Class notes
BUL 4421 Final Exam Review Notes
- Course
- BUL 4421
- Institution
- Florida Atlantic University
Bul 4421 final review - Lecture notes Chapters 13-20; 50,51; and 32b
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Chapter 13 Contract- a promise or set of promises for the breach of which the law gives a remedy or
the performance of which the law in some way recognizes a duty.
Agreement- consists of an offer by one party, called the offeror, to enter into a contract
and an acceptance of the terms of the offer by the other party, called the offeree
Consideration- the bargained for exchange or what each party gets in exchange for his
or her promise under the contract.
Contractual capacity- the legal ability to enter into a binding agreement
o Most adults over the age of majority have capacity; those under the age of
majority, people suffering from mental illness, and sufficiently intoxicated
persons do not.
Objective theory of contracts- we base the existence of a contract on the parties’
outward manifestations of intent and we base its interpretation on how a reasonable
person would interpret it
o The subjective intent of parties is not usually relevant; what matters is how they
represented their intent through their actions and words.
Bilateral contract- a promise in exchange for a promise. As soon as the promises
exchanged, a contract is formed and the parties’ legal obligations arise.
Unilateral contract- requires performance in order to form a contract (i.e. a promise + a
requested action). The offeror wants the offeree to do something, not promise to do
something.
Express contract: the terms of the contract are all clearly set forth in either written or
spoken words
Implied contract- arise not from words but from the conduct of the parties.
Void contract- not a contract at all. Either its object is illegal or it has some defect so
serious it is not a contract.
Voidable contract- one or both of the parties has the ability to either withdraw from the
contract or enforce it.
Chapter 14
Option contract- the offeree gives the offeror consideration in exchange for holding the
offer open for a specified period of time.
Revocation- the offeror can revoke the offer at any time unless the offeree entered into
an option contract with the offeror. Revocation is effective when the offeree receives it.
Rejection- another way to terminate the offer, effectuated by the offeree. Regardless of
how long the offer was stated to be open, once the offeree rejects it, it is terminated.
Counteroffer- an offer made by an offeree to his offeror relating to the same matter as
the original and proposing a substituted bargain differing from that proposed in the
original offer
o A counteroffer terminates the original offer.
Destruction or subsequent illegality of the subject matter- if the subject matter of the
offer is destroyed or becomes illegal, the offer immediately terminates.
Lapse of time- if the offer states ut wukk be held open for only a certain tie, it
terminates when that time expires.
, o In the absence of such a time condition, the offer will expire after the lapse of a
reasonable amount of time.
Authorized means of acceptance- if the offer specifies that acceptance must be
communicated by a specific mode, that mode is the only means for accepting the offer.
o If no mode of communication is specified in the offer any reasonable means of
acceptance is valid.
Unauthorized means of acceptance- when an offer specifies that acceptance must be
communicated by a particular mode, no their form of acceptance is valid
o Note- for a unilateral contract, only performance by the offeree constitutes a
valid acceptance.
Chapter 15
Consideration- what a person will receive in return for performing a contract obligation.
o Types of consideration
A benefit to the promise
A detriment to the promiser
A promise to do something
A promise to refrain from doing something.
Adequacy of consideration-
o The court seldom considers adequacy of consideration
o The court does not weigh whether you made a good bargain
Exception: if the court believes fraud or undue influence occurred, the
court may look at adequacy of consideration.
Illusory promise
o Is not a promise at all
o An illusory promise is not consideration
o E.g., Shawn offers to sell molly his skis for $300, and Molly responds “ill look at
them in the morning, and I like them, ill pay you”
Enforcement of promise
o For a court to enforce a promise, both parties must provide valid consideration,
consideration by one party only is insufficient to support an enforceable contract.
Preexisting duty rule
o Performance of a duty you are obligated to do under the law is not consideration
o Performance of an existing contractual duty is not good consideration
Partial payment of a debt
o Liquidated debt- no dispute that money is owed or how much
o Unliquidated debt- the parties either disagree about whether money is owed or
dispute the amount- the parties cans settle for less the full amount if they enter
into an accord and satisfaction.
Accord and satisfaction
o Settling to pay an unliquidated debt for less than the full amount required:
The debt is unliquidated
The creditor agree to accept as full payment less than it claims is owed
The debtor pays the amount they have agreed on
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