ACC 241 BYU Cummings (exam 2)

Void contract

No effect and is not recognized under the law

you are not forced to enforce it

4 Elements of an implied-in-fact contract

1) someone gives goods/services to someone else

2) there is an expectation that the person will be paid

3) persons receiving the goods knew or reasonably should've known that the other person expected to be paid

4) Person receiving the goods had a chance to reject the goods/services but didn't

Serious objective intent (offers)

Offers made out of anger, joking, or excitement wouldn't count as serious intent

Effective when received (offers)

- heard by anyone, received an email or letter

-cant be revoked anytime up until until its accepted

- Unilateral offer can be revoked up until substantial work has been done

Advertisement (special offers)

Invitation to come and make an offer

act of the parties (termination)

-the offeror can revoke the offer any point up until it is accepted

option contract

A promise to leave an offer open for a time. to be valid must have separate consideration

operation of law

-by destruction

-supervening illegality: - the subject matter on the contract becomes illegal

Mirror rule (acceptances)

Must accept the mirror image of whatever the offer is, must be exactly how it was give no adding things to it

Effective when sent/mailbox rule (acceptances)

-Excepted whenever is sent

- unless: the address is incorrect, the parties agree it is effective when accepted by offeror, or someone sends a rejection 1st followed by an acceptance (whatever is 1st to arrive is valid (must be in that order))

Legal value (consideration)

-tangible payment

-promise to preform

actually preforming the action

-forbearance legal right to do it but chose not to

Bargained for exchange (consideration)

in order for consideration to be valid it must be new consideration

-if you hirer a contractor to do work an the (partway through the work) say that they won't finish unless given more money. this isn't valid consideration

Settlement agreements (consideration)

underlying debts must be disputed

(need to agree on what is up for grabs)

Promissory Estoppel

-When someone makes a promise and the person receiving it relies on it so much that they are forced to what was promised

-have to prove reasonable and substantial reliance by acting or refraining from an act

infancy (capacity)

Minors can terminate a contract at anytime, adults cant

minor's duty of restoration

As a general rule a minor is obligated only to return the goods or property he or she has received from the adult in the condition it is in at the time of disaffirmance. (they can give it back destroyed, if that's the current state)

Adults duty of restitution

If the minor disaffirms the contract, the adult must make the minor whole (how it was when the contract was created)

Minors: Ratification

Minor accepts contract after reaching age of majority. Can be by words or actions.

Ex). If child buys a car and makes a payment once they are 18 it is ratified. If child DOES NOT disaffirm the contract, they ratify it.

intoxication (capacity)

-If they didn't understand then it is voidable at the intoxicated persons discretion

-if they understood then they are bound to it

Regulatory (legality)

-If you don't pass the regulating license reqs in the state then you cant hold someone for payment of a service you gave them

contracts to commit crime (legality)

-If the contract makes you break the law then the contract is voided

-if you don't know about the illegal activities then the contract is valid

Exculpatory clause

-A clause that releases a contractual party from liability in the event of monetary or physical injury, no matter who is at fault.

-unless there is bad behavior, fraud, recklessness, gross negligence

Unilateral mistake of facts

-if only one person is mistaken as to a fact pertaining to the contract

-general rule is this will not provide any relief to the mistaken party

- 2 times that the mistaken party is given relief: - if the non-mistaken party knows that a mistakes has been made but does nothing about it

- if the mistake was due to clerical or mathematical error result of normal negligence

mutual mistake of fact

-where both parties are mistaken as to material fact about the contract (no meeting of the minds)

- the law provides relief if there was no meeting if the minds

mutual mistake of value

no relief for mistake of value

Fraud in the inception

when someone doesn't know what they are singing

Duress

-forcing someone to enter into a contract though a threat of a wrongful act (violence or blackmail

-taking advantage of someone financially doesnt count as duress

1 year rule (writing req)

if it is impossible to preform in year, no matter the man power, then it must be written

Promise transfer for the best of another (writing req)

must be written, unless you are doing it for personal benefit

Parol evidence rule

-you cant alter, contradict, or add to the agreement

-unless it shows the contract is voidable (intoxication), or to give definitions to important terms

Assignees

-a transfer of rights/benefits of the contract to another

-cant assign personal contracts (unique service like a coach)

-you can assign the rights to real estate

-if you receive an assignment it is your responsibly to tell other parties that you now hold the contract

American/NY rule (assignment)

1st person that was assign gets the contract

english rule

1st person to give notice gets the contract

3rd party intended beneficiary

-someone that they contract party intended to benefit

-if one or both parties involved breach the intended beneficiary can sue both

covenants

an unconditional promise to perform not matter what

conditions

a qualified promise to perform becomes a covenant if an action is taken

Precedent

-Requires something to happen or not happen before a party is obligated to perform

-ex: builder doesnt have to get started until I get city approval

subsequent

-a trigger event the relieves you of obligations

Substantial (performance)

-Sue for the different between full and substance performance

Anticipatory breach

occurs prior to performance coming due

compensatory (remedies)

-compensates the non-breaching party for the loss of the bargain

-puts them in the same spot they would have been if the person did not breach

Consequential (remedies)

-damages outside of the contract

Liquidated (remedies)

-damages agreed to in advance

-must be speculative and the amount listed must be reasonable

Nominal (remedies)

-the amount of damages is small

-you will get a small amount when you sue

Recission

Cancelling contract

restitution

The return if the benefit conferred of the monetary equivalent in the performance the contract

Specific performance

-an order from the court requiring a party to do what they were supposed to have done like if the subject matter of the contract is unique

-not available for personal contracts, would apply for the sale of land