Bus 215 Midterm #2

89 terms by hayes117

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Contracts

Viewed in the objective standard. Symbolized by K

Offeror

The one who makes/poses the offer

Offeree

to whom the offer has been made

Promisor

one who creates/makes the promise

Promisee

To whom the promise has been made

Contracts (Rules Statement)

In order to create a valid contract one must have; offer, acceptance, and consideration.

Offer

The outward manifestation of present, contractural intent to be bound by certain and definite terms, communicated to the offeree.

Certain and Definite terms

QTIPS

QTIPS

Quantity terms, Time for performance, Interested parties, Price terms, Subject matter

Ways to Destroy an Offer

Rejection (Offeree), Revocation (Offeror), Death of the Parties, Lapse of time, Destruction of subject matter, Insanity

Rejection

Say pure no or varying of the terms that could give rise to a counter offer

Revocation

Taking it back, revoking offer. Can be done until acceptance

Death of Parties

offer dies with them

Lapse of time

deadline passes, it's over

Destruction of subject matter

Can sue for breach of contract if you don't give back money after knowledge of destruction. Counts as well with act of god or act of another

Insanity

One of the parties is insane with an actual mental disability or intoxication analysis at the time the offer was made

Ways to Keep an Offer Open (Counter Offer)

Option contacts and Firm Offer Rule

Option contract

A little mini contract designed to keep an offer open for a state period of time or a reason amount of time supported by good and valuable consideration (Consideration needed). (Only applicable under common law)

Acceptance

The unqualified, unequivocal, assent (agreement) to the terms of the offer

Mirror Image rule

Must be the same, "Unqualified, unequivocal" saying yes and giving exact amount asked for

Silence

not deemed an acceptance

Mailbox rule

When you have a vacilating offeree (can't make up their mind). Dispatch and rejection rules

Dispatch

Valid acceptance. When he hands over letter to post master or takes to mailbox receptor is deemed dispatch. Considered time sent with an e-mail or text

Rejection

Valid when received (On receipt)

Grumbling Acceptance

Given by offeree. "Hoped, wished, desired" buzz words needed

Mutual Assent

Offer and acceptance are mutal assent (agreement) between the parties. Plus consideration is another way of having a valid contract

Consideration

The bargained for exchange of a legal detriment (Neither parties owes the other)

Consideration analysis issues

Past consideration, pre-existing duty rule, promissory estoppel/detrimental reliance

Past consideration

Past consideration is no consideration. A gift, "because you did something"

Pre- existing duty rule

Where one is already under a prior obligation to act
ex: Firefighter, policeman

Promissory estoppel/detrimental reliance

Where the promisor makes a promise to the promisee and the promise has been detrimentally relied upon, it would create an undo burden not to fulfill such a promise.

Types of contractions

Implied/expressed, Valid/void/voidable, unilateral/bilateral, Quasi-contractions, executed/executory, auctions

Implied/Expressed

Usually comes from prior contractions
ex: Leasee, Leasor scenario: Expressed the first payment, then the rest are implied. done in the oral or written mode

Valid/Void/Voidable

valid: offer, acceptance, and consideration
void: by nature void contracts are illegal
Voidable: Contracts that fall within the statutes of fraud

Unilateral/Bilateral

Unilateral: Are very rare and not as likely. Contracts where there is a promise in exchange for an act. (Brooklyn bridge hypothetical)
Bilateral: A promise in exchange for a promise.

Quasi- Contractions

(No underlying contracts) Where a court will create a contract to prevent an unjust enrichment (Neighbor and pool hypothetical) Pay market value always

Executed/ Executory

Executed: Fully performed on both sides
Executory: Only been performed on one side

Auctions

With reserve and without reserve
With reserve: Can take back the item before any acceptance
Without reserve: Cannot take back an item, the bid is what you get

Defenses of Contracts

Capacity, Mistake of Law, Mistake of Fact, Fraud, Undue Influence, Duress, Unconscionable Contracts

Capacity

Minors/Intoxication/Menta State
Minors: A minor cannot validy contract. Exception- If minor is emancipated. Exception to Exception: The contract is at the option of the minor
Intoxication: Contract is voidable when under the influence
Mental State: Mentally instable

Mistake of Law

Under the mistaken guidance or reliance by someone who should know the law (Police, lawyer, judge)

Mistake of Fact

Unilateral and Bilateral mutual mistake
Unilateral: If the non-mistaken party new or should have known of the mistake, then unilateral mistake is a valid defense
Bilateral/Mutual: Where both parties are mutually mistaken as to the terms of the contract (No meeting of the minds)
(Raffles v. Witchelhouse)

Fraud

Misrepresentation of fact known to be false by the wrong-doer for porposes of inducing action or in-action and in face induces the action or in-action desires

Undue Influence

A party's status can influence another to believe or do an action that they might not usually do

Duress

An absolute legal defense, being force to do something they would not otherwise do

Unconscionable contracts

A contract that benefits one party substantially more than the other

Statute of Frauds

Certain contracts need to be in writing in order to be deemed valid. Marriage, Realty, Debt of another, Cannot be completed in One Year, Goods of $500+

Marriage

Person can be held accountable for expenses if one party backs out
ex: Venue, dress, etc if groom bails

Realty

The sale and purchase of realty has to be in writing

Debt of Another

A party that answers for the debt of another

Contracts that cannot be completed within one year

very terms exceed one year (3 year representation by a company)

Goods of $500+

Goods or chattels worth more must be in writing

Rebuttals of Plaintiff

Sufficient memorandum part performance, main purpose doctrine, full performance, receipt of goods

Sufficient Memorandum

Only one that is applicable to all. Could be a check, receipt, bank statement, contract document as evidence

Part Performance

Has to be for real estate. Either through improvements on the land where the plaintiff goes on the land and changes something before title transfers. Or money or transfer which is partially paid for before transfer of title

Main purpose doctrine

Only to debt of another, the party that is answering for the dead of another must benefit them/him/her

Full performance

Only applies to contracts within a year. Doesn't matter the time period if the breach comes later on (after the payment has been fully performed)

Receipt of goods

Only for goods $500+. Either full or partial receipt of money or goods themselves

Performance excused/discharged?

Impossibility, Impracticability, Waiver, Modification, Substituted performance, Novation, Recession, Complete performance, Substantial performance

Impossibility

An act of god, the initial contract was created as a lawful issue but is now unlawful

Impracticability

Commercially impracticable to perform obligations owed

Waiver

Occurs when one relinquishes a known right

Equal Dignities Rule

Whatever you had to do to establish the validity of the valid contract you must also do to validate the waiver

Modification

A change in terms post-contracting

Substituted Perfornace

Two original contract parties, and one of the parties substituted the performance of the contract (equal value)

Novation

Consent of all three parties in a substitution performance.

Recession

Where both parties agree to disaffirm or cancel the contract

Complete performance

You are entitiled for what you did if you completed it

Substantial performance

Jacobs/Young case. You are entitled to whatever you were fund wise if it is equal or greater value to whatever was originally in the contract

3rd Party Contracts

3rd party beneficiary contracts, assignments, and delegation

3rd Party Beneficiary contracts

Intended and Incidental.
Intended: The 3rd party is a known beneficiary (vesting rights: whatever the intended party wanted or could argue) the 3rd party beneficiary can use the same arguments the original could
Incidental: No vesting rights. Just get the benefit of a contract.

Assignments

One may freely assign any known right that they are entitled to

Delegation

Only delegable duties are valid (cannot be personal in nature)

Conditions

Gives rise to whose time for performance is due. Presumption: Work before pay
Precendent: Someone needs to act before the other
Concurrent: Action at the same time
Subsequent: Action after the other

Risk of Loss

Who owns title, and when does title transfer (Shipping terms) FAS/FAV, CIF, FOB, Sale on approval

FAS/FAV

Free along side/ free along vessel. Common carrier or place, is as though title has transferred

CIF

Cost of Insurance and Freight. The damage done to the item is paid for by the one who bought the insurance and Freight

FOB

Free on board. Once it is on board a vessel it is as though title has transferred, if it was destroyed them the new person is responsible fo rthe damages.

Sale on Approval

The buyer must approve the item before the sale. Silence or a failure to act can also count as approval

UCC

Uniform Commercial Code Article II. The sale of goods. Any tangible personal property capable of being moved at the identification of sale.

Good faith

Honestly in fact. No bad faith

Merchants

A person or entitiy that deals in goods of a kind and has specialized skill and knowledge of those goods.

Offer for UCC

For an offer to be valid, all that there needs to be is the quantity terms. The rest can be fillled in by the court. "gap fillers"

Defensesof UCC

Same as other defenses along with Statute of Frauds. The big one being the G for Goods of $500+

Firm offer rule

Must have a merchant. A merchant desires/constructs/offers another to keep an offer open for a stated period of time not to exceed three months (90 days) and no consideration is needed.

Warranties

Two types: expressed and implied
Expressed: Given verbally or in writing

Implied Warranties

Mercantability, FFPP

Fitness for a particular purpose (FFPP)

Merchant specific. Where one relies on the specialized skill of knowledge of another (merchant) and that good falls to act as desired.

Mercantability

The good is what the good is expected to be

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