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Contracts 1L Mod9-10

Contracts 1L Mod 9-10 Things to know

QuestionAnswer
What are the 2 common law "CONSIDERATION SUBSTITUTES?" Promissory Estoppel and Seal Contracts.
What is a SEALED CONTRACT? A document where the signer's signature is mark with "seal." The signing of this document indicates that the signer is in admittance that their promise is supported by consideration.
When can you elect to invoke Promissory Estoppel? When the promisee has detrimentally, reasonable and forseeably relied upon promisor's promise. MAKES A CONTRACT ENFORCEABLE AND DOES NOT NEED CONSIDERATION.
What are the 2 U.C,C's "CONSIDERATION SUBSTITUTES?" Merchant's Firm Offer Rule and Modifications to Contracts.
What is the Merchant's Firm Offer Rule? The MERCHANT puts an offer in writing nad indicates that this offer will be "held open." The offer will be an irrevocable offer for up to 3 months. (Supplies 3 mos. of consideration). Can be kept open longer IF new consideration is given.
What is Modification to Contracts about? Under the UCC you do not need to have valid consideration for the modified promises as long as they are made in good faith.
Discuss the PAROL EVIDENCE RULE. Tells us what the actual terms are of the agreement. Prevents fradulent activity in the enforcement of contracts.
Do you need a final writing in order for Parol Evidence Rule to come into play? YES, you must have a final writing.
What is the rule of Parol Evidence Rule. No prior oral, written or contemporaneous negotiations can be introduced into evidence to vary or contradict the final written agreement.
Can Parol Evidence Rule be introduced as a defense to a contract? YES, it can always be introduced to make a defense or undermine the contract.
Can we use Parol Evidence to explain an ambiguity? YES, you may always use Parol Evidence to clear up or correct an ambiguity.
Is the Parol Evidence Rule a rule of evidence? No, it is a rule of substantive law.
What is the idea behind the Parol Evidence Rule? That the final writing of the parties should be protected from certain kinds of evidence.
What is PARTIAL INTEGRATION? A writing that is final but does not completely express the parties' contract. May NOT be contradicted by parol evidence. MAY BE SUPPLEMENTED BY CONSISTENT ADDITIONAL TERMS.
What is TOTAL INTEGRATION? A writing of the parties that is final and complete. CAN'T BE CONTRADICTED BY PAROL EVIDENCE AND CAN'T BE SUPPLEMENTS BY ADDITIONAL TERMS.
Does the Parol Evidence Rule apply to subsequent agreements? NO, it does not.
What tests are applied to determine if a writing is a total Integration. Four Corner's Rule; Collateral Contract Concept; Willistons' Rule; Corbin's Approach; The UCC Rule; CISG; The Restatement 2nd; Intention of the Parties' Test.
Are collateral agreements independent writings? Yes, they are independent of other writings.
Discuss the Four Corner's Rule.
Discuss Williston's Test.
Discuss Corbin's Approach.
What does a MERGER CLAUSE do. A Merger Clause states that the writing is a final, complete abd exclusive statement of all the terms agreed upon.
Define Promissory Fraud. When a person makes a promise with no intention on performing.
Define "FRAUD IN THE INDUCEMENT." Relates to false statements of fact that induce the party to enter into a contract. A defense against a contract.
Define "FRAUD IN THE EXECUTION." Relates to deception about the nature of the instrument being signed. (Lies and says doc. is a B-day card when really it is a contract).
What is the MISTAKE DEFENSE to a contract baout? If a mistake is recognized by law-the mistake that induced the agreement usually makes the agreement voidable. (Parol doen't prevent this).
Will an illegality make a contract void/voidable? YES
Are Non-parties (3rd) persons bound by the Parol Evidence Rule? YES
Define "INTERPRETATION" as it relates to a promise or agreement. The ascertainment of the promise/agreement's meaning.
Discuss "CONSTRUCTION" as it relates to a promise or agreement. Relates to the legal effect of the words used in the promise/agreement.
Discuss Extrinsic Evidence. A very broad term. Includes not only prior and contemporaneous statements but also surrounding circumstances, evidence of subjective intention, what was said between the parties, usage and course of dealings/performance.
What is the PLAIN MEANING RULE? If a writing or a term is plain and clear on its face, its meaning must be determined form the four corners of the instrument.
List the 8 Contract Defenses. Formation Defense, Lack of Capacity, Fraud/Misrepresentation, Duress/Undue Influence, Illegality, Mistake, Unconscionability, Statute of Frauds.
What are the 3 ways the defenses to contracts work? Makes the contact VOID, VOIDABLE OR UNENFORCEABLE.
Discuss Voiding a Contract as a defense. A defense can cause a contract to be VOID. Thus, there are no obligatons as a result of their negotiations.
Discuss a contract being VOIDABLE. The contract could be voidable. This is where a party who is entitled to the defense can choose to either enforce the contract or not.
Discuss UNENFORCEABLE as a defense. There is a valid contract but there is a legal rule that is preventing the enforcement of the contract until certain conditions have been met.
What are formation defenses? The offer or acceptance wasn't really an offer or acceptance OR the promoses are not supported by consideration. Have not formed a contract properly.
Discuss LACK OF CAPACITY. In order to form a valid contacrt with people you have to have capacity. Must be age appropriate, legally sane, not under the influence and able to understand what's going on.
What happens if a party lacks capacity to enter into a contractual relationship? The contract is voidable.
Can the lack of capacity cease? Yes and then the person is made fully obligated under all of the provisions of the agreement. (i.e. 17 yeras old at the time of the contract and then turns 18)
What are mental infirmaties? When a person can't understadnfully what is going on with the contract.
How many types of fraud are there? Name them. 2-Fraud in the inducement and fraud in the execution.
What is DURESS? How many types of duess are there? Force or undue influences. 2-Personal Duress and Economic duress.
What is personal duress? That whic creates a voidable obligation by the party subjected to the duress.
What is economic duress? Is where someone takes advantage of yout bad economis situation. It is not a defense to the contract UNLESS they are the cuase of your economic hardship. The party who is causing the duress is also the person who causes the problem.
Discuss Illegality. Explains whatever the parties agreed to is illegal. There can be an illegal contract or illegal purpose contracts.
What is an illegal contract? Where the subject matter of the contract is prohibited by law. The contract is the VOID.
What is an illegal purpose contract? Whete the subject matter of the contract is fine BUT the reason the parties enter the contrat is prohibited by law. Voidable by the innocent party (the person who didn't realize the illegal purpose.
Discuss the MISTAKE defense. Where the parties are having a meeting of the minds and they both think they understand the terms-IF one party is mistaken then we need to see if the mistake is important enough to avoid the agreement.
What are the 3 types of mistakes? Unilateral mistake, Mutual mistake and Ambiguity.
Discuss the UNILATERAL MISTAKE. IF one party is mistaken about a material issue in the contract, there is no defense to the contract UNLESS the other party knewor should have known the mistake was being made.
Discuss MUTUAL MISTAKE. Both parties are mistaken about a common law/matter of the material issues in a contract. The contract is voidable by either party or they can enforce it if they want.
Discuss Ambiguity. An ambigous material term in the contract. There is NO CONTRACT, unless both parties intend the same meaning for the ambiguous term OR unless one party knows of the ambiguity and the other does not. (Enforce the contract the way the non-party thinks).
What does unconscionability mean? We look at the time the contract was formed and see if there is any unfair advantage being taken by one party over the other. If unfair at the time of formation-the court can do anything necessary to make the contract fair (BLUE OENCIL POWER).
Define procedural unconscionability. A party has substantial bargaining power over the other party. Contract of Adhesion.
Define substantive unconscionability. Is where the contract terms are simply oppressive and unfair. (Ex. selling a freeer for $1,000 when it normally sells for $500.
Discuss the STATUTE OF FRAUDS. Will make a contract unenforceable. It is a statute that "holds-ip" the performance of certain contracts UNTIL there can be evidence provided of the existence of that contract to satisfy the state of frauds. (tangible proof that a contract was made).
What kinds of tangible evidence is required in order to satisy the statute of frauds? A writing, a performance or invoking promissory estoppel.
Discuss the writing requirement of the Statute of Frauds. The writing avoids oral agreements becuase it is now written. The writing must: identify the parties, identify the subject matter, identify all material terms of the agreement and be signed by the party to be charged.
Discuss the performance requirement of the Statute of Frauds. Performance by either party full or partial will satisfy the statute of frauds to the extent of the performance.
Discuss the promissory estoppel as it relates to the Statute of Frauds. Even the statute of frauds may make a contract enforceable, IF, one of the parties has so detrimentally, reasonable and forseeably relied upon an oral agreement as it owuld be unfair not to enforce it.
Name the kinds of contract that are covered by the sttaute of frauds. Real estate contracts, sale of good for over $500, contracts that cannot be performed wihtin 1 year, contracts to answer for the debt of another, and contract where marriage is the consideration for the contract (prenuptial agrs.)
With regrad to performance within one year, what do we measure? Measure the duration from the date of formation through the date of performance.
Created by: Rochelle28nm