Business Law Chapter 11 & 12 Cheeseman – Flashcards
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Consideration
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Something of legal value given in exchange for a promise.
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Gift Promise
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"gratuitous promises" are unenforceable because they lack consideration.
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Illegal Consideration
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Considerations or actions that are considered illegal -> make contracts void
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Illusory Promise
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Where one or both parties can choose not to perform their contractual obligations.
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Preexisting Duty
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If a person is already under obligation to do something.
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Past Consideration
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not enforceable due to work done in the past is not consideration for a new promise.
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Infancy Doctrine
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Gives minors the right to disaffirm (cancel) most contracts they have entered into with adults.
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Minor's Duty to Restoration
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based on rationale that if a minor had to place the adult in status quo upon disaffirmance of a contract, there would be no incentive for an adult not to deal with the minor.
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Parents' Liability
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stuff and things.
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Necessaries of Life
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Food, clothing, shelter, medical care, and other items considered necessary to the maintenance of life.
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Adjudged Insane
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Declared legally insane by a proper court or administrative agency. A contract entered into by a person adjudged insane is void.
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Insane but not Adjudged Insane
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Being insane but not having been adjudged insane by a court or an administrative agency. A contract entered by such person is generally voidable. Some states hold that such a contract is void.
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Contracts Contrary to statues
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Contracts to perform activities that are prohibited by statute are illegal contracts
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Usury Laws
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A law that sets an upper limit on the interest rate that can be changed on certain types of loans.
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Exculpatory Clause
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A contractual provision that relieves one or both of the parties to a contract from tort liability for ordinary negligence. Also known as a release of liability clause.
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Unconscionable Contracts
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A contract that courts refuse to enforce in part or at all because it s so oppressive or manifestly unfair as to be unjust.
