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95 Cards in this Set
- Front
- Back
sources of contract law
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common law except where replaced by statutory law such as ucc Uniform commercial code
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Function of Contract law (pacta sunt servanda)
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agreements shall be kept
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Contract is a
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Legal Promise or a set of promises for which a breach thereof the law gives a remedy
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Objective theory of contracts
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what the party said when entering in to the contract, how the party acted, the circumstances surrounding the contract.
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Requirements of a valid contract
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Agreement, consideration, contractual capacity, legality
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Enforceable contracts must
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Have an offer and acceptance, Consideration, Legal Capacity, Legal undertaking.
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Defenses to the enforceability of a contract
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Genuineness of assent. fraud, influence or mistake) Form - writing
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Classification of Contracts
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Express, Implied, and Quasi Contracts, - b. Executed and executor contracts, - c. Valid, Void, and Void able contracts, - d. Bilateral and Unilateral contracts.
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Bilateral Contract
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Promise for promising, - Bargained for exchange of promises
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Unilateral
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Promise for an act - or performance
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Mail box rule
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an acceptance which may properly be communicated by mail becomes effective as soon as it is deposited in the mailbox
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Intent to Accept
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It is the offered who accepts the offertory's offer
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Objective manifestation
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law is not concerned with state of mind
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Adequacy of Consideration
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Adequacy of consideration relates to how much consideration is given and whether a fair bargain was reached.
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Agreements that lack consideration
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preexisting duty,
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Past consideration
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the element of bargained for exchange is missing
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Legal sufficiency of Consideration
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Problem areas concerning consideration
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Accord and Satisfaction
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a debtors offer of payment and creditors acceptance of a lesser amount
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Release
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an agreement by which, for consideration, a party is barred from further recovery
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covenant not to sue
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promises enforceable without consideration
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Promissory estopel
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Liquidedated debt
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amount has been ascertained
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unliquidated debt
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not an agreement on
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promises enforceable without consideration
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promises to pay debts that are barred by statue of limitations
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detrimental reliance's, doctrine of promissory estoppel, promises to make charitable contributions
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The test of capacity of contract
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Ability to understand the nature of the transaction and its consequences.
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Valid contract
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Both parties have full contractual capacity
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Voidable contract
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One or both parties lacks capacity to contract and may avoid capacity
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Minors
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most contracts entered into by minors are voidable contracts, may not enter into contracts prohibited by minors
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Enters into a contract for necessaries
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Items that fulfill basic needs. Minors can be held liable. Must not be under the care of a parent.
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Ratification
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a minor who has reached the age of majority.
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Intoxication
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a contract is voidable only if the intoxication was severe. Rarely to courts allow parties out of the case.
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Mental Incompetence
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Tests whether the individual understands the contract. The duty to prove mental incompetence is on the defending party
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Legality
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for a contract to be valid and enforceable it must be formed for a legal purpose
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Contrary to statue
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there is a specific statute that says it is illegal - Gambling
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Usury
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Every state sets maximum limits of interest,
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Gambling
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Contracts involving distribution of property by chance.
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Sabbath (Sunday Laws)
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Prohibit certain types of formation or performance of certain contracts on a Sunday.
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Licensing Statutes
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All states require certain members of certain processions to obtain licenses
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Contract to commit a crime
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All contracts to commit crimes violate statutes and are thus illegal and unenforceable.
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Effect of illegality
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in general an illegal contract is void. Only when one party is innocent, or when one party is protected by a statute, or if contract was forced on a party by duress.
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Contracts contrary to public policy
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Unconscionable
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court may deem illegal and may not be enforced
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Mistakes - Unilateral
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Other party knew or should have known that mistake was made.
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Mistakes - Bilateral
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Both parties are mistaken - either party may rescind contract
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Fraudulent Misrepresentation
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a misrepresentation of a material fact has occurred. Must be an intent to deceive . The innocent party must rely on the misrepresentation.
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Non fraudulent misrepresentation
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innocent misrepresentation - occurs when a person makes a statement that he or she believes to be true that actually
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Unilateral Mistake
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does not afford the mistaken party a right to relief
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Misrepresentation by conduct
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turn back odometer
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Misrepresentation of the law
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a layperson should not rely on statements but know the law or have a lawyer
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Misrepresentation by silence
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Intent to deceive
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the justifiable reliance
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Reliance on Misrepresentation
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Rent a car to a minor who had a fake id. The summary
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negligent misrepresentation
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believing the statement is true or carelessness. Has the same ruling as fraudulent misrepresentation.
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Undue influence
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Arises from special relationships such as fiduciary relationships where a party is overcome by influence .
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Undue influence
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Duress - defined by forcing. The forced party can rescind the contract.
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Presumption of Undue influence
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an elderly patient is told by an attorney to sell her property at below market value
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Adhesion contracts take it or leave it
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has no choice but to agree to the sellers dictated terms if the buyer is to procedure certain goods or services.
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Unconscionability
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concerned with one sided bargains
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Standard form contracts
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shift risk normally borne by one party to the other party for example , a liability.
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take it over or leave it
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standard form
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4 basic elements of a contract
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Agreement, consideration, contractual capacity, legality
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general contract law basis
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common law's decision of the courts
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uniform commercial code
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article 2 for the sale of goods
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types of contracts bilateral
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bargain for exchange of promises
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Unilateral contract
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Promise for an act - or performance
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implied in fact contract
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based on the actions of the party
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executed contract
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has been fully executed by both parties
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ambiguities in a contract
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terms are not clear - these terms will be held against the party who wrote the contract
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Contracts contrary to public policy
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definite
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termination of an offer
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or ee rule if or terminates it is revocation, ee terminates rejection, or lapse of time, or operation of law
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operation of law
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if illegal it terminates
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only offeror
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has power to revoke offer must be communicated
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detrimental reliance
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Promissory estopel
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when a contractor lies on the bids of his subcontractors
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offer and counter offer
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kills the offer
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uniform commercial code
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page a-22 rejects the mirror image rule
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acceptance is upon
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dispatch not on the received from the offeror
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when acceptance occurs
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Mail box rule is valid when it is in the mail box.
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Consideration
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the adequacy of consideration (courts don’t question)
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preexisting rule
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no detriment to obeying the law, no contract
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Promise to pay with out a bargain
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is no contract
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Promise is consideration
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under contract law
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Accord and Satisfaction
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occur when a debt is agreed by both parties and when the agreement is in effect
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statue of limitations
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3 years run the contract if the party agrees to pay
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Minors are liable
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necessassaries i.e. food, or the minor is not liable
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Minors are liable
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they do have to return any consideration they receive
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covenants not to compete
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not struck down unless it results in lack of trade
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mistaken by both parties
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either party may rescind the contract
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Unilateral Mistake
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no relief for the mistaken party
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Dominant party
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burden of proof shifts to the dominant party
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Undue influence
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on elderly on positions of trust.
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proving lack of contractual capacity
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one party claims I don’t have capacity - burden of proof is on this party
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