Key Legal Concepts: Contracts, Torts, and Liabilities
Key Legal Concepts
1. Negligence
Definition: Failure to exercise reasonable care, resulting in harm to another. Example: A driver runs a red light and crashes into another car, causing injury.
Defenses
- Assumption of risk: Plaintiff knowingly exposed themselves to danger (e.g., someone injured while skydiving).
- Contributory negligence: Plaintiff’s own negligence contributed to the injury (e.g., a pedestrian jaywalking).
2. Offer
Definition: A proposal to form a contract. Example: “I will sell you my car for $5,000.”
3. Firm Offer
Definition: An offer that is irrevocable for a specified period if it is in writing and signed by the offeror. Example: A seller agrees to keep an offer open for 30 days in a signed document.
4. Acceptance
Definition: Agreement to the terms of an offer, creating a contract. Example: Responding “I accept your offer to buy the car for $5,000.”
5. Consideration
Definition: Something of value exchanged for a promise. Example: One person promises to pay $100 in exchange for the other’s promise to deliver a package.
6. Liquidated and Unliquidated Debts
Definition:
- Liquidated Debt: Amount is fixed or agreed upon. Example: A loan with a set repayment amount.
- Unliquidated Debt: Amount is uncertain or disputed. Example: A claim for personal injury damages where the amount is not yet determined.
7. Bilateral and Unilateral Contracts
- Bilateral Contract: Both parties make promises. Example: A contract where one promises to sell a car, and the other promises to pay.
- Unilateral Contract: Only one party makes a promise. Example: A reward offer for finding a lost pet.
8. Express and Implied Contracts
- Express Contract: Terms are clearly stated. Example: A written agreement for services.
- Implied Contract: Formed by the actions or conduct of the parties. Example: Ordering food at a restaurant implies an agreement to pay.
9. Quasi-Contract
Definition: A legal remedy created to prevent unjust enrichment when no contract exists. Example: A person receives emergency medical treatment while unconscious and later must pay for the services.
10. Material Breach vs. Substantial Performance
- Material Breach: A significant failure to perform that justifies terminating the contract. Example: A builder fails to complete a house as per the contract, ruining the deal.
- Substantial Performance: Minor deviations from the contract that do not affect the contract’s purpose. Example: A contractor installs slightly off-colored paint but completes the rest of the job.
11. Mistake as Defense to a Contract
- Mutual Mistake: Both parties misunderstand a basic fact. Example: Both parties mistakenly believe a painting is an original.
- Unilateral Mistake: One party is mistaken. Example: One party misreads a price and agrees to buy a product at an incorrect price.
12. Statute of Frauds as Defense to a Contract
Definition: Certain contracts must be in writing (e.g., real estate, contracts lasting over a year). Example: A contract for the sale of land that is not in writing is unenforceable.
13. Commercial Impracticability as a Defense
Definition: Performance becomes excessively difficult or expensive due to unforeseen events. Example: A supplier can’t deliver goods due to an unexpected natural disaster.
14. Assignment
Definition: Transfer of rights or obligations under a contract. Example: A landlord assigns rent collection rights to a property manager.
Obligor suing Assignee: If the obligor has no obligation to the assignee, they can’t sue them.
15. Delegation
Definition: Transfer of duty to perform under a contract. Example: A contractor delegates the task of plumbing to another plumber.
Obligee suing for Breach: The obligee can still sue the original party for breach.
16. Third-Party Beneficiary Contract
- Donee Beneficiary: Intended to receive a gift. Example: A life insurance policy naming a beneficiary.
- Creditor Beneficiary: Intended to receive payment of a debt. Example: A contract where one party agrees to pay another’s debt.
17. Monetary Damages
Definition: Compensatory Damages: Intended to restore the injured party to the position they would have been in had the contract been performed. Example: A seller sues a buyer who refuses to pay and is awarded the difference between the contract price and market value.
18. Liquidated Damages
Definition: Pre-determined amount for breach of contract, enforceable if reasonable. Example: A contract specifies a $500 penalty for late delivery.
Excessive: If the penalty is unreasonable and punitive, it may not be enforceable.
19. Equitable Remedy: Specific Performance
Definition: Court orders a party to fulfill their contractual obligations. Example: A seller must deliver a rare antique item as agreed.
Limitations: Not used for personal service contracts (e.g., labor contracts).
20. Equitable Remedy: Injunction
Definition: Court order to stop a party from doing something. Example: An injunction to stop a competitor from using a trademark.
21. Mitigation of Damages
Definition: Plaintiff must take reasonable steps to reduce their damages after a breach. Example: A tenant must try to find a new tenant if the original lessee breaches the lease.
22-23. Employment Discrimination Questions
Focus: Title VII of the Civil Rights Act of 1964.
Protected Classes: Race, color, religion, sex, national origin. Example: An employer cannot fire someone because of their gender.
24. Product Liability (Manufacturer and Seller)
Strict Liability: Both manufacturer and seller can be liable for defective products that cause harm. Example: A manufacturer sells a defective car part that causes an accident.
25. Product Liability: Defective Product
Definition: Manufacturer or seller is liable for defects. Example: A defective tire causes a car crash; both the tire maker and seller can be sued.
Fraud – Pre-owned Car
Plaintiff’s Argument:
- False Statement: Defendant falsely claimed to have repaired the car (alignment, transmission fluid, tires).
- Material Fact: These claims were important to the plaintiff’s decision to purchase.
- Intent to Deceive: Defendant knew the repairs weren’t done and intended to deceive.
- Justifiable Reliance: Plaintiff trusted the dealer without independent verification.
- Damages: Plaintiff paid $800 for repairs elsewhere.
Defendant’s Argument:
- No False Statement: Defendant has paperwork showing repairs were made, or if not, it was negligence, not intent to deceive.
- No Argument: Accepts that the facts were material.
- No Intent to Deceive: Claims no intention to deceive, repairs were done.
- Plaintiff’s Fault: Plaintiff should have noticed the tires and raised concerns.
- No Damages: Plaintiff’s damages were self-inflicted or caused by another mechanic.
Negligence – Tool in Doorway
Plaintiff’s Argument:
- Duty: Worker (and employer) had a duty to act reasonably, not place dangerous tools overhead.
- Breach of Duty: Hanging the tool in a dangerous spot was unreasonable.
- Proximate Cause: Tool falling caused plaintiff’s injury.
- Damages: Plaintiff suffered injury leading to medical costs and lost work.
Defendant’s Response:
- Duty: Worker had a duty to be safe.
- Breach: Admits hanging tool was unreasonable.
- Proximate Cause: Admits tool falling caused the injury.
- Harm: Admits plaintiff was harmed.
Defenses:
- Assumption of Risk: Plaintiff saw the tool but chose to walk under it.
- Superseding Cause: An external factor could have caused the accident (unlikely).
- Comparative Negligence: Plaintiff should have seen the tool and acted more carefully.
Torts Cheat Sheet
Problem I: Kramer v. Annika’s Coffee Shop (spilled coffee)
Kramer’s Argument (Plaintiff):
Negligence: Annika’s Coffee Shop breached its duty to serve coffee at a safe temperature. Coffee was too hot, causing severe burns even after carrying it for two blocks. Prior customer burn incidents show Annika’s knew of the danger but failed to act. Damages: Kramer seeks compensation for hospital bills, lost wages, and pain and suffering.
Annika’s Argument (Defendant):
Coffee temperature was reasonable, and most customers were satisfied. Comparative negligence: Kramer breached his own duty of care by carrying coffee dangerously in his pocket. The spill, not the coffee’s temperature, directly caused his injuries. Kramer should have assessed the temperature before transporting it.
Problem II: Buyer v. Seller (Real Estate Fraud) (sold the house without mentioning past murder in the house)
Buyer’s Argument (Plaintiff):
Fraud: Seller concealed material facts (past murder), impacting the resale value. Seller actively deceived Buyer by instructing neighbors to hide the truth. Buyer relied on Seller’s duty to disclose defects and suffered financial damages.
Seller’s Argument (Defendant):
No false statement made; Buyer didn’t ask about the murder. The murder is not material to living conditions or current home value. No intent to deceive; Seller was simply marketing the home positively. Buyer did not perform due diligence (e.g., reading local newspapers).