BLS 342 Exam 3

criminal law

preexisting obligations to state

torts

preexisting obligations to other persons, property, etc.

Contracts

people create their own obligations

Requirements of a Contract

1. agreement (offer and acceptance)
2. between competent parties
3. with genuineness of assent
4. each giving consideration
5. legal
6. in proper legal form

relationship between parties

privity of contract

bilateral contract

an exchange of promises where A gives promise (offer) and consideration and B gives a return promise (acceptance) and consideration

promises must relate to

future performance

unilateral contract

promise for an act where A gives promise (offer) and consideration and B accepts and gives act (consideration)

Unilateral or Bilateral: A promises B 5K for swimming 24 miles

unilateral

express contract

oral or written

implied contract

based on conduct of parties

can a customer walks in and get a haircut without paying because they never said a word?

no, because barbershop made an implied offer by being open and a valid business license and customer made implied acceptance by willingly walking in (making agreement). barbershop's consideration is services and customer's implied consideration is paying making unliateral contract

when is there a breach of contract with services?

as long as the services are reasonable and adequate there is no breach of contract

Quasi-Contract

not a contract because one or more of the 6 requirements are missing, but courts still enforce based on unjust enrichment. measure of damages is reasonable value

is A liable for damages if he was unconscious and so was taken to the hospital

even though there was no contract between A and the hospital, still liable because A was unjustly enriched and must pay a reasonable value

defense to quasi-contract

if the other party volunteered their consideration, because then it wasn't unjust

measure of value in implied contracts

quantum meriut

valid contract

meets all requirements of contract which can either be oral, written, or implied

void contract

not a contract, generally not a contract because it is illegal. contract never existed and never will exist

types of void contracts

minor (

voidable contract

can either be ratified or disaffirm (avoid) within a reasonable time (12 types)

types of voidable contract

fraud in inducement, illegality (sometimes), minor (7-17), insane (partially), too intoxicated, misrepresentation, bilateral mistake of fact, unconscionability, undue influence, concealment (sometimes), duress (mild), unilateral mistake of fact,

unenforceable contract

a contract that can't be enforced in the court of law, includes all void contracts and statute of frauds, bankruptcy, and statute of limitations

discharge contract

discharge and bankruptcy

no contract

lack of consideration and/or lack of agreement

Fraud

misrepresentation of material fact where there was knowledge or reckless indifference to the truth, intent to deceive, and a reliance

if plaintiff proves fraud in contract law

don't need to prove injury, contract is voidable and plaintiff is entitled to equitable remedy of rescission

executory contract

performance has not been completed by either party

executed contract

both sides completed performances

partially executed (executory) contract

one has completed performance

agreement

offer and acceptance

offer

written, oral, implied between two parties:
1. present, serious, contractual intent
2. sufficiently definite (specific)
3. communicated to offeree

things that are not offers

future offers, offers made injest (anger, jokes), preliminary negotiations, invitations, invitations to offer (ads), inquiries ("would you like..?"), answers to inquiries

possibilities for offers

acceptance by offeree (agreement, but not necessarily contract), rejected by offeree, revocation by offeror, terminate

recovation by offeror

generally, an offer can be revoked at anytime prior to acceptance and it terminates the offer (unless irrevocable offer)

irrevocable offer

option contract (in either common law or sales contract), and firm offers (only sale offers)

sales contract

governed by VOC which is legislative. ohio adopted title 13 of ORC instead which is similar. present transfer of title and goods (goods being tangible personal property)

everything's that is not a sales contract is

common law contract

common law contracts

come from case law/courts

common law includes

sale of real estate, intangibles, services, contract for sale of business

A offers B house for 800K open for 60 days. 27 days later A sells to C. B sues A, who wins?

offer is not legally binding because B didn't accept and the 60 days is a promise which sin't binding without consideration so B loses. the revocation terminates the offer. if B gave A consideration (down payment) the promise is binding and offer irrevocable

what makes a firm offer

offer, promise to keep offer open, and made by a merchant in writing for 3 months or less (if meets this no consideration is required)

rejection by offeree

terminates offer: flat rejection, counteroffer, qualified acceptance (a counter offer that's a rejection in common law)

termination

lapse of time (if no specified time it's open reasonably), death of offeror or offeree, revocation, rejection, condition subsequent (any condition offeror likes), subsequent illegality (was legal but now not), impossibility

when is an offer effective

when received

when is a rejection effective

when received

when is a revocation effective

when received

when is an acceptance effective

when sent is the general rule unless offer states otherwise, implied agency rule (only with common law which says as long as you use same means or faster, sales is any means), acceptance following a prior rejection (if acceptance sent before rejection received)

consideration

bargain for legal detriment

doctrine of consideration

promise is not binding unless supported by consideration unless promissory estoppel, promises made to charitable institutions, composition agreements, promises made after statute of limitations has expired, promises made after discharge in bankruptcy, unforeseeable difficulties rule, modification of a sales contract

promissory estoppel

substantial detrimental reliance like moving whole life to a promised job

composition agreements

if a debitor has 7 creditors, any creditor can reduce amount owed by modifying contract. to modify common law contract, both parties must agree and give new consideration (due to preexisting duty saying consideration cannot be repeated). in order for the creditors promise to hold the lowered amount there must be additional consideration by debitor. or all creditors agree to reduce amount owed then no consideration is needed

statute of limitations

negligence has 2 year statute of limitations
intentional torts has 1 year
mal practice has 1 year + 180 days
written contract has 15 years
oral contract has 6 years
sales contract has 4 years

promises made after statute of limitations

if a party promises to pay the party after statute of limitations has run out, it revives the contract extending the time to sue (even cup of coffee if they don't designate what it's for)

promises made after discharge in bankruptcy

if the party promises to pay it revives however much debt you stipulate, this must happen in front of a judge

unforseeable difficulties rule

happens only with construction contract with some unforseeable event and a promise to pay in that order. A doesn't need consideration for these unforeseen difficulties

modification of a sales contract

both parties must agree but only one party needs to give new consideration

to analyze contracts

state trial court, identify parties, consideration of each party, identify if common law or sales, identify plaintiff and defendant

unliquidated debt

disputed debt

liquidated debt

undisputed debt

defenses to genuiness of assent

mistake, misrepresentation, concealment, fraud, duress, undue influence unconscionability

mistake

unilateral and bilateral mistakes of fact law, expectation (facts are not opinions or values)

unilateral mistake of fact

general rule is no effect on contract except if other party is aware of mistake and says or does nothing making contract voidable (ex: I think a painting is worth 6M, courts won't help me unless seller knows I am mistaken)

why courts won't help unilateral mistakes of fact

caveat emptian --\> buyer beware

unilateral mistake of law

mistaken in facts of law have no effect on contract (ignorance of law is no excuse) but in rare cases it could be seen as mistake of fact

unilateral mistake of expectation

no effect on contract ex: buying stock or bonds

mutual mistake of fact

contract is voidable by either party

mutual mistake of law

no effect on contract though sometimes courts see as mistake of fact

mutual mistake of expectation

no effect on contract

misrepresentation

innocent in nature because if it is not innocent it is fraud. contract is then voidable and this differs from mutual mistake of fact because one of the parties created the misrepresentation here (no legal remedy, just equitable remedy of recission)

termination applies to

offers, not contracts

concealment

generally there is no duty to disclose information regarding a contract (don't answer what isn't asked) except if one party knows the other is walking into a trap, statutory, or confidential relationship between parties. in those three exceptions contract is voidable

fraud

without proving injury the contract is voidable and equitable remedy of rescission, and if prove injury get legal remedy of damages

duress

threats

extreme duress

contract is void (threats to kill)

mild duress

contract is voidable (threat of criminal prosecution)

others (duress)

no effect on contract like threat of civil suit or economic loss

undue influence

contract is voidable if there is a confidential relationship, person in dominating position takes advantage, and there is unequal bargaining power

unconscionability

contract is fundamentally unfair and therefore void (in rare cases voidable)

lack of capacity

mental capacity to enter a contract

minors (

total incapacity 0-6 is void and partial incapacity 7-17 is voidable

insane

total is declared (adjudged) void, partial are insane voidable

too intoxicated

no total, but partial is voidable

what happens to a contract if a minor misrepresents their age

then that is fraud and the contract is voidable for both the minor and seller

duty of restoration v. duty of resitution

a majority of states (ohio included) say a minor can disaffirm contract but has a duty of restitution (return what they're able to return for FMV of what is returned over duty of restoration (return what they're able for everything back)

all rescissions must happen within

a reasonable time when minors hit 18, insane people have moments of clarity, and intoxicated people sober up

illegality

generally contracts are void. include lottery, usury, lack of license, contracts in restraint of trade, and exculpatory clauses

lottery

it is a lottery if it has a price, it's based on chance and with consideration (void)

usury

someone can only change a max interest rate on a loan (in Ohio it's 10%)

lack of licenses

if you don't have a license that primarily is meant to raise revenue it has no effect on contract (like fishing, hunting), but if primarily meant to protect the public contract is void (like electrician)

contracts in restraint of trade

these are void unless anticompetitive covenant or covenant to not compete

when are anti competitive covenants legal

if ancillary (it's 1 part of a large contract), consideration is given, and reasonable as to time and space

exculpatory clauses

example "can't sue me for negligence" are illegal and void unless language is clear and unequivocal, consideration is given, and equal bargaining power

limitation of liability clause

a legal exculpatory clause that sets a specific amount to a liability

statute of frauds

it is okay to have oral contracts, but people lie so certain oral contracts must be evidenced by writing and if no writing, the contract is unenforceable

included under statute of frauds

sale of land, contracts that can't be completed in a year, promises to pay the debt of another, promises made in consideration of marriage, promises made by an executor or administrator to pay the debts of the estate of of their own pocket, sale of goods \>$500

promises to pay the debt of another

in order for statute of fraud to apply, the promise must be oral, to the creditor, and must be a secondary promise

secondary promise

being a surety (if X defaults, I'll pay) or guarantor (if X defaults and if creditor is unable to collect, I'll pay)

default on promissory notes

the co-signer is defaulted to co-maker making you joint and severally liable (would rather by guarantor)

exceptions to statute of frauds

primary purpose exception (for paying debitors debts), part performance doctrine (for sale of land), goods received and accepted, money received and accepted, specifically manufactured goods, admission in court (for sale of goods \>$500)