BLaw Midterm 1

Contract

A voluntary exchange of promises creating obligations that can be enforced and remedied by courts.

Freedom of contract

The ability for parties to enter into almost any kind of contractual agreement as long as it meets common law requirements.

Consensus

The mutual agreement and understanding between parties in a contract. Usually from equal bargaining positions. Conc

Consideration

The commitment by each party to do something or abstain from doing something in a contract.

Capacity

The legal capability of parties to understand and enter into a contract.

Legality

The requirement that the object and consideration involved in a contract must be legal and not against public policy.

Intention

The seriousness and intent of both parties to create legally enforceable obligations in a contract.

Formal contract

A contract that is sealed by a party, typically with sealing wax or any mark or impression.

Simple contract

A contract that may be verbal or written but is not under seal.

Express contract

A contract where the parties have expressly stated their agreement, either verbally or in writing.

Implied contract

A contract that is inferred from the conduct of the parties.

Valid contract

A legally binding contract on both parties.

Void contract

A contract that does not qualify as legally binding due to the absence of an essential element.

Voidable contract

A contract that exists and has legal effect, but one party has the option to end it.

Unenforceable contract

A contract that is valid in all other contexts but cannot be enforced by the courts.

Illegal contract

A contract that involves the performance of an unlawful act, making it void.

Bilateral contract

A contract where both parties make commitments and assume obligations.

Unilateral contract

A contract where there is no exchange of promises, but rather one party makes an offer and the other party accepts by performing a specific action.

Offer

A tentative promise by one party to do something in return for the other party's consent.

Acceptance

The agreement to the terms of an offer by the other party.

Invitation to Treat

An invitation to potential customers to engage in the negotiation process, which does not have legal effect and is not an offer.

Offer by Conduct

An offer made through the conduct of the parties, such as placing goods and money on a counter or hailing a cab.

Communication of an Offer

The requirement for an offer to be communicated to the offeree before it can be accepted.

Exemption clause

A clause in a contract that limits or exempts liability for certain events or circumstances.

End of an Offer

The various ways in which an offer can come to an end before acceptance, such as revocation, rejection, or expiration of a reasonable time.

Option agreement

A subsidiary contract given to the offeror in exchange for keeping the offer open for a specific length of time.

Unilateral offers

Offers that cannot be revoked once performance has begun.

Standard Form Contract

An offer with fixed terms that the customer is invited to accept, often containing one-sided terms favoring the business.

Statutes and consumer protection legislation

Laws that alleviate unfairness in standard form contracts and interpret exemption clauses in favor of the disadvantaged party.

Duty of Good Faith

The obligation to act honestly and in a way that does not defeat the purpose of the agreement.

Acceptance

The intention to commit to an offer, forming a contract and binding the parties.

Communication of Acceptance

The act of communicating acceptance to the offeror, usually done by the offeree.

The Postbox Rule

The rule that states acceptance is effective when and where it is posted, especially in long-distance communication.

Electronic Transactions

The adaptation of contract law to accommodate electronic transactions.

Consensus

The agreement between parties on the terms of a contract.

Consideration

The benefit received or price paid in a contract.

Adequacy of Consideration

The requirement that consideration must have some legal value, even if it is not fair.

Existing Duty

The situation where a person is already legally obligated to do something, which may affect the enforceability of an agreement.

Past Consideration

The consideration that has already been performed and cannot be enforced.

Paying Less to Satisfy a Debt

The common law principle that an agreement to accept less to satisfy a debt is not binding.

Illegal Consideration

The consideration that involves illegal activity, making the agreement void.

Settlement Out of Court

The agreement reached between parties to settle a dispute outside of court, which is considered valid consideration.

Quantum meruit

The principle of "as much as is deserved" in a quasi-contract.

Breaching party

The party that fails to fulfill their contractual obligations.

Courts

Legal institutions responsible for resolving disputes and administering justice.

Quasi-contract

A legal concept that allows for the recovery of unjust enrichment in the absence of a formal contract.

Reasonable price

The amount that is fair and appropriate to be paid for a service or benefit received.

“Click-wrap”

Clicking the “I Accept” button indicates you have read the terms and conditions and have accepted the offer.

Negligence

Involves inadvertently or unintentionally careless conduct that causes injury or damage to another person or their property.

Duty to Exercise Care

The obligation to be careful and not cause harm to others.

Reasonable Foreseeability Test

Determines if a duty of care exists based on whether it was reasonably foreseeable that the defendant's conduct would cause harm to the plaintiff.

Misfeasance

Wrongful conduct that can lead to liability.

Nonfeasance

Failure to act when there is a specific duty to act, which courts are reluctant to provide a remedy for.

Special Relationship

Exists between a commercial establishment that profits from the sale of alcohol and its customers, extending the duty of care to third parties who might foreseeably be injured by intoxicated customers.

Reasonable Person Test

Used to establish standards of socially acceptable behavior by asking what a reasonably prudent person would have done in the same situation.

Standard of Care

Varies with the expertise of the person being sued, with professionals held to a higher standard than the average person.

Res Ipsa Loquitur

A legal doctrine that allows a court to infer negligence from the surrounding circumstances.

Causation

The requirement that negligence must cause some sort of loss or harm to the person or property of the plaintiff.

Damages

The tangible or physical injury suffered by the plaintiff as a result of negligence, which provides grounds for legal action.

Negligence

Failure to advise parents of potential genetic defect and allowing pregnancy to continue, resulting in the cost of raising a child born with severe defects being awarded.

"But For" Test

A test used to establish negligence by proving that the negligent conduct caused the loss. It is a general test for causation.

Material Causation

In cases where the "but for" test is unworkable, courts look for material causation to determine if the conduct complained of materially contributed to the injury or loss.

Remoteness Test - Legal Causation

Problems arise when the connection between the conduct complained of and the injury seems tenuous or when the nature of the injury suffered is unusual or unexpected. Courts will impose liability only when the defendant could have reasonably anticipated the general nature of the injury or damage suffered.

Thin Skull Rule

If a personal injury is a foreseeable consequence of a motor vehicle collision, the person responsible is liable for the full extent of the injuries suffered, even if the person has pre-existing frailties or unique physical conditions.

Volenti Non Fit Injuria

Voluntary assumption of risk. To escape liability, the defendant must show that the plaintiff not only assumed the physical risk but also the legal risk, and both parties understood the risks and that the defendant assumed no responsibility to take care of the plaintiff.

Contributory Negligence

Previously a complete bar to recovery, it is now a defense that permits courts to apportion loss between parties based on the extent of blameworthiness or degree to which each party is at fault.

Illegality (Ex Turpi Causa)

Plaintiffs harmed while acting illegally or immorally may be denied recovery in tort law. Courts should refuse to entertain a lawsuit brought by a party who engaged in unlawful activity.

Occupiers' Liability

In common law, people who occupy property have a special obligation to people who are injured on their property. The duty of care varies depending on the status of the visitor (invitee, licensee, trespasser).

Duty of Care

Generally, legislation requires that occupiers of premises owe a duty to take reasonable care to ensure that people will be reasonably safe in using the premises. This duty may also extend to any property brought onto the premises and the conduct of third parties on the premises.

Innkeepers' Liability

The responsibility of an innkeeper to protect guests from wrongful acts of others, even if the innkeeper or servant is not at fault.

Strict Liability

Liability that is imposed regardless of fault, often applied in cases involving dangerous products, processes, or animals.

Vicarious Liability

The liability of an employer for the wrongful acts of an employee, even if the employer has done nothing wrong.

Product Liability

The liability of manufacturers for injuries or losses caused by defective products.

Contributory Negligence

When both the manufacturer and inspector of a product are found to be negligent and held jointly liable for injuries to the consumer.

Negligent Warning

Alleging that a manufacturer failed to provide adequate warnings or precautions for a product, leading to injury or loss.

Inherent Danger

Products that are inherently dangerous, such as chemicals, explosives, tools, and pharmaceuticals, require manufacturers to take extra precautions to ensure safety.

Contractual Liability

Liability that arises from a breach of contract, where professionals are held responsible for losses resulting from substandard service.

Negligence

The extension of tort liability to third parties, allowing professionals to be sued for economic losses caused by their negligent words or actions.

Negligent Misstatement

When a professional provides incorrect information or advice that leads to economic losses for a third party who relied on that information.

Duty of Care

The obligation of professionals to exercise a reasonable level of care and skill in providing their services.

Breach of Standard of Care

Failing to meet the expected standard of care for a reasonable member of the profession in the given circumstances.

GAAP

Generally accepted accounting principles that set standards for accountants.

GAAS

Generally accepted auditing standards that set standards for auditors.

Negligence

Failure to live up to GAAP or GAAS standards.

Standard of care

The degree of care exercised by professionals in a specific field, as determined by their peers.

Reasonable person

Refers to a standard of care that is not necessarily average, but what a prudent professional would do in similar circumstances.

Causation and Reliance

The plaintiff must show that the negligent conduct or words of the professional caused the loss.

Fiduciary duty

The duty of a professional to act in the best interest of their client and maintain loyalty and good faith.

Breach of trust

Any misuse of property or funds by a professional, which is actionable.

Professional insurance

Specialized liability insurance required by professional associations for their members.

Errors and omissions insurance

Insurance that covers negligence but not fraud or breach of trust.

Mediation

A method of resolving malpractice actions outside of court.

Insurer

The entity that assumes the risk and provides insurance coverage.

Premiums

The cost of insurance coverage.

Liability insurance

Insurance that covers negligence by a company or its employees.

Property insurance

Insurance that covers losses to buildings and their contents due to named perils.

Business interruption insurance

Insurance that provides coverage for lost profits and additional expenses incurred due to business interruption.

Life insurance

Insurance that provides security for family or business against the death of the insured.

Health insurance

Insurance that provides coverage for healthcare expenses during the life of the insured.

Bonding

Insurance against wrongful or willful acts by employees or individuals they deal with.