Business Law (Ch. 5 —> Ch. 12) – Flashcards
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Any agreement enforceable by law
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Contract
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Exchange of items of equal value
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Equity Theory
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Create both moral and legal obligations.
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What do contracts do?
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Are not contracts and not enforceable by law. (Prom date).
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Social Arrangements
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Wether the parties agreed to the terms set forth by the contract without duress.
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Will Theory
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What parties were thinking when a contract was laid out.
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Formalist Theory
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Proposal from one part to another.
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Offer
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Willingness by the offeree to go along with the proposed contract.
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Acceptance
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Meeting of the minds.
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Mutual Assent
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Any promise that requires bargaining.
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Consideration
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Both parties must be legally competent in order to contract.
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Capacity
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Purpose of a contract must be to accomplish a legal goal, contracts agreeing to illegal acts are not enforceable in court.
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Legality of Subject Matter
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Legally binding.
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Valid
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If a contract is missing legal elements, the there is no contract.
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Void
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When you can cancel a contract
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Voidable
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Contract exists, but cannot enforce because of legal defense or court order.
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Unenforceable
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Formed by words (oral or written)
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Express Contract
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A contract formed by conduct.
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Implied Contract
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A promise for a promise.
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Bilateral Contract
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A promise for an act.
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Unilateral Promise
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Contract formed by of mouth.
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Oral Contract
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Contract formed in writing, proof of agreement.
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Written Contract
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Imposed to prevent unjust enrichment (take advantage of minors).
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Quasi Contract
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Contract requiring a special form.
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Formal Contract
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No special form required to contract.
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Informal Contract
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A contract which has been fully performed.
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Executed Contract
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A contract that has not yet been completed.
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Executory Contract
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Agreement to agree are to vague and do not constitute a contract.
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Agreements to Contract
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To withdraw an offer.
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Termination/Revocation
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When an offeree refuses a proposal by word or deed.
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Rejected
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When the physical material of a contract is destroyed and the contract is voided.
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Destruction of Material
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Lacks capacity to contract; contract is void.
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Death or Incompetence
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No response does not constitute acceptance.
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Silence
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When a sellers actions prevent the buyer from learning all of the facts.
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Concealment
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Ignorance of the law does not excuse concealment.
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Misrepresentation of Law
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Neither party has duty to announce facts.
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Misrepresentation by Silence
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Deliberate deception intended to secure an unfair or unlawful gain
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Fraud
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To cancel a contact
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Rescind
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Any fact that is important to one of the parties.
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Material fact
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Choice to not reveal important information; just as bad as fraud.
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Concealment
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False representation Party making it must know it is false Made with intent to rely upon falsity Innocent party must rely on the fact Innocent suffer monetary loss.
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Five elements of fraud
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Mistake by one party, cannot use to avoid contract.
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Unilateral Mistake
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Not aware what contract entails. Bound to it.
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Mistake of nature
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Voids a contract.
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Mistake of Identity
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Mutual mistake. Either party can avoid contract.
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Bilateral Mistake
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Mistaken as the identity of the subject matter.
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Mistake of subject matter
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Overcoming ones will; agreements made under this are voidable.
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Duress
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Threats to ones business or income that destroy a persons free will to avoid a contract.
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Economic duress
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Can cause a contract to be voidable, unfair and improper persuasive pressure.
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Undue Influence
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Permission by law to assume both parties have the power to contract; challenges or in court.
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Rebuttable presumption.
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Legal age of adulthood.
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Majority
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Person below legal age of adulthood.
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Minority (Minor)
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Day before birthday, law doesn't count fractions of days in ones life.
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Age of Majority
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Minors no longer in control of their parentsz
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Emancipated
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Giving up adult protection of minors.
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Abandoned
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Minor lies about age, may or may not be sued depending on state. Can be sued for fraud.
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Misrepresentation of age
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Void their contracts, but only the entire thing.
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Minors can
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Contracts are ratified upon age of majority when minors use goods and services at the age.
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Ratify
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Minor is responsible for fair value of necessaries.
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Necessaries
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A person appointed to look after a person lacking capacity.
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Guardian
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Can disaffirm contracts made when they were drunk.
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Intoxicated Persons
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People living in he country who owe allegiance to another one.
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Aliens
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Exchange of benefits and detriments.
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Consideration
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Something a party was not entitled to revive.
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Benefit
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Any loss suffered.
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Detriment
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Law supports anything bargained for.
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Bargained for Exchange
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When consideration of a contract is out of line.
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Unconscionable
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An agreement not to sue.
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Release
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A charity must carry out task collecting money for.
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Pledge
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Way a dispute is settled
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Accord and Satisfaction
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Acceptance from creditor of what has been billed.
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Accord
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Agreement reached in accord.
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Satisfaction
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Stop contracting.
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Promissory estoppel
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Irrevocable offer.
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Firm offer
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Promise to keep offer open for a period of time
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Option
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Appear to be a contract but actually isn't.
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Illusory promise
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Something already done, not recognized by courts
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Past consideration
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Under legal obligation to do something
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Preexisting duties.
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Good reputation of a business
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Goodwill
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Competitions agreement to sell products at a certain cost.
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Price fixing
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Required in certain fields
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License
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Demand of higher rate of insurance than allowed by law.
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Usury
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Promises not to compete
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Restrictive covenants
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Offer to buy or sell certain goods at certain prices
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Bid
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A game of chance used to raise money for the government
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Lottery
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The fee the borrower pays to the lender
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Interest
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Element of competition used to control prices
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Restraint of Trade
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Process used by the government to contract public works
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Competitive bidding
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A kind of written contract
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Memorandum
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False statements made under oath.
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Perjury
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Moveable items such as books, furniture and clothing
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Goods
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Rule that states evidence of oral statement made before signing of a contract are not admissible in court
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The parol of evidence law
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When a contract can be understood in multiple ways.
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Ambiguous
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Law establishing written contracts as enforceablez
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The Statute of Frauds
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Land and anything affixed to the land.
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Real Property
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Failure to perform
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Breach of contract
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End of contract
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Discharged
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Parities have curtailed the terms set out by the contract.
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Performance
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Contract is discharged by this once carried out properly.
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Complete Performance
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A time that varies case to case.
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Reasonable time
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Mostly completed contract, leaving out only a few minor details.
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Substantial Performance
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Offer to do what you have agreed to do. Must make tender in order to bring suit.
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Tender
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Must offer US coins or currency
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Legal Tender
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Both parties agree to end a contract
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Mutual release
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Death or illness of destruction of property prevents performance of a contract.
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Impossibility of performance
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Time frame in which a law suit must be filed
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Statute of limitations
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Court orders end of contract or a provision becomes illegal.
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Operation of Law
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Discharging a debtors obligations, debtor can't be imprisoned for inability to pay.
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Bankruptcy laws
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Transfer of a right under the law
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Assignment
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Rights may be assigned unless the alter he contract in an important way.
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What can be assigned
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transfer of duties
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Delegation
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an agreement in which the original party of a contract is replaced by a new one
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Novation
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Who can so whom over a question of performance
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Privity of Contract
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not a signor but directly benefits from a contract
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third party benificiary
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payments recovered in court for a person who suffered injury
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Damages
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Damages directly attributable to another party's breach of contract.
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actual damages
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any reasonable expense resulting from a breach of contract.
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incidental damages
