This essay consists of 3 questions, each to be answered thoroughly to at least 1000 words (more is preferred)QUESTION 1:You are the property acquisition manager for Caruana Industries.Your job is to find properties so that the corporation can build buildings or other structures and develop land.You have found a parcel of land of approximately 50 acres in the City of Oceanside.First of all, if you were going to advise the corporation about how they should acquire the land, what would you advise?In other words, would you recommend that they rent the land on a month-to-month basis or perhaps get a lease or would you recommend purchase?You are concerned about which of the above is the best but assuming that you have come to the conclusion that you would like to purchase the land, how can you be sure that the land is really owned by what appears to be the prior owner, Park Industries?What would you do to verify ownership?Subsequent to deciding to purchase, assume that you are going to go into escrow.Please explain the escrow process and the significance of it. Please detail all of the stages and the issues.In looking at the land that you will subdivide, certain pieces of land, once subdivided, if approved by the City of Oceanside, will need access to major streets and highways.What do we call the right of way that a person may have in going over another piece of property?Please explain what that is and the significance of it. Explain how it is accomplished.Finally, if there are problems with the purchase of the land, the parties may have remedies.When it comes to remedies for real estate deals, please explain what the remedies might be if somebody wants to get out of a deal. Please check your text books for the types of damages and the other remedies. Make sure that you consider rescission as a remedy.———–QUESTION 2:Reliance Steel Products sent a purchase order for certain steel products to Kentucky Electric Steel referred to as KES.Reliance’s purchase order contained a clause stating that Reliance would not be bound by any terms other than those in its purchase order unless it agreed in writing to a change of the terms.KES responded with its standard order acknowledgment form and the form contained a limitation of liability clause that limited KES’s liability for defective goods to replacing the goods or allowing the buyer a credit for them.Reliance later filed a breach of contract suit against KES arguing that some of the goods received did not conform to the contract specifications.Reliance asked for a damage award based upon damage to its fabricating machinery and lost profits that they claimed resulted from KES’s breach.KES obviously argues that such damages are not allowable for several reasons.Please discuss the various positions.First of all, please analyze whether or not there is a valid offer and acceptance.Second, please discuss the various contents of the offer, if any, and the contents of the acceptance, if any.Third, please look into the damages issue as is requested.Please discuss what would have been allowable and not allowable.———-QUESTION 3:Matthew Green, age 16, signed a contract to buy a Camaro from Caruana Chevrolet.Matthew Green is the son of Mark Green, a local businessman, well known by Caruana Chevrolet.The Green family lived about six miles from the dealership.The Green family was friends with the Caruana family.Matthew Green lived about six miles from his school and about one mile from his job and used the Camaro to go back and forth to school and to work. Matthew misrepresented his age by using a false ID card which was an obvious fraud. The photo looked nothing like Matthew. When Matthew did not have the car, he used a car pool to get to school and to work.Matthew’s father drove in the car pool as did several other parents.Several months later, the used car became inoperable due to a blown head gasket and Green gave notice of his rejection of the car and of the contact to Caruana Chevrolet. Caruana Chevrolet refused to refund the purchase price.Caruana Chevrolet had purchased this vehicle at auction for $2,500.00.The sale price to Matthew was $7,000.00.Please discuss the issues contained within this case.Before you get to any subsequent issues, please take a look at the primary issues.————————————————————–Requirements:- analysis of the cases are to be done thoroughly by realizing what term applies to the case and to elaborate as detailed as possible.- I will be providing notes as to be used as a reference in determining what needs to be used- upon completion, I will need a work cited page at the end of the essay please (MLA)
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Contracts
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Consideration
o Bargained for change in your legal standing
o If there has been a detriment to both sides; there is legal consideration
▪ Even if a profit is made on an item there is still a “loss” because the item is still
given up for money
Form of the contract
o A contract is not always required to be in writing
▪ Sometimes things are taken on credibility
• Secondary problem in this is that certain contracts must be in writing
o If you want full recovery
• Remedy of law
o Only foreseeable damages will be awarded
o Compensatory damages
▪ In a contract action the only damages you’ll receive are
compensatory economic damages
• You’ll only get what’s in the contract (the
benefit of the bargain)
o What was expected at the time of the
formation of the contract
▪ Unless there is a tort
• Fraud
o At the time of the fraud you knew the
action to be false
o Rolling back the odometer as an
example
• Misrepresentation
o An honest mistake
o No knowledge of the mistake
• Fraud will get punitive damages,
misrepresentations will get damages
▪ There are times when the judge will give an equitable
decision with his/her power of equitable discretion
o Full recovery items (statutes of fraud)
▪ In place because it is too easy to be dishonest
• Contracts for the sale of land
• Any interest in land that is greater than month
to month
• Contracts to answer for the debt of another
o Don’t cosign on loans unless you LOVE
them
o All partners in business are cosigners in
the business
•
▪
▪
▪
Contracts for the sale of goods over $500.00
o Not services
• Contracts not capable of being performed in
one year
o Lifetime contracts can be oral
• Contracts in contemplation of a marriage
o Pre-nuptial agreements
• Divorce proceedings
o Marriage settlement agreement (MSA)
▪ Binding agreement between
the ex-spouses
▪ MSA do not relieve
responsibility to a third-party
creditor
Rules of writings
• Any documentations listing the essential terms
signed by the person denying the existence of
the agreement was.
o Can be a cocktail napkin
Parole Evidence Rule (PER)
• Where the parties to a contract express their
agreement in a writing, with the intent that this
is final manifestation of the deal, any other
writings made prior to or at the same time of
those writings are inadmissible to change the
terms of the deal.
o Only loophole, if a prior document can
explain an ambiguity it will be examined
Communication in writing should be worded like it is
going to be read in court
Contracts (cont.)
–
Capacity
o Minors
▪ Contracts with a minor are voidable at the option of the minor
• Don’t deal with minors when it comes to business
▪ If dealing with a minor for the necessities of life
• Food, shelter and clothing
• The court will deem that you have a quasi-contract
o A judge has discretion to look at the deal and accept it or
modify it as he/she sees fit.
• There are some potential remedies
o Not automatic
• Exception
o If the kid uses a fake ID (Fraud) you can sue
▪ Can be awarded wear/tear and depreciation
o Intoxicated/Drugged parties
▪ Contract can be voided because there still has not been a thoughtful agreement
• Mentally incompetent due to the effects of the substance abuse
o Insanity (sometimes retarded)
▪ Must be declared insane (decreed)
▪ Voidable at the discretion of the individual
• Represented by an officer of the court
• It will never make it that far after the decree is handed over
Third Party (non-parties)
–
–
Rights and obligations of non-parties
Assignments (of benefit)
o Example: Insurance payment goes directly to the MD vs. the insured
▪ It is assigned to the MD
▪ The rights do not change amongst the parties as long as there is a release (which
will not happen)
Delegations (Duties)
o Can only delegate a very general duty
▪ Cannot delegate artistic work without permission of the other party
Insurance
–
Liability
o
Workers Compensation
o Medical bills paid
▪ The company controls the medical care
o Loss of earnings
▪ By percentage
o
o
o
o
–
–
Disability rating
▪ Lump sum after determining the percentage
Only for unexpected risks of the job
Required by law
▪ Labor code
Covers people within the course and scope
▪ Doubt will almost always go to the employee
▪ Going to or from work is not course and scope
• Unless you perform ANY assistance for the job
o
Group Health
o Covered by ERISA (Employee Retirement Income Security Act) of 1974
▪ If you sue under ERISA you will only get benefit of the bargain
o Required for companies with 50 full time employees
▪ Per the ACA
o HMO
▪ Health Maintenance Org
▪ Will pay 70%-80%
• 60% if you go outside the HMO
▪ Tells the employee that he/she must go to a specific MD
• Cheaper
• Limited in coverage
o PPO
▪ Preferred Provider Org
▪ Will pay 70%-80%
▪ More expensive
• Can lower costs with a higher deductible
• Can lower costs with a co-pay
Four portions of an insurance company
o Sales
▪ Captive Agents
• Works for one company an agent can represent a principal
• When an agent makes a statement on behalf of a principal it is binding
to the principal
• Known and principal and agency law
▪ General Agents
• Represents multiple carriers
• Aka broker
o Need to be authorized to work on behalf of those companies
▪ Authorization = before the fact
o Ratification (captive and general)
▪ When an agent does something without previous
authority and the principal accepts payment
• After the fact
o
o
When you make a representation, it is making an offer
▪ Telling the company what you are insuring
If you misrepresent your offer, the insurer will attempt to not
pay
▪ Void ab intitio: Void from the beginning
o
–
Underwriting
▪ Assess the risk
o Operations
▪ Envelope stuffers
▪ Send correspondence
o Claims
▪ Function is to not pay the claim
• Not your friend
▪ They look at:
• Coverage
o If you were not truthful on what was insured
• Liability
o If I am at fault, they will not pay
• Damages
Must have an insurable interest
o Insured has a stake in the outcome
An insurance company must have communication with the named insured
o Additional insured do not have to be named.
Make sure that our subcontractors have POI before you bring them onto the project
o Make sure that the sub’s insurance has me named under the policy
Insurance Law
–
If the insurance doesn’t pay
o The most you can sue for is the benefit of the bargain
o When there is a breach of contract
▪ Sue for the breach and a tort of bad faith
Contracts (day three)
Undo Pressure
–
–
Physical duress
o Can’t muscle people into a contract
Emotional duress
o Threats cannot be used to influence a decision
o
Economic duress
o If you get a cartel together and force a price down it is illegal
Unclear Contracts
–
Fast maneuvering
o Adhesion contract
▪ Unfair portions can be removed by the judge
• Known as a “Blue pencil”
Breach of Contract
–
–
–
–
Entitled to damages
o Ensure that you have mitigated your issues prior to going into a lawsuit
▪ Must make an effort to cover the losses
o Will get compensatory
▪ Economic damages only
• Unless the cause of action is an insurance bad faith
o That would be a tort
Violating a covenant
o At the heart of the matter (benefit of the bargain)
▪ “you didn’t paint the house”
Violating a condition
o Supports a covenant
▪ “You didn’t get it done in three days.”
Rescission
o Unwinding the deal
Specific performance
o Forcing the judge to do something
▪ “Judge, I want him to pay me.”
Real Estate
–
If it’s not in writing, it doesn’t exist
Recording Statutes
o County recorder
▪ Deed shows title to the property
• Encumbrances (burdens) are listed on title
o Limitations on the property
–
–
–
–
–
Title can be held in many ways
o Start with a title search
▪ Done at the recorder’s office
o Title insurance
▪ Says that if the title is not correct, the title company will buy out or make it right
o Asset check
▪ To ensure that the loan doesn’t default
• Make sure that the funds are available
o Easements
▪ A right of use of a property
• Can be owned by the government
▪ A right of way
• Roadway to the street
o Best way is “fee simple absolute”
Covenants
o If they run with the land, it must be recorded on title
▪ Enforceable by the law
▪ Some historical covenants are no longer enforceable
▪ If the covenant is not bound by the land, it is an agreement between people
• Known as a condition
Zoning
o Public limitation on private use of land
o Public regulation of land
▪ R1
• Residential Normal
▪ R2
• Residential high density
▪ C1
• Commercial Normal
▪ C2
• Commercial high density
o Easier to change than covenants
o Infrastructure
▪ Those services needed to support the community’s use of land
Master plan
o Growth is projected and tends to be smarter
▪ Without the plan there are variances
• Variance means the land is being used contrary to the zoning
o Conditional Use Permit (CUP) helps existing businesses stay in
place even if the zoning changes over time
Multiple Listing Service (MLS)
o Let’s the realtors know that property is for sale
Escrow
o Collects the paperwork and cash between seller and buyer
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PITI
o
o
o
o
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Principal
Interest
Taxes
Insurance
▪ Payed into an impound account
Mello – Roos
o Temporary fee (tax) for the amount of strain placed on the infrastructure.
▪ New construction
▪ Payed via impound to city, state, county
HOA
o Make sure that you know the limitations of the HOA and myself
o Payments are ON TOP of Mello – Roos
Condemnation proceeding
o Government wants your land
▪ Gets around the Constitution
o Emanant Domain
Inverse condemnation
o When a project causes damage to the property
▪ Having the govt pay for it
Nuisance
o When you do something on your property that has an unreasonable interference on
another’s property
o It’s a tort
▪ The tort can defended like any other tort
Contract Law For Dummies®
Visit www.dummies.com/cheatsheet/contractlaw to view this book’s cheat sheet.
Table of Contents
Introduction
About This Book
Conventions Used in This Book
What You’re Not to Read
Foolish Assumptions
How This Book Is Organized
Part I: Introducing Contract Law and Contract Formation
Part II: Determining Whether a Contract Is Void, Voidable, or Unenforceable
Part III: Analyzing Contract Terms and Their Meaning
Part IV: Performing the Contract or Breaching It
Part V: Exploring Remedies for Breach of Contract
Part VI: Bringing Third Parties into the Picture
Part VII: The Part of Tens
Icons Used in This Book
Where to Go From Here
Part I: Introducing Contract Law and Contract Formation
Chapter 1: Getting the Lowdown on Contract Law
Grasping the Concept of Contract Law
Defining contract
Comparing different schools of thought on contract rules
Tracing contract law’s roots
Meeting the Key Players: Common Law, the Restatement, and the UCC
Exploring the common law: Tradition and precedent
Capturing general rules in the Restatement
Statutes: Supplanting common law with codes
Brushing up on the Uniform Commercial Code (UCC)
Applying state law in federal court
Applying different sources of contract law
Forming, Defending, and Interpreting Contracts: The Basics
Understanding contract formation
Checking out attack and defense maneuvers
Finding the terms of the contract and building contract-interpretation
skills
Examining Contract Performance, Breach, and Remedies
Recognizing breach of contract
Formulating remedies and establishing losses
Exploring the role of third parties in contract law
Practicing in the Real World of Contracts
Chapter 2: Let’s Make a Deal: Offer and Acceptance
Contract Formation: Getting a Handle on the Essentials
Forming a Contract: Promises, Offers, and Mutual Assent
Making a commitment by making a promise
Turning a promise into an offer by asking for something in return
Giving acceptance by giving or agreeing to give what was requested in
return
Assenting in action or thought: Objective manifestation versus subjective
intent
Forming contracts without words: The implied-in-fact contract
Determining Whether Language Constitutes an Offer
Distinguishing a preliminary inquiry from an offer
Ads, catalogs, and circulars: Distinguishing advertisements from offers
Deciding How Long an Offer Remains Open
Determining Whether the Offeror Can Back Out: Revoking the Offer
Making an option contract
Recognizing statutes that create an option
Relying on the offer
Deciding Whether the Offer Has Been Accepted
Acceptance must match the offer: The mirror-image rule
Acceptance is effective on dispatch: The mailbox rule
Looking at various forms of acceptance
Making Sense of the “Battle of the Forms” and UCC § 2-207
Deciding whether acceptance is conditional
Dealing with additional or different terms
Chapter 3: Sealing the Deal: The Doctrine of Consideration
Checking an Agreement for Consideration
Using a simple Q and A
Making a diagram
Making Distinctions about Consideration
Deciding whether it’s a bargain or a gift promise
Distinguishing between sufficient and adequate consideration
Detecting an Absence of Consideration
Spotting a phony: Nominal consideration
Applying the pre-existing duty rule
Finding past consideration
Tracking Down Illusory Promises
Dealing with satisfaction clauses
Analyzing output and requirements contracts
Spotting illusory promises in settlements
Too Many Blanks: Distinguishing Contracts from Agreements to Agree
Looking for Consideration Substitutes: Enforcing without Consideration
Evaluating the Recital of Consideration in a Contract Term
Chapter 4: Noting Exceptions: Promises Enforceable without a Contract
Examining Exceptions: When Contracts Aren’t Necessary
The Doctrine of Reliance: Looking for a Promise That Induced Action
Determining whether reliance applies
Limiting the remedy for breach of the promise
Deciding Cases That Test the Limits of Reliance: Promissory Estoppel
Deciding whether a charitable pledge is enforceable
Deciding whether a sophisticated party can claim reliance
Remembering that reliance doesn’t usually qualify as acceptance
The Doctrine of Restitution: Creating an Obligation to Prevent Unjust
Enrichment
Battling unjust enrichment with the implied-in-law contract
Determining when a court is likely to find unjust enrichment
Sorting out restitution in a material breach
Part II: Determining Whether a Contract Is Void, Voidable, or Unenforceable
Chapter 5: Introducing Contract Defenses
Leveraging the Power of Policies
Freedom of contract
Efficiency
Fairness
Predictability
Making the Most of Statutes
Protecting consumers with state and federal statutes
Tapping the power of statutes to bring a contract claim
Examining the Courts’ Role in Policing Contracts
Checking into Affirmative Defenses
Distinguishing valid, void, and voidable contracts
Separating matters of law and matters of fact
Chapter 6: Considering Whether an Agreement Is Unenforceable Due to Illegality
or Unfairness
Determining Enforceability When the Legislature Has Spoken
Recognizing illegal agreements that are unenforceable
Noting exceptions: Illegal but enforceable agreements
Making a Public Policy Argument
Examining enforceability in agreements that restrain trade
Examining enforceability in agreements that interfere with family
relationships
Examining enforceability in agreements that encourage torts
Testing an Agreement against the Doctrine of Unconscionability
Applying the doctrine of unconscionability in the UCC
Distinguishing procedural and substantive unconscionability
Challenging Enforceability with the Doctrine of Reasonable Expectations
Chapter 7: Evaluating the Parties’ Ability to Make the Contract
Recognizing Who Can Legally Make a Contract
Passing the mental capacity check
Child’s play? Making contracts with minors
Basing a Contract Defense on One Party’s Bad Actions
Saying things that aren’t true: The fraud defense
Making an offer they can’t refuse: The duress defense
Taking unfair advantage: The undue influence defense
Whoops! The Mistake Defense
Evaluating a mutual mistake defense
Using the mutual mistake defense to escape a release
Finding relief when the mistake is unilateral
Chapter 8: Assessing the Enforceability of Oral Agreements
Asking Whether the Parties Intended to Orally Form a Contract
Challenging Oral Agreements with the Statute of Frauds
Determining whether a transaction is within the statute of frauds
Distinguishing between voidable and unenforceable agreements
Finding a Writing That Satisfies the Statute
Does it describe the contract?
Is it signed by the party against whom enforcement is sought?
Finding Exceptions to the Statute
Revisiting reliance
Finding an exception in the main purpose rule
Examining part performance and restitution
Finding exceptions in UCC § 2-201
Finding a big exception in international contracts
Part III: Analyzing Contract Terms and Their Meaning
Chapter 9: Evaluating Unwritten Terms with the Parol Evidence Rule
Introducing the Parol Evidence Rule
Identifying Parol Evidence: The Stuff outside the Writing
Asking Why the Evidence Is Being Offered
To prove a modification
To prove a defense to formation
To prove an unfulfilled condition
To prove the meaning of a term
To add a term to the agreement
Deciding Whether the Agreement Is Final and Complete
Recognizing the difference between subjective and objective intent
Figuring out whether the agreement is final
Checking whether the agreement is complete
Dealing with a merger clause that says the contract is final and complete
Considering Evidence That Supplements or Contradicts the Agreement
Contrasting the Common Law with the UCC Parol Evidence Rule
Getting Terms in Writing to Avoid the Parol Evidence Rule Quagmire
Chapter 10: Finding Unwritten Terms That Complete the Contract
Finding the Terms of an Incomplete Contract
Using contract rules to fill the gaps
Understanding types of gap-filling rules
Reading In the Duty of Good Faith
Being honest: The subjective duty of good faith
Being reasonable: The objective duty of good faith
Using freedom of contract to refine the definition of good faith
Working with and around the Default Rules
Recognizing default rules when you see them
Using freedom of contract to change the rules and shift the risk
Protecting Buyers through Warranties
Making express warranties
Looking for an implied warranty of title or warranty against
infringement
Checking for an implied warranty of merchantability
Seeking out an implied warranty of fitness for a particular purpose
Shifting the Risk by Disclaiming or Limiting Warranties
Making warranty disclaimers specific and conspicuous
Limiting the remedy for breach
Drafting a disclaimer of warranty
Recognizing the statutory regulation of disclaimers
Chapter 11: Interpreting Contracts
Grasping the Basics of Ambiguity
Doing the Interpretation Two-Step
Understanding How Courts Decide What’s Ambiguous
Applying the rules of interpretation
Examining the baggage the parties bring to the contract
Bringing in objective meaning from outside the contract
Considering subjective evidence: Context and testimony
Deciding What Something Means
Dealing with Misunderstanding
Part IV: Performing the Contract or Breaching It
Chapter 12: Evaluating Whether Contract Modifications Are Enforceable
Considering Modifications Made during Performance
Determining whether consideration is required
Written requirements: Seeing whether the modification is within the
statute of frauds
Dealing with “no oral modification” clauses
Agreeing to future, unilateral modifications
Making Changes after One Party Fully Performed: Accord and Satisfaction
Determining whether the parties formed an accord: Offer and acceptance
Finding consideration: Doing something additional or different
Finding consideration in unliquidat …
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