Chapter 7 Strict Liability liability without fault or perhaps more precisely irrespective of fault defendant is liable even though he did not intend to cause the harm and did not bring it about through recklessness or negligence Chapter 20 Caveat Emptor let the buyer beware Caveat Venditor let the seller beware Warranty an express or implied promise about the nature of the product sold Express Warranty if an affirmation of fact or promise description or sample or model becomes part of the basis of the bargain Implied Warranty a warranty created by operation of law rather than the seller s express statements merchantability Implied warranty of fitness is implied warranty that the goods will be fit for the buyer s particular purpose Negligence allege that the seller or manufacturer breached a duty to the plaintiff by failing to eliminate a reasonably foreseeable risk or harm associated with the product manufacture inspection warning design For strict liability to be imposed 1 the seller must be engaged in the business of selling the product that harmed the plaintiff 2 The product must be in a defective condition when sold and must also be unreasonably dangerous because of that condition 3 Finally defendants may avoid liability where the product was substantially modified by the plaintiff or another party after the sale and the modification contributed to the plaintiff s injury or other loss Statues of Limitations the usual UCC statue of limitations for express and implied warranty is four years after the seller offers the defective goods to the buyer Basis of the bargain buyers of defective goods have not received full value for the goods purchase price Consequential Damages personal injury property damage indirect economic loss and noneconomic loss Punitive Damages intended to punish the defendants who have acted in an especially outrageous fashion and to deter them and others from so acting in the future Chapter 9 To qualify as a contract a set of promises must be based on a voluntary agreement which is made up of an offer and an acceptance of that offer In addition there usually must be consideration to support each party s promise The contract must be between parties who have the capacity to contract and the objective and performance of the contract must be legal Unilateral Contracts only one party makes a promise Bilateral Contract both parties exchange promises and the contract is formed as soon as the promises are exchanged Quasi Contract a promise by the benefited party to pay the reasonable value of the benefits just received because it represents an obligation imposed by law to avoid injustice Promissory Estoppel a promise that the promisor should foresee is likely to introduce reliance reliance on the promise by the promisor and the injustice as a result of that reliance Chapter 10 Offer this is it if you agree to these terms we have a contract offeror the person who makes an offer offeree the person to whom the offeror makes the offer to Options a separate contract in which an offeror agrees not to revoke her offer for a stated time in exchange for some valuable consideration Firm Offer Must be made by an offeror who is a merchant be contained in a signed writing give assurances that the offer will be kept on irrevocability 3 months When offers cant be revoked options firm offers unilateral contract offers and promissory estoppel Chapter 11 Acceptance 1 The offeree intended to enter the contract 2 the offeree accepted on the terms proposed by the offeror 3 the offeree communicated his acceptance to the offeree According to the mirror image rule if a dispute had arose after performance had commenced the court would probably hold that the offeror had impliedly accepted the offeree s counteroffer and was bound by its terms Stipulation the precise time place and manner in which acceptance must be communicated Mailbox Rule properly addressed and dispatched acceptances can become effective when they are dispatched even if they are lost and never received by the offeror Chapter 12 Consideration legal value bargained for and given in exchange for an act or a promise Output Contract to buy all of the other party s production of a particular commodity Requirement Contract to supply all of another party s needs for a particular commodity Liquidated Debts a debt that is both due and certain that is the parties have no good faith about either the existence or the amount of the original debt Unliquidated Debts a good faith dispute about either the existence or the amount of a debt Accord and Satisfaction the settlement of an unliquidated debt Composition Agreements agreements between a debtor and two or more creditors who agree to accept as full payment a stated percentage of their liquidated claims against the debtor at or after the date on which those claims are payable Forbearance to Sue an agreement by a promisee to refrain or forbear from pursuing a legal claim against a promisor can be valid consideration to support a return promise usually to pay a sum of money by a promisor Chapter 13 5 doctrines that permit people to avoid contracts misrepresentation fraud mistake duress and undue influence Rescind cancel a contract Ratification a person who had the right to rescind has elected not to do so ratification ends the right to rescind Scienter the legal term for this knowledge of falsity which distinguishes fraud from innocent misrepresentation Deceit the action of deceiving someone by concealing or misrepresenting the truth Rescission innocent misrepresentation Elements to establish fraudulent misrepresentation 1 an untrue assertion of fact was made 2 the fact asserted was material or the assertion was fraudulent 3 the complaining party entered the contract because of his reliance on the assertion 4 the reliance of the complaining party was reasonable A person trying to avoid on the ground of unilateral mistake must show either one of the following 1 the nonmistaken party caused or had reason to know of the mistake 2 it would be unconscionable to enforce the contract Duress a wrongful coercion that induces a person to enter or modify a contract Undue Influence wrongful pressure exerted on a person during the bargaining process unfair persuasion
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