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Basic Business Law (BPP432/80) 2006 Fall Quarter

Basic Business Law (BPP432/80) 2006 Fall Quarter. Instructor: David Oliveiri Week 3: Facilitating Exchange ; Fairness, Capacity, Legality as Affecting Mutual Assent . Conduct/Status Affecting/Invalidating Assent .

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Basic Business Law (BPP432/80) 2006 Fall Quarter

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  1. Basic Business Law (BPP432/80) 2006 Fall Quarter Instructor: David Oliveiri Week 3: Facilitating Exchange; Fairness, Capacity, Legality as Affecting Mutual Assent

  2. Conduct/Status Affecting/Invalidating Assent • Presumptions: Freedom (No Coercion), Self-Knowledge (Reasonable Clarity on Preferences), and Information (Subjective Knowledge) • Suspicious Circumstances • Unfair and “Unconscionable Situations • Illegal Bargains • Lack of Capacity

  3. Unfair & “Unconscionable” Situations • Duress – Physical Compulsion, Improper Threats [S&R11 – Problems 4, 20] • Undue Influence [S&R 11 – Problem 9] • Fraud [S&R 11 – Problems 2, 6] • In the Execution [Britney Spears Autograph] • In the Inducement = False Representation of a Material Fact + Knowledge of Falsity + Intent to Deceive + Justifiable Reliance • Nonfraudulent Misrepresentation [S&R 11 – Problem 17] • Mistake [S&R 11 – Problems 3,7,8,12]

  4. Conduct Invalidating Assent – Effect on Ability to Contract

  5. Illegal Bargains • Violations of Statutes – Common Examples: Licensing Statutes, Gambling Statutes, Usury Statutes [S&R 13 – Problem 2] • Violations of Public Policy [S&R 13 – Problems 1,5] • Common Law Restraint of Trade and Reasonableness • Sale of Business • Employment Contracts and Non-Compete Agreements • Exculpatory Clauses • Unconscionable Contracts = Absence of choice + Unreasonable advantage • Illegal Contracts Unenforceable

  6. Contractual Capacity • Minors [S&R 14 – Problems 1,2,5,6] • Liability on Contracts Depends Upon • Disaffirmance • Ratification • Liability for Necessaries • Incompetent Persons [S&R 14 – Problem 8] • Intoxicated Persons [S&R 14 – Problem 9]

  7. Mental illness or defect Voidable Guardianship for incompetency Void Intoxication Voidable Contractual Incapacity – Effect on Attempt to Contract Effect on attempt to make a contract Reason for Incapacity Minority Voidable

  8. Summary; Q&A • Contracts Require a “Meeting of the Minds,” Defined Through Mutual Assent Rules • Suspicious Circumstances May Neutralize Mutual Assent

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