BUS 3350 1st Edition Exam 2 Study Guide Lectures 6 9 Lecture 6 February 16 Common Law Contracts What are contracts What are the different types of contracts What are the requirements to fulfill a contract Contracts are agreements between two or more people and a breach of a contract allows a party to sue o Subjective view viewed from parties side o Objective view courts interpret contracts in an unbiased view They encourage parties to be in clear writing Contracts need to be as clear as possible Courts do not second guess what is written down Different Types of Contracts Implied contract not written down o Courts deem it to exist o Courts look at implied objectively by behavior o There is an underlying assumption that people act under self rational instinct Express contract a combination of a promise orally and in writing Bilateral contract promise for a promise o Ex You will pay your son daughter to make straight A s Unilateral contract one party promises and other party accepts based on conduct performing o Ex lottery and buying a ticket 4 Characteristics to Validate and Enforce Contracts Validity Enforceability 1 has to be an agreement 3 Capacity contractual capacity 2 has to have consideration 1 2 3 4 Legal 3 requirements for agreement offer one party sets forth a promise to enter in acceptance of pffer Meeting of the minds mutual esset 1 2 3 o o 3 requirements under offer serious intent terms must be specific have to be reasonably certain and definitive communication Advertising Depends on language of advertisement Language should be specific Ex 1st 100 people in line get fur coat Communication o Has to be communicated to be another party o Ex specific offer to specific person but email the wrong person Lecture 7 March 2 Explaining requirements to fulfill requirements for contracts What are the consequences of breaching a contract Primary contracts property o Has to be written down to avoid fraud Definitive terms o Parties involved have to be certain o Subject matter must be clear o Clear consideration certain o Time paid must be certain Terminating an offer o Offeror can terminate the offer before acceptance o Can dictate how and when a contract can be done method and timeliness o Can be terminated under law Destruction of subject matter o Counter offer is a rejection of the original offer resulting in a new offer Acceptance o Can be done by word or deed Unless they require something else ex email mail Offeror dictates acceptance Meeting of the minds o Goes to an understanding by both parties of the subject matter Consideration o 2 parts legally sufficient bargain or exchange Bargain or exchange o Someone gives something up o Actual exchange promise o Ex if I do this you ll do that if I don t do this you ll do this that Lack of consideration o Ex A murderer is on the loose if you catch him you get 50 000 Sherriff catches him and wants money Can he receive money No it is his job o If Sherriff from different county captures him he gets reward Contractual capacity ability to understand subject matter o Minors can t enter contract o Mental capacity o Generally entering a contract is voluntary Legality o Certain contracts based on their nature makes it illegal Ex prostitution drug deals Statute of fraud o Contracts have to be in writing o Marital contracts have to be in writing Performance o Both parties have to live up to agreement o Breach breaking of a contract 3 types of performance 1 complete 2 minor breach substantial performance 3 material breach substandard performance What is the purpose of the contract and to what degree is the breach o When determining between minor and material Consequences o Material breach Injured party does not have to fulfill their duties end of the bargain and sue o Minor breach Injured party can stop payment but has to give breaching party opportunity to fix breach Easy to fix Doesn t end injured party but suspends them Anticipatory repudiation o Some contracts have deadlines o Anticipating inability to breach a contract Mitigating damages finding alternatives to supply the contracts o Ex Any increase in cost that they suffer they can charge the breacher o Better for people to do things in their best interest o Courts appreciate it when you negotiate and work things out yourself Commercial impractability o Things out of one s control o Ex power goes out a wedding Remedies for relief for a breach of a contract o Primary means of relief o Courts look at what you contracted and what you receive The different of money value Compensatory damages o Loss of bargain internal to contract Consequential damages o Harm caused beyond contract itself Punitive damages o Punishment for when someone does something intentionally o Has to be serious egregious Lecture 8 March 16 UCC What is the UCC What is sole proprietorship What is partnership What are fiduciary duties What is the LCC What is LLP UCC uniformed commercial code o 9 titles o Article II sale of goods o code is a statute legislature passed state statute o commercial business o uniform every state has the same law Why the UCC o Facilitate commerce o Help streamline the making of money Article II o Sale of goods must be mobile and tangible Transfer of title for something What about contracts with sale of goods and services o Do you use UCC or common law Courts look at predominant factor test What is the primary purpose of the contract o Under common law you must name price o Under UCC no price needed between merchants As long as there is common business practice courts will deem there is a contract If dispute arises court looks at how business is handled Sole proprietorship o One person is doing business o No distinction between individual and business o Benefit you keep everything you make and pay individual income taxes o Problem liability No protection against liability Partnership o Any agreement written implied between 2 or more people that have a common purpose o Implication 2 people just start working together If anything happens courts deem partnership Courts look at if they share profits and losses o Partner is an agent of partnership o Partners are separate from agents o Owners are agents of partnership o On its own partnerships can do Sue and be sued Own property Enter into contracts Collect judgments Go into bankruptcy o Partnerships do not pay federal taxes They pay individual income tax o They form partnerships for specific purposes o Each partner has certain rights Right to management