For a mark to be protected under federal law
It must be registered with the Patent and Trademark Office
For how long does a copyright last
The author's life plus 70 years
One way of a trade sercret is to obtain a paten on it
A person who falls asleep while driving would not be liable for any resulting injury since it would be an unavoidable accident
The duty of a possessor of land to persons who come on the land usually depends on whether those persons are
Invitees, trespassers, or licensees
Disparagement differs from dafamation in that defamation pertains to personal reputation, whereas disparagement pertains to business interests.
Two absolute defenses to the tort of defamation are
Truth and privilege
Invasion of privacy consists of
intrusion, public disclosure of private facts, and appropriation
Cal sprayed pesticide on his crops in a very careful manner on a windless day. Nevertheless, some of the pesticide spray fell on his neighbor's side of the fence and contaminated the cornmeal for the chickens. The chickens died and the neighbor sues. What is the likely result?
Cal is liable because spraying pesticides is an abnormally dangerous activity.
Electronic surveillance for the purpose of acquiring trade secrets is permissible under the law of unfair competition.
Intellectual property consists of
Trade secrets, trade symbols, and patents
A duty to act is imposed on those whose innocent conduct has injured another and left him helpless and in danager of further harm.
Mark is out sailing in his boat one evening when he hears a young girl crying for help in the middle of the lake.
Mark must help the girl if he begins to resue her and increases her danager.
An artist would like to protect one of her original oil paintings from being sold as original prints. She may protect her painting by applying for a
Jonah, a businessman, has no connection with Harvard University, but he has a new line of computer software that he would like to market to university students and faculty under the name of "Havard Software".
It is unlikely that Jonah will be able to register the name "Harvard Software," because it falsely suggests a connection to an institution.
Sam goes to the movies one Friday evening. The movie is boring and Sam falls asleep. At 2 a.m., the security guard locks the building. Sam awakens the next morning when the cleaning crew opens the door. Sam can sue for false imprisonment.
The tort of __________ is a false communication, which injures a person's reputation and good name by disgracing him and diminishing the respect in which he is held.
Stan doesn't like having neighborhood teenagers walk across his yard at night. He rigs an animal trap on the path the teenagers usually use to cross his land. One night, Tim and his friends are walking across the yard when Tim gets caught in the trap. He is taken to the hospital for his injuries.In this case:
Stan is not free to inflict intentional injury on a trespasser.
A reasonable person, as used in the law of torts, is
A fictitious individual who is always careful, prudent, and never negligent.
Bartow signed a contract to coach baseball for Washington High for a period of three years. After two years he is offered and accepts an assistant coaching position at State University. Contract law will not allow Washington High to ask for:
Specific performance of his contract.
Unless one of the parties contractually assumes the risk, the __________ discharges a contract if supervening circumstances make fulfillment of the purpose which both parties had in mind impossible.
Frustration of purpose doctrine
Scott, a minor, sells his digital camera to Megan, who then sells it to Sherry. Under these circumstances:
If Sherry is a good faith purchaser for value and she buys the camera before Scott elects to rescind, no rescission is permitted.
In the Zelnick v. Adams case, the Supreme Court of Virginia found:
The case must be remanded for further proceedings, including the taking of evidence on the issue of the factual determination of necessity under all of the circumstances.
In which situations would a minor be unable to disaffirm a contract which he had made?
Where the minor wishes to perform part of a contract and disaffirm another part of the same contract.
On March 1, Tammy, a student, received a telephone call from Watterson, Inc. offering her a job for one year beginning on June 15, after completion of the school year. According to the personnel manager, she will have to move to California and be ready to start work at 8:00 a.m. on June 15. Should Tammy ask for a letter confirming the telephone conversation if she accepts the offer immediately?
Yes, because the job offer is for longer than one year from March 1.
In which of the following cases will an oral contract for the sale of goods of $750 be enforceable without a writing?
A party admits in an answer to a complaint in a lawsuit that the contract was made, Delivery and acceptance of the goods has been made, and The goods are to be specially manufactured for the buyer and the seller has made a substantial beginning of their manufacture.
Implied-in-fact conditions must fully and literally occur, and they are understood by the parties to be part of the agreement.
Miller made a contract to sell his condominium to Jefferson for $80,000. Two days later Miller changes his mind after discovering that he could have sold the property to another buyer for an additional $20,000. Jefferson sues and asks the court to have the property conveyed to him at the price of $80,000. Jefferson is seeking:
UCC Revised Article 8, which all states have adopted
provides that the statute of frauds does not apply to contracts for the sale of securities.
UCC Article 9 requires
That contracts creating certain types of security interests be in writing.
The Code greatly alters the common law doctrine of material breach by adopting what is known as the:
Perfect tender rule.
Steve purchases a four-wheel drive truck from Belk Auto Sales. Steve is only 17 years of age. He wrecks the vehicle and attempts to disaffirm the contract and have Belk repay him all that he has paid. In the majority of jurisdictions, what would happen?
Steve may simply return the vehicle and get his money.
_________ are the most frequently granted remedy for breach of contract.
The contracts of a person who is adjudicated insane and placed in care of a guardian are
_________ contracts immediately discharge the original contracts.
Nancy, who lives in Birdville, wants to open a McHenry Roast Chicken franchise. Mark, a representative of McHenry, told Nancy, "If you will buy a lot and build a building in River City, we will give you a franchise." Nancy bought the lot and built the building as instructed only to discover that McHenry had awarded the franchise to a large corporation. McHenry claims no liability to Nancy since there was no consideration. Which statement best describes the situation?
McHenry is liable to Nancy based on the concept of promissory estoppel.
Adam wants to buy a six-passenger car. The salesman tells him that the two-seat sports car Adam sees on the car lot would be just perfect for six people. Adam test drives the car and then buys it. In this case:
Adam was not justified in relying upon the salesman's representation that the car would seat six people.
A __________ is an obligation imposed by law to avoid injustice.
bilateral contract, quasi contract, contract implied in law.
Nathan's father promises to give him a car for his twenty-first birthday. Nathan can legally enforce this promise because it created a moral obligation.
Sandy's private secretary promises not to disclose the contents of a letter she typed if Sandy will give her the next day off with pay. If the secretary takes the day off, Sandy does not have to pay her for the day.
An ad in a newspaper or a circular describing goods and stating prices would generally be considered:
an invitation to buyers to make an offer to buy goods.
The law does not provide a remedy for the breach of an unenforceable agreement.
In addition to the four basic requirements of a contract, which of the following must also occur in order to have a valid contract?
There must be an absence of invalidating conduct, such as duress.
To be effective, an offer must:
be sufficiently definite and certain, manifest an intent to enter into a contract, and be communicated to the offeree.
Samuel Tate enters into a contract with Bill Smith under the terms of which Smith is to pay Tate $7,000 and Tate is to build a garage, repair a boat, and build a doghouse. If the doghouse has not yet been built, which term describes the type of contract in existence?
Nell gives Al $50 in return for Al's promise to defame Sara. Nell hopes to ruin Sara's chances at a promotion. Nell finds out that Al did not hold up his end of the agreement. Which of the following statements is true?
Legally, Nell can neither get the money back nor force Al to do as he promised.
Steven makes a material misrepresentation of fact regarding his motorcycle to Thelma who agrees to buy the motorcycle based upon the misrepresentation. This contract is:
An intentional misrepresentation of a material fact made with knowledge of the falsity and intention to deceive and which a party justifiably relies upon to his detriment is known as:
fraud in the inducement
Al owns a farm that he believes is worth $150,000. Betty knows that there is oil under the farm and offers Al $160,000 for it. Al accepts and sells the farm to Betty. Al later realizes that the land was worth more than $160,000. Al can have the contract avoided based upon fraud.
When does acceptance of an offer to enter into a unilateral contract generally occur?
Upon full performance by the offeree.
Intentional infliction of harmful or offensive bodily contact.
Intentional infliction of apprehension of immediate bodily harm or offensive contact.
Intentional confining of a person against his or her will.
Infliction of Emotional Distress
Extreme and outrageous conduct intentionally or recklessly causing severe emotional distress.
False communication that injuries person's reputation.
Written or electronically transmitted defamation.
Unauthorized use of a person's indentity
Unreasonable and highly offensive interference with the seclusion of another.
Public Disclosure of Private Facts
Highly offensive publicity of private information.
Highly offensive and false publicity about another.
Misuse of Legal Procedure
Torts of malicious prosecution, wrongful civil proceeding, and abuse of process that protect an individual from unjustifiable litigation.
Land and anything attached to it.
Trespass to Real Property
Wrongfully entering on land of another
A nontrespassory interference with another's use and enjoyment of land.
Any property other than land.
Trespass to Personal Property
An intentional taking or use of another's personal property
Intentional exercise of control over another's personal property.
Interference with Contractual Relations
Intentionally causing one of the parties to a contract not to perform.
Publication of false statements about another's property or products.
A false statement, made with knowledge of its falsity, intended to induce another to act.
Definition of Negligence
Conduct that falls below the standard established by law for the protection of others against unreasonable risk of harm.
Reasonable Person Standard
Degree of care that a resonable person would exercise under all the circumstances.
Must conform to conduct of a reasonable person of the same age, intelligence, and experience under all the circumstances.
A disabled person's conduct must conform to that of a reasonable person under the same disability.
A mentally disabled person is held to the reasonable person standard of a reasonable person who is not mentally deficient.
Superior Skill or Knowledge
If person has skills or knowledge beyond those possessed by most others, these skills or knowledge are circumstances to be taken into account in determining whether the person has acted with reasonable care.
The reasonable person standard applies, but an unexpected emergency is considered part of the circumstances.
Violation of Statute
If the statue applies, the violation is negligence per se in most states.
Duty to Act
A person is under a duty to all others at all times to exerise reasonable care for the safety of the others' person and property; however, except in special circumstances, no one is required to aid another in peril.
Duty to Trespassers
Not to injure intentionally.
Duty of Licensees
To warn of known dangerous conditions licenses are unlikely to discover for themselves.
Duty of Invitees
To exercise reasonable care to protect invitees aganist dangerouse conditions possessor should know of but invitees are unlikely to discover.
Res Ispsa Loquitur
Permits the jury to infer both negligent conduct and causation.
The defendant's conduct is a factual cause of the harm when the harm would not ahve occured absent the conduct.
Scope of Liabilities (Proximate Cause)
Liability is limited to those harms that result from the risks that made the defendant's conduct tortious.
Excludes liability for harms that were sufficiently unforseeable at the time of the defendant's tortious conduct that they were not among the risks that made the defendant negligent.
An intervening act that relieves the defendant of liability.
Burden of Proof
Plaintiff must prove that defendant's negligent conduct caused harm to a legally protected interest.
Harm to Legally Protected Interest
Courts determine which interests are protected from negligent interference.
Failure of a plantiff to exercise reasonable care for his own protection, which in a few states prevents the plantiff from recovering anything.
Damages are divided between the parties in proportion to their degree of negligence; applies in almost all states.
Assumption of Risk
Plaintiff's express consent to encounter a known danager; some states still apply implied assumption of the risk.
Definition of Strict Liability
Liability for nonintentional and nonnegligent conduct.
Abnormally Dangerous Activity
Strict liability is imposed for any activity that (1) creates a forseeable and highly significant risk of harm and (2) is not one of common usage.
Keeping of Animals
Strict liability is imposed for wild animals and usually for trespassing domestic animals.
Is not a defense to strict liability.
Somes states apply that this doctrine to some strict liability cases.
Assumption of Risk
Express assumption of risk is a defense to an action based upon strict liability; some states apply implied assumption of risk to strict liability cases.
Definition of trade secret
Commercially valuable, secret information.
Owner of a trade secret may obtain damages or injunctive relief when the secret is misappropriated (wrongly used) by an employee or a competitor.
Federal law imposed penalties for the theft of trade secrets.
Types of trade symbols
Trademarks, service marks, certification marks, collection marks.
Distinctive symbol, word, or design that is used to identify a provider's service.
Distinctive symbol, word, or design that is used with goods or services to certify specific characteristics.
Distinctive symbol used to indicate membership in an organization.
Registration of trade symbols
To be registered and thus protected by the Lanham Act, a mark must be distinctive and not immoral, deceptive, or scandalous.
Infrigement of trade symbols
Occurs when a person withour authorization uses a infringement:injunctive relief, profits, damages, destruction of infringing articles, costs, and, in exceptional cases, attorneys' fees.
Remedies for trade symbols
Damages and injunctions are available if infringement occurs.
Any name used to identify a business, vocation, or occupation
Protection for trade names
May not be registered under the Lanham Act, but infringement is prohibited.
Remidies for trade names
Damages and injunctions are available if infringement occurs.
Definition of Copyright
Exclusive right, usually for the author's life plus seventy years, to original works of authorship.
Registration is not required but provides additional remedies for infringement.
Rights of copyrights
copyright protection provides for the exclusive rights to (1) reproduce the copyrighted work, (2) prepare derivative works based on the work, (3) distribute copies of work, and (4) perform or display the work publicly.
The aurthur of the copyrighted work is usually the owner of the copyright, which may be transfereed in whole or in part.
Occurs when someone exerises the copyright owner's rights without authorization.
If infringement occurs after registration, the following remedies are avilable: (1) injunction, (2) impoundment and possible destruction of infringement articles, (3) actual damages plus profits or statutory damages, (4) costs, and (5) criminal penalties.
The exclusive right to an invention for twenty years from the date of application for utility and plant patents; fourteen years from grant for design patents.
To be patentable, the invention must be (1) noval, (2) useful, and (3) not obvious
Patents are issed upon application to and after examination by the U.S. Patent and Trademark office.
Occurs when anyone without permission makes, uses or sells a patented invention.
For infringement of a patent are (1) injunctive relief; (2) damages; (3) treble damages, when appropriate; (4) attorney's fees; and (5) costs.
Study of what is right and good in a business
Study of what is right and good in a business setting.
Individuals look to a central authority or set of rules to guide them in ethical decision making.
Asserts that actions must be judged by what individuals subjectively feel is right or wrong for themselves.
One must judge a person's actions by first putting oneself in the actor's situation.
Moral actions are those that produce the greatest net pleasure compared with net pain.
Assesses each seperate act according to weather it maximize pleasure over pain.
Supports rules that on balance produce the geratest for society.
Quantifies the benefits and costs of alternatives.
Holds that actions must be judged by their motives and means as well as their results.
Social Ethics Theories
Focus on a person's obligations to toher members in society and on the individual's rights and obligations within society.
Believe that society should provide all its members with equal amounts of goods and services regardless of their relative contributions
Stresses equality of opportunity rather than results.
Stress Market outcomes as the basis for distributing society's rewards.
a rational person possesses inherent power to assess the correctness of actions
Individuals should seek out and emulate good role models
Choosing an Ethical System
Kolberg's stages of moral development is a widely accepted model
Corporations as Moral Agents
Because a corporation is a statutorily created entity, it is not clear weather it should be held morally responsible.
Regulation of Business
Governmental regulation has been necessary because all the conditions for perfect competition havenot been satisifed and free competition cannot by itself achieve other societal objectives.
Vast amounts of wealth and power have become comcentrated in a small number of corporations, which in turn are controlled by a small group of corporate officers.
Arguments against Social Responsibility
Profitabiltiy, unfairness, accountability, expertise
Because corporations are artificaial entitiles established for profit-making acitivities, their only social obligation should be to return as much money as possible to shareholders.
Whenever corporations engage in social activities, such as supporting the arts or education, they divert funds rightfully belonging to shareholders and/or employees to unrelated third parties.
A corporation is subject to less public accountability than public bodies are.
Although a corporation may have a high level of expertise in selling its goods and services, there is absolutely no guarantee that any promotion of social activities will be carried on with the same degree of competence.
Agruments in Favor of Social Responsibility
The social contract, less goernment regulation, long run profits.
The Social Contract
Because society allows for the creation of corporations and gives them special rights, uncluding a grant of limited liability, corporations owe a responsibility to society.
Less Government Regulation
By taking a more proactive role in addressing society's problems, corporations create a climate of trust and respect that has the effect of reducing governement regulation.
Corporate involvement in social caused created goodwill, which simply makes good business sense.
"A rule of civil conduct prescribed by the supreme power in a state, commanding what is right, and prohibiting what is wrong"
Functions of Law
To maitain stability in the social, political, and economic system through dispute resolution, protection of property, and the preservation of the state, while simultaneously permitting ordered change.
Law and Morals
Are different but overlapping; law provides sanction while morals do not.
Law and Justice
Are seperate and distinct concepts; justice is the fair, equitable, and impartial treatment of competing interests with due regard for the common good.
Classification of Law
Substantive and Procedural, Public and Private, and Civil adn Criminal.
Law creating rights and duties
Rules for enforcing substantive law
Law dealing with relationship between government and individuals.
Law governing the relationships among individuals and legal entities.
Law dealing with rights and duties, the violation of which constitutes a wrong against an individual or other legal entity.
Law establishing duties that, if violated, constitute a wrong against the entire community.
Fundamental law of a government establishing its powers and limitations.
Sources of Law
Constitiutional law, judicial law, legislative law, and administrative law.
Body of law developed by the courts that serves as precedent for determination of later controversies.
Body of law based upon principles distint from common law and providing remedies not avaliable at law.
Two Types of Judical Law
Common law and Equity law
Two types of Legislative Law
Treaties and executive Orders
Status adopted by legislative bodies
Agreements between or among independent nations.
Laws issued by the president or by the governor of a state.
Is created by adminsitrative agencies in the form of rules, regulations, orders, and decisions to carry out the regulatory powers and duties of those agencies.
A binding agreement that the courts will enforce.
Contract - Common Law
Most contracts are primarily governed by state common law, including contracts involveing employment, services, insurance, real property (land and anything attached to it), patents, and copyrights
Contract - UCC
Article 2 of the UCC governs the sales of goods
UCC - Sale
The transfer of title from seller to buyer.
UCC - Goods
Tangible personal property (personal property is all property other than an interest in land).
The parties to a contract must maniferst by words or conduct that they have agreed to enter into a contract.
Each party to a contract must intentionally exchange a legal beneft or incur a legal detriment as an inducement to the other party to make a return exchange.
Legality of Object
The purpose of a contract must not be criminal, tortious, or otherwise against public policy
The parties to a contract must have contractual capacity
Implied in Fact Contract
Contract where the agreement of the parties is inferred from their conduct.
An agreement that is stated in words either orally or in writing
Contract in which both parties exchange promises.
Contract in which only one party makes a promise.
One that meets all the requirements of a binding contract.
No contract at all; without legal effect
Contract capable of being made void.
Contract for the breach of which the law provides no remedy.
Contract that has been fully performed by all of the parties.
Contract that has yet to be fully performed.
A doctrine enforcing some noncontractual promises.
Promissory Estoppel Requirements
A Promise made under circumstances that should lead the promisor reasonably to expect that the promise would induce the promisee to take definite and substantial action, and the promisee does take such action.
Promissory Estoppel Remedy
A court will enfoce the promise to the extent necessary to avoid injustice.
An obligation not based upon contract that is imposed by law to avoid injustice; also called an implied in law contract.
Quasi Contract Requirements
A court will impose a quasi contract when (1) the plaintiff confers a benefit upon the defendant (2) the defendant knows or appreciates the benefit, and (3) the defendant's retention of the benefit is inequitable.
The plaintiff recovers the reasonable value of the benefit she conferred upon the defendant.
Essentials of an Offer
Indications of willingness to enter into a contract.(1) Communication - offeree must have knowledge of the offer and the offer must be made by the offeror or her authorized agent to the offeree. (2) Intent - determined by an objective standard of what a resaonable offere would have believed. (3) Definiteness - offer's terms must be clear enough to provide a court with a basis for giving an appropriate remedy.
Offers - Lapse of Time
Offer remains open for the time period specified or, if no time is stated, for a reasonable period of time.
Offers - Revocaton
Generally, an offer may be terminated at any time before it is accepted, subject to the following exceptions: (1) Option Contract (2) Firm Offer (3) Statutory Irrevocability (4) Irrevocable Offer of Unilateral Contracts (5) Promissory Estoppel (all are broken down separately into definitions. paula)
Contract that binds offeror to keep an offer open for a specified time.
A merchant's irrevocable offer to sell or buy goods in a signed writing that ensures that the offer will not be terminated for up to three months.
Offer made irrevocable by statute.
Irrevocable Offer of Unilateral Contracts
A unilateral offer may not be revoked for a reasonable time after perforande is begun.
Noncontractual promise that binds the promisor because she should reasonably expect that the promise will induce the promisee (offeree) to take action in reliance on it.
Offer - Rejection
Refusal to accept an offer terminates the power of acceptance.
Offer - Counteroffer
Counterproposal to an offer that genearlly terminates the original offer.
Offer - Death or Incompetency
of either the offeror or the offeree terminates the offer.
Offer - Destructions of Subject Matter
Terminates the offer.
Offer - Subsequent Illegality
Subsequent Illegality of the purpose or subject matter of the offer terminates the offer.
Positive and unequivocal expression of a willingsness to enter into a contract on the terms of the offer.
Offer Mirror Image Rule
Except as modified by the code, an acceptance cannot deviate from the terms of the offer.
Communication of Acceptance
General Rule - acceptance effective upon dispatch unless the offer specifically provides otherwise of the offeree uses an unauthorized means of communication.
Offer - Silence as Acceptance
Generally, does not indicate acceptance of the offer.
Offer - Effective Moment
Generally upon dispatch.
Offer - Stipulated Provisions in the Offer
The communication of acceptance must conform to the specifications in the offer.
Offer - Authorized Means
The Restatement and the code provided that, unless the offer provides otherwise, acceptance is authorized to be in any reasonable manner.
Offer - Unauthorized Means
Acceptance effective when received, provided that it is received within the time within which the authorized means would have arrived.
Offer - Acceptance Following a Prior Rejection
First communication received by the offeror is effective.
Offer - Defective Acceptance
Does not create a contract but serves as a new offer.
Wrongful act or threat that overcomes the free will of a party.
Duress - Physical Compulsion
Coercion involving physical force renders the agreement VOID.
Duress - Improper Threats
Improper threats or acts, including economic and social coercion, render the contract VOIDABLE.
Taking unfair advantage of a person by reason of a dominant position based on a confidential relationship.
Undue Influence - Effect
Renders contract VOIDABLE.
Fraud in the Execution
A misrepresentation that deceives the other party as to the nature of a document evidencing the contract; renders agreement VOID
Fraud in the Inducement
Renders the agreement VOIDABLE if the following elements are present: (1) False Representation (2) Fact (3) Materiality (4) Knowledge of Falsity and Intention to Deceive (5) Justifiable Reliance (each of these have separate definitions.) paula
Fraud in the Inducement - False Representation
Positive statement or conduct that misleads. VOIDABLE
Fraud in the Inducement - Fact
An event that occurred or thing that exists. VOIDABLE
Fraud in the Inducement - Materiality
Fraudulent information having sustantial importance. VOIDABLE
Fraud in the Inducement - Knowledge of Falsity and Intention to Deceive (SCIENTER)
Includes (1) actual knowledge (2) lack of belief in statement's truthfuless (3) reckless indifference to its truthfulness.
Fraud in the Inducement - Justifiable Reliance
Defrauded party is reasonably influenced by the misrepresentation.
Nonfrudulent Misrepresentation - Negligent Misrepresentation
Misrepresentation made without due care in ascertaining its truthfuless; renders agreement VOIDABLE
Nonfrudulent Misrepresentation - Innocent Misrepresentation
Misrepresentation made without knowledge of its falsity but with due care; renders contract VOIDABLE
An understanding that is not in accord with existing fact.
Both parties have a common but erroneous belief forming the basis of the contract; renders the contract VOIDABLE by either party.
Courts are unlikely to grant relief unless the error is known or should be known by the nonmistaken party.
Assumption of Risk or Mistake
A party may assume the risk of a mistake.
Effect of Fault upon Mistake
Not a bar to AVOIDANCE unless the fault amounts to a failure to act in good faith.
The inducement to enter into a contract.
Consideration - Elements
Legal sufficiency and bargained for exchange.
Legal Sufficiency of Consderation
Consists of either a benefit to the promisor or a detriment to the promisee.
Obtaining something to which one had no prior legal right.
Doing an act one is not legally obligated to do or not doing an act that one has a legal right to do.
Adequacy of Consideration
Not required where the parties have freely agreed to the exchange.
Promise that imposes no obligtation on the promisor; the following promises are not illusory. (1) Output Contract (2) Requirements Contract (3) Exclusive Dealing Contract (4) Conditional Contract (These have separate definition pages.) pb
Ilusory Promise - Output Contract
Agreement to sell all of one's production to a single buyer.
Illusory Promise - Requirements contract
Agreement to buy all of one's needs from a single producer.
Illusory Promise - Exclusive Dealing Contract
Grant to a franchisee or licensee by a manufacturer of the sole right to sell goods in the defined market.
Illusory Promise - Conditional Contract
A contract in which the obligations are contingent upon the occurrence of a stated event.
Preexisting Public Obligations
Public duties such as those imposed by tort or criminal law are neither a legal detriment nor a legal benefit.
Preexisting contractual Obligation
Performance of a preexisting contractual duty is not consideration. (1) Modification of a preexisting contract (2) Substituted contracts (3) Settlement of an Undisputed Debt (4) Settlement of a disputed Debt. (These have separate definitions. pb
Modification of a Preexisting contract
Under the common law a modificaton of a preexisting contract must be supported by mutual consideration; under the code a contract can be modified without new consideration.
The parties agree to rescind their original contract and to enter into a new one; rescission and new contract are supported by consideration.
Settlement of an Undisputed Debt
Payment of a lesser sum of money to discharge an undisputed debt (ones whose existence and amount are not contested) does NOT consititue legally sufficient consideration.
Bargained For Exchange
A mutually agreed upon exchange.
Bargained For Exchange - Past Consideration
An act done before the contract is made is NOT consideration.
Contracts Without Consideration
Promises tro Perform Prior Unenforceable Obligations
Promise to Pay Debt Barred by the Statute of Limitations
New Promise by the debtor to pay the debt renews the running of the statute of limitations for a second statutory period.
Promise to Pay Debt Discharged in Bankruptcy
May be enforceable without consideration.
New promise to perform a voidable obligation that has not been previously avoided is enforceable.
Promise made to satisfy a preexisting moral obligation is generally unenforceable for lack of consideration.
Doctrine that prohibits a party from denying his promise when the promisee takes action or forbearance to his detriment reasonably based upon the promise.
Contracts under Seal
Where still recognized, the seal acts as a substitute for consideration.
Promises Made Enforceable by Statute
Some gratuitous promises have been made enforceable by statute; the Code makes enforceable (1) contract modifications (2) renunciations and (3) firm offers
Violations of Statutes
The courts will not enforce agreements declared illegal by statute.
Require formal authorizaton to engage in certain trades, professons, or businesses.
Licensing Statute that is intended to protect the public against unqualified persons; an unlicensed person may not recover for servicdes he has performed.
Licensing Statute that seeks to raise money; an unlicensed person may recover for services he has performed.
Prohibit wagers, which are agreements that one party will win and the other lose depending on the outcome of an event in which their only interest is the gain or loss.
Establish a maximum rate of interest.
Common Law Restraint of Trade
Unreasonable restraints of trade are not enforceable.
Sale of a Business
The promise by a seller of a business not to compete in that particular business in a reasonable geographic area for a reasonable period of time is enforceable.
An employment contract prohibiting an employee from competing with his employer for a reasonable period following termination is enforceable provided the restriction is necessary to protect legitimate interst of the employer.
The courts genearlly disapprove of contractual provisions excusing a party from liability for his own tortious conduct.
Unfair or unduly harsh agreements are not enforceable
Unfair or irregular bargaining.
Oppressive or grossly unfair contractual terms.
An agreement that requires a person to commit a tort is unenforceable.
Corrupting Public Officials
Agreements that corrupt public officials are not enforceable.
Neither party may recover (unenforceable) under an illegal agreement where both parties are in PARI DELICTO (in equal fault)
Permits one Party to Recover
(1) Party withdrawing before performance,(2) Party protected by Statute, (3) Party not equally at fault, (4)Excusable Ignorance, (5) Partial Illegality. (no further definitions on these) pb
Contracts within the Statute of Frauds
(1) Electronic Records (2) Suretyship Provision - promises to pay debt of another (promise cannot be made to debtor) (3) Executor-Admin. Provision (4) Marriage Provision (does not include mutual promises to marry (5)Land Contract Provison (6) One-year Provision (contracts that cannot be performed within a year (7) Sales of Goods of over $500 (8) Admission in court proceedings (9) Specially Manufactured Goods (10) Delivery or Payment and Acceptance validates thje contract only for the goods that have been accepted or for which payment has been accepted. (No further definitions) pb
Modifications or Rescission of Contracts witin the Statute of Frauds
Oral contracts modifying existing contracts are unenforceable if the resulting contract is within the Statute of Frauds.
General Contract Provisions - the writings or records must
(1) Specify the parties to the contract (23) Specify the subject matter and essential terms (3) Be signed by the party to be charged or by her agent.
Sale of Goods
Provides a general method of compliance for all parties and an additional one for merchants. (written confirmation)
Sale of Goods - Writings or Records must
(1) Be sufficient to indicate that the contract has been made between the parties (2) Be signed by the party against whom enforcement is sought or by her authorized agent, (3) Specify the quantitiy of goods to be sold
Sale of Goods - Written confirmation - Merchants
Between merchants, a written confirmation that is sufficient against the sender is also sufficient against the recipient unless the recipient gives written notice of his objection within ten days.
Effect of Noncompliance
(1) Full Performance Statute does not apply to executed contracts (2) Restitution is available in quasi-contract for benefits conferred in reliance on the oral contract (3) Promissory Estoppel oral contracts will be enforced where the party seeking enforcement has reasonably and justifiably relied on the promise and the court can avoid injustice only by enforcement.
PAROL EVIDENCE RULE
The Rule when parties express a contract in a writing that they intended to be the final expression of their rights and duties, evidence of their prior oral or written negotiations or agreements of their contemporaneous oral agreements that vary or change the written contract as NOT ADMISSIBLE.
Parol Evidence Rule - Exceptions
(1) A contract that is not an integrated document. (2) Correction of a typographical error. (3) Showing that a contract was void or voidable (4) Showing whether a condition has in fact occurred (5) Showing a subsequent mutual rescission or modification of the contract.
Parol Evidence Rule - Supplemental Evidence May Be Admitted
(1) Course of Dealing - previous conduct between the parties (2) Usage of Trade - practice engaged in by the trade or industry (3) Course of Performance - conduct between the parties concerning performance of the particular contract and (4) Supplemental consistent evidence
Contract - Rules of Interpretation
*All the circumstances are considered and the principal purpose of the parties is given great weight.
*A writing is interpreted as a whole.
*Commonly accepted meanings are used unless the parties manifest a different intention.
*Wherever possible, the intentions of the parties are interpreted as consistent with each other and with course of performance, course of dealing or usage of trade
*Technical terms are given their technical meaning.
*Speific terms are given greater weight than general language.
*Separately negotiated terms are given greater weight than standardized terms or those not separately negotiated.
*The order for interpretations is 1-express terms, 2-course of performance, 3-course of dealing and 4-usage of trade.
*Where a term has several possible meanings, the term will be interpreted against the party who supplied the contract or term.
*Written provisions are given preference over typed or printed provisions and typed provisions are given preference over printed provisions.
*If an amount is set forth in both words and figures and they differ, words control the figures.
District courts, Courts of Appeals, The Supreme Court, Special Courts.
trail courts of general jurisduction that can hear adn decide most legal controversies in teh federal system.
Courts of Appeals
Hear appeals from the district courts and and review orders of certain administrative agencies.
The Supreme Court
the nation's highest court, whose principals function is to review decisions of the federal courts of appeals and the highest state courts.
Have jursidication over cases in a patricular area of federal law and include the U.S. Court of Federal Claims, the U.S. Tax Court, the U.S. Bankrutcy Courts, and teh U.S. Courts of Appeals for the federal circuit.
Inferior Trail Courts, Trail Courts, Special Trail Courts, Appellate Courts.
hear minial criminal cases such as traffic offenses and civial cases involving small amounts of money and conduct preliminary hearings in more serious criminal cases.
Have general jurisdiction over civil and criminal cases
Special Trail Courts
Trail courts, such as probate courts and family courts, which have jurisdiction over a particular area of state law.
Include one or two levels, the highest court's decisions are final except in those cases reviewed by the U.S. Supreme Court.
Subject Matter Jurisdiction
authority of a court to decide a particular kind of case
Exclusive and Concurrent
Federal courts have sole jurisdiction over federal crimes, bankruptcy, antitrust, patent, trademark, copyright, and other special cases.
authority of more than one court to hear the same case; state and federal courts have concurrent jurisdiction over (1) federal question cases that do not involve exclusive federal jurisdiction and (2) diversity of citizenship cases involving more than $75,000.
Exclusive State Jurisdiction
State courts have exclusive jurisdiction over all mattes to which the federal judicial power does not reach.
Jurisdiction over the parties
the power of a court to bind the parties to a suit.
In Personam Jurisdiction
Jurisdiction based on claims against a person, in contrast to jurisdiction over property.
In rem Jurisdiction
Jurisdiction based on claims against property.
Jurisdiction over a defendant's property to obtainpayment of a claim not related to the property.
Geographical area in which a lawsuit should be brought.
Civil dispute resolution pleadings
Series of statements that give notice and establish the issues of fact and law presented and disputed.
Civil dispute resolution Complaint
intial pleading by the plantiff
Civil dispute resolution Summons
notice given to inform a person of a lawsuit against her.
Civil dispute resolution Answer
defendants pleading in response to the plaintiff's complaint.
Civil dispute resolution Reply
Plaintiffs pleading in response to the defendants answer
Civil dispute resolution Pretrail Procedure
Process requiring the parties to disclose what evidence is available to prove the disputed facts; disigned to encourge settlement of cases or to make the trail more efficient.
Judgement on Pleadings
a final ruling in favor of one party by the judge based on the pleadings.
Right of each party to obtain evidence from the other party.
A conference between the judge and the attorneys to simplify the issues in dispute and to attempt to settle the dispute without trail.
Final ruling by the judge in favor of one party based on the evidence disclosed by discovery.
Determines the facts and the outcome of the case.
Each party has an unlimited number of challenges for cause and a limited number of peremptory challenges.
Conduct of trail
Consists of opening statements by attorneys, direct and cross-examination of witness, and closing arguments.
Final rulings by the judge in favor of one party based on the evidence introducced at trail.
Judge gives the jury the particular rules of the law that apply to the case.
The jurys decision based on those facts the jury determines the evidence proves.
Motions Challenging Verdict
Include motions for a new trail and a motion for judgement notwithstanding the verdict.
Determines whether the trail court committed prejudical error.
Planitiff with an unpaid judgement may resort to a writ of execution to have the sheriff seize property of the defendants and to garnishment to collect money owed to the defendant by a third party.
Nonjudical proceeding in which a netural third party selected by the disputed renders a binding decision (award).
Nonbinding process in which a third party acts as an intermediary between the disputing parties.
Nonbinding process in which a third party acts as an intermediary between the disputing parties and propses solutions for them to consider.
Nonbinding process in which attorneys for the disputing parties present evidence to managers of the disputing parties and a neutral third party, after which the manafer attempt to negotiate a settlement in consultation with the third party.
Summary Jury trail
Mock trail followed by negotiations.
Consensual bargaining process in which the parties attempt to reach an agreement resolving their dispute without the involvement of third parties.
Assignment of rights
voluntary transfer to a third party of the rights arising from a contract so that the assignors right to performance is extinguished.
Party making an assignment
party to whom the contract rights are assigned.
party owing a duty to the assignor under the orginial contract.
party whom a duty of performance is owed under a contract
Requirments of an Assignment
include intent but not consideration
Revocability of Assignment
when the assignee gives consideration, the assignor may not revoke the addignment without the assignees consent.
transfer of a portion of contractual rights to one or more assignees
most contract rights are assignable except:
Assignments that materially increse the duty, risk, or burden upon the olbligor.
Assignment of personal rights
Assignment of expressly forbidden by the contract
Assignment prohibited by law
Rights of Assignee
the assignee stand in the shoes of the assignor.
Defense of Obligor
may be asserted against the assignee
is not required but is advisable.
obligation imposed by law upon the assignor of a contract right.
Explicitly made contractual promise regarding contract rights transferred.
Successive Assignment of the same right
The majority rule is that the first assignee in point of time prevails over later assignees; majority rule is that the first assignee to notify the obligor prevails.
transfer to a third party of a contractual obligation
party delegating his duty to a third party
third party to whom the delegators duty is delegated.
party to whom a duty of performance is owed by the delegator and delegatee.
Most contract duties may be delgated execpt:
Duties that are personal
Duties that are expressly nondelegable
Duties whose delegation is prohibited by statue or public policy.
Delegator is still bound to perform original obligation.
a substitited contract to which the promisee is a party, which substitutes a new promisor for an exisiting promisor, who is consequently no longer liable on the oringinal contract and is not liable as a delegator.
Third Party Beneficiary Contracts
is one in which one party promises to render a performance to a third person (beneficiary)
third parties intended by the two contacting parties to receive a benefit from their contract
third party intended to receive a benefit from the contract as a gift
a third person intented to receive a benefit from the contract to satisfy a legal duty owed to him.
Rights of Intended Beneficiary
an intended donee beneficary may enforce the contract against the promisor; an intended creditor beneficiary may enforce the contract against either or both the promiser and the promisee.
If the beneficiary rights vest, the promisor and promisee may not therafter vary or discharge these vested rights.
Defenses against beneficiary
in an action by the intended beneficiary to enforce the promise, the promisor may assert any defense that would be available to her if that action had been brought by the promisee
third party whom the two parties to the contract have no intention of benefiting by their contract and who aquires no rights under the contract.
An event whoe happening or nonhappening affets a duty of perdormance.
contingency explicity set fourth in language
exoress condition making performance contingent on one party's approval of the others performance.
Approval based on a partys honestly help opinion
Approval based on whether a reasonable person would be satisfied.
Implied in fact condition
Contingency undestood by the paties to be part of the agreement, though no expressed.
Implied in law conditon
Contingency not contained in the language of the contract but imposed by law; also called constructive condition.
conditions that are to takw place at the same time.
an event that terminates a duty of performance
termination of a contractual duty
Fulfillment of a contractual obligation resulting in a discharge.
Discharge by breach
a wongeful failure to perform the terms of a contract that fives rise to a right to damages by the injured party.
Non performance that significantly impairs the injured party rights under the contract and discharges the injured party from any furthur duty under the contract.
Prevention of performance
one party substantial interference with or prevention performance by the other consititues a mterial breachand discharges theo ther party to the contract.
Perfect tender rule
Standard under the UCC that a sellers performance under a sale contract must strictly comply with contractual duties and that any deviation discharges the injured party.
performance that is incomplete but that does not defeat the purpose of the contract; does not discharge the injured party but entitles him to damges.
An inability ot refusal to perform, before performance is due, that is treated as a breach, allowing the nonrepudiating party tp bring suit immediately.
Material Alteration of written Contract
A material and fraudulent alteration of a written contract by a oarty to the contract discharges the entire contract.
An agreement between the parties to terminate their respective duties under the contract.
A new contract accepted by both partied in satifaction of the parties duties under the original contract.
Accord and Satisfaction
Substituted duty under a contract (accord) and the discharge of the prior contractual obligation by performance of the new duty (satifaction)
Asubstituted contract involving a new third party promisor or promisee.
Perforamance of contract cannot be done
the promisor but not all promisors cannnot perform; does not discharge the promisor
No promisor is able to perform; gernalyy discharged the promisor
if performance becaomes illegal or impratical as a result of a change in the law, the duty of performance is discharged.
Frustration of Purpose
Principal purpose of a contract cannot be fulfilled because of a subsequent event.
Where performance can be accomplished only under unforeseen and unjust hardship, the contract is discharged under the code and the restatment performance, breach, and discharge.
discharge avilable to a debotor who obtains an order of discharge by the bankruptcy court
Statue of Limitations
After the statue of limitations run, the debt us not discharged, but the creditor cannot maintain an action against the debtor.
Election of Remedies
if remedies are not inconsistent, a party injured by a breach of contract may seek more than one remedy.
Loss of Power of Avoidance
A aprty with the power to avoid a contract may lose that power by:'affirming the contract
Delaying unreasonably in exercising the power of avoidance
Being subordinated to the interviewing rights of third parties
Contract damages palcing the third party in a position as good as the one he would have held had the other party performed; equals loss of vaule minus loss avoided by injured party plus incidental damages plus consequential damages.
Loss of Value
value promised performance minus value of actual performance
Loss or costs the injured party aviods by not having to perform.
damages arising directly out of the breach of contract
damages not arising directly out of a breach but arising as a forseeable result of teh breach.
Contrcact damages placing the injured party in as good as position as she would have been in had the contract not been made.
A small sum awarded where a contract has been breached but the loss is negligible or unproved.
Damages of Misrepresentation
Out of pocket damages and benefit of the bargain damages.
Out of Pocket Damages
differnce between teh value given and the valued received.
Benefit of the Bargain Damges
differnce between the value of the fraudualent partys performance as represented and the value the defrauded party received.
Are generally no recoverable for a breach of contract
Reasonable damages agreed to in advance by the parties to a contract.
Foreseeability of damages
potential loss that the party now in default had reason to know of when the contract was made.
Certainty of Damages
damges are nto recoverable beyond an amount that can be established with reasonable certainty.
Mitigation of Damages
injured oarty may not recover damges for loss he could have avoided by reasonable effort.
Remedies in Equity Availability
only in cases when there is no adequate remedy at law
Types of remedies in Equity
Specific performance, injunction, reformation.
court degree ordering the breaching party to render promised performance.
Court order prohibiting a party from doing a specific act
Court order correcting a written contract to confirm with the intent of the contracting parties.
Restoration of the injured party to the positon she was before the contract was made.
Availability of Restitution
Party injured by breach, Party in default, statue of frauds, voidable contracts.
party injured by breach
if the other party totally breaches the contract by nonperformance or repudiation.
Party in default
for any benefit conferred in excess of the loss caused by the breach
Statue of Frauds
where a contract is unenforceable because of the statue of frauds, a party may recover the benefits conferred on the other party in reliance on the contract
a party who has avoided a contract is entitiled to restitution for any benefit conferred on the other party.