business law quiz 4 review

Statute of Frauds

Certain contracts must be in writing to be enforceable

MY LEGS rule

Marriage, Year (over 1 year), Land, Executor, Goods $500+, Surety

Interest in land contracts

Must be in writing to be enforceable

One-year rule

Contracts that cannot be performed within 1 year must be in writing

Possibility rule

If a contract COULD be performed within 1 year, no writing required

Sale of goods $500+

Must be in writing under UCC

Suretyship

Promise to pay the debt of another

Executor promise

Executor agreeing to pay estate debts with personal funds

Marriage contracts

Must be in writing if made in consideration of marriage

Full performance exception

Fully completed contracts are enforceable even if oral

Part performance (land)

Oral contract may be enforced if buyer paid and improved land

Leading object rule

Oral promise enforceable if promisor benefits themselves

Parol evidence rule

Written contract cannot be contradicted by prior oral statements

Requirements of writing

Must include parties, subject matter, essential terms, signature

Electronic signature

Valid and enforceable like handwritten signatures

UCC Statute of Frauds

Requires writing for sale of goods $500+

Merchant exception

Between merchants, written confirmation binds unless objected

Third-party beneficiary

Person not in contract but benefits from it

Intended beneficiary

Has legal right to enforce contract

Incidental beneficiary

Has no right to enforce contract

Creditor beneficiary

Intended beneficiary where obligation is being satisfied

Donee beneficiary

Intended beneficiary receiving a gift

Assignment

Transfer of contract rights

Delegation

Transfer of contract duties

Novation

Transfer of both rights and duties with release of original party

Assignor

Person transferring rights

Assignee

Person receiving rights

Obligor

Person who must perform

Valid assignment rule

Most rights can be assigned unless restricted

When assignment invalid

If it changes duties, violates law, or contract prohibits

Condition

Event that must occur before obligation arises

Condition precedent

Must occur before duty exists

Condition subsequent

Ends duty after it arises

Concurrent conditions

Parties perform at the same time

Express condition

Clearly stated condition in contract

Implied condition

Condition inferred from situation

Strict performance

Exact performance required

Substantial performance

Performance close enough to satisfy contract

Material breach

Major breach that excuses other party

Minor breach

Small breach, contract still enforceable

Anticipatory breach

Clear refusal to perform before due date

Discharge

End of contractual duties

Rescission

Mutual agreement to cancel contract

Impossibility

Contract cannot be performed due to unforeseen event

Personal satisfaction contract

Performance judged by personal opinion

Good faith

Parties must act honestly and fairly

Time is of the essence

Deadlines strictly enforceable

Agency relationship

Relationship where agent acts on behalf of principal

Principal

Person who authorizes agent

Agent

Person acting for principal

Requirements of agency

Consent, control, fiduciary relationship

Fiduciary duty

Duty of trust and loyalty

Duty of loyalty

Agent must act in principal’s best interest

No secret profits

Agent cannot benefit without approval

No competition

Agent cannot compete with principal

Duty of care

Agent must act with reasonable skill

Duty to obey

Agent must follow lawful instructions

Duty to inform

Agent must share important info

Principal’s duty to indemnify

Must reimburse agent for expenses

Termination of agency

Ends by agreement, time, purpose, or circumstances

Authority

Power of agent to act for principal

Express authority

Clearly given authority

Implied authority

Authority necessary to carry out duties

Apparent authority

Third party believes agent has authority

Ratification

Principal approves unauthorized act

Principal liability

Principal liable if agent has authority

Agent liability

Agent liable if no authority

Fully disclosed principal

Agent not liable

Undisclosed principal

Agent can be liable

Unauthorized agent

Agent liable for actions

Subagent

Agent hired by another agent

Assignment vs delegation

Rights vs duties

Statute of limitations

Time limit to sue

Remedies

Legal solutions for breach

Compensatory damages

Money to cover losses

Specific performance

Court orders exact performance

Rescission remedy

Cancels contract and returns parties to original state