Blaw exam 3

contract definition

agreement that is enforceable by court law/judge

4 elements of a contract

ACCL: agreement, consideration, contractual capacity, lawful object

Common Law of Contracts

precedent set primarily by state court decisions, previous ruling stands- contracts with services/ performances

What is the exception to common law of contracts?

Uniform Commercial Code

What does universal commercial code apply to?

contracts for the sale of goods

Objective Theory of Contracts

would a reasonable person view the scenario/circumstances as a legally binding contract

What is the key aspect of Objective Theory of Contracts

the words used

Bilateral Contract

promise for a promise, an exchange of promises to do something

Unilateral Contract

promise for an act, contract isnt valid until performance

which is more common bilateral or unilateral

Bilateral

key concept of unilateral contracts

reward

Formal Contract

require a special form or language to create

Informal Contract

fully enforceable, no special form or language, most common

Valid Contract

has all 4 elements of a contract

Void Contract

is either missing agreement, consideration, or lawful object - dead at start

Voidable Contract

is missing 3rd element, contractual capacity, can CHOOSE to accept/continue contract- common with kids

Who can choose not perform in voidable contract?

the person who does not meant contractual capacity

executory contract

not yet been fully performed by both parties, incomplete

executed contract

completed contract

express contract

stated in oral or written words, most

Implied in fact contract

implied from conduct/ behavior of the parties- pattern of action, communication isnt required

equity

judge can choose to override law in favor of fairness, morals, natural law

common equity example

eviction of 10+ year renters for barely missing renewal window after putting money and effort into maintence + improvement

After an offer has been made what are the 3 things that can occur?

accept, reject, counteroffer

agreement defintion

voluntary exchangeofpromises between two or more people to do or refrain from an act

Is silence considered a meeting of the minds

no response shows no affirmation and no acceptance

Agreement, 2 elements:

offer and acceptance

3 elements to make an offer effective:

objectively intent to be bound, definite and reasonably certain, offer must be communicated

two exceptions to an offer

offer is found, not given , offer is communicated by a 3rd party or by telephone game

express terms

clear enough terms to be able to decide whether to reject or accept -identify: parties, subject matter, consideration, time

advertisements are considered an

invitation for a buyer to make an offer

what has to be present for an AD to be a offer

extreme details, and ability to identify a single object

when is a reward an offer?

when it has been accepted or complete

revocation of an offer

offer can be revoked any time prior to it’s accepted

2 ways to revoke?

express terms (i withdraw) and if actions inconsistent with offer

rejection of an offer

terminated if offeree rejects- cannot go back and accept

counteroffer

terminates the old while generating a new offer, cannot go back to previous offer but can recreate with new

Option Contract

offeree can prevent offeror from revoking by paying the offeror compensation to keep offer open for agreed set of time

offeror

party who makes an offer

offeree

party who offer was made

termination of an offer

destruction of subject matter, supervening illegality

destruction of subject matter

terminates the offer when subject matter is destroyed, no fault of either party

supervening illegality

subject matter is made illegal prior to the acceptance of the offer, offer is terminated

who can accept?

offeree

bilateral acceptance

both parties promise and perform

unilateral acceptance

completion of task

unequivocal acceptance

clear and unambiguous acceptance, only one possible meaning

can a grunt or rumble be an acceptance?

yes

mirror image rule

accept exact terms, no modification- change - counteroffer, kills old

silence does NOT mean acceptance

indication that silence mean assent, signed agreement indicating continuing acceptance of delivery, prior dealing between parties indicate silence means acceptance

when are offers effective?

received by offeree

when are revocation of offer effective?

received by offeree

when are rejection of offer effective?

received by offeree

when are counteroffer effective?

received by offeree

when are acceptance of offer effective?

dispatched by offeree

mode of acceptance

acceptance conditions in offer, if conditions are not meet, acceptance is not met

complete performance

both parties perform exactly to contract requirements

tender of performance

discharge of contractual obligations, limited/refusal to let perform/ unable to complete task by obstacle

substantial breach

minor deviation in performance from contractual obligations

substantial breach remedy

if the breaching party doesnt correct- deduct cost to repair from og price- or sue to recover the cost to repair

inferior performance

performance impairs or destroys the essence of contract- material or minor

inferior performance, non breaching can?

rescind contract, get compensation, does not have to perform

anticipatory breach

advance notice that one party will not perform contractual duties- also allows non-breaching party to sue early

monetary damages

breach of contract, nonbreaching can recover monetary damages

compensatory damages

compensate the non breaching party for loss of bargin- restoring the “benefit”

consequential damages

damages that can be recovered separately or on top of compensatory damages, for forseeable damages from circumstances outside of contract

nominal damages

no financial loss occurs, small amount of 1 dollar, for principle

mitigation of damages

duty of innocent party to mitigate damages from breaching party

liquidated damages

agree in advance to the amount of damage that will be payable with breach

liquidated damages- penalty exception

compension for damages is excessive or unconscious able= unenforceable

equitable remedies

breach of contract that can be compensated through legal remedy, to make fair

specific performance

breaching party is ordered to perform act promised in contract- with unique goods- land

injunction

prohibits a person certain act- will suffer injury is injunction is not issued

intentional interference with contractual relations

3rd party interferes with contract and causes injury- enforceable contract, 3rd party knowledge, inducement to breach

creditor

extending the credit, lender

debtor

borrowing the money, borrower

unsecure credit

loan without securities/collateral to protect

how are unsecure credits decided on (why issue)

based on past credit history, income and other assets

secure debt

loan that is protected w collateral

secure debt collateral is used when

debtor fails to make payments, they repossess collateral

what happens if collateral is insufficient to repay debt/borrowed money

creditor can sue to recover

mortgage

property owner who borrows money, and uses real estate/ property as collateral

recording statue

mortgages must be filed with county recorder office

are non recorded mortgages valid

yes, they are valid and you have to pay but they DO NOT take precedent to filed

foreclosure sale

debtor defaults of payments, creditor can sue and get judgement to order property be sold at judicial sale

what happens to surplus from judicial sales after foreclosure

surplus money goes back to original owner

deficiency payment

even after foreclosure sale, if funds are still insufficient, creditor can sue to recover the excess amount still owed

surety arrangement

cosigner who has equal liability to debtor, is liable for principal of debt when due, and can be sued by creditor first

guaranty arrangement

secondary liability, pays principal if debtor defaults after it is due

writ of execution

sheriff seizes the debtors property and possessions, judicial sale, proceeds pay creditor

writ of garnishment

POSTJUDGEMENT court order, seizure of property and possessions of 3rd party, bank with accounts or jobs and wages

truth in lending act

creditors must disclose certain information to debtors

truth in lending act disclosed info?

cash price, down payment, APR, total $ amount financed, numbers and dates of payments, security interest

fair credit billing act

regulates billing involving consumer credit- creditors must acknowledge and investigate- fix by refund or correcting

fair credit reporting act

regulates reporting on credit information- access by parties who have purpose to obtain

what can consumers find out with the fair credit reporting act

nature and substance of information, source of information, and names of recipients of their credit reports

Fair Debt Collection Practice Act

protects debtors from bad creditors- abuse/harassment, false/misleading info, unfair/unconscionable acts

2 key elements to fair debt collection practice act

inconvenient timing (outside of 8-9) and inconvenient places (like church or mixer)

equal credit opportunity act

stops discrimination in extension of credit based on race, sex, martial status, color, income from public assistance