BUSINESS LAW EXAM REVIEW

Part 3- 2015

PART 3 OF 3 CONTENTS Consideration Capacity Writing Legality Other contract materials

WHAT IS CONSIDERATION? Both sides

gain something

Fair but not necessarily equal

Give, trade and legal value must be proven

RESCISSION To take

back consideration

MUST occur before ratification to be effective

FORBEARANCE A promise NOT

to do something you have a legal right to do

Ex) Rather than to pay back a loan, you ask for an extension of time to NOT pay

UNCONSCIONABLE A grossly unfair contract for one side

Being taken advantage of

FRAUD An “INTENTIONAL” misrepresentation

of an existing fact Misleading someone on purpose

MATERIAL Very important detail to one side of a contract

LEGAL VALUE A change in

the parties legal position as a result of the contract

Ex) You gain $20, I get my law mowed

PROMISSORY ESTOPPELPromising a gift and making it an enforceable contract in courtMust show a legal detriment in order to win a case involving a promise

LIQUIDATED DEBT Agreeing that a debt exists and to its amount

Ex) Getting a “correct” bill in the mail

FIRM OFFERS A contract

overseen by UCC Law (Retailers) in which a promise stays open for at least 3 months

When a store gives a customer a rain check

DURESS Using an improper threat to

obtain an agreement

OPTIONS CONTRACTS Overseen by Common

Law Usually collateral is

involved (Something of value used to keep the offer open)

Ex) Giving a person $40 so you can have a week to decide if you want to buy their car

CAPACITY Ability to understand a contract

and its terms Protected groups include minors,

intoxicated and mentally impaired Intoxication is never an absolute

defense Only protects groups against

luxury goods purchases (Non-necessaries) even if a minor lies about their age

TIMEFRAMES Age of minority is the shortest timeframe of a persons life (Birth to 18)

Age of Majority is the longest time of a persons life (18- end of your life)

Anyone within the age of minority is a minor

MINORS CANNOT GET OUT OF THESE CONTRACTUAL AGREEMENTS

Banking contracts Major Commitments (Military, student loans)

Insurance contracts Sale of reality Apartment contracts in some states

STATUTE OF FRAUDSWhen contracts “Must” be in writing to be considered valid

$500+ Takes more than 1 year to

complete Promise to pay the debt of another Marriage with consideration Sale of real property

ANY QUESTIONS? Exam Wednesday/Thursday #2 pencil Book turn in

THANK YOU for being a wonderful class… Its been a great year and I wish you nothing but the best!