WGU LWC1 – Business Law and Ethics – Flashcards
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What is the definition of a contract?
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A promise that the law will enforce
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4 parts of a contract (optional)
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(1) Agreement, (2) Consideration, (3) Legality, (4) Capacity
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Name the various types of contracts
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Bilateral, Unilateral, Express, Implied
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Describe bilateral contracts
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In a bilateral contract, BOTH parties make a promise. This is the most common and is used for services, sale of goods and almost anything else. A promise for a promise...
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Describe unilateral contracts
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In a unilateral contract, ONE party makes a promise the the other party can accept only *by doing* something. This is a less common contract.
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Describe express contracts
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In an express contract the two parties explicitly state all important terms of their agreement. This is the majority of contracts.
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Describe implied contracts
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In an implied contract, the words and conduct of the parties indicate the intended agreement. This is less common.
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Identify the four theories of recovery in contract law
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Express (YP/YC) and implied contracts (non-explicit promise/YC, Promissory Estopppel (YP/NC), Quasi-contract (NP/NC). Note: Y/N=Yes No, P=Promise, C=Contract
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What is a Promissory Estoppel?
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There is no contract but the defendant makes a promise that she can foresee will induce reliance; it would be unjust not to award the plaintiff damages.
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What is a quasi-contract?
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There is no intention to contract, but the plaintiff gives some benefit to the defendant, who knows that the plaintiff expects compensation; it would be unjust not to award the plaintiff damages.
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What conditions would constitute a discharge of a contract?
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Full performance and agreement.
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Describe the conditions for a discharge of contractual obligation
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Full performance: the parties do what they promise. Agreement: termination by mutual agreement.
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Name and describe the types of acceptable performance of a contract
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Strict and substantial performance. Strict: requires one party to perform its duties perfectly. Substantial: generally sufficient to entitle the promisor the contract price, minus the cost of defects in the work.
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What constitutes a breach of contract?
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An unjustifiable failure to perform all or some part of a contractual duty without a valid excuse.
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What is the definition of remedies?
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Methods the courts use to compensate an injured party
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Name the four contract remedies (interests)
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(1) Expectation interest, (2) Reliance Interest, (3) Restitution Interest, (4) Equitable Interest
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Describe "Expectation interest"
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What the injured party reasonably thought they would get from the contract. This places the injured party in the position they would have been in if both sides had fully performed their obligations.
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Describe "Reliance interest"
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The injured party may be unable to demonstrate expectation damages, perhaps because it is unclear he would have profited.
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Describe "Restitution interest"
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The injured party may be unable to show an expectation interest or reliance - but perhaps she has conferred a *benefit* to the other party. Here, the objective is to restore to the injure party the benefit she has provided.
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Describe "Equitable interest"
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In some cases money damages will not suffice to help the injured party. Something more is needed such as the transfer of property to the injured party (specific performance) or an order forcing one party to stop doing something (an injunction).
