TodayMisrepresentationIn-Class AssignmentChapter 16 – Statute of FraudsExceptions to Statute of FraudsNo Writing, No ProblemCommon LawChapter 17 – Three ConceptsAssignment – DefinitionAssignment – ExamplesDelegationException – Personal ServicesThird PartiesThird Party BeneficiariesCondominium AssociationLife InsuranceScheduleToday•Discuss chapters 16 and 17•Discuss assignment, extra credit, Exam 2MisrepresentationFour elements to analyze1) Material fact•Effect on reasonable person’s decision to enter the contract?2) Intent to deceive•By words? By conduct? By silence?3) Justifiable reliance on misrepresentation4) Harm to collect damages (but not for rescission)In-Class Assignment1) Is it possible for a seller to be liable for contractual misrepresentation if the seller remains completely silent about a known defect and the buyer never asks about it?2) If a seller blatantly lies about an unimportant minor detail in the contract, is the seller likely liable for contractual misrepresentation?Chapter 16 – Statute of Frauds•“Writing” is interpreted broadly•Five contracts that must be in writing (not verbal)•Real estate•Cannot possibly be performed in one year•Collateral (secondary, guarantor) contracts•Marriage as consideration (“prenups”)•UCC: sale of goods over $500; bankingExceptions to Statute of Frauds•Sometimes oral contracts are enforceable, even though they are supposed to be in writing1) Partial Performance2) Promissory Estoppel3) AdmissionNo Writing, No Problem•Oral contract + partial performance can equal exception to writing requirement•Example: Stillwater Bicycle Store•Commercial lease: oral contract, 5 years, $15/sq. ft.Two other exceptions also apply•Admission •Promissory estoppel (promise, reliance, injustice)Common Law•Form over substance?•Flexibility to do justice?•More litigation? Culture of lawsuits?Chapter 17 – Three Concepts•Assignment•Delegation•Third PartiesAssignment – Definition•Assignor and assignee•Focus is usually on assignment of rights•But obligations are also included•Assignment means•Entire contract is given to a new party (a “third party”)•All rights and obligations of the original party are extinguished after the date of assignmentAssignment – Examples •Business transactions•Real estate mortgage•Loan originator makes loan to home owner•Loan originator transfers loan to bank servicer•Merger agreement•HealthTest Co has a contract with DataAnalytics Co•HealthTest Co is acquired by Insurance Co•Contract may require consent for assignmentDelegation•Delegator and delagatee•Narrow focus on delegation of obligations•Contract obligations are given to a third party•Real estate mortgage example•Loan originator, bank servicer, home owner•Can home owner delegate obligation to pay to tenants?Exception – Personal Services•Consent required to assign or delegate contracts for personal services (even if the contract is silent)•Piano teaching example•Anton, Barney, James & Julie, Mike & Mary•Consent of service provider is required for assignment•Consent of customer is required for delegationThird Parties•Privity of Contract = party to the contract•Third Party = not a party to the contract•Intended Third Party Beneficiary•Third party that can sue to enforce a contract•Incidental Third Party Beneficiary•Third party that can not sue to enforce a contractThird Party Beneficiaries•Business contracts often state that there are no third party beneficiaries•But “foreseeability” is the analytical focus•Did the third party have involvement in the contract?•Was the third party mentioned in the contract?•Example: breach of skyscraper construction contract•Third party beneficiaries: nearby residents vs. specialty glass contractor•Intended beneficiary can sue after the party to the contract refusesCondominium Association•Condo owners agree to abide by certain rules, including keeping appliances in order•All contracts are between individual owners and the condo association•Can one condo owner sue another for breach of contract?•Court: yes, each condo owner is an intended third party beneficiaryLife Insurance•Single mom with daughter in college•Daughter is named as intended third party beneficiary•Daughter has rights under the contract even though she is not a party to the contract•“Key man” insurance on executives?•Company insurance on employees? Wal Mart exampleSchedule•Coming soon:•D2L: study guide for Exam 2•D2L: assignment due in class on exam day•Thursday, 10/22: bonus material on intellectual property•Tuesday, 10/27: clicker review day•Thursday, 10/29: Exam