IF
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-past consideration-actions taken before K was formed
-pre-existing duty-an obligation which the party already had before K formed |
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PRE-EXISTING DUTY RULE
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modifying a K
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PAST CONSIDERATION
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not sufficient to serve as consideration for a new K because it is not bargained for
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DISAFFIRM A K
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a minor can disaffirm K during his minority & within reasonable time after reaching majority age
- a minor can ratify a K expressly or by actions indicating ratification after reaching the age of majority -failure to disaffirm within a reasonable time after reaching majority age does act as ratification |
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WHAT MAKES A K VOIDABLE?
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UNDUE INFLUENCE -
close relationships in which a dominant person has extreme influence over a weaker person |
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UNCONSCIONABILITY
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an oppressive K in which one party has taken severe, unfair advantage of another which is based on absence of choice or poor education
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VOIDABLE K'S
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-DURESS
-UNDUE INFLUENCE -MISREP OF FACT -FRAUD OF INDUCEMENT -MISTAKE - UNILATERAL -LEGAL CAPACITY OR LACK OF CAPACITY -INCOMPETENT |
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VOID K'S
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-FRAUD IN EXECUTION
-EXTREME DURESS -ILLEGAL SUBJ MATTER |
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STATUTE OF FRAUDS - GROSS
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must be in writing to be enforceable
sale of Goods > 500 sale of Real Estate - any $$ (exception: part performance - when buyer of property takes possession with the owner's consent) Over 1 year - bilateral K, CANNOT BE PERFORMED IN ONE YEAR = over Suretyship - guarantor - K's that answer the debt of another, signed by party to be charged Subj to Marriage |
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K - enforceable that are not in writing
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SPAM
Specifically mfgd goods Partially performed Moron - if you admit it in court Merchants - bound by silence |
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PAROL EVIDENCE RULE
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any prior or contemporaneous agreements (oral or written) are not admissible in court to written agreement
-subsequent agreements are admissible as evidence |
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DISCHARGE OF K
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-by agreement
-accord & satisfaction -novation -release from performance -destruction of subj matter -death of person where personal service -breach of K releases injured |
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ASSIGNMENT OF K
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transfer of a right under a K by one person to another
no consideration - not needed but when consideration given-irrevocable exceptions - personal services, trust or confidence |
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ASSIGNMENT OF K
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transfer of a right under a K by one person to another
no consideration - not needed but when consideration given-irrevocable exceptions - personal services, trust or confidence |
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NOVATION OF K
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discharge of K
-when 3 parties discharge a previous K by creating a new K |
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RESCISSION OF K
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-discharge of K
-canceling a K and placing parties in the position they were in before the K was formed |
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RELEASE OF K
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discharge of a K
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REVOCATION OF K
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by an offeror to TERMINATE the offer, not discharge the K
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SPECIFIC PERFORMANCE REMEDY -
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when $$ will not sufficiently compensate the afflicted party due to unique nature of subject matter of K
-real property is unique |
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NOVATION OF K
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discharge of K
-when 3 parties discharge a previous K by creating a new K |
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ASSIGNMENT OF K
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transfer of a right under a K by one person to another
no consideration - not needed but when consideration given-irrevocable exceptions - personal services, trust or confidence |
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RESCISSION OF K
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canceling a K and placing parties in the position they were in before the K was formed
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RELEASE OF K
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discharge of a K
-abandoning a K but it does not place parties in the same position as before the K |
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unilateral contract
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-a K that can only be accepted by a actual performance
-partner will promote staff to Mgr if she passes the CPA exam -a promise for an act (performance) (i'll pay anyone $$ who smokes all of this pot) |
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bilateral contract
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-a K that can be accepted by a promise
a promise for a promise (i'll pay you $$ if you do my audit) |
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formation of a valid K
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Offer
Acceptance Consideration |
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valid Offer
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-terms must be definite
-price, parties, nature of subj matter, qty, time for performance -Intent to make offer -Communicated to offeree |
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requirements K
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I supply you with all of the pot (consideration) you need for one year (give up the right to sell to someone else)
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outputs K
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I give up the right to buy elsewhere (I only buy from you) and
She gives up the right to sell to someone else |
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duress
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forcing a person to enter into a K by force (wrongful threat or act of violence)
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undue influence
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defense that makes a K VOIDABLE
close relationships where a dominant person extremely influences the weaker person |
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promissory estoppel
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-acts as a substitute for consideration
-a promise to donate $ to a charity which charity relies upon -renders promise enforceable elements required: 1) detrimental reliance on promise 2) detrimental reliance is forseeable & reasonable 3) damage results if the promise is not enforced |
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accord and satisfaction
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-discharge of K
-agreement where a party with an existing duty or performance under a K promises to do something other than perform the duty originally promised in the K -agreed substitute of performance (accord) & actual performance (satisfaction) |
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substantial performance
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allows for a K obligation to be discharged even though the performance tendered was not in complete conformity with the terms of the agreement
*Is breach material? if immaterial, then recovery will be limited to monetary damages |
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anticipatory repudiation
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allows one to sue at once or wait until after performance is due when the other party indicates they won't perform
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remedy of specific performance
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when $$ is not enough to compensate the party due to the unique nature of the K
(real property is unique) |
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punitive damages
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awarded when court is seeking to punish a party for their improper actions and are not usually granted in breach of K actions
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material breach of K
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once one party breaches the K, the other party is discharged from performing his or her obligations under the K
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unilateral offer
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when an offeror expects acceptance of an offer by action of the offeree
-unilateral K is formed when offeree accepts the K through performance of the offeror's required action |
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What makes a K unenforceable?
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-illegal
-violates public policy |
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OPTION K
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irrevocable promise by offeror to keep offer open for specific amount of time (60 days)
-MUST BE SUPPORTED BY NEW CONSIDERATION |
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FIRM OFFER
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must be signed by merchant
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PRE-EXISTING LEGAL DUTY
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-not sufficient as consideration b/c no new legal detriment is suffered by performing obligation
-not valid consideration |
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liquidated damage clause
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provision that states the amount of damage (reasonable) that will occur if a party breaches K
-materiality is not a factor in enforceability of liquidated damage provision -clause for excessive damage = penalty; courts do not enforce penalties |
