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41 Cards in this Set
- Front
- Back
Six rules of offer and acceptance |
1. A contract doesn't exist until an offer is made by one person and accepted by another an 2. An invitation to do business is not an offer 3. an offer must be communicated 4. an offer has lapsed if time period has expired, reasonable time, or offer becomes insane or dead 5. an offer may be revoked at anytime prior to acceptance 6. a contract becomes binding the moment an offer is accepted |
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When does an offer come into existence? |
- Step 1: Identify method of communicatingacceptance (i.e. verbal, mail, telephone, etc.)- Step 2: Ask -> Is this an accepted method ofcommunication? Yes, if it is the method specified in the offer. Yes, if it isthe same method as used in the offer or a more efficient method- Step 3: If answer to Step 2 is “NO” thenacceptance occurs WHEN RECEIEVED- Step 4: If answer to Step 2 is “YES” then followrules for each method of communication… |
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What is revocation? |
know when exactly an offer can no longer be revoked. |
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International Contracts |
laws of the country where the contract actually come into existence determine who has jurisdiction |
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Consideration |
the promise of a price or benefit to be paid in return for another's promised act or benefit. |
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General rule of Consideration |
must have consideration flowing both directions in order to have a binding contract |
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Adequacy of Consideration |
the court does not care how bad a deal is, they just care if consideration exists |
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Special rules to Consideration |
Past consideration is No consideration A gratuitous promise does not prove basis for a contract A promise to perform a pre-existing contractualobligation does not constitute consideration |
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Estoppel |
to prevent or stop something (If someone relies on a promise that leads totheir detriment, the person that made the promise will be stopped from denyingto fulfill that promise) |
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Concept of Capacity
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not physical but legal capacity |
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A void Contract |
contract that never had legal existence, it can never become a real contract |
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A 'voidable' contract |
it is a good contract, but it has a defect in it that could cause it to be killed |
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Repudiation |
refusal of contract in party to perform its contractual obligation |
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Quantum Meriut |
what is reasonable in circumstances |
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Use of a Seal |
if you have a written document that is signed and sealed, that can be a substitution for consideration |
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Consideration but still no contract? |
if you lack "meeting of the minds" you won't have a contract |
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What happens when Minor does repudiate?
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he/she must give back the goods but only in the condition that they are in, and only if the minor has them in possession |
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Can you use Tort Law to do what Contract law can't do? |
No. if the very thing the contract is about is what caused the harm in Tort, you can't go to tort law to get around the contract |
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What happens if the Minor reaches 19. |
Stays the same contract that is permanent ongoing in nature whatever is left in the contract remains |
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Insane or Intoxicated |
contracts are voidable and can be repudiated if the person is insane or intoxicated |
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Define Incapacitated |
You do not understand what you are doing. |
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3 Special Rules for Insane or Intoxicated |
1. if you will repudiate, you have to show that you because of your insanity or intoxication you were actually incapacitated 2. if you're going to repudiate b/c of your insanity or intoxication, the incapacity must be known to the other party at the time of contract 3. if you're going to repudiate because of your insanity or intoxication you must do so promptly after coming out from the incapacity otherwise you may have binding contract |
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Rescission of a Contract |
an order of the court to cancel or revoke a contract |
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Rectification of a contract |
is correction by the court of a written document to reflect accurately the contract mae by the parties. it is the correction of a written term to correspond to the true intention of the parties |
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Why are courts reluctant to rescind contracts? |
damages how binding a contract can be takes time unjust results to third parties |
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Legal Test for Rescission |
would a reasonable person have relied on the term, as being intentionally made, when entering into the contract |
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The court may grant rectification if: |
1.there is a clear, complete unconditional prior agreement between parties 2.there is no evidence of change in agreeement 3. the difference between the original agreement and the written document can be best explained as an error |
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Mistake in Assumption - Legal test |
the courts may grant recession if the mistake in assumption is so material it alters the very nature of the contract |
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Non Est Factum |
"Not my Document" not the document the person intended to sign |
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Discharge of Contracts By Performance |
if all requirements of the contract are filled, not ongoing obligations, then the contract is discharged
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Discharge of Contracts By Agreement |
a. Mutual agreement to terminate b. Replace Original with New agreement |
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Novation |
material change in original K change in parties |
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Accord and Satisfaction |
when there is a dispute with original K and the parties come to a settlement agreemetn |
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Condition Precedence |
future event must occur to have a fully binding contract if this doesn't happen then k is discharged |
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Condition Subsequence |
future event that if it happens K will be discharged |
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Frustration |
when K becomes impossible or very close to impossible to perform, then K is discharged |
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Fraudulent Misrepresentation |
Most serious. is an inaccurate representation of fact made without any belief in its truth, with the intent the person to whom it was made should rely on it, and that person did in fact rely on it |
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Fraudulent Misrepresentation must prove the following: |
1. representation was made by wrongdoer to victim 2.representation was a statement of fact 3. representation was false 4. the wrongdoer knew the representation was false or made it recklessly 5. the wrongdoer intend that victim to be induced to enter contract by the represntiontion |
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Negligent Misrepresentation |
incorrect statement of fact made without due are for its accuracy |
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Innocent Misrepresentation |
is an inaccurate representation of fact made without any intention to deceive , but on which the victim has relied in entering into the contract |
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Silent Misrepresentation |
if a contract is of "uberrimae fidei" meaning of utmost good faith, there will be a duty to disclose material facts and failure to do so may be misrepresentation |