Business Law Exam 3

Equitable remedy; annul the contract; voidable contracts; restitution follows

Rescission

Subtle pressure; social or moral force; overpower will of another

Undue Influence

Equitable remedy; court rewrites contract; intent of parties important

Reformation

Hidden; inconspicuous; not obvious; termites; must disclose

Latent Defect

Art gallery painting; both parties thought genuine; can rescind

Mistake of Material Fact

Cannot modify contract; lease agreement; unequal bargaining power

Adhesion Contract

Misrepresentation with intent and damage and reliance and material fact required; exact legal work of art

Fraud

Pain and suffering; punish guilty party; gross negligence; evil

Punitive Damages

Physical or economic force; not contracting under free will

Duress

Intent to mislead/deceive

Scienter

Opinion; not material fact; subjective; not fraudulent

Puffing

No remedy; contract enforced; yard sale; risk involved; bargain purchase

Mistake of Value

What you must do to preserve your rights and bind the other party; pass bar exam to stay employed at law firm; file insurance claim for damage incurred

Condition Subsequent

One party wants to get out of voidable contract; equitable remedy; annul contract

Rescission

Must obtain financing before purchasing house; one party must do something before the other party is bound; satisfactory termite inspection

Condition Precedent

Excuse for non-performance; house burns down; hardship; cannot perform

Impossibility

Written out in the contract; "time is of the essence;" 100% performance

Expressed Condition

Can sue immediately if other party announces a breach; must wait if installment plan note until due date

Anticipatory Repudiation

Offer to perform; ready, willing and able to perform; delivered the goods

Tender

Accept less than full amount due; unliquidated debt; payment in full

Accord and Satisfaction

Discharge present contract; enter into new contract with new party; consent of all required; not an assignment

Novation

Wrongful preclusion of normal/anticipated performance; ice cream parlor rental; excuse for non-performance

Prevention

Excuse for non-performance; price goes up to perform on fixed price contract; financial pain; building contractors

Economic Frustration

Payment upon delivery of goods; both parties must do something at the same time; deed for money at closing

Condition Concurrent

Certain contracts must be in writing to be enforceable; 1677; England

Statue of Frauds (in general)

Does not come under the Statute of Frauds; could die tomorrow

Indefinite employment contract

"This contract contains the final agreement and all terms"

Merger clause

Cannot use oral evidence to contradict the present written contract

Parol evidence rule

Secondary promise to pay for debt of another; must be in writing

Suretyship

Ambiguity; judicial admissions

Exception to parol evidence rule

Promises made in consideration of marriage

Prenuptial agreement

Money damages; not penalty; parties agree on damages when contract drawn up

Liquidated damages

Equitable remedy; prevent unjustifiable enrichment; overpay credit card bill

Quasi Contract

Money damages; exemplary damages; evil; triggered by gross negligence

Punitive Damages

Equitable remedy; act like contract never existed; restitution follows

Rescission

Equitable remedy; must perform as promised; real estate; antiques

Specific Performance

Excuse for non-performance; surrender a right on the contract; golf course rent late; putt-putt

Waiver

Money damages; $1; breach without damage; $3, USFL/NFL

Nominal Damages

Money damages; Hadley v. Baxendale; indirect losses; special damages

Consequential Damages

Money damages; direct losses; foreseeable; incidental damages

Compensatory damages

Equitable remedy; after rescission; return what previously exchanged

Restitution

Eastern Shore Toyota case; defamation; false rumors; verbal

Slander

Equitable remedy; parties meant to do one thing but accidentally did something

Reformation