BLA Exam 2 (Contracts)

5 Element of a Contract

Offer, Acceptance, Consideration, Legality, Capacity

Consideration

Something of value exchanged in a contract (ex. money, services, goods)

Statute of Frauds

Certain contracts must in writing (ex. sale of land, contracts that take over a year, goods over $5000, marriage)

Details of an Offer

Must be clear, definite and communicated to offeree

3 Elements of an Offer

Intent, Definiteness, Communication

How is an Offer Terminated?

Revocation, Rejection, Counteroffer, Lapse of Time, Death or Incapacity, Illegality

UCC Article 2 - Sale of Public Goods

Governs contracts for the sale of public goods, (tangible, moveable items)

Benefits and Detriments

Consideration must include both a benefit and a detriment for each party.

Subject Matter of a Contract

What the contract is about (goods, services, employment, etc.) And must be clearly defined.

Non-Compete Contracts

Agreements preventing someone from competing with a business for a specific time and location

Exculpatory Contracts

Limit liability for negligence (waivers, but cannot excuse gross negligence or illegal acts)

Adhesion Contracts

One-sided contracts when one party has all the power (take-it-or-leave-it contracts)

Unconscionable Contracts

Contracts that are so unfair that they shock the conscience (typically voided by the court)

Capacity & Minors

Minors can void contracts, but adults cannot void them. Can make contracts for necessities (food, clothing, shelter, etc.)

Mental Impairment

A contract can be void if a person lacks the mental capacity to understand it.

Consent Issues

Duress, Undue Influence, Mistake, Fraud, Under the Influence

Duress

Forced into a contract under threat or pressure

Undue Influence

Unfair persuasion due to relationship power imbalance (Like a teacher mentioning how they have control over your grade)

Mistake

Both parties must be mistaken about a key fact for a contract to be voidable

Fraud/Misrepresentation

Contract voidable if one party lied about a key fact (I sell you a car and forget to mention it’s broken)

Under the Influence

Intoxication can make a contract voidable, but only if the person was severly impaired.