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Unformatted text preview: Chapter life Cycle of a contract C 2 Not all promises are enforced. How to distinguish enforceable from others? Bargained for consideration versus promissory estoppels latter is rare C 3 Bargain mechanics offer acceptance revoke reject new media C4 Relational preliminary negotiations output requirements exclusivity modification In a long time relationship, contract is not clear and specific. Court struggles to figure out what is the contractor’s intention. Vagueness could never invalid a contract Chapter 5 Regulating the bargaining Process not all contracts are enforced! Why: 5A Introduction Assumption contract should be enforced Default: Enforce contract Exception: excuse performance 5B.Duress - contracts are not enforced if made under duress. Reason: Not sufficiently voluntary. Agreement against the will of one of the parties. Status Restatement §174 175 176 1. old common law of duress.-Physical compulsion required. §174 : When Duress by Physical Compulsion Prevents Formation of a Contract If conduct that appears to be a manifestation of assent by a party who does not intent to engage in that conduct is physically compelled by duress, the conduct is not effective as a manifestation of assent. 2. Modern Approach In a nutshell, Restatement requires an improper threat that reasonably induces assent. 1) An improper threat 2) Inducement of the promise by that threat 3) Reasonable inducement §175 (1)– if manifestation of assent is induced by an improper threat that leaves the victim no reasonable alternative , it is voidable by the victim. 1) Manifestation of assent must be induced 2) Inducement must be an improper threat – see §176 3) must leave the victim with no reasonable alternative (2) If a party’s manifestation of assent is induced by one who is not a party to the transaction, the contract is avoidable by the victim unless the other party to the transaction in good faith and without reason to know of the duress either gives value or relies materially on the transaction. §176 – When a Threat is Improper (1) A threat is improper if a) What is threatened is a crime or tort , or the threat itself would be a crime or a tort if it resulted in obtaining property, b) a criminal prosecution c) the use a civil process and made in bad faith, or d) a breach of duty of good faith and fair dealing- test: would the actions be agreed to at the time of contract formation? If absolutely not, its bad faith OR (2) if the resulting exchange is not on fair terms and a) threatened act would harm the recipient and would not significantly benefit the party making the threat b) the effectiveness of the threat is significantly increased by prior unfair dealing by the party making the threat, or c) what is threatened is otherwise a use of power for illegitimate ends....
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This note was uploaded on 08/27/2008 for the course LAW A501 taught by Professor Winn during the Spring '08 term at University of Washington.
- Spring '08