AWESOME CHAPTER 7 LEGAL

Genuineness of assent

The requirement in contract law that a party's agreement to a contract must be real, voluntary, and free from external pressure or false information

Fraudulent misrepresentation

Intentionally lying about or hiding a material fact to get someone to enter a contract.

Duress

Being forced into a contract by threats. It can be physical, mental, or economic.

Undue influence

Being pressured into a contract by someone you know and trust (a relationship of trust or dominance).

Unconscionable contract

A contract that is fundamentally unfair, usually because the parties had unequal bargaining power.

Non-compete agreement

An agreement not to work for a competitor for a certain time. Courts often refuse to enforce overly broad ones because they don't want people kept out of work (otherwise the government ends up supporting them).

Statute of Frauds

Law requiring certain contracts to be in writing to be enforceable.

Contracts that must be in writing

(1) Contracts that can't be performed within one year, (2) promises to pay another person's debt, (3) contracts related to marriage (prenups), (4) sales of goods over $500, (5) real estate.

Guarantor

A person who promises to pay another's debt if that person can't. The promise must be in writing.

Prenuptial agreement (prenup)

A contract made before marriage that covers matters for a possible divorce. It must be in writing.

Parol evidence rule

Oral testimony about prior or side agreements is not allowed. The court only looks at what was written in the final contract.

Exceptions to the parol evidence rule

Fraud, or a subsequent (later) contract or modification.

Discharge of a contract

Making a contract go away (parties leave it behind, fulfill it, etc.). It should be done in good faith.

Substantial performance

Completing the main purpose of what was promised, even if there were minor errors.

Contract modification

Changing the terms of an existing contract. Example: changing a paint color (hair dresser/lady example).

Impossibility

Performance cannot be done at all (for example, the subject matter is destroyed). The contract is discharged.

Impracticability

You technically can perform, but doing so would be extremely costly or might put you out of business. It may discharge the contract.

Frustration of purpose

The reason the contract was made no longer exists, even though performance is still possible. You must go to court and show that money wouldn't suffice.

Remedies at law

Money damages.

Equitable remedies

Court orders other than money, used when money damages aren't enough (specific performance, injunction, reformation).

Compensatory damages

Money awarded to make the injured party whole again.

Consequential damages

Compensation for foreseeable costs that occur because of the breach.

Punitive damages

Money awarded to punish the wrongdoer, not to compensate.

Restitution

Returning payment or benefit so that no one is unjustly enriched (the money you might pay so there's no legal loss).

Liquidated damages

A pre-determined amount of money specified in a contract that one party must pay if they breach the agreement

Specific performance

Court order to do exactly what the contract says. Used when the subject is unique or one of a kind (example: real estate).

Limits of specific performance

Doesn't apply to doing a job. The court will never force people to work for others (involuntary servitude). It is an equitable remedy (no money exchanged).

Injunction

A court order that forces a person or entity to do a specific action or stops them from doing something. 

Reformation

When the court looks at a contract and changes it.

Mitigation of damages

The duty to keep damages as low as possible after a breach.