Week 3 Study Guide: Contracts and Property Law

Study Guide
LAW/531 Version 9 / 1

Week 3 Study Guide: Contracts and Property Law

Readings and Key Terms

· Ch. 7 of Business Law

o Intellectual property

o Trade secrets

o Patents

o Public use doctrine

o Copyrights

o Fair use doctrine

o Trademarks

· Ch. 9

o Traditional contracts

o E-contracts

o Agreement

o Consideration

o Capacity

o Lawful object

o The Uniform Commercial Code

o The Uniform Computer Information Transaction Act (UCITA)

o Bilateral contracts

o Unilateral contracts

o Formal contracts

o Informal contracts

o Valid contracts

o Void contracts

o Unenforceable contracts

o Implied in law contract

· Ch. 10

o Agreement

o Offer

o Acceptance

· Ch. 11

o Consideration

o Promissory estoppel

· Ch. 12

o Capacity

o Legality

· Ch. 14

o Statute of Frauds

o Equitable Exceptions

· Ch. 47

o Personal property

o Bailment

o Mislaid property

o Lost property

o Abandoned property

o Accession

· Ch. 48

o Real property

o Subsurface rights

o Fee simple absolute

Content Overview

· Intellectual property and cyber piracy

o Intellectual property laws, both federal and state, protect consumers against infringement on their trade secrets, patents, copyrights, and trademarks.

o Trade secrets are categorized as product formulas, patterns, designs, compilations of data, and customer lists.

o Patent protection is afforded to inventions such as machines, processes, compositions of matter, improvements to existing machines, processes, or compositions of matter, asexually produced plants and living material invented by a person. These are utility patents. Design patents are also available for ornamental nonfunctional design of something.

· Requirements for obtaining a patent are that the invention must be novel, useful, and nonobvious.

· Public use doctrine states that no patent will be granted if the invention was used by the public for more than one year prior to the filing of the patent application.

o Copyright gives an author the legal right to publish, produce, sell, license and distribute his or her work.

· Copyright period for individuals is the life of the author plus 70 years

· Copyright period for business is the shorter of 95 years from publication or 120 years from creation

· Fair use doctrine permits anyone limited use of copyrighted material

o Trademark gives protection through the Landham Act to any trade name, symbol, word, logo, design, or device used by a company to identify that product.

· Nature of traditional and e-contracts

o For a contract to be enforceable, certain elements must exist.

· Agreement: the contract must have an offer and acceptance between the parties.

· Consideration: there must be an exchange of money, personal property, real property, services or other bargained for consideration.

· Capacity: the parties must have contractual capacity.

· Lawful object: the contract must be for legal objects.

o Contract law is governed by common law and the Uniform Commercial Code.

o The Restatement of the Law of Contracts is not law, but rather is used to provide guidance to lawyers and judges.

· Common law governance developed through the court system.

· The Uniform Commercial Code creates a uniform system of codified laws among the 50 states that generally take precedence over the common law.

· The Restatement (Second) of the Law of Contracts is a compilation of contract law principles but is not law.

· The Uniform Computer Information Transaction Act, (UCITA) establishes legal rules for the formation and enforcement of electronic contracts and licenses.

o Contracts are classified as bilateral, unilateral, formal, and informal and are valid, void, voidable, or unenforceable.

· Bilateral contracts exist where there is a promise for a promise.

· Unilateral contracts exist where acceptance of the offer is by the performance of the other party.

· Formal contracts require a special form or method of creation.

· Informal contracts have no special form or method of creation but are valid and can be sued upon.

· Valid contracts satisfy all of the elements of contract formation.

· Void contracts have no legal effect.

· Voidable contracts allow one or both parties to void the contract.

· Unenforceable contracts have satisfied the formation requirements but there is a legal defense available.

· Implied in law contract is an equitable doctrine when monetary damages can be awarded, even though no contract existed.

· Agreement

o An agreement is a voluntary exchange of promises between two or more people that require mutual assent to perform contractual terms, whereas a contract takes agreement further by requiring that an offer and acceptance take place.

· Offer is the manifestation by someone to enter into a bargain and must objectively intend to bind the offeror, its terms must be definite and must be communicated to the offeree.

· Offers can be revoked by the offeror any time prior to acceptance.

· Rejection of the offer by the offeree by express words or conduct is acceptable.

· Acceptance of the contract is complete by a manifestation of assent by the offeree to the terms of the offer.

· Rules for acceptance are governed by unequivocal acceptance, mirror image rule, mailbox rule, or by any authorized means of communication.

· Consideration and promissory estoppel

o Consideration is where something of value is given for a promise in return. The requirements for consideration are:

· Legal value

· Bargained-for exchange

o Promises that lack consideration are promises that are illegal, are illusory, where a preexisting duty to perform the act is present or where past consideration exists.

o Promissory estoppel allows for a court to enforce a contract where consideration does not exist and usually takes place where someone has relied upon a promise made.

· Capacity and legality

o Capacity to contract is something that the common law has recognized by protecting minors, insane persons, and intoxicated persons from having contracts enforced against them.

· Minors are any persons who have not reached the age of majority and are protected by the infancy doctrine which states that minors can cancel contracts with adults in most situations.

· Insane persons are deemed to not have the mental capacity to enter into contracts and, therefore, will not be bound by its terms.

· Intoxicated persons can void the contract with another. However, the other party cannot void the contract with the intoxicated person.

o Legality requires that the object of the contract must be legal to be enforceable.

o Unconscionable contracts will not be enforced if the parties to the contract had significant differences in bargaining power, if one of the parties used his or her unequal bargaining power to obtain favorable terms, or the adhering party had no reasonable alternative.

· Statute of frauds and equitable exceptions

o Statute of Frauds requires that certain transactions must be in writing to be enforceable.

o The Uniform Commercial Code establishes statutes of frauds for sales and lease contracts. Section 2-201(1) deals with sales contracts and Section 2A-201(1) with lease contracts

o Equitable exceptions to the Statute of Frauds exist in the form of part performance and promissory estoppel.

· Part performance allows for oral contracts involving property to be enforced if partial performance of the terms has been completed.

· Promissory estoppel allows enforcement of oral contracts where a writing is required.

· Personal property and bailment

o Personal property is everything that is not real property and includes tangible property, fixtures, and intangible property.

o Ownership of mislaid, lost, or abandoned property varies depending on its categorization.

· Mislaid property occurs when the property is left somewhere and forgotten. Possession of that property is given to the owner of the property where the mislaid property resides until the real owner claims it.

· Lost property must be returned to the rightful owner and occurs where it is left somewhere due to the owner’s negligence, carelessness, or inadvertence.

· Abandoned property has been discarded by the owner and the finder of that property acquires title.

· Accession occurs when the value of personal property increases because of improvements by natural or manufactured means.

o Bailment occurs when property is given to another person who is to hold or store it, or is given for some other agreed to purpose.

· Bailor is the person who owns the property in a bailment arrangement

· Bailee is the holder of the goods

· Real property

o Real property is immovable or is attached to land or buildings and includes trees, plants and anything else that is permanently attached to land.

o Land owners possess subsurface rights which include mineral rights

o Fee simple absolute, (also known as fee simple) is an estate to real property containing all of the possessory rights, without limits, for all of time, and does not end with an event.