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CONTRACTS

CONTRACTS. I. Introduction II. Elements of a contract A. AGREEMENT B. CONSIDERATION C. CAPACITY III. Defenses IV. Statute of Frauds and Parole Evidence Rule V. Assignment/delegation and Third Party Beneficiaries. Contracts Outline. I. Introduction A. Definition of contract

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CONTRACTS

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  1. CONTRACTS • I. Introduction • II. Elements of a contract • A. AGREEMENT • B. CONSIDERATION • C. CAPACITY • III. Defenses • IV. Statute of Frauds and Parole Evidence Rule • V. Assignment/delegation and Third Party Beneficiaries..

  2. Contracts Outline • I. Introduction • A. Definition of contract • B. Types of contracts • II. Elements of a contract • A. Agreement • 1.OFFER • (a) Requirements of: • (1) Serious proposal • (2) Definite terms • (3) Communication • (b) Termination of: • (1) Acts of parties • (2) Operation of Law..

  3. 2. ACCEPTANCE • (a) Requirements for acceptance of bilateral offer • (1) Unconditional • (2) Unequivocal • (3) Communication • (b) Requirements for acceptance of unilateral offer • B. Consideration • C. Capacity • 1. Minors • 2. Mental incompetency..

  4. III. Defenses • A. Legality • B. Mistake • C. Fraud • D. Undue Influence • E. Duress • IV. Statute of Frauds and Parole Evidence Rule • V. Assignment/delegation and Third Party Beneficiaries..

  5. Definition of a contract • What is a promise? • A promise is a declaration that something will or will not happen in the future. • What is the difference between a promise and a contract? • A Contract is an agreement (based on a promise) that can be enforced in court. • What law governs? • Common law vs. UCC..

  6. Types of Contracts • Unilateral or Bilateral. • Express or Implied In Fact. • Quasi Contracts - Implied in law. Quantum Meruit: reasonable value of the benefit received. • Executed or Executory. • Valid, void, voidable, or unenforceable..

  7. OfferSerious proposal and intent • Objective manifestation theory. • Offers made in anger, jest, or undue excitement. • Expressions of opinion. • Statements of Intention or preliminary negotiations. • Advertisements, Catalogues, Price Lists, and Circular..

  8. Offer: Definiteness of Terms • Terms (Expressed or Implied). • Identification of the parties. • Object or subject matter of the contract. • Consideration to be paid. • Time of payment, Delivery, or Performance. • Quantity • Illusory • Requirement • Output..

  9. Offer: Communication • Offeree’s knowledge of the offer: • Directly by the Offeror. • Use of mail..

  10. Termination by Acts of the Parties • Revocation of the offer by the Offeror: • When can offer be revoked? • Exceptions: • Performance of unilateral offer • Option Contract • Firm offer under UCC • Promissory estoppel. • When is revocation effective?

  11. Rejection • Rejection (expressed or implied). • Effective upon receipt. • Counteroffer • Mirror image rule • UCC modification..

  12. Termination by Operation of Law • Lapse of Time. • Death or destruction of the Subject Matter. • Death or Incompetence of the Offeror or Offeree. • Supervening Illegality..

  13. Acceptance of Bilateral Offer • Unconditional • Unequivocal • Silence as Acceptance • Offer limits acceptance to silence • Prior dealings • Solicited Offers. • Communication • Mail Box Rule..

  14. Acceptance of unilateral offer • No notice of acceptance required • Must have knowledge of the offer • Complete or substantial performance required..

  15. Consideration • Consideration • Detriment to the promisee • Promise to give up what he thought he had the legal right to retain • Liquidated vs. unliquidated debt • Accord and satisfaction • Bargained for exchange • Adequacy of consideration..

  16. Agreements That Lack Consideration • Preexisting Duty. • Statute • Prior agreement • UCC modification • Past Consideration..

  17. Promissory Estoppel • Promissory Estoppel and Detrimental Reliance..

  18. Minority • Dissaffirmance. • Ratification (express or implied) • Necessities • Contracts for Necessaries. • May be disaffirmed by minor • Minor liable under quasi contract..

  19. IntoxicationMentally Incompetent Persons

  20. Legality • Covenant not to compete • Secondary • Limited in time and location • Licensing statutes • Regulatory • Revenue raising..

  21. Mistakes • Mistake of Fact vs. Mistake of Value • Bilateral (Mutual) • Unilateral Mistakes

  22. Fraudulent Misrepresentation • Voidable by Innocent Party. • Elements: • Misrepresentation of Material Fact. • Intent to Deceive. • Reliance on Misrepresentation. • Injury ..

  23. Nonfraudulent Misrepresentation • Innocent Misrepresentation..

  24. Undue Influence • Voidable. • Confidential or Fiduciary Relationship. • Relationship of dependence. • Influence or Persuasion. • Weak party talked into doing something not beneficial to him or herself. • Presumption of Undue Influence..

  25. Duress • Voidable. • Threatened act must be wrongful or illegal. • Exceptions: • Threat to exercise legal rights (criminal or civil suit). • Economic..

  26. Statutes of Frauds • To be enforceable, the following types of contracts must be in writing and signed: • Contracts involving interest in land. • Contracts involving “One Year Rule.” • Collateral or Secondary Contracts to pay debts • Estate debts • Promise made in consideration of marriage. • Contracts for the sale of goods priced at $500 or more..

  27. Writing requirement • Parole evidence rule..

  28. Third Party Rights • Only the Parties to a contract have rights and liabilities under the contract. • Exceptions: • Assignment or Delegation. • Third party beneficiary contract..

  29. No prior notice to or consent of obligator is required • No consideration required • No writing required (Equal dignity rule) • Delegation: duties are not extinguishable..

  30. Third Party Beneficiaries • Original parties to the contract intend at the time of contracting that the contract performance directly benefits a third person. • Intended vs. • Incidental beneficiaries (cannot recover)..

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