Legal Terminology Lectia 2 27 Martie 2014
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Transcript of Legal Terminology Lectia 2 27 Martie 2014
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8/11/2019 Legal Terminology Lectia 2 27 Martie 2014
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LEGAL TRERMINOLOGY
Academic year
2013/2014
2nd Sem.
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Unit 1.
Terms Used in Law of Contracts
ChapterFormation of Contracts
ChapterContract Requirements
ChapterThird Parties and Discharge of
Contracts
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Revision
Contract definition & Elements
Definition:
CONTRACT is anyagreement that is
enforceable in a
court of law.
An enforceableagreement has the
following elements:
Mutual assent
Lawful object
Capacity of person to
perform
Consideration
Appropriate form
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Consideration
To be binding onthe parties, anagreement must
have consideration.
Consideration = an
exchange of benefitsand detriments by the
parties to the
agreement.
Detriment = the givingup of a legal right.
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Note
In a bilateral contract, consideration is
found in the promises made by each
party.
In a unilateral contract, consideration is
found in the promise of one and the act ofthe other; it does not come about until the
act is completed.
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Legal terms used in Contract law
Nudum pactum= abarren promise with no
consideration. Option contract= a
binding promise by anofferor to hold an offeropen and requiresconsideration from theofferee to make itbinding.
Firm offer= a promise
that requires no
considferation to be
binding.
Lack of consideration
= a barren promise
containing noconsideration in the
agrement.
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Legal terms used in Contract law
Failure of
consideration=refers ot acontractcontainingconsiderationthat is in fcatgiven to the partybeing sued.
Promissory estoppel
= no consideration is
necessary whensomeone makes a
promise that induces
anothers action or
forbearance (refrainingfrom taking action).
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Contract required to be in writing
Thw writing that isnecessary to satisfy the
statute of frauds is calleda memorandum. It mayconsist of any writing(such as words on apiece of scrap paper,receipt, or check) so longas it meets thefoilklowing requirements:
a) Identifies the parties to the
contract.
b) States the terms of the contract.
c) Identifies the locus if landthat
is, the exact parcel of land under
contract.
d) States proice.
e) Is signed by the person against
whom enforcement is sought.
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If the parties agree, the federal law and
many state laws allow contracts to be
signed with an e/signature (electronic
signature)a method of signing and
electronic mesaage that identifies thesender and signifies his or her approval
of the messages content.
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Deffective agreements
Certain agreements are defective and are
therefore not recognized as valid, bindingcontracts.
The most common of these are agreements
involving mutual mistake, fraud, dures, and
undue influence. Unconscionable contracts may also be
declared unenforceable by the courts.
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Deffective agreements
Mistake
Mistake. When both parties
are mistaken about an
importtant aspect of anagreement that they entered
into, so that no meeting of the
minds occurs, it is known as a
bilateralor mutual mistake,and the contrcat is voidable at
the option of either party.
In contrast, when
only one of the
parties makes amistake, it is known
as unilateral(one-
sided) mistake,
and the contractcannot be avoided
(made void) by the
parties.
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Deffective agreements:
Durress & Undue influence
Durress. Contracts thatare entered into
because of duress orundue influence mayalso be avoided by the Injured party.
Durressis theovercoming of apersons free willl bythe use of threat ofphysical harm.
Undue influenceis
the overcoming of a
persons free will bymisusing a position
of trust and taking
advantage of the
other person who isrelying on the trust
relationship.
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Deffective agreements
Fraud 1
Fraud, called deceitintort alw, occurs when
one party to the contractmakes a misrepresenta-tion of a material,existing fact that the
other party to the to thecontract relies on andthereby suffers damages.
If the defrauded party
was induced by fraudto enter into thecontract, it is calledfraud in the
inducement,and thecontract is voidable atthe option of theinjured party.
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Deffective agreements
Fraud 2
Fraud as to the essential nature
of the transaction occurred, such
as telling a blind man that he is
signing a receipt when it is really
a check, it is called fraud in esse
contractus, and the contract is
void.A defrauded party alwayshas the right to rescind(cancel)
the contract and return any
consideration received.
Thus , rescission
(cancellation) restoresthe parties to their
original positions. A
defraud party may
choose, instead, to keep
the consideration and
affirm(approve) thecontract and bring suit for
damages.
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Unconscionable Contracts
Some contracts (or partsof them) are so harshly
one-sided and unfairthat they shock theconscience of the court.These are calledunconscionableby the
courts and will not beenforced. Sometimesadhesion contractsfall into this category.
These are contracts that aredrawn by one party that
partys benefit and must beaccepted as is on an take-it-or-leave-it basis if acontract is to result.
Adhesion contracts oftencontain boilerplate, whichis standard language usedcommonly in documents ofthe same type.
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Illegality
To be valid andenforceable,contracts mustbe within theframework of thelaw. Illegal
contracts arevoid: they haveno legal effect.
Usury,for example, which is thecharging of a greater amount of
interest than is allowed by law, isillegal in every state.
Except when the parties are not
in pari delicto(in equal fault), the
copurt will not aid either party to anillegal contract. It will leave theparties where they placedthemselves.