Chapter 11 - Business Law

an agreement not to compete, must be part of a larger agreement
Ex. Sale of Business, Employment

Noncompete agreements related to the sale of a business are enforceable if reasonable in time, activity, and territory

must have: reasonably necessary for the protection of the employer, provide a reasonable time limit, reasonable geographic limit, not harsh or oppressive to the employee, not contrary to public policy

A contract provision that attempts to release one party from liability in the event the other is injured
unenforceable when;
Attempts to exclude an international tort or gross negligence
Affected activity is in the public interest, such as medical care, public transportation, essential service
Parties have greatly unequal bargaining power
Unless the clause is clearly written and readily visible

a contract a court refuses to enforce because of fundamental unfairness, factors are oppression and surprise

one party uses its superior power to force a contract on the weaker party

meaning that the weaker party did not fully understand the censuses of its agreement

make a contract voidable

legal ability to enter into a contract (minors cause problem)

lack legal capacity therefore can only create voidable contract (only the party lacking capacity can cancel agreement)

to give notice of refusal to be bound by an agreement (minors option)

to cancel a contract, files to court to formally cancel it

a minor who disaffirms a contract must return the consideration he has received, to the extent he is able

provides that if a minor cannot return the consideration, the adult or store is only required to return its profit margin to the minor

refers to whether a party truly understood the terms of the contract and whether she made the agreement voluntarily

Fraud, Mistake, Duress

1. the defendant knew that his statement was false or that he made the statement recklessly and without knowledge of whether it was false
2. the false statement was material (important)
3. the injured party justifiably relied on the statement

Rescinding the contract, suing for damages, or both.

Unilateral, Mutual

Occurs when only one party enters a contract under a mistaken assumption

Must prove one:
the nonmistaken party knew or had reason to know of the error
the mistake is mathematical or mechanical alone
enforcing the contract would unconscionable

occurs when both parties negotiate based on the same factual error

if one party makes an improper threat that causes the victim to enter into a contract, and the victim had no reasonable alternative, the contract is voidable

Acts that have no legitimate business purpose
Greatly unequal bargaining power
An unnaturally large gain for one party
Financial distress to one party

A relationship between the two parties either of trust or of domination
Improper persuasion by the stronger party

agreements that must be in writing
For the transfer of land
cannot be performed within one year
promises to pay debt of another
executor of an estate to pay a debt of the estate
consideration of marriage
sale of goods of \$500 or more

Full performance by Seller, Part performance by the Buyer

Must be signed by the defendant
Must state with reasonable certainty the name of each party, the subject matter of the agreement, and all of the essential terms and promises

contract is not enforceable unless there is some writing, signed by the defendant, INDICATING that the parties reached an agreement

anything said, done, or written before the parties signed the agreement or as they signed it is inadmissible

a writing that the parties intend as the final, complete expression of their agreement

When two parties make an integrated contract, neither one may use parol evidence to contradict, vary, or add to its terms