Doctrine of vicarious liability
An employer can be responsible for injuries and damages done by employees. If an employee is negligent, he can always be sued directly. The theory of "deep pockets".
Respondiat superior.
There must be a master-servant(employee) relationship. There is no responsibility for an intependent contractor. If he is an IC, the employer is only responsible if there was negligence in the hiring of the IC. The employer should have investigated the IC before hiring him.
Who has the right to control the job that is being done? If the employer doesn't know much about the job, it indicates that he's in IC.
How is the individual being paid? If it's by the job, he's an IC.
Whose tools are being used. If it's the worker's tools, it indicates that he's an IC.
If he's an employee and he causes injury, there must be certain events:
The employee must be acting within the scope of the employment. Ask these questions: is he where he is supposed to be, when he's supposed to be there, doing what he's supposed to do? If so, employer can be held responsible. If not, he's on a "detour and frolic".
Ex: bread truck driver. If driver is on the route, employer can be held responsible. If he's visting his girlfriend in Morton Grove, the employer is not responsible. The driver is not where he's supposed to be.
If the bakery knows what he's doing and allows it, it becomes part of the job and it would be considered within the scope of the employment.
No vicarious liability allowed for unauthorized passengers in a vehicle.
Vicarious liability of an employer for the intention torts of an employee
The general rules is that the employer is not responsible for the intention torts of an employee. Ex: swimming teacher assaulting a student at the ymca. they're only responsible because they knew about a previous case of improper touching and they took no action.
3 exceptions:
1. when force is specifically authorized by the employer, if excessive or illegal. ex: someone shoplifting. if the employer tells an employee to stop the shoplifter, the employer is responsbile for any excessive force
2. if the employee is in a position that by its very nature generates friction. ex: bouncer at a bar. security guard.
3. employee who acts to protect the property of the employer, for the purpose of the employer. ex: pickle barrel case
So therefore, the employer is not responsible if the employee acts for a totally personal reason with no relationship to the job and the employee has no previous record of violence that the employer should have known about.
Best lines of the semester:
Q: "Is that papyrus?" A: "Is that an F?"
Q: "Where are the questions?" A: "I'd call you an idiot, but I want you to write a good evaluation."
Final Exam Review
Tuesday, 6pm. almost 2 hours.
8 questions. mUch on contract law. one on product liabliety
strict liabali
strict liability in tort and in contract
privity in contract
mcpherson buick case first eliminated requirement for contract with manufacturer
strict liab expanded
implied suitability. first in food and drink then in manuf goods.
if there's a defect in good, even if theres no neg, manufacturer is liable
breach of an express warranty
representation of fact ex: shatterproof glass.
even in advertising brochure
strict liab in tort
final expansion
if something is sold in an inherently dangerous condition (axle of a car), manuf is strict liab in tort. defect in good, design defect (lawnmower with no shutoff switch), failure to warn (diet food to baby, firing gun close to head)
contract law
when does an offer become an offer. what is an offer. when does it form a contract? what constitutes an acceptance? when does the acceptance form a contract. mailbox rule.
contracts for minors
generally voidable at the optoin of the minor. can get his money or property back, even if the goods are destroyed. unless it's a necessicity or a necessary (for their position in the society).
sufficiency of consideration vs adequacy of consideration
must be a legal detriment.
fraud/duress/undue influence
Contract fraud - intention misrepresentation of a material fact unknowingly made.
fraud can be a tort too. (know this!)
two torts:
1. intentional interference with a contractual relation
2. intentional interference with prospective advantage (predatory behavior)
ex: am baking company - cut out the driver
parol evidence rule - if you have a written contract, prior or contemporaneous oral statements can contradict the written agreement
contracts that must be in writing
land
promising to pay other ppls debts - who's obligation is it really? if it's to benefit the person who's making the promise, then it's his debt. ex: builder paying the debt of a subcontractor to a supplier so the sub can do the work.
Thursday, December 10, 2009
Tuesday, December 8, 2009
Class 26 - Contracts and the Statute of Frauds
Next Tuesday 12/15 is the final. Review will be on Thursday. The final is NOT cumulative. It covers: negligence (ch 6), ch 7, ch 8, ch 9, ch 10 and what he talks about next time.
Statute of frauds - a body of law intended to prevent fraud. Involves agreements that are so important or unusual that the court will only enforce them if they are in writing.
6 contracts must be in writing, or else they will not be enforced by the courts:
1. A promise of an executor/administrator to pay the debts of the deceased person from his/her own pocket.
2. Related to #1 and more common, the promise to pay the debt of another person. this is normally not done, but sometimes they do and in such a case it will be enforced, if they're in writing. must determine: who is the obligor and who is the promiser? Ex: twins, boy and girl, 18 yrs old. both going to senior prom. son is paying for his own tux, but father will pay if he can't. father offers to pay for daughter's dress. only for the son does it require in writing. exception to the rule: main purpose doctrine. if the promise was made for the benefit of the promisor, not the obligor, it doesnt need to be in writing. ex: contractor. electric subcontractor. sub can't get supplies. main contractor promises to pay supplier. since it's for his own benefit, it does NOT need to be in writing.
3. Agreements upon consideration of marriage - this does not refer to the agreement to get married. You can't sue someone for leaving you at the altar. Heart balm statues prevent suing for emotional distress. Only for actual out of pocket expenses. It does refer to prenuptial agreements - should the marriage not work out, the parties agree on how to split the assets. It also refers to desperation agreements where one party offers something if the other party will marry him/her. Some call this a "dowry". Those must be in writing in order to be enforceable.
4. Contracts for the sale of land or an interest therein - cemetery plot, real estate. Sometimes there's a question when you're buying crops. If the buyer does the harvesting, that's considered a contract for an interest in land, and it must be in writing. If the seller does the harvesting, then the contract is for personal property. Same for a mining contract for the sale of ore.
5. Agreements not to be performed for one year - impossible under the terms of the contract. not whether it is likely to be performed or contemplated to be performed within a year. rather, the contract terms require that it takes more than a year. ex: hiring an accountant for services of 15 months. such a contract must be in writing.
6. Under UCC, contracts for the sale of goods for $500 or more - common law requires detailed contract. ucc requires only quantity, price and signature of party responsible for payment. ex: contract for sale of an HDTV at ABT Electronics for $1250.
Parol Evidence Rule - "spoken" - rule of contract finality
Can't use oral statements to add to delete from or change a contract
Ex: apartment lease - oral agreement to replace carpeting and fix ceiling plaster. No oral statements can be used to change a written agreement.
Sometimes, you can get the change accepted if you can prove fraud or mistake. Ex: if there are inconsistencies in the agreement itself, such as different rental prices in different parts of the contract/lease.
Contract Remedy
Usually, the contract remedy is the difference btwn the agreed upon price and the cost to get the goods/services elsewhere.
There may be punitive damages if the conduct is wanton and willful.
Specific performance
You must perform exactly as the contract requires. All real estate is unique. It requires specific performance. For a BMW, you can provide another one. If it's for a rare or unique item, it will require specific performance.
You never find specific performance in an employment contract - it's involuntary servitude.
Quasi-contract - unjust enrichment. (review this!)
Review question: Main purpose doctrine - such a contract to pay another person's debts do not require a written contract.
Doctrine of Vicarious Responsibility - responsibilities of an employer for injuries caused by an employee. "deep pockets theory". is the person an employee or contractor? if an employee, is he acting within the scope of his/her employment? if "no" to either, he is on a detour and frolic and the employer is not responsible.
As a general rule, an employer is not responsible to a 3rd party for an employee's intentional torts. But there are some exceptions. Ex: swimming teacher at YMCA. Y didn't respond to first complaint. being sued for their negligence in allowing him to continue teaching after the complaint, not for vicarious responsibility for the tort.
There is no vicarious liability for the negligence of an independent contractor.
Statute of frauds - a body of law intended to prevent fraud. Involves agreements that are so important or unusual that the court will only enforce them if they are in writing.
6 contracts must be in writing, or else they will not be enforced by the courts:
1. A promise of an executor/administrator to pay the debts of the deceased person from his/her own pocket.
2. Related to #1 and more common, the promise to pay the debt of another person. this is normally not done, but sometimes they do and in such a case it will be enforced, if they're in writing. must determine: who is the obligor and who is the promiser? Ex: twins, boy and girl, 18 yrs old. both going to senior prom. son is paying for his own tux, but father will pay if he can't. father offers to pay for daughter's dress. only for the son does it require in writing. exception to the rule: main purpose doctrine. if the promise was made for the benefit of the promisor, not the obligor, it doesnt need to be in writing. ex: contractor. electric subcontractor. sub can't get supplies. main contractor promises to pay supplier. since it's for his own benefit, it does NOT need to be in writing.
3. Agreements upon consideration of marriage - this does not refer to the agreement to get married. You can't sue someone for leaving you at the altar. Heart balm statues prevent suing for emotional distress. Only for actual out of pocket expenses. It does refer to prenuptial agreements - should the marriage not work out, the parties agree on how to split the assets. It also refers to desperation agreements where one party offers something if the other party will marry him/her. Some call this a "dowry". Those must be in writing in order to be enforceable.
4. Contracts for the sale of land or an interest therein - cemetery plot, real estate. Sometimes there's a question when you're buying crops. If the buyer does the harvesting, that's considered a contract for an interest in land, and it must be in writing. If the seller does the harvesting, then the contract is for personal property. Same for a mining contract for the sale of ore.
5. Agreements not to be performed for one year - impossible under the terms of the contract. not whether it is likely to be performed or contemplated to be performed within a year. rather, the contract terms require that it takes more than a year. ex: hiring an accountant for services of 15 months. such a contract must be in writing.
6. Under UCC, contracts for the sale of goods for $500 or more - common law requires detailed contract. ucc requires only quantity, price and signature of party responsible for payment. ex: contract for sale of an HDTV at ABT Electronics for $1250.
Parol Evidence Rule - "spoken" - rule of contract finality
Can't use oral statements to add to delete from or change a contract
Ex: apartment lease - oral agreement to replace carpeting and fix ceiling plaster. No oral statements can be used to change a written agreement.
Sometimes, you can get the change accepted if you can prove fraud or mistake. Ex: if there are inconsistencies in the agreement itself, such as different rental prices in different parts of the contract/lease.
Contract Remedy
Usually, the contract remedy is the difference btwn the agreed upon price and the cost to get the goods/services elsewhere.
There may be punitive damages if the conduct is wanton and willful.
Specific performance
You must perform exactly as the contract requires. All real estate is unique. It requires specific performance. For a BMW, you can provide another one. If it's for a rare or unique item, it will require specific performance.
You never find specific performance in an employment contract - it's involuntary servitude.
Quasi-contract - unjust enrichment. (review this!)
Review question: Main purpose doctrine - such a contract to pay another person's debts do not require a written contract.
Doctrine of Vicarious Responsibility - responsibilities of an employer for injuries caused by an employee. "deep pockets theory". is the person an employee or contractor? if an employee, is he acting within the scope of his/her employment? if "no" to either, he is on a detour and frolic and the employer is not responsible.
As a general rule, an employer is not responsible to a 3rd party for an employee's intentional torts. But there are some exceptions. Ex: swimming teacher at YMCA. Y didn't respond to first complaint. being sued for their negligence in allowing him to continue teaching after the complaint, not for vicarious responsibility for the tort.
There is no vicarious liability for the negligence of an independent contractor.
Thursday, December 3, 2009
Class 25 - Contracts (cont.)
The elements of an agreement in order for it to be a legally binding contract.
intent
offer
acceptance
absence of fraud, duress or undue influence
legally sufficient consideration
It must be legal. Agreements involving illegal activities are not binding (gambling, murder, etc). If there is a contract for an unlicensed worker to do work, it depends what type of license if require.
Regulatory or Revenue-raising device.
If it's a revenue-raising device, then the contract is enforceable.
If it's a regulatory license, then the contract is not enforceable.
Another regulation is the Sunday "blue" laws. Auto dealerships are closed on Sunday. In Massachusetts, they barred businesses from being open on Sunday. Schechter Poultry sued and lost.
If the parties do business in violation of a Sunday closing law, the contract is voidable. But if the parties continue with the contract, it continues in effect.
Restraint of Trade
Non-competition clause. Gene & Georgetti's Italian Steakhouse at Franklin & Illinois. If someone buys a business and adds a clause that keeps the old owners from reopening, under the common law, this was a violation of restraint of trade. Under current law, it's permitted as long as it's reasonable in time and geography. It depends on the business and its reputation. Hot Dog stand on Armitage, east of Halsted - cannot bar them from opening in a wide area, only in the immediate area.
Non-competition clause in an employment contract also must be reasonable. Non-solicitation clause is reasonable. Barring the employee from working in his profession in his community is usually not considered reasonable.
Another illegal clause...
Violation of Public Policy - you must be responsible for your own careless behavior. If someone puts in a contract that they're not responsible for anything, it is meaningless.
Contractual Capacity
18 yrs old+
Mental capacity
Contracts for necessities
1. food
2. clothing
3. shelter
4. medical care
Contracts for necessities by minors are valid (for and against them)
Necessaries - necessary, considering the status or position in the community. Courts will enforce the contract for and against the minor.
Luxuries
Good advice: Don't deal with minors.
Story of Susan (north shore) and Sharon (inner city girl) who both bought a fur. For Susan it was a necessary - enforced the contract, for Sharon it was a luxury - contract is void.
An emancipated minor can be held responsible for his/her contracts.
If a minor buys a car, makes payments, and then becomes 18, the contract is then ratified.
Mental illness
Simple insanity - Person has lucid moments when medicated. If a person is off his meds and signs a contract, he can disaffirm it when he becomes lucid.
Ajudicated insanity - court has ruled the person insane. A contract by such a person can never be valid.
Intoxication - an intoxicated person who signs a contract cannot void the contract. unless the person was totally intoxicated and the other party knew it.
Contracts of minors are voidable by the minor if they are for luxury items. The contract is not voidable if it is for necessities or necessaries.
Statue of Frauds
A body of law that deals with misrepresentation. Some contracts are so important or unusual that they are only enforceable if they are in writing.
Most oral contracts are enforceable.
Six must be in writing:
1. promises of an executor or administrator to pay debts of an estate out of his own personal funds.
2. promise to answer the debt of another person
3. agreement upon consideration of marriage
4. agreement for the sale of land or an interest therein
5. agreements taht cannot be performed within one year
6. contracts for the sale of goods if they are in excess on $500 (according to UCC)
first 5 must be in writing according to common law.
Final exam: Tuesday, Dec 15. 6pm.
intent
offer
acceptance
absence of fraud, duress or undue influence
legally sufficient consideration
It must be legal. Agreements involving illegal activities are not binding (gambling, murder, etc). If there is a contract for an unlicensed worker to do work, it depends what type of license if require.
Regulatory or Revenue-raising device.
If it's a revenue-raising device, then the contract is enforceable.
If it's a regulatory license, then the contract is not enforceable.
Another regulation is the Sunday "blue" laws. Auto dealerships are closed on Sunday. In Massachusetts, they barred businesses from being open on Sunday. Schechter Poultry sued and lost.
If the parties do business in violation of a Sunday closing law, the contract is voidable. But if the parties continue with the contract, it continues in effect.
Restraint of Trade
Non-competition clause. Gene & Georgetti's Italian Steakhouse at Franklin & Illinois. If someone buys a business and adds a clause that keeps the old owners from reopening, under the common law, this was a violation of restraint of trade. Under current law, it's permitted as long as it's reasonable in time and geography. It depends on the business and its reputation. Hot Dog stand on Armitage, east of Halsted - cannot bar them from opening in a wide area, only in the immediate area.
Non-competition clause in an employment contract also must be reasonable. Non-solicitation clause is reasonable. Barring the employee from working in his profession in his community is usually not considered reasonable.
Another illegal clause...
Violation of Public Policy - you must be responsible for your own careless behavior. If someone puts in a contract that they're not responsible for anything, it is meaningless.
Contractual Capacity
18 yrs old+
Mental capacity
Contracts for necessities
1. food
2. clothing
3. shelter
4. medical care
Contracts for necessities by minors are valid (for and against them)
Necessaries - necessary, considering the status or position in the community. Courts will enforce the contract for and against the minor.
Luxuries
Good advice: Don't deal with minors.
Story of Susan (north shore) and Sharon (inner city girl) who both bought a fur. For Susan it was a necessary - enforced the contract, for Sharon it was a luxury - contract is void.
An emancipated minor can be held responsible for his/her contracts.
If a minor buys a car, makes payments, and then becomes 18, the contract is then ratified.
Mental illness
Simple insanity - Person has lucid moments when medicated. If a person is off his meds and signs a contract, he can disaffirm it when he becomes lucid.
Ajudicated insanity - court has ruled the person insane. A contract by such a person can never be valid.
Intoxication - an intoxicated person who signs a contract cannot void the contract. unless the person was totally intoxicated and the other party knew it.
Contracts of minors are voidable by the minor if they are for luxury items. The contract is not voidable if it is for necessities or necessaries.
Statue of Frauds
A body of law that deals with misrepresentation. Some contracts are so important or unusual that they are only enforceable if they are in writing.
Most oral contracts are enforceable.
Six must be in writing:
1. promises of an executor or administrator to pay debts of an estate out of his own personal funds.
2. promise to answer the debt of another person
3. agreement upon consideration of marriage
4. agreement for the sale of land or an interest therein
5. agreements taht cannot be performed within one year
6. contracts for the sale of goods if they are in excess on $500 (according to UCC)
first 5 must be in writing according to common law.
Final exam: Tuesday, Dec 15. 6pm.
Tuesday, December 1, 2009
Class 24 - Contracts (cont.)
Manifestation of ascent: offer and acceptance
If an offer is made, it can be revoke or rejected, until it has been accepted. If it has been accepted, it can be enforced by law.
Sometimes, it appears that there is a contract, but certain kinds of conduct can invalidate the manifested ascent. Ex: duress.
Two types of duress: Simple duress and gun-at-head duress.
GAH duress voids a contract.
Simple duress is an improper threat. Ex: offering not to prosecute someone if he agrees to a contract. The threat of criminal prosecution. Criminal prosecution can only be done by the government. Threatening to sue civilly, is not improper. It's how you do a settlement.
Undue influence can also void a contract. Ex: adult child and an elderly parent.
Examine three factors in undue influence:
was the consideration ($) adequate?
was there independent advice given to the individual?
was full disclosure made to the individual?
Fraud - this is the major type of fact situatino taht allows someone to rescind the contract. It is not only contractual issue, it is also a tort for which punitive damages may be awarded.
Fraud in the execution - Ex: petition with a hidden contract
Fraud in the enducement - a false representation of a fact (not opinion) which is material (important) made with knowledge of its falsity with the intention to decieve and is justifyably relied upon. Silence can also be a false representation - ex: speedometer with wrong mileage.
It has to be material/important. Ex: the brand of spark plugs on a car is not material
It is fraud even if you don't know the truth. If you're making up a fact, it's fraud - Reckless indifference to the truthfulness.
Justifyable reliance - it has to be something that is relied upon. if the person didnt really care, it's not fraud.
You can recover a remedy for both the fraud (void the contract) and the tort of fraud and also punitive damages.
Innocent misrepresentation is just like fraud, but it's not intentional. You can rescind the contract, but you can't sue for any tort.
Sometimes a mistake by one or both of the parties allows for rescision.
Mistake as to the subject matter: if both parties believe that the glass is a diamond.
One party can't take advantage of the other person's mistake. Ex: guy who bought a valuable baseball card.
Mistake for failure to read the contract - this does not invalidate the contract.
Consideration
Consideration is one of the necessarily elements for an agreement to be a binding contract. (just like offer and acceptance)
Must show that the consideration was legally sufficient. Sufficiency of consideration is not the same as adequacy (pay too much or too little). Courts never get involved in adequacy of consideration.
Test of legal detriment/benefit: one of the parties much receive a legal benefit or incur a legal detriment.
Detriment - be required to do something that there was no pre-existing obligation to do, or refrain from doing something that you had a legal right to do.
Ex: promise to pay for tuition if student achieves a 3.0+ average. The student had no previous obligation to go to the school. He also gave up other things that he could have done instead.
Ex: offer to give money to a person if he loses weight. The person who diets, has incurred a legal detriment.
Promises to give gifts are unenforceable because there is no consideration.
Preexisting public obligation vs preexisting contractual obligation.
Public obligation - public employee, police must return an object as part of their job so they don't get the reward money. state's attorney has obligation to prosecute.
preexisting contractual obligation - accountant who wants more money to do work that he already had a contractual obligation to do. in order for there be consideration, he has to do more work, even menial.
sports stars renegotiating a contract - you have to tear up the old contract, otherwise there's a preexisting contractual obligation.
Settlement of a liquidated debt vs settlement of an unliquidated debt
liquidated debt - a debt which is undisputed
unliquidated debt - a debt which has a dispute over the amount of the debt
ex: writing "paid in full" on a check for less than the total amount of the debt. does not constitute an offer to settle for less.
unliquidated debt - ex: dentist who didn't discuss the cost. if the patient then writes "paid in full" on the check for less than the amount billed and the dentist cashes it, it's considered an offer and acceptance of the settlement.
Doctrine of promissary estoppal - the promise cannot be stopped. ex: if you offer to give a gift to a university and based upon that promise they take some action are reasonably rely on the promise, the doctrine of promissary estoppal says that you can't rescind the promise for lack of consideration.
If an offer is made, it can be revoke or rejected, until it has been accepted. If it has been accepted, it can be enforced by law.
Sometimes, it appears that there is a contract, but certain kinds of conduct can invalidate the manifested ascent. Ex: duress.
Two types of duress: Simple duress and gun-at-head duress.
GAH duress voids a contract.
Simple duress is an improper threat. Ex: offering not to prosecute someone if he agrees to a contract. The threat of criminal prosecution. Criminal prosecution can only be done by the government. Threatening to sue civilly, is not improper. It's how you do a settlement.
Undue influence can also void a contract. Ex: adult child and an elderly parent.
Examine three factors in undue influence:
was the consideration ($) adequate?
was there independent advice given to the individual?
was full disclosure made to the individual?
Fraud - this is the major type of fact situatino taht allows someone to rescind the contract. It is not only contractual issue, it is also a tort for which punitive damages may be awarded.
Fraud in the execution - Ex: petition with a hidden contract
Fraud in the enducement - a false representation of a fact (not opinion) which is material (important) made with knowledge of its falsity with the intention to decieve and is justifyably relied upon. Silence can also be a false representation - ex: speedometer with wrong mileage.
It has to be material/important. Ex: the brand of spark plugs on a car is not material
It is fraud even if you don't know the truth. If you're making up a fact, it's fraud - Reckless indifference to the truthfulness.
Justifyable reliance - it has to be something that is relied upon. if the person didnt really care, it's not fraud.
You can recover a remedy for both the fraud (void the contract) and the tort of fraud and also punitive damages.
Innocent misrepresentation is just like fraud, but it's not intentional. You can rescind the contract, but you can't sue for any tort.
Sometimes a mistake by one or both of the parties allows for rescision.
Mistake as to the subject matter: if both parties believe that the glass is a diamond.
One party can't take advantage of the other person's mistake. Ex: guy who bought a valuable baseball card.
Mistake for failure to read the contract - this does not invalidate the contract.
Consideration
Consideration is one of the necessarily elements for an agreement to be a binding contract. (just like offer and acceptance)
Must show that the consideration was legally sufficient. Sufficiency of consideration is not the same as adequacy (pay too much or too little). Courts never get involved in adequacy of consideration.
Test of legal detriment/benefit: one of the parties much receive a legal benefit or incur a legal detriment.
Detriment - be required to do something that there was no pre-existing obligation to do, or refrain from doing something that you had a legal right to do.
Ex: promise to pay for tuition if student achieves a 3.0+ average. The student had no previous obligation to go to the school. He also gave up other things that he could have done instead.
Ex: offer to give money to a person if he loses weight. The person who diets, has incurred a legal detriment.
Promises to give gifts are unenforceable because there is no consideration.
Preexisting public obligation vs preexisting contractual obligation.
Public obligation - public employee, police must return an object as part of their job so they don't get the reward money. state's attorney has obligation to prosecute.
preexisting contractual obligation - accountant who wants more money to do work that he already had a contractual obligation to do. in order for there be consideration, he has to do more work, even menial.
sports stars renegotiating a contract - you have to tear up the old contract, otherwise there's a preexisting contractual obligation.
Settlement of a liquidated debt vs settlement of an unliquidated debt
liquidated debt - a debt which is undisputed
unliquidated debt - a debt which has a dispute over the amount of the debt
ex: writing "paid in full" on a check for less than the total amount of the debt. does not constitute an offer to settle for less.
unliquidated debt - ex: dentist who didn't discuss the cost. if the patient then writes "paid in full" on the check for less than the amount billed and the dentist cashes it, it's considered an offer and acceptance of the settlement.
Doctrine of promissary estoppal - the promise cannot be stopped. ex: if you offer to give a gift to a university and based upon that promise they take some action are reasonably rely on the promise, the doctrine of promissary estoppal says that you can't rescind the promise for lack of consideration.
Tuesday, November 24, 2009
Class 23 - Contracts
Final - Dec 10th
Recognize a contract issue when it comes up. What are the red flags that you need to look out for.
Not all agreements are contracts. Some are not binding. Definition of a contract: An agreement between two or more parties, the breach of which, the law affords a remedy.
A void contract is not a contract. Some contracts are "voidable", may or may not be void. Ex: contracts by minors. Lacks capacity to enter into a contract. If its for a luxury item (ex: car), it's void. If, after the minor reaches the age of 18, the person continues with the contract, it becomes valid.
Oral agreements for purchase of real property is unenforceable. Must be in writing. Other important, unique or unusual types of agreements must also be in writing. Ex: Sale of more than $500, to pay debts of other people, marriage.
Two bodies of law cover contracts: common law and Article II of Uniform Commercial Code (UCC) covers contracts for the sale of goods.
Quasi-contract: It's a contract remedy. Prevents unjust enrichment. "As if there were a contract". Ex: Painters paint your house with your knowledge, but it's the wrong house. This is a quasi-contract, because you were knowingly and unjustly enriched and took advantage of it. Quasi-contract allows the painters to get a remedy (payment) from you.
Unsolicited books, newspapers (etc) don't create a quasi-contract with the recipients.
There must be a "meeting of the minds" - manifistation of mutual assent. Both parties agree to be bound by the contract. Requires an offer and an acceptance. What constitutes an offer/acceptance? Offer must be communicated directly by the offeror to the offeree. Indirect is not sufficient (unless through an agent). Requires intent. Clear, concise, definite. Never in the form of a question. "Would you like to buy my car for $60k?" does not consistute an offer.
If an advertisement is definite, it may be an offer. But courts sometimes consider it an invitation for the customer to make an offer. "We'll beat any competitor's price" or "Come in and make an offer" are not offers.
See Lefkowitz v Great Minneapolis Surplus Store. Quantity, price and other terms were specified, so GMSS had to honor it. It was an offer.
Words can constitute an offer, even if you didn't mean it. It's an objective test - what would an ordinary, reasonable person mean in such a case?
Common law: quantity, price, identify the item.
UCC: some terms can be left open. you can even leave off the price sometimes. "price to be determined at the time of delivery"
How long is an offer good for? If stated in the contract, that is what's binding. It might be able to be revocation or rejection or counter-offer or death/insanity of either party or subsequent illegality. Otherwise, after a "reasonable" amount of time.
Revocation: an offer can be revoked by the offeror at any time even if the offeror had promised to keep it open for longer. Even if the offeror is revoking it because he got a better offer from someone else. However, this can't be done if someone puts a down payment on it. It's an option contract. That under common law.
Under UCC, which covers moveable items, an option contract is called a firm merchant's offer rule - if a merchant puts an offer in writing and promises not to revoke it, that offer is irrevokable for the stated time, not to exceed 3 months.
Rejection - If offeree rejects and offer, it kills the offer. It cannot be revived (unless the offeror agrees). Must be definite.
Counter-offer - rejection by the offeree and then the offeree becomes the offeror. it kills the original offer.
A: I'll give you my car for 60k.
B: I'll give you 50k.
A: No.
B: Ok, I'll give you 60k.
A: No. The offer is gone.
The offer is gone because the counter-offer killed it.
Counter offer must be definite and certain, otherwise, it's not a counteroffer and the original offer is still in force.
Always get agreements in writing. If not, people will lie in court.
Offer dies if any of the parties dies while the offer is pending.
Contracts don't die with the parties, unless it's for personal services. Option contracts don't die with one of the parties.
If the subject matter is destroyed, the contract dies. After the time of delivery, the buyer must still pay.
Subsequent illegality: ex: sporting goods contract with smith & wesson when chicago made it illegal. contract was dead.
Acceptance. Must be definite, certain and unequivocal. Not a question. Simply "I accept".
Under common law, we have mirror image rule. must be an exact restatement of the offer. Under UCC, changes in the terms, do not constitute a counter-offer so long as the terms are not material.
Do the additional terms become part of the contract? Not necessarily. But if both are merchants, the party has 10 days to object or accept additional terms.
When does the acceptance form a contract? When it is sent, as long as it is sent by an authorized means of communication. i.e. the means that the offeror requires or the means either equal to or faster than the offer. if offer is first class mail and acceptance is first class mail, the contract is in effect the minute the acceptance is mailed.
If the acceptance is sent by unauthorized means of communication, it is only considered a contract when it is received by the offeror.
Rejection kills an offer only when received. If you mailed a rejection and you want to revoke the rejection, you have to send the acceptance and it must be received before the rejection.
Recognize a contract issue when it comes up. What are the red flags that you need to look out for.
Not all agreements are contracts. Some are not binding. Definition of a contract: An agreement between two or more parties, the breach of which, the law affords a remedy.
A void contract is not a contract. Some contracts are "voidable", may or may not be void. Ex: contracts by minors. Lacks capacity to enter into a contract. If its for a luxury item (ex: car), it's void. If, after the minor reaches the age of 18, the person continues with the contract, it becomes valid.
Oral agreements for purchase of real property is unenforceable. Must be in writing. Other important, unique or unusual types of agreements must also be in writing. Ex: Sale of more than $500, to pay debts of other people, marriage.
Two bodies of law cover contracts: common law and Article II of Uniform Commercial Code (UCC) covers contracts for the sale of goods.
Quasi-contract: It's a contract remedy. Prevents unjust enrichment. "As if there were a contract". Ex: Painters paint your house with your knowledge, but it's the wrong house. This is a quasi-contract, because you were knowingly and unjustly enriched and took advantage of it. Quasi-contract allows the painters to get a remedy (payment) from you.
Unsolicited books, newspapers (etc) don't create a quasi-contract with the recipients.
There must be a "meeting of the minds" - manifistation of mutual assent. Both parties agree to be bound by the contract. Requires an offer and an acceptance. What constitutes an offer/acceptance? Offer must be communicated directly by the offeror to the offeree. Indirect is not sufficient (unless through an agent). Requires intent. Clear, concise, definite. Never in the form of a question. "Would you like to buy my car for $60k?" does not consistute an offer.
If an advertisement is definite, it may be an offer. But courts sometimes consider it an invitation for the customer to make an offer. "We'll beat any competitor's price" or "Come in and make an offer" are not offers.
See Lefkowitz v Great Minneapolis Surplus Store. Quantity, price and other terms were specified, so GMSS had to honor it. It was an offer.
Words can constitute an offer, even if you didn't mean it. It's an objective test - what would an ordinary, reasonable person mean in such a case?
Common law: quantity, price, identify the item.
UCC: some terms can be left open. you can even leave off the price sometimes. "price to be determined at the time of delivery"
How long is an offer good for? If stated in the contract, that is what's binding. It might be able to be revocation or rejection or counter-offer or death/insanity of either party or subsequent illegality. Otherwise, after a "reasonable" amount of time.
Revocation: an offer can be revoked by the offeror at any time even if the offeror had promised to keep it open for longer. Even if the offeror is revoking it because he got a better offer from someone else. However, this can't be done if someone puts a down payment on it. It's an option contract. That under common law.
Under UCC, which covers moveable items, an option contract is called a firm merchant's offer rule - if a merchant puts an offer in writing and promises not to revoke it, that offer is irrevokable for the stated time, not to exceed 3 months.
Rejection - If offeree rejects and offer, it kills the offer. It cannot be revived (unless the offeror agrees). Must be definite.
Counter-offer - rejection by the offeree and then the offeree becomes the offeror. it kills the original offer.
A: I'll give you my car for 60k.
B: I'll give you 50k.
A: No.
B: Ok, I'll give you 60k.
A: No. The offer is gone.
The offer is gone because the counter-offer killed it.
Counter offer must be definite and certain, otherwise, it's not a counteroffer and the original offer is still in force.
Always get agreements in writing. If not, people will lie in court.
Offer dies if any of the parties dies while the offer is pending.
Contracts don't die with the parties, unless it's for personal services. Option contracts don't die with one of the parties.
If the subject matter is destroyed, the contract dies. After the time of delivery, the buyer must still pay.
Subsequent illegality: ex: sporting goods contract with smith & wesson when chicago made it illegal. contract was dead.
Acceptance. Must be definite, certain and unequivocal. Not a question. Simply "I accept".
Under common law, we have mirror image rule. must be an exact restatement of the offer. Under UCC, changes in the terms, do not constitute a counter-offer so long as the terms are not material.
Do the additional terms become part of the contract? Not necessarily. But if both are merchants, the party has 10 days to object or accept additional terms.
When does the acceptance form a contract? When it is sent, as long as it is sent by an authorized means of communication. i.e. the means that the offeror requires or the means either equal to or faster than the offer. if offer is first class mail and acceptance is first class mail, the contract is in effect the minute the acceptance is mailed.
If the acceptance is sent by unauthorized means of communication, it is only considered a contract when it is received by the offeror.
Rejection kills an offer only when received. If you mailed a rejection and you want to revoke the rejection, you have to send the acceptance and it must be received before the rejection.
Thursday, November 19, 2009
Class 22 - Trademarks and Intro to Contracts
Trademarks are an important part of business.
You don't have to copy the trademarked name or logo directly to get sued. Even if you just hint at the name, like "McDoofus", you may be in violation of the law. Even if you use your own name. E.g. Hyatt Legal Services, Gerber Foods.
Trademark Dilution - See pg 204-205. Certain trade names are so recognized that no matter what you use the name for, you must cease and desist. E.g. Coca-Cola Motels.
Servicemarks - "Home of the Whopper"
Patents and other intellectual property - trade secrets. Trade espionage is a federal crime. Coca-cola has HFCS, not sugar. KFC just moved their secret recipe to a new safe.
See pg 215 trade secret:
1. not known by competition
2. business would lose its advantage if the competition were to obtain it
3. owner has taken reasonable steps to protect the secret
You make more money from suing infringers than from a patent itself.
Main thing is: you have to be careful when you use a logo or name.
Companies protect their trademark because if they don't, they can lose the right to use it exclusively.
Even if you alter the logo, like taking off the letters from the BMW logo, you can still get sued for infringement.
Intro to Contracts
Your rights and liabilities under agreements.
A contract is an agreement between two or more parties (individuals, corps, partnerships, govts), the breach of which the law affords a remedy.
Not all agreements are enforceable. Not all are legal.
Manifestation of mutual assent. Offer. Acceptance. Must be voluntary. Duress. Undue influence. Must be legal - have a legal purpose. Sometimes people need to be licensed. If not, if the contract enforceable?
Contractual capacity - parties must have capacity, i.e. be 18 yrs old and have mental capacity.
Some contracts must be in writing. Some can be oral or in writing.
Consideration: The quid pro quo. A contract must have consideration. Promises to make gifts are generally not enforceable. Consideration is a legal detriment. the legal sufficiency of consideration.
What happens if you want to change an executed contract.
Every day of your life, you're in a contract.
The owner of property owes a duty of care to invitees for their safety. Ex: Old Orchard shopping center could they be sued when a crime happened there? Did they need to add more security guards? No. Because there had only been 2 violent crimes (one at Mario Tricocci and one food court murder by a fired employee) in the past. Neither was foreseeable, so the owner wasn't liable. You only need to provide the necessary security to protect against foreseeable incidents. See Campisi v Acme Markets when a blind employee with a cane caused a customer to trip.
Bloomingdales in Hartford, CT. It's a high-crime area. A woman was raped and murdered. The family sued Bloomingdales. Bloomies was found to be negligent. Similar situation with a Fotomat.
Trademarks
See page 201. BMW vigorously protects their logo. See the program Illicit (PBS special) about trademark infringement.
Classification of Trademarks:
Arbitrary & Fanciful (preferred by the courts)
Suggestive
Descriptive
Generic
If you don't enforce your trademark, it can become generic. Ex: Aspirin (was originally owned by Bayer).
On Thursday, we will start contracts. This is important!
You don't have to copy the trademarked name or logo directly to get sued. Even if you just hint at the name, like "McDoofus", you may be in violation of the law. Even if you use your own name. E.g. Hyatt Legal Services, Gerber Foods.
Trademark Dilution - See pg 204-205. Certain trade names are so recognized that no matter what you use the name for, you must cease and desist. E.g. Coca-Cola Motels.
Servicemarks - "Home of the Whopper"
Patents and other intellectual property - trade secrets. Trade espionage is a federal crime. Coca-cola has HFCS, not sugar. KFC just moved their secret recipe to a new safe.
See pg 215 trade secret:
1. not known by competition
2. business would lose its advantage if the competition were to obtain it
3. owner has taken reasonable steps to protect the secret
You make more money from suing infringers than from a patent itself.
Main thing is: you have to be careful when you use a logo or name.
Companies protect their trademark because if they don't, they can lose the right to use it exclusively.
Even if you alter the logo, like taking off the letters from the BMW logo, you can still get sued for infringement.
Intro to Contracts
Your rights and liabilities under agreements.
A contract is an agreement between two or more parties (individuals, corps, partnerships, govts), the breach of which the law affords a remedy.
Not all agreements are enforceable. Not all are legal.
Manifestation of mutual assent. Offer. Acceptance. Must be voluntary. Duress. Undue influence. Must be legal - have a legal purpose. Sometimes people need to be licensed. If not, if the contract enforceable?
Contractual capacity - parties must have capacity, i.e. be 18 yrs old and have mental capacity.
Some contracts must be in writing. Some can be oral or in writing.
Consideration: The quid pro quo. A contract must have consideration. Promises to make gifts are generally not enforceable. Consideration is a legal detriment. the legal sufficiency of consideration.
What happens if you want to change an executed contract.
Every day of your life, you're in a contract.
The owner of property owes a duty of care to invitees for their safety. Ex: Old Orchard shopping center could they be sued when a crime happened there? Did they need to add more security guards? No. Because there had only been 2 violent crimes (one at Mario Tricocci and one food court murder by a fired employee) in the past. Neither was foreseeable, so the owner wasn't liable. You only need to provide the necessary security to protect against foreseeable incidents. See Campisi v Acme Markets when a blind employee with a cane caused a customer to trip.
Bloomingdales in Hartford, CT. It's a high-crime area. A woman was raped and murdered. The family sued Bloomingdales. Bloomies was found to be negligent. Similar situation with a Fotomat.
Trademarks
See page 201. BMW vigorously protects their logo. See the program Illicit (PBS special) about trademark infringement.
Classification of Trademarks:
Arbitrary & Fanciful (preferred by the courts)
Suggestive
Descriptive
Generic
If you don't enforce your trademark, it can become generic. Ex: Aspirin (was originally owned by Bayer).
On Thursday, we will start contracts. This is important!
Tuesday, November 17, 2009
Class 21
An oral lease is not a lease. A lease must be writing to be valid. See page 182-193.
Unless it's prohibited by the terms of the lease, you can sublease.
Lease must state where it is, for how long, and for how much. Can be month-to-month. Can include other terms also. Tenant can't abuse the property or change it. Can't let it fall into disrepair.
Most leases are based on Uniform Residential Landlord and Tenant Act.
Security deposit cannot be retained because of normal wear and tear. Only if you misuse, damage or allow to fall into disrepair. If landlord tries to retain it, you get 3x back.
Lease can state intended use.
Nielsen v. Gold's Gym - terms were ambiguous. If it's not clear, the court can't do anything with it.
Public Control - Eminent Domain - 5th amendment says govt can take private property for public use. Even if they take or limit your ability to use your property (like an easement), they must pay you for that. Ex: land in Florida taken to be a wildlife refuge.
Zoning laws
Torts against Property:
Trespass to land - unlawful intrusion by a person or thing on land belonging to another. Even if the trespasser didn't realize it. In criminal law, it's only if they know about it. "You can't shoot a trespasser."
Common types - dumping, hunting, building on someone else's property (fence over the property line). two choices: give it to the other person or tear it down. if it's a big structure, buy the property.
Nuisance
Private nuisance: Anything that interferes with the use and enjoyment of the land.
Public nuisance: interference with the public health and welfare.
Ex: neighbor from hell. wrigley night games. midway and ohare airport expansions. barking dogs at nw corner of estes and washtenaw.
businesses that detract from neighboring businesses. ex: boutique next to aerobic dance studio.
Trespass to Personal Property
Conversion - intention, unlawful control or appropriation of the personal property of another. civil side of theft. if you rent a dvd and never return it, after a while, you own it. also, changing the character of the property. ex: loan of a car and then put many miles on it.
Premises Liability
slip and fall cases. if it's not safe, it's negligent.
It's no longer true that if you don't clean the snow, it's not your fault, but if you do, it is. Now, you must keep the property clean and safe.
Unless it's prohibited by the terms of the lease, you can sublease.
Lease must state where it is, for how long, and for how much. Can be month-to-month. Can include other terms also. Tenant can't abuse the property or change it. Can't let it fall into disrepair.
Most leases are based on Uniform Residential Landlord and Tenant Act.
Security deposit cannot be retained because of normal wear and tear. Only if you misuse, damage or allow to fall into disrepair. If landlord tries to retain it, you get 3x back.
Lease can state intended use.
Nielsen v. Gold's Gym - terms were ambiguous. If it's not clear, the court can't do anything with it.
Public Control - Eminent Domain - 5th amendment says govt can take private property for public use. Even if they take or limit your ability to use your property (like an easement), they must pay you for that. Ex: land in Florida taken to be a wildlife refuge.
Zoning laws
Torts against Property:
Trespass to land - unlawful intrusion by a person or thing on land belonging to another. Even if the trespasser didn't realize it. In criminal law, it's only if they know about it. "You can't shoot a trespasser."
Common types - dumping, hunting, building on someone else's property (fence over the property line). two choices: give it to the other person or tear it down. if it's a big structure, buy the property.
Nuisance
Private nuisance: Anything that interferes with the use and enjoyment of the land.
Public nuisance: interference with the public health and welfare.
Ex: neighbor from hell. wrigley night games. midway and ohare airport expansions. barking dogs at nw corner of estes and washtenaw.
businesses that detract from neighboring businesses. ex: boutique next to aerobic dance studio.
Trespass to Personal Property
Conversion - intention, unlawful control or appropriation of the personal property of another. civil side of theft. if you rent a dvd and never return it, after a while, you own it. also, changing the character of the property. ex: loan of a car and then put many miles on it.
Premises Liability
slip and fall cases. if it's not safe, it's negligent.
It's no longer true that if you don't clean the snow, it's not your fault, but if you do, it is. Now, you must keep the property clean and safe.
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