BLAW 3430 Test Two Study Guide 03 24 2015 The Elements of an Enforceable Contract Agreement Offer o Valid offer must include 1 Serious Intent for a contract a Test Does the contract exist objectively Is it a serious offer objective theory of contracts 2 Reasonably definite and certain terms if covered by common law identified a The subject price time and party must be b Article II UCC sayas if intent is clear the terms can be decided at a later time 3 Must be communicated to the offeree o Under Article II UCC offer cannot be revoked Acceptance o Valid acceptance must include 1 Intent to accept objective theory of contracts 2 Terms a Common law mirror image rule i Terms of the offer and terms of acceptance must be identical ii meeting of the minds 3 Communicated to the offeror o Additional terms in acceptance under Article II UCC Contract between merchants additional terms in contract unless Offer prohibits such an act Material change that a reasonable person would consider important Promptly objected to o Additional terms in contract between two nonmerchants The additional terms are not included in the contract RATHER it is a proposal until the other party agrees to the addition Genuine Agreement o Mutual assent o No agreement if Duress threat if party does not sign contract Mistake a mutual mistake of a material fact makes the contract voidable Facts are objectively ascertainable Fraud Fraud in the execution Neither knew nor had reasonable opportunity to know Fraud in the inducement False representation statement Material fact With knowledge and intent to Buyer had reasonable reliance on falsified information Buyer suffers damages Consideration DEFN quid pro quo or this for that bargin for the exchange in which legal value exists o Legal value exists if either a benefit or detriment occurred Act Promise to act Refrain from acting Promise to refrain from acting MUST include a o Benefit concurred o Detriment concurred Doctrine of Promissory Estoppel o Substitute for consideration o Doctrine exists if there is A promise reasonably expected to induce action Does induce action Avoid injustice only by enforcing o Doctrine is more enforceable in donations to nonprofit charities Adequacy of Consideration o Unconscionable If a court finds a contract to be unconscionable contract can be voided Unconscionable means so one side as to shock the o Enforceable to the extent they are reasonable in time and in conscious of a judge Non Competition Agreement scope Valid Purpose Void if crime occurs under contract Usury lending at an unreasonable rate Licensing requirement Competent Parties Capacity to Contract Intoxicated at the time of contract o Test at the time of contract did the person understand the nature consequences of contract Incapacitated Incompetent o Contract is void if party is deemed retarded Contracts by infants i e minors o Contracts entered into by minors are VOIDABLE at the option of minor during minority Necessories minors are liable for the fair market value of necessary goods shelter food clothing Fraud Statute for the Prevention of Frauds and Perjuries Created specifically to prevent people from claiming a contracts exists when one does not exist SOME contrats are not enforceable unless o Evidenced by a WRITTEN memorandum AND SIGNED by the party to be charged Contracts which the statute of fraud covers o Contracts for the transfer of an intent in real property land mortgage lease easement Exceptions case an oral agreement IS enforceable o Contracts not to be performed within one year Leases of LESS than one year i e in this TEST Is it possible for this contract to be performed WITHIN one year If so an oral contract IS enforceable Contracts to answer for the debt s of another A guarantor surety is used as a cosigner to repay loan if debtor doesn t repay In the case of corporate law the president or CFO is the guarantor o Contracts based on consideration of marriage Prenuptial agreement i e if you marry me I ll give you 1MM if I pass away before you 03 24 2015 03 24 2015