Term
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Definition
| legally enforceabe promise or set of promises |
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Term
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Definition
| states shall pass no laws impairing the legal obligations of contracts |
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Term
| 4 requirements for a valid contract |
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Definition
1. mutual manifestation of assent
2. consideration
3. capacity
4. legality |
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Term
| mutual manifestation of assent |
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Definition
| consists of offer and acceptance, viewed objectively not subjectively |
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Term
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Definition
| value given or detriment suffered in exchange for a promise allowing the promise to be enforceable, a bargained for exchange |
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Definition
| ability to legally enter a contract |
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Definition
| contract requirement that states a contract must not break any laws or be unlawful |
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Term
| defenses to a contract are... |
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Definition
-lack of reality of consent (assent)
-noncompliance with formalities |
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Term
| lack or reality of consent |
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Definition
| defense to a contract, where assent to a contract is not real or voluntary, contract is voidable |
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Term
| noncompliance with formalities |
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Definition
| defense to a contract when legal standards arent met. some contracts must be in writing or witnessed to be enforceable |
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Term
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Definition
| a promise in exchange for a promise |
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Term
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Definition
| promise in exchange for a completed act |
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Definition
| contract created by the specific words of the parties |
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Definition
| created by conduct of parties, (getting a hair cut, you gotta pay for it!) |
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Definition
| enforceable by all parties |
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Definition
| enforceable by none of the parties |
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Term
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Definition
| may be avoided by one or more parties |
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Term
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Definition
| 4 requirements for a valid contracts are met, but contract i not binding because of a statute |
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Term
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Definition
| all performance is complete |
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Term
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Definition
| part of the performance is lacking |
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Term
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Definition
| interpretation where a judge looks at the words and actions of the parties rather than what they are thinking |
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Term
| rules of construction (interpretation) |
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Definition
1. plain meaning rule
2. entire writing rule
3. meaning of words
4. conflicts of terms
5. ambiguous terms
6. surrounding circumstances |
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Term
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Definition
| if words of the contract are clear in their meaning, the courts will enforce the contract as written-generaly no extrinsic evidence allowed |
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Term
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Definition
| the court will do its best to enforce the entire contract when there is a potential conflict of terms |
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Term
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Definition
| ordinary words are given their dictionary definition, legal terms are given their legal definition, technical terms are given their technical definition |
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Term
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Definition
| review the entire contract and apply the most consistent with the intent of the parties |
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Term
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Definition
| primary rule is to interpret the word against the drafting party; hand written has first priority, type written terms have second priority, pre printed terms have last priority |
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Term
| surrounding circumstances |
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Definition
-course of performance: the way the parties performed the contract being interpreted
-course of dealing: the way the parties performed previous similar contracts
-usage of trade: the way the issue in question is customarily addressed in the type of business involved |
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Term
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Definition
| look at words spoken or written and conduct and what they would mean to a reasonable person |
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Term
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Definition
| a serious specific offer and a specific demand in a contract setting |
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Term
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Definition
-expressions of opinion
-statements of intentions
-preliminary negotiations
-certain advertisements and auctions |
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Term
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Definition
| non offer; statement as to general quality or prediction |
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Term
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Definition
| non offer; a statement of what one may do in the future |
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Term
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Definition
| non offer;inquiries or generall discussion of potential contract terms |
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Term
| advertisements and auctions |
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Definition
| non offers; with ads the problem is multiple acceptances-could be offers if they are very specific eliminating multiple acceptances. auctions are not offers unless they are advertised without reserve |
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Term
| requirements of a valid offer include... |
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Definition
-intention
-definitenes
-communication |
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Term
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Definition
| a serious and dobjective intention by the offer to be bound, offers made in obvious anger, jest, or excitement are not binding |
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Term
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Definition
| offer definite enough to ascertain the terms of the contract, includes names, descrition of goods or services, quantity, price, and important delivery terms |
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Term
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Definition
| offer must be communicated to the offeree; requires communication by the offeror and a receipt by the offeree |
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Term
| when does an offer terminate |
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Definition
-revocation of offeror
-lapse of time
-rejection or counter offer
-operation of law
-by terms of offer |
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Term
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Definition
| under the UCC, a merchant who has been given money to hold an offer on the table must keep offer on table |
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Term
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Definition
| an acceptance which contains new or varying terms is considered a rejection and counteroffer (the acceptance must be a mirror image of offer or it is invalid) |
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Term
| requirements for valid acceptance |
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Definition
-acceptance by whom
-terms of acceptance
-must be communicated |
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Term
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Definition
| must be made by the offeree; cant accept an offer made to another person |
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Term
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Definition
acceptance must be...
-unconditional
-unequivocal
-same terms |
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Term
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Definition
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Term
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Definition
| governs contracts involving sale of goods |
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Term
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Definition
| passage of title from a seller to a buyer for a price or consideration |
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Term
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Definition
| things tangible and moveable |
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Term
| 3 categories of a merchant |
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Definition
-dealer in goods of the type contracted for
-person who holds himself out as having special knowledge as to goods of the type contracted for
-a person who employs a merchant as an agent |
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Term
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Definition
| employment and sales of land, services, and insurance |
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Term
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Definition
| sales of goods and has other provisions governing leases of personal property, commercial paper, and mortgages on personal property |
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Term
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Definition
-standards of dealing
-offer |
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Term
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Definition
1. good faith is implied in every contract
2. higher standards for merchants: must meet industry standards for fair dealing |
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Term
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Definition
-price
-payment terms
-delivery
-shipment time |
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Term
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Definition
| if a merchant in a signed writing promises an offer will be kept open, the merchant is bound to holdthe offer open for stated time or reasonable time, not greater than three months |
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Term
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Definition
| value given or detriments suffered in exchange for a promise, making the promise enforceable |
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Term
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Definition
| this for that; a bargained for exchange of consideration on each side is normally necessary for a contract to be enforceable |
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Term
| 4 types of sufficient consideration... |
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Definition
-an act
-giving up the exercise of a legal right
-a change in status
-a promise to do any of the first 3 |
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Term
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Definition
| enough consideration to make the contract enforceable |
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Term
| adequacy of consideration |
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Definition
| fairness of the amount of consideration for what is received in exchange |
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Term
| 5 types of insufficient consideration |
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Definition
-illusory promise
-a gratuitors promise
-past consideration is insufficient
-nominal consideration
-promise to perform a pre-existing duty is insufficient consideration |
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Term
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Definition
| a promise with no substance behind it-subject of the promisor; exceptions: requirements contracts, output contracts |
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Term
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Definition
| promise to make a gift or moral obligation |
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Term
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Definition
| not sufficient consideration; promised consideration has already been performed prior to the promise to do it |
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Term
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Definition
| consideration in name only-typically only recited in a written agreement but not paid; amount is very small in light of the entire contract |
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Term
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Definition
| if a duty existed prior to the promise to do it then the promise to fulfill that duty is not valid consideration |
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Term
| exceptions to the consideration rule include... |
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Definition
-promises to pay debts barred by statute of limitations
-reaffirmation agreements in bankruptcy
-charitably subscriptions
-promissory estoppel |
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Term
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Definition
| promise is made by the defendant, plaintiff suffers detriment by reasonable reliance on the promise, and enforcement of the promise is necessary to avoid injustice |
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Term
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Definition
| parties have full legal capacity |
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Term
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Definition
| one or more parties have been adjudicated mentally incompetent, contract is void |
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Term
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Definition
| one or both are minors, highly intoxicated, or mentally incompetent; contract is voidable by the person with disability |
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Term
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Definition
| avoidance of a contract by a person with a legal disability |
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Term
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Definition
-expierencing the intent, by words or conduct, not to be bound to the contract while under a disability or within a thereafter
-restoration: requires the return of property purchased before disaffirmance
-restitution: requires payment for any damages to property prior to return |
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Term
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Definition
| step in disaffirmance; requires return of property purchased before disaffirmance |
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Term
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Definition
| step to disaffirmance; requires payment for any damages to property prior to its return |
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Term
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Definition
| using specific language to manifest agreement to the contract after a legal disability is removed |
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Term
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Definition
| failure to disaffirm within a reasonable time after the removal of a disability is an implied ratification (no longer voidable) |
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Term
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Definition
| items necessary for health and maitenance such as foodm clothing, medical care, etc |
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Term
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Definition
| contract implied in law to avoid unjust enrichment |
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Term
| requirements for disaffirmance in the case of minority |
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Definition
1. express the intent not to be bound within the required time period.
2. fullfill only the duty of restoration under the majority rule
3. must be a type of contract for which disaffirmance is allowed |
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Term
| contracts that cant be voided because of minority |
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Definition
-marriage
-military
-student loans |
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Term
| intoxicated persons capacity and legality... |
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Definition
| someone so intoxicated at the time of the contract that they do not understand the nature or substance of the transaction |
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Term
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Definition
| persons who at time of contract do not understand the nature or substance of the transaction because of a mental condition |
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Term
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Definition
| an agreement whose purpose or performance is illegal |
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Term
| illegal agreements include... |
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Definition
-violation of usury laws
-gambling laws
-blue (sabbath) laws
-contracts by unliscensed professionals
-contracts to perform illegal acts |
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Term
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Definition
| violation of laws which set a maximum interest rate on loans or credit; typically cannot collect interest and some states cant collect on entire contract |
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Term
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Definition
| gambling contract is void, but the loser as a short time to sue to recover losses |
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Term
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Definition
| now illegal, certain contracts that prohibited on sundays |
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Term
| contracts by unlicensed professionals |
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Definition
| certain professions require a liscence to perform (surgeon, cutting hair) |
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Term
| contracts to perform illegal acts |
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Definition
| cant make a contract that involves illegal shit |
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Term
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Definition
| attempt to escape liability of the party at fault |
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Term
| 3 types of agreements in restraint of trade |
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Definition
-price fixing schemes are against public policy
-market divisions are against public policy
-covenants not to complete |
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Term
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Definition
| cant descriminate in a contract because it is protected by the constitution |
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Term
| contracts involving a tort |
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Definition
| contracts involving commission of a tort are illegal |
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Term
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Definition
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Term
| 5 contracts which must be in writing |
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Definition
1. sale of interest in land
2. performance beyond one year
3. collateral promises
4. promises made in consideration of marriage
5. sale of goods priced at $500 or more |
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Term
| statute of frauds (definition) |
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Definition
| a statute which requires certain types of contracts to be in writing to be enforceable |
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Term
| if a contract has to be in writing |
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Definition
| it is inside or within the statute of frauds |
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Term
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Definition
| if ownership of land may be divided into various parts, the entire interest is the parts possible |
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Term
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Definition
| the permanent right to use a portion of land without owning it |
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Term
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Definition
| right to come onto land and remove something from it, like coal/gold |
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Term
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Definition
| an interest which allows a sale of property to collect a debt |
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Term
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Definition
| a mortgage gives this right if a certain obligation is breached |
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Term
| performance beyond one year |
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Definition
| if performance of a contract will take longer than one year from the date it is made the contract must be in writing to be enforceable |
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Term
| posibility of performance |
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Definition
| the mere posibility of performance within one year, however unlikely, takes the contract outside the statute of limitations |
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Term
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Definition
| a promise of guarantee made to a creditor to pay anothers debt only if the other does not pay; debtor and guarantor both have promises to creditor |
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Term
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Definition
| liable on same basis as debtor-not a collateral promise; see pic in notes |
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Term
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Definition
| guarantor is liable instead of debtor; see pic in notes |
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Term
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Definition
| promises made prior to marriage, must be in writing |
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Term
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Definition
| familys promise made to prospective husband by daughters family, must be in writing |
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Term
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Definition
1. writing must be sufficient to show the essential terms of the contract
2. contract must be signed by the party being sued |
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Term
| exceptions to the statute of frauds... |
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Definition
-performance
-admissions of terms |
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Term
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Definition
| exception to statute of frauds, when the defendant admits there is a contract, the contract is enforceable to the extent of teh admission |
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Term
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Definition
| evidence prior to contempoaneous oral statements or agreements is inadmissible as evidence to alter the terms of a written contract |
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Term
| exceptions to parol evidence rule |
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Definition
1. extrinsic (outside) evidence is admissible to prove lack of reality of consent (fraud)
2. extrensic evidence is admissible to clear up ambiguity
2. extrinsic eviednce is admissible to clarify incomplete contracts |
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