Professional Documents
Culture Documents
Chapter 1:
stare decisis (pronounced ster-ay dih-si-ses) A Latin phrase meaning to stand on decided cases.
administrative A federal, state, or local government agency established to perform a specific function. Administrative agencies are
agency authorized by legislative acts to make and enforce rules to administer and enforce the acts.
administrative The body of law created by administrative agencies (in the form of rules, regulations, orders, and decisions) in
law order to carry out their duties and responsibilities.
allege To state, recite, assert, or charge.
analogy In logical reasoning, an assumption that if two things are similar in some respects, they will be similar in other
respects also. Often used in legal reasoning to infer the appropriate application of legal principles in a case being
decided by referring to previous cases involving different facts but considered to come within the policy underlying
the rule.
appellant The party who takes an appeal from one court to another.
appellee The party against whom an appeal is takenµthat is, the party who opposes setting aside or reversing the judgment.
binding authority Any source of law that a court must follow when deciding a case. Binding authorities include constitutions, statutes,
and regulations that govern the issue being decided, as well as court decisions that are controlling precedents
within the jurisdiction.
breach To violate a law, by an act or an omission, or to break a legal obligation that one owes to another person or to
society.
case law The rules of law announced in court decisions. Case law includes the aggregate of reported cases that interpret
judicial precedents, statutes, regulations, and constitutional provisions.
case on point A previous case involving factual circumstances and issues that are similar to the case before the court.
chancellor An adviser to the king at the time of the early king's courts of England. Individuals petitioned the king for relief
when they could not obtain an adequate remedy in a court of law, and these petitions were decided by the
chancellor.
citation A reference to a publication in which a legal authorityµsuch as a statute or a court decisionµor other source can be
found.
civil law The branch of law dealing with the definition and enforcement of all private or public rights, as opposed to criminal
matters.
common law That body of law developed from custom or judicial decisions in English and U.S. courts, not attributable to a
legislature.
constitutional
Law that is based on the U.S. Constitution and the constitutions of the various states.
law
court of equity A court that decides controversies and administers justice according to the rules, principles, and precedents of
equity.
court of law A court in which the only remedies that could be granted were things of value, such as money damages. In the
early English king's courts, courts of law were distinct from courts of equity.
criminal law Law that defines and governs actions that constitute crimes. Generally, criminal law has to do with wrongful actions
committed against society for which society demands redress.
cyberlaw An informal term used to refer to all laws governing electronic communications and transactions, particularly those
conducted via the Internet.
Cybernotary A legally recognized authority that can certify the validity of digital signatures.
damages Money sought as a remedy for a breach of contract or for a tortious act.
defendant One against whom a lawsuit is brought; the accused person in a criminal proceeding.
defense Reasons that a defendant offers in an action or suit as to why the plaintiff should not obtain what he or she is
seeking.
equitable maxims General propositions or principles of law that have to do with fairness (equity).
executive agency An administrative agency within the executive branch of government. At the federal level, executive agencies are
those within the cabinet departments.
historical school A school of legal thought that emphasizes the evolutionary process of law and that looks to the past to discover
what the principles of contemporary law should be.
independent
An administrative agency that is not considered part of the government's executive branch and is not subject to the
regulatory
authority of the president. Independent agency officials cannot be removed without cause.
agency
jurisprudence The science or philosophy of law.
laches The equitable doctrine that bars a party's right to legal action if the party has neglected for an unreasonable length
of time to act on his or her rights.
law A body of enforceable rules governing relationships among individuals and between individuals and their society.
legal realism A school of legal thought that was popular in the 1920s and 1930s and that challenged many existing
jurisprudential assumptions, particularly the assumption that subjective elements play no part in judicial reasoning.
Legal realists generally advocated a less abstract and more pragmatic approach to the law, an approach that
would take into account customary practices and the circumstances in which transactions take place. The school
left a lasting imprint on American jurisprudence.
legal reasoning The process of reasoning by which a judge harmonizes his or her decision with the judicial decisions of previous
cases.
natural law The belief that government and the legal system should reflect universal moral and ethical principles that are
inherent in human nature. The natural law school is the oldest and one of the most significant schools of legal
thought.
opinion A statement by the court expressing the reasons for its decision in a case.
ordinance A law passed by a local governing unit, such as a municipality or a county.
petitioner In equity practice, a party that initiates a lawsuit.
plaintiff One who initiates a lawsuit.
positive law The body of conventional, or written, law of a particular society at a particular point in time.
positivist school A school of legal thought whose adherents believe that there can be no higher law than a nation's positive lawµthe
body of conventional, or written, law of a particular society at a particular time.
precedent A court decision that furnishes an example or authority for deciding subsequent cases involving identical or similar
facts.
procedural law Rules that define the manner in which the rights and duties of individuals may be enforced.
public policy A government policy based on widely held societal values and (usually) expressed or implied in laws or
regulations.
remedy The relief given to an innocent party to enforce a right or compensate for the violation of a right.
remedy at law A remedy available in a court of law. Money damages are awarded as a remedy at law
remedy in equity A remedy allowed by courts in situations where remedies at law are not appropriate. Remedies in equity are based
on settled rules of fairness, justice, and honesty, and include injunction, specific performance, rescission and
restitution, and reformation.
reporter A publication in which court cases are published, or reported.
respondent In equity practice, the party who answers a bill or other proceeding.
sociological
A school of legal thought that views the law as a tool for promoting justice in society.
school
statute of A federal or state statute setting the maximum time period during which a certain action can be brought or certain
limitations rights enforced.
statutory law The body of law enacted by legislative bodies (as opposed to constitutional law, administrative law, or case law).
substantive law Law that defines the rights and duties of individuals with respect to each other, as opposed to procedural law,
which defines the manner in which these rights and duties may be enforced.
syllogism A form of deductive reasoning consisting of a major premise, a minor premise, and a conclusion.
uniform law A model law created by the National Conference of Commissioners on Uniform State Laws and/or the American
Law Institute for the states to consider adopting. If the state adopts the law, it becomes statutory law in that state.
Each state has the option of adopting or rejecting all or part of a uniform law.
in personam
Court jurisdiction over the person involved in a legal action; personal jurisdiction.
jurisdiction
in rem
Court jurisdiction over a defendant's property.
jurisdiction
voir dire (pronounced vwahr deehr) A French phrase meaning, literally, to see, to speak. In jury trials, the phrase refers to
the process in which the attorneys question prospective jurors to determine whether they are biased or have any
connection with a party to the action or with a prospective witness.
writ of certiorari (pronounced sur-shee-uh-rah-ree) A writ from a higher court asking the lower court for the record of a case.
affidavit A written or printed voluntary statement of facts, confirmed by the oath or affirmation of the party making it and
made before a person having the authority to administer the oath or affirmation.
affirmative A response to a plaintiff's claim that does not deny the plaintiff's facts but attacks the plaintiff's legal right to bring
defense an action. An example is the running of the statute of limitations.
answer Procedurally, a defendant's response to the plaintiff's complaint.
bankruptcy court A federal court of limited jurisdiction that handles only bankruptcy proceedings. Bankruptcy proceedings are
governed by federal bankruptcy law
brief A formal legal document submitted by the attorney for the appellantµor the appellee (in answer to the appellant's
brief)µto an appellate court when a case is appealed. The appellant's brief outlines the facts and issues of the
case, the judge's rulings or jury's findings that should be reversed or modified, the applicable law, and the
arguments on the client's behalf.
closing argument An argument made after the plaintiff and defendant have rested their cases. Closing arguments are made prior to
the jury charges.
complaint The pleading made by a plaintiff alleging wrongdoing on the part of the defendant; the document that, when filed
with a court, initiates a lawsuit.
concurrent Jurisdiction that exists when two different courts have the power to hear a case. For example, some cases can be
jurisdiction heard in either a federal or a state court.
Concurrent
Joint ownership.
ownership
counterclaim A claim made by a defendant in a civil lawsuit that in effect sues the plaintiff.
cross-
The questioning of an opposing witness during a trial.
examination
default judgment A judgment entered by a court against a defendant who has failed to appear in court to answer or defend against
the plaintiff's claim.
deposition The testimony of a party to a lawsuit or a witness taken under oath before a trial.
direct The examination of a witness by the attorney who calls the witness to the stand to testify on behalf of the attorney's
examination client.
discovery A phase in the litigation process during which the opposing parties may obtain information from each other and
from third parties prior to trial.
diversity of Under Article III, Section 2, of the Constitution, a basis for federal court jurisdiction over a lawsuit between (1)
citizenship citizens of different states, (2) a foreign country and citizens of a state or of different states, or (3) citizens of a state
and citizens or subjects of a foreign country. The amount in controversy must be more than $75,000 before a
federal court can take jurisdiction in such cases.
e-evidence A type of evidence that consists of computer-generated or electronically recorded information, including e-mail,
voice mail, spreadsheets, word processing documents, and other data.
exclusive Jurisdiction that exists when a case can be heard only in a particular court or type of court, such as a federal court
jurisdiction or a state court.
federal question A question that pertains to the U.S. Constitution, acts of Congress, or treaties. A federal question provides a basis
for federal jurisdiction.
Federal Rules of
Civil Procedure The rules controlling procedural matters in civil trials brought before the federal district courts.
(FRCP)
hearsay An oral or written statement made out of court that is later offered in court by a witness (not the person who made
the statement) to prove the truth of the matter asserted in the statement. Hearsay is generally inadmissible as
evidence.
interrogatories A series of written questions for which written answers are prepared and then signed under oath by a party to a
lawsuit, usually with the assistance of the party's attorney.
judicial review The process by which courts decide on the constitutionality of legislative enactments and actions of the executive
branch.
jurisdiction The authority of a court to hear and decide a specific action.
justiciable A controversy that is not hypothetical or academic but real and substantial; a requirement that must be satisfied
controversy before a court will hear a case.
long arm statute A state statute that permits a state to obtain personal jurisdiction over nonresident defendants. A defendant must
have minimum contacts with that state for the statute to apply.
motion A procedural request or application presented by an attorney to the court on behalf of a client.
motion for a In a jury trial, a motion for the judge to take the decision out of the hands of the jury and direct a verdict for the
directed verdict moving party on the ground that the other party has not produced sufficient evidence to support his or her claim;
referred to as a motion for judgment as a matter of law in the federal courts.
motion for a In a federal court, a party's request that the judge enter a judgment in her or his favor before the case is submitted
judgment as a to a jury because the other party has not presented sufficient evidence to support the claim. The state courts refer
matter of law to this request as a motion for a directed verdict.
motion for a new A motion asserting that the trial was so fundamentally flawed (because of error, newly discovered evidence,
trial prejudice, or other reason) that a new trial is necessary to prevent a miscarriage of justice.
motion for A motion requesting the court to grant judgment in favor of the party making the motion on the ground that the jury
judgment n.o.v. verdict against him or her was unreasonable and erroneous.
motion for
A motion by either party to a lawsuit at the close of the pleadings requesting the court to decide the issue solely on
judgment on the
the pleadings without proceeding to trial. The motion will be granted only if no facts are in dispute.
pleadings
motion for
A motion requesting the court to enter a judgment without proceeding to trial. The motion can be based on
summary
evidence outside the pleadings and will be granted only if no facts are in dispute.
judgment
motion to A pleading in which a defendant asserts that the plaintiff's claim fails to state a cause of action (that is, has no
dismiss basis in law) or that there are other grounds on which a suit should be dismissed.
opening A statement made to the jury at the beginning of a trial by a party's attorney, prior to the presentation of evidence.
statement The attorney briefly outlines the evidence that will be offered and the legal theory that will be pursued.
pleadings Statements made by the plaintiff and the defendant in a lawsuit that detail the facts, charges, and defenses
involved in the litigation; the complaint and answer are part of the pleadings.
pretrial A conference, scheduled before the trial begins, between the judge and the attorneys litigating the suit. The parties
conference may settle the dispute, clarify the issues, schedule discovery, and so on during the conference.
pretrial motion A written or oral application to a court for a ruling or order, made before trial.
probate court A state court of limited jurisdiction that conducts proceedings relating to the settlement of a deceased person's
estate.
question of fact In a lawsuit, an issue involving a factual dispute that can only be decided by a judge (or, in a jury trial, a jury).
question of law In a lawsuit, an issue involving the application or interpretation of a law; therefore, the judge, and not the jury,
decides the issue.
rebuttal The refutation of evidence introduced by an adverse party's attorney.
rejoinder The defendant's answer to the plaintiff's rebuttal.
relevant evidence Evidence tending to make a fact at issue in the case more or less probable than it would be without the evidence.
Only relevant evidence is admissible in court.
rule of four A rule of the United States Supreme Court under which the Court will not issue a writ of certiorari unless at least
four justices approve of the decision to issue the writ.
rules of evidence Rules governing the admissibility of evidence in trial courts.
service of
The delivery of the complaint and summons to a defendant.
process
small claims Special courts in which parties may litigate small claims (usually, claims involving $5,000 or less). Attorneys are not
court required in small claims courts, and in many states attorneys are not allowed to represent the parties.
standing to sue The requirement that an individual must have a sufficient stake in a controversy before he or she can bring a
lawsuit. The plaintiff must demonstrate that he or she either has been injured or threatened with injury.
summons A document informing a defendant that a legal action has been commenced against him or her and that the
defendant must appear in court on a certain date to answer the plaintiff's complaint. The document is delivered by
a sheriff or any other person so authorized.
venue (pronounced ven-yoo) The geographical district in which an action is tried and from which the jury is selected.
verdict A formal decision made by a jury.
writ of execution A court's order, after a judgment has been entered against the debtor, directing the sheriff to seize (levy) and sell
any of the debtor's nonexempt real or personal property. The proceeds of the sale are used to pay off the
judgment, accrued interest, and costs of the sale; any surplus is paid to the debtor.
• Jurisdiction is who has the authority to hear the case and decide a specific action. Limited to the area of
the state they are in
o Personal jurisdiction – authority of a court to hear case involving the particular parties before
it. Long arm Statue: court can exercise personal jurisdiction over out-of-state defendants based
on activities that took place within the state
o Subject matter jurisdiction – authority of a court to hear the particular dispute before it
o Original jurisdiction – trial courts, and for federal is district courts
o Limited vs. general jurisdiction –
Probate – divide assets after death,
Traffic -
bankruptcy – only federal court handles bankruptcy
o Concurrent or exclusive – two courts have jurisdiction of subject matter with same dispute this is
concurrent. If only one court, it is exclusive.
o Federal judges are appointed for life
o Federal jurisdiction: when a plaintiff’s case is based on U.S. constitution, federal statues or
regulation, or treaty between US and another country, a federal question arises which is under
the federal court system.
o Diversity of citizenship puts the case in federal court and applies if:
Must be more than 75,000 and
Lawsuit is between
• Plantiff and defendant are residents of different states
o Corporation is a resident of both its state of incorporation, and state of its
principal place of business, if the two are not the same
o For this, the laws of the state in which the court resides are applied rather
than federal law.
• Foreign country – and citizens of one or more states or
• Citizens of a state and citizens or subjects of a foreign country
Jurisdiction in Cyberspace
• If you are in New Hampshire and selling in Nevada and have ads in Nevada then you can be sued in
Nevada. If you have a passive ad and aren’t aggressively marketing in Nevada then you have to go to NJ
to sue
• Does the court have jurisdiction? (long arm statute)
• Venue and standing:
o Jurisdiction deals with authority over persons or property and subject.
o Venue within a jurisdiction, most appropriate (or convenient) location for a trial to be held and
from which a jury will be selected. Where did the crime occur, where do the parties in the civil
lawsuit reside (usually defendant),
o Standing to sue: an individual or entity must have a sufficient stake in the controversy before he,
she, or it may bring suit
Whether standing exists, in turn, will depend in part on whether there is a justice able
controversy – that is, a real and substantial controversy, not one that is hypothetical or
academic.
State courts:
• Trial courts – litigation starts, general or limited jurisdiction.
o Divorce adoption, criminal, ticket – municipal courts, small claims court,
• Appellate courts
o Appellate courts review questions of law not questions of fact
o Decisions of state’s highest (court of last resort) or state Supreme Court are final unless they
implicate the U.S. constitution or federal statue. Then they are subject to review by the U.S.
Supreme Court.
Federal courts:
• U.S. District court (trial court) then
• U.S. Circuit courts of appeals – Nevada is in the 9th circuit court of appeals. 12 circuit courts and a 13th
for specific issues then
• U.S. Supreme Court – writ of certiorari (says we the supreme court will hear the case) which requires at
least four justices agree the case merits the court’s review
o Majority opinion must be written
o Minority opinion must be written
Pre-Suit Considerations
• Consulting with an attorney: consult with a qualified attorney
• Legal fees: investigating and prosecuting or defending the case, maybe appeal, and how those fees will
be paid
o Fixed Fees: flat fees excluding expenses for expert witnesses, depositions
o Hourly Fees: based on the attorney’s time, depending on what he was doing e.g. - researching,
engaging in discovery, or before the court
o Contingent Fees: typically set as a percentage or declining percentage, of the damages recovered
in the event of a successful outcome
• Settlement Considerations: the limited time and money a client has to invest in a lawsuit, particularly
when the remedy the client might recover is also limited, may suggest trying to resolve the dispute
without filing suit or early in the litigation process.
Appellate procedure: appeal can be filed on any ruling on any motion, jury’s verdict, award, etc.
• Notice of appeal: filed with clerk of trial court. That person is the appellant or petitioner
• Record of appeal is sent to appeals court, has everything from the trial including transcript and both
lawyers file a brief
• Sent to a higher court: reviews matters of law only. Will reverse facts on rare occasions but must be
grossly negligent. Have to give weight to lower court’s decision.
o Affirm
o Reverse: if trial court erred or jury instructions wrong without further proceedings
o Remand back to trial court for further proceedings consistent with its opinions on the matter
o Reverse or remand part of it
o Modify decision like reduce jury’s award
• Higher courts (state or US Supreme Court) have discretionary power to hear the cases they want to. It is
a privilege, not a right for your case to be accepted by a higher court.
Vocabulary:
adjudicate To render a judicial decision. In the administrative process, the proceeding in which an administrative law
judge hears and decides on issues that arise when an administrative agency charges a person or a firm
with violating a law or regulation enforced by the agency.
adjudication The process of adjudicating. See Adjudicate
administrative One who presides over an administrative agency hearing and who has the power to administer oaths, take
law judge (ALJ) testimony, rule on questions of evidence, and make determinations of fact.
bureaucracy A large organization that is structured hierarchically to carry out specific functions.
enabling A statute enacted by Congress that authorizes the creation of an administrative agency and specifies the
legislation name, composition, purpose, and powers of the agency being created.
final order The final decision of an administrative agency on an issue. If no appeal is taken, or if the case is not
reviewed or considered anew by the agency commission, the administrative law judge's initial order
becomes the final order of the agency
initial order In the context of administrative law, an agency's disposition in a matter other than a rulemaking. An
administrative law judge's initial order becomes final unless it is appealed.
notice-and- An administrative rulemaking procedure that involves the publication of a notice of a proposed rulemaking in
comment the Federal Register, a comment period for interested parties to express their views on the proposed rule,
rulemaking and the publication of the agency's final rule in the Federal Register.
rulemaking The process undertaken by an administrative agency when formally adopting a new regulation or amending
an old one. Rulemaking involves notifying the public of a proposed rule or change and receiving and
considering the public's comments.
Class notes 1/31/2010:
• Administrative agencies:
o Executive agencies - Some subject to president’s authority
o Independent agencies are appointed by president but can’t be removed without just cause
o Administrative agencies constitute the bureaucracy and are sometimes referred to as the 4th
branch of government ;but are really part of the executive branch.
o Congress can affect the agencies by not funding them or passing additional legislation relating
the agencies
• Congress passes legislation to enable an agency – enabling legislation has powers, functions, purpose,
name. Agency can’t do more than the enabling legislation allows them to do.
o Agency does all the details to create the rules
o Was gap filling agency – agencies would fill in all the gaps of laws
o Pumped up prices and wages, national recovery and industrial act
Pres came up with fair trade codes during post depression era.
• Supreme court overruled them
o
• Judicial review of agency actions
o Federal court can hold unlawful and set aside actions the court finds to be arbitrary, capricious,
and abuse of discretion or otherwise not allowed in accordance with law upon appeal.
Among the factors consider include whether the agency:
Failed to rationally explain its action
Changed its prior policy without justification
Considered legally inappropriate factors
Ignored a relevant factor or
Rendered a decision plainly contrary to the evidence
o Chevron deference: federal court should defer to an agency’s reasonable interpretations of the
scope of its legal authority unless the agency’s interpretation I contrary to the unambiguous
language of a federal statue addressing the agency’s authority.
Administrative rule Making:
• Notice of proposed ruling in the Federal Register to have a hearing
• Comment period – allow time for public comment. Doesn’t have to respond to all but to significant ones
. Exparte (off the record should also be considered.
• Final rule – published in federal register. Public must then abide by it.
• Interpretive rules – they can say that the rule was part of the original intent of the rule that was published
and it was just a clarification. They are trying to interpret what congress wanted. These don’t have the
force of law.
Agency investigations
• Most businesses comply with the agencies.
o If you don’t they get a subpoena compelling them to cooperate
Subpoena duces tecum – provide records
Subpoena ad testificatum – provide testimony
o Search warrant compelling to make available
• To decide if agency overstepping bounds courts consider
o Whether the investigation has a legitimate purpose
o The relevance of the information sought
o The specificity of the agency’s demand for testimony or documents
o The burden the demand places on the entity
Agency adjudication
• Agency takes action against an entity to and tries to seek voluntary compliance. If that fails:
o Formal complaint is filed, answer must be submitted
o Discovery
o An Administrative Law Judge of that agency such as OSHA hold an administrative law judge
trial
o ALJ issues initial order can be appealed to board of commissioners
o Can be appealed to federal circuit court of appeals, supreme court
o After appeals, then the final order is in effect
Limitations on agency powers
• Judicial controls: subject to judicial review. Must have:
o Standing to sue
o Actual controversy
o Exhausted all administrative remedies
Courts defer to agency fact finding actions and generally review agency decisions for
procedural irregularity, failure to interpret, lack of evidence, constitutional issues, abuse
of power
• Executive control – can veto money funding
• Legislative controls: stop or reduce money, review enabling legislation, controls appropriations (subject
to executive veto), congress may also freeze the implementation of new rules before they take effect.
Public accountability
• Freedom of information act: agency must disclose certain records to any person on request subject to
restrictions as to time and place and electronically within one year.
• Sunshine legislation: subject to specified exceptions, agency meetings must be noticed to the public and
open for public observation
• Regulatory flexibility act (RFA): when a new regulation will have a significant impact upon substantial
number of small business, agency must consider less burdensome alternatives, notify small business
about forthcoming info, and reduce the record-keeping responsibilities of small businesses.
• Small business regulatory enforcement fairness act: must explain regulations in plain English, hires
ombudsmen to receive comments and complaints from small businesses to recover expenses and legal
fees incurred due to excessive agency demands.
Chapter 9:
Vocabulary:
acceptance In contract law, the offeree's notification to the offeror that the offeree agrees to be bound by the terms of the
offeror's proposal. Although historically the terms of acceptance had to be the mirror image of the terms of the
offer, the Uniform Commercial Code provides that even modified terms of the offer in a definite expression of
acceptance constitute a contract.
adhesion A standard-form contract, such as that between a large retailer and a consumer, in which the stronger party
contract dictates the terms.
agreement A meeting of two or more minds in regard to the terms of a contract; usually broken down into two eventsµan offer
by one party to form a contract, and an acceptance of the offer by the person to whom the offer is made.
assignment The act of transferring to another all or part of one's rights arising under a contract.
consideration Generally, the value given in return for a promise. The consideration, which must be present to make the contract
legally binding, must be something of legally sufficient value and bargained for and must result in a detriment to the
promisee or a benefit to the promisor.
contract An agreement that can be enforced in court; formed by two or more parties, each of whom agrees to perform or to
refrain from performing some act now or in the future.
counteroffer An offeree's response to an offer in which the offeree rejects the original offer and at the same time makes a new
offer.
covenant not to A contractual promise to refrain from competing with another party for a certain period of time (not excessive in
compete duration) and within a reasonable geographic area. Although covenants not to compete restrain trade, they are
commonly found in partnership agreements, business sale agreements, and employment contracts. If they are
ancillary to such agreements, covenants not to compete will normally be enforced by the courts unless the time
period or geographic area is deemed unreasonable.
delegation The transfer of a contractual duty to a third party. The party delegating the duty (the delegator) to the third party
(the delegatee) is still obliged to perform on the contract should the delegatee fail to perform.
estop To bar, impede, or preclude.
exculpatory A clause that releases a contractual party from liability in the event of monetary or physical injury, no matter who is
clause at fault.
express contract A contract in which the terms of the agreement are fully and explicitly stated in words, oral or written.
implied-in-fact
A contract formed in whole or in part from the conduct of the parties (as opposed to an express contract).
contract
incidental A third party who incidentally benefits from a contract but whose benefit was not the reason the contract was
beneficiary formed; an incidental beneficiary has no rights in a contract and cannot sue to have the contract enforced.
intended A third party for whose benefit a contract is formed; an intended beneficiary can sue the promisor if such a contract
beneficiary is breached.
mailbox rule A rule providing that an acceptance of an offer becomes effective on dispatch (on being placed in a mailbox), if
mail is, expressly or impliedly, an authorized means of communication of acceptance to the offeror.
mirror image rule A common law rule that requires, for a valid contractual agreement, that the terms of the offeree's acceptance
adhere exactly to the terms of the offeror's offer.
mutual assent The element of agreement in the formation of a contract. The manifestation of contract parties' mutual assent to
the same bargain is required to establish a contract.
offer A promise or commitment to perform or refrain from performing some specified act in the future.
past An act done before the contract is made, which ordinarily, by itself, cannot be consideration for a later promise to
consideration pay for the act.
promise A declaration that something either will or will not happen in the future.
promissory A doctrine that applies when a promissory makes a clear and definite promise on which the promisee justifiably
estoppel relies; such a promise is binding if justice will be better served by the enforcement of the promise.
revocation In contract law, the withdrawal of an offer by an offeror. Unless an offer is irrevocable, it can be revoked at any time
prior to acceptance without liability.
Statute of Frauds A state statute under which certain types of contracts must be in writing to be enforceable.
third party
One for whose benefit a promise is made in a contract but who is not a party to the contract.
beneficiary
voluntary Knowing and voluntary assent to the terms of a contract. If a contract is formed as a result of a mistake,
consent misrepresentation, undue influence, or duress, genuineness of assent is lacking, and the contract will be voidable.
(genuineness of
assent)
Contractual capacity
• Instances where one is not bound by contracts
o Minors – can disaffirm contract even after 18, but must cancel entire contract and not just part of
it.
Status ends at 18 in most states
Status ends at marriage
Status ends at emancipation
o Intoxicated person – must prove that they couldn’t comprehend legal consequences
o Mentally impaired or incompetent persons can’t act reasonably
Adjudicated incompetent, contract is void
Only contracts entered into by guardian are valid
Illegality
• Illegal contract void – clause or contract may be illegal even in the absence of a specific statue
prohibiting the action promised in the contract
• Some provisions in a contract are contrary to statues and therefore are illegal
o Contracts to commit crime – even if the act became illegal AFTER the contract is made, it is still
unenforceable
o Usury – maximum rate of interest that can be charged. Contracts that exceed this have different
rules per state of what the loan company can recover.
o Gambling – distribution of property by chance among persons paying consideration for that
chance
o Licensing statues – unlicensed professional workers may be agreeing to unenforceable contracts
because the work they perform requires a license.
Statue of Frauds – denies enforceability to certain contracts that don’t meet its requirements. These contracts
fall under this statue and require it be in writing
• Contracts that must be in writing
o Interests in land
o Cannot be performed within one year from the date of formation
o Promises made in consideration of marriage
o Under the UCC, contracts for the sale of goods priced in excess of $500
• Promissory estoppel exceptions:
o If the promisor could foresee that the promisee was going to detrimentally rely on the
promise, and if injustice could be avoided only by enforcing the promise then it will be
enforced
3rd party rights – one party has a right require another party to perform, and the other party has a duty to
• Rights can be assigned from the original assignor to an assignee and this will terminate all rights
the assignor had. Some statues prohibit certain rights from being assignable and contracts that
are personal in nature cannot be assigned unless the only thing left is $.
• Some contracts can prohibit the assignment of rights, the following cannot be prohibited
o The right to receive payment
o Ownership rights in Real Estate
o Assignment of Negotiable Instruments
o In the sale of goods: the right to receive damages for breach or payment of owed money
• Transferring duties is called delegation. The original party (delegator) is still on the hook though
if the new people (delegatee) don’t perform.
• Delegation is prohibited in the following circumstances:
o When special trust has been placed in the obligor
o Performance depends on the special skills or talents of the obligor
o When performance by a 3rd party will vary materially from that expected by the oblige
o When contract expressly prohibits delegation
Third parties can be involved in a contract without signing
• If a 3rd party is designated and the beneficiary of a contract they are called the 3rd party
beneficiary
• They can then sue the promisor directly for breach of contract if need be
o An incidental beneficiary is not important to the contract, so has no rights to sue.