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Uncategorized > 2nd Quarter- BUSINESS LAW Exam 2 > Flashcards

2nd Quarter- BUSINESS LAW Exam 2 Flashcards

1
Q

Legal objectives of written contracts

A

legal purpose and execution,
as long as elements of a contract are legal (Mutual Agreements,competent parties and Consideration) terms of contract should be executed. Illegality renders a contract void.

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2
Q

expression of willingness of the offeror to enter a contractual agreement.

A

offer

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3
Q

person or party who initiates or makes and offer

A

offeror

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4
Q

person or party to whom an offer is made

A

offeree

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5
Q

requirements of a valid offer

A

Must be Definite
o Basis for agreement
o Seriously intended
o Not a joke / Nor offered in jest, fear, or anger.
o Communicated from offeror to offeree.
o Both parties must be cognizant of the agreement.

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6
Q

Offer vs. invitation to deal

A

o Is it truly an offer?

o Or an invitation to deal and make a subsequent offer?

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7
Q

invitation to deal

A
  • Advertisement
  • Price list and quotations
  • Bids
  • Estimates
  • Not valid offers
  • May lead to an offer.
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8
Q

termination of an offer

A

o By revocation - annulment or cancellation of an instrument, act, promise by one doing or making it.
o Communicated by offeror to offeree prior to acceptance.

By terms of the offer:
o If terms are not met, there is no contract.
o By lapse of “reasonable” period of time.
o Depends on type of offer.
o By death or insanity of offeror.

By rejection.
o Refusal to accept.
o By counter offer - intended acceptance which changes or qualifies the offer, and is a rejection of the original offer.
o By intervening illegality.
(Legal situation interfering with an offer and agreement. Example:Making a contract to kill someone.)

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9
Q

person afflicted with a serious mental disorder impairing ability to function.

A

insane

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10
Q

intended acceptance which changes or qualifies the offer, and is a rejection of the original offer

A

counter offer

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11
Q

o Legal situation interfering with an offer and agreement.

A

intervening illegality

example: making a contract to kill someone

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12
Q

o Agreement to an offer resulting in a contract.
o Communicated by offeree to offeror.
o Oral or written.
o Including mail or telegram.

A

acceptance

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13
Q

o Justifiable reliance by offeree.
o Offeree believes what offeror says is true.
o No reason to believe otherwise.
o Without this, contract is voidable.

A

reality of consent

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14
Q

False statement of a matter of fact.

A

misrepresentation

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15
Q

False statement made in the belief it is true.

A

innocent misrepresentation

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16
Q

Intentional or reckless false statement of a material fact, upon which the injured party relied, which induced the injured party to enter into a contract, at his/her detriment.

A

fraud

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17
Q

manner of committing fraud

A

o By expressed misrepresentation.
o Oral or written.
o By concealment. (attempting to hide information)
o By silence when one has a duty to speak.
(Not sharing information when asked or requested.)

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18
Q

• Improper influence that is asserted by one dominant person over another, without threat or harm.
o Often with a fiduciary relationship.

A

undue influence

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19
Q

Person in a relationship of trust or confidence

A

fiduciary

Examples
•	Family relationship.
•	Attorney and client.
•	Physician and patient.
•	Funeral director and family.
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20
Q

Means of removing one’s free will. Obtaining consent by threat to do harm to the person, his/her family, or property.
o Element of coercion or force.Can be physical, emotional and financial.

A

duress

21
Q

Mistake by one party to a contract
o Mistake as to quality, value or price.
o Mistake as to terms of contract.
o Generally will not render agreement defective.

A

unilateral mistake

22
Q

Mistake by both parties to a contract.
o Mistake as to nature of transaction.
o Mistake as to identity or existence of subject matter.
o Generally render agreement defective

A

mutual mistake

23
Q

classes of illegal agreement

A

agreements to commit a crime or torts. Agreements prohibited by statute. Agreements contrary to public policy

24
Q

injurious to individuals and society at large

A

agreements to commit crimes of torts

25
Q

What type of agreements fall under the category of agreements prohibited by statute?

A 
unsurious
restraint of trade
fix prices
influence fiduciaries 
defraud creditors
obstruct justice
relieve liability for willful negligence
26
Q

exceeding maximum rate of interest which may be charged on loans or consumer credit accounts

A

usurious

27
Q

charging a higher rate of interest than the law allows

A

unsury

28
Q

highest legal rate of interest

A

maximum contract rate

29
Q

interest rate applied when no rate is specified

A

legal rate

30
Q

laws which seek to promote competition among business

A

antitrust law

31
Q

what are the advantages of antitrust laws or why were they set up?

A

to prevent creation of a monopoly
prohibits contracts not to compete
fix prices of goods and services
unfair competitive practices

32
Q

Legislation intended to promote competition among business by prohibiting restraint of trade.

A

Sherman Antitrust Law

33
Q

Person or persons in a relationship of trust or confidence

A

Fiduciaries

34
Q

Agreement in which someone else “takes the blame.”

A

Agreements to relieve liability for willful negligence:

35
Q

Regarding payment of a debt.

Money owed.

A

Agreements to defraud creditors

36
Q

o Contracts limiting freedom of marriage.

o Contracts injurious to public service of the “public good.”

A

Agreements contrary to public policy:

37
Q

Statute of Frauds

A
  • Originally enacted by the English Parliament (1677).
  • Present in some form in all states.
  • Lists certain types of contracts which can only be enforced if it is in written form.
38
Q

Types of contracts in writing:

A

Contracts to transfer an interest in real property.
Real estate - Land
Real property - Objects attached to land.

39
Q

cannot be completed within one year from date of making.
Ensures parties do not forget contract terms
Example: purchase of real estate with long term loan contract/mortgage.

A

Executory bilateral contracts

40
Q

Obligation to pay money or goods

A

debt

41
Q

Non-performance of a duty or obligation

A

default

42
Q

Rather than paying debts from decedent’s estate.

Agreement to pay debts of another.

A

Contracts made by executor or administrators to pay debts of an estate out of his/her personal funds.

43
Q

Promises made in consideration of marriage.

A

Prenuptial agreements.

44
Q
  • movable, tangible, personal property.
A

goods

45
Q

Termination of a contract by performance, agreement, impossibility, acceptance of breach, or operation law.

A

Discharge of contracts

46
Q

When all terms of the contract have been fulfilled, the contract is discharged by performance

A

Performance

47
Q
  • Satisfactory or complete performance.

* Contract that has been performed in a manner that would “satisfy” an ordinary, reasonable person.

A

Nature of performance:

48
Q

Fulfilling major terms of the contract. Contract can be discharged. Less any damages that might occur for minor breaches of contract

A

Substantial performance

49
Q
  • Mutual agreement to cancel the contract.
  • Entering into a contract is a mutual agreement.
  • Parties can also mutually agree to cancel the contract.
A

Discharge by Agreement

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