Class 8 & 9

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

To prevent fraud and misunderstandings

Why are some contracts required to be in writing?

A law requiring certain contracts to be in writing to be enforceable.

What is the Statute of Frauds?

New York General Obligations Law § 5-701.

What NY law governs the Statute of Frauds?

Contracts not performable within one year.

What contracts must be in writing under NY GOL § 5-701(1)?

A promise to pay the debt of another; must be in writing.

What is a collateral promise?

No, only promises made in consideration of marriage must be in writing.

Are mutual promises to marry required in writing?

No, it must be in writing.

Is a promise to pay a discharged debt enforceable without writing?

Yes, with specifics noted by the auctioneer.

Are contracts made at public auctions required to be written?

Yes, unless involving industrial insurance.

Are contracts regarding insurance assignments required in writing?

Yes, if admissible and indicative of agreement.

Can electronic communications prove a contract under NY law?

It can serve as evidence, even without a written agreement.

What if a party admits in court that a contract exists?

Timely delivery, no objection, and sufficient detail.

What is required in a written confirmation for it to be valid?

The contract may be enforceable.

What if a seller fully performs under an oral land contract?

Payment plus possession or improvements—may enforce oral agreement.

What is part performance by the buyer?

A doctrine preventing denial of contract due to reliance, even without writing.

What is promissory estoppel?

Names of parties, subject matter, essential terms.

What must a "writing" include to be valid?

A clause stating the written contract is the complete and final agreement.

What is a merger clause?

UCC 2-201(1)

which UCC is written contract for sales of goods ≥ $500 with quantity and signature.

UCC Merchants Exception 2-201(2)

Which UCC is this - A written confirmation sent between merchants can bind both parties if no objection is made in 10 days.

Oral contracts are enforceable if goods are custom-made, admitted in court, or delivered/paid.

What are UCC special exceptions under § 2-201(3)?

No prior or contemporaneous oral evidence can alter a written contract.

What does the Parol Evidence Rule state?

A final written contract that includes all terms.

What is an integrated agreement?

For ambiguities, fraud, misrepresentation, or incomplete agreements.

When is parol evidence allowed?

Let the buyer beware—parties must protect themselves in contracts.

What does “caveat emptor” mean?

If performance can be completed in under a year, writing is not required.

What is the time test under the Statute of Frauds?

Yes, if executor is personally liable.

Are agreements with executors always required in writing?

Terms and consideration, signed by the party to be charged.

What must be written in a real estate lease over 1 year?

Conduct that clearly indicates existence of the contract.

Define “unequivocally referable” in part performance.

A writing sufficient to show a contract existed.

What is a "note or memorandum"?

A person who regularly deals in goods of the kind sold.

Define “merchant” under the UCC.

A clause asserting the contract is complete and final.

Define “integration clause.”