Showalter Exam 3

Elements of a Contract

Agreement
Consideration
Legality
Capacity (for every party)
(Has to be in writing for certain types)
Consent

Common Law

Judge made law
Old

Promissory Estoppel
Quasi Contract

When can not a contract be a contract

Purpose of a contract

To make business matters more predictable

Contracts

Frequently, a series of _____________ may become mutually dependent

Contract

A promise that the law will enforce

Common Law

_________________ once required all contracts to be in writing with a seal affixed

Mutual promises

______________________ became enforceable i the 1600's

Fairness

by the 1900's courts began to consider the ____________ of contracts before enforcing them

Agreement

One party must make a valid offer and the other party must accept it

Consideration

There has to be bargaining that leads to an exchange between the parties

Legality

the contract must be for a lawful purpose

Capacity

The parties must be adults of sound mind

all elements of contract

Will you mow my yard this saturday at 10AM on 900 draper road blacksburg va for 20 dollars? (I Accept)

Everybody in the contract gets something

A bargain for an exchange

Bilateral Contract

both parties promise to do something for each other

Unilateral Contract

one party makes a promise that the other party can accept only by actually doing something specific

Express Contract

the two parties to the contract explicitly state all of the important terms of their agreement

Implied Contract

the words and conduct of the parties indicate that the parties intended an agreement

Ordering something at a restaurant
Buying something at a store

Example of implied contract (3 on the exam)

Executory Contract

when one or more parties has not fulfilled its obligations under the contract

Executed Contract

when all parties to the contract have fulfilled their obligations under the contract

Valid Contract

Satisfies all of the law's requirements

Unenforceable Contract

when the parties intend to form a valid bargain but some rule of law prevents enforcement

Voidable Contract

when the law permits one party to terminate the agreement

Void Contract

one that neither party can enforce, usually because the purpose is illegal or one of the parties had no legal authority

Article 2 of the UCC

covers the sale of goods (which means all things that are moveable except for money, securities and certain legal rights, at the time of identification to the contract

True

T/F Contracts can be oral/verbal or in writing

True

T/F Contracts can be formal or informal

NOT FLEXIBLE, all elements must be there (OLD = NOT Flexible)

Common law contract is _____________, Its old

Services; Real estate

Common law contracts deal with ________ or ____________

the UCC

_______________ is hip and cool and flexible

Common Law

Deals with services and real estate

Do you want 100 lbs of chocolate for $100

yea

Four Theories of Recovery

Express Contract
Implied Contract
Promissory Estoppel
Quasi-Contract

Expressed Contract

Did the defendant make a promise? - Yes
Is a contract

Implied Contract

Did the defendant make a promise? - Not explicitly
Is a contract

Promissory Estoppel

Did the defendant make a promise? - Yes, the parties know each other
Not a contract

Quasi-Contract

Did the defendant make a promise? - No
Not a contract

Quantim Meruit

You get what you deserve

UCC

A movable good

UCC because primary purpose is the moveable goods

Kroger (UCC or Common Law)

Common Law because you go there for the service of them making a wedding cake

Bakery for wedding cakes (UCC or Common Law)

Offer
Acceptance

Needed for an agreement

Offeror

The person who makes the offer

Offeree

The person to whom an offer is made.

Merchant

under the UCC person who regularly sells goods under his or her trade or employs people to sell the goods

Non Merchant

A person selling a good who isnt in the business

Offeree

Who holds the power once the offeror makes the offer?

Meeting of the minds

The parties must hold this to make a contract

Meeting of the minds

They must understand each other and intend to reach an agreement during this

The trier of fact decides

What happens when the parties disagree whether a contract was made?

Invitation for an offer

In an auction when you put an item up it is an ___________

With reservation

all auctions are ______________________

with reservation

if you dont offer the minimum bid, dont have to offer an item

Without reservation

Person putting up item is offeror, no minimum bid

Offer

an intentional act or statement by the offeror, the offeror proposes definite and certain terms which is communicated to the offeree and permits the other party the offeree to create a contract by accepting those terms

Send a price list or price quote to everyone who deals in the business

How are you going to plan for finances in the future?

weather
shipping
demand
revolution

what could sway a business from how much of a product they make?

Price list/Price quote

Only an invitation to bargain, not an actual offer

common law

In ______________ the agreement must be complete in every aspect

UCC

In ___________ there are some provisions for supplying some missing contract terms

You can put anything in a contract as long as it's legal

Open Price

The UCC establishes a price, based on market value or valuation by a neutral party.

Payment

Payment is due at the time and place at which the buyer is to receive the goods

Delivery

The place for delivery is the seller's place of business

Time

The contract must be preformed within a reasonable amount of time

Duration

The party that wants to terminate an ongoing contrat must use good faith and give reasonable notification

Quantity

The only place the UCC is not flexible

Output contract

An agreement in which a seller agrees to sell and a single buyer agrees to buy all or up to a stated amount of what the seller produces. Seller gives all to one buyer.

Outputs Contract

If Dylan said "M&Ms I'll sell you all my chocolate i make"

requirements contract

An agreement in which a buyer agrees to purchase and the seller agrees to sell all or up to a stated amount of what the buyer needs or requires. Buyer buys all they require from one seller.

the offeree

Only ___________ can accept the offerors offer

Termination by Revocation

effective when the offeree receives it

Common law rule

revocation of a firm offer is effective if the offeree receives it before he accepts

Option Contract

The offeror may not revoke an offer during option period

Sale of goods

A writing signed by a merchant, offering to hold an offer open, may not be revoked.
ONLY IN UCC

consideration

The offeree gives the offeror a piece of ______________ in exchange for the offeror's agreement to hold the offer for the specified period of time.

Firm Offer/Raincheck

a writing signed by a merchant promising the sale price to a customer in the future.

Mailbox Rule

the default rule under contract law for determining the time at which an offer is accepted, states that an offer is considered accepted at the time that the acceptance is communicated (Dispatch)

Common Law

Weight club contract UCC or Common Law

Have to

All elements ___________ be there in common law for written contracts

The minute the offeree knows

When is revocation of an offer in effect

Its legal

Anything can be put in a contract as long as ____________

Dispached

Sent something and cant get it back

False

An offer that is accepted on Wednesday and the offeree receives a revocation letter on Thursday, the contract is void? T/F

Everybody in the contract has to get something

Bilateral agreement

Promise is a(n)

Unilateral agreement

Reward is a(n)

No

Ben was walking through campus and found a dead body. He reported the body to the police, who identified the body as a 21 year old co-ed, Byrum Robes. Robes had been missing and his family offered a reward of $25,000 reward for info on their sin. When Ben found the body, he did not know of the reward. Later when he found out about the reward, he asked the parents for money.

Do they have to pay him?

Inducement

when a person doesnt know about a reward

Tender

A ready, willing, and able offer to perform an obligation

Adequacy of Consideration

Courts rarely interfere; refers to fairness of the amount of consideration for what is received in exchange

Peppercorn Rule

No matter how small, as long as there is consideration

Illusory Promise

if one party's promise is conditional, the other party is not bound to the agreement, it is not consideration, neither party can enforce.

UCC
Not
Illusory Promise

Seeing a car and saying if I like it, I'll buy it; UCC or Common Law, Parties ___________ bound because of ________________

I have a preexisting duty

I accepted an offer to teach business law. I now demand an additional $3,000 to finish the semester. Va Tech doesn't have to do this because

Preexisting Duty

promise to do what one already has a legal duty to do does not constitute legally sufficient consideration

Additional Work
Modification
Unforeseen Circumstances

Exceptions to preexisting duty rule

Additional Work

When a party agrees to do something above and beyond what he is obligated to do, his promise is generally valid consideration