Business Law Contracts Essay

question

contract
answer

a legally enforceable agreement that is created when two or more competent parties agree to perform, or to avoid performing, certain acts that they have a legal right to do and that meet certain legal requirements; “a promise for a promise”; state law enforces contracts
question

tangible personal property
answer

part of the UCC that is relevant to contract law; Article 2; only applies to personal property, which can be moved, such as a vehicle, kitchen table, or computer
question

common law
answer

source of contract law regarding the sale of fixed assets, services, and intangibles
question

six elements necessary to have a contract
answer

offer and acceptance, mutual agreement, consideration, competent parties, legality of purpose, and proper form
question

offer (instructor combines this with mutual agreement)
answer

proposal made by one party, the offeror, to another party, the offeree, that indicates a willingness to enter into a contract.
question

mutual agreement (instructor combines this with offer and acceptance)
answer

the state of mind that exists between an offeror and an offeree when a valid offer has been accepted, and the parties know what the terms are and have agreed to be bound by them; mutual agreement is also known as “a meeting of the minds”
question

consideration
answer

the promise to give up something of value that a party to a contract has a legal right to keep, or to do something that the party is not otherwise legally required to do
question

competent parties
answer

being mentally capable of understanding the terms of a contract
question

legality of purpose
answer

the requirement that the intent of a contract be legal for the contract to be enforceable
question

proper form
answer

the requirement that the form of a contract be correct for the terms of the contract to be enforceable
question

oral contract
answer

an agreement that is not in writing or signed by the parties
question

written contract
answer

an agreement that is reduced to writing on a permanent surface
question

express contract
answer

a contract that explicitly states the agreement of the parties, either orally or in writing
question

implied contracts
answer

a contract that does not explicitly state the agreement of the parties but in which the terms of the agreement can be inferred from the conduct of the parties, the customs of the trade, or the conditions or circumstances.
question

formal contract
answer

a specialty contract that is written and under seal;bonds, mortgages, and deeds conveying title to real estate, are required to have a seal
question

simple contract
answer

an informal contract made without seal; even though the subject matter of the contract may be extremely complex and may involve huge amounts of money
question

entire contract
answer

an agreement that is made up of two or more parts, in which each part is dependent upon the others
question

divisible contract
answer

an agreement that is made up of two or more parts, each part being independent of the others
question

executory contract
answer

an agreement in which some future act or obligation remains to be performed under its terms
question

executed contract
answer

a record of an agreement that has been completed in all respects by all the parties; not really a contract at all but a mere record of an agreement that has been completed in all respects by all parties
question

valid contract
answer

an agreement resulting in an obligation that is legally enforceable; meets all six essential elements
question

void contract
answer

a contract that is not enforceable from the beginning because it lacks one of the requirements of a valid contract
question

voidable contract
answer

an agreement that can be rejected by one of the parties for a legally acceptable reason
question

Why is a contract important?
answer

because of consequences
question

Why are states so adamant about enforcing contracts?
answer

to avoid chaos they rely on agreements
question

Where did basic contract laws originate?
answer

common law from England
question

UCC Universal Commercial Code
answer

governs contracts with sale of goods; modern times has seen an explosion of goods; all states have adopted rules that apply from UCC so that the same laws apply to cases regarding contracts involving the sale of goods; does not cover services; common law covers services
question

Statute of Frauds
answer

Promises that involve marriage as consideration Contracts that can’t be performed within one year Contracts that involve the sale or transfer of land Contracts that involve promises by executors to pay estate debts Contracts that involve a promise to act as a guarantor or surety Contracts that involve the sale of goods worth more than $500
question

Zappos.com customer data security breach litigation
answer

customers were not held to the browsewrap terms of use because of their obscure nature. The courts also held that the agreement was unenforceable because Zappos had reserved the right to change it at any time without informing the customers; This court decision set precedence for businesses that use browsewrap agreements and/or include a clause in their agreements that allow them to change the agreements at any time. The decision encouraged conversation on how a business should most fairly display its terms of use and how to avoid unfairness and ambiguity when writing them; court explained that if a party retains the unilateral, unrestricted right to terminate the arbitration agreement it is illusory and unenforceable
question

Pache v Aviation Volunteer Fire Co
answer

working for volunteer fire co., fire chief dies of heart attack at the scene of a fire; wife applied for Workers’ Comp. and granted benefits based on implied contract between the city and Aviation; courts upheld based in implication of contract by actions
question

Reisenfeld v The Network Group, Builders Square, Kmart Corp
answer

Quasi Contract Theory – created by courts to eliminate unjust enrichment “something for nothing” dealt with the relationship between a party that had a contract with a contractor that was eliminated, along with his commission debt, due to fraud; a subcontractor, Reisenfeld, sued Builders Square for his commission from The Network Group, claiming under the Quasi contract theory. Ohio cases cited were Ross v Steveco, Brower v Musilli, Steel Quest v City Mark Const. These cases involved property owners who had not paid the contractors and therefore were held accountable for payment to the subcontractors.
question

Requirements for a valid offer
answer

1. definite and certain – should specify all the terms and conditions of the contract 2. communicated oral, written, purchase order 3. intend an enforceable obligation (not in ager or jest)4 items: parties, subject of matter, price, quantity
question

request for proposal
answer

a request for an offer or an invitation to negotiate that can be accepted or rejected by the person calling for a bid; main purposes are to ensure that the purchaser gets the most economical price and to prevent dishonesty in the form of bribery and kickbacks.
question

invitation to trade
answer

an announcement published for the purpose of creating interest and attracting a response by many people. It is not considered a valid offer because it does not contain sufficient words of commitment to sell; however if an advertisement contains a positive promise and a positive statement of what the advertiser expect in return, the occurs will usually hold that the advertisement is an offer.
question

public offer
answer

a general offer to the public at large
question

requirements for a valid acceptance
answer

1. must be communicated to the offeror 2. must be unconditional
question

mailbox rule
answer

states than an acceptance sent via the postal system or by courier is effective when sent; acceptance sent by telephone, fax, or telex is effective when received;
question

counteroffer
answer

a response to an offer in which the terms and conditions of the original offer are changed
question

termination by lapse of time
answer

when an opportunity to form a contract ends because the offeree fails to accept an offer within the time specified
question

revocation
answer

the calling back of an offer by the offeror before the offer has been accepted or rejected
question

rejection
answer

the express or implied refusal by an offeree to accept an offer; terminates
question

option contract
answer

has a provision to keep an offer open for a certain period of time
question

termination by destruction or illegality
answer

if the subject matter of a contract is destroyed or declared illegal after the offer has been made but before it has been accepted, the contract is terminated
question

custom and usage
answer

in bidding, a certain customary action
question

Andrus v DOT
answer

Plaintiff sued the city and DOT claiming wrongful discharge after receiving a pone call offering him a position, only to be withdrawn the next day by another phone call, based on unsatisfactory job reference; court ruled that there was no offer because it lacked “reasonably certain terms” such as salary or benefit info
question

Alexander v Lafayette CrimeStoppers
answer

victim of assault tries to claim reward money because her description of her attacker helped investigators catch the suspect; court ruled that that the Plaiintiff’s acceptance of the reward offers must have been received via the telephone number stated in the offer and by the time and date stated by the offerer; no contract was formed
question

defective agreements
answer

if there is any misunderstanding or if any force or deception is used by either party to obtain the necessary agreement of the other party, the contract is voidable and may be disaffirmed at the option of the injured party; a voidable contract results if ageement of either party is obtained by fraud, misrepresentation, mistake, undue influence, or duress, or if the contract is one of adhesion or is unconscionable
question

fraud
answer

intentional misstatement or nondisclosure of a material (essential) fact made by one party in an attempt to influence the actions of another party
question

puffing
answer

mere expression of opinion of exaggeration
question

misrepresentation
answer

a misstatement of a material fact that results in inducing another to enter into an agreement to his or her injury
question

difference bw fraud and misrepresentation
answer

injured party who can successfully prove fraud may have the contract cancelled and bring suit for damages; if only misrepresentation, the contract can be cancelled, but the injured party cannot sue for additional damages
question

mistake
answer

a belief that is not in accord with the facts; for a contract to be dissolved because of a mistake, the law usually requires that both parties be a part of the misunderstanding; mutual
question

undue influence
answer

the improper use of excessive pressure by the dominant member of a confidential relationship to convince the weaker party to enter a contract that greatly benefits the dominant party; employer/employee, physician/patient, teacher/student
question

duress
answer

the act of applying unlawful or improper pressure to a person to gain his or her agreement to a contract
question

contract of adhesion
answer

contract drawn by one party that must be accepted as on a take-it-or-leave-it basis; insurance policies or disclaimers on tickeg stubs and dry cleaning
question

unconscionable contract
answer

is so one-sided that is is oppressive and gives unfair advantage to one of the parties

Get instant access to
all materials

Become a Member