LCW1- Fundamentals of Business Law and Ethics – Flashcards
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Contract
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a binding agreement between two or more persons that is enforceable by law
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Judicial Restraint
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The court takes a passive role and enforces what is already written in the contract, no matter if one party benefits over the other party.
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Judicial Activism
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The court takes an active interest in the contents of the contract and makes decisions based on what is "fair" and "right".
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Four Elements of a Contract
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Agreement- offer is made by one party and accepted by another party. Consideration- bargaining Legality- has to be legal Capacity- all parties must be of legal, adult age and be sound of mind.
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Issues Regarding Contracts
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Consent- parties may not trick each other or use force. Written Contract- some must be written Third Party Interests- affect other people or parties that are not included in the contract. Performance and discharge- once parties fulfill their duties under the contract, those duties are discharged. Remedies- a breach of contract may result in money being awarded to the injured party by the court.
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Bilateral Contract
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a contract in which both parties make a promise.
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Unilateral Contract
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One party promises to give something in return for something and the other party agrees by their actions
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Express Contract
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Parties explicitly state their terms of the agreement.
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Implied Contract
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The actions and words of the involved parties indicate there was an intention of a contract
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Executory Contract
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One of the parties does not fulfill their obligations under the contract.
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Executed Contract
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all parties have fulfilled the terms of the contract
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Valid Contract
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A contract that meets all requirements as set by law
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Unenforceable Agreement
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The parties have agreed on terms and intend to form a valid agreement, but the contract is unenforceable because of some rule of law or a change in law.
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Voidable Contract
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The law allows one party to terminate the agreement
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Void Agreement
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An agreement that all parties are unable to enforce
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Promissory Estoppel
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There is no contract in place, but the injured party can show that the defendant made a promise with knowledge that the injured party would rely on the promise, the injured party did rely on that promise, and the only way to avoid injustice is to enforce the promise.
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Quasi-Contract
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There is no contract nor was there an intention of a contract, but the defendant gains a benefit from the injured party and knows that he injured party had an expectation of compensation.
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discharge
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a party is discharged when they no longer have any duties under a contract.
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Commercial Impracticability
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It would cause extreme harm to one party if the terms of the contract were fulfilled.
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Personal Satisfaction Clauses
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"Good" work may not be enough if there is a personal satisfaction clause and the promisee is not happy with the work that was done.
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Condition Precedent
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Some event must occur before there is an obligation to pay
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Condition
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An event that must occur before a party becomes obligated under a contract.
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Express Condition
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A condition is expressly stated by a party of the contract.
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Implied Condition
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Nothing is said about a condition, but the agreement clearly shows the intention of a condition
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Conditional Precedent
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An event must occur before a duty arises. Plaintiff has burden of proof.
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Conditional Subsequent
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Condition must occur after the particular duty arises. Defendant has the burden to prove
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Concurrent Conditions
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Both parties have a duty to perform simultaneously.
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Public Policy
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Permitting the conditional clause would hurt society.
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Strict Performance
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Requires one party to perform its obligations precisely, with no deviation from the contract terms. The contract must expressly demand the performance and the demand must be reasonable.
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Substantial Performance
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performance which does not vary greatly from that anticipated in the contract and confers the same benefits as promised in the contract
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Personal Satisfaction Contract
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