LEB Study Guide Test 3 - 1 Test Chapters(33 34 11&12 13&14 36 37 38 2 Contract Elements(Chapters 11-14 a Element#1 Agreement 1 Reasonableness needs to

LEB Study Guide Test 3 - 1 Test Chapters(33 34 11&12 13&14...

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1. Test Chapters (33, 34, 11&12, 13&14, 36, 37, 38) 2. Contract Elements (Chapters 11-14) a. Element #1: Agreement 1. Reasonableness: needs to be clear to reasonable person 2. Intent to follow through ii. Parts 1. Offer: needs to be heard or read a. Intent to enter into a contract b. Reasonably definitive -clear to reasonable person c. Must be communicated – someone hears or reads d. Reward offer springs to life when read, legally bound upon action i. Buy one get one free 1. Once buy one, need to get free one ii. Ads are not, they are invitations e. Termination of offer i. Revocation: person who made offer can do this BEFORE acceptance ii. Rejection: offeree rejects, offer extinguished iii. Termination: by law; one part dies, goes insane before acceptance iv. Lapse of time: reasonable time 2. Acceptance: needs to be sent a. Intent to enter into contract b. Mirror image: reasonable person standard i. Acceptance must be the same as the offer c. Must be communicated d. Acceptance takes into effect upon sending i. Offerer cannot apply conditions b. Element #2: Consideration (if no consideration, no value) i. Parts 1. Both must give this 2. Parties define value, doesn’t need to be equal a. Pre-existing obligations cannot be consideration b. If parties redefine contract, might not be seen as considerations 3. Bargained for: take it or leave it is a bargained value a. Not seen in adhesion 4. Detriment: some negative a. If one party walks away, other will suffer = value ii. Court can enforce w/o consideration if 1. Promise to charity 2. Promissory estoppel: person relies on promise, will suffer if not made a. Ex. Promise to pay tuition c. Element #3: Capacity
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i. Voidable contracts 1. Minors a. General rule: can walk away from contract b. Ratification: they can ratify it when 18 by acknowledging c. Exceptions: contract for necessities, court can force follow through 2. Mentally impaired a. Insanity i. Legal insanity: no legal contract (VOID) ii. Insanity in fact: do not have full legal capacity 1. Has partial legal capacity, voidable 3. Intoxication: doesn’t matter if voluntary or involuntary a. Can walk away if they want to VOIDABLE b. Needs evidence of enough intoxication 4. Lack of consent a. Fraud i. Needs to be associated w/ material fact ii. Material fact: if fact decision is based on 1. Immaterial fact doesn’t matter b. Mistake of fact: lack of understanding i. Mutual: both parties are mistaken on price 1. Can be voidable ii. Unilateral: one party is mistaken; own fault 5. Duress a. Out of fear = VOIDABLE b. Undue influence: elderly people d. Element #4: Legal purpose (court will try to rid of illegal purpose, let stand) i. What can make contract illegal 1. Restraint of trade: could be on business, industry trade routes a. Covenant not to compete: don’t want employee competing i. These are illegal when it is big restriction or restraint 1. Unreasonable 2. Exculpatory clause: if death occurs, can’t sue, no liability a. Exception: intentional, extremely reckless, ILLEGAL 3. Unconscionability: one sided contract, something isn’t right a. Court considers: bargaining power, education, age, language barrier b.
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