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BLAW Notes Week 5

by: Winston

BLAW Notes Week 5 BLAW 2013

Marketplace > University of Arkansas > BLAW 2013 > BLAW Notes Week 5

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notes from week five of business law, fall 2016
Business Law
Class Notes
blaw, business, Law, torts
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This 4 page Class Notes was uploaded by Winston on Monday September 26, 2016. The Class Notes belongs to BLAW 2013 at University of Arkansas taught by Norwood in Fall 2016. Since its upload, it has received 50 views.


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Date Created: 09/26/16
1. Contract a. An agreement that a court is willing to enforce i. Social agreements are not contracts ii. Illegal contracts are not contracts 1. Elements a. Agreement b. Consideration c. Capacity d. Legality  i. Writing is not required 1. Would be nice, but not required a. What you cannot prove in court,  does not exist ii. Handshake not required iii. No money must be exchanged iv. Neither party can cancel the deal without the other  party  b. Sources of contract law i. Common law on contracts 1. Case law 2. Not much statutory law ii. Restatement of contracts 1. Summary of basic common law in the U.S. a. American Law Institute i. Not statutory  1. Not legally binding a. Very influential iii. Uniform commercial code 1. State law 2. Not federal  a. National conference of commissioners on state laws i. Wrote uniform state code  1. Uniform State Code a. Article II 2. Sales contract 3. Contract for the sale of personal property  4. Types of Contracts a. Bilateral i. Two sides 1. Two promises b. Unilateral i. One side 1. One promise  5. Important terms p 160­163 a. Express i. Something that is not implied 1. Parties have explicitly stated their agreement  b. Implied i. Terms not specifically stated 1. Understood by both parties c. Executory i. Not been fully performed d. Executed i. Fully performed and now part of history e. Void i. Never has legal effect at all f. Voidable  i. Initially had legal effect but could be canceled by one of the parties 6. The offer a. The expression to a willingness to enter into a legally binding agreement i. Three requirements 1. Legal intent 2. Communicating a. Intent has to be judged by the outward manifestation of  intent, not by the unexpressed intent  b. Lucey v. Zehmer i. Land c. Advertisements are not offers i. Only invitation to negotiate 1. Different from smoke ball case d. Offer must be communicated directly from offeree to  offered  7. The acceptance “completes the deal” a. Bilateral contract i. Promise completes the deal b. Unilateral contract i. Completed act 1. Offer can revoke at any time a. Offer to hold an offer open, is not  legally binding  8. A promise with no consideration has no validity in the law 9. Two exceptions  a. The option: A makes offer to B i. States that the offer will be held open for 30 days 1. If B will pay A $100 b. The Firm Offer Rule under the UCC i. Has to be made by a merchant ii. Has to be the sale of personal property 1. Ex a. Merchant writes that someone can purchase a TV at a  price for 30 days i. This is unchangeable 10. A counter offer terminates the old contract 11. Mirror image rule a. Acceptance cannot change the offer at all i. That would make it a counter offer  12. Consideration  a. Bargained for exchanged i. Doesn't have to be fair 1. Trevor (pitcher) won’t take the mound unless he gets $100,000  bonus a. Team says ok i. Team doesn't pay him 1. Preexisting duty rule  13. Past consideration rule a. The act is done already i. You have nothing to offer 14. Capacity a. Minors i. Voidable by the minor only. Must act while still a minor or within a  reasonable time after becoming an adult  b. Intoxication  c. Insane in law i. Ruled incompetent d. Insane in fact i. Don’t know the material  15. Legality a. Gambling  i. Hypothetical 1. A business allows you to register to win a big screen TV, but only  if you make a $5 or more purchase a. Answer i. This is gambling 1. If they switch it to “no purchase necessary”  then it is legal ii. Basic rule regarding the enforcement of gambling contracts 1. Gambling contracts are not enforceable by way of action or  defense (rule of “in pari delicto” ­ equally at fault). The court will  leave the parties where it finds them a. If your friend won’t pay you for losing a bet, he can’t be  held legally accountable to pay you i. If your friend pays you, finds out gambling is illegal  and wants his money back, you can’t be held  legally accountable to pay him back b. Failure to obtain a license required by law: only if “regulatory” i. The purpose of providing a license is to protect the public 1. If it is a regulatory license, a person without said license can not  collect on contracts regarding that license c. Exculpatory clauses: i. Sometimes called a “waiver” or “disclaimer”  1. “No lifeguard on duty swim at own risk” a. These are legally enforceable  i. “Except when it isn’t” d. Covenant not to compete (AKA: “non compete clause”). i. If you leave our company, you can’t go work for a competitor for a given  period of time 1. Basic rule: a. Reasonable business purpose b. Limited as to time i. 2 years is a good rule of thumb c. Limited as to area: i. Two possible rules: 1. Entire contract invalidated 2. Area of contract changed by court (blue  pencil rule) a. In Missouri, the judge is allowed to  rewrite part of the contract in regards to area b. In Arkansas, if the area is “too  broad” then the whole contract is  void 16. WRONG ­ Arkansas changed the law, now a blue pencil state a. Can a judge refuse to enforce a contract because he/she feels that the contract  is “grossly unfair”? i. Yes  1. Adhesion  b. Statute of frauds i. Contracts have to be in writing when they concern; 1. Sale of land 2. Contract which cannot be completed in one year 3. Promise to stand behind the debt of another  4. Sale of goods greater than $500 (not a service) a. If it has been “carried out” or “executed” it does not have to be in writing  17. Satisfying the statute of frauds: a. Who must sign it? i. The person against whom enforcement is sought  18. Parole evidence rule a. Oral agreements which are in contradiction to the writing cannot be held up  against the writing in a court of law 19. UETA a. “A record or authentication may not be denied legal effect or enforceability solely  because it is in electronic form”


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