Business Law (Ch. 5 —> Ch. 12)
Any agreement enforceable by law
Exchange of items of equal value
What do contracts do?
Create both moral and legal obligations.
Are not contracts and not enforceable by law. (Prom date).
Wether the parties agreed to the terms set forth by the contract without duress.
What parties were thinking when a contract was laid out.
Proposal from one part to another.
Willingness by the offeree to go along with the proposed contract.
Meeting of the minds.
Any promise that requires bargaining.
Both parties must be legally competent in order to contract.
Legality of Subject Matter
Purpose of a contract must be to accomplish a legal goal, contracts agreeing to illegal acts are not enforceable in court.
If a contract is missing legal elements, the there is no contract.
When you can cancel a contract
Contract exists, but cannot enforce because of legal defense or court order.
Formed by words (oral or written)
A contract formed by conduct.
A promise for a promise.
A promise for an act.
Contract formed by of mouth.
Contract formed in writing, proof of agreement.
Imposed to prevent unjust enrichment (take advantage of minors).
Contract requiring a special form.
No special form required to contract.
A contract which has been fully performed.
A contract that has not yet been completed.
Agreements to Contract
Agreement to agree are to vague and do not constitute a contract.
To withdraw an offer.
When an offeree refuses a proposal by word or deed.
Destruction of Material
When the physical material of a contract is destroyed and the contract is voided.
Death or Incompetence
Lacks capacity to contract; contract is void.
No response does not constitute acceptance.
When a sellers actions prevent the buyer from learning all of the facts.
Misrepresentation of Law
Ignorance of the law does not excuse concealment.
Misrepresentation by Silence
Neither party has duty to announce facts.
Deliberate deception intended to secure an unfair or unlawful gain
To cancel a contact
Any fact that is important to one of the parties.
Choice to not reveal important information; just as bad as fraud.
Five elements of fraud
Party making it must know it is false
Made with intent to rely upon falsity
Innocent party must rely on the fact
Innocent suffer monetary loss.
Mistake by one party, cannot use to avoid contract.
Mistake of nature
Not aware what contract entails. Bound to it.
Mistake of Identity
Voids a contract.
Mutual mistake. Either party can avoid contract.
Mistake of subject matter
Mistaken as the identity of the subject matter.
Overcoming ones will; agreements made under this are voidable.
Threats to ones business or income that destroy a persons free will to avoid a contract.
Can cause a contract to be voidable, unfair and improper persuasive pressure.
Permission by law to assume both parties have the power to contract; challenges or in court.
Legal age of adulthood.
Person below legal age of adulthood.
Age of Majority
Day before birthday, law doesn’t count fractions of days in ones life.
Minors no longer in control of their parentsz
Giving up adult protection of minors.
Misrepresentation of age
Minor lies about age, may or may not be sued depending on state. Can be sued for fraud.
Void their contracts, but only the entire thing.
Contracts are ratified upon age of majority when minors use goods and services at the age.
Minor is responsible for fair value of necessaries.
A person appointed to look after a person lacking capacity.
Can disaffirm contracts made when they were drunk.
People living in he country who owe allegiance to another one.
Exchange of benefits and detriments.
Something a party was not entitled to revive.
Any loss suffered.
Bargained for Exchange
Law supports anything bargained for.
When consideration of a contract is out of line.
An agreement not to sue.
A charity must carry out task collecting money for.
Accord and Satisfaction
Way a dispute is settled
Acceptance from creditor of what has been billed.
Agreement reached in accord.
Promise to keep offer open for a period of time
Appear to be a contract but actually isn’t.
Something already done, not recognized by courts
Under legal obligation to do something
Good reputation of a business
Competitions agreement to sell products at a certain cost.
Required in certain fields
Demand of higher rate of insurance than allowed by law.
Promises not to compete
Offer to buy or sell certain goods at certain prices
A game of chance used to raise money for the government
The fee the borrower pays to the lender
Restraint of Trade
Element of competition used to control prices
Process used by the government to contract public works
A kind of written contract
False statements made under oath.
Moveable items such as books, furniture and clothing
The parol of evidence law
Rule that states evidence of oral statement made before signing of a contract are not admissible in court
When a contract can be understood in multiple ways.
The Statute of Frauds
Law establishing written contracts as enforceablez
Land and anything affixed to the land.
Breach of contract
Failure to perform
End of contract
Parities have curtailed the terms set out by the contract.
Contract is discharged by this once carried out properly.
A time that varies case to case.
Mostly completed contract, leaving out only a few minor details.
Offer to do what you have agreed to do. Must make tender in order to bring suit.
Must offer US coins or currency
Both parties agree to end a contract
Impossibility of performance
Death or illness of destruction of property prevents performance of a contract.
Statute of limitations
Time frame in which a law suit must be filed
Operation of Law
Court orders end of contract or a provision becomes illegal.
Discharging a debtors obligations, debtor can’t be imprisoned for inability to pay.
Transfer of a right under the law
What can be assigned
Rights may be assigned unless the alter he contract in an important way.
transfer of duties
an agreement in which the original party of a contract is replaced by a new one
Privity of Contract
Who can so whom over a question of performance
third party benificiary
not a signor but directly benefits from a contract
payments recovered in court for a person who suffered injury
Damages directly attributable to another party’s breach of contract.
any reasonable expense resulting from a breach of contract.