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Judical restraitant

answer

A courts reluctance to intervine with the terms of a contract.

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judicial activism

answer

A courts willingsness to change or ignore a contract that it preceives as injust.

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noncompetition agreement

answer

a contract in which one party agrees not to compete with another

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Bilateral contract

answer

a promise for a promise

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express contract

answer

A contract in which the terms of the agreement are fully and explicitly stated in words, oral or written.

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executory contract

answer

an agreement in which one or more parties has not yet fulfilled its obligations

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executed contract

answer

an agreement in which all parties have fulfilled their obligations

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voidable contract

answer

A contract that may be legally avoided (canceled, or annulled) at the option of one of the parties.

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void contract

answer

a contract that neither party can enforce, because the bargain is illegal or one of the parties had no legal authority to make it.

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promissory estoppel

answer

A possible remedy for an injured plaintiff in a case with no valid contract, where the plaintiff can show a promise, reasonable reliance, and injustice.

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Quasi-contract

answer

a possible remedy for an injured plaintiff in a case with no valid contract, where the plaintiff can show benefit to the defendant, reasonable expectation of payment, and unjust enrichment

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Quantum meruit

answer

"as much as he deserves" the damages awarded in a quasi-contract case

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Meeting of the minds

answer

a situation in which the parties understand each other and intend to reach an agreement

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offer

answer

an act or statement that proposes definite terms and permits the other party to create a contract by accepting those terms

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offeror

answer

A person who makes an offer.

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Offeree

answer

the person to whom an offer is made

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Letter of intent

answer

a letter that summarizes negotiating progress

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Gap-filler provisions

answer

UCC rules for supplying missing terms Delivery, time & payment are gap-fillers Quantity is NOT a gap-filler.

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Output contract

answer

an agreement in which the seller guarantees to sell everything he or she produces to one buyer and no quantity is stated; valid under the UCC but not under common law

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Requirements contract

answer

Agreement to buy all of one's needs from a single producer

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Implied warranty of merchantability

answer

Warranty implied in every sale of goods that the goods are of average acceptable quality and are generally fit for the ordinary purpose for which the goods are sold.

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Implied warranty of fitness for a particular purpose

answer

A warranty that goods sold or leased are fit for a particular purpose. The warranty arises when any seller or lessor knows the particular purpose for which a buyer or lessee will use the goods and knows that the buyer or lessee is relying on the skill and judgment of the seller or lessor to select suitable goods.

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Firm offer

answer

an offer that by its own terms will be held open for a given period

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Mirror image rule

answer

The principle that the contract accepted must be the same as the offer

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mailbox rule

answer

acceptance is effective upon transmission (i.e. when the letter is put in the mailbox)

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Promisor

answer

a person who makes a promise

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Promisee

answer

a person to whom a promise is made

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Liquidated debt

answer

no dispute as to amount of money owed

question

unliquidated debt

answer

A debt for which the parties either dispute the fact that any money is owed or agree that some money is owed but dispute the amount.

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Accord and Satisfaction

answer

Agreement to settle an existing debt for less than the amount owed and payment of that lesser amount

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Usury

answer

the act of lending money at an exorbitant rate of interest

question

noncompete agreement

answer

Employment An agreement between an employer (the principal) and an employee (the agent) to protect the employer's customers, trade secrets, confidential information, and other items for a specific period after an employee relationship has been terminated. Sale of Business an illegal agreement unless it is ancillary to the sale of bsuinesses

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Exculpatory clause

answer

A contract provision that attempts to release one party from liability in the event the other is injured. *unenforceable when the affected activity is in the public interest, such as medical care, public transportation. *unenforceable when the parties have greatly unequal bargaining power. *unenforceable unless the clause is clearly written and readily visible.

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Bailment

answer

Giving possession and control of personal property to another person.

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Bailor

answer

One who creates a bailment by delivering goods to another.

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Bailee

answer

A person who rightfully possesses goods belonging to another.

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Oppression

answer

the state of being kept down by unjust use of force or authority: to force a contract on a weaker party.

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Adhesion contracts

answer

Standard form contracts prepared by one party and presented to the other on a "take it or leave it" basis.

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Disaffirm

answer

to give notice of refusal to be bound by an agreement

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Rescind

answer

to cancel a contract

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Restitution

answer

the act of restoring someone or something to the rightful owner or to a former state or position; making good on a loss or damage

question

Ratification

answer

the act of accepting and giving legal force to an obligation that previously was not enforceable; to be bound by a contract

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Misrepresentation

answer

Occurs when one party to a contract is not given full or accurate information by the other party about the contract subject matter

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Bilateral mistake

answer

occurs when both parties to a contract are mistaken about some important fact

question

Unilaterial mistake

answer

Uknown to other party doesn't void contract, if mistake is known then the contract may be voidable

question

Duress

answer

compulsory force or threat; made to force another party to enter into a contract

question

Statute of frauds

answer

State law requires certain instruments, such as deeds, real estate sales contracts and certain leases, to be in writing to be legally enforceable

question

Remedies created by judicial system

answer

Promissory Estopel: 1.The def made a promise knowing that the plaint. would rely on it. 2. the plaint. did rely on promise 3. the only way to avoid injustice is to enforce promise. Judicial Activicism 1. where no contract exists. Quasi Contract 1. Plaint. gave some benefit to def. 2. Plaint. reasonably expected to be paid for the benefit & def. knew this. 3.Def. would be unjustly enriched if he didn't pay. Quantum Meruit 1. Plaint. gets as much as he deserves; not full measure. 2. purpose is justice.

question

"UCC" Uniform Contract Law

answer

governs the sale of goods; anything moveable. excludes sales of land/house, stocks certificates

question

Common Law contracts

answer

for services, employment & realestate

question

letter of intent

answer

a letter that summarizes negotiating progress

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warranties

answer

guarantees made by a seller that an article, good or service will conform to certain standard or will operate in a certain manner.

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revocation

answer

In contract law, the withdrawal of an offer by an offeror. Unless an offer is irrevocable, it can be revoked at any time prior to acceptance without liability.

question

acceptance

answer

(contract law) words signifying consent to the terms of an offer (thereby creating a contract)

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common law rule

answer

revocation of a firm offer is effective if the offeree receives it before he accepts

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option contract

answer

A contract in which the buyer gives the seller consideration to keep the offer open for a stated period of time

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termination by rejection

answer

if an offeree rejects an offer, the rejection immediately terminates the offer

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counter offer

answer

Any response to an offer (other than outright rejection) which presents alternative terms for a contract.

question

termination by exception

answer

when offer specifies period of time for acceptance the period is binding, if no time limit, then reasonable time limit.

question

termination by operation of law

answer

Can be terminated through any of these events. 1. lapse of time. 2. Destruction of specific subject matter of the offer. 3. Death or incompetence of the offeror or offeree.4. Supervening illegality of the proposed contract.

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ambiguious

answer

confusing; unclear as to meaning if an offer is ambiguous the offeree my accept by a promise or performance

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bargaining

answer

seeking an agreement to a conflict through direct negotiation between parties

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adequacy of consideration

answer

involves "how much" consideration is given and is concerned with the fairness of the bargain. In general courts do not questions the adequacy of consideration if the consideration is legally sufficient—parties are usually free to bargain as they wish, however, in extreme cases a court of law may look to the amount or value because apparently inadequate consideration can indicate that fraud, duress, or undue influence was involved or that a gift was made. In cases in which the consideration is grossly inadequate, the courts may declare the contract unenforceable on the grounds that it is unconscionable or one sided and overly unfair. "the peppercorn rule"

question

Illusuory contract

answer

No consideration, promise does not committ; ex. I will pay if I like it. neither party can enforce it.

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Past consideration

answer

An act that takes place before the contract is made and that ordinarily, by itself, cannot be consideration for a later promise to pay for the act.

question

Pre-existing duty

answer

A promise lacks consideration if a person promises to perform an act or do something he or she is already under an obligation to do.

question

licensing statues

answer

Require formal authorization to engage in certain trades, professions, or businesses

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Unilateral contract

answer

a one-sided agreement whereby you promise to do (or refrain from doing) something in return for a performance (not a promise)

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Wagers

answer

a gambling contract is illegal unless it is specifically authorized by state statutes

question

Insurance

answer

written contract or certificate of insurance Anyone taking out a policy on the life of another must have an insurable interest in that person, such as a spouse or parent.

question

ancillary

answer

relating to something that is added but is not essential, noncompetition agreement must be part of a larger one.

question

exculpatroy clause

answer

a contract provision that attemps to release one party from liability in the event the other is injured.

question

unconscoinable contracts

answer

Courts refuse to enforce because of fundamental unfairness; 1. opression-one party used its superior power to force a contract on the weaker party. 2. suprise-weaker party did not fully understand the consequences of the agreement.

question

capacity

answer

the legal ability to enter a contract.

question

innocent misrepresentation

answer

Misrepresentation made without knowledge of its falsity but with due care; renders contract voidable

question

misrepesentation

answer

utrue statment of facts

question

fraudulent misrepesentation

answer

Person making statement knows statement is false.

question

puffery

answer

A salesperson's often exaggerated claims concerning the quality of property offered for sale. Such claims involve opinions rather than facts and are not considered to be legally binding promises or warranties.

question

justifiable reliance

answer

prior to a false statement being deemed a misrepresentation, the victim must reasonably believe the statement and act on the statement to her injury; if the victim investigates and discovers the falsity, no action for fraud can be maintained

question

"Silence" non-disclosure of facts

answer

1. Where discolsure is necessary to correct a previous assertion. 2. Disclosure would correct a basic mistaken assumption that another party is relying on. 3. discolsure would correct other partys mistaken understanding about a writing 4. there is a relationship of trust between parties.

question

undue infulence

answer

Exerting excessive pressure on someone so as to overpower the person's free will and prevent him or her from making a rational or prudent decision; often involves abusing a realtionship of trust.

question

parole evidence rule

answer

Substantive common law that claims any agreement made by both parties prior to signing the contract that was not incorporated into the contract is barred upon signing by this rule in seeking to alter the terms of the contract.

question

Agreements that must be in writing

answer

Statue of Frauds; 1. for any interest in land 2. that cannot be performed within 1 year 3.to pay the debt of another 4. made by the executor of an estate 5. made in consideration of marriage

question

integrated contract

answer

a contract that is intended to be a complete and final statement of the terms of the agreement. Makes parol evidence inadmissible.

Business Law Chapters 9-14 – Flashcards

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