Today Upper division business law courses Finish chap 14 four elements of a contract Begin chap 15 mistake misrepresentation Upper Division B Law Courses Commercial Law Employment Law International Business Law Law and Entrepreneurship LSB 4403 T TH 3 30 4 45 Law and innovation creativity Starting and operating your own business IP stock venture capital crowdfunding real estate Four Elements of a Contract Agreement Consideration Capacity Legality Architecture Firm Not always as obvious as criminal action OK architecture firm Bid to build UAE embassy in Washington D C Enforceable contract Court no contract public policy concern over safety Medical Clinic Medical clinic in Illinois Medical license vs corporate registration Enforceable non compete agreement Court yes enforceable contract no public policy concern over safety Burrito Express v Kansas DOL Agreement at 6 per hour 50 hours worked would equal 300 per week Actually paid 50 per week Court enforceable contract Public policy company must pay for work performed Purpose immigration laws not designed to invalidate employment contracts Illegality Analysis More than obvious criminal violations Public policy does the illegality relate to public safety Purpose is the illegality related to the contract issue Chapter 15 Mistake and fraud in contracts Both parties consent to the same bargain Genuine meeting of the minds Mistake Mutual mistake either party can rescind Unilateral mistake enforceable against the mistaken party except for three exceptions Mutual Mistake Example Elena selling a jet ski to Chin Price 2 500 in email correspondence Contract 250 Contract 25 000 Both parties knew of mistake so court will correct or rescind the contract Unilateral Mistake Analysis Usually courts don t undo unilateral mistakes But in three situations contracts are not enforceable against mistaken party 1 Other party knew or should have known 2 Results in unconscionable outcome 3 Substantial inadvertent mathematical error Unilateral Mistake Example Jet ski for 2 500 or 1 500 Analysis Knew or should have known Obvious mistake Unconscionable Mathematical error vs typo Which Mistakes Not mistakes regarding market value Yes mistakes as to what you were buying But not if you bear the risk of the mistake Risk of Mistake How does a party bear the risk of mistake 1 Item sold as is where is can waive defense of mistake 2 Conscious ignorance example of locked metal box Cutting and Pasting Example Forum selection OK firm usually opts for OK or TX But makes an exception for FL for large customer Then didn t read the contract with VA company Court unilateral mistake Must read the contract Three exceptions don t apply Not obvious not unconscionable not math error Retail Sales Example Shoe store mistake 259 159 9 Airline tickets mistake 24 98 SF to Paris instead of 1 500 150 people purchased at mistaken price Loss of 221 250 United Airlines Three elements of contract analysis 1 Should have known Obvious 2 Unconscionable 3 Math error or typo Also non legal factors Dog Track Races Offer says the jackpot is 825 000 Mistakenly read as 8 25 000 was intended Contextual analysis Obvious mistake Unconscionable Mathematical error Next Class Finish chapter 15 mistake fraud misrepresentation