Second LES 305 Test

What are the 3 Main elements of a contract?

1. Offer

2. Acceptance

3. Consideration

(Legal Purpose

(Legal Subject Matter

(Legal Capacity

What two categories can we classify “offers” as?

Bilateral: Two-Sided offer

Unilateral: One-sided offer

Offer is accepted by offeree performing the requested action.

>If asking to come on thursday to wash my car- that is an offer and Im going to pay $100 and if oyu show up on thursday to wash my car =acceptance ^UNILATERAL CONTRACT^

>Pomising to do the task is not enough

>If offer is being started, offer is accpeted and it cannot be withdrawn

>If offer goes over terms ( ex. time limit) the offeree doesnt owe anything

>Offer cannot not be revoked once accpeted

Offer and Acceptance are considered what?

“Meeting of the Minds”

What is Mutual Consideration?

Value Given by Both Parties

What is Legal Purpose?

Reason; The reason for the contract cannot be illegal.

Ex: A contract to break into someone’s home to steal their television

What is the Subject Matter?

Object; The subject matter of the contract cannot be illegal.

What is a Void Contract?

Void contracts are unenforceable

What is a Voidable Contract?

One or both parties can withdraw from contract

What is an Unenforceable Contract?

Considered valid but there is a legal defense to the contract that lets the party cancel

What is the statute of Limitations?

is a law that sets a strict maximum deadline on how long a person or government entity has to initiate legal proceedings after an alleged offense or injury occurs.

What is a main rule of Interpreation of Contacts?

Numbers written in words prevail (win) over numerals

Ex: May 5th, 2026 prevails over 05/02/2026

Are Advertisements and preliminary negotiations offers or not?

-Ads are just invitations for cutomers to make an offer

-The seller has opportunity to reject offer if the offer either is a bad offer or is not avaible anymore

What’s an exception for Advertisements when it comes to offers?

Advertisements are not offers unless the wording is specific enough to constitute a unilateral offer.

ex: $10 plasma TV for first 50 in line when store opens at 9:00am MST on Sunday 4th October 2026

What are Auctions wehn it comes to offers?

-Placing an item up for auction is NOT an offer it is merely a request for an offer from the potential buyer.

-Auctions are WITH or WITHOUT reserve.

>With reserve: the item for sale has a minimum selling price

>Without reserve: the item for sale has no minimum selling price

What is an example pertaining to Vagueness?

-”I offer you a job as a salesclerk in my store during the holdiday season. We will work out a fair wage once we see how busy things get.

-”Thats fine with me”

>Is this a valid offer?

-No, because…

1.What is fair wage?

2. What is holiday season?

What is an example of a Valid offer?

-”I offer you a job as a salesclerk in my store form Novemebr 1st, 2026 through 29th of December 2026, 40 hours per week at $15 per hour.”

>Is this valid?

-Yes because…

1.We know the pay

2. We know the dates

Different ways to terminate an offer are…

1. Revocation (withdrawal)

2. Rejection

3. Counteroffer

4. Lapse of time

5. Failure of conditions specified in offer

What happens in Withdrawal/Revocation?

-In all contracts the offeror can withdraw the offer before the offeree has accpeted the offer

-Cannot withdraw once offer is accepted

What happens if in a Unilateral contract a contract term is withdrawn?

The offeror cannot withdraw or revoke the offer after the offeree has been the actions because starting the action is acceptance.

CONTRACT EX: Khal offers ot sell you is fishing boat for 100,000, He tells you that you need to give him an answer by WEdnesday at 2:00 pm

Can Khal sell the fishing boat to someone else at 2:01 pm on Wed?

Yes, Since the offer expires at 2:00 pm if you have not accepted prior to that time, Khal can sell the boat to someone else.

CONTRACT EX: Khal offers ot sell you is fishing boat for 100,000, He tells you that you need to give him an answer by WEdnesday at 2:00 pm

Can Khal sell the fishing boat to someone else before 2:00 pm on Wed?

Yes, if he notifies you prior to you accepting the offer, he can sell the boat to someone else he has the right to withdraw before you accept it.

CONTRACT EX: Khal offers ot sell you is fishing boat for 100,000, He tells you that you need to give him an answer by WEdnesday at 2:00 pm

What if you give khal $100 to save the boat offer open until Wednesday. Can Khal sell the fishing boat to someone else at 2:00 pm on Wed?

No, Because there is a contract between you and khal to hold the offer open until 2:00 pm on Wed, you cannot sell the boat prior to 2:00 pm on Wednesday.

What is the Mirror Image Rule?

Terms of acceptance must be identical to terms of offer.

What is Consideration often abbreviated as?

“C” when taking notes in class

-Something of value, given exchange for value

What is Sacrifice/Detriment in a contract?

Promising to stop smoking for health is considered a detriment, therefore, is a valid consideration and valid contract.

What is Legality in a contract?

If the contract would violate the law, it is unenforceable.

What is Capacity in a contract?

In order to enforce a contract you must enter it with a party who is legally allowed to sign.

What are the consequences of signing a contract with a minor.

-Can be void or unenforceable HOWEVER can accept a contract with an adult but can take it to court to get in voided.

-Needs the contract to be for necessaries.

Who are the Individuals who have only limited capacity to Contract?

-Minors

-Those suffering mental deficiency

-Whose who are intoxicated.

What are the Rules Regarding Minors “Contractual Power of Avoidance?

-Disaffirmance (“Power of Avoidance”)

>Minors right until reasonable time after reaching age of majority, to disaffirm (void) their contracts.

-This rule is designed to discourage competent parties from entering contracts with minors.

What are the two exceptions to minors right to disaffirm contracts?

-Exception #1: Contracts for Necessaries

Necessaries are for basic food, medical care, and life or death necessities.

-Exception #2: Express Ratification and Implied Ratification

>The minor accpets the terms of a co ntract after reaching the age of majority.

What is Express Ratification?

Occurs when , after reaching age of majority the former minor states that he she intends to be bound by contract entered into while a minor.

What is Implied Ratification?

The person continues performing or keeps using the benefits of the contract.

Individuals No capacity to contract are…

-those adjudicated insane

-those adjudicated habitually intoxicated

-Those with appointed legal guardians

What does Genuine Assent mean?

Each party freely and knowingly agree to the contract terms.

-If there is no “genuine” assent, there is no contract.

-Things to prevent genuine consent:

>Fraud

>Duress

>Undue Influence

>Misrepresentation

>Unconscionability

What is Legal Assent?

If a person does not enter into the contract freely, then the party who said “yes” can void (cancel) the contract.

To prove fraud/misrepresentation, you must show…

1. The person knows that his/her statement is false.

2. The false statement was material (important).

3. The injured party justifiably relied on the statement.

4. Puffing & opinions are NOT fraudulent misrepresentation

What is Duress?

-Duress occurs when one party threatens the other with wrongful act unless assent given. Occurs when wrongful pressure leaves a person without a meaningful choice.

-Saying yes under duress is not legal assent, since coercion interferes with contracting parties free will.

What is Undue Influence? **WILL BE ON EXAM

This involves improper pressure within a trusted relationship.

(trickery,deception, and flattery)

what is the Difference between undue influence and duress?

-When duress is claimed, it is because there has been an intentional use of force or a threat of force.

-Undue influence is between people with a special relationship (a fiduciary relationship).

What is Unconscionability?

An unconscionable contract is so grossly unfair that it “shocks the conscience”.

-Focuses on extreme unfairness, rather than an ordinary bad bargain.

What is the statute of Frauds?

Requires written evidence of certain types of contracts..

-Main purpose is to prevent fraud

-Does not require every contract to be written

-Sale of real estate or marriage and the parties have oral agreement (generally unenforcable)

What are the conditions of a contract?

A condition is an event that affects a partys duty to perform.

-Precedent

-Concurrent

-Subsequent

What is Condition Precedent?

The event must occur before a duty becomes due.

What is Condition Concurrent?

The parties must perform at the same time.

What is Condition Subsequent?

A later event that ends an existing duty.

What are the actions that affect performance of a contract?

-Discharge(Impossibility, Impracticality, Frustration of Purpose)

-Special Issues (Death, Force Majeure, Temporary Illness)

-Party Changes (Novation substitutes a new party for an orginal party)

These may excuse further performance operation of law.

What is Impossibility in a timing event of a contract?

Impossibility is when performance cannot legally or physically occur.

What is impracticability in a timing event of a contract?

An unforceen event creates an extreme barrier to performance.

What is frustration of purpose when it comes to a contract?

Performance remains possible but the contract shared central purpose has failed.

What is Force Majeure?

Extraordinary event outside of parties control, sometimes described as an act of God.

Who decides if the unforeseen disaster is a force Majeure?

Depends on the drafting contained in every contract.

What does a company need to prove to invoke the force majeure clause?

-Effectively impossible to perform duties

-Not enough to show more costly or time-consuming

-Facts of each case are different.

What is a breach of Contract?

-When a party to an agreement owed a duty to perform and fails obligation.

-Damaged party can attempt to recover money damages (remedies)

What is a Material Breach (aka total breach)?

this occurs when a partys non performance related to a fundamental term of the contract or has an effect on the value of the contract.

What is a Partial Breach?

This is when the injured party may recover damages but is not excused from performing.

What is an Anticipatory repudiation (breach)?

-Occurs when one party- before their performance is due- indicates though words or conduct unequivocally that it will not perform the contract.

-Non breaching Sue for damages immediately and not wait for breach to occur

Remedies at Law - Damages

A sum of money claimed or awarded in compensation for a breach of contract.

What are remedies at law- Liquidated Damages?

These are the damages that the parties agree to ahead of time (in the written contract).

What are are remedies at law - Compensatory Damages?

This is an award intended to put the non-breaching party in the same position he/she would have been in if the other party had performed as agreed.

-This arises directly out of the contract.

What are remedies at law - Consequential Damages?

These damages compensate the non breaching party for foreseeable indirect losses not covered by compensatory damages.

-Arise indirectly out of the contract.

(Ex: Hadley v. Baxendale: A party is entitled to recover consequential damages if the damages are caused by unique and foreseeable circumstances beyond the contract itself. Reasonable person could bot have foreseen lost profit would occur, so they were not foreseeable. )

What are nominal damages?

A minimal amount that signifies defendant’s behavior was wrongful but caused no harm. Nominal damages are awarded to commemorate the plaintiffs winning in court.

What are Punitive Damages?

-Damages that punish defendant, whose conduct is considered groslly negliglent or intentional, seeking to deter such conduct in the future.

-Courts award punitive damages only when it is determined that the defendant has acted in a particularly harmful way.

-main goal is to act as a deterrent.

What is the duty to mitigate?

-Under the law, parties to a contract must avoid incurring excessive damages

-No recovery for avoidable damages.

>Non breaching party: The party that did not breach the contract is required to mitigate damages to avoid further losses.

>Reasonable efforts: the duty involves taking reasonable actions to minimize the impact of the breach, such as finding a new tenant if a lease is abandoned.

What are Equitable remedies? ** where monetary damages are not adequate.

Specific performance: court orders breaching party to render the promised performance and complete a contract.

-Purpose: compel the promised action because money is inadequate

-Timing: follows a breach or refusal to provide the promised performance.

This is available ONLY when the subject matter of the contract is unique so that money damages are inadequate.

What is considered unique?

>Real estate is always unique

>Colectory items are unique

(rare cars, artwork, jewelry, and horses.)

What is an equitable remedy- injunction?

Court orders party to refrain from doing a particular act.

Trials- Litigation stages are?

-Pleadings

-Pre-Trial Procedures

-Jury Selection (called voir dire)

>Voir dire: the questioning helps identify whether a potential juror can evaluate the case fairly.

-Trial

-Verdict

Trials- Trial Format are?

-Jury Trial

-Bench Trial (judge is finder of fact)

-Alternative Dispute Resolution (mediation & arbitration)

What are the aspects of pleadings?

-The plaintiffs state claims in a complaint

-defendents state defenses in an answer.

-Defendents can bring in other parties (cross-claim or counterclaim)

What are the aspects of a pre-trial?

-The judge and parties narrow the issues, prepare the case for trial, and try to come to a settlement before trial.

-Only judge defendants, and plaintiffs are in the pretrial conference. there is no court reporter because we do not want a record of this meeting.

What are the aspects of Trial?

-The parties present the case to a jury or judge (bench trial).

-In a jury trial, the jury decided the facts of the cases and reaches a verdict.

-In a bench trial, the judge (alone) evaluates the evidence and decides the outcome/verdict.

What are the aspects of Verdict or Retrial?

-A verdict is the decision made by the finder of the fact

-Hung jury means that the required number of jurors could not agree on a verdict.

What is a plaintiffs openting statement?

The plaintiffs attorney outlines the evidence they expect to present to show that a valid contract exsisted, the defendant breached it, and the plaintiff suffered damages.

What is defenses opening statement?

The defense attorney explains why the plaintiff cannot prove one or more elements of the claim, such as the exsistence of a valid contract, a breach, or resulting damages.

What is the plaintiff’s closing argument?

The plaintiff’s attorney reviews the evidence presented at trial and argues that it proves a valid contract existed, the defendant breached it, and the plaintiffs is entitled to damages.

What is the denfese’s closing argument?

The defense attorney reviews the evidence and argues that the plaintiff failed to prove one or more required elements, such as the existence of a valid contract, a breach, or resulting damages.

**closing arguments are the last time the attorneys address the jury or judge in a trial.

What is a Cross-Claim?

A cross claim brings in a 3rd party who they claim is responible for the plaintiffs harm.

What is a Counterclaim?

A counterclaim is asserted against the plaintiffs by the defendant. Defendant claims that they were injured by the plaintiff.

Methods of Resolution

-Settlement (our people talk with your people)

-Trial (litigation)

-Alternative Dispute Resolution (ADR) (faster and cheaper alternative to litigation)

>mediation

>arbitration

**unlike litigation, ADR required parties to voluntarily submit to the process.

What are the two ADRs to a Trial?

Mediation (hire a neutral 3rd party who helps the parties resolve issues raised in lawsuit.

>Voluntary

>mediator facilities settlement

>once agreement made a contract is signed.

-Binding arbitration (private judge)

>voluntary

>you cannot withdraw from process

>arbitrator kaoes a ruling he/she is the finder of fact.

>binding award.

What are the contracts that generally require writing?

real estate, marriage, or vehicles (important will be on exam)