Business Law unit 6
Truly Blessed
Unit6readingBusinessLaw.ppt| Fundamentals of Business Law Summarized Cases, 8th Ed., and Excerpted Cases, 2nd Ed. | |
| ROGER LeROY MILLER Institute for University Studies Arlington, Texas | GAYLORD A. JENTZ Herbert D. Kelleher Emeritus Professor in Business Law University of Texas at Austin |
*
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Learning Objectives
- In what types of situations might genuineness of assent to a contract’s terms be lacking?
- What is the difference between a mistake of value or quality and mistake of fact?
- What elements must exist for fraud to occur?
- What contracts must be in writing to be enforceable?
- What is parole evidence? When is it admissible to clarify the terms of a written contract?
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Mistakes
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Mistakes
- Mistake of Value (or Quality).
- Contract is enforceable.
- Mistake of Fact.
- Unilateral Mistake of Material Fact—mistaken party does not have the right to cancel contract unless:
- (1) the non-mistaken party knew or should have known about the mistake, or
- (2) there is a clerical error.
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Mistakes
- Bilateral (Mutual) Mistakes—if both are mistaken either one can cancel the contract.
- CASE 10.1 Inkel v. Pride Chevrolet-Pontiac, Inc. (Vermont, 2008).
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Fraudulent Misrepresentation
- Innocent party can cancel the contract.
- Plaintiff must show:
- Misrepresentation of a material fact (not opinion) by conduct, silence or words.
- Intent to deceive.
- Innocent party must have justifiably relied on the misrepresentation.
- Plaintiff must have suffered a legal injury.
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Undue Influence and Duress
- Undue Influence.
- Arises from a special relationship of trust.
- A stronger party overcomes a weaker party’s free will by exerting psychological influence.
- Duress.
- Threat of physical force or extortion.
- Can serve as basis for rescission of contract.
- Economic need, by itself, is not duress.
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Statute of Frauds: The Requirement of a Writing
- Statute of Frauds requires certain contracts to be in writing and signed to be enforceable.
- A contract involving an interest in land.
- A contract that by its terms cannot be performed within 1 year of execution.
- Collateral contracts to answer for the debt of another.
- Prenuptial agreement.
- Contracts for sale of goods over $500.
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
One Year Rule
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Exceptions to Statute of Frauds
- Partial performance.
- Purchaser has paid part of purchase price, taken possession and made valuable improvements to property.
- CASE 10.2 School-Link Technologies, Inc. v. Applied Resources, Inc. (Kansas, 2007).
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Exceptions to Statute of Frauds
- Admissions.
- Party admits in court records contract exists.
- Promissory Estoppel/Detrimental Reliance.
- Promisee justifiably relies.
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Sufficiency of the Writing
- “Writing” includes memorandum, invoice, fax, check, email.
- Essential terms sufficient.
- Signed by party against whom enforcement is sought (Defendant).
- Initials of Defendant adequate.
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Contracts Subject to
the Statute of Frauds
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Parol Evidence Rule
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Parol Evidence Rule
- Prohibits the introduction at trial of evidence of the parties prior communications that contradicts the written contract.
- CASE 10.3 Yocca v. Pittsburgh Steelers Sports, Inc. (Penn., 2004).
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Parol Evidence: Exceptions
- Exceptions (allow parol evidence):
- Evidence of subsequent contract modifications
- Oral evidence to show contract was void or voidable.
- Show meaning of ambiguous Terms.
- To “fill in the gaps.”
- Prior Dealings, course of performance, usage in trade.
- Obvious or gross clerical errors.
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
Integrated Contracts
- Is the written contract intended to be a complete and final statement of the terms of the agreement?
- If “yes”, then the contract is “integrated.”
- Can be fully or partially integrated.
- Courts exclude any parol evidence that contradicts the writing.
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.
*
