Bls 342 Exam 2

Front 1

Manufacturing defect

Back 1

An individual product has a defect making it dangerous

Front 2

Design defect

Back 2

All products of a particular design are dangerous

Front 3

Product defect

Back 3

1. Manufacturing
2. Design
3. Inadequate warning about dangers

Front 4

Elements of negligence

Back 4

1. Duty
2. Breech of duty
3. Causation
4. Damages

Front 5

MacPherson vs. Buic Motor Co.

Back 5

Established that any foreseeable plaintiff can sue a manufacturer for breech of duty of care

Front 6

Negligent failure to warn

Back 6

The plaintiff must prove the defendant knew or should have known that without a warning, the product would be dangerous

Front 7

Negligence per se

Back 7

A statute violation what causes the harm that the statute was enacted to prevent

Front 8

Damages recovery

Back 8

1. Compensatory (make whole again)
2. Punitive (to punish)

Front 9

Product liability defenses

Back 9

1. Contributory negligence
2. Comparative negligence
3. Modified comparative negligence
4. Assumption of the risk
5. Misuse of the product

Front 10

Strict product liability

Back 10

Focus is on the product, not the seller.
There is no duty.

Must prove:
1. Product was defective when sold
2. Product was so defective it was dangerous
3. The product caused damages

Front 11

Products are defective if:

Back 11

Manufacturing
Design
Missing/inadequate warning

Front 12

Warranty

Back 12

A guarantee or binding promise regarding a product

Front 13

Warranty types:

Back 13

Express warranty - written/oral affirmative representation about a product.

Implied warranty of merchant-ability - goods are fit for the propose in which they were sold.

Implied warranty of fitness for a purpose - the buyer is relying on the sellers skill/judgement to select a product

Front 14

Market share liability

Back 14

1. All defendants are tortfeasors
2. The harmful products are identical
3. The plaintiff cannot identify specific defendant
4. All defendants in the area are named

Front 15

Accounting fraud

Back 15

1. Misrepresentation of material fact
2. The accountant acted with intent to deceive
3. The client relied on the misrepresentation
4. The client suffered an injury

Front 16

Contract:

Back 16

A promise of set of promises for the breach of which the law gives a remedy or the performance of which the law gives a duty

Front 17

Elements of a contract

Back 17

Agreement
Consideration
Contractual capacity
Legal object

Front 18

Agreement

Back 18

Consisting of an offer and acceptance

Front 19

Consideration

Back 19

The bargained for exchange for each party

Front 20

Contractual capacity

Back 20

The legal ability to enter into a binding agreement

Front 21

Legal object

Back 21

The contract must be legally enforceable

Front 22

Contract defense:

Back 22

Lack of genuine assent: the oferor severs acceptance through fraud, duress, undue-influence, or misrepresentation

Lack of proper form: lack of writing when required

Front 23

Sources of contract law

Back 23

Common law
Uniform commercial code

Front 24

Contract classification

Back 24

Unilateral: A promise for a request
Bilateral: A promise for a promise

Express: clearly set forth in written/oral words
Implied: Arises not from words but from conduct

Front 25

Quasi-contract (implied in law contract)

Back 25

Not real contracts. Rather, to prevent one party from being unjustly enriched at the expense of another, the courts impose contractual obligations on one party.

Front 26

Valid:

Back 26

A contract that contains all legal elements and is enforceable

Front 27

Unenforceable:

Back 27

Law prohibits the court from enforcing the contract because of fraud, lack of writing when required, passing of the statute of limitations

Front 28

Void:

Back 28

A contract in effect is not a contract at all. Either the object is illegal or it is defective in some manner

Front 29

Voidable:

Back 29

If one or both parties has the ability to withdraw from the contract OR enforce it

Front 30

Executed contract:
Executory contract:

Back 30

Executed: all the terms of the contract have been fully performed.

Executory: some terms have not been performed yet.

Front 31

Not an offer:

Back 31

Preliminary negotiations, they are only an expression of willingness to make an offer.

Advertisements, they are the invitation for an offer.

Front 32

Auctions

Back 32

Without reserve: the highest bid is accepted.
With reserve: the auctioner can refuse to sell the item if not satisfied with the highest bid.

Front 33

Termination:

Back 33

1. Revocation by the offeror
2. Rejection/counteroffer by the offeree
3. Death or incapacity
4. Destruction or subsequent illegality of the subject matter
5. Lapse of time

Front 34

Mirror image rule

Back 34

The terms of the offer must mirror the offer.
The acceptance of the offer must mirror the offer.

Front 35

Mailbox rule

Back 35

Acceptance is valid when the offeree places it in the mailbox.

A revocation is effective only when the oferee receives it

Front 36

Consideration

Back 36

What a person will receive in return for performing a contract obligation

Front 37

Promissory estoppel

Back 37

All must occur:
1. One party makes a promise knowing the other will rely on it.
2. The other party does rely on the promise.
3. The only way to avoid injustice is to enforce the promise

Front 38

Preexisting duty

Back 38

Performance of a duty you are obligated to do under the law is not good consideration and performance of an existing contractual duty is not consideration.

Front 39

Requirement contract

Back 39

When a buyer agrees to purchase all of their goods from the same seller

Front 40

Output contract

Back 40

A seller guarantees to sell everything they produce to one buyer

Front 41

Liquidated debt

Back 41

There is no dispute that money is owed or how much.

Front 42

Unliquidated debt

Back 42

Dispute whether money is owed or how much. Can settle for less than full amount by entering into an accord and satisfaction

Front 43

Accord and Satisfaction

Back 43

The debt is unliquidated
The creditor agrees to accept as full payment less than it claims
The debtor pays the agreed upon amount

Front 44

Contracts can contain:

Back 44

A benefit to the promisor
A determent to the promisee
A promise to do something
A refusal to do something

Front 45

Capacity

Back 45

The metal ability to understand rights and obligations under a contract

Front 46

A contract with a minor

Back 46

Voidable until they reach the age of majority or shortly there after

Front 47

Exceptions to capacity

Back 47

Insurance, counseling, money transfers, education, child support, military enlistment

Front 48

Express Radification

Back 48

After reaching legal age, the person declares intent to be bound by the agreement

Front 49

Implied Radification

Back 49

After reaching legal age, the person takes action consistent with intent to ratify

Front 50

Legality

Back 50

Contracts must have legal subject matter and be able to be performed legally according to state and federal law

Front 51

Usury

Back 51

A loan given with an interest rate exceeding the legal minimum

Front 52

Gambling

Back 52

When a party pays consideration for the opportunity to obtain an amount of money or property

Front 53

Sabbath law

Back 53

Limiting business activity on Sunday

Front 54

Covenant not to compete

Back 54

Unlawful if the main part of the agreement, but legal when in conjunction with the sale of a business or for an employee.

Front 55

Unconscionable

Back 55

The agreement is so unfair that it is void

Front 56

Procedural unconscionably

Back 56

Conditions that impair one party's understanding of a context. Includes adhesion - take it or leave it.

Front 57

Substantive unconscionability

Back 57

When an agreement is overly harsh or lopsided

Front 58

Exculpatory clause

Back 58

Releases one of the contracting parties from all liability, regardless of who is at fault

Front 59

In pari delicto

Back 59

Both parties are equally responsible for an illegal agreement

Front 60

Severable contracts

Back 60

Contract contains multiple parts that can each be performed separately for which each part consideration is offered

Front 61

Mistake of fact

Back 61

An erroneous belief about the facts of the contract at the time of the contract conclusion

Front 62

Unilateral mistake

Back 62

Mistake of material resulting from an error by one party. Can be invalidated IF one party knew the other party made a mistake, the mistake was clerical not negligence, or the mistake was so serious as to be unconscionable

Front 63

Mutual mistake

Back 63

A mistake shared by both agreeing parties. Can void a contract IF the mistake is a basic assumption affecting subject matter, the mistake has material effect and enforcing the contract would have an adverse effect on one party

Front 64

Misrepresentation

Back 64

Unlawful assertion by one party about material fact.

Front 65

Misrepresentation types

Back 65

Innocent - Rescind the contract, but no damages
Negligent - Rescind contract plus damages
Fraudulent - Rescind contract plus damages

Front 66

Concealment

Back 66

Active hiding of the truth about a material fact

Front 67

Nondisclosure

Back 67

Failure to provide pertinent information about the projected contract

Front 68

Undue influence

Back 68

When one person takes advantage of a dominant position in a relationship to unfairly persuade the other.

Front 69

Duress

Back 69

When one party is forced into an agreement by the wrongful act of another

Front 70

Statute of frauds

Back 70

It attempts to ease contractual negotiations by requiring sufficiently reliable evidence to prove the existence and specific terms of a contract.

Front 71

Included in the statute of frauds:

Back 71

1. Contracts not possible to be performed within a year
2. Promises made in consideration of marriage
3. Contracts for one party to pay the debt of another
4. Contracts with interest in land
5. Contracts for the sale of goods totaling more than $500, needing to only state quantity
6. Equal dignity rule - any contract that falls under the statute also requires writing if performed by an agent

Front 72

Statute of frauds requirement

Back 72

Names of parties, subject matter, consideration, terms, signatures

Front 73

Exceptions to statutes of frauds

Back 73

Admission in court or under oath, partial performance or payment, promissory estoppel, or UCC exceptions

Front 74

Parol evidence rule

Back 74

Oral evidence is inadmissible unless made with an incomplete contract

Front 75

Obligor
Obligee

Back 75

Obligor: contracted party who agrees to do something for the other
Obligee: Contracted party who agrees to receive something from other party

Front 76

Assignment

Back 76

When a party to a contract transfers rights to receive something to a third party.
An asignee must agreee

Front 77

Rights that cannot be assigned

Back 77

Rights personal in nature, rights that would increase the obligors duty or risk, rights whose assignment is prohibited by contract or law

Front 78

First-assignment in time rule

Back 78

Gives contractual right to the first party granted the assignment

Front 79

English rule

Back 79

The first assignee to give notice of assignment to obligor has the contract rights

Front 80

Delegation

Back 80

When a party to a contract transfers duty to perform to a third party.

After delegation, the delegate is bound to perform, but the delegator is still liable

Front 81

Duties that cannot be delegated

Back 81

Duties personal in nature, duties that vary with delegators performance, and duties forbid by contract

Front 82

Third party beneficiary

Back 82

Created when two parties enter into a contract with the purpose of benefiting a third party beneficiary.

Creditor beneficiary
Donee beneficiary
Incidental beneficiary

Front 83

Strength of third party beneficiary to sue

Back 83

Creditor beneficiary - Promisor or promisee
Donee beneficiary - Promisor
Incidental beneficiary - None

Front 84

Condition precedent

Back 84

A particular event must occur in order for a party's duty to vest

Front 85

Condition subsequent

Back 85

A future event that terminates the obligations of the party

Front 86

Concurrent conditions

Back 86

When each parties performance is conditioned on the performance of the other

Front 87

Express condition

Back 87

Explicitly stated in the contract using "conditioned, or, if, provided that, when."

Front 88

Discharge

Back 88

Complete performance
Substantial performance

Front 89

Breech

Back 89

When a party fails to perform obligations under the contract

Front 90

Material breech

Back 90

A party unjustifiably fails to substantially perform obligations under the contract. This discharges nonbreeching party from contract obligations

Front 91

Anticipatory repudiation

Back 91

Breaking a contract because it is no longer financially profitable to fulfill

Front 92

Discharge by mutual agreement

Back 92

Mutual rescission: both parties discharge each other
Substitute contract: parties discharge each other in favor of a new contract
Accord and Satisfaction: When one party fulfills new duties, old duties are discharged under the contract
Novation: A third party replaces one of the original parties thus discharging their duties

Front 93

Discharge by operation of law

Back 93

Alterations of the contract
Bankruptcy
Tolling of the statute of limitations
Impossible to perform, destruction of material, death, incapacity
Commercial impracticability
Frustration of purpose

Front 94

Remedies for breech
Legal

Back 94

Compensatory damages - put plaintiff in position they would have been if contract was performed fully
Consequential or special damages - Foreseeable damages that result from special facts of the contract
Punitive damages - to punish or deter
Nominal damages - to recognize the plaintiffs win

Front 95

Remedies for breech
Equitable

Back 95

If there is no legal remedy and irreparable damage to the plaintiff will arise if remedy is not found

Front 96

Remedies for breech
Equitable

Back 96

Rescission - terminate contract
Restitution - return property

Specific performance - order for breaching party to fulfill part of the contract

Injunction - order forcing a person to do something or to not do something

Reformation/rewriting - recovery based on quasi-contract