CONTRACTS:

CONTRACTS:

An agreement that can be enforced by a court, the breach of which gives may give rise to money damages.  Private law, people agree that this will be the law that governs their relationship 

 There are SIX requisites for a valid contract:

-                 Competent parties

-                 Mutual Agreement

-                 Genuine Assent

-                 Reciprocal consideration

-                 In form prescribed by law

-                 Legal formation and execution

discussed above, under parties to a contract.

COMPETENT PARTIES

                        Each party must have the legal capacity to enter a contract. 

If an incompetent person enters into a contract, the contract is VOIDABLE at the discretion of that person, or that person’s guardian, etc.

A.             Minors (those under 18)(these contracts are voidable at the discretion of the minor)

1.              Competent party has duty of “restitution” to minor, e.g. putting the minor back in the same position as before the contract;

2.              Minor also has duty to return property, etc., even if it has depreciated;

3.              Some States require minor to also make restitution, to make the other party “whole”.

4.              Minor may ratify the contract by NOT trying to disavow it, and accepting its terms and consequences.

EXCEPT: Necessities of Life: medical, educational loans, military contracts, food, shelter, etc. 

Also: Emancipated minors are able to contract for food/shelter, etc.

B.             Mentally incompetent (schizophrenic, senile people, etc.) are not held to contracts.  Test: objective cognitive “understanding” test – the person’s mental incapacity must render that person incapable of understanding or comprehending the nature of the transaction.  Mere stupidity does not meet this test.

Publishers Clearinghouse Sweepstakes forms.

                                    Local care dealership….

C.            Drunk/Baked – but only if “incapable of understanding the nature of the transaction at the time.”  The person NOT drunk must be returned to the status quo ante.

                        POLICY CONSIDERATIONS: Protect those who are not capable of making rational,

                        Intelligent decisions.  The BURDEN is shifted to those who SHOULD KNOW that they

are dealing with someone unable to make an informed, rational (though sometimes dumb) decision.  The more intelligent person is left with the risks that the contract is voidable.

The parties must come to a mutual agreement by OFFER and ACCEPTANCE (they must

Agree to THE SAME THING – and come to a MEETING OF THE MINDS).  Contracts are judge by OBJECTIVE FACTS (what is SAID and WRITTEN, not what the party SUBJECTIVELY THINKS

1. The offeror must objectively intend to be bound by the offer – Intent using the objective theory of contracts

TIME.  Offers are generally open for a reasonable amount of time, but the offeror may indicate that the offer terminates at a set time.

EX. OPTION CONTRACTS

A separate “contract” to keep the “option” to buy, open for a set period

of time.  The death of either offeror or offeree will not terminate the

subject of the option during the time period.

OFFER MAY BE REVOKED ANY TIME PRIOR TO ACCEPTANCE. This is true even if the offeror initially promised to keep the offer open for a set period of time, and decides to revoke it prior to the time running.  Revocation may be accomplished by either telling the other party “the offer is revoked.”

REJECTION of the offer terminates the offer.  Ex.  If I offer you my car for $5,000, and you decline it, then change your mind a week later, and call me to say you will accept the deal, it’s too late.  There is no offer on the table at this point.

COUNTEROFFERS  terminate the initial offer.

DESTRUCTION of the item, through no fault of the offeror, terminates the offer. Ex. If the building, which is the subject of the sales contract, burns down, the offer to sell it ends.

DEATH of either offeror or offeree terminates the offer.

SUPERVENING ILLEGALITY will also terminate offer. Ex. If legislature bars interest rates of more than 18% (called “usury”) any outstanding “offers” to loan money for 21% would be terminated.

THE ACCEPTANCE --  A positive response of a mirror image of the offer. Any material deviation does not constitute acceptance.

EX: “I’ll pay you $50 to paint my garage.”

You respond by saying “I’ll do it for $75”.

No contract yet; just a counteroffer.

However, if you respond with “OK, I’ll do it”, a contract is created.

Test for Genuine Assent: 

Both Parties have to voluntarily enter into the contract

1. No undue influence (Appraiser gives low-ball number on value of your house, then arranges for the sale to his own son)

2. Duress: Threatening someone to sign contract, “offer you can’t refuse”

3. Fraud

4. Mutual Mistake: If both parties are wrong about a central assumption (one mistake is not enough to void contract)

Test for Reciprocal Consideration

– that which induces both parties to contract.

Each party gives something, and each party receives something / or / 

OR

a contract is considered supported by legal value if 

(1) the promisee suffers a legal detriment, or 

(2) the promisor receives a legal benefit.

Test for Legal Formation and Execution:

Test for Legal Formation and Execution: 

May NOT be contrary to a statute. 

May NOT be contrary to public policy.

BUT – Two major exceptions:

Sale of business. Owner may agree not to

Compete in geographic area for several years; this is via the “goodwill” part of sale

Employees may sign “non-compete” clauses

Test for Disparate Impact

Facially neutral policy that results in people of different races/sexes being treated differently. Question is whether it has a good business justification..

1. Is the policy in conformity with a bona fide seniority system

2. MERIT SYSTEM

3. System that measures results of a professionally developed ability test NOT designed to discriminate

Test for Disability

Unable to perform major life functions

Test for Corpus Delicti

1. Fact of death

2. Casual connection between death and criminal agency

Test of Criminal Statute Vagueness:

Must describe the forbidden conduct clearly, so that people can conform their conduct to act within the statute in a crime is not clearly defined, it is void for being vague

Test for Aggravated Murder:

1. Intentional Murder

2. Premeditated Murder

3. Specical Circumstances: multiple victims, torture, law officer, hate crime

4. Prosecutorial Discretion to Seek Death penalty

Test for Murder 1: 

Premeditated AND Intentional 

OR

Intentional Felony AND Death resulting, even though not intentional (running from police, felony, and kill someone

Test for Murder 2:

Intentional Murder (not premeditated)

Test for Manslaughter 1: 

Reckless Killing with NO intent to kill (Friends w/Gun)

Test for Manslaughter 2

Negligent Killing with NO intent to kill (Dad w/Sled)

Test for Vehicular Homicide: 

DRUNK DRIVING (OVER .08 OR AFFECTED BY ALCOHOL) 

+

CAUSING ACCIDENT, CAUSING DEATH.

Test for Force:

Physical force that overcomes resistance 

OR

More force than necessary to accomplish the sex act

Test for Rape 1:

1. Intercourse

2. Force

3. Weapon or Kidnap or Burglary or Serious Physical Injury

4. May be Husband/Wife

Test for Rape 2: 

1. Intercourse AND Force

2. OR Intercourse AND Victim could not consent (Drunk)

3. May be Husband/Wife