Ch 12 - Consent - outline - Business Law: The Ethical, Global, and E-Commerce Environment 17th Edition PDF

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Ch 12 - Consent Tuesday, April 16, 2019 5:58 PM

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Voidable Rescind - like it never happened. o Mistake - belief about a fact that is not true. NOT the same as poor judgment/bad luck o Unilateral Mistake - one person mistaken o Bilateral Mistake - 2 people mistaken Ratification - continued use, conduct can be ratification

Hicks v Sparks         

Facts: Accident. Agreed to 4000 dollars, signed release. Found out later needed surgery. Sued for mistake. Procedural History: s Question/Issue: Was there mistake? Holding(Answer): NO Reasoning: Made a bad deal, on you Final Result: Summary judgment affirmed Tests: s Relevant Cases: s Requirements for Unilateral Mistake o No mistaken party caused or had reason to know of the mistake o It would be unconscionable to enforce the contract

Patterson v. CitiMortgage, Inc.        

Facts: Short selling, back and forth offers. Clerical mistake. Patterson Procedural History: Question/Issue: s Holding(Answer): s Reasoning: Unilateral mistake with clerical error. Patterson knows this and law doesn’t allow him to take advantage Final Result: Affirmed Tests: s Relevant Cases: s

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Misrepresentation  Requirements: 1. Untrue assertion of fact 2. Material 3. Actual and justifiable reliance  *tort needs economic injury, recession suit does not

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Fraud Remedies - recession of contract  Fraud has more consequences; criminal charge 1. Common law - can pick one remedy 2. UCC - can sue for both Fraudulent Misrepresentation

Stephen A. Wheat Trust v. Sparks 

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Facts: Sewer encroaches on another property that they did not disclose. Which means it requires trespassing. Continuing water issues that they did not disclose. Actively trying to conceal issues. Procedural History: Fraud claim, want compensatory and punitive damages. Question/Issue: s Holding(Answer): s Reasoning: Fraud conditions met. Common law, can't have compensatory and punitive damages in this case because it's not UCC. Final Result: Summary judgment t Sparks reversed, remanded Tests: Fraud: 5 things looks at, all met Relevant Cases: s

Timothy v. Keetch        

Facts: Used horse as collateral that was already encumbered by another debt. Was repo'd for first debt. Second debtors sue for fraud and breach of contract Procedural History: Timothy sees Keetch. Court rules in favor of Timothy. Keetch appeals Question/Issue: Was there fraud Holding(Answer): yes Reasoning: Can't protect fraud. They made claims that horse was unencumbered Final Result: Judgment affirmed for Timothy Tests: s Relevant Cases: s

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Duress o

Wrongful coercion that induces a person to enter or modify a contract  Elements: 1. Induced by improper threat 2. Victim had no reasonable alternative 3. Threat of physical, emotional, or economic harm

Olmstead v. Saint Paul Public Schools    

Facts: Procedural History: s Question/Issue: Duress? Holding(Answer): No

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Reasoning: Had reasonable alternatives. Could have talked them through with his counsel. Had enough time. Reasonable suspicion and evidence he was a problem Final Result: s Tests: s Relevant Cases: s Undue Influence 1. Unfair persuasion/wrongful pressure in bargaining process usually through inappropriate use of relationships trust or confidence (or dominance) i. Example - family member or close advisor abuses power to influence an old person to change their will or something ii. Very fact specific, courts look at case by case basis

Ch 14 - Capacity  

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Capacity Capacity: Minors o Can't give up their rights o Minors Right to Disaffirm - voidable if they disaffirm  Even if married, self-supporting, emancipated o Disaffirmance - any way they want. Can be words or acts, no formal act or writing necessary o Time during which minor may disaffirm:  Real Estate: kids don’t know real estate, cant disaffirm in this case Ratification o Can give up right to disaffirm o Slidesss Duties upon Disaffirmance o Liability for Necessities  Disaffirming minors required to pay reasonable value of "necessities"  Something essential for minor's continuing existence and general wellbeing not provided by parent/guardian: food, clothing, shelter, etc.  Quasi-Contractual - minor liable for reasonable value of necessities they actually receive o Effect of Misrepresentation of Age

Zelnick v. Adams      

Facts: s Procedural History: s Question/Issue: s Holding(Answer): s Reasoning: s Final Result: s

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Tests: s Relevant Cases: s

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Capacity of Mentally Impaired Persons o Theory of Incapacity o Test of Mental Incapacity  Mental Incapacity Cognitive Test  Traditional test: did person have sufficient mental capacity to understand nature and effect of contract o Effect of Incapacity Caused by Mental Impairment  Restatement 2D: voidable if unable to act in a reasonable manner and other person had reason to know of condition  Depends if incapacitated person under guardianship (adjudicated "insane") at time contract made  Already adjudicated: VOID  Adjudicated after formation: voidable at election of person  The right to disaffirm  Voidable because of mental incapacity, incapacitated person may disaffirm  Same restoration duty as disaffirmed minor; liable for reasonable value of necessities; may have obligation to reimburse for damage Intoxication - (alcohol or drugs)can make contract voidable on ground of incapacity o Standard Ruel: only when so extreme that person is unable to understand nature of business at hand; must promptly disaffirm when regains sobriety or becomes ratified o Restatement 2D - other part must know intoxicated individual can't understand/act

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Rogers v. Household Life Insurance Co.        

Facts: s Procedural History: s Question/Issue: s Holding(Answer): s Reasoning: s Final Result: s Tests: s Relevant Cases: s

CHAPTER 15 - ILLEGALITY 

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Illegality 1. Legislature declares type of contract unenforceable or void 2. Agreement violates public policy developed by courts, constitutions, statutes, administrative regulations, etc. 1. Violation of Statutes 2. Violation of Public Policy from Courts 3. Unconscionable Agreements and Contracts of Adhesion Effect of Illegality 1. General Ruel: no remedy for breach of illegal agreements (like it never happened)  Exceptions to "hands-off" rule: 1. Excusable ignorance of facts/legislation 2. Rights of parties not equally in wrong (pari delicto) 3. Recession before performance of illegal act Nathan for You "Dumb Starbucks" 1. Parody Law - allows use of trademarks and copyrighted material as long as you're making fun of them  Helio Café into Parody Starbucks  Nathan tries to trick Peter (Lawyer) into being responsible for clause of legal fees 1. He rescinded! Not responsible Meaning of Illegality o Determining Whether an Agreement is Illegal Agreements in Violation of Statute o Agreements Declared Illegal By Statute o Agreements that Violate the Public Policy of a Statute Agreements That May Be Made in Violation of Public Policy Articulated by Courts o Agreements in Restraint of Competition o Exculpatory Clauses o Family Relationships and Public Policy Unfairness in Agreements: Contracts of Adhesion and Unconscionable Contracts o Unconscionability Contracts of Adhesion Effect of Illegality o General Rule: No Remedy for Breach of Illegal Agreements o Exceptions o

Chapter 16 - WRITING 

Significance of Writing in Contract Law

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Purposes of Writing  Writing is better, oral still counts o Writing and Contract Enforcement - sometimes oral can't be enforced Overview of Statute of Frauds o History and Purposes  17th Century England: oral not good, cant testify for yourself, third parties get bribed o Effect of Violating the Statute of Frauds  Statute of Frauds - requires certain things in writing Contracts Covered By Statute of Frauds

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Rooftops - provision 6.6 contract interpretation by judge. o Courts found no ambiguity  Why is that important?  Can look at Parol Evidence

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Contract Provisions o Treatment of Confidential Information o Covenant of Good Faith and Fair Dealing o Headings o Incorporation of Recitals o Entire Agreement Modification o Severability o Waiver of Breach Interpretation of Contracts o Principal objective - interpret clauses in light of principal objective o Ordinary words - given usual meaning o Technical words - given technical meaning unless different meaning clearly intended o Specific terms that follow general terms o Handwritten will prevail o Ambiguities - go against drafter o If both parties members of group where words have certain usage/meaning, courts assume that usage Parol Evidence - written or spoken statements not contained in written contract o Rule: When parties enter into completely integrated written contract, a court will not permit the use of evidence of prior or contemporaneous statements to add to, alter, or contradict the terms of the written contract o Common law and UCC o Subsequent statements are okay o Exceptions

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Yung-Kai Lu v. University of Utah pg. 500

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Facts: s Procedural History: s Question/Issue: s Holding(Answer): s Reasoning: Complete integration, oral agreement can't be admitted. Final Result: s Tests: s Relevant Cases: s Statute of frauds problem here - impossibility issue, contract can't be completed in a year if it’s a 3 year agreement, so it would have to be in writing.

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Admissible Parol Evidence o Additional Terms in Partially integrated Contracts o Merger Clause o Explaining Ambiguities o Circumstances Invalidating Contract o Existence of a Condition o Subsequent Agreements Statute of Frauds o Contracts within Statute of Frauds  Collateral contracts in which a person promises to perform the obligations of another person  Contracts for the sale of an interest in real estate  Bilateral contracts that cannot be performed within a year from the date of their formation  Contracts for sale of goods for price of $500 or more – UCC  Contracts in which an executor or administrator promises to be personally liable for the debt of an estate  Contracts in which marriage is the consideration o SOF Covered Contracts: Collateral Contracts o Main Purpose or Leading Object Rule  Question: is it Collateral or Original  Obligation conditional on default of another person?  Original - both obligated "co-sign"  Collateral - only if other person fails to do so  Exception - Main purpose or leading object rule  When consideration given in exchange for collateral promise is something guarantor seeks primarily for his own benefit rather than for the benefit of the primary debtor, the contract is outside the Statute of Frauds

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Dynegy, Inc. v. Yates 

Facts: s

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Procedural History: s Question/Issue: Does Dynegy promise to pay attorney fees to Yates, serve as main purpose for Dynegy the employer, or is it collateral? Holding(Answer): Court found it's collateral (professor disagrees: your employee is agent, you have responsibility. Feels main purpose) Reasoning: s Final Result: s Tests: s Relevant Cases: s

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SOF Covered Contracts: Interest in Real Estate  Any creation or transfer of an interest in real property is within Statute of Frauds  Exceptions:  Full performance by the Vendor (Seller)  Part performance by Vendee (purchaser)  Vendee must have acted in reliance on contract and nature of action must be such that restitution not an adequate remedy. Payment not enough  Remedy is specific performance; no damages for breach SOF Covered Contracts: One Year Rule  Bilateral executory contract that cannot be performed within a year from date on which contract comes into existence is within SOF  Slides Computing Time - courts begin courting time on day when contract comes into existence  Impossibility Test  If possible to perform within one year from this date, contract not within SOF  Terms of contract make it impossible to complete performance (without breaching) within one year from day came into existence, contract within SOF

Browning v. Poirier p. 489        

Facts: lottery ticket issue Procedural History: s Question/Issue: does contract have to be in writing because its within 1 year period of statute of frauds Holding(Answer): does not have to be in writing Reasoning: Relationships are of indefinite Final Result: browning gets half of winnings Tests: s Relevant Cases: s

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SOF Covered Contracts: Contracts for Sale of Goods of $500 or more (UCC)  You look at modification:  From 490 to 501. Look at 501  If you modify it orally, is it a valid contract.  NO, over 500, needs to be in writing  501 in writing, orally modify to 490.  Valid? Yes Meeting the Requirements of the SOF  Signed memorandum stating essential terms:  Identity of parties  Subject matter identified with reasonable certainty  Signed by the party to be charged  Memorandum can be made after contract formation UCC satisfying the SOF  UCC – writing must be sufficient to indicate that a contract for sale has been made between parties but can be sufficient even if omits or incorrectly states term agreed upon  Quantity must be stated in writing  Memorandum not enforceable for more than quantity of goods stated in memorandum  4 alternatives xyz?  Confirmatory Memorandum Between Merchants charging party, merchants, reasonable time, received 10 days SOF  Part payment or part delivery  Green Garden Packaging Co., Inc. v. Schoenmann Produce Co., Inc. p. 496  Admission in pleadings or in court - SOF satisfied up to quantity of goods admitted  Specially manufactured goods - not suitable for sale in course of sellers ordinary business Promissory Estoppel  Look at slides/book ***KNOW SOF REQUIREMENTS

Kahoot  

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When court undoes contract o Recession Helps dentist where J had tooth pulled, never signed written contract or made oral agreement to pay o Quasi-contract Contracts for sale of goods for ___ or more must be in writing to enforce o 500$ SOF req Memo on sale of goods that doesn't indicate ___ of goods to be sold does not satisfy what UCC writing req

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o Quantity Sign this contract or I'll kill you o Voidable because of duress o VOID if there is PHYSICAL FORCE, grabbing your hand and forcing signature C agrees to start portrait of Z on 4/1, 3/27 C writes Z that won't be able to perform o Anticipatory repudiation A agrees to paint Scar for 500$, on completion S tries to cancel because B offers to paint for 400$ o Promisee: A, promisor: S The law that applies to sale of goods when seller is not a merchant o UCC, higher standard for merchants S = emancipated 15yo.. S enter contract with B 100$ necessary groceries on credit. R value = 80$ o S must pay 80$. (reasonable value of necessaries) In general, ambiguities in a written agreement are resolved against the ____ o Drafter Governs contract between DEE and LI where D entered into contract with L for sale of D's boat o Boat is a good. UCC Requires reasonable reliance on the promisor's promise o Promissory estoppel Governs contract between Greg and jones cheevy, where G signed contract to work as a manager for J o State common law (employment agreement) Only state to adopt UCC only partially: Louisiana Type of contract when Aaron agrees to sell boat to Matt and M promises to buy from A o Bilateral Contract cancelled and returned to pre-contract positions o Rescission Failure to rescind promptly & unequivocal upon learning facts that constitute avoidance grounds o Ratification A contract where at least one party has the option to avoid is or her contractual obligations o Voidable E and B has oral contract for the sale of land price 500k. B pays 400k and takes possession o Contract enforceable, paid and possession W attempts to introduce oral evidence in action relating to written contract with S. prohibited IF: o A change in meaning of an unambiguous provision in contract.  Mistake, court says change it, you know it’s a mistake  Fraud need evidence  Modification after execution is ok Written agmt. F agrees to sell Q 100 boxes for 6/box. F orally agrees to 4/box o Oral modification is valid because it brings it under 500 dollars Y will purchase all the gas that Y wants to in 2017, at a price of 2/gal. V agrees to those terms

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o Illusory contract. Totally meaningless. What is the status of an offer when the offeree tries to accept an offer, on its exact terms, after expired? o Offeree becomes offeror making a new offer. If part of an agreement is legal and part is illegal: o Courts will Enforce legal part is possible to separate the two A contract in which one party agrees to buy all goods of another party o Output contract Imply promise to pay for benefits he received from another to avoid unjust enrichment o Quasi-contract IMPLIED promise (see someone painting, don’t stop. Implied you'll pay)  Promissory estoppel ACTUAL promise Which of the following does cover SOF o Real estate mortgage  4mo lease not long term  200$ not enough  Contract performed within 6mo, needs to be a year In a hybrid contract, includes sale of goods and services, courts will apply: o Depends on which element (goods or services) predominates W enters contract to sell car to T who is minor 16yo. o Contract is voidable & enforceable unless and until T cancels contracts Which of the following conditions characterizes a firm offer regarding the sale of goods? o It must be by an offeror who is a merchant, in writing Def of party seeking to rescind bc reliance on unintentional materially false statements of other o Misrepresentation No time limit specified: a reasonable time Offeror agrees not to revoke offer for stated time in exchange for valuable consideration o Option  Firm offer, look at defs A ++++ is a rejection and terminates the power to accept an offer: o Counteroffer Status of contract between A & B, where A performed 100% and B performed 50% o Executory Contract between Stella and Painture LLC for paint purchase 50$ and installation 1000$. S sues P o Predominant purpose of service, common law  X offers sell 99 dicks to Y for 999$. Keep in signed writing open for 1 year  A firm offer that cannot be revoked for 3 months. 3months is limit, 1 year doesn’t matter An oral contract for the sale of land that has been completely performed by the vendor (seller) o Take out of SOF and can be partially enforced by purchaser Which of following is legally binding even though no consideration o Promise to donate money to charity that they rely on. Promissory estoppel The glue that holds the bargain together

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o Consideration Offeror can revoke offer at any time prior to accept even if promised not to = common law o TRUER A debt that is due and certain o Liquidated Absence of meaningful choice and terms unreasonably advantageous to one party o Unconscionability The remedy for a violation of the SOF when contract is fully executed o There is no remedy. Fully executed its ova Remedy for violation of SOF in executory contract o Contract unenforceable; possibly recover in promissory estoppel ...