BLAW FINAL

Contracts
1) property
2) goods
3) Hire
4) Lease

__ form the basis of many activities such as:
1) Sell/Transfer __
2) Purchase __
3) __ employees
4) __ apartments

Contract

promise or set of promises for the breach of which the law provides a remedy

voluntarily; "legal effect"

Contracts are __ entered between two or more parties. Terms become private law between the parties, and the court will be obligated to give that contract "__ __".

Offeror

party who makes the offer; promises to do/not do something

"revoke"; "reject"

Offerors can "__" the offer. Offerees can "__" the offer.

Offeree

party to whom the offer is made

Offeree

The (OFFEROR/OFFEREE) is the only party with the power to create a Contract by acceptance.

Bilateral contract

promise for promise

Bilateral

Name the Classification:
If you promise to paint my house, I promise to pay you $500.

Unilateral contract

promise for an act; can only be accepted by performance

Unilateral

Name the Classification:
If you paint my house by July 1st, then I will pay you $500.

prior

Under a Unilateral Contract, the offer can be revoked at any time __ to performance. Once performance has begun, the offer cannot be revoked.

Objective Theory K

Court will use "reasonable person" standard to decide whether the parties intended to enter the contract. There is NEVER going to be a subjective standard.

Express Contract

Oral or written; clearly stated offer that's accepted, thereby resulting in contract

Implied-in-fact Contract

examines conduct of the parties:
1) Plaintiff provided services to the Defendant.
2) Plaintiff expected to be paid, not gift.
3) Defendant could have rejected services but did not.

Quasi-K Contract

doctrines based on reliance, not bargaining:
- One person has provided a benefit to another where no K actually exits

"unjust enrichment"

Quasi-K contracts are intended to prevent "__ __."

Quasi-K

Name the Classification:
John agrees to paint Fred's house at 100 W Texas Ave. John's crew shows up to 100 E Texas Ave and starts painting Frank's house. Frank's house needs painting, Frank is silent. John sues Frank, Frank says no K.
Court: Frank owes for "reasonable value" work done.

Executed Contract

completed, fully performed on both sides

Executory Contract

has not been fully performed

Valid Contract

meets all the essential elements of a K

1) consideration
2) capacity
3) object
4) enforceable

Elements of a Valid Contract:
1) Supported by __ (legal $).
2) Between parties who have legal __ to K.
3) Accomplish legal __.
4) Is __ to at least 1 party to the K.

Void Contract

no legal effect "ab initio" (from the beginning)
- Neither party is obligated, neither can enforce

from the beginning

"ab initio"

Void

A contract to commit a crime is __.

Voidable Contract

at least one party has the option to cancel or resend the K
- If voided, both parties are released.
- If party with option chooses to ratify the K, both must perform under K.

Unenforceable Contract

legal defense to the K's enforcement

Unenforceable

Name the Classification:
Real Estate K's are required to be in writing pursuant to the Statute of Frauds (SOF).

1) Agreement; Offer and Acceptance; "Mirror Image Doctrine"
2) Consideration
3) capacity
4) lawful

The Requirements of a K:
1) __ between the parties. __ and __; "__ __ Doctrine."
2) __
3) Parties have assumed __ to K.
4) Object of the K must be __.

Offer

building up in the mind of the offeree that the offeror wants to do business on those terms

Example of an Offer

Ex) I will buy your car for $500.

Example of an Invitation to Negotiate

Ex) Are you interested in selling your car?

True

(T/F) "Offers" made in jest and anger are NOT offers.

indefinitely

Offers do no continue on __.

Action of parties or Operation of Law

What are the two methods of terminating offers?

Counter Offer

made by the Offeree; simultaneously terminates the original offer

offer

A counteroffer creates a new __ by adding new terms and conditions.

Lapse of Time

stated time period by which offer expires

"reasonable time"

If there is no stated time period, then use "__ time."

Destruction of Subject Matter

offer automatically terminates
ex) Fire destroys building for sale.

Death or Incapacity of the Offeror or Offeree

Will terminate an offer, no notice required.

Supervening Illegality

if prior to acceptance, the object of the offer becomes illegal...the offer terminates

Acceptance

manifestation of assent by the offeree to the terms of the offer

Mirror Image Rule

offeree must accept the terms of the offer exactly and unequivocally as stated in the offer

Mailbox Rule ("Acceptance Upon Dispatch")

Offeree's acceptance of the offer is effective as soon as it is mailed, even if the acceptance is thereafter lost

To protect the offeree from unscrupulous offeror(s).

What is the purpose of the Mailbox Rule?

Consideration

All contracts must be supported by __.

Consideration

thing of value given in exchange for a promise

Property, Legal/Professional

Forms of Consideration:
- Money
- __
- __/__ Services
- Agreement to do/not to do an act

"Illegal"; Illusory

K's lacking Consideration:
1) Gratuitous K
2) "__" Consideration
3) __ Promise
4) Pre Existing Duty

Gratuitous K

gift promises

"Illegal" Consideration

K to refrain from doing an illegal act
ex) I will burn your house down unless you pay $10K.

Illusory Promise

Parties enter K but put in that 1 or both parties can choose not to perform

Pre-Existing Duty

K to promise to perform a duty that one is already obligated to perform

Capacity

presumption that everyone has; age of majority is 18

Infancy Doctrine

minors can cancel (disaffirm) contracts entered into with adults

before, "necessities of life"

Under the Infancy Doctrine, such K's are voidable by the minor...
a. Anytime __ minor reaches age of majority plus a __ time thereafter.
b. Minors cannot cancel K's for "__ of __"

Mentally Incompetent

mentally ill, senile, brain damage, etc.

Adjudged Insane; VOID

legally insane by the Court "judgement"

These K's are (VOID/VOIDABLE).

De Facto Insane; VOIDABLE

no court has said they're insane, "We know" who they are

These K's are (VOID/VOIDABLE).

that person, not the other party

Contracts made by intoxicated persons are only voidable by...

"Incapable of understanding or comprehending the nature of the transaction"

What test is used for K's involving Intoxicated Persons?

self-induced; returned to the other party; ratified

Considering K's involving Intoxicated persons is irrelecant if the intoxication is __-__. If rescinded, any consideration taken has to be _____. The K itself can be __ once the person is sober.

can't

A contract (can/can't) be enforced by either party to K.

True

(T/F) Some K's are illegal because of laws or statutes.

Usury law

set "appropriate" limits on APR's that credit card companies can charge

Trade, Compete, Exulpartory

Contracts against public policy include:
1) K's in Restraint of __
2) Non-__ Clause
3) __ Clause

K's in Restraint of Trade

Ex) Every bakery in Ruston agrees to fix the price of cupcakes at $4 per (illegal price fix).

Non-Compete Clause

might be illegal/unreasonable if geographics are too large or length of noncompete is too lengthy; prohibits employee from competing with employer for stated period of time

Exculpatory Clause

relieves 1 party to a K from tort suit for ordinary negligence

immoral

If object of K is __, it might also be illegal.

True

(T/F) Third parties to a K have no rights to the K.

assign; "assignee"

Parties to a K can "__" their rights:
A & B = C
In the situation above, C is the "__."

a. benefit, "intended"
b. "incidental", unintentionally

Parties to enter K, draft __ or __:
a. Performance under the K __ 3rd party "__"
Ex) Life insurance beneficiary.
b. "__" parties to a K __ benefit a 3rd party
- No right to enforce K.
- No right to sue under the K.

assent

Even if all the requirements for a K are met, it may not be enforced if the __ was not real or genuine.

Unilateral Mistake

only 1 party is mistaken as the a material fact or term to the K or subject matter to K

knew or should have known about it

Under Unilateral Mistake, the contract will usually be enforced EXCEPT...if the person mistaken can prove that the other person involved ______, then the contract could be rescinded.

Mutual Mistake of Fact

both parties are mistaken as to material facts, term, or subject matter of the K

Either party may rescind the K bc there was never a true "meeting of the minds"

Under Mutual Mistake of Fact, who can rescind the contract and why?

Mutual Mistake of Value

both parties know the object of the K but are mistaken as to its value

enforceable; identity; worst

Under Mutual Mistake of Value, the K is __ by either party because the __ of the subject matter is not at issue. If the logic was different, almost every K could be rescinded by the party after the fact who felt that they got the __ value.

Fraud in the Inception (VOID)

person is deceived as to the nature of his action and does not know what he's signing. (VOID or VOIDABLE)

Example of Fraud in the Inception

Ex) FedEx driver brings person invoice, but on the bottom is actually a Power of Attorney that names FedEx driver person's Attoney-in-Fact.

Fraud in Inducement (VOIDABLE)

person knows what they're signing, but has been fraudulently induced to sign the K (VOID or VOIDABLE)

Example of Fraud in Inducement

Ex) A tells B "I'm forming an oil venture, you just need to give me $10K to get in now;" B signs, A goes to South America, non-extradition: B can rescind/sue/restitution, if A can be found.

Fraud in Concealment

one party takes an action to conceal a material fact from another party

Example of Fraud in Concealment

Ex) ABC--WW = used industrial sewing machine

- WW: works great, won't disclose what eventually extensive repair history-record.

- ABC purchases machine, rely, thinking there is not record.

- ABC starts having issues with machine.

- ABC finds out about "history", sues WW for fraud.

Duress (VOIDABLE, by the person put under duress)

one party threatens to PHYSICALLY harm the other unless they enter K (assent not voluntary) (VOID or VOIDABLE, by who?)

a. Threatening to bring a criminal suit

Which of the situations below is an example of duress:

a. Threatening to bring a criminal suit
b. Threatening a civil suit

Undue Influence (VOIDABLE)

one party takes advantage of another's MENTAL state or physical weakness, persuading them to enter K (VOID or VOIDABLE)

Example of Undue Influence

The relationships listed below are an example of what type of fraud:

1) Preist and Parishioner

2)Attorney and Client

3) Doctor and Patient

Statute of Frauds (SOF)

requires certain K's to be in writing (every state)

unenforceable; rescind

If an executory K is required to be in writing per SOF was not, it's __. If already executed, neither party can __ it under the SOF.

1) land
2) one
3) Collateral Promise/"Guarantor Rule"
4) $500 or greater

Statue of Frauds is required for:

1) K's involving interests in __
2) __ year rule
3) __ Promise/ "__ Rule"
4) K's for sale of goods $__ or greater

K's involving interests in land

mortgages, leases, life estates

One Year Rule

an executory contract that cannot be performed within one year of its formation must be in writing

Collateral Promise/"Guarantor Rule"

one person agrees to answer for the debts of another

- Involves three parties and two contracts

a. Does not need to be in writing
b. Needs to be in writing

Under Collateral Promise, there is the:

a. Original contract between the debtor and creditor, (NEED TO BE IN WRITING or DOESN'T NEED TO BE IN WRITING)
b. Second contract between the guarantor and the creditor, (NEED TO BE IN WRITING or DOESN'T NEED TO BE IN WRITING). Guarantor's duty to perform only arises if the debtor fails to perform.

Promissory Estoppel

equitable exception to SOF writing requirement (created by the courts)

- Parties have an ORAL K that should've been in writing

1) action/forbearance
2) "foreseeable"
3) Injustice

Under Promissory Estoppel, the oral promise will be enforced if:

1) Promise induced __/__ by other party

2) Reliance on the promise was "__"

3) __ can only be avoided by enforcing the promise