Term
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Definition
The third element of a legally binding contract.
-Incapacity is a defect that prevents someone from entering contracts, can either have no contracts or voidable contracts |
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Term
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Definition
Any contract entered into by a minor is voidable by the minor until they reach age 18.
-Must return competency received |
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Term
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Definition
| Minors can disaffirm contracts for necessities, but will be held liable for the reasonable value of the necessity. |
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Term
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Definition
| Once a person reaches the age of majority, he or she may affirm the legal contract. |
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Term
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Definition
| The person states orally or in writing that they intend to be bound by the contract entered as a minor |
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Term
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Definition
| WHen the former minor takes some action with intent to ratify the contract |
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Term
| Exceptions for minor's right to disaffirm |
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Definition
| Life Insurance, Health Insurance, pyschological counseling, perofromance of futies related to stock and bond tansfers, bank account, education loan contracts, Child support contracts, marrriage and enlistment |
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Term
| Parent's Liability for children's contracts |
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Definition
| Generally not liable, except for necessities provided to children. can be held liable if courts decide that the parent failed to properly supervise the child subjecting others to an unreasonable risk of harm |
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Term
| Legal Priniciple: Mentally Incapacitated persons |
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Definition
| Contracts of a perosn with limited mental capcity can be valid, voidable or void, depending, on the extent of the mental incapacity. If a person suffers from delusions that may impair his judgement but he can still understand he he is entering into a contract and understand his obligations under contract his contract is valid. If his delusions prevent him from understanding that he is entering into a contract or the nature and extent of his obligations under the contact his contract is voidable. If he has been addjudicated insane the contract is void. |
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Term
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Definition
| contract can be rendered voidable if the other party had reason to know that the intoxication rendered the person unable to understand the nautre and consequences of the transaction. or unable to act in a reaonsable manner . |
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Term
| Agreements to Commit a crime or Tort |
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Definition
| These contracts are void. |
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Term
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Definition
1. Give control over which people and how many people can perform certain jobs
2. Government can obtain revenue
3. Protection of public health, safety and welfare
4. A person can not enter into a contract with an unlicensed professional.
5.Illegal and unenforceable |
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Term
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Definition
| Occurs when a party gvies a loan at an interest rate exceeding the legal maximum. |
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Term
| Usury Exception, Corporations |
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Definition
| Corporations can borrow and lend in order to expand to benefit the economy. |
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Term
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Definition
| Limit the type of business activities parties can operate on Sundays- most are alcohok, or specific types up to a certain time. Most states do not enact their sabbath laws. |
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Term
| Covenant not to compete - Business |
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Definition
| The first type is in regards to business they cannot be placed for a reasonable length and time |
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Term
| Covenant not to compete- Employee |
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Definition
| Employee is afreeing not to compete with her boss for a certain period of time, or within a designated area, however in most states these covenants cease once employment does |
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Term
| Unconscionable contracts or clauses. |
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Definition
| A contract so unfair it is void of conscience, these would not be enforceable. |
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Term
2 types of Unconsiable agreements
1. Procedural Unconscionability |
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Definition
COnditions that impair one party's understanding of a contract as well as the integration of terms of the contract.
eg tiny words on the back of a contract |
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Term
| Procedural unconcionability typically arises in |
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Definition
| an adhesion contract is a contract based on a take it or leave or as the only chance the presented party will have to enter it. They are legal, but do raise red flags for courts |
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Term
| Substantitive unconsionability |
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Definition
| Occurs when an agreement is overly harsh or lopsided |
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Term
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Definition
| Releases one of the contracting parties from all liability, regardless of who is at fault or what injury is suffered. however most are not enforceable |
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Term
| Basic test for Exculpatory clause |
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Definition
| To see whehter the enforcing party engages in a business direcly related to public, like a bank, transportaing or public utility |
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Term
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Definition
| Both parties are equally responsible for an illegal agreement. |
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Term
2 exceptions
1. Truck Driver
2. Justifiable ignorance of facts
3. Before illegal acts performed |
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Definition
Truck Driver drives more than allotted hours. he is allowed to sue.
Leaves one party unawaare of a prvoision of the agreement that makes it illegal.
One party must pull out before any illegal acts were performed. |
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Term
| Severable Contracts or Divisible Contracts |
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Definition
Contain multiple parts that can each be performed separately and for which separate consideration is offered.
Courts can void only the illegal sections and enforce the legal ones. |
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Term
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Definition
| Requires complete performance by both parties even if it appears to contain multiple parts. |
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Term
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Definition
| Does not relate to fraudulaten contracts nor illegal contracts. Focuses on enforceability of contracts that fail to meet the requirements set forth in it |
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Term
| 1st main purpose : SOFrauds |
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Definition
| Ease contractual negotiations by requiring sufficiently reliably evidence to prove the existence and specific terms of a contract |
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Term
| 2nd Main Purpose : SOFrauds |
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Definition
| to prevent unreliable oral evidence from interfering with a contractual relationship. Precludes the admittance of oral evidence denying the existence of a contract of claiming additional terms that would substantially alter the contract from its agreed on written form. |
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Term
| 3rd Main Purpose : SOFrauds |
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Definition
| to prevent parties from entering into contracts with which they do not agree. Provides a degree of cautionary protection. Law assumes these steps will allow for careful consideation |
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Term
| Contracts whose Terms prevent possible performance within a year |
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Definition
| If a contract can POSSIBLY be performed within a year, even if such performanc is highly unlikely, then the contract does not need a writing to be considered enforceable |
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Term
| Promises made in Consideration of Marriage |
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Definition
| Agreements regarding marriage in which one party is gaining osmething other than a return on his or her promise to marry are within the statute of frauds and must be in writing. In other words when one party promises something to the other as part of an offer of marriage the contract must be in writing to be enforceable |
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Term
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Definition
| do not fall within the statute of Frauds |
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Term
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Definition
| Fall within Statute of Frauds, clearly state whose property is whose . |
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Term
| Legal Priniciple Marriage: SOFrauds |
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Definition
| Contracts in which one party promises something in exchange for another's promise to marry must have a writing to be enforceable, but mutual promises to marry do not require a writing |
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Term
| Contracts for one party to Pay the Debt of Another if the Initial Party Fails to pay. SOF |
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Definition
| Primary obligations do not require a writing, but secondary obligations do unless the main reason a person makes a secondary promise is to obtain a personal benefit |
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Term
| Secondary Obligatoin: SOF |
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Definition
| Occurs when a party outside of a primary agreement promises to fulfill one of the original party's obligations if the original party fails to fulfill it. |
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Term
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Definition
| Debt incurred in an initial contract. |
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Term
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Definition
| IF the main purpose for incurring a secondary obligation is to obtain a personal benefit, the promise does not fall within the statue and does not have to be in writing. |
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Term
| Contracts Related to an interest in land : SOF |
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Definition
| The statute requires a writing as evidence of the contract a claim to an oral contract for the sale of land is not enough to prove such a contract exists. Contracts transferring other interests in land are also part of the statute of Frauds |
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Term
| Contracts for the Sale of Good totaling more than $500: SOF |
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Definition
| Agreements 500 or more are required by UCC section 2-201 to be recorded in a written contract or a memorandum. The writing need only state the QUANTITY to be sold; buyer, seller, price and method of payment do not need to be included. to be enforceable the contract must be signed. |
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Term
| Further Requirements specific to certain states |
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Definition
| the Equal dignity rule states that contracts that nomrally fall under that statute and need aa writing if negotiated by the principal must be in writing even if negotiated by an agent. |
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Term
| Three Exceptions to to Statute of Frauds |
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Definition
1. Admission
2. Partial Performance
3. Promissory Estoppal |
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Term
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Definition
| A statement made in court, under oath, or at some stage during a legal proceeding in which a party against whom charges have been brought admits that an oral contract existed, even though the contract was required to be in writing. |
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Term
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Definition
| If the buyer in an alleged contract for the sale of land has paid any portion of the sale price, has begun to permanently improve the land or has taken possession of it, the courts will consider the contract partially performed and this= Proof |
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Term
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Definition
| Legal enforcements of an otherwise enforceable contract due to a party's detrimental reliance |
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Term
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Definition
| Oral Evidence of an agreement is not admissible if it is made before or at the same time as a writing that the parties intend to be the FINAL document. |
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Term
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Definition
| Both parties attempt to signal to judges, that the written contract is intended to be the final and complete statement of their agreement. |
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Term
| Parol Evidence Rule: Legal Principle |
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Definition
| Once a Fully Integrated agreement has been written, no oral evidence of any prior or contemporaneous agreement can be admitted in court to change the terms of the agreements |
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Term
| Exceptions to Parol Evidence Rule |
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Definition
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Term
| Exceptions to Parol Evidence Rule: Contracts that have been subsequently Modified |
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Definition
Modification must have been made after the writing, and the evidence must clearly indicate a later modification.
- More Exceptions if the contracts are required to be in writing this does not apply. If the agreement is required to be in writing because it is within the statue of Frauds, oral modifications are unenforceable . |
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Term
| Exceptions to Parol Evidence Rule: Contracts conditioned on orally agreed- on Terms |
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Definition
| Does not prevent parties from introducing evidence proving the written agreement was conditioned on terms agreed to orally. |
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Term
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Definition
| When an entire contract is conditioned on something else occurring first. |
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Term
| Exceptions to Parol Evidence Rule: Non Finalized, Partially written and partially oral Contracts |
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Definition
| Oral evidence is admissible because the written document is not the complete and final representation of the agreement |
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Term
| Exceptions to Parol Evidence Rule: Contracts Containing Ambiguous Terms. |
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Definition
| Evidenced used to clarify ambiguity is believed not to modify the the contract but, rather to clarify and therefore it is admissible |
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Term
| Exceptions to Parol Evidence Rule: Incomplete Contracts |
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Definition
| When a contract is fundamentally flawed because it is missing A portion of the contract Parol evidenced can be used to facilitate business transactions. |
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Term
| Exceptions to Parol Evidence Rule : Contracts with Obvious Typological Errors |
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Definition
| Whenever a written agreement under the statute of frauds contains a serious, and obvious, Typo, parol evidence is admissible to set forth that it was a typo and to set forth the proper term. |
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Term
| Exceptions to Parol Evidence Rule: Void or Voidable Contracts |
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Definition
| Courts allow Parol Evidence to demonstrate what makes a contract void or voidable |
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Term
| Exceptions to Parol Evidence Rule : Evidence of Prior Dealings or Usage of Trade UCC |
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Definition
| Actually Falls under the UCC Parol Evidence is admissible for the sake of clarification, if it addresses prior dealings between the parties or usages of tade in the business they are in. |
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