Business law ch. 7 – Flashcards
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offeror
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party who makes an offer
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offeree
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party to whom an offer is made
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counteroffer
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a response with new terms by the offeree which ends the original offer and changes the terms of the offer by the offeree
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acceptance
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affirmative response necessary to turn an offer into a contract
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offer
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proposal that expresses willingness of the offeror to enter into a legally binding agreement
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contract
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legally binding and enforceable agreement between 2 or more parties and results from a valid offer and acceptance from an exchange of acts or promises
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firm offer
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binding offer stating in writing how long it is to be held open
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legally competent
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having the capacity to contract
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void agreement
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agreement that isn't enforceable by either party
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voidable contract
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may be avoided by only one of the parties
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option contract
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will keep an offer open a certain length of time by giving something (ex down payment)
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capacity
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ability to understand the nature and effect of one's action
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valid contract
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agreement that is legally effective and is enforceable in court
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revocation
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withdrawal of an offer before acceptance
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unilateral contract
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agreement in which only one party makes a promise
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offer and acceptance
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there can be no contract without
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legal obligation
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social invitation if accepted doesn't create a contract because the parties didn't intend to create a
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valid acceptance
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must be unconditional and identical to the offer
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contract that can be enforced
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a valid acceptance of a valid offer results in a
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minors, intoxicated persons, and insane
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people are restricted in their freedom to contract, for their own protection
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revoked or modified
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an offer may be ____ by the offeror once made
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terminated
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if the offeree rejects the offer or makes a counteroffer, the offer is
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unenforceable contract
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valid contract that can't be enforced
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definite and communicated
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an offer must be ___ to the offeree and made with the intention to be bound
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time stated
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if not accepted an offer ends at the
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mirror image rule
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requires that the terms in the acceptance must exactly match the terms contained in the offer
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offer and acceptance, genuine agreement, legality, consideration, capacity, writing
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identify the six major requirement or elements of a contract
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time stated in the offer, reasonable length of time, rejection by the offeree, counteroffer by the offeree, death or insanity of either party
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5 ways an offer is ended
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minors, insane/intoxicated people, people convicted of major crimes, aliens from countries at war with U.S.
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4 groups of people who may be restricted in their freedom to contract
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reasonable person test
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used to determine whether an offer was made
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ad
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invitation to customers to make an offer
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clear
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an offer must be ____ to allow a court to determine what the parties intended
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implied terms
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some contracts contain
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anger
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words spoken in ____ aren't considered contracts
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merchants
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regularly deal in bought or sold goods
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uniform commercial code
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makes firm offers binding for the time stated
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bilateral contract
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agreement in which both parties make promises
