Contract Law: Promises and Performance

Occurs when one party uses their power over another to get an unfair advantage in a contract.

A situation where one party has the power to influence another's decisions due to authority, fiduciary relationship, or the other party's mental state.

When a contract seems unfair on its face or based on the evidence, it's assumed to be influenced by undue influence. The person with the advantage must prove otherwise.

Intentional acts committed by a party to deceive another and lead them into a contract.

A statement presented as a fact, but the speaker doesn't actually believe it to be true.

Hiding a known fact to deceive someone into a contract.

Making a promise with no real intention of keeping it to trick someone into a contract.

Making a statement that isn't accurate, but the person making it believes it to be true.

A contract where one party (the promisor) agrees to cover the financial losses of another party (the promisee) if the promisee incurs those losses due to a specific event or action.

The party who receives the promise of financial protection in a contract of indemnity.

The party who makes the promise of financial protection in a contract of indemnity.

A contract where one party (the surety) guarantees the performance of a debt or obligation by a third party (the principal debtor) to a creditor.

The person who provides the guarantee in a contract of guarantee.

The person who owes the debt or obligation in a contract of guarantee.

The person to whom the debt or obligation is owed in a contract of guarantee.

A guarantee that applies to a series of transactions, not just one specific debt or obligation.

When a promise requires performance on a specific day but doesn't state that the promisor must wait for the promisee's request, the promisor can perform anytime during usual business hours on that day at the agreed-upon location.

If a promise involves performance on a specific day but requires the promisee's request, the promisee must ask for performance at a suitable time and place during normal business hours.

When a promise requires no application from the promisee and doesn't specify a location, the promisor must ask the promisee to choose a reasonable place for performance.

The promisee can dictate how and when the promise is fulfilled, as long as their instructions align with the original agreement.

In contracts with reciprocal promises (each party promises something), neither party needs to fulfill their promise unless the other party is ready and willing to fulfill theirs.

When a contract with reciprocal promises specifies the order of performance, parties must follow that order. If the order is not explicitly defined, it must be determined based on the nature of the transaction.

The question of a reasonable time to perform a promise depends on the specific situation and is determined based on the facts presented.

The question of what constitutes proper time and place for performance is determined by the specific circumstances of each case.

A bailment contract can be cancelled by the bailor if the bailee acts in a way that goes against the agreed conditions of the bailment.

The bailee is responsible for paying the bailor for any damage caused to the goods if they use the goods in a way not agreed upon in the bailment contract.

If the bailor agrees to mix their goods with the bailee's goods, both parties own shares in the mixture based on their original contribution.

When the bailee mixes goods without the bailor's permission, but they can be separated, ownership remains with the original parties, but the bailee covers costs of separation and any damage.

If the bailee mixes goods without consent and they can't be separated, the bailor gets compensation from the bailee for the loss of their goods.

When the bailee incurs necessary expenses for the bailor's benefit (like storage, transport, or work done), the bailor needs to pay back these expenses.

A lender can ask for a borrowed item back even if it was lent for a specific time or purpose, unless the borrower has suffered losses due to reliance on the loan that exceed the benefit gained.

A contract of bailment is voidable at the option of the bailor if the bailee does any act with regard to the goods bailed, inconsistent with the condition of the bailment.

A finder of lost goods has the right to sue the owner for any specific reward offered for the return of the goods.

A finder of lost goods can retain the goods until they receive compensation for expenses incurred in preserving the goods and finding the owner.

When a lost item is commonly sold, the finder can sell it if the owner cannot be found or refuses to pay the finder's charges. This applies if the item is in danger of perishing or the charges are two-thirds its value.

A bailee who has performed services involving labor or skill in relation to the goods has a right to retain those goods until paid for the services rendered.

Certain types of professionals like bankers, factors, wharfingers, attorneys, and policy brokers have a general lien, allowing them to retain goods as security for a general balance owed by the client.

A pledge is a bailment of goods as security for payment of a debt or fulfillment of a promise. The bailor is called the pawnor, and the bailee is called the pawnee.

The pawnee has the right to retain the goods pledged not only for the debt but also for any interest on the debt and necessary expenses incurred in maintaining the goods.

A pledge is a type of bailment where goods are given as security for a debt or the fulfillment of a promise.

A principal is bound to an agent's actions only within the scope of their authorized authority.

If an agent's unauthorized actions are distinct from authorized actions, the principal is bound only to the authorized part.

If an agent's unauthorized actions cannot be separated from the authorized ones, the principal is not bound by the transaction.

Information given to or acquired by an agent during the course of their work binds the principal, as if communicated directly.

Unless agreed upon, an agent cannot personally enforce or be bound by contracts made on behalf of their principal.

An agent is presumed to have authority to personally enforce or be bound by contracts in specific cases, like contracts made by an agent for a foreign merchant or when the agent's principal is undisclosed.

If a contracting party doesn't know or suspect an agent's involvement, the principal can enforce the contract. But the other party has rights against the principal as if the agent were the principal.

If a principal is disclosed before a contract is finished, the other party can refuse to complete it if they would have declined the contract knowing the principal's identity.