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Management and Organizational Studies
Management and Organizational Studies 2275A/B

Business Law Chapter Notes 10/20/2013 8:21:00 AM - Importance of Enforcing Contracts  Legal doctrines developed through common law and statue - Doctrines categorized on the basis of  Unequal relationship between the two parties o Legal Capacity: Ability to make binding contracts  Minors: Age of Majority: When a person becomes an adult for legal purposes  Minors are not obligated to the contracts signed  Contracts are voidable at the option of the minor  When minors reach age of majority there is no impact on contracts formed while underage  Mental Incapacity  Both parties must be able to understand the nature and consequences of the agreement  If someone was impaired while entering a contract and the other party had knowledge of it then the contact is voidable o Duress  Economic Duress: Threat of economic harm that uses the will of the other party and results in a contract  The contract is voidable by the party under duress o Under Influence: Unfair manipulation that compromises someone’s free will  Actual Pressure: A transaction arises and one party has exerted unfair influence on the other  Party who seeks relief must show influence existed  Presumed Pressure: The relationship that already exists brought about unfair manipulation of the other o Unconscionability Contract: Formed when one party takes advantage of the weakness of another  Proof of Inequality Between Parties  Due to unsophistication, lower economic standing, lacks language ability. Never on equal terms  Proof of Exploitation  Terms greatly advantage one party  People risk everything for no return  Misrepresentation or important mistakes concerning the contract o Misrepresentation of Relevant Facts  One party provides on partial information  One party actively conceals the truth  One party neglects to correct an untrue assertion  Parties are i
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