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Quiz Notes

by: Nuyev

Quiz Notes BSL212

GPA 3.1
Intro to Business Law
J.Martinez Evora

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About this Document

Full pack of quiz notes for professor Martinez Business Law class
Intro to Business Law
J.Martinez Evora
BSL212, Bussinesslaw, bsl 212 martinez, martinez evora, bsl, Law, business law miami, business law quiz, 1, 2, 3 business law quiz 5
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This 36 page Bundle was uploaded by Nuyev on Tuesday October 6, 2015. The Bundle belongs to BSL212 at University of Miami taught by J.Martinez Evora in Spring2014. Since its upload, it has received 52 views. For similar materials see Intro to Business Law in Business Administration at University of Miami.

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Date Created: 10/06/15
Moral Philosophies and Values 09112012 Ethics 0 PhHosophy 0 General system of values by which we live Moral philosoohies o lndividual speci c principles or rules that people use to decide what is right or wrong personspeci c Business ethics o Group decisions within a business that groups deem as right or wrong Ethical viewpoints A framework for making business decisions Moral Philosophies Conseduentialist Theories deems acts right if they reach some desired result 0 Egoism o De nes right or acceptable actions as those that maximize a persons own selfinterest 0 Different for all people Relativism 0 Ethical behavior is based upon an individual or groups personal experiences Utilitarianism 0 Right or acceptable if the action is for the greater good greatest good for the greatest number of people 0 Systematic comparison of the costs and bene ts to all affected parties Teleology 0 Something is right if it produces a desired result self interest or utility Rights Based Categorical Theories focus on the rights of individuals and on the intentions behind an individuals particular behavior rather than the behavior s consequences deontology o Libertarianism 0 Live free or die believes in the doctrine of free will 0 humans have absolute rights that must be respected o Kant and the categorical imperative Virtue ethics and justice 0 Virtue ethics deems something right or wrong based on the current societal de nitions of what is moral in a given situation and what a mature person with good moral character would do Business virtue ethics a Trust a Selfcontrol n Empathy n Fairness n Truthfulness Nonbusiness virtue ethics n Lying n Cheating a Fraud n Corruption 0 justice evaluate the idea of fair treatment and due reward in accordance with ethical or legal standards Distributive justice evaluation of the outcome of a business relationship Procedural justice refer to the processactivities that produce the outcomes Interactional justice based on the communication process in business Contracts 0 Freedom of contract gives you the right to enter into a contract or not choose to sign one or not 0 Contracts exist in all aspects of a persons life 0 Fundamental institution in our lives 0 Can they be modi ed 0 When you sign a contract that is binding sometimes you can get out of them but HOW State Law 0 Contract law governed by UCC universal commercial code 0 Every state has its own version with minimal differences 0 Common Law 0 Law created by judges 0 Every state has its common law governing contract law 0 The restatement of contracts discuss common law principals and make modi cations on it UCC vs Common Law 0 UCC 0 Deals with whether or not a transaction is a sale ofgoods tangible movable governed by article 2 of this code 0 COMMON LAW 0 Deals with a performance of a service 0 When it comes to a case of installation the installation is normally just and addition to the sale of the good so it remains under UCC International Contract Law CISG Essential Elements What isisn t a contract 0 6 basic requirements of contracts 0 Mutual ascent offer and agreement Established through conduct or written consent 0 Consideration Legal bene tgains in a transaction and legal detrimentosses can be money product time etc o Legality of a contract Contract is not valid if the objects discussed in the contract are illegal criminal or tortuous 0 Capacity Absolute lack of capacity declared incompetent by law example would be mentally challenged or incapable of understanding the law or limited lack of capacity minors can invalidate contracts unless the services are necessary 0 Writing Some contracts must be in writing to satisfy the statue of clause 0 Absence of an invalidated conduct Misrepresentation undue in uence Classi cation 0 Express v Implied Contract 0 Express contracts agreed upon by both parties at time of the contract 0 lmplied parts of contracts that may not have been mentioned by both parties at time of contract but are included to quotmake sensequot of the contract 0 Bilateral v Unilateral Contract 0 Bilateral both parties agree to perform their promises at some time in the future not at the same time o Unilateral one party performs their promise at time of contract and other party performs at later time Executed v Executory Contract 0 Executed contract completed by both parties 0 Executory contract yet to be completed or partially completed by one party 0 Valid v Void Contracts 0 Valid meets all essential elements and requirements 0 Void contract never existed because from its birth it was wrong NonContractual Remedies Two instances where the law recognizes an obligation to pay or perform because it is fair can be awarded without contracts 0 Promissory Estoppel detrimental reliance Detrimental reliance promisor promises another individual something in exchange for a good service etc that cannot be taken back I Basically 3 points need to be met Promise Detrimental Reliance Unjust can be avoided o Quasi Contract Unjust Enrichment Implied in Law Act of a person permitted by law by which he obliges himself towards another without any agreement between them No promises made or reliance s involved in quasi contracts Professionals should be paid for reasonable value of services rendered for clients Fairness Doctrines In rare occasions there is no valid contract a court might award a remedy as if there were a contract under the theories of o Promissory Estoppel o Unjust Enrichment Mutual Assent 09202012 All business disputes do not end up in court only a few percentage of business cases go to court e Mutua assent Essential requirement to have a contract Offer and Acceptance Offer Essentials Communicated offerer has to say what they are offering to the offer 0 As intended Offerer s intention did not happen by accident 0 As authorized directly communicated to the offere Usually in words can also be in contact Intent to enter into a contract Jokes 0 Ex selling a lambo For 1000 Excited utterances Preliminary negotiations o Negotiations prior to contracts Auctions 0 Invitation to an offer 0 Ex auctioning a portrait one person offers 1000 next offers 3000 settle on 5000 one the hammer is sounded that portrait must go to the person who offered 5000 It can not be revoked General ads 0 Speci c ads De nite and Certain General Common Law Rule every contract should have the name of parties quantity quality time place etc UCC rule deals with open terms only thing that matters is quantity 0 Special Cases 0 Output contracts buyer will buy merchandise for a period of time 0 Requirements contracts seller will sell merchandise for a period of time Duration of an Offer Until acceptance 0 Offer is open until the offere accepts the offer offere has the power of acceptance Lapse of reasonable time when time is not mentioned in contract 0 If there is no mention of time period in the offer than it is subject to the jury to decide ex perishable goods and real estate will have different periods of reasonable time Revocann The offer is going to be open until 0 The offere accepts 0 There is a lapse of reasonable time o The maker of the offer revokes the offer and the offer is closed 0 REVOCATION CANNOT occur when exception 0 A Common Law exception to revocation rule An option contract an irrevocable person getting offer pays considerationnormally money to keep contract open for task so the offerer cannot revoke the contract 0 B UCC exception to revocation rule Merchants rm offer an irrevocable offer that is signed by the merchant that is open for 3 months if no time is stated 0 C CISG rule for irrevocable offers If offere relied on the offerer then the offerer is bound to the offer and has to sell the goods or provide services Rejection The offere does not want what the offerer is offering 0 Does not have to verbally reject the offer because it will expire over a certain lapse of time 0 Can verbally say that they don t want it to substantiate it if they choose to but this is not necessary Counteroffer Terminate offer as well as introduce a new offer 0 Rejection of the rst offer but introduces a new offer 0 Ex a quotdo you want to buy this watch for 5 dollarsquot 8 quotno I want to buy it for four dollarsquot Death and incompetency of Either Party o If either party dies then the offer is terminated Destruction of subject matter lf the subject at hand is destroyed then the offer is terminated Subsequent Illegalitv lf the subject matter at hand is deemed illegal example prohibition then the offer is terminated Acceptance Communicate o Silence is usually not a way of acceptance unless there were prior course dealings 0 Timing o What do all of these have in common Offers Rejections Counteroffers Revocations o Mailbox Rule 0 If you communicate your acceptance by reasonable means then the acceptance is effective upon dispatch If you put it in the mail we have a contract 0 Generally in the form of a letter as long as there is proof that you send something then there is a a contract In order to have a contract the mutual assent must be Voluntary and knowing o 4 situations fail the test 0 1 Duress 0 When a person performs an act under Physical threats physically forcing someone to perform an act threat pressure etc Improper threats social coercion or economical duress n Economic Duress idea that one party is forcing another party though economic threats to negotiate with them Sophisticated Disfavored to nd economic duress by the US court Reasonable alternative 0 2 Undue in uence 0 Unfair persuasion by a dominant party where there is a con dential or duciary relationship 3 main points italicized 0 Can also occur between Guardianminor Agentexpertlawyerclient Trustee trusterbeneficiary creditors 3 Fraud 0 5 Elements of fraud in the inducement are A false representation Of a fact That is material That is made with the knowledge of its falsity and the intention to deceive Which representation is justi ably relied on Duty to disclose reed v king Fact is material Affects value of property Known or accessible to seller Buyer did not know Materiality gravity of the harm af icted by nondisclosure the fairness of imposing a duty of discovery on the buyer as an alternative the impact on the stability of contract if rescinded o 4 Mistake 0 mutual affected party can claim mistake and get money or damages 0 unilateral only one party is mistaken if the nonmistaken party should have known or knew of the mistake than the case can be taken to court Consideration 10022012 Perfect Contract 0 Mutual assent Consideration Legal objet Capacity 0 Writing 0 Absence of invalid conduct Contract 0 Parties capacity 0 Object 0 Cause subjective objective Consideration Exchange of products promises are enforceable when both parties have exchanged something of value in the eye of the law A Court Will Find Consideration When Both are Met Legal suf ciency either legal detriment obtaining something to which one had no prior right to the promisee or the legal benefit doing and act one is not legally obligated to do or not doing an act that one has a legal right to do to the promisor Illusory promises promise that doesn t oblige the promisor to keep it shall wish may want desire NO CONSIDERATION Promises not illusory have consideration 0 Output K agree to sell all products to one buyer 0 Requirements K agree to buy all needs from single producer 0 Exclusive Dealing K grant to a franchisee or licensee by a manufacturer or the sole right to sell goods in a de ned market 0 Conditional K obligations are contingent upon occurrence of a stated event may or may not have happened Example if a person promises to buy a man s car for 8000 provided they get money from their dead aunt if the aunt does not die they don t have to pay since they were conditioned on the expectation of that money 0 Preexisting Public obligations duties imposed by tortcourt law that deal with neither a legal bene t or a legal detriment o Duties are already deemed preexisting by criminaltort law so there is no consideration 0 No contract because it is imposed by members of society or a previous lawcontractcriminal law 0 Example if someone pays someone else 10 not to harm them that is not supported by consideration since because it is already a duty that people should not be doing tort law 0 Deals with false imprisonment negligence battery 0 PreExisting contractual obligation both parties mutually agree to change one or more of their contract s terms Modi cation of prior K s 0 Under Common Law service employment land real estate we need mutual consideration inducement to enter into a contract and there must be a separate and distinct modi cation contract 0 Under UCC Rule sale of goods we need good faith no separate contract 0 Under ClSGinternational element in transaction we need mere agreement of the parties Settlement of Debts o Undisputed debt Payment of a lesser sum of money to discharge an undisputed debt one whose amount is stated is legally insuf cient consideration 0 Disputed debt Payment of a lesser sum of money to discharge a disputed debt one whose amount is not stated is legally suf cient consideration If a lawyer performs services for a client and does not state how much his services are worth then bills his client for 600 but his client only sends him 250 because he thinks that s suf cient and the lawyer cashes that check then the client has no further liability to the lawyer to pay anymore since the cashing of the check substantiates for the services Bargained for exchange Mutually agreed upon exchange 0 Each party gives something to the other in exchange for hisher promise Past Consideration 0 An act completed before the contract is made is not consideration 0 Promise is based on something that happened in the past so it is not good enough Contracts Which are Enforceable that do not have Consideration Promissory Estoppel when a person depends on another person s promise and goes and performs a task based on the dependence of the promise oTypicay a situation in which there is no consideration oContracts under Seal o When a person binds himself with a seal bond deed or solemn promise the seal acts as a substitute for consideration oPromises Made Enforceable by Statue o Some gratuitous promises are made enforceable by a Code Contract modi cations Renunciations Firm offers oPromises to Perform Prior Unenforceable Obligations o Promise to pay debt barred by the statue of limitations a new promise by the debtor to pay the debt renews the running of the statue of limitations for a second statutory period 0 Promise to pay debt discharged in bankruptcy may be enforceable without considerations 0 Voidable promises new promise to perform a voidable obligation that has not been previously avoided is enforceable Moral obligation a promise made to satisfy a preexisting moral obligation is generally unenforceable for lack of consideration Illegal Bargains 10162012 Unenforceable contracts Can be validly formed but can still be unenforceable Contracts that violate regulatory licensing laws Generally Unenforceable doctors lawyers plumbers etc need licenses to perform duties 1 Regulatory license v revenue license Regulatory person cannot recover for services rendered if they are unlicensed 0 Designed to protect the public from unquali ed practitioners Revenue an unlicensed person may recover for services he has performed if the licensing statue seeks to raise money 0 Looking out for greater good raising money Gambling Statues Contacts Two or more people enter into a contract on which they bet on the outcome of an event winner and loser They are only concerned with the possibility of a gain or a loss Generally unenforceable unless permitted by a statue Usurious Statues Contracts Usury statues law that establishes a maximum rate of interest for which a lender and borrower of money may contract When a company is charging above the legal interest courts will need evidence to prove a transaction usurious o 1 A loan 0 2 Of money 0 3 That is repayable absolutely in all events 0 4 For which an interest charge is exacted in excess of the interest rate allowed by the law 1 2 amp 3 are all violations of STATUES 49 are all violations of PUBLIC POLICIES 4 Common Law Restraint of Trade Sale of business amp employment contracts U39l 01 Contracts that try to eliminate competition or obstruct tradecommerce Also contracts that prevent employees to compete against competition Example covenant not to trade agreement to refrain from entering into a competing trade profession or business Can be enforceable IF 0 Purpose of restraint is to protect a property interest or legitimate interest of the employer 0 The contract is reasonable Depends on geography period for which it is effective and the hardship it imposes on the promisor public Contracts with OverReaching Excupatory Clauses Courts generally disapprove of contractual provisions excusing a party from liability for his own tortious conduct One case it is enforceable negligence o Duty Breach of duty Cause in fact legal proximate Damage Intention is absent it is not on purpose different from intentional conduct Unconscionable Contract Court will go against contracts that are unfair and offend public policies Procedural unconscionability o The way the business is introduced to your client was it fair 0 How the contract handled with a client did the seller act reasonably Did he explain all of the terms and information Did he explain the interest rate If he didn t then the court will rule against the contract Substantive unconscionability 0 When courts look at the actual terms of a contract and deem them fair or unfair exorbitant prices unfair exclusionlimitations etc Looking at the contract terms themselves Example Italian man comes to NYC from Italy moves into an apartment but has no appliances Homeseller approaches him and offers him Italian immigrant a fridge for 1000 Italian guy thinks it is great because he gets it at home doesn t even have to go out and buy it BUT after two months the Italian man nds out that the fridge is actually 15000 in the real market 000 O l 00 Sues and wins WHY Nobody normal would have entered into this contract but because he was an immigrant he was ignorant to the market and the businesscontract Adhesion Contract Standardform contract made by one party offering a quottakeitor leaveitquot offer to another party Generally these are not automatically found unenforceable they instead are under scrutiny for substantive or procedural unconscionability You don t have bargaining or negotiating Tortious Contracts Any contract that requires a person to commit a tort is illegal and unenforceable example paying someone to kill someone or paying someone to run someone ese s company out of business 9 Corruption of Public Officials Agreements that may negatively affect the public interest Corrupt public officials Impair legislative processes 0 Unenforceable Every person who enters into a contract MUST have contractual capacity Minor Contracts entered in by minors are enforceable but can almost always be voided by their guardian 1 Power of disaf rm A minor can disaf rmdo away with release from liability a contract at any time before reaching the age of majority generally this age is 18 Can be either expresssaid or implied through conduct They can also disaf rm to contract within a reasonable time after the age of majority 0 As long as they have not rati ed the contract 2 Rati cation words or conduct that shows a minor wants to be bound by a contract Minor cannot ratify a contract when they are a minor Minor can ratify a contract after they reach age of majority Rati cation makes a contract binding from the beginning Rati cation is nal and cannot be withdrawn and is done through 0 Express language 0 Conduct 0 UL O O 0 Failure to make a timely disaf rmance Necessaries Minor is responsible for reasonable value for necessaries Necessaries Food lodging clothing medicine medical services textbooks school instruction student loans legal advice articles of property If merchants are providing necessaries they win Merchants don t have to reimburse them If merchants are providing unnecessary items they lose Merchants have to reimburse them 4 Liability for Misrepresentation of Age 0 If a minor misrepresents his age he can still disaf rm the contract Widely debated on throughout the country but the prevailing view is that minors may still disaf rm contracts even though they misrepresent their age U39l Liability for Tort Connected with Contracts Minors are generally liable for their torts o Tort when a persons behavior causes someone else harm When a tort and a legal contract are so interwoven then minors are not held responsible and not liable in tort Incompetent Individuals 0 Person under guardianship O O O 0 Contracts made by a person placed under guardianship by court order are void Court declares person insane for a period of time because a court said so in a judgment Guardians are given to people because they are impaired in someway to control and manage themselves A quotwardsquot person under guardianship s contract may be rati ed by his guardian or by himself once his placement under guardianship is terminated 0 Person with a mental illness or mental defect 0 When a person is mentally incompetent has a mental illness or does not have an appropriate level of mental capacity and enters into a contract the contract is voidabe Not declared quotmentally illquot by a court more concerned with metal defects One who is unable to understand the nature and consequences of his acts Intoxicated Individuals 0 A contract entered into by an intoxicated person is voidable 0 One who cannot understand the legal consequences of his ac ons o Slight intoxication 0 Contracts are perfectly ne and enforceable if the person signing it only had a minimal amount of alcohol glass of wine one shot one beer etc 0 Look and act ne 0 Major intoxication 0 Contracts are unenforceable if a person who has consumed a substantial amount of alcohol bottle of vodka multiple shots multiple beers etc prior to signing a contracts 0 Even though they look and act ne the contract is still Voidable o If there is a lab test proving that the person is over the legal drinking level then the contract is most likely voidable Contracts in Writing 10282012 contracts are typically enforceable when they are said orally but it is highly desirable that signi cant contracts be written Statue of Fraud States that certain designated types of contracts must be in writing in order to be enforceable No relation to any kind of fraud practiced in contracts Relates only to the proof or evidence ofa contract Contracts Within the Statue of Fraud Must be in Writing 1 Suretyship Provision Applies to a contractual promise by a surety promisor to a creditorpromisee to perform the duties or obligations of a third party if the principal debtorthird party does not perform carry out his debt or duties owner 0 Promisor is not primary liable only agree to cover the debt if the principal debtor cannot pay 0 2 contracts 0 lst between initial creditor and debtor that creates the indebtness o 2 d between initial creditor person covering principal debtors debt aka promisor and suretypromisor which has the surety promising to cover the debt if the principal debtor cannot cover it 0 Both contracts must be in writing and signed 0 Exceptions don t have to be in writing can be oral 0 Main purpose doctrine If the promisor s main purpose of his promise is to obtain an economic bene t that he did not previously have 0 Original promise Statue of frauds does not apply when the promisor originaly promises to become primary liable for the entire debt cover entire debt regardless if the principal debtor can pay it or not 0 Promise made to the debtor Promisor cannot promise the debtor anything needs to go straight to the creditor Example D owed debt to C S promises D to pay D s debt not a Suretyship contract Executive or Administrative If a person who dies appoints a speci c person to answer personally for them in regards to duties the contract must be in writing in order for the executoradministrator person appointed by dead person to answer for personal duties to be enforceable Land Contract Provision Any contract that deals with the rights privileges powers or immunity in real landproperty must be in writing All promises to transfer buy or pay interest in a land including ownership interests leases mortgages options are included in this provision and also need to be in writing Exception do not need to be in writing 0 Partperformance plus detrimental reliance Buyer makes improvements on land and detrimentally relies on sellers promise to sell 0 Seller conveys property One Year Provision Contracts that cannot be fully performed within one year of the making of the contract must be in writing Year runs from the date the contract is made to one year from that day not from the day performance is to begin Exceonns o Possibility test Courts ask whether it is possible that a contract be performed within a year All we pay attention to is quotis it possiblequot don t take into account probabilities or subsequent events not quotI thinkquot or quotwe cantquot Court will ask themselves whether it iswas possible for a contract to be carried out within one year or not Marriage If there is an agreement made upon consideration of marriage the contract must be in writing Example quotI will sell you my house if we get marriedquot must be in writing 0 Exception o If two people mutually decide to get married no promises 0 Proposal I love you lets get married nothing to be promised or contracted therefore it does not need to be in writing 6 Sale of Goods over 500 0 Must be in writing Goods movable personal property 0 Exceptions don t need written contracts 0 Oral contract is acceptable when a defendant in court admits admission that a contract was made 0 When goods are speci cally designed for a buyer that the buyer cannot just go sell in his business special order 0 When part of the goodsprice are deliveredpaid validates the contract but only for the goods that have been accepted Modi cation or Rescission of Contracts Within the Statue of Frauds 0 Oral contracts modifying previously existing contracts are unenforceable if the resulting contract is within the statue of frauds 0 Common sense Compliance Within the Statue of Frauds General contract provisions the writings or record must 0 Specify the parties by contract 0 Specify the subject matter and essential terms o Be signed by the party to be charged or by his agent oSale of Goods UCC Merchant Rule 0 Provides a general method of compliance for all parties and an additional one for merchants 0 Writing or record must be sufficient to indicate that a contract has been made between the parties be signed by the party against whom enforcement is sought or by his authorized agent and specify the quantity of goods to be sold 0 Written con rmation between merchants a written con rmation that is suf cient against the sender is also suf cient against the recipient unless the recipient gives written notice of his objection within ten days Third Parties 0 Persons who are not parties to a contact but who have a right to or an obligation for its performance 0 Generally only the parties have rights and duties under a contract Privity of Contract 0 The contract is private to the people involved in them 0 Third parties are not originally part of the contract but if they become assignees delegates or thirdparty bene ciaries then they in turn gain rights and duties Rights and Duties of Third Parties Arise By 1 Assignment of Rights bene ts you will receive original contract between AampB third party is now introduced into the contract 0 Assignor party making an assignment Assignee party to whom contract rights are assigned by the assignor Obligor person who owes duty to the assignor under the original contract after third party is introduced heshe will only deal with the them aka assignee Obligee person to whom a contractual duty is owed to 0 Assignment of rights is the voluntary transfer to a third partyassignee of the rights arising from the contract 0 Third party is called assignee and the person who deals with the assignee is the assignor o Assignor s right to receive performance is terminated when heshe introduces the third party assignee All rights are assignable BUT o Assignments that materially increase the duty risk or burden upon the obligor When an assignment materially alters the duty between the obligor and the assignee differs from the obligors duty to the assignor 0 Assignment of Personal rights If the assignment deals with rights that are extremely personal to the Obligee Example if two people are getting married one of the parties cannot assign hisher right to marry 0 Express Prohibition Against Assignment If the assignment is against a statuecontract or law it is prohibited Form of assignment 0 Orally is okay 0 Consideration is not required but With consideration assignments become irrevocable Delegation of Duties things that are to be done Delegator person in contract that introduced the third party and gives himher duty initial contract makes the delegator liable to the Obligee to perform some type of duty 0 Still held responsible even though he delegates his duty Obligee person receiving something part of the original contract performance is owed by the delegator and delegatee Delegatee person assuming a duty from the delegator Delegation of duties is a transfer of a contractual obligation to a third party Most contractual dealings are delegable UNLESS 0 Language in contract prohibiting the contract Sublease o Duties are personal 0 Duties whose delegations are prohibited by statue or public policy Duties of the Parties 0 Delegation delegator is still bound to perform original obligation regardless of if their delegatee does so Third Party Bene ciary Contracts Contract itself when it is made between two parties promises that performance will be rendered to a third party bene ciary lntended bene ciary 0 Third partyies intended by the two contracting parties to receive a bene t from their contract 0 Donee Bene ciary a third party intended to receive a bene t from the contract as a gift 0 Credit Bene ciary a third person intended to receive a bene t from the contract to satisfy a legal duty owed to him Incidental bene ciary 0 Third party whom the two parties to the contract have no intention of bene ting by their contract and who acquires no rights under the contract Transfer of Title 11152012 Transfer of Title Ownership when you have title and rights to something 0 Title of Ownership 0 Fundamental right 0 Owner is able to selldestroytradeetc goods as long as heshe is the rightful owner of the goods or is authorized to sell goods for the rightful owner Transfer or Rights 0 Owner transfers ownership and risk to buyer Lease Transferring the right to possess Issue here is possession o Ownerleaser keeps the title but is transferring the right to possess and use the goods for a certain period of time to the leasee in return for consideration generally Shipment v Destination Contracts Seller gtgtgt Carrier gtgtgt Buyer o Shipment contract 0 As long as the seller delivers the good to the carrier person who is going to ship the goods to the buyer then the title of ownership is transferred to the buyer 0 Destination contract 0 The title of ownership is not transferred to the buyer until the buyer receives the goods 0 Requires the seller to deliver the goods to a particular destination Warranties 0 An obligation of the seller to the buyer or lessor or lessee concerning title quality characteristics or conditions of goods Warranty of Title 0 Seller has title of the product he made it he owns it etc 0 Basically he did not steal it Express Warranty Writtenoral representations of facts about a product or service that a seller makes 0 Seller is bound by these facts that they claim are true about their product or services 0 Can sue anyone Implied Warranty 0 Warranties that are not written in the contract but implied by operation of law 0 Merchantability Warranty that a product is reasonably t for the ordinary purpose for which they are manufactured or sold Performs fair and average quality Basically that a product works for its intended purpose Example an air conditioner will provide cool air 0 Fitness for Particular Purpose Warranty by any seller that their goods are reasonably t for a particular purpose Seller has to know that their buyer is relying on their skill and judgment to furnish suitable goods 0 Disclaimers of lmplied Warranties 0 1 if a seller says they are selling their goodsproduct quotas isquot quotwith all faultsquot or other similar language 0 2 by course of dealing course of performance or usage of trade 0 3 as to defects an examination ought to have revealed where the buyer has examined the goods or where the buyer has refused to examine the goods buyer have the right to inspect the goods before purchasing Strict Product Liability Any participant in the chain of distribution can sue the seller 0 We don t care how careful the seller was when the seller was manufacturing the good the seller is liable REGARDLESS If the good 0 1 Design The product though made as designed is dangerous because the design is inadequate o 2 Manufacturer defect Defect in the product itself Failure to meet manufacturing speci cations so the product is not properly made o 3 Failure to warn Failure to warn anyone of the dangers of the product Failure to provide appropriate directions for use of product 0 Then the participant can sue the seller 6 Elements to Prove a Case 1 Merchant 2 Defective 3 Unreasonany dangerous to an ordinary average consumer 4When it left the manufacturers hand it was defective 5 Harm is caused 6 Causation Performance Breach and Discharge 11062012 Conditions many contractual promises are not absolute promises to perform but are conditional they depend on the happening or nonhappening of a speci c event 0 Condition event whose happenings or nonhappenings affect a duty of performance under a contract 0 Noliability carried with conditions for the promisor or promisee How do you classify conditions Express Conditions Explicitly set forth in language 0 Must be fully and literally performed before the conditional duty to perform arises Satisfaction of a Contracting Party 0 Parties in a contract agree that performance by one of them shall be to the satisfaction of the other who will not be obligated to perform unless he is satis ed 0 Example You make me a suit and I agree to pay you 300 if it satis es me 0 As long as the dissatisfaction is honest and in good faith then the party does not have to pay or perform 0 Subjective satisfaction Conditions of the contract are based on taste opinion orjudgment and the promisor does not have to perform if he is in good faith dissatis ed 0 Objective satisfaction Not whether the promisor was actually satis ed personally but if the reasonable person would be satis ed Satisfaction of a Third Party 0 Contract may condition the performance of a party on the approval of a third party lmpliedlnFact Conditions 0 Must fully and literally occur and are understood by both parties as part of their agreement but they are NOT stated in expressed language ImpliedlnLawConditions Imposed by law to accomplish a just and fair result 0 Not contained doesn t have to be implied from the contract and it needs to only be substantially performed When do you classify conditions Concurrent Conditions 0 When the mutual agreements of a contract are to take place at the same time Condition Precedent An event that must occur before performance is due under a contract 0 Immediate duty of one party to perform depends on the condition that some other event must rst occur Condition Subsequent 0 An event that terminates an existing duty Discharge Discharge is the termination of a contractual duty Not liable to pay the contract Discharge by Performance 0 Complete performance by one party of the required duty no longer hold that party responsible for the duty Discharge by Breach Breach of a contract is a wrongful failure to perform its terms 0 Material Breach o More serious failure to perform a substantial obligation o Aggrieved party party that expected some substantial duty to be performed is discharged from a contract 0 Example if a limo driver is paid to pick up the groom at 5 for a 6 o clock wedding and he shows up at 550 the groom is discharged from the contract and does not have to pay the limo drive 0 Considered a material breach if Partial performance omits some essential part of a k Intentional breach of a contract I Failure to perform a promise promptly lF TIME IS OF THE ESSENCE lf parties specify what breaches are material Perfect tender under UCC any deviation from the original contract is considered a material breach Substantial Performance 0 An incomplete performance of a contract that does not defeat the overall purpose of a contract o If a party substantially but not completely performs her obligations under a contract that party can generally be able to obtain the other parties performance less any damages the partial performance caused 0 Example Adam builds a 200000 house for Betty but deviates from the speci cations causing Betty 10000 in damages So Adam will still be paid but will only be paid 190000 instead of the 200000 0 Anticipatory Repudiation 0 When a party announces that he will not perform or that he may commit an act that makes him unable to perform before the due date of which the party is to be performed Discharge by Agreement of the Parties 0 Parties can agree amongst one another to be discharged for the obligations of a contract 0 Mutual Rescission o A contract between two parties that terminates both of their duties both give up their rights in exchange for the other to do the same Accord and Satisfaction 0 Contract when an Obligee promises to accept a stated performance in satisfaction of the obligor s existing contractual duty the performance is called a satisfaction 0 Example Dan owes Sara 500 and the parties agree that Dan will paint Sara s house in satisfaction of the debt the agreement is an executor accord When he paints the house he will by satisfaction discharge the 500 debt Substituted Contracts 0 New contract between parties that immediately discharges the old contract and imposes new obligations under its terms 0 Agree to substitute old contract for a new one Novation o A substituted contract involving a new third party promisor or promisee 0 Example 1 A owes B 500 but C agrees to pay B the 500 or 2 A owes B 500 but parties agree that A will pay C the 500 Discharge by Operation of Law Discharge brought on by the operation of law Impossibility performance of the contract cannot be done 0 Frustration of purpose principal purpose of a contract cannot be ful lled because of a subsequent event 0 Subsequent illegality if performance become illegal or impractical as a result of a change in the law the duty of performance is discharged Commercial lmpracticability if a duty becomes too expensive to perform 0 As a result a person is discharged Contract Remedies When one party to a contract breaches the contract by failing to perform his contractual duties the law provides a remedy for the injured party Impossible for any remedy to equal the promised performance Goal is to put the nonbreaching party in the position they would have been in had the contract been carried out Do not want to punish the breaching party Relief a court gives the equivalent of the promised performance o 3 kinds of remedies Monetary Damages Most frequently granted judicial remedies for breach of contracts Awarded only for losses that are foreseeable Compensatory Remedies Always available to the injured party 0 Purpose is to place the injured party in a position as good as the one he would have been in had the other part performed under the contract Damages losses costs avoided incidentals consequential damages 0 Losses promised performance actual performance 0 Costs avoided saved expenses or mitigations o lncidentals expenses transportation etc o Consequential damages lost pro ts and injuries ONLY IF FORSEEABLE Reliance Remedies Contract damages placing the injured party in as good a position as she would have been in had the contract not been made Liquidated Remedies Reasonable damages agreed to in advance by the parties to a contract Limits on Monetary Damages Foreseeability of Damages o The losses have to be foreseeability in order for the injured party to be remedied Certainty of Damages Reasonable Certainty 0 Cannot be speculative damages Mitigation of Damages o Breaching party has the duty to mitigate damages 0 He cannot sit at home waiting for the damages to be mitigated Equitable Damages Speci c Performance Injunctions Court order prohibiting a party from doing a speci c act Restitution Party injured by Breach Party in Default Statue of Frauds Voidable Contracts Limitations on Remedies What is the Law 09112012 State vs Estate 0 State government executiveenforce decisions legislative make decisions and judicial supreme courts lower courts etc body of rules of conduct with legal force and effect with controlled authority It consists of enforceable rules dealing with individuals and their societies Government obtains control through 0 legal order body of laws and judicial process Nature of Law 0 What is law for o Permitting or prohibiting individuals 0 Rightsprivileges grants to do something vs duties what you are required to do must perform some type of obligation 0 Does law morality are all laws morally sound 0 Some immoral acts are performed under some type of law so they are deemed legal examples Fidel Castro Rwanda Genocide etc 0 Sometimes law does not equal justice Classi cation 0 Civil Law vs Criminal Law 0 Civil private against individual think of it as person to person 0 Criminal law state against individual Substantive Law vs Procedural Law 0 Substantive deals with the facts it is a person or companies or states right because of a law example right to privacy right to vote at 18 etc 0 Procedural how to implement the substantive laws go to court le suit etc Federal Law vs State Law 0 Two should balance out Where does the law come from 0 Legislative branch 0 Constitution Statues 0 Regulations protect individuals from unfair practices Case decisions common law law developed though cases that set a precedent for the future once set World Legal Systems 0 Civil law statues Common law Customary law 0 Muslim law Dual Court System 0 Federal court 0 US district courts gt US court of appeals gt Supreme court top of the ladder so to speak 0 Writ of certiorari decide whether of not a case will be heard by the Supreme court 0 State court 0 Justice of the peace courtsmunicipal courts gt superior courttax court gt US court of appeals gt Supreme court 0 Which court do we use 0 2 types ofjurisdiction Subject Matter and In Personam Subject Matter content of law whether it be civil trademark domestic landlord dispute etc This will help decide whether or not it is federal state or either ln Personam defendant and plaintiff jurisdiction Which Court Subject Matter jurisdiction authority of a court to judge a controversy 0 Exclusive Federal 0 Cases dealing with admiralty bankruptcy antitrust patent trademark copyright cases suits against the US cases arising under certain federal statues expressiver for exclusive fed jurisdiction Concurrent federal or state either federal or state can hear the case Federal question Case arising under the constitution statues US treaties Diversity Case exceeds 75000 and the price is clearly states Diversity of citizenships Plaintiff and defendant from different states Foreign country brings a case against the US 0 Plaintiff and defendant are from different countries 0 Exclusive State 0 2 people from different states issue is under 75000 0 All other matters included but not limited to property torts contract agency commercial transactions most crimes etc In Personam personal Jurisdiction need to give an individual a summons 0 Minimum contacts between an individual and the forum state Longarm statues developed so states can expand their in personam jurisdictional reach allow courts to obtain jurisdiction over nonresident defendants if the defendant s 0 Principal place of business is in the state transacted business within the state that is the subject matter of the lawsuit 0 Has committed a civil wrong in the state 0 Owns property within the state property in lawsuit 0 Entered into a contract within the state Civil Dispute Resolution Court the last resort for solving a problem 0 When a dispute arises civilly 0 Civil dispute resolution 1 Negotiation conversation and agreement between the two parties 2 Consolation introduce a third party but make the agreement decision between the two initial parties 3 Arbitration call expert allow them to make the decision binding 4 Mediation 3rd party makes life easy suggests a decision but is not a binding decision OOOOOOO 0 People don t always go to court because it is less expensive and less formal It also salvages relationships no hard feelings Adversarial Svstem Judge deals with the law tells the defendant the decision and punishment 0 Jury deals with the facts vote on a decision Civil Procedure 0 Pleadings the complaint and the answer 0 Plaintiff les complaint the defendant is then noti ed of the complaint and has 20 days to answer to the complaint and then they can reply and then the discovery time is set forth 0 Types of Discovery meant to narrow issues and prevent surprises o Depositions 0 Request for admission 0 Interrogations Before trial during discovery defendant and plaintiff can le motions to dismiss charges because of issues such as a resolution deal lack of evidence etc


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