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26 Cards in this Set
- Front
- Back
Contract
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A legally enforceable promise or set of promises.
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Freedom of Contract
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1. Importance show by our nation's founders
a. Contracts clause of the U.S. Constitution: "States shall pass no laws impairing the legal obligation of contracts" b. Declaration of Independence: "life, liberty, and property" 2. Limitations of freedom without freedom to contract |
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Mutual manifestation of assent
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1. Consists of offer and acceptance
2. Viewed objectively |
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Quid Pro Quo
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this for that
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Capacity
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Rule of law: minors, mentally incompetent persons and highly intoxicated persons may not enter a valid contract
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Legality
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A contract involving illegality is void. Those who make a deal involving a crime should not expect a court to enforce the contract
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Lack of reality of consent
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Where assent to a contract is not real or voluntary, the contract is voidable (fraud and duress)
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Noncompliance with formalities
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Some contracts must be formalized by a writing or a witnessed writing to be enforceable (contracts for sale of land must be in writing)
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Unilateral
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A promise in exchange for a completed act
-Offer contemplates acceptance by performance -Duty of offeror arises upon complete performance -Offeree has no duty -Return a lost dog for money/reward |
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Bilateral contracts
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A promise in exchange for a promise
-Offer contemplates a promise as acceptance -Duties of offeror and offeree arise on verbal acceptance |
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Express
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created by the specific words of the parties
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Implied
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created by the conduct parties (haircut-it is implied that you pay even though you don'r discuss it before)
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Implied in law
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Quasi contract
created by a court when one party unjustly enriches another party (emergency room when you are unconscious) |
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Valid contract
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enforceable by all parties
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Void Contract
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enforceable by none of the parties
Illegal contracts |
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Voidable contracts
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may be avoided by one or more parties
Contracts procured through fraud |
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Unenforceable contract
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the four requirements for a valid contract are met, but the contract is not binding because of a statute
Statute of Frauds or Limitations |
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Executed contract
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all performance is complete
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Executory contract
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part of the performance is lacking
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Objective nature
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1. A judge looks at the words and actions of the parties rather than what they were thinking
Lucy vs. Zehmer |
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Plain meaning rule
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If the words of the contract are clear in their meaning, the courts will enforce the contract as written--> generally no extrinsic evidence allowed
ex: covenant not to compete signed unknowingly |
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Entire Writing Rule
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the court will do its best to enforce the entire contract when there is a potential conflict of terms
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Meaning of words
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Ordinary words: dictionary definition
Legal terms: legal definition Technical terms: technical meaning in the relevant trade or profession |
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Conflict of terms
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review the entire contract and apply the most consistent with the intent of the parties
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Ambiguous terms
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Interpret against the drafting party.
Priorities of terms when resolving conflict or ambiguity: hand written, type written, then pre-printed. An ambiguity makes extrinsic evidence admissible. |
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Surrounding circumstances
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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 is question is customarily dealt with in the type of business involved. |