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PIMS - Business law > week 2 > Flashcards

week 2 Flashcards

1
Q

a legally enforceable agreement

A

contract

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2
Q

a contract in which the parties express their intentions, either verbally or in writing; at the time of the agreement

A

express contract

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3
Q

one in which the terms of the contract are implied by act or conduct of the parties

A

implied contract

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4
Q

a contract created or implied by law to prevent unjust enrichment
-court creates the terms of the contract and requires the party to perform

A

quasi contract

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5
Q

a contract which consists of mutual promises to perform future acts
-a promise in exchange for a promise

A

bilateral contract

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6
Q

formation of contracts based on promises (2)

A
  1. bilateral contract

2. unilateral contract

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7
Q

a contract is formed when an act is done in consideration for a promise
-1 promise in exchange for a performance

A

unilateral contract

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8
Q

contracts classified based on performance (2)

A
  1. executed contract

2. executory contract

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9
Q

a contract in which the terms have already been fulfilled

-fully performed contract

A

executed contract

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10
Q

a contract in which the terms have not been completely executed or fulfilled
-performance still due

A

executory contract

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11
Q

contracts classified based on validity/enforceability (4)

A
  1. valid contract
  2. voidable contract
  3. void contract
  4. unenforceable contract
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12
Q

a contract which is legally enforceable

  • all elements are present
  • all enforceable
A

valid contract

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13
Q

a contract which would be an enforceable agreement but due to circumstances may be set aside by one of the parties

  • cannot be void
  • contract may be set aside by a party
  • examples; minor, fraud
A

voidable contract

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14
Q

an agreement of no legal effect

  • no legal effect (void ab initio)
  • contract to commit crime
A

void contract

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15
Q

an agreement which at the current time is not enforceable by law

  • (verbal)
  • court will not provide remedy
  • stateute of frauds
A

unenforceable contract

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16
Q

no legal effect

A

void ab initio

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17
Q

contract required to be in writing

A

statute of frauds

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18
Q

creation of agreement (4)

A
  1. formation of contracts
  2. law of offer and acceptance
  3. offeror
  4. offer
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19
Q

party who initiates or makes an offer

A

offeror

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20
Q

party to whom an offer is made

A

offeree

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21
Q

the offer (3)

A
  1. serious intent
  2. definite terms
  3. communication to the offeree
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22
Q

objective manifestation

-not joking

A

serious intent

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23
Q

material terms: parties, subject matter consideration

A

definite terms

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24
Q

offeror/agent to particular offeree

A

communication to the offeree

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25
Q

not offers (5)

1 exception

A 
advertisements
invitations to deal
price list
bids
estimates
etc
  1. rewards
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26
Q

termination of offer (3)

A
  1. terminated by offeror
    - terms stated in offer
    - revocation
  2. terminated by offeree
    - rejection
    - counteroffer
  3. termination of operation of law
    - lapse of reasonable time
    - death or insanity
    - intervening illegality
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27
Q

inability to terminate offer

A
  1. common law
    - option contract
    - -agreement to keep offer open
    - -supported by consideration
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28
Q

occurs when the offeree communicates the acceptance to the offeror
ex: letter, email, phone call

A

acceptance

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29
Q

what if the offeror requires acceptance in a special form?

  • examples: unilateral offer
  • offer requires payment
  • offer requires special signature proof of offeree
A
  • Special rule 1

- -offeror is the master of the offer and acceptance must conform to the terms in the offer

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30
Q

what is the offer does not specify the form of acceptance ; who bears the risk when the acceptance is sent by the offeree but never received by offeror?

A

-special rule 2

law imposes the “implied mode of acceptance rule”

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31
Q

-offer does not contain how acceptance is to occur
-mode of offer becomes the implied mode of acceptance
effective when placed offeree in “mode”

A

implied mode of acceptance

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32
Q
  • false statement of material fact
  • justifiable reliance
  • damages
  • contract voidable
  • innocent party may recover money damages in addition to rescission of contract
A

misrepresentation

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33
Q

intentional or reckless false statement or concealment of material fact

  • deliberate statement/concealment/duty to speak
  • justifiable reliance
  • damages
  • contract voidable
  • innocent party recover money damages if applicable
A

fraud

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34
Q
  • improper influence that is asserted by one dominant person over another, without the threat of harm
  • trusting relationship
  • destruction of freewill
  • damages
  • may recover money
A

undue influence

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35
Q
  • removing ones free and obtaining consent by means of a threat
  • destroyed by
  • physical harm
  • economic harm
  • threat
  • contract voidable
  • recover money damages in addition to rescission of contract
A

duress

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36
Q
  • bilateral/mutual
  • effect of ^
  • -rescission (contract defective; never existed)
  • unilateral
  • -issues of quality, value, or price
  • contract is valid and remains in effect
A

mistake

37
Q
  • legal ability to enter into a contract
  • law presumes parties are competent
  • person raising defense of incompetency has the burden of proving the impotency
A

contractual capacity

38
Q

general areas that render a person incompetent (3)

A
  1. minority (under 18)
  2. under the influence of controlled substance
  3. recognized mental illness
39
Q

election to avoid a voidable contract

A

disaffirmance/ repudiation

40
Q
  • approving an act which was executed without authority;

- electing to be bound by a voidable contract, approving an act which was executed without authority

A

ratification

41
Q

items required for living at a reasonable standard

-food, shelter, clothing and medical

A

necessaries

42
Q

contracts with minors (3)

A
  1. voidable by minor
  2. adult is bound
  3. effect of disaffirmance
43
Q
  • contract is not void

- minor elects to disaffirm

A

voidable by minor

44
Q
  • minor returns to adult whatever is in the minors possession from contract
  • adult must return full amount of money/consideration
A

effect of disaffirmance

45
Q
  • dont include luxury/ necessaries items

- contracts for luxury items may be disaffirmed by minor

A

exception to the rule; minor contracts for necessaries

46
Q
  • court will create a quasi contract

- minor is bound in quasi contract

A

effect of minor “disaffirming” contract for necessaries

47
Q

when can a minor disaffirm a contract?

A
  • at any time during minority

- a reasonable time after reaching the age of majority

48
Q

when can a minor ratify a contract?

A

only upon reaching majority

49
Q

how can a minor disaffirm a contract?

A

make an oral or written statement during minority or a reasonable time after reaching majority

  • If contract is executory at time of majority, minor refuses to make any performance after reaching majority is disaffirmance
  • minor must return consideration
50
Q

how can a minor ratify a contract?

A

-make an oral or written statement upon reaching majority or a reasonable time after reaching majority -if contracted is executed prior to majority; silence of the minor ratifies the contract

51
Q

how to contract with minors?

what are other options

A 
DONT
---
having an adult sign the agreement 
-a party promising 
-a guarantor
52
Q

what is minor misrepresents age?

A
  • misrepresentation is a tort ; not a contract

- recover from the minor for the damages on a tort theory instead of contract theory

53
Q

intoxicated persons (3)

-same rules apply for minors

A
  1. voluntary intoxication
  2. involuntary intoxication
  3. party dealing with the intoxicated person is aware of the intoxication and that the person is unable to understand their conduct
54
Q

person cannot disaffirm

A

voluntary intoxication

55
Q

person can disaffirm ;

-someone slips a person drugs without knowledge

A

involuntary intoxication

56
Q

incompetent persons (2)

A
  1. adjudicated incompetent

2. not adjudicated incompetent

57
Q
  • determination by court after hearing

- order of court proves incompetency

A

adjudicated incompetent

58
Q

expert testimony to prove lacked capacity

A

not adjudicated incompetent

59
Q

2 ways to determine incompacity

A
  1. danger to self or others

2. guardianship

60
Q

mental health procedures
adjudication by court
-commitment/out patient
-treatment

A

danger to self or others

61
Q
  • guardian of the person
  • of the estate
  • pleanary guardianship
  • durable power of attorney
A

guardianship

62
Q

an agreement made and executed in satisfaction of the rights one has from a previous contract

A

accord and satisfaction

63
Q

the bargained for exchange in a contract

-legal value to both parties

A

consideration

64
Q

a person giving up the right to perform an act that they were legally entitled to do

A

forbearance

65
Q

an equitable doctrine that prevents the primisor from revoking the promise when the promisee justifiably acts in reliance upon the promise to his/her detriment

A

promissory estoppel

66
Q

a law that restricts the period of time within which an action may be brought to court

A

statute of limitations

67
Q

elements of consideration (2)

-each party will have benefit/detriment

A
  1. legal value
    - money, property, etc.
  2. bargained for exchanged
    - legal detriment
    - gives up a legal right
    - inducement to act/forbear
68
Q

gives up a legal right

A

legal detriment

69
Q
  • courts do not weigh consideration to determine if each party receives equal value
  • if consideration is present, adequacy is not questioned
A

adequacy of consideration

70
Q

exception to adequacy of consideration rule (5)

A
  • 1.00
  • nominal consideration
  • sham consideration
  • peppercorn consideration
  • stated consideration
  • unconscionable contracts
71
Q
  • settlement of disputed amounts

- consideration is present

A

accord & satisfaction

72
Q

substitute for consideration (1)

A

-promissory estoppel

73
Q

justifiable reliance on statement

-change in legal position

A

promissory estoppel

74
Q

promissory estoppel debts (2)

A

-statute of limitation
-statement in writing; enforceable
-bankruptcy
-

75
Q

those contracts which must be in special form or produced in a certain way, such as under seal

A

formal contract

76
Q

a contract other than a formal contract, whether written, oral or implied

A

simple contract

77
Q

the party appointed by the principal to enter into a contract with a third party on behalf of the principal

A

agent

78
Q

a change to an original offer that in effect, rejects that offer and becomes a new offer

A

counteroffer

79
Q

when both parties are mistaken concerning the identity or even the existence of the subject matter of the contract

A

mutual mistake

80
Q

a proposal to make a contract

A

offer

81
Q

refusal to accept

A

rejection

82
Q

to set aside or cancel a contract

A

rescission

83
Q

cancellation of an instrument by the maker or drawer; rescinding an offer

A

revocation

84
Q

when one party is mistaken concerning the quality, value or price of the subject matter of the contract or the terms of the contract

A

unilateral mistake

85
Q

an order of court or a recess rendered after a judicial hearing

A

adjudication

86
Q

election to avoid a voidable contract

A

disaffirmance

87
Q

those persons under legal age; standard is 18

A

minor

88
Q

elements of a contract (5)

A
  1. mutual agreement
  2. competency
  3. consideration
  4. lawful purpose
  5. formal requirements

PIMS - Business law (8 decks)

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