Legal Environment Of Business Exam 1

Front 1

Primary Sources of Law

Back 1

Legislature, Judge made law, consitutional law, administrative law

Front 2

Legislature

Back 2

federal-internal code
State- partnership laws, statues

Front 3

Judge made law

Back 3

cases, like common law

Front 4

Constitutional law

Back 4

US + State

Front 5

Administrative Law

Back 5

Federal and state are giving many rule-making authority to give rules that have the same affect as statue

Front 6

Examples of Secondary Sources of Law

Back 6

Books, treatises, law review articles (courts rely on these to develop the law)

Front 7

Why do we have courts?

Back 7

To settle disputes

Front 8

Federal Courts

Back 8

US supreme court
Federal Circuit court of appeals(covers several states...13 circuits in Fed. system)
Federal District Court (trial court of federal system, each state has at least one)

All judges are appointed by the president for life.

Front 9

State Courts

Back 9

Highest State Court
Intermediate Int. Appelate Court (has to be proper jurisdiction)
Trial Court

Front 10

Sershiarary (sp?)

Back 10

Supreme courts discretionary choice of cases

Front 11

2 bases for jurisdiction in federal court

Back 11

1. Diversity of citizenship-opposite sides of case are citizens of different states, controversy exceeds $75,000.

2. Federal question- case involves interpretation of federal statue or US constitution

Front 12

Pleadings

Back 12

documents that lawyers file in a case

Front 13

complaint

Back 13

1. statement of courts jurisdiction

2. statement of claim, showing that plaintiff is entitled to relief, a cause to action, legal theoryof liability.

3. Demand for relief (usually money damages). What does plaintiff want? Civil case is compensatory not punitive

*if money damages are not adequate or irreperable relief, court enjoins (orders) defendant to do something- if violates- contempt of court

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Equitable relief

Back 14

wants an injunction (order) from the judge to prohibit something/mandatory injunction- perhaps fix what you did?

Front 15

specific performance

Back 15

equitable remedy for breach of contract- ordering the seller to do the contract wehn money damages are not adequate or defendant faces irreperable harm.

Front 16

Do you need a legal theory for specific performance?

Back 16

Yes. Notions are dismissed for lack of this.

Front 17

Motion for Summary Judgement

Back 17

A motion requesting the court to enter a judgement without proceeding to trial. The motion can be based on evidence outside the pleadings and will only be granted if no facts are in dispute.
either party can file
no issue of material fact that's in dispute

Front 18

Law and facts decision w/ judge and jury

Back 18

judge decides the law
jury decides the facts

Front 19

Law and facts decision w/ only judge

Back 19

judge decides law and facts

Front 20

stare decisis

Back 20

using precedence for judges decision to decide cases.

example: VA state court-if one case is decided and another case has the same facts, then the decision is the same. VA state court has binding authority on lower courts(i.e. appelate) (as long as the facts are the same)
-VA state court does not have binding authority on GA state court
-Creates reliability and consistancy in the law

Front 21

exception to stare decisis

Back 21

VA hasn't looked at the case in 100 yrs and case comes up, lots of other states made diff decisions- possible that there's no binding authority

Front 22

Contracts Law (key points)

Back 22

-Is there a valid contract?
-Does it have to be in writing to be enforceable? (some are, some aren't)
-Interpret language
-Performing the contract
If there's a breach, what are the remedies?

Front 23

3 binding elements of a contract

Back 23

-offer
-acceptance
-consideration

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3 types of contracts

Back 24

expressed, implied in fact, implied in law

Front 25

expressed contract

Back 25

parties agree in words (oral or written)

Front 26

Implied in fact contract

Back 26

mutual promises are inferred by the person's actions or conducts (not words) inferred promises (mutual agreement)

Front 27

Implied in law contract

Back 27

"quasi-contract"- to avoid unjust enrichment-purpose. the law fictionally implies a promise to pay for benefits recieved.

1. Plaintiff confers a benefit on defendant
2. P expects to be paid
3. D does not expect to pay
4. P is an officious intermeddler
5. It would be unjust enrichment for the D to have the benefits and not to pay the P
*i.e. doctor saves an unconscious person. they get better, doc sends bill. needs to pay.
*neighbor paints house without permission and you watch

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officious intermeddler

Back 28

someone who does something for someone else
ADD?

Front 29

2 elements for an offer

Back 29

1. promise- manifestation of apparent intent
2. bargain- induce something from the other party

Front 30

Offer- 5 questions

Back 30

1. Is there a promise?
2. Is there a bargain?
3. Is the offer still open at the termination of the contract?
4. What does offeror ask for acceptance?
5. Is there an acceptance?

Front 31

Objective theory of contracts (rule of law)

Back 31

-promise- manifestation of present contractual intent
-present assurance of willingness to enter into a bargain
-would a reasonable person hearing or seeing the words reasonably believe that he could conclude a bargain merely by giving his assent
-what could a person hearing or seeing the words reasonably believe the outward manifestation of the speaker or writer to mean under all the circumstances

Front 32

Bargain

Back 32

-test- benefit to promisure-trying to induce something-a return promise beneficial

*gift promises are usually unenforceable

Front 33

(specificity of) Terms of contract

Back 33

Terms (price, time) and definitions must be definite enough

-bad example-"all the steel I produce I'll sell to you."

-the more terms are certain the more likely the court will say it's an offer. If there aren't definitive terms, court may decide its not an offer.

A offers to B, can C accept?...NO

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Bilateral Contract

Back 34

If the offeror is asking for a return promise from offeree

"I promise to give you my book if you promise to pay me $10"

Front 35

Unilateral Contract

Back 35

Offerer is bargaining for offeree's complete performance (even substaint

"I promise to give you my book, if you get me $10 to my office by 5"

Front 36

Is the offer still open at time of acceptance?

6 ways an offer can be terminated

Back 36

1. lapse of time (may be specified in offer, if not specified, offer stays open a reasonable time)
2. If offerer or offeree- death or insanity
3. Destruction of subject matter
4. Supervening illeagility-example- prior to acceptance legislature makes buying something illegal
5. offeree rejects offer
6. offeror revokes offer prior to acceptance, could be expressed revocation. "I revoke" "take back" or indirect revocation

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Ways offeree can reject offer

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1. expressed rejection "no", "I reject"
2. Counter offer acts as a rejection of offer. (change terms of offer, qualify or condition of acceptance, add terms)

*offeree loses power when it has been rejected

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Mirror Image Rule

Back 38

Offer must be accepted on same terms as original offer

Front 39

Grumbling Acceptance

Back 39

offeree rises to level of dissatisfaction but doesn't rise to actual disent

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Indirect revocation

Back 40

offeree finds out info from reliable source (i.e. agent) that the offeror has taken some action that shows that he changed his mind.

*i.e. offeror sold land to someone else (varies by state whether it should be by sale or whatever)

Front 41

Firm Offer

Back 41

offer, by its own terms that states a date to which it will be open.

Can that be revoked? Yes! Any offer can be revoked prior to acceptance

*exception option contract (irrevocable)

Front 42

Option Contract

Back 42

-you pay or promise to pay
-bargained for
-if its not bargained for, just nominal (i.e. $1)
-nominal consideration, you need it in writing
-offeree promises to pay consideration for promise from offeror to keep offer open to certain date.

Front 43

Effects of an Option Contract

Back 43

-1. promisore has duty not to revoke
2. offeror loses power to revoke offer
3. offeror dies, offer will not lapse
4. offeree makes counter-offer during option pd, it will not terminate offerees ability to choose original offer.

*possible that law can imply an option contract only for offer for unilateral contract

Front 44

When you accept an offer for unilateral contract through complete performance you...

Back 44

-offeree has started complete performance, so offeror can't revoke
-no acceptance until she completes the offer
-Substaintiality- began to perform (question for the jury-when?)

Front 45

reverse unilateral contract

Back 45

offer doesn't contain promise-offer is created by beggining of performance and is accepted by offeree's silence when he/she has a duty to speak or by promise.

Offeree by words or conduct leads offeror to believe that silence will equal acceptance.

Would offeror reasonably believe offeree's outward expression was his apparent intent to accept.

Front 46

Exception- silence constituting an acceptance

Back 46

reverse unilateral contract
*fridges accidentally are delivered to wrong place, person accepts, should not have been silent, accepts offer by silence.

Front 47

Bilateral Contract (ways to accept)

Back 47

-Offerer may authorize a specific act- if offeree does that act, then it is an acceptance. Moment he "waves the red flag". It can't be something he usually does anyway.

"park the car in my driveway if you want to accept the contract"

Front 48

Silence as acceptance in the Insurance Industry (3 elements)

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1. The insurance application is prepared by the insurance industry
2. The application is in good order-applicant is qualified
3. The loss occurs after expiration of a reasonable time for the insurance company application

Front 49

Course of Dealing between parties

Back 49

-Prior contracts/dealings between two parties
-yr 1-A promise, B return promise-valid contract
-yr 2- A renewal, B silence- contract performance (continues for years 2-10)
yr 11- A renewal, B silence- B thinks "no I didn't accept"

Course of dealing created exception. A vaild contract.

Front 50

Acceptance

Back 50

Objective theory of contracts- offeror reasonably believe offeree apparent intent to accept unqualifiably the terms of the contract.

Front 51

Means of Accepting an Offer

Back 51

-any means specified for or requested by offeror (or faster way).
-"this is the only way to accept"-absolute term
-If offeror does not specify, than a commercially mean of accepting is reasonable

Front 52

When is the acceptance Effective?
MAIL BOX RULE

Back 52

When offeree properly dispatches the acceptance.

Front 53

Exceptions to Mail Box Rule

Back 53

1. If offeror say with clear language "offer is only accepted when I recieve it"
2. In some states, w/ option contract, to accept main offer, wouldn't be accepted until offeror recieves it.
3. Suppose offeror suggests a request of acceptance and offeree accepts by different means (of communication) then acceptance is not effective until recieved by offeror and only effective when its recieved within the time that it would have been recieved had the suggested means of communication been used.

Front 54

What does properly dispatched mean?

Back 54

put in the mail, proper postage, address, mailed

Front 55

When is a rejection effective?

Back 55

Not until it is recieved by the offeror

Front 56

When is a revocation effective?

Back 56

Not until it is recieved by the offeree

Front 57

1. offeree mails rejection
changes mind
2. offeree telegraphs acceptance

Back 57

whichever gets there first is effective

Front 58

1. offeree mails acceptance
changes mind
2. telegraphs rejection

Back 58

A contract was formed when the offeree mailed the acceptance

Front 59

4 elements of estoppel (exception to offeree sending acceptance then changing mind and sending rejection) all have to be satisified

Back 59

1. rejection got there first
2. offeror in good faith (not knowing acceptance in the mail)
3. Immediately
4.relies to her detriment

*theory one party is holding out, and the other party reasonable relies on it.

Front 60

Consideration

Back 60

-The third element of a contract
-2 elements- bargain and legal detriment

Front 61

Bargain test

Back 61

benefit to promisure

Front 62

legal detriment

Back 62

doing something or promising to do something that you are not under a pre-existing duty to do. Or forebearing, refraining, promising to forebear from doing something you have a legal pre-existing duty to do.

Front 63

Bilateral contract (legal detriment)

Back 63

Both parties are bargaining for legal detriment

Front 64

Unilateral contract

Back 64

offeree- complete performance
offeror-legal detriment

Front 65

If we have a valid contract and want to modify it, you need new...

Back 65

consideration
*only enforceable this way
-Builder B contracts to build A's house, finds out losing proposition, B wants A to pay $2000 extra. No consideration! So not valid

Front 66

Exception to need for new consideration when modifying a contract

Back 66

in some states- unanticipated circumstances doctrine

Front 67

Unanticipated circumstances doctrine

Back 67

1. circumstances were unanticipated when contract was made (not ordinary business risk)
2. circumstances make readjustment of terms of contract fair and equitable

* example- lost ring, promise to pay reward for return. On duty police officer finds ring and returns. ( can he get reward?) No. He had PED.

Front 68

Debts (key points)

Back 68

-Debtor owes creditor money
-A promise to accept less than full amount of liquidated debt is not enforceable due to contracts

Front 69

Liquidated debt

Back 69

amount was certain

Front 70

Unliquidated debt

Back 70

amount is subject to dispute

Front 71

Exceptions for unliquidated debt

Back 71

Honest dispute exists about whether it is a genuine claim (gift vs. claim)
*gift promises are unenforceable because there is no bargain
* any different performance by debtor will be legal detriment and enforceable

Front 72

Illusory promise

Back 72

promisore has a completely free way out. "I'll buy a suit from you at whatever price I want"

*doesn't actually promise anything

Front 73

Canceling (under certain time amt.)

Back 73

The less restrictive the right to cancel the better the chance it will be illusory and unenforceable

Front 74

3 cases of illusory promise

Back 74

3 common cases
*exclusive agency- one party gives exclusive agency (best effort to sell the product) to company to market a product
* "All the steel I'll buy, I'll buy from Sam"- suppose you don't need steel (good faith and best efforts- not to go out of business)
*good faith-legal detriment?
-Nominal consideration- phrased as bargain for consideration. Has form of bargain, no real substance- i.e. father sells land to daughter for $1.

Front 75

Exception to illusory promise

Back 75

-Signed by offeror
-in writing
-recites consideration
(for guarantee contracts and options)

Front 76

Doctrine of promissory estoppel

Back 76

Exception to gift promise being unenforceable-
4 factors must exist-
1. Gift promise
2. Promisure should reasonably expect offeree to rely on offer
3. Promisee does rely
4. Only way to avoid injustice is by enforcing the promise

Front 77

Army Navy Case

Back 77

*Bargaining for legal detriment from Young
* Young bargaining for LD from Army Navy
* Customers get 5% discount
*Army Navy bargaining for Young to promise to pay 8 1/2% and $2.10
*Young is bargaining for advertising (circular leaflets)
*Young says he is bargaining for bringing in customers (he benefitted b/c patrons kept going to his store)
*each was bargaining for legal detriment
*bilateral contract

Front 78

Pfeiffer vs. Feinberg Case

Back 78

*Feinberg has worked since 1910
-bookkeeper, manager, assistant treasurer
*37 years
-$350-400
-retirement package was a gift (apprecitation)
-all the good yrs of work
-gift promises usually not enforceable b/c bargain is missing
-promissory estoppel developed
1. gift promise
2. should the employer expect her to rely? yes, b/c she was getting older, because she had been there 37 yrs and made you a promise (board of directors allows for expectation)
3. Did she rely? her testimony-she said yes. If she's credible.
4. Only way to avoid injustice by enforcing the promise
-she's 63
-poor health-cancer
-not employed
-not employable
-gave up a good career

Front 79

moral obligation

Back 79

a promise based on a moral obligation or past consideration is not enforceable
*A intervenes voluntarily to save B's life, during which A is seriously injured, B based on moral obligation/past consideration makes a promise to pay A's hospital bills
Exceptions
-new promise to pay a debt that it barred
-new promise to pay a debt charged in bankruptcy

Front 80

modern trend to moral obligation

Back 80

-enforceable or binding to the extent necessary to prevent injustic but not binding that the value is disproportionate to the benfit recieved

Front 81

Disaffirm a contract

Back 81

contract is voidable

Front 82

Lack of capacity (minor)

Back 82

Contract of a minor is voidable up to the age of majority (18) and a reasonable time after.

Front 83

Exception to lack of capacity (minor)

Back 83

The minor is liable for the reasonable value of any necessaries. (implied in law theory)

Front 84

Necessaries (traditionally)

Back 84

food, clothing, shelter, medical expenses

Front 85

A minor can avoid a contract by...

Back 85

returning the thing in whatever condition it is in and the adult must return whatever the minor owned or the reasonable amount of it.

*even if it was the minor's negligence that damaged it. (still voidable)

Front 86

Mental incapacity

Back 86

-one lacking mental capacity- can disaffirm contract, voidable

*cognizance rule- old rule- didn't know what was going on

Front 87

Informed desicion rule

Back 87

-can't bargain, negotiate, or make a sensible desicion.
-person actually adjudacated as insane by court prior to contract- in most cases that contract will be void
-if contract happens, and then declared insane after (soon after-voidable...if declared insane 20 years later- not relevant)

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Temporary Incapacity

Back 88

-Test-whether the person is so drunk or drugged that he is unable to understand nature, effect and purpose of the contract.
-if necessaries were furnished- liable for reasonable amount of those necessaries
*rescind-opposite of suing someone for breach

Front 89

4 different legal basis for which somone can rescind

Back 89

-to undue the contract for any of these legal reasons (give back their things)
1. Mutual mistake of fact
2. misrepresentation
-intentional (fraud)
-negligent
3. Undue influence-innocent
4. Durress

Front 90

Fraud (6 elements)

Back 90

1. false statement or concealment of
2. material fact
3. intent (knew or believe, should have believed it was false)
4. Should have expected other party to rely on it
5. Other party actually relies
6. Damages caused by misrepresentation

Front 91

To get recision in some courts you don't need to prove _______ (some you do)

Back 91

damages

Front 92

differnece between fraud and negligent-

Back 92

only #3, false statement was made negligently-innocent, misrepresented

Front 93

Undue influence

Back 93

1. Feduciary or confidential relationship- lawyer/client, doctor/patient
2. promisore was vulnerable to influence of promisee
3. Promisee used excessive influence to overcome will of promisore

Front 94

Durress

Back 94

Usually force or threat of force to compel another party to enter into a contract- can be rescinded
-economic durress-B needs A.
It is not a basis for recision

1. wrongful or illegal act by one party
2. places other party in position where property or finances are jeaporadized
3. No other adequate means available to avoid threatened loss except by entering contract
4. durressed party acted as a reasonably prudent person by entering into contract (in yielding to coercion)

Front 95

Statue of Frauds

Back 95

purpose to avoid frauds

Front 96

5 categories of contracts- if they're not in writing they're not enforceable

Back 96

1. contracts in contemplation of marriage
2. contracts for sale of land or an interest in land
3. contracts for sale of goods for $500 or more
4. contract that by their own terms cannot possibly be performed within one year after the contract was formed.
5. Suretyship contract-answer for somebody else's debt.

Front 97

2 purposes or functions of statue of frauds

Back 97

1. evidentiary-know the terms of the contract later on
2. cautionary- thinking about the deal twice
*always put it in writing

Front 98

What has to be in writing to satisfy the SOF?

Back 98

1. Identity of parties
2. Description of the subject matter
3. terms and conditions
4. consideration on both sides
5. the signature of the party against whom the contract is being enforced

conditions-
-it can be any mark to indicate authentification of writing- can be typed, handwritten
-doesnt have to be just one document
-doesnt have to have signature at the bottom of the page

Front 99

contract for sale of land or interest in land

Back 99

land-immovable
-interest in land- mortagage on a house, its a security interest in that property
-easement-interest in property, right of way across someone's land

Front 100

contract of sale of land or interest in land- how can it be taken out of SOF?

Back 100

-complete performance (by either party) would make it enforceable...i.e. building or giving all the money
-can it be removed for part performance?-only when what's being asked for is specific performance and not money damages, probably need evidence for prior improvement to land (ask about this- what evidence do you need?)

Front 101

contract for sale of goods $500 or more

Back 101

goods-things that are movable

Front 102

How can sale of goods be moved from SOF?

Back 102

-to the extent that payment is made and accepted
-(so in the case that $7,000 is made of $10,000)
-to the extent that the goods were recieved and accepted
-to the extent that it is admitted in pleadings, in court "I bought 5.000 widgets" party being sued admits it
-especially maufacturing goods exception (3 elements-all need to be there)
A. goods being specifically manufactured for buyer
B. goods are not suitable for sale to others in the ordinary course of the seller's business
C. the seller before receiving buyer's notice of breach had made a substantial beggining of their manufacture, or a commitment to procure the goods.

Front 103

contract that by their own terms, cannot possibly be performed in a yr. (yr begins day after contract is made)

Back 103

i.e.- K to work for life
yes b/c he could die
-work for 5 yrs
no, more than one yr
-work for 1 yr
work begins next day-yes
-work for one yr, work begins day after tomorrow- no, cannot be performed in one yr

Front 104

contract that by their own terms, cannot possibly be performed in a yr. -taken out of SOF?

Back 104

If the payment in full has already been made then it is enforceable

Front 105

Suretyship contract

Back 105

Answer for somebody else's debt
THE SURETY's promise ALWAYS runs to the creditor
Surity's promise is of secondary liability. Their promise is if D does not pay then I will.

Front 106

Suretyship contract- remove from SOF?

Back 106

1. Leading object rule-the main purpose of the promisure is to benefit herself economically
i.e. construction- owner has a general contractor and that runs to a subcontractor, w/out payment from general, sub will quit. If owner makes K with sub that they will pay if general doesnt then sub gives up right to quit.
2. Three party agreement called a NOVATION. A,B,C agree that C will give money to B, and A doesnt anymore
3. Not suretyship but still an exception-Mom promises Emily that she will pay Binns (enforceable).

Front 107

Conditions

Back 107

-fact or event, the happening or non-happening of which creates or extinguishes absolute duty of the promisure

*In order to have a breech you must find that the alleged breacher had an absolute duty to perform

Front 108

3 kinds of conditions

Back 108

1. condition precedent-has to happen first to create absolute duty
"I will sell you my book if temp. doesn't reach 100 degrees"
2. Concurrent conditions-payment and delivery
-Mutually dependent performances capable of nearly simultaneous performance
"you don't have to give me 100 until given book"
"I dont have to give you the book until you give me 100"
-if condtion precedent or concurrent occurs it creates absolute duty to perform
-if condition subsequent happens it extinguishes previous absolute duty
-"I'll give you my book and you give me 100 unless thare are pgs missing from the book"

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Need to be proven (conditions)

Back 109

1. That all conditions precendent or concurrent either happened or were legally excused.
2. Plaintiff can show that the defendant breeached a contract

Front 110

How do conditions happen?

Back 110

-oral, written-expressed conditions
-implied in fact-reasonable person would have thought existed even though not stated
- implied in law condition to cooperate and not to hinder or prevent the other party's performance

Front 111

Legal excuses for non-happening of conditions

Back 111

-if a party's absolute duty to perform relies on a condition precedent or concurrent there can be no breech of contract unless the conditions happened or were legally excused-creating absolute duty

Front 112

Examples of being legally excused

Back 112

1. one party prevents another party from performing or wrongfully hinders happening of condition
2. voluntary diablement- one party makes it appear by her conduct that she will not be able to perform when the time arises- only if the proper unit we're talking about is unique like land.
3. Anticipatory repudiation (breach)-if either party to a bilateral contract repudiates by words indicating the intent not to perform the other party can contrive it as a present, material breech and sue immediately-condition for other party's duty to perform.

*positive, unconditional statement that states not going to perform.

Front 113

Only can be a breech is there is a....

Back 113

absolute duty to perform (of other party). And absolute duty is created by the condition precedent or concurrent or if it is legally excused. If absolute duty is not performed-there is a breech of contract

Front 114

Different ways contractual duties get discharged and dont have to perform

Back 114

1. Impossibility of performance
A. Supervening (after contract is made) illegality or act of government
B. Supervening destruction or non-existance of the subject matter
C. Death or illness in a personal services contract.
2. Conditions subsequent happens, extinguishing previous duty
3. recision- mutual recision-fine -new contract- both agreeing to forebear from contract
-unilateral recision- has to be legally proven- undue influence, mutual mistake of fact etc.- what do you need to do to rescind?
-legal basis
-notice to other party
-give back whatever was given
4. Modification of contract
-new contract (b/c its been modified), need new consideration
5. Novation-exception to suretyship, doesn't need writing
-all three parties agree that A owes B, and then substitute C for A and now C will owe B.
6. Accord and satisfaction

Front 115

Accord and satisfaction

Back 115

-executory contract- duties to be performed in the future by at least one of the parties (as opposed to already having been performed-the legal effect suspends the right to sue for money)
-when satisfaction occurs, then the duty to perform the old contract is discharged (giving $/product) can't sue for original contract of $2,000.
*If there is bonafide dispute as to the amount owed (unliquidated debt) then if the check is tendered in full (what one party thinks is the full amount), if check is cashed, most states consider that accord and satisfaction and therefore party can't sue for full amount of debt
*if it's liquidated debt, can sue because there is a pre-existing duty.

Front 116

Remedies for breeach of contract

Back 116

normal remedy-money
damages intended to be compensatory, not punitive
- exception - equitable remedy of specific performance, when money damages not adequate or when plaintiff can prove irreprable harm.
*contract for sale of land (could be specific performance or money damages- (market price-contract price at day of breech)
*battle of the experts to figure this out

Front 117

consequential damages

Back 117

special damages, damages for lost profits.
*P owned mill, needed crankshaft cleaned and cleaner turned crankshaft back 5 days late. P never told cleaner that it was only crankshaft and that he had to shut down the mill, he can't sue for lost profits.

Front 118

objective standard (of consequential damages)

Back 118

what would a reasonable person having knowledge of facts given to him by P, reasonably anticipate damages to be upon breach.

Front 119

Doctrine of Avoidable consequences

Back 119

-P-the non-breacher has a duty to minimize the harm caused by D's breech.
*i.e.-employment contract-need to make reasonable effort to find job in their field

Front 120

Employment contract
Employer is plaintiff, employee breeched

Back 120

-p cannot get special performance for a personal services contract
1. violates the 13th amendment (which prohibits slavery)
2. Can't tell if he/she is performing up to their ability
3. Courts don't want to supervise performance
*Employer can't get mandated injunction for specific performance

Front 121

"Non-compete" clause on contract

Back 121

can employer get a negative injunction to uphold non-compete-yes only within reasonable limit in space and time.

Front 122

Where a negative injunction has been ordered the following five factors exist

Back 122

1.uniqueness of employee services
2.employer was ready to perform
3. not close relationship (mom-son)
4. injunction will not leave the employee with no way to live
5. There is some competition b/w the plaintiff(employer) and some third party for whom the employee wants to work.

Front 123

Employee is the plaintiff and the employer is the defendant

Back 123

1. loss of salary
2 expenses to seek employment
3. Should be able to recover cost of moving
(in the case of moving work offices)

Front 124

Construction contract
Builder is the plaintiff and the owner if the defendant (breeches)
2 measures of damages

Back 124

1. contract price-reasonable cost to complete
2. cost of work done + (contract price-total cost) expected profits

Front 125

Construction contract
Owner is plaintiff, Builder is defendant
measures of damages

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1. If substantial performance was not done (i.e. foundation doesn't hold walls) then the measure of damages is the cost to replace
2. If substantial performance was done, have to ask
-can it be replaced w/o economic waste? (w/o tearing down the house?)
*if yes-then the measure of damages is the cost to replace
*if no-can't be replaced without economic waste, the damages are the diminution made from breech

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General rule for construction contracts

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no specific performance...there are exceptions

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Exception to general rule for construction contracts

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1. if money damages would be inadequate and difficulty of performance is not difficult (extreme)
2. Land grading contract-not a lot of supervision required
3. Plaintiff can show they will suffer irreperable harm
4. Where damages are difficult to ascertain

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Liquidated damages

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-parites put damages in contract if there is a breech
-enforceable? yes if,
1. damages difficult to ascertain when contract was made
2. they are reasonable (not in there as a penalty)

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Nominal Damages

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Technical infraction of plaintiff's rights but wasn't really harmed

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Equitable remedy

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-reformation-equitable remedy where the parties have expressed their contract in writing
-in extreme case-allow contract to be rewritten to show their true intent. Normally has to prove preponderance of evidence, but in this case plaintiff has to prove the case by clear and convincing evidence of fraud. (this is usually a clerical error)

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Lucy v. Zehmer

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objective theory of contracts

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Minneapolis and St. Louis v. Columbus rolling mill

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mirror image rule

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Hoover v. Clements

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paper company- whether there was a rejection

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Feinberg v. Pfeiffer

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she was working for pharmeceutical company- promissory estoppel

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Army and Navy Stores v. Young

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what rule of law?