Exam 3 Flashcards
Sources of contract law
Common law
uniform commercial code (UCC0
International Sales Contract Law (CISG)
UCC governs…
contracts for the sale and lease of goods
what makes a contract
a legally binding agreement between two or more parties who agree to perform or refrain from performing some act now or in the future
-promises, favors, gifts and contracts
requirements for common law contracts
- agreement
- consideration
- contractual capacity
- legality
define “agreement”
an offer and an acceptance
define “consideration”
- “bargained for” consideration
- something of value received or promised such as money to convince the person to make the deal. -does not have to be of equal value, but must show there was exchange e.g. selling a house for $1
- prior contracts or something you already have a legal obligation to do is not a sufficient consideration
- negated by being able to demonstrate fraud, coercion or distress, language barrier, mental capacity or anything that would make them an inferior bargaining party
define “contractual capacity”
law must recognize the parties as possessing characteristics that qualify them as competent
define “legality”
purpose of contract must be to accomplish something legal, and not against public policy
unilateral contract
one side has all the risk. one side will perform and the other will pay later
e.g. any service contract
NOT a simultaneous promise for a promise
high risk for the common man so special rules are in place
bilateral contract
both parties perform at the same time
executory contract
one that has not been performed yet
executed contract
one that has already been performed
illusory consideration
fiction, imagined
consideration for the act never actually happened
e.g. loose promise for a bonus “we’ll see”
accord and satisfaction
even though performance wasn’t exactly as specified, the parties agree it’s good enough to satisfy the contract
-some money is paid based on contract
release
release the right to sue over a contract
covenant not to sue
typically included as part of a release
rescission
reverses a contract.
-can be reversed as of today, or reverse it back to the very beginning of the contracg
compensatory damages
covers direct losses.
- you buy something and its defective, you’re awarded cost of what you paid plus the time value of money.
- pay your own court costs
- usually written into a contract to protect you incase it comes up
mitigation of damages
you must try to do everything in your power to come to court with clean hands. must show you’ve tried to help yourself, try to solve your own problem and minimize the damages to you
nominal damages
suing for a small amount just to prove that the other party has done wrong and prove a point.
it’ll create a record of their breach of contract and wrong-doing
waiver of breach of contract
even though the other party breached, you agree not to sue
Hadley v. Baxendale
limitations on consequential damages.
-where special circumstance apply, the parties must communicate them, you can’t assume the other party just knows