BMGT380 FINAL EXAM NOTES Final exam 50 questions same format 85 90 of the final exam is contracts and the other 10 is mostly antitrust 5 7 questions and the last bit of chapter 20 Chapter 20 1 Defense o No privity defense Historically 19th century only sue company with privity of contract only sue retailer Direct contractual relationship Modern tort cases no requirement of privity of contract in negligence or strict liability theory Ex an injured bystander can sue a remote Ex friends microwave explodes and injures you manufacturer can sue manufacturer Privity of contract is abolished Warranty theory do you need privity of contract No clear answer governed by UCC 2 Disclaimers and Remedy Limitations o Disclaimer clause in sales contract where seller attempts to eliminate liability under one of theories If it is effective than the plaintiff cannot recover against the seller Can disclaim implied warranties of merchantability and fitness Sell product As is disclaimer of implied warranty Must be conspicuous big enough to read it Very difficult to disclaim an express warranty Rarely enforced by the courts Cannot disclaim liability for negligence If disclaimer is effective injured consumer can not recover against a seller Disclaimer of tort liability if it is one business trying to disclaim tort liability against another business it is must more likely to be enforced than if it is a consumer suing the business o Remedy Limitation seller is not necessarily saying not liable but can recover few damages attempts to block recovery of certain damages sets limit Rule 1 if consumer suing a business under negligence strict liability theory will probably not be enforced Rule 2 one business suing anther business much more likely court will enforce this Rule 3 if someone is suing under a warranty theory the UCC deals with the situation Cannot limit the remedy that consumer gets 3 If defendant is strictly liable then plaintiff doesn t have to prove breach of duty Chapter 9 Contracts Law of contracts deals with the enforcement of promises Not every promise is legally enforceable 19th century Freedom of Contract contracts should be enforced by courts because they are the products of the free will of the contracting parties 20th century much more governmental regulation of private contracts Methods of contracting o Rule 1 Enforceable contracts can be either written or oral o Rule 2 Exception to rule 1 certain contracts need to be in writing to be enforceable Ex contract to buy property Basic elements of a contract o There must be voluntary agreement which is a offer and b acceptance o There must be consideration to support each party s promise Consideration something of benefit given by each party to the contract to each other o Parties must have capacity to contract legal ability to enter into a contract Minors do not have capacity and are the only ones who can end the contract Recording company tries to get Justin Bieber out of contract because Justin is a minor but they cannot only the minor can People with Alzheimer s do not have capacity or mentally impaired Drunk people enter into a contact while drunk then sober up and realize want to get out of contract general rule courts are unsympathetic to people who try to get out of contracts because of intoxication at the time of entering the contract o Objective and performance of contract must be legal Ex contract to sell cocaine does not have a legal objective Different ways to classify contracts contracts can fall into multiple categories ex Bilateral voidable express executory o Bilateral vs Unilateral depending on whether one or both of the parties have made a promise Bilateral both of the parties made a promise to each other 1 Ex mark s employment contract with umd agrees to teach certain number of classes complete certain amount of research service activities in exchange for salary Unilateral only one party made a promise 1 Ex frequent flyer miles airline promises to redeem miles customer doesn t need to promise to do anything only airline is making promise to frequent flyer o Valid unenforceable voidable and void contracts question on exam Valid meets all of the requirements for a binding contract and thus is enforceable in court Unenforceable meets all of the elements of a contract but unenforceable for some other reason legal rule 1 Statute of Frauds the requirement that a contract be in writing to be enforceable unenforceable o Ex contract for land must be in writing orally is valid but 2 Statute of Limitations expires if you wait too long to use 6 years for breach of contract Voidable one or more parties to the contract have the legal right to cancel their obligations under the agreement 1 Ex enter contract because he defrauded me into making investments could void the contact because I am defrauded and try to recoup losses only defrauded party investors can get out of a voidable contract 2 Only the injured party is entitled to exercise the right to cancel the contract if he chooses 3 One of the parties has no capacity o Ex 10 year old enters contract with adult if doing it without legal guardian child can get out o Ex if mentally impaired can get out of contract Void agreement that creates no legal obligations and for which there is no remedy if the contract is breached 1 Ex illegal contacts mafia contract to kill someone if hit man is hired and breaches contract by failing to carry out the hit the court will throw it out of court o Express vs Implied Express parties expressly state what the terms of their contract are orally or in writing at the time the contract was formed Implied terms not directly expressed cant figure out what the terms are unless you look at the surrounding facts and the circumstances 1 Ex go to a dentist dentist will use reasonable care to clean teeth and you will pay dentist for implied services o Executed vs Executory their contractual duties Executed contract whereby all parties have fully performed all of Executory not all of the duties have been fully performed doctor provides services and you don t pay him for 30 days until you pay him the contract is executory because you have not fulfilled your end of the contract every contract falls into all four categories It will be either bilateral or unilateral one of the 4 things either expressed or implied and either executed or executor could start as executory and later point becomes executed when its fully performed why does is matter which categories they fall
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