Bus Law Class 8

contract

a legally enforceable agreement

capacity

the legal ability to enter into a contract

voidable contract

since minors lack the legal capacity to enter into a contract, what can they create instead?

only at the option of the party lacking capacity

a voidable contract can only be canceled when?

void contract

illegal from the time of formation and may not be enforced by either party

voidable contract

legal but permits one party to avoid the contract if he or she chooses so

disaffirm it by notifying the other party that they no longer are bound by the contract

how would a minor escape from a contract?

anytime before their 18th birthday

when must a minor disaffirm a contract?

if they ratify the contract

how may a minor loose their right to disaffirm a contract

ratification

the process by which a party, by words or actions, indicates their intention to be bound by the contract, not withstanding its voidability

fraud and its elements

a misrepresentation or a material omission of fact which renders the representation false, known by the defendant

fraud and its elements

made for the purpose of inducing the other party to rely on it

fraud and it’s elements

justifiable reliance of the other party

fraud and it’s elements

injury

intentional or reckless misrepresentation of fact

the party alleging fruad must prove that there was an intentional or reckless misstatement of a fact.

intentional or reckless misrepresentation of fact

the party establishing fraud must ALSO prove the misrepresentation was material or significant.

justifiable reliance

the reliance must be reasonable under the circumstances

unilateral mistake

occurs when one party enters into an agreement under a mistaken assumption

must demonstrate in order to rescind a contract plagued by one party’s unilateral mistake assumption regarding a material fact

the non-mistaken party knew or had reason to know of the mistaken party’s error

must demonstrate in order to rescind a contract plagued by one party’s unilateral mistake assumption regarding a material fact

the mistake is mathematical, mechanical or otherwise objectively obvious

must demonstrate in order to rescind a contract plagued by one party’s unilateral mistake assumption regarding a material fact

enforcing the contract would be unconscionable

mutual mistake

occurs when both contracting parties proceed under the same mistaken assumption.

mistakes that do not support the rescission of a contract

errors in predicting future events

mistakes that do not support the rescission of a contract

mistakes in the value of an item for sale

mistakes that do not support the rescission of a contract

facts that the parties know involve an element of risk

voidable

if one party to a contract makes an improper threat that coerces the other party to enter into the contract the contract will be what

undue influence

this claim is raised when a family member, friend or other person close to the purported victim is alleged to have been bullied or importuned the victim into signing a contract, making a gift or executing a will or trust that they
would not have agreed to in the absence of the allegedly improper conduct.

legality

a contract that is illegal is void and unenforceable

unenforceable

contracts that violate a statue are what

insurance law

is largely a function of state law

insurable interest

a legitimate interest which one person has in the life or health of another, usually because the person being insured has some type of financial obligation or duty to the person purchasing the policy

usury laws

prohibit the charging of excess interest on loans

a non-compete agreement

a contract where one party agrees not to compete with another party in a specified trade or business