question

Agreement

answer

Offer and Acceptance

question

answer

Invitations for you to make an offer/invitations to negotiate

question

Auction with reserve

answer

can withdraw goods. There is a minimum bid acceptable by the auctioneer, and if offer doesn't exceed reserve the bidder doesn't get what he was bidding on.

question

Action without reserve

answer

cannot withdraw goods. The highest bidder wins, no matter what

question

Definiteness of Terms in an Agreement

answer

Identification of parties, object or subject matter of the contract, consideration to be paid, and time of payment, delivery, or performance

question

Revocation of the offer by the offeror:

answer

offer can be withdrawn anytime before offer accepts the offer. Becomes effective when the offeree receives it

question

Rejection of the offer by the offeree:

answer

terminates the offer. Effective only when it is received by the offeror

question

Acceptance

answer

The voluntary act by the offeree that shows agreement to the terms of an offer.

question

mailbox rule

answer

acceptance of offer is valid once offer places the ACCEPTANCE to the offer in the mailbox

question

Function of Contract Law

answer

Provides stability and predictability for commerce

question

Definition of a Contract

answer

Promise or set of promises for breach of which the law provides a remedy or the performance of which the law in some way recognizes as a duty

question

Objective theory of contracts

answer

we determine what a contract means by what the parties did, not by what the parties tell us they meant

question

What a contract is or what it means can be inferred from the parties' conduct T/F

answer

T

question

Executed contract

answer

a contract that has been fully performed on both sides

question

executory

answer

a contract that has not been fully performed on either one of the sides

question

valid contract

answer

agreement, consideration, contractual capacity, and legality

question

void

answer

no contract.

question

voidable

answer

may be rendered unenforceable

question

Quasi contract

answer

no actual contract exists, it's just implied in law.

question

The assent/willingness of parties to enter into a contract must be voluntary T/F

answer

T

question

The intent to enter in to a contract depends on what parties think T/F

answer

F

question

An offeror's revocation of an offer is effective when received by the offer. An offerree's rejection of an offer is effective when received by the offeror. T/F

answer

T

question

Counteroffer is the rejection of original offer and simultaneous making of a new offer T/F

answer

T

question

E-signatures are generally valid acceptances of a contract T/F

answer

T

question

Courts consider the adequacy of consideration in a contract T/F

answer

F (because it is not up to them to figure out how valuable)

question

Does consideration have to be equal between parties?

answer

NO.

question

Why is a gift promise unenforceable?

answer

It lacks consideration on both sides of the contract.

question

general rule of mode and timeliness of contracts

answer

in bilateral contracts, acceptance is timely if made before offer is terminated

question

Courts do not enforce gift contracts because it does not help the economy, they are only a transfer of wealth T/F

answer

T

question

Past consideration is no consideration T/F

answer

T (because bargained for exchange element is missing)

question

Void means there is no contract T/F

answer

T

question

Contract to commit a tort or a crime is illegal T/F

answer

T

question

Covenant not to compete is enforceable for up to 2 years, 75 miles in geographic area + same type of business (Hunter's outdoor store) 1 yr sold T/f

answer

T

question

In bilateral mistake, both parties make a mistake T/F

answer

T

question

either party can rescind contract T/F

answer

T (mutual mistake of fact=bilateral mistake)

question

What is a unilateral mistake?

answer

One party makes a mistake

question

Fraud on the part of one party allows the other party to rescind a contract T/F

answer

T

question

Fiduciary Relationship

answer

One that has special trust/confidence

question

Forcing a party to enter into a contract under fear or threat makes the contract voidable T/F

answer

T

question

Contracts (promises) are important because of _________

answer

economics

question

Function of contract law

answer

provides stability and predictablity for commerce

question

The most important reason courts enforce contracts is:

answer

contracts are a foundation of our economy

question

Contract law emphasizes personal responsibility and accountability T/F

answer

T

question

Elements of a contract

answer

Agreement, consideration, contractual capacity, and legality

question

bilateral contract

answer

a promise for a promise

question

unilateral

answer

a promise for an act

question

express contract

answer

formed by words

question

implied contract

answer

formed by the conduct of the parties

question

If destruction of the subject matter occurs before the offer is accepted, then the offer is cancelled T/F

answer

T

question

Acceptance of a bilateral contract

answer

communication of acceptance is necessary because of mutual exchange of promises

question

Acceptance of a unilateral contract

answer

acceptance is evident, notification not necessary

question

A court can supply missing terms if the parties intend to form a contract T/F

answer

T

question

both parties must get and give __________

answer

consideration

question

In an e-contract, the full contract should be available to both parties (at least hyperlink). The terms of acceptance should be clear. What are the terms of acceptance?

answer

Forum-selection clause choice of law clause click-on agreements: "I accept" or "I agree"

question

E-signatures and E-documentsa re valid under federal law unless ____?

answer

the parties both specifically agree otherwise

question

Generally, consideration must have ____ and a ______

answer

legally sufficient value and a bargained-for-exchange

question

legal value of consideration

answer

value, promise, performance, or forbearance

question

bargained-for-exchange

answer

must provide basis for the bargain, both parties must be able to say yes or no, and something of legal value must be exchanged between the parties. (Once again, both parties must get and give consideration)

question

General rule of adequacy of consideration

answer

courts usually don't consider adequacy of consideration, and in general the law doesn't protect a person from entering into an unwise contract.

question

Costs are connected to _____, not value.

answer

profits

question

Consideration has to be essentially equal in any contract T/F

answer

F

question

The most important consideration in determining value is the cost involved T/F

answer

F

question

Accord and satisfaction claim

answer

When the debtor offers to pay a lesser amount than the creditor purports to be owed. The debt(amount owed) must be in dispute and the accord is the new agreement, and the satisfaction occurs when the agreement is completed.

question

illusory promises

answer

promisor has not definitely promised to do anything

question

Contractual capacity

answer

legal capacity to enter into a contractual relationship (you can't if you're a minor or incompetent)

question

If someone was not adjudged by a court to be mentally incompetent but later determined mentally incompetent, the contract is ______

answer

voidable

question

If contract is created during lucid intervals, the contract is voidable T/F

answer

F (it's valid)

question

Incompetency because of intoxication is mostly valid or void today?

answer

valid!

question

The common law age of morality was

answer

18 for females and 21 for males

question

the age of morality now is usually

answer

18 or 19 depending on the state

question

A contract entered into by a minor is generally ______ at the option of the minor

answer

voidable (disaffirmance is when they reject the contract)

question

A specific clause in contract can be illegal, but rest of contract can be enforceable T/F

answer

T

question

Where a license is required, a contract without a license is ___________

answer

unenforceable

question

contracts contrary to public policy are generally ____

answer

void

question

contracts in restraint of trade are generally ____

answer

void

question

covenant not to compete

answer

reasonable in protected business geographical area can't be more than 75 miles and no more than 2 years (buyer will have the seller sign an agreement that states that they will not open a competing business within a regional area, within a specific duration of time.)

question

Contract may be unenforceable if the parties have not genuinely assented to its terms by:

answer

mistake, misrepresentation, undue influence, and duress.

question

A mistake of fact might allow a contract to be _______

answer

cancelled

question

unilateral mistakes cannot be cancelled unless

answer

If other party to the contract to the contract knows or should have known that a mistake of fact was made, or if mistake was due to an inadvertent mathematical and without gross negligence.

question

bilateral mistakes can be rescinded by either party T/F

answer

T

question

mistake of value

answer

generally, contract is enforceable by either party

question

Fraudulent misrepresentation consists of the following elements:

answer

misrepresentation of material fact, intent to deceive, reliance on misrepresentation, and injury to the innocent party. THE CONTRACT IS VOIDABLE BY THE INNOCENT PARTY

question

misrepresentation by conduct

answer

occurs when a party takes specific action to conceal a fact that is material to the contract

question

misrepresentation of law

answer

does not entitle a party to relief

question

misrepresentation by silence

answer

ordinarily neither party has duty to disclose facts, however, seller will be liable if she knows of material defect that cannot be reasonably discovered by the buyer

question

innocent representation

answer

occurs when a person makes a statement he believes to be true but actually misrepresents facts. An innocent party can rescind a contract, but usually CANNOT seek damages.

question

undue influence

answer

contract lacks voluntary consent and is voidable. Based on confidential or fiduciary relationship, or relationship dependence. Undue influence or persuasion is presumed if weak party talked into doing something not beneficial to him or herself.

question

(Duress) Party who enters into a contract under fear or threat makes the contract ________

answer

voidable (threatened act mustt be wrongful or illegal and render the person incapable of exercising free will)

question

economic duress

answer

generally not sufficient to constitute duress, unless same party who created the need also requires the money.

question

Privity of contract

answer

Only original parties to a contract have rights and liabilities under the contract (exceptions: assignment or delegation, and third party beneficiary contract which is someone who has the right to sue on a contract)

question

Transfer of contractual rights is a(n) ________

answer

assignment

question

Transfer of contractual duties is a(n) ________

answer

delegation

question

obligor

answer

person who is obligated to perform a duty

question

obligee

answer

person to whom a duty or obligation is owed

question

Rights that can't be assigned:

answer

when a statute expressly prohibits assignment, when a contract is personal in nature, if assignment materially changes risks or duties of obligor, or when the contract expressly prohibits assignment.

question

Duties that can't be delegated

answer

when duties are personal in nature(special trust), when performance by a third party will vary material from that expected by the obligee, or when the contract prohibits delegation

question

when an "assignment of all rights" is made this is both an assignment and a delegation T/F

answer

T

question

Types of intended beneficiaries

answer

intended and incidental beneficiaries

question

intended beneficiaries

answer

a third party to whom performance is rendered directly and/or who has the right to control the details of the performance or who is designated a beneficiary of the contract

question

incidental beneficiary

answer

a third party who benefits from a contract but whose benefit was not the reason for the contract and/or who has no rights in the contract

question

A party may be discharged (released) from a valid contract if

answer

a condition occuring (or not occuring), full performance or material breach by the other party, agreement of the parties, or operation of law.

question

discharge by novation

answer

both parties agree to substitute a new third party for one of the original parties. requirements: previous valid obligation, agreement by all parties, extinguishment of all old obligations, and new valid contract.

question

discharge by accord

answer

making a new agreement made to resolve a contract dispute

question

discharge by satisfaction

answer

performance of an accord (physically resolving the contract dispute)

question

discharge by operation of law: commercial impracticability

answer

performance becomes extremely difficult or costly, and not have been known by parties when contract made.

question

discharge by operation of law: frustration of purpose

answer

supervening event makes it impossible to attain purpose both parties had in mind.The event must not have been foreseeable, and decreases value of what a party receives under contract

question

most common breach of contract remedy

answer

damages

question

goal of a damage

answer

to make the party whole or to give them the benefit of their bargain

question

types of damages

answer

compensatory, consequential, nominal and punitive

question

A breach of contract is both a _____ and a _____

answer

wrong and a crime

question

Mitigation of damages

answer

when a breach of contract occurs, the innocent injured party is held to a duty to reduce the damages that he or she suffered

question

restitution

answer

after a rescission, both parties must return goods, property, or money previously conveyed.

question

specific performance

answer

an equitable remedy calling for the performance of an act promised in the contract

question

reformation

answer

equitable remedy allowing a contract to be reformed, or rewritten, to reflect the parties' true intentions (available if fraud or mutual mistake is present)(written contract incorrectly states the parties' oral agreement).

question

An offeree's rejection is effective when

answer

sent by the offeree

question

An offeror's revocation is effective when

answer

received by the offeree

question

Generally, consideration must be ___ and ___

answer

of legally sufficient value and a bargained-for-exchange

question

An award of ______ performance orders the breaching party to perform the acts promised in a contract.

answer

specific

question

Inferior performance is the same as

answer

no performance at all

question

An email contract is

answer

valid and enforceable, assuming all the elements of a contract are present.

question

Courts generally consider the adequacy of consideration in a contract T/F

answer

F

question

A breach of contract usually calls for an economic remedy since a contract is an economic transaction T/F

answer

T

question

You may not delegate duties to someone who is not as experienced, qualified, or as capable as you are to perform your obligations under the contract T/F

answer

T

question

An oral contract for the sale of land is enforceable.

answer

F. It's unenforceable

question

When a client accepts the services of an accountant without an agreement concerning payment, the result is an

answer

implied-in-fact contract

question

If a contract requires the occurrence of an event before a party is obligated to perform a contractual duty, this is a contractual

answer

precedent.

Business Law Final-Cochran – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards