BUL 3130 Exam #3

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In Contract Law the six elements required to exist in order to create a valid binding legal contract are

Intent, Capacity, Legal Subject Matter, Acceptance, Consideration, and Offer (ICLACO)

If one or both of the parties to a contract do NOT have intent

the contract is VOID

If the other five, any of them, elements do not exist then

the contract is VOIDABLE

Oral

most contracts are oral, meaning created verbally

Written

a writing evidencing the contract is created when the contract is formed

Express

clearly stated as to the terms and provisions of the contract

Implied

by the words or conduct of one of the parties

Bilateral

both parties are in agreement with the terms and performance will take place immediately or at some designated future time

Unilateral

considered a one sided agreement, where an offer is made that has (1) yet to be accepted by a reply or by (2) performance of what the offer requires

Void

means no contract ever existed in law and the parties are free from any legal responsibility under the terms and provisions of the agreement/contract

Voidable

the party to a contract who has the option of performing according to the terms of the contact or being free from any responsibility thereunder

Mirror Image Rule

(common law) the offer and acceptance are identical and creates a valid binding legal contract

Mailbox Rule

(common law) acceptance of an offer legally takes place when the acceptance is placed in the US Mail with adequate postage and addressed as the offer requested (on line contracts are accepted when you click on the icon indicating acceptance of the offer)

E-Sign Act

satisfies the statute of frauds for a signature; 9. Electronic Signature in Global and national Commerce Act gives an e-signature the same legal force and effect as a pen-inscribed signature on paper

Statute of Frauds

if a contract cannot be performed within 12 months of being entered into it must be written in order for it to be enforceable

Parol Evidence Rule

If you enter into a written contract which involved discussions before signing it, and you have NOT incorporated into the terms of the written contract what you discussed beforehand, what you had discussed will be barred in Court to prove you were defrauded in the inducement of the formation of the contract, or defrauded at the inception of the contract

Counteroffer

A says to B I will sell you my Jaguar for $128,000-. B says I will pay you $122,000. B made a counteroffer, which in law ended the existence of the offer which A never has to re-offer.

Force majeure clause

for international contracts this clause permits a party to be free of a contract if there is a political insurrection or a natural disaster.

Uniform commercial code (UCC)

RELAXED all strict common law rules regarding the creation and contracts; this helps merchants conduct business easier and promotes commerce.

Article 2 sale of goods, not services

UCC applies when an item is movable and is not money or an investment security. If a contract encompasses goods and services, the court will examine which is dominant, if goods is - then UCC applies, otherwise common law applies.

Article 2 applies to merchants

someone who regularly deals in the goods involved in the contract; by occupation has knowledge or a special skill related to the goods; and, who holds themselves out to have such specialized knowledge or skill.

Statute of frauds

applies to contracts between merchants when the sum is $5,000- or more you will see Parol evidence rule in this chapter-please read it as to Article 2.

CISG

was adopted by the United Nations and is a treaty adopted by congress and is superior to the UCC. Remember, a treaty and a convention are identical.

Commercial Paper

certificates of deposit - where you give the bank a deposit for a certain time period and receive a higher than normal return as interest; check - those you write every day; draft; and Promissory Note - I promise to pay Joe $5.00 in 30 days with or without interest.

Mechanic's Lien

applies to ONLY realty, in that if you provide service and material either or and claim you are not paid then you can file this lien against the realty.

Collateral

what you creditor holds to secure your repayment of a debt.

Bankruptcy Law is identified by

Chapters.

Chapter 1, 3 and 5 are

administrative chapters of the bankruptcy code.

Bankruptcy law is exclusively

Federal law, except each state can designate what is an exemption of specific types of property that can be exempt from a bankruptcy, such as a wheelchair,...)

Chapters, 7, 9, 11, 12 and 13 are

operative chapters.

Chapter 7 is also known as

a fresh start in that a debtor can be relieved of having to pay any debt, and all assets of the debtor can be taken by creditors. Most often a debtor will be able to keep their home and cars and some personal property. New law in 2006 does require a debtor to pay some of the debts as determined by the trustee in bankruptcy.

Chapter 9 applies to

cities, towns, counties and any State.

Chapter 11 (for businesses)

is a reorganization of debts so a debtor can have as many as 60 months to pay all existing debts and no assets of a debtor can be taken by a creditor.

Chapter 12 applies to

a family farmer.

Chapter 13 applies to

individuals and is the same as Chapter 11 for businesses.

Common Law permits the creator of an original idea to be known as

the owner

That certificate of copyright will

be the best evidence proving you are the creator, thus it is not always advisable to only rely on the common law protection. Always get a copyright from the government.

Trademark

is a commercial symbol - think of Target for example, need I say more? apply for, and obtain a trademark from the government to legally give you the greatest amount of protection.

Trade name

is merely the "name" of your business, whether incorporated or not. They are protected by the common law, not under the Lanham Act. Generally, the first to use a "name" in a geographic area is the owner of it

Patent law

is purely statutory, not known to any common law doctrine. It involves a (i) process, (ii)a manufacture, or a (iii) composition of matter.

E-contract

one created by on line communication can, and most often results in a valid binding contract if all elements of contract law are present, also, by printing the agreement one has evidence that can be admitted in Court to prove the contract

A nondisclosure agreement is

a contract

nondisclosure agreement

Protects an original idea from unauthorized disclosure

Copyright

music, poem books, articles etc. Common law says as the creator of the original work you automatically by the virtue of you creating it are the owner but trying to proof it is hard without a copyright that is registered with the government. That certificate of copyright will be the best evidence proving you are the creator

Trade dress

the packaging or idea for products (Pictures). To protect your trade dress you get a trademark

Trade secret

protects the composition of matter that you would have normally gotten a patent on, such as recipe for KFC chicken. (Patents are public record)

Confidentiality agreement (non-disclosure agreement)

protects your thoughts even from a lawyer whom you are seeking advice from

1 year and 1 day

if you put an idea or product in the market place (stream of commerce) after 1 year and 1 day you can never get a protection of ownership (copyright, patent, trade secret, etc)

Trademark

a commercial symbol - think of Target for example. Apply for, and obtain a trademark from the government to legally give you the greatest amount of protection.

The Lanham Act

made the common law trademark protection part of federal law

Patent

law is purely statutory, not known to any common law doctrine. It involves a (i) process, (ii)a manufacture, or a (iii) composition of matter.(utility)

Intent

Sometimes known as mutual assent. I can be proven by action and words. Evidence of my intent can be seen by examining the totality of circumstances

Capacity

I am affected my age, infirmity, medication and being drunk even if I am incapacitated in my mind. If I have a lucid time I can contract. If I get married when I am drunk I can void the contract or ratify it. If I am under age I can contract for necessities: food, shelter, clothing and insurance.

Legal Subject Matter

The reasons the contracts must be legal, some states gambling, prostitution and drinking are not legal. The purpose of the contract must be lawful.

Acceptance

I follow my friend the offer 99.5% of the time. I can be expressed or implied and oral or written. I can be by merely acting in accord with the offer (doing what is asked) silence cannot be acceptance. My friend offer and I are judged by the mirror image rule.

Consideration

I require a fair value to be part of a bargain. I can be a service for a service. I can be a monetary payment for a service. I can be a barter.

Offer

without me there would never, ever be a contract. I am a V.I.P. I can be oral or written. I can be expressed or implied. I can be interpreted by my actions or words.

Statute of limitation

Period of time in which you must go to the clerk's office in the state and county in which the incident occurred and file a law suit. You must file and serve

Trade name

is merely the "name" of your business, whether incorporated or not. They are protected by the common law, not under the Lanham Act. Generally, the first to use a "name" in a geographic area is the owner of it.

Selective enforcement of law

where what is good for the goose is not good for the gander. The inequality of administering justice

WARRANTIES are there for you to read.

Express, implied and fitness for a Particular Purpose and of merchantability

Intellectual property

created by mental effort, not by physical labor also called intangible property because it may be invisible, impossible to hold and harder to value than physical property

Four major forms of intellectual property

trademarks; copyrights; patents; trade secrets

Economic espionage

whoever, with the intent to convert a trade secret that is related to or included in a product that is produced for or placed in interstate or foreign commerce to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will injure any owner of that trade secret

Legal detriment

an act, or a promise to act, or the refraining from an action, such as giving up a legal act (settle car accident out of court you cannot later sue the person)

Contractual capacity

legal ability to create a contract

Exculpatory agreement (clause)

releases one party from the consequences brought about by wrongful acts or negligence

Expressed warranty

a seller's promise or guarantee as to the quality, safety, performance, or durability of goods being sold

Implied warranty

quality and safety standard that is imposed by Article 2

Merchantable

the good must be of a quality comparable to that generally acceptable in that line or trade

Quantum Meriut

a concept in equity that a party should not be unjustly enriched by not paying for goods or services received that do not clearly fall under a contract

Orders to pay for negotiation

checks; notes; drafts; certificates of deposit

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