LSB Study Guide Pages 180-217

LSB Study Guide Pages 180-217 - Business Law Study Guide...

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Business Law Study Guide Pages 180-217 Exculpatory clauses Exculpatory clauses-Provisions that disclaim liability o Meant to hold someone harmless “Not responsible for this” o Key questions are “Who are the parties to the clause? How far does the clause go? o Contracting parties can exculpate negligent acts or omissions if the parties have roughly equal bargaining power Superior Risk Bearers o Law and economics principles argue that an obligor’s excuse for not performing its contractual duties should be granted when the obligee is the “superior risk bearer” and denied when the obligee itself is the superior risk bearer. A party is defined as a “superior risk bearer” if it is relatively more efficient in preventing an event from occurring or insuring against the risk of its occurrence Ex: unforeseen problems in constructing a building are more likely to be the builder’s “superior risk” than that of the less knowledgeable party that hired the builder (builder is not excused from the contract because of the heightened costs it had to incur in stabilizing the ground before starting to lay the building’s foundation). Landlord-tenant example o Tenant is injured because of a collapse on the wooden steps in an apt. A clause in a residential lease agreement absolving the landlord responsibility for such harm is unconscionable, but a clause exculpating from personal injury claims arising within the tenant’s own “zone of control” is much more likely to be acceptable **generally not the law** Indemnity- an agreement between two parties not to hold one of them liable for future legal action or fines o Standard in many commercial contracts
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The lessee will indemnify the lessor for property, use, sales, and other miscellaneous taxes that may be imposed on the transaction Adhesion clause- party with superior power says “no bargaining allowed” except for a few basic elements such as price, quantity, or other buyer requirements o “take it or leave it approach” o Concept of unconscionability is the focus of most courts in holding the adhesion clause unenforceable Statute of Frauds- the requirement of written evidence o To prevent fraud on oral contracts, the English Parliament established the first Statue of Frauds in 1677 o Evidence rule because rather than going directly after the fraud problem it indirectly approaches the matter: unless there is an exception to that statute, it bars the use of oral evidence (testimony) to try to prove existence and alleged terms of a contract o MYLEGS- six types of contracts that fall under Statute of Frauds Marriages- contracts in contemplation Prenuptial agreements- about 5% of all marriages are preceded by prenup agreements Details on how assets will be divided if a marriage ends in divorce or the death of a spouse. Ex: alimony, child support, inheritances Enforceable if. . o
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LSB Study Guide Pages 180-217 - Business Law Study Guide...

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