BLAW Quiz 2

elements of a contract

agreement made between competent parties based on genuine assent of parties supported by consideration made for a lawful objective and in form required by law

promisor

person who makes promise; aka obligor: if promise is binding and thus imposes a duty on promisor

promisee

person to whom promise made; party can be individual OR business

privity

relation between two parties recognized by law

privity of contract

relationship between promisor and promisee in contractual relationship

How does a contract arise?

• When offeror makes an offer and offeree accepts

• Must be intent to make a binding agreement

• Can make any type of contract; no requirement that they are fair/reasonable/kind

Formal contract

under seal (signature, seal, L.S.) and contracts of record

Informal contract

written, oral, etc (simple contract) ; still enforcable

Express contract

terms clearly stated by written/spoken words

caveat emptor

“let the buyer beware” ; law does not require parties to be fair/kind/equitable

contracts of record

obligations that have been entered before court of record

court of record

trial court or appeal court in which clerk or reported records proceedings; aka recognizance

if u make a promise in court (and all other elements of contract are intact) , it is under a ___

contract of record

negotiable instruments

unconditional writing that promises fixed amount be paid no matter what; vary by state; just promise, no money itself in it

implied contract

terms shown by action/conduct of parties, not words; cannot exist when there is an existing express contract on same subject (but additional work still assumed; shed v house)

valid contract must be both

binding and enforcable

void contract

cant be enforced by law (ex: contract based on sum illegal)

voidable contract

would be valid but certain circumstances mean it can be rejected if one of parties wants

parties can void a contract when?

at any time

can voidable contract still be performed?

yes, but unbound party can choose to void it before performance

executed contract

contract is done by both parties

executory contract

something still needs to be done by one or both parties

bilateral contract

one promise given in exchange for another; “ill do x if u AGREe to do y”

lateral contract

ll do x if u do y

Option and first-refusal contract

contract to hold an offer to keep a contract open for a period of time (can leave for a diff contract later)

right of first refusal (ROFR)

the right to match an outside offer before a seller can accept it; author cant go to another publisher until OG one says so

in unilateral contract, offeree only accepts when _

they perform their condition

unilateral contract enforceable when someone . bilateral contract enforceable when _.

begins act. from the get-go.

quasi contract

no actual contract but court creates obligation to prevent unfair treatment (No agreement → but it would be unfair not to pay)

in a quasi contract, burden of proof is on_

plaintiff to prove they should be paid

restitution damages

Money awarded to return the injured party to the position they were in before the contract by taking back any benefit the other party unfairly received. (You pay $1,000 for services never performed → you get $1,000 back)

quantum meruit

what one has earned; related to restitution damages

internet contracts

property rights, law of sales, privacy laws all apply to internet purchases

terms and conditions of a website are _

legally enforceable contract for website

promise of a contract conditional upon (one of 3 things)

an act OR a forbearance OR a return promise

forbearance

refraining from doing something u can do (“I’ll pay you $500 if you don’t sue me”)

return promise

promise for promise

3 requirements of an offer

intent, definiteness, communication

intent

realistic and being fr not joking

invitation to negotiate =

NOT an offer

contract to enter into a future contract

has no effect, no obligation until contract actually made

definiteness

contract must clearly state info and not be hella vague

can a court rewrite a vague contract to be more definite?

no

best efforts clause

must try best, cant half-ass

divisible contract

work can be split into diff parts (paid for each hour done)

requirements contract

buyer agrees to buy everything from one seller (A restaurant agrees to buy all its vegetables from one farm)

output contract

seller agrees to sell everything to one buyer (farm sells all veggies to one restaurant)

the two contract types that are exceptions to definiteness requirement

outputs and requirements (still binding but do not state exact quantity that has to be bought/sold)

communication

offeror must communicate to offeree (You can’t claim a reward for helping catch a criminal if you didn’t know the reward existed when you gave the information)

termination of offer

recovcation, counteroffer, offeree rejects, takes too long to accept, death, subsequent illegality

revocation

offer can be revoked by offerror at any time BEFORE accepted (unless option/future)

revocation letter (sent by the offeror) not effective till _

offeree receives it

written revocation must be received within

reasonable time

firm offer

if u promise to keep contract open for X amount of time, u cant revoke it until then

counteroffer

rejects initial offer; accepting og offer and adding/changing terms counts

offerree rejects

no turning back to accept og offer; new contract must b made

lapse of time

offer dies on date it is said to be open till (if no specific time, then after “reasonable time”… late acceptance dont count

subsequent illegality

if performance of contract becomes illegal after offer made, its terminated

once u accept, cant withdraw without

consent of other party

unordered goods (Postal Reorganization Act)

can keep goods that were accidently sent, dont have to pay or give back

mailbox rule

the acceptance of an offer in place the second u ship it out (unless said otherwise)

mailbox rule vs revocation

offeree telling offeror they accept VS offeree being notified of revocation

auction sales

auctioneer makes invitations to negotiate when they say a number, not agreeing

contractual capacity

must have mental (factual incapacity) and legal (status incapacity -minors) ability to enter contract (doesnt apply to just being dumb)

minors can make contracts but treated as _

protected class (law sides w them)

power to avoid

minor can cancel contract whenever

time for avoidance

minor must act fast to cancel contract after they turn 18

restitution after avoidance

if avoidance, both parties must go back to way things were before

when a minor cancels a contract:

must return what they have (or part of it if thats all they got), (except necessities)

if child makes contract, parents _

not liable on contract

co-signers of minors on contract

still liable even if minor cancels contract

ratification by guardian for mentally incompetent

guardian can agree or disagree contract for them

if drunk person signs contract

sober them can rescind it

mistake of fact

wrong belief (NOT about law) is grounds for rescinding contract if they bring light to confusion

mistake of law

wrong about legal effect not valid bc law objective

unilateral mistake

only one party misunderstand, not valid unless they communicate the misunderstanding

mutual mistake

both parties misunderstand → affected party can void contract

reform

contract rewritten to reflect what both parties actually meant

fraud

lying about smt to get someone to agree to contract (intentional lie + reliance + damage) ; does not include opinions

negligent misinterpretation

didnt intent to deceive but left out important info; diff charge but still cooked

nondisclosure

party doesnt HAVE to tell info to other party (unless exceptions)

unknown defect (nondisclosure exception)

If you know about a hidden problem, you must disclose it

contractual relationship (nondisclosure exception)

Some special relationships require full honesty by law (attorney-client privilege)

active concealment (nondisclosure exception)

can’t hide or cover up the truth (fraud)

undue influence

dominant or trusted person pressures a weaker person into a contract (victim can void contract)

duress

Forcing someone into a contract by threats (physical or economic)

consideration

what each party of contract gives up to other when they agree

bargained-for-exchange

Each side gives something in exchange for the other (with some bargain)

benefit-detriment approach

one party receives a benefit or the other incurs a detriment (even without bargain)

charitable subscription

A promise to donate can be legally enforceable (charity starts project expecting u to pay for it)

adequacy of consideration

law does not care if you get screwed on a contract

illusory promises

promise that doesnt require anything real (if i feel like it)

mutuality of obligation

contract requires both parties to have real obligation

cancellation provision

if X happens by certain date, i can cancel agreement

consideration not adequate if

preexisting legal obligations, past consideration, moral obligation

preexisting legal obligations

Doing something you’re already legally required to do = NOT consideration (unless new circumstances)

unliquidated debt

Both sides disagree on how much is owed

partial payment check

sum better than nun, avoid legal fees

composition of creditors

Multiple creditors agree to accept less money to settle a debtor’s total debt

past consideration

Something you already did in the past cannot count as consideration for a new contract