Business Law Contracts

What is a contract

promise enforced in court

T or F

if a contract is not written, it is not enforceable

false

the elements of a contract

what is consideration

there must be an exchange between two parties

elements of a contract

1. some kind of agreement

explain

someone making an offer and the other party accepts it

Elements of a contract

what is consideration

MUST be an exchange between the two parties

consideration helps with

determine someone made an offer and whether there is an acceptance

makes promise enforceable

elements of a contract

contract must

follow the law

elements of a contract

what is capacity

parties must understand what they are getting themselves into in the contract

MUST be adults (18 and older)

promisor

person making the promise

promisee

person to whom the promise is made to

purpose of a contract

to make business matters…

predictable

purpose of a contract

avoid ___ relating to agreement

misunderstanding

Purpose of a contract

to know parties ___ if agreement falls apart

rights

bilateral contract

promise made to each other

A: I will cut your grass if you pay me 50 bucks

is person A making a bilateral or unilateral contract

bilateral

A: I will cut your grass if you pay me 50 bucks

what person A says has automatic…

consideration

A: find my dog and I will reward you 50 bucks

what kind of contract is this?

unilateral contract

in bilateral contract

once they exchange promise they are

bound to each other and promise must go both ways

how do you accept a unilateral contract

to perform what is said in the contract only

how does suing work in a unilateral contract

after the party accepts and performs all the requirements, and they are entitled to whatever the other side promised but the other party does not fulfill their promise

then you can sue

scenario

A: make 1000 red widgets for me by Friday and I will pay you 5% more than our standard price

unilateral contract

A: make 1000 red widgets for me by Friday and I will pay you 5% more than our standard price

why is this unilateral

Person A is not asking for promise back necessarily

scenario

A: I need 100 red widgets and I will pay you 10% more

I will promise to do that if you promise to get them to me by Friday

bilateral contract

A: I need 100 red widgets and I will pay you 10% more

I will promise to do that if you promise to get them to me by Friday

does the other party have to perform agreement even though they said they will do it?

no because A did not ask the other party to commit

executory contract

one that has something left to be performed

scenario

in this contract, one party finished all their duties but the other party has not paid…

what is that?

executory contract

executed contract

everybody has done everything they are supposed to do

what does UCC stand for

Uniform commercial code

what article is the uniform commercial code in

article 2

article 2 UCC only applies to…

sale of goods

what are sale of goods

anything moveable other than money, securities, and other intangible rights

what are intangible rights

assets that are not physical in nature

examples of intangible rights

stocks, bonds, contract rights

contract laws were invented as a part of the

common law

Predominant factor test

if it is a good

the uniform commercial code applies

what is a predominant factor test

it helps determine the dominant purpose of the contract

Predominant factor test

what if it is not a good

the common law will be applied

express contract is based on

written or spoken words

what is not involved in express contracts

conduct and actions

implied in fact contracts

based on actions

no written or verbal agreement

course of dealing

previous conduct between parties that create a common basis for understanding the meaning of their actions

mixed contracts

involves both sale of goods and non-goods

scenario

A’s car grinds whenever A presses the brakes

A goes to B to fix that

they find out A needs a new brake pad

it cost 200 dollars

A promise to pay

B promise to fix

what contract is this

bilateral

scenario

A’s car grinds whenever A presses the brakes

A goes to B to fix that

they find out A needs a new brake pad

it cost 200 dollars

A promise to pay

B promise to fix

Is this a contract for service or goods

service

Scenario

A wants an oil change

B changes oil, dispose, refill, etc

If A&B end up in a dispute, is this a contract to sell goods or non-goods

non-goods

what is also considered non-goods

service

Scenario

A wants recommendation to change oil in their 2005 Forestor with 300,000 miles

A wants to know which oil, what oil filler is needed

A asking B for recommendation

Is this a good or is A going to be charged for service?

service

whenever you ask for help it is a service

Non-contractual obligations

both torts and contracts

unjust enrichment is a

noncontractual obligation

Scenario

members joining APA had to pay a fee to join

APA asked them to pay a special assessment on their due statement saying it was mandatory to pay in order to join

Later they find out it was not mandatory but it was voluntary

What is this?

Unjust enrichment, Quasi K

Elements of Quasi K

Plaintiff gave what to the defendant

a benefit

Elements of Quasi K

what is the 2nd element

defendant knew they got the benefit and got some value out of it

Elements of Quasi K

what is the 3rd element

defendant accepted benefits under unfair circumstances where the plaintiff didn't receive any compensation

Scenario

• Museum wants a display that looks like London

• Museum hires designers and is able to pay them little by little throughout the process

• Usually, designers get paid when they make the design

• Museum later tells designers they are unable to afford their full payment

• designer file a lawsuit

Was element 1 of Quasi K fulfilled

Yes, designer (plaintiff) gave benefit to museum (defendant)

Scenario

• Museum wants a display that looks like London

• Museum hires designers and is able to pay them little by little throughout the process

• Usually, designers get paid when they make the design

• Museum later tells designers they are unable to afford their full payment

• designer file a lawsuit

Did the museum know they got the benefit without a doubt

yes

Scenario

• Museum wants a display that looks like London

• Museum hires designers and is able to pay them little by little throughout the process

• Usually, designers get paid when they make the design

• Museum later tells designers they are unable to afford their full payment

• designer file a lawsuit

Did the museum know they got the benefit without a doubt

yes

Scenario

• Museum wants a display that looks like London

• Museum hires designers and is able to pay them little by little throughout the process

• Usually, designers get paid when they make the design

• Museum later tells designers they are unable to afford their full payment

• designer file a lawsuit

Did the museum expect that this was something they had to pay for?

yes because they were paying them little bits throughout the design process but not the full payment

Scenario

• Museum wants a display that looks like London

• Museum hires designers and is able to pay them little by little throughout the process

• Usually, designers get paid when they make the design

• Museum later tells designers they are unable to afford their full payment

• designer file a lawsuit

Wouldnt it be unfair for them to end up with the plans in exchange for nothing for the designers

yes

Promissory Estoppel

a legal doctrine that states that if someone reasonably relies on a promise and acts (or fails to act) in a way that causes them financial harm because of that promise, the promise can be enforced

Elements of Promissory Estoppel

1. promisor reasonably expect promisee to act ___

in reliance on a promise

elements of promissory estoppel

2. promisee reasonably ____ on the promise

acts in reliance

Elements of promissory estoppel

there will be substantial injustice to the promisee if the promise is not

enforced

Father ask his daughter to leave her job to work at his ranch and he will give the ranch to her

who is the promisor

the father

Father ask his daughter to leave her job to work at his ranch and he will give the ranch to her

who is the promisee

the daughter

Statute of frauds is all in…

writing

an agreement for the ___ of land should be in writing

transfer of land

an agreement that ___ be performed in one year needs to be written

a. can

b. can not be

can be

an agreement made in consideration of __ needs to be in writing

marriage

an agreement made by an ___ to answer personally for a duty of the decedent

executor of an estate

decedent means

dead

an agreement for the sale of goods worth ___ must be written

500 dollars or more

requirement of written contract or memorandum

signed by defendant, name of each party

in modern times

federal and state statutes give full effect to…

electric signature and contract

t or f

a retinal or a voice scan is considered an electronic signature

true

t or f

a magnetic card swipe with your personal id number is NOT an e-signature

false