1.       Subject Matter Jurisdiction: power to address the subject

2.       In Rem:  Real-estate has jurisdiction

3.       Personal: jurisdiction over the defendant

·         Defendant voluntarily subjects themselves

-          Forum selections clause

-          No challenge is made

·         Defendant is a resident

·         Defendant is served with process in that state

·         Breach or contract occurred in that state

·         Defendant has sufficient minimum contacts with the state

·         Exclusive: tax, bankruptcy, federal crime, patents

·         Concurrent:

-          question of federal law

-          diversity: residences of 2 different states at least $75,000

·         Personal Jurisdiction: same as above

• Ø  Ethical Fundamentalism: Follows an external source such as the bible
• Ø  Ethical Relativism: believe you are ethically doing the right thing
• Ø  Utilitarianism: greater good as a whole
• Ø  Deontology: focuses on motivation, duties
• Ø  Social Ethics Theories: veil of ignorance, all equal
• Ø  Duty of Care: higher care to people we have relationships with

-          Plaintiff provides benefit to defendant

-          Defendant knowingly accepts

-          “unfair” for defendant not to pay

Promissory Estoppel

-          Promisor made a promise

-          Promisor should have expected promisee would act in reliance

-          Promisee acted in reliance

-          Promisee suffered detriment

Offer

1.       Offeror intends to enter a binding contract

2.       Certain on the terms

3.       Communication

§  Ads are not offers unless highly specific

§  Offers can expire if stated in contract or a reasonable time after

§  Revocation: offeror can revoke their contract any time prior to acceptance, effective when received

 Firm offer for the sale of goods

1.       Offeror is a merchant

2.       Written signed offer

3.       State it will be held open

Cannot be revoked, max period of irrevocability is 3 months

 Acceptance

1.       Objective intent

2.       Terms of the offer

Common Law: mirror image rule: acceptance must mirror offer on any material term

U.C.C.: Battle of the forms

There is a contract even if the acceptance adds or changes the terms

-          Terms are that of the offer unless both parties are merchants

-          If both are merchants

®     Changed terms not automatically added

®     Added terms are added unless: offeror objects or it is limited in the k

Mailbox Rule: timely acceptance properly dispatched via a stated or reasonable method is effective upon dispatch

Duress

• v  Physical: void contract
• v  Voidable:

-          Improper threat

-          No reasonable alternative

A.      Relationship between parties:

~ fiduciary: relationship of trust

~ dependence: one party depended on the other

B.      Unfair persuasion: use relationship to unfairly convince other party

Misrepresentation

1.       Must be an untrue assertion of fact

-          Affirmative untrue statement

-          Concealment: hiding a fact

-          Non-disclosure if:

~fiduciary relationship

~correct half truths

~failure to disclose could cause serious injury

~defeat materially affects the value

AND

2.       Fact is material

-          To any reasonable party    OR

-          Party knows it is important to the other party

AND

3.       Actual and Reasonable reliance

Mistake

1. 1.       Basic assumption
2. 2.       Material effect on the agreed upon exchange
3. 3.       Party seeking to cancel did not bear the risk of the mistake

Legally Sufficient

Consideration

A.      Asks promisee to do something they do not normally do

B.      Asks promisee to refrain from something they have the right to do

the unlimited right to cancel a contract

-          Not consideration

-          Any limitation saves the contract

Output and requirement contracts

-          Parties must continue to produce or purchase a reasonably proportionate amount to any estimate of prior statement

Pre-Existing Duties

  Ø  Contract Modification

v  Common Law: modification must have new consideration unless unforeseeable circum.

v  UCC: no new consideration required

  Ø  Debt Settlement Agreements

v  Undisputed debt: must be supported by new consideration

v  Disputed debt: always enforceable

a.       Regulatory licensing laws

-          not enforceable if not licensed

-          degree, training, expertise

b.      revenue licensing law

-          enforceable even if unlicensed

-          raise money for Gov’t

-          ex. Pay money and follow process

Agreements not to compete enforceable if:

-          Protects property interest

-          Reasonable restriction

-          No undue hardship

    A.      Right to disaffirm

-          Throughout contract or reasonable time after

-          Explicitly or implicitly

    B.      Ratification: you intend to be bound

-          Only after 18

-          Explicitly, implicitly, or waiting too long

1.       Adults duties: return minor to state before the contract

2.       Minors duties:

-          Traditional: minor returns consideration in current condition; if it was a necessary they must pay reasonable value

-          Modern: must pay for use or depreciation

Mental Incapacity

    A.      Declared mentally ill by a court: void contract

    B.      Unable to understand nature and effects of contract:      voidable

1.       Right to disaffirm

2.       Ratification

    C.      Duties

-          Capacitated party: put IP in position before contract

-          Incapacitated party:

~if CP knew then IP returns consideration in current condition

~if CP did not know then IP must pay for use

Intoxication

1.       Unable to understand nature and effects

2.       Other party knew or had reason to know of incapacity

3.       Can return other party to position they were in before the contract

     A.      Collateral Contracts: party agrees to pay a debt a        second party owes to a third party if the second            party fails to pay

-          Unless it is to benefit themselves

     B.      Land Contracts: to buy or sell land

-          Except full or partial performance by the buyer in clear reliance

     C.      Marriage Provision: prenuptial agreements     

     D.      One Year Provision

-          cannot possibly be completed in one year 

     E.       Contracts for the sale of goods > $500

1.       Agreement was made

2.       Material terms

3.       Signature by party suit is being enforced against

Parol Evidence

: prior statements not contained in a written contract

-          Rule: PE is not admissible to add, alter, or contradict the terms of a written contract that qualifies as an “integration”

Contract must be considered whole

Anything contradicting the contract is not admissable

~ merger or integration clause: states the written contract is final

~ highly detailed: corrections or additions may be added

a.       Materially increases duties or risk of obligor

b.      Personal contract

c.       Under common law, prohibited in the contract

d.      Prohibited by public policy

Assignor’s Liability

-          Implied: if an assignment is supported by consideration, underlying contract is enforceable

-          Expressed: if obligor does not pay, oblige must

a.       Personal contracts

b.      Prohibited by the contract

Effect of Delegation

-          Delegatee’s liable when they assume the duties

-          Delegator’s remains liable until delegate performs unless

~novation: agreement releases delegator

Third Party Beneficiaries

Intended

a.       Subject to any defenses of the contract

b.      Rights against promisee if consideration was included

-          Express condition on party’s satisfaction of other party’s performance

~ objective: satisfy the average person

~ subjective: satisfies the defendant

Discharge of Duties by Agreement

1.       Mutual Rescission

2.       Substituted contract

3.       Novation

4.       Debt Settlement Agreement

Doctrine of Impossibilities

a.       Death

b.      Subsequent illegality

c.       Destruction of subject matter under common law

d.      Commercial Impracticability

i.                     Unforeseeable event

ii.                   Performance made extremely difficult

-          substantial performance under common law

-          Delay is reasonable and time was not of the essence

-          Failure to substantially perform under common law

-           Late performance is unreasonable or time is of the essence

-          Substantive Defect under the UCC perfect tender rule

-          Substantial interference

-          Anticipatory Repudiation: party tells the other party ahead of time that they are not going to perform

A.      Compensatory Damages

1.       Loss of value” contract price – market value

2.       Incidental: cost obtaining substitute

3.       Consequential Damages: caused by breach but are from outside the contract

-          must be foreseeable

-          recovery can be limited by contract

B.      Reliance: occurred before the breach

C.      Nominal: symbolic

D.      Punitive: punish defendant

: contract breached, breacher will pay a reasonably related amount of what the

losses might have been 

Equitable Damages

A.      Specific Performance

1.       Real estate

2.       Goods that are proven unique

3.       Not for personal services

B.      Injunction: prevent defendant from doing something

A.      T & ROL passes to buyer when goods are delivered to the shipment carrier

-          “shipment k”

-          FOB sellers location

-          Not clear on type of contract

A.      T & ROL passes when goods are delivered to buyer

-          Labeled “destination or delivery”

-          FOB buyers location

Buyer picks up the goods

Title -   passes when document is transferred or seller completes their responsibilities

 ROL -  Merchant seller: passes when goods are picked up

-          Non merchant seller: when seller tenders delivery

a.       Seller with voidable title can pass good title to a good faith purchaser for value

b.      Entrustment rule: if an owner entrusts goods to a merchant, they can pass good title to a good faith purchaser for value

Implied Warranty of Fitness for a Particular Purpose

a.       Seller knew of buyers particular purpose

b.      Buyer was relying on sellers to pick appropriate good

c.       Buyer does rely on seller

Strict Liability

1.       Defendant is a merchant

2.       Defendant sold product in defective condition

3.       Defect renders the product dangerous

4.       Plaintiff was in fact injured from the defect

Foreign Sovereign Immunities Act

Not Immune if

-          If the foreign state has conducted commercial business in the United States

-          case is based on an act which was connected to the United States and the commercial business conducted

-           if an act is performed outside of the United States but it is directly connected to them  

v  Commercial Activity is something that could be done by someone private

v  Government Activity could only be done by the government