Business Law Chapter 10 Quiz Study Guide – Flashcards
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A form of gambling that has 3 elements: prize, chance, consideration
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Lottery
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A bet on the uncertain outcome of an event or on the identity of a fact unknown to those placing it
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Wager
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Refraining from informing on or prosecuting an alleged crime in exchange for money or other valuable consideration
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Compounding a crime
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License that ensures a person in a certain occupation or business can perform adequately; void without it
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Competency license
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Raises revenue rather than protecting people; valid and enforceable without it
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Revenue license
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Laws that preserve competition
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Anti-trust laws
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When competitors who bid on jobs agree that one bidder will have the lowest bid for a particular job
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Bid rigging
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When a contract is so grossly unfair that parties under ordinary circumstances would not accept it
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Unconscionable
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4 elements of unconscionable contract
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Take it or leave it; no other option; superior bargaining power; to not enforce it is unjust
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3 elements of lottery
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Price; chance; consideration
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When are agreements considered illegal? (9)
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Felony; illegal lotteries; usurious interest; illegal discrimination; obstruct legal procedures; without competency license; affect marriage negatively; restrain trade unreasonably; not to compete
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Describe the three (4) illegal agreements that unreasonably restrain trade
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Price fixing: competing firms agree on the same price; allocation of markets: competitors divide markets between themselves; resale price maintenance: you must sell at this price; bid rigging: competitors agree on who will have lowest bid for a job
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Explain how parties to an illegal agreement are often not equally to blame (5) Are these enforceable?
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Protected victims; excusably ignorant; those who rescind before illegal act; one party committed fraud, duress, undue influence; divisible contract; yes
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Statute that determines when a contract must be written
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Statute of frauds
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Words spoken prior to the execution of the final writing or at the time of the writing, not admissible
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Parole evidence
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Which key elements must be in writing in order to satisfy the statute of frauds? (6)
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Names of the parties; description of the subject matter; price; quantity; signatures; other essential terms
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What are the special rules regarding signatures?
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Only the parties whose signatures are on the contract may be sued for enforcement, may be written, stamped, engraved, or printed; merchants: one party (10 day refusal period)
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Briefly describe 5 types of contracts that must be evidenced by a writing and signed by the party against whom the contract is to be enforced AND exceptions
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Contract for the sale of goods for 500 or more (executed contract, custom, admits oral contract); contract to sell an interest in real property (executed contract); contracts that require more than one year to complete; contract to pay a debt or answer for another's debt or the debts of an estate (main purpose rule: main purpose of the promise serves the promisor's own interest); contract for which the consideration is marriage
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Describe why the statute of frauds is necessary
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Specific contracts considered elevated; word v word
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What are the rules of contract interpretation? (5)
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Analysis; conflicting terms; words; ambiguities; implied reasonableness
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Describe how conflicting terms are resolved (3)
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Words over numbers; written over typed; other person over author
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What is usury?
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Charges above maximum interest rate (highest rate state allows) (usually 18%)
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What is an integration clause?
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Everything we discuss here is in the contract; if not integrated, not enforceable
