Business Law Test 2 Chap 9-17

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117 terms

Contract

Agreement between two or more parties

What two elements must be present in a contract?

Offer + Acceptance

3 elements for a Valid Offer

1.Objective Intent 2.) Express Terms 3.) Has to be communicated

Disabilities of Contracts

Infancy, Insanity, Intoxication

UCC

Uniform Commercial Code
A comprehensive Statutory Scheme that includes laws that cover aspects of commercial transactions

Bilateral Contract

A promise for a promise: If you do this for me, I will do this for you.

Unilateral Contract

A promise for an act A contract in which the offeror's Offer can be accepted only by the performance of an act by the offeree

Express Contract

A contract expressed in Oral or written words: A contractor will build building, with Who, What, When , Where, Why

What element is typically missing in a contract

Quantity, if Quantity is not listed, it is unenforceable.

Implied-In-Fact Contract

A contract inferred from the contract of the parties. IN which agreement between parties has been inferred by their contract. Page 174

Quasi Contract

Contract implied by law to prevent unjust enrichment.
Page 176

What is a Bank?

A place that will lend you money..only after you have proven you don't need it.

Formal Contract

A contract that requires a special form or method of creation.

InFormal Contract

A contract that requires no special form or method of creation. Page 173

Valid Contract

A contract That meets all the essential elements of establishing a contract

Essential Elements for establishing a contract

Objective Intent: Did the offeror mean to make a contract?
Express Terms: Who, what When, Where, Why, Quantity
Communication:

Voidable Contract

A contract in which at least one party has at least the option of voiding the contract.

Unenforceable COntract

A Contract that cannot be enforced because of legal defense

Void Contract

No Contract exists

Executed Contracts

A contract that is fully performed on both sides

Executory Contract

A contract that is not fully performed by one ore both parties

Example of the Store Advertisement when is it an offer?

When the store lists a quantity.

Law Merchant

Beginning of Contract Law, began in England

Classified ads under law are

Invitations to Trade

In an advertisement who is the offeror, and offeree?

Store is the Offeree, and You are the Offeror. Unless the Store puts quantity in advertisement then they are the Offeror and you are the offeree

Offer

The manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.

Reward: 2 elements needed

1.) Have knowledge of the reward prior to completing the requested act
2.) To perform the requested act
Person Finding becomes the offeror
Rewards are enforceable and only 1 person can collect

Auctions 2 types

With Reserve and Without Reserve

Auction With Reserve

If the person selling does not get the money that they want, they can pull the item, and choose not to sell

Auction without reserve

They must sell to the highest bidder and cannot take it off the block

Auctions who is the Offeror, and Offeree

Bidder: Offeror
Auctioneer: Offeree

Bids

Contractor making an offer to build building with the specifications for x number of dollars. FUS has ability to refuse or accept the offers

Public Bid

They have to accept the lowest bid. Ex: Government Contract

Does an Offer go on indefinitely?

No as long as the offer has not been accepted, it can be revoked

Counter offer

I will build for $100, and person rejects offer and asks for $750. Counteroffer. Basically nothing more than negotionation

Law can Terminate COntract When:

Destruction
Death
Supervening Illegality, made illegal by new law
Time Lapse

Promissary Estoppel In Consideration

An Equity Doctrine that permits the court to order enforcement of a contract that lacks consideration. Or Detrimental reliance: Example of Roofer with wrong address

Consideration

What is exchanged between two parties: IN a Contract you have to get something but you must give something up

Promissary Estoppel

Words and Actions lead someone to believe there is a contract present. Court will lean in favor of person who has the detriment

To Steal Ideas from one person is called Plaigarism

To steal from many...is called research.

K

Offer Acceptance Consideration

Mirror Image Rule

States that an offer must be accepted exactly without modifications. The offeror is the master of his own offer. An attempt to accept the offer on different terms instead creates a counter-offer, and this constitutes a rejection of the original offer.

Silance

Silance is NOT an ecceptance. This protects the offeree from being legally bound to offers because they failed to respond.

3 exceptions to SILANCE

1) The offeree has indecated that silance means assent, 2) The offeree has signed an agreement indecating continuing acceptance of delivery until further notification.
3) Prior dealings between the parties indecated that silance means acceptance.

Preexisting Duties

Somthing a person is already under an obligation to do.A Promise lacks concideration if a person promises to perform a preexisting.

Past Consideration.

Promise based on the past performance of the promise. Will not support a new contract. New consideration must be given.

Accord

An agreement whereby the parties agree to accept something different in satisfaction of the original contract.

Satisfaction

The performance of an accord

Consent

refers to the provision of approval or agreement, particularly and especially after thoughtful consideration.

Charitable Subscription

is binding when a promise which the promisor should reasonably expect to induce action - no consideration (only for charities). Key: look for the intent of the donor

Undue influence

A situation in which one person takes advantage of another person's mental, emotional, or physical weakness and unduly persuades that person to enter into a contract or makes a will.
The persuasion by the wrongdoer must overcome the free will of the innocent party.

Misrepresentation

P 224
When an assertion is made that is not in accord with the facts.
Can be oral or writen.
To be actionable as fraud, must be from an existing or past material fact.

Two types of Misrepresentation

Intentional: Fraudulent Misrepresentation

Innocent: When a person makes a statement of fact that he honestly and reasonably believes to be true even though it is not.

Element of to prove fraud or Misrepresentation

1. The wrongdoer made a false representation of material facts.
2. The wrongdoer intended to deceive the innocent party.
3. The innocent party justifiably relied in the misrepresentation.
4. The innocent party was injured.

Parol Evidence

Any writen or oral words written outside the four corners of a written contract.

Parol Evidence rule

A rule that oral evidence cannot be used to contradict the terms of a written contract,

Evidence of a prior or contemporaneous agreement may not be admitted at trial to vary the terms of an integrated written contract

Exceptions to Parol Evidence rule

1. Shoes that a contract is void or voidable
2. Explains ambigouse language
3. Concerns a prior course of dealing or cource of performance between the parties or usage of trade.
4. Fills in the gaps in a contract
5. Corrects an obvious clerical or typographical error. The court can reform the contract to reflect the correction.

Contract of Adhesion

Preprinted forms whose terms the customer cannot nagotiate and that they must sign in order to obtain a product. Ex: Car sales contracts

Statutes of Frauds

A state statute that requires certain types of contracts to be in writing.

The six areas of writing requirements

1. Contracts involving interests in Real Property
2. One-year Rule- A contract that cannot be performed by its own terms within one year of its formation must be in writing.
3. Calateral contracts
4. Marraeg contract- pernuptual -antinuptual: protects the person with the money. Both have to agree, be specific, each person of the party must be represented.
5. Administrator Executer of astate to pay out of pocket to Debt.
6. Contracts for the sale of good above $500- has to be in writing if above $500, also has to have evidence of sale.

Assignment of rights

The transfer if contractual rights by an obligee to another party. p248-

anti-assignment clause

A clause that prohibits the assignment of rights under the contract.

approval clause

...

Conditions

A promise that becomes a covineant after it has been met.
1. Conditions precedent-
2. Condition subsiquent-
3. Concurent Condition-

Conditions precedent

Condition that requiers the occerance of an event before a party ex: has to snow 6" before clearing the road

If I'd Agree with you.....

We'd Both be Wrong

Condition subsiquent

condition that states that when an occurance or nonoccurance of an event autematically excuses the performance of an existing contractual duty to perform Ex. at time of closing if the house suffers damages of 40% or more the buyer can back out.

Concurent Condition

condition that both parties have to perform at the same time.
EX: Retail sales

Third Party Beneficiary

(intended) third party who is not in privity of the contract but who has rights under the contract against the promisor. Ex: auto insurance

Legal Monetary Damages

1. Compensatory damages
2. Consequential Dameges
3. Normal damages
4. Liquidated Damages

Compensatory damages

Damages that compensate a nonbreaching party for loss of a bargain. It places the places the nonbreachign party in the same position as if the contract had been fully performed.

Consequential Dameges

Damages that compensate a nonbreaching party for foreseeable special damages that arise frin circomstances outside a contract. The breaching party must have known ar should have known that these damages would have result from the breach.

Normal damages

Damages awarded against the breaching party even though the nonbreaching party has suffered no financial loss because of the breach. A small $1 is usually awarded.

Liquidated Damages

An agreement by the parties in advance that set the amount of damages recoverable in case of breach. These damages are lawful if they do not cause a penalty.

Substantial Performance

Performance by a contracting party that deviatesonly slightly from complete performance

Discharge of a contract

1) Mutual agreement
2) impossability of performance
3) commercial impracticability
4) By operation by law

Force Majeure Clause

A clause in a contract in which the parties specify certain events that will excuse nonperformance

Statute of Limitations for a contract

They loose their right to sue after a certain period of time if there is a breach of contract.
4 years if it calls for installments
15 years for like a student loan, from when a first payment was made...p259,337-338

Enforcement of Remedies p274

1) Issue to writ of attachment- Court can issue a government agent to seize the property anf sell it if the there is a breach.
2) Issues a writ of gernishment- The court can go into the breaching party's accouts and take the money that is owed to the person that is to be paid.

Equitable Remedies

A remidy that is available if there has been a breach if contract that cannot be adequately compensated through legal remedy or to prevent unjust enrichment.

Privity of contract

The state of two specified parties being in a contract.

Donee Beneficiary

A third party on whom a benefit is to be conferred.

Incidental Beneficiary

A party who is unintentionally benefited by other people's contracts

Restaining Injuction

A court order that prohibits a person from doing aa certain act.

E-Contract

...

Licensing Statute

...

Reformation

An equitable doctrine that perrnits the court to write a contract to express the parties' true intentions.

Digital Signature

Some electronic method that identifies an individual.

E-Commerce

The use of the internet and WEB and the sale of goods and services

License

A contract that transfers limited rights in intellectual property and info rights.

Electronic Communications Privacy Act

This act makes it illegal to intercept an electronic communication

Uniform Computer Information Transaction Act

A modal law that creates contract law for the licensing of info tech rights

Offer

THe Manifestation of Willingness to enter info a bargain so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it

Offeree

The Party to whom an offer to enter into contract is made

Offeror

The part who make an offer to enter into a contract

What's round on both ends and Hi in the middle?

OhiO ;-P

What is a Shin Bone?

The device used to find furniture at night

Termination of an Offer by law

1.) Destruction of the subject matter
2.) The death or incompetency of the offeror or the offeree
3.) A supervening illegality
4.) Lapse of time of the offer

Termination of an Offer by act of the parties

1.) Rejection of an offer
2) Counteroffer of the offeree
3.) Revocation of an offer by the offeror

Acceptance

Manifestation of Assent

Consideration

What is exchanged between two parties in a contact you have to get something but you must also give something up

Pledge

...

Fraud

An event that occurs when one person consciously decides to induce another person to rely and act on a misrepresentation

Duress

A situation in which one party threatens to do a wrongful act unless the other party enters into the contract

Usury Law

A Law that sets the upper limit on the interest rate that can be charged on certain types of loans

Illegality

A universal defense that can be raised against both holder and holder in due courses to prevent the enforcement of a negotiable insturment

Discharge

Discharge from liability......

Injunction

A court order that inhibits a person carrying out a certain act

Excuses

......

Modification

???

Delegation of a duty

A transfer of contractual duty by an obliger to another party for performance; Also known as delegation

Necessaries

??Is this the one about what is needed in a contract that we already did?

Rescission

?? What is this? I can't find it

Domain Name

Can't find this one either

Mistake

A situation that occurs where one or both of the parties to a contract have an erroneous belief about the subject matter, value, or some other aspect of the contract

Capacity

Page 207

Unconscionability

...

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