How can we help?

You can also find more resources in our Help Center.

89 terms

Bus 215 Midterm #2

STUDY
PLAY
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