Business Law Chapter 10-14 Raisig

Front 1

sources of contract law

Back 1

common law except where replaced by statutory law such as ucc Uniform commercial code

Front 2

Function of Contract law (pacta sunt servanda)

Back 2

agreements shall be kept

Front 3

Contract is a

Back 3

Legal Promise or a set of promises for which a breach thereof the law gives a remedy

Front 4

Objective theory of contracts

Back 4

what the party said when entering in to the contract, how the party acted, the circumstances surrounding the contract.

Front 5

Requirements of a valid contract

Back 5

Agreement, consideration, contractual capacity, legality

Front 6

Enforceable contracts must

Back 6

Have an offer and acceptance, Consideration, Legal Capacity, Legal undertaking.

Front 7

Defenses to the enforceability of a contract

Back 7

Genuineness of assent. fraud, influence or mistake) Form - writing

Front 8

Classification of Contracts

Back 8

Express, Implied, and Quasi Contracts, - b. Executed and executor contracts, - c. Valid, Void, and Void able contracts, - d. Bilateral and Unilateral contracts.

Front 9

Bilateral Contract

Back 9

Promise for promising, - Bargained for exchange of promises

Front 10

Unilateral

Back 10

Promise for an act - or performance

Front 11

Mail box rule

Back 11

an acceptance which may properly be communicated by mail becomes effective as soon as it is deposited in the mailbox

Front 12

Intent to Accept

Back 12

It is the offered who accepts the offertory's offer

Front 13

Objective manifestation

Back 13

law is not concerned with state of mind

Front 14

Adequacy of Consideration

Back 14

Adequacy of consideration relates to how much consideration is given and whether a fair bargain was reached.

Front 15

Agreements that lack consideration

Back 15

preexisting duty,

Front 16

Past consideration

Back 16

the element of bargained for exchange is missing

Front 17

Legal sufficiency of Consideration

Front 18

Problem areas concerning consideration

Front 19

Accord and Satisfaction

Back 19

a debtors offer of payment and creditors acceptance of a lesser amount

Front 20

Release

Back 20

an agreement by which, for consideration, a party is barred from further recovery

Front 21

covenant not to sue

Front 22

promises enforceable without consideration

Front 23

Promissory estopel

Front 24

Liquidedated debt

Back 24

amount has been ascertained

Front 25

unliquidated debt

Back 25

not an agreement on

Front 26

promises enforceable without consideration

Back 26

promises to pay debts that are barred by statue of limitations

Back 27

detrimental reliance's, doctrine of promissory estoppel, promises to make charitable contributions

Front 28

The test of capacity of contract

Back 28

Ability to understand the nature of the transaction and its consequences.

Front 29

Valid contract

Back 29

Both parties have full contractual capacity

Front 30

Voidable contract

Back 30

One or both parties lacks capacity to contract and may avoid capacity

Front 31

Minors

Back 31

most contracts entered into by minors are voidable contracts, may not enter into contracts prohibited by minors

Front 32

Enters into a contract for necessaries

Back 32

Items that fulfill basic needs. Minors can be held liable. Must not be under the care of a parent.

Front 33

Ratification

Back 33

a minor who has reached the age of majority.

Front 34

Intoxication

Back 34

a contract is voidable only if the intoxication was severe. Rarely to courts allow parties out of the case.

Front 35

Mental Incompetence

Back 35

Tests whether the individual understands the contract. The duty to prove mental incompetence is on the defending party

Front 36

Legality

Back 36

for a contract to be valid and enforceable it must be formed for a legal purpose

Front 37

Contrary to statue

Back 37

there is a specific statute that says it is illegal - Gambling

Front 38

Usury

Back 38

Every state sets maximum limits of interest,

Front 39

Gambling

Back 39

Contracts involving distribution of property by chance.

Front 40

Sabbath (Sunday Laws)

Back 40

Prohibit certain types of formation or performance of certain contracts on a Sunday.

Front 41

Licensing Statutes

Back 41

All states require certain members of certain processions to obtain licenses

Front 42

Contract to commit a crime

Back 42

All contracts to commit crimes violate statutes and are thus illegal and unenforceable.

Front 43

Effect of illegality

Back 43

in general an illegal contract is void. Only when one party is innocent, or when one party is protected by a statute, or if contract was forced on a party by duress.

Front 44

Contracts contrary to public policy

Front 45

Unconscionable

Back 45

court may deem illegal and may not be enforced

Front 46

Mistakes - Unilateral

Back 46

Other party knew or should have known that mistake was made.

Front 47

Mistakes - Bilateral

Back 47

Both parties are mistaken - either party may rescind contract

Front 48

Fraudulent Misrepresentation

Back 48

a misrepresentation of a material fact has occurred. Must be an intent to deceive . The innocent party must rely on the misrepresentation.

Front 49

Non fraudulent misrepresentation

Back 49

innocent misrepresentation - occurs when a person makes a statement that he or she believes to be true that actually

Front 50

Unilateral Mistake

Back 50

does not afford the mistaken party a right to relief

Front 51

Misrepresentation by conduct

Back 51

turn back odometer

Front 52

Misrepresentation of the law

Back 52

a layperson should not rely on statements but know the law or have a lawyer

Front 53

Misrepresentation by silence

Front 54

Intent to deceive

Back 54

the justifiable reliance

Front 55

Reliance on Misrepresentation

Back 55

Rent a car to a minor who had a fake id. The summary

Front 56

negligent misrepresentation

Back 56

believing the statement is true or carelessness. Has the same ruling as fraudulent misrepresentation.

Front 57

Undue influence

Back 57

Arises from special relationships such as fiduciary relationships where a party is overcome by influence .

Front 58

Undue influence

Back 58

Duress - defined by forcing. The forced party can rescind the contract.

Front 59

Presumption of Undue influence

Back 59

an elderly patient is told by an attorney to sell her property at below market value

Front 60

Adhesion contracts take it or leave it

Back 60

has no choice but to agree to the sellers dictated terms if the buyer is to procedure certain goods or services.

Front 61

Unconscionability

Back 61

concerned with one sided bargains

Front 62

Standard form contracts

Back 62

shift risk normally borne by one party to the other party for example , a liability.

Front 63

take it over or leave it

Back 63

standard form

Front 64

4 basic elements of a contract

Back 64

Agreement, consideration, contractual capacity, legality

Front 65

general contract law basis

Back 65

common law's decision of the courts

Front 66

uniform commercial code

Back 66

article 2 for the sale of goods

Front 67

types of contracts bilateral

Back 67

bargain for exchange of promises

Front 68

Unilateral contract

Back 68

Promise for an act - or performance

Front 69

implied in fact contract

Back 69

based on the actions of the party

Front 70

executed contract

Back 70

has been fully executed by both parties

Front 71

ambiguities in a contract

Back 71

terms are not clear - these terms will be held against the party who wrote the contract

Front 72

Contracts contrary to public policy

Back 72

definite

Front 73

termination of an offer

Back 73

or ee rule if or terminates it is revocation, ee terminates rejection, or lapse of time, or operation of law

Front 74

operation of law

Back 74

if illegal it terminates

Front 75

only offeror

Back 75

has power to revoke offer must be communicated

Front 76

detrimental reliance

Front 77

Promissory estopel

Back 77

when a contractor lies on the bids of his subcontractors

Front 78

offer and counter offer

Back 78

kills the offer

Front 79

uniform commercial code

Back 79

page a-22 rejects the mirror image rule

Front 80

acceptance is upon

Back 80

dispatch not on the received from the offeror

Front 81

when acceptance occurs

Back 81

Mail box rule is valid when it is in the mail box.

Front 82

Consideration

Back 82

the adequacy of consideration (courts don’t question)

Front 83

preexisting rule

Back 83

no detriment to obeying the law, no contract

Front 84

Promise to pay with out a bargain

Back 84

is no contract

Front 85

Promise is consideration

Back 85

under contract law

Front 86

Accord and Satisfaction

Back 86

occur when a debt is agreed by both parties and when the agreement is in effect

Front 87

statue of limitations

Back 87

3 years run the contract if the party agrees to pay

Front 88

Minors are liable

Back 88

necessassaries i.e. food, or the minor is not liable

Front 89

Minors are liable

Back 89

they do have to return any consideration they receive

Front 90

covenants not to compete

Back 90

not struck down unless it results in lack of trade

Front 91

mistaken by both parties

Back 91

either party may rescind the contract

Front 92

Unilateral Mistake

Back 92

no relief for the mistaken party

Front 93

Dominant party

Back 93

burden of proof shifts to the dominant party

Front 94

Undue influence

Back 94

on elderly on positions of trust.

Front 95

proving lack of contractual capacity

Back 95

one party claims I don’t have capacity - burden of proof is on this party