Flashcards on Business Law Exam 4
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True
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True/False: Many agreements are unenforceable, unless it, or some memorandum of it, is in writing and signed.
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-interest in land -cannot be performed within one year -to pay the debt of another -made by an executor of an estate -made in consideration of marriage -for sale of goods over $500
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What are the list of reasons for a written contract?
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True
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True/False: Once a contract is fully executed, it makes no difference that it was unwritten.
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True
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True/False: A contract for interest in land must be in writing to be enforceable.
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True
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True/False: Land is hard to define (super surface).
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when one person agrees to pay the debt of another as a favor to the debtor
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Collateral Promise
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True
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True/False: Life estate is interest in property.
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Yes
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Can a residental lease be oral in Texas?
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True
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True/False: License is NOT a written contract.
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-contract must be signed by the defendant -it must state with reasonable certainty: 1. name of each party 2. the subject matter of the agreement 3. all of the essential terms and promises
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What must written contracts contain?
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recorded map of a subdivision
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Reference to a Plat
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descriptions by course and distance
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Metes and Bounds
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True
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True/False: A contract for sale of goods worth $500 or more is not enforceable unless there is some writing, signed by the defendant.
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refers to anything that was said, done, or written before the parties signed the agreement or as they signed it -oral evidence
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Parol Evidence
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someone who was not a party to the contract but stands to benefit from it
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Third Party Beneficiary
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True
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True/False: Intended beneficiary may enforce a contract if the parties intended her to benefit.
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creditor of one of the contracting parties and their intended to benefit -can enforce
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Creditor Beneficiary
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being made a gift through the contract -can enforce
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Donee Beneficiary
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those who would benefit but not intended to benefit -cannot be enforced
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Incidental Beneficiary
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donor= giver donee= receiver
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Doner vs. Donee
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a contracting party may transfer his rights under the contract
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Assignment of Rights
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a contracting party may transfer her duties pursuant to the contract
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Delegation of Duties
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assignor= one making an agreement assignee= is the one receiving an assignment
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Assignor vs. Assignee
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holding something on behalf of others
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Stakeholder
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-any contractual right may be assigned unless assignment: 1. would change the obligors rights or duties under the contract 2. is forbidden by law or public policy 3. is validly precluded by the contract itself
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What rights are assignable?
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True
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True/False: Assignment is also prohibited when the obligor is agreeing to perform personal services.
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1. Writing 2. Consideration -irrevocable -a gratuitous assignment is generally revocable if it is oral and irrevocable if it is written 3. Notice to the obligor
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How are rights assigned?
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1. delegation would violate public policy 2. the contract prohibits delegation 3. the obligee has a substantial interest in personal performance by the obligor
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An obligor may delegate unless:
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True
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True/False: Most duties are delegable, but delegation does not by itself relieve the delegator of his own responsibility to perform the contract.
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a three-way agreement in which the obligor delegates all rights and duties to the delegates and the obligee agrees to look only to the delegate for performance
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Novation
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True
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True/False: The obligee releases the obligor from all liability.
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True
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True/False: Generally, contracts calling for the conveyance of an interest in land must be in writing to be enforceable.
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False
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True/False: Oral evidence of prior oral agreements that differ from the terms of a subsequent written contract can ordinarily be introduced in court to alter the subsequent written contract.
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d. any of the above.
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City Transport Corporation and Midwest Warehouses, Inc., enter into a contract for an easement over Midwest's land. To be enforceable, the easement must be in writing if the warehouse is valued at a. $50. b. $500. c. $5,000. d. any of the above.
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b. an assignment
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Jill and Kurt enter into a contract under which Jill agrees to pay Kurt $125 for a new briefcase. If Kurt transfers his right to receive payment to Ingrid, Kurt's transfer payment is a. a delegation. b. an assignment. c. a third party beneficiary contract. d. not a delegation, an assignment, or a third party beneficiary contract.
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c. third party beneficiary contract
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Vicky makes a contract with Warren with the intent to benefit, by gift, Alex. This is a type of: a. delegation. b. assignment. c. third party beneficiary contract. d. not a delegation, an assignment, or a third party beneficiary contract
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d. Close contact
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Parties not in ______ usually do not have rights to a contract. a. Acknowledged contact b. Diverse contact c. Privity of contract d. Close contact e. Privileged contact
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a. Assignment
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Which of the following occurs when a party to a contract transfers her rights to a contract to a third party? a. Assignment b. Referral c. Disgorgement d. Privity e. Transfer
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a. Creditor
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A ______ beneficiary is a third party that benefits from a contract in which the promisor agrees to pay the promisee's debt. a. Creditor b. Donee c. Incidental d. Promised e. Avowed
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c. The statute requires that certain contracts be in writing
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Which of the following is true regarding the statute of frauds? a. It requires as an element the misrepresentation of material facts. b. Its purpose is to address inequities in the bargaining process. c. The statute requires that certain contracts be in writing d. all of the above e. a and b above
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e. All the above are true
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Which of the following is true regarding the statute of frauds requirement involving contracts that cannot be performed within one year? a. The one-year period begins to run the day after the contract is created, not when the contract is scheduled to begin b. Even if it is highly unlikely that a contract will be completed within one year, a contract does not come within the statute of frauds if it could be completed within one year c. If a party contracts for lifetime employment, the contract does not have to be in writing in order to be enforceable d. Contracts whose performance, based on the terms of the contract, could not possibly occur within one year fall within the statute of frauds ( become subject to its requirements). e. All the above are true
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d. Prenuptial
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A[n] ______ agreement is an agreement two parties enter into before marriage that clearly states the ownership rights each party enjoys in the other party's property. a. Preliminary b. Planned c. Approved d. Prenuptial e. Arranged
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a. Secondary Obligations
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Contracts in which one party promises to pay a debt of another if the initial party fails to pay deal with the enforcement of: a. Secondary obligations b. Primary promises c. Primary debts d. Third-party debts e. Commercial promises
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b. Burt
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In order for John to enforce a written contract between he and Burt, which of the following parties must sign a document? a. John b. Burt c. John and Burt d. Only a person who has agreed to pay the debt of another
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True
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True/False: Employees with authority to deal and contract with third parties are agents of their employers.
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False
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True/False: Agency relationships do not exist outside employment relationships.
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False
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True/False: There must be a written agreement between two parties to create an agency relationship
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False
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True/False: Authority must be either express or implied in order for a person to bind another to an act as their principal.
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True
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True/False: Apparent authority requires that a "principal" cause a third party to reasonably believe that an "agent" has authority to act.
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True
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True/False: The knowing acceptance by a principal of an unauthorized transaction by an agent will likely be ratification of the transaction.
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False
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True/False: A partially disclosed principal is always liable to a third party for contracts made by the agent acting outside the scope of his or her authority.
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True
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True/False: A principal is generally liable for an agent's tort simply because it was committed while the agent was acting within the scope of employment.
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b. Cooperation
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Beta Distribution Company grants its agent Cathy an exclusive territory in which to sell Beta products. Beta likely cannot compete with Cathy in that territory under the principal's duty of a. Compensation. b. Cooperation. c. Indemnification. d. Reimbursement
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a. Being in privity of contract
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Which of the following references the relationship of being a party to a contract? a. Being in privity of contract b. Being in association with contract c. Being in connect to contract d. Being in affiliation with contract e. Being connected by contract
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True
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True/False: Deed of Trust, Texas form of mortgage.
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nobody can do anything to the bankrupt (all actions stop)
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Automatic Stay
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a writing that the parties intend as the final, complete expression of their agreement
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Integrated Contract
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B. a gratuitous agent is only liable for gross negligence
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At Business University, semester enrollment begins at midnight on April 1. Jasper asked his roommate Alonso as a favor to register him for an important required course. Alonso agreed to do so but then overslept. As a result, Jasper could not enroll in the required course he needed to graduate and had to stay in school for an additional semester. Is Alonso liable to Jasper? (a) No, because an agency agreement is invalid unless the agent receives payment. (b) No, because Alonso was not grossly negligent. (c) No, because the cost of the extra semester is unreasonably high. (d) Yes, because Alonso disobeyed his instructions.
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D. Yes, Finn has violated his duty of loyalty to Barry
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Finn learns that, despite his stellar record, he is being paid less than other salespeople at Barry Co. So he decides to start his own company. During his last month on the Barry payroll, he tells all of his clients about his new business. He also tells them that Barry is a great company, but his fees will be lower. After he opens the doors of his new business, most of his former clients move with him. Is Finn liable to Barry? (a) No, because he has not been disloyal to Barry -- he praised the company. (b) No, because Barry was underpaying him. (c) No, because his clients have the right to hire whichever company they choose. (d) Yes, Finn has violated his duty of loyalty to Barry.
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A. Quinn must pay Kurt the amount of money she received from the Ford's prior owner.
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Kurt asked his car mechanic, Quinn, for help in buying a used car. Quinn recommends a Ford Focus that she has been taking care of its whole life. Quinn was working for the seller. Which of the following statements is true? (a) Quinn must pay Kurt the amount of money she received from the Ford's prior owner. (b) After buying the car, Kurt discovers it needs $1000 in repairs. He may recover that amount from Quinn, but only if Quinn knew about the needed repairs before Kurt bought the car. (c) Kurt cannot recover anything because Quinn had no obligation to reveal her relationship with the car's seller. (d) Kurt cannot recover anything because he had not paid Quinn for her help
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D. Yes, because Sue had apparent authority
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Figgins is the dean of a college. He appointed Sue acting dean while he was out of the country and posted an announcement on the college web site announcing that she was authorized to act in his place. He also told Sue privately that she did not have the right to make admissions decisions. While Figgins was gone, Sue overruled the admissions committee to admit the child of a wealthy alumnus. Does the child have the right to attend this college? (a) No, because Sue was not authorized to admit him. (b) No, because Figgins did not ratify Sue's decision. (c) Yes, because Figgins was a fully disclosed principal. (d) Yes, because Sue had apparent authority
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B. Unless the tort was committed within the scope of the agency relationship
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A principal will not be liable to a third party for a tort committed by an agent: (a) Unless the principal instructed the agent to commit the tort (b) Unless the tort was committed within the scope of the agency relationship (c) If the agency agreement limits the principal's liability for the agent's tort (d) If the tort is also regarded as a criminal act
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D. The third party may choose to hold wither Datz or Cox liable.
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Cox engaged Datz as her agent. It was mutually agreed that Datz would not disclose that he was acting as Cox's agent. Instead he was to deal with prospective customers as if he were a principal acting on his own behalf. This he did and made several contracts for Cox. Assuming Cox, Datz, or the customer seeks to avoid liability on one of the contracts involved, which of the following statements is correct? (a) Cox must ratify the Datz contracts in order to be held liable. (b) Datz has no liability once he discloses that Cox was the real principal. (c) The third party can avoid liability because he believed he was dealing with Datz as a principal. (d) The third party may choose to hold either Datz or Cox liable.
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is a relationship in which the agent agrees to perform a task for, and under the control of, the principal
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Agency
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-a principal -an agent -mutual consent that the agent will act on behalf of the principal -be subject to the principals control -thereby creating a fiduciary relationship
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What is needed to create an agency?
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True
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True/False: Agency contracts don't require a writing, unless it's a contract over a year.
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Consent, Control, and a Fiduciary Relationship
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What 3 elements are required for an Agency?
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True
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True/False: Agent has obligation to disclose information to the principal.
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-principal can recover damages caused by the agent's breach -the agent must refund any profits made from the agency -principal may rescind a transaction with an disloyal agent
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Principals's Remedies when the Agent Breaches a Duty
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Employee= largely controlled by the employer Independent Contractor= hired to do a job by a certain time, not normally liable
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Employee vs. Independent Contractor
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1. avoid taxes 2. avoid liability
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What are the 2 benefits of Independent Contractor?
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1. completion of the agreed term 2. completion of the agreed purpose 3. mutual agreement 4. in an agency at will, either party can terminate at any time, for any reason 5. wrongful termination- either party can terminate relationship, but the wrongful party may have to pay damages
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What are the 5 basic ways an agency is terminated by the parties?
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True
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True/False: If you terminate an agent you need to give direct notice to those whom the agent had dealt with, everyone else will see a public announcement.
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The principal is bound by the acts of an agent if: -the agent has authority -the principal, for reasons of fairness, is estopped from denying that the agent has authority -the principal ratifies the acts of the agent
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Principal's Liability for Contracts
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principal grants express authority by words or conduct that, reasonably interpreted, cause the agent to believe the principal desires her to act on the principals account
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Express Authority
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unless otherwise agreed, authority to conduct a transaction includes authority to do acts that are reasonably necessary to accomplish it
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Implied Authority
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a principal can be liable for the acts of agent and is not, in fact, acting with authority if the principal's conduct causes a third party reasonably to believe that the agent is authorized
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Apparent Authority
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Apparent Authority
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What authority is not actual authority?
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remains effective beyond incapacity
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Durable Power of Attorney
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gives someone the ability to act in certain instances
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Special Power of Attorney (Limited)
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agent can do anything the principal can do
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General Power of Attorney (Universal)
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If a person accepts the benefit of an unauthorized transaction or fails to repudiate it, then he is as bound by the act as if he had originally authorized it
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Ratification
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an agent is not liable for any contracts
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Fully Disclosed Principal
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third party can recover from either the agent or the principal (don't know your an agent)
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Undisclosed Principal
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third party can recover from either the agent or the principal (won't tell who the principal is)
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Partially Disclosed Principal
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the principal is not liable and the agent is
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Unauthorized Agent
