How can we help?

You can also find more resources in our Help Center.

123 terms

BUS 215: Exam 2

Exam 2
STUDY
PLAY
Offeror
The one who makes the offer or poses the offer
Offeree
The party to whom the offer has been made
Promisor
The one who creates or makes the promise
Promisee
The one to whom the promise has been made
Contract
In order to create a valid ___, one must have offer, acceptance and consideration
Contract
In order to create a valid ___, one must have mutual assent and consideration
Mutual Assent
Offer and acceptance
Suit
Breach of contract
Disaffirm
Nullify the contract
Offer
The outward manifestation of present contractual intent to be bound by certain and definite terms communicated to the ___ee
Outward Manifestation and Present Contractual Intent
The intent or desire to deal
Option Contract
Designed to keep an offer open for a stated period of time or a reasonable period of time
Certain and definite terms
QTIPS
QTIPS
Q: Quantity terms
T: Time for performance term
I: Interested parties
P: Price term
S: Subject matter
Ways to destroy an offer
RRDLDS and Insanity
RRDLDS
R: Rejection
R: Revocation
D: Death of the parties
L: Lapse of time
D: Destruction of the subject matter
S: Sanity
Rejection
The offeree can reject the offer
Pure Rejection
Not interested in the offer, "no"
Varying of the terms
Could give rise to a counter-offer - a whole new offer
Revocation
The offeror can take back the offer, prior to acceptance or expiration
Death of the parties
When the offeror or offeree dies, the offer dies, unless otherwise stated in the contract
Lapse of time
Once the specified time has passed, the offer is no longer avaliable
Destruction of the subject matter
The matter in the contract has been destroy, prior to acceptance, through an act of god or a 3rd party
Insanity
Inappropriate mental state of the offeror or offeree at the time which the offer was made
Ways to keep an offer open
1. Extend an offer past the original expiration date
2. Common Law Jurisdiction: Option Contract
3. UCC: Firm Offer Rule
Acceptance
The unqualified, unequivocal assent (agreement) to the terms of the offer
Mirror Image Rule
The absolute mirror image of what the offeror offered to the offeree
Mailbox Rule
Acceptance is valid on dispatch and rejection is valid on receipt
Dispatch
Mailing a letter, dropping off a letter at a mail receptacle, etc.
Grumbling Acceptance
1. Buzz words: Hope, wish, desired
2. Not a concrete rejection
Consideration
The bargain for exchange of a legal detriment
Past Consideration
Past consideration is no consideration - the contract must be established before the action/event
Pre-existing Duty Rule
Where there is pre-existing duty, there is no consideration - Gives rise to a situation where one is already under a prior obligation to act, before the contract was made
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 undue burden not to fulfill such a promise
Detrimental Reliance
The promisee performed specific acts, based on the existing promise
Implied Contract
Prior history of repetitious contracts flowing between parties
Expressed Contract
Oral or written mode (Contract)
Valid Contract
Offer, acceptance, and consideration
Void Contract
A contract that by its very terms is illegal, depending on the laws of the moment
Voidable Contract
Contracts that fall within the statute of frauds
Unilateral Contract
Contracts where there is a promise in exchange for an act
Bilateral Contract
A promise in exchange for a promise
Quasi Contract
Where a court will create a contract to prevent an unjust enrichment
Executed Contract
Fully performed on both sides
Executory Contract
The contract has only been fulfilled by one party
Minors
1. A minor cannot validly contract, unless an emancipated minor
2. The contract can be considered valid or not valid at the option of the minor
Intoxication
If ___ at the time of negotiations, the contract is considered invalid
Mental State of Mind
Suffer from some sort of mental defect, either brought on by genetic or environmental influence
Capacity
1. Minors
2. Intoxication
3. Mental state of mind
Mistake
1. Of law
2. Of fact
Mistake of Law
Where a defendant is under the mistake and belief by someone under a position that would be expected to know the law, such as a lawyer, police officer, or judge
Mistake of Fact
1. Unilateral mistake
2. Bilateral (mutual) mistake
Unilateral Mistake
If the non-mistaken party knew or should have known as a reasonable, prudent person of the mistake, then ___ is a valid defense
Bilateral (Mutual) Mistake
Both parties are mutually mistaken as to the basis of the bargain - there is no meeting of the minds, so the contract is disaffirmed and no one is held responsible
Fraud
The misrepresentation of fact known to be false by the wrongdoer for purposes of inducing action or inaction, and in fact induces the action or inaction desired
Undue Influence
Where a party's influence or power causes another to believe or do an action that they might not otherwise do
Duress
Where one would do an action that they would not otherwise do, because of the situation at hand
Unconscionable Contracts
A contract that substantially prefers one party over the other
Statute of Frauds
Certain contracts (MRDOG) need to be in writing in order to be deemed valid - they are invalid if done in the verbal mode
MRDOG
M: Marriage
R: Realty
D: Debt of Another
O: Contracts that by their very terms cannot be completed within 1 year
G: Goods of $500 or more
Marriage
Hold people accountable for contracts based on the belief that marriage was going to take place
Realty
The sale or purchase of realty or real estate must be in writing
Goods of $500 or more
Only goods, not services
Rebuttal Against the Statute of Frauds
The plaintiff can rebut MRDOG if MRDOG SPMFR
SPMFR
S: Sufficient Memorandum
P: Partial Performance
M: Main Purpose Doctrine
F:Full Performance
R: Receipt of the Goods or Funds
Sufficient Memorandum
Receipts, cards, bank statements, text messages, etc. - APPLIES TO ALL STATUTES OF FRAUD
Partial Performance
REALTY
1. Improvements on the land
2. Partly perform through money or the transfer of funds
Main Purpose Doctrine
DEBT OF ANOTHER
The party answering for the debt of another must benefit from that answering - without the benefit, such action is seen as a gift or donation
Full Performance
CONTRACTS OF OVER 1 YEAR
Rebuttal only stands if brought up after the fact that performance was fully finished
Receipt of the Goods or Funds
GOODS OF OVER $500
Full or partial receipt/delivery of either money or the goods themselves
Auction with Reserve
The auctioneer reserves the right to remove or take back the item at any time prior to acceptance
Auction Without Reserve
The auctioneer must accept any offer they receive
Performance Excused or Discharged
1. Impossibility
2. (Commercial) Impracticability
3. Waiver
4. Modification
5. Substituted Performance
6. Novation
7. Rescission
8. Completed Performance
9. Substantial Performance
Impossibility
1. An act of God, such as a natural disaster
2. The initial contract was created when it was lawful material issue, but now it is unlawful
(Commercial) Impracticability
It would be commercially impracticable for the breaching party to do the obligation that they are required to do under the contract
Waiver
One relinquishes a known right
Equal Dignities Rule
Whatever you had to do to address the validity of the underlying contract, you must also do for future changes (waiver, modification, etc.)
Modification
A change in terms post-contracting
Substituted Performance
There are 2 original contracting parties, and one party's performance has been substituted for someone of equal or better value - the original party is still held responsible
Novation
The consent of all three parties - the two original parties and the substituting party - the substitute is held responsible
Rescission
Where both parties agree to disaffirm the original contract
Completed Performance
Full performance; discharged of obligations
Substantial Performance
Should be excused; compare the quality of the original performance and the actual performance for quality and intentional harm or negligence
Beneficiary
The 3rd party or person
Intended Beneficiary
Known beneficiaries, such as spouse and children
Vesting Rights
Whatever the original party can bring forth against the other party, the 3rd party beneficiaries can also bring forth
Incidental Beneficiary
Unintended beneficiaries, who do not have vesting rights
Assignments
One may freely assign any known right that he/she is entitled to
Delegations
Only delegable duties are valid, which cannot be personal in nature or too unique in nature
Conditions
1. Precedent
2. Concurrent
3. Subsequent
4. Presumption
Time for Performance
Gives rise to whose time for performance is due; look to the terms of the contract for who is to perform and when
Precedent
Before
Concurrent
Same time
Subsequent
After
Presumption
If not stated clearly in the contract, work is before pay and delivery is before payment
Risk of Loss
Who owns title and when does title transfer?
FAS/FAV
Free along side/Free along vessel
Common Carriers
Anything that can transport something from point A to point B
CIF
Cost of insurance and freight
Free along side/Free along vessel
1. Pertains to any common carriers, as well as buildings and residences
2. It is as if the title was transferred, at the moment of delivery
Cost of Insurance and Freight
Whoever takes out cost for insurance coverage and freight expense pays for the damage done to the item
FOB
Free on board
Free on Board
Once the good is "on board" the particular vessel, it is if the title has been transferred, at the moment of delivery
Sale on approval
The buyer must approve the goods prior to the sale being had and valid - silence or failure to act is validation of the sale
UCC
Uniform Commercial Code
Article II (UCC)
The sale of goods
1. Goods
2. Good faith
3. Merchant
4. Offer
5. Acceptance
6. Consideration
7. Defenses
8. Warranties
Goods (UCC)
Any tangible, personal property capable of being moved at the identification for sale, not including realty or anything annxed to the structure
Good faith (UCC)
Presumption of good faith, including honesty and fact
Merchant (UCC)
Determine merchant status or non-merchant status
Merchant Status
A person or entity that deals in goods of a kind, and has specialized skill and knowledge in those goods (not services)
Non-merchant Status
Does not fit the merchant status
Offer (UCC)
Only needs quantity terms (not full QTIPS)
Defenses (UCC)
1. Statutes of Fraud
2. Discharged Performance (waiver, modification, etc.)
Warranties (UCC)
1. Expressed
2. Implied
Expressed Warranties
Verbally or in writing
Implied Warranties
1. Fitness for a Particular Purpose (FFPP)
2. Merchantability
Fitness for a Particular Purpose (FFPP)
Where one relies on the specialized skill and knowledge of the merchant, and that good fails to act or operate as desired
Merchantibility
The good is what the good is expected to be
Firm Offer (UCC)
A merchant offers another to keep an offer open for a state period of time, not to exceed 3 months or 90 days, and no consideration is needed
Lucy v. Zehmer
I: Did Zehmer make a serious offer to Lucy with valid intent?
R: We must look to the outward expression of a person as manifesting his intention rather than to his secret and unexpressed intention
A: The signed writing constituted a binding contract of sale
C: The writing was an enforceable contract, based on the history between the two parties. The conversations had started well before the consumption of alcohol
Alexander v. Lafayette
I: Did a valid contract exist between parties?
R: Acceptance is received when it comes into the possession of a person authorized by the offeror to receive it, or when it is deposited in a place the offeror has indicated as the place where communications of that kind are to be deposited
A: Alexander did not contact Crime Stoppers before the deadline and there was no valid acceptance of the reward
C: The summary judgment was affirmed, as a valid contract never existed between the parties
Jacob & Youngs v. Kent
I: Did the plaintiff substantially perform to fulfill the contract?
R: Substantial Performance: Compare the quality of the original performance and the actual performance for quality and intentional harm or negligence
A:The wrong piping was of better quality and caliber, compared to the correct brand
C: Jacobs and Young performed a minor breach, with no malicious intent or substantial damage. The homeowner had to make good on the outstanding balance
Merry Homes, Inc. v. Chi Hung Luu
I: Was the contract still deemed valid and/or voidable?
R: Performance: Impossibility: The initial contract was created when it was lawful material issue, but now it is unlawful & Void Contract: A contract that by its very terms is illegal, depending on the laws of the moment
A: Mr. Luu could not possibly do what he had desired
C: The contract is deemed void, due to legality