8us Law SLudy Culde of Cld lLems

1est 1
uefenses an lndlvldual can clalm
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Crlmlnal law vs Clvll (1orL) Law
ln cr|m|na| |aw a gullLy defendanL ls punlshed by elLher (1) lncarceraLlon ln a [all or prlson (2) flne pald
Lo Lhe governmenL or ln excepLlonal cases (3) execuLlon of Lhe defendanL Lhe deaLh penalLy Crlmes
are dlvlded lnLo Lwo broad classes felonles have a maxlmum posslble senLence of more Lhan one year
lncarceraLlon mlsdemeanors have a maxlmum posslble senLence of less Lhan one year lncarceraLlon
In cr|m|na| ||t|gat|on the burden of proof |s a|ways on the state
Corporat|ons can be cr|m|na||y ||ab|e for acts of |ts agents

ln conLrasL a defendanL ln c|v|| llLlgaLlon ls never lncarceraLed and never execuLed ln general a loslng
defendanL ln clvll llLlgaLlon only relmburses Lhe plalnLlff for losses caused by Lhe defendanLs behavlor
Socalled punlLlve damages are never awarded ln a clvll case under conLracL law ln a clvll case under
LorL law Lhere ls a posslblllLy of punlLlve damages lf Lhe defendanLs conducL ls egreglous and had
elLher (1) a mallclous lnLenL (le deslre Lo cause harm) (2) gross negllgence (le consclous lndlfference)
or (3) a wlllful dlsregard for Lhe rlghLs of oLhers 1he use of punlLlve damages makes a publlc example of
Lhe defendanL and supposedly deLers fuLure wrongful conducL by oLhers unlLlve damages are
parLlcularly lmporLanL ln LorLs lnvolvlng dlgnlLary harms (eg lnvaslon of prlvacy) and clvll rlghLs where
Lhe acLual moneLary ln[ury Lo plalnLlff(s) may be small
In c|v|| ||t|gat|on the burden of proof |s usua||y on the p|a|nt|ff

vlshlng hlshlng uslng a phone

lormal ConLracLs vs lnformal ConLracLs
When we speak of lormal versus lnformal we are dlsLlngulshlng Lhe dlfference beLween a lormal
ConLracL whlch ls wrlLLen slgned and sealed and an lnformal ConLracL whlch ls verbal or oral
AucLlon wlLh reserve some prlce musL be meL
AucLlon wlLhouL reserve Any prlce buys Lhe lLem no seL amounL lL musL be sold for
ueflnlLe Lerms ln a conLracL nforceab|e
lndeflnlLe 1erms Unenforceab|e

Cffer and AccepLance
An offer ls a promlse or commlLmenL made by one parLy (offeror) Lo do or forbear from dolng someLhlng
LhaL creaLes a power of accepLance ln Lhe oLher parLy (offeree) and a correspondlng llablllLy on Lhe
offeror r|or to acceptance an offer may be w|thdrawn
AdverLlsemenLs are not offers Lhey are merely lnvlLaLlons Lo come negoLlaLe
romlssory LsLoppel ueLrlmenLal re||ance on a promlse
vold conLracL CannoL be enforced
voldable conLracL A voldable conLracL un||ke a vo|d contract |s a va||d contract AL mosL one parLy Lo
Lhe conLracL ls bound 1he unbound parLy may repudlaLe Lhe conLracL aL whlch Llme Lhe conLracL ls vold
unenforceable conLracL An unenforceable conLracL or LransacLlon ls one LhaL ls valld buL whlch Lhe
courL wlll noL enforce usually because Lhe sub[ecL maLLer ls lllegal
lnLoxlcaLed beyond comprehenslon vold
Intox|cated but aware of the consequences nforceab|e contract
ou are not ||ab|e to pay a comm|ss|on to an agent |f they v|o|ated ||cens|ng agreements

Important!
1he m|rror |mage ru|e states that |f you are to accept an offer you must accept an offer exact|y
w|thout mod|f|cat|ons |f you change the offer |n any way th|s |s a counteroffer that k|||s the or|g|na|
offer If there |s a counteroffer |t "k|||s" the or|g|na| offer you can no |onger accept |t

|ements of a Contract
A contract |s an agreement reached after suff|c|ent cons|derat|on to do or refra|n from do|ng some
|ega| act|on A contract |s cons|dered va||d when two or more part|es w|th capac|ty make an
agreement |nvo|v|ng va||d cons|derat|on to do or to refra|n from do|ng some |awfu| act If these
e|ements ex|st the contract |s va||d If one or more or these necessary e|ements |s m|ss|ng the
contract |s vo|d or vo|dab|e In other words |t |s not a true contract and therefore cannot be enforced

A vo|d contract |s no contract at a|| It |s not b|nd|ng and no act|on can be ma|nta|ned |f |t |s breached
A d|saff|rmance |s not necessary to avo|d a vo|d contract

If a contract can be re[ected by one of the pert|es on |ega| grounds |t |s ca||ed a vo|dab|e contract A
vo|dab|e contract |s va||d and b|nd|ng un|ess the ent|t|ed party (the party wha has |ega| grounds to
re[ect the contract) vo|ds |t A defect ex|sts 1he defect may be cured by rat|f|cat|on of the ent|t|ed
party
1he three bas|c components of a contract are the offer the cons|derat|on and the acceptance 1he
fo||ow|ng are s|x e|ements that are to he|p to determ|ne whether or not the bas|c components are
present and meet |ega| cr|ter|a for a va||d contract

1 A|| part|es must have capac|ty to enter the contract
2 An offer must be made
3 Cons|derat|on must be exchanged
4 1he part|es must be |n mutua| agreement
S 1he contracts ob[ect and purpose must be |ega|
6 1he form of the contract must meet the |ega| requ|rements
Capac|ty to Contract
1he ab|||ty to know and understand the terms of contract |s known as capac|ty Ior a contract to be
va||d a|| part|es must have capac|ty Corporat|ons and most adu|ts have capac|ty M|nors menta||y
|ncompetent persons and those who are |ntox|cated do not have capac|ty

Most states cons|der persons under the age of 18 to be m|nors M|nors |ack capac|ty to enter |nto a
contract If they do enter |nto a contract the contract |s genera||y cons|dered vo|dab|e 1hey have the
r|ght to cance| the contract at any t|me before reach|ng the age of 18 If however a m|nor cance|s the
contract the benef|ts that he or she rece|ved must be returned

If a person |s so menta||y |ncompetent that he or she fa||s to understand that a contract |s be|ng made
and further does not understand the terms of the contract that person |s sa|d to |ack capac|ty to enter
|nto a contract If such a person enters |nto a contract the contract may be deemed vo|dab|e or
poss|b|y vo|d

Covenants not to Compete
Must be reasonab|e |n t|me]d|stance not over|y restr|ct|ve

1est 2
,uLual mlsLakes Where a mlsLake of boLh parLles aL Lhe Llme of conLracL was made as Lo a baslc
assumpLlon on whlch Lhe conLracL was made has a maLerlal effecL on Lhe agreed exchange of
performances Lhe contract |s vo|dab|e by the adverse|y affected party
unllaLeral ,lsLake Cenerally Lhere ls sLlll an enforceab|e contract lf Lhe mlsLake ls an obvlous maLh
error lL can be correcLed
8ecovery on conLracLs allowed by provlng fraud undue lnfluence duress eLc
uffery not defrauded ex Lhe car has a smooLh rlde" ls sales puffery noL a verlflable clalm
,osL sLaLes have laws (ca||ed Statutes of Irauds) llsLlng Lhe Lypes of conLracLs LhaL musL be wrlLLen ln
order Lo be enforceable 1he purpose of Lhe SLaLuLes of lrauds ls Lo prevenL fraudulenL clalms from
arlslng AlLhough Lhe laws vary from sLaLeLosLaLe Lhe mosL common examp|es of contracts that
genera||y must be |n wr|t|ng are
(1) sa|es of rea| property
(2) prom|ses to pay someones debt ob||gat|ons
(3) a contract that takes |onger than one year to comp|ete
(4) rea| property |eases that run for more than a year
(S) contracts for an amount or other cons|derat|on that exceeds the states thresho|d
(6) a contract that w||| go beyond the ||fet|me of the one perform|ng the contract
(7) the transfer of property upon the death of the party perform|ng the contract

WhaL conLracLs can't be asslgned?
A conLracLlng parLy may asslgn hls rlghLs under Lhe conLracL when such ass|gnment does not |nvo|ve the
cred|t sk||| or other persona||ty of the ass|gnor n|s r|ghts to anothers persona| serv|ce he can never
ass|gn
Asslgnor lndlvldual who ls Lransferrlng a LlLle or rlghL
Asslgnee ersona recelvlng a LlLlle or rlghL from Lhe asslgnor
Cbllgor erson who has a duLy Lo perform someLhlng (pay chlld supporL)
Cbllgee erson recelvlng a performed duLy from Lhe obllgor

lnLended vs lncldenLal
ln order for a Lhlrd parLy beneflclary Lo have any rlghLs under Lhe conLracL he musL be an lnLended
beneflclary as opposed Lo an lncldenLal beneflclary 1he burden ls on Lhe Lhlrd parLy Lo plead and prove
LhaL he was lndeed an lnLended beneflclary

SubsLanLlal erformance subsLanLlal performance ls an alLernaLlve prlnclple Lo Lhe perfecL Lender rule
1h|s pr|nc|p|e |s re|evant when a contractors performance |s |n some way def|c|ent through no w|||fu|
act by the contractor yet |s so near|y equ|va|ent that |t wou|d be unreasonab|e for the owner to deny
the agreed upon payment lf a conLracLor successfully demonsLraLes subsLanLlal performance Lhe
owner remalns obllgaLed Lo fulflll paymenL less any damages suffered as a resulL of Lhe deflclencles ln
workmanshlp by Lhe conLracLor (L|ke when you acc|denta||y use 1he|sen p|umb|ng p|pes |nstead of
nenry p|pes)
novaLlon 1he subsLlLuLlon of a new conLracL for an old one
Accord SaLlsfacLlon legal conLracL whereby Lwo parLles agree Lo dlscharge a LorL clalm conLracL or
oLher llablllLy for an amounL or based on Lerms LhaL dlffer from Lhe orlglnal amounL of Lhe conLracL or
clalm (usually less!)
ConsequenLlal uamages ConsequenLlal damages lnclude loss of producL and loss of proflL or revenue
and may be recovered lf lL ls deLermlned such damages were reasonably foreseeable or wlLhln Lhe
conLemplaLlon of Lhe parLles aL Lhe Llme of conLracL formaLlon 1hls ls a facLual deLermlnaLlon LhaL
could lead Lo Lhe conLracLors llablllLy for an enormous loss lor example Lhe cosL Lo compleLe
unflnlshed work on Llme may pale ln comparlson Lo Lhe loss of operaLlng revenue an owner mlghL clalm
as a resulL of laLe compleLlon
After recover|ng damages you cannot obta|n add|t|ona| |tems ||ke spec|f|c performance
LxculpaLory Clause A provlslon ln a conLracL under whlch elLher of Lwo Lhlngs ls sLlpulaLed (1) one parLy
ls relleved of any blame or llablllLy arlslng from Lhe oLher parLys wrongdolng or (2) one parLy (usually
Lhe one LhaL drafLed Lhe agreemenL) ls freed of all llablllLy arlslng ouL of performance of LhaL conLracL
An example of an exculpaLory clause ls a dry cleaners recelpL LhaL lncludes a dlsclalmer freelng hlm or
her from any llablllLy for damage Lo Lhe lLem Lo be cleaned durlng Lhe dry cleanlng process An
exculpaLory clause may be overruled by courLs lf found Lo be unreasonable ln Lhe clrcumsLances
Important!
Any defenses that person has aga|nst ass|gnor can be used aga|nst ass|gnee to not have to pay
When a contract |s breached Can sue for compensatory consequent|a| however usua||y not pun|t|ve
damage