Business Law Unit 3

What is a Contract?

A promise (or set of promises) that the law will enforce.

Offeror

The person who makes the offer

Offeree

The person who receives the offer

Problem with Verbal Contracts

If someone breaks a verbal contract, there is usually very little evidence

When receiving an offer, the offeree can:

Accept, reject, or counter the offer.

List 4 Elements of a Contract

Meeting of the minds, consideration, legal capacity, and legal object

Meeting of the Minds

Requires an offer and acceptance

Consideration

Quid pro quo required

Capacity to Contract

A person must have the legal ability to enter a contract

Lawful Object

Cannot be an illegal subject

Valid Contract

Meets all essential elements to establish contract

Void Contract

Has no legal effect from the start

Voidable Contract

May be voided, in the result of a mistake

Executed Contract

All parties have performed the contract

Executory Contract

Terms and conditions of contract not yet performed by either party or by one party.

Express Contract

Oral or written with specifically state terms

Implied-in-fact Contract

implied by conduct of parties (ex: You sit in a barber chair and get a haircut → implied agreement to pay

Quasi-Contract

Not a real contract, usually no consent
(ex: someone paints driveway w/ no permission and sends a bill)

Unilateral Mistake

Only one party is mistaken, and usually does not void the contract

Mutual Mistake

both parties are mistaken about a key fact

What is Fraud

Intentional deception to get someone to enter a contract

Fraud in the Inception

Does not even know what they are signing (void)

Fraud in the Inducement

You know its a contract, but were lied into agreeing (voidable)

Fraud by concealment

one party take specific action to conceal a fact from other party. (voidable)

Duress

Threats or force used to make someone enter a contract

Undue Influence

No threat, but unfair pressure or manipulation (unfair power imbalance)

Statue of Frauds

Require that certain contracts be in writing

Uniform Commercial Code (UCC)

A set of laws governing contracts for sale of goods

UCC Article 2

Uniform Commercial Code governs the sale of GOODS as opposed to services

Gives default terms for contracts between merchants (warranty)

Breach

occurs when one or both of the parties do not perform their duties as stated

Remedies

The non breaching party may seek remedies such as monetary damages

Anticipatory Breach

nforms the other party in advance that they wont be able to perform

Damages at law are

money damages

Compesatory

Damages that compensate a non-breaching party for the loss resulting from breach

Consequential

Covers extra losses caused by the breach, and must be foreseeable

nominal damages

Used when a contract was broken but no real financial loss

Penalties

Exception: if damages were hard to estimate and the amount is reasonable (called liquidated damages)

Punitive Damages

punishment

Writ of Attachment (levy)

Orders Sheriff or other government officer to seize property own by and in the possession of breaching party

Writ of Garnishment (garnish)

Orders that wages, bank accounts, or other property of breaching party that is in the hands of third parties be paid over

Assault

An intentional act that causes someone to have a reasonable fear (threat)

Battery

The intentional and harmful or offensive touching of another person

False Imprisonment

Intentional confinement or restraint of another without authority

Shopkeeper’s Priviledge

Allows merchants to stop, detain, and investigate suspected shoplifters without liability for false imprisonment

Defamation of character

untrue statement of fact

Libel

Written

Slander

Oral

Disparagement

Untrue statement about Plaintiff’s products, services, property, or business reputation

Intentional Infliction of Emotional Distress

Conduct of defendant so outrageous in character and extreme in degree or recklessly causes severe emotional distress to another.

4 Things to Prove Negligence

1. Duty of Care 2. Breach 3. Causation 4. Injury

Negligence Per Se

Violation of a statute which was enacted to prevent the type of injury suffered