2nd Quarter- BUSINESS LAW Exam 2 Flashcards Preview

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

Flashcards in 2nd Quarter- BUSINESS LAW Exam 2 Deck (49):
1

Legal objectives of written contracts

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.

2

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

offer

3

person or party who initiates or makes and offer

offeror

4

person or party to whom an offer is made

offeree

5

requirements of a valid offer

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.

6

Offer vs. invitation to deal

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

7

invitation to deal

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

8

termination of an offer

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.)

9

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

insane

10

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

counter offer

11

o Legal situation interfering with an offer and agreement.

intervening illegality
example: making a contract to kill someone

12

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

acceptance

13

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.

reality of consent

14

False statement of a matter of fact.

misrepresentation

15

False statement made in the belief it is true.

innocent misrepresentation

16

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.

fraud

17

manner of committing fraud

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.)

18

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

undue influence

19

Person in a relationship of trust or confidence

fiduciary

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

20

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.

duress

21

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.

unilateral mistake

22

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

mutual mistake

23

classes of illegal agreement

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

24

injurious to individuals and society at large

agreements to commit crimes of torts

25

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

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

26

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

usurious

27

charging a higher rate of interest than the law allows

unsury

28

highest legal rate of interest

maximum contract rate

29

interest rate applied when no rate is specified

legal rate

30

laws which seek to promote competition among business

antitrust law

31

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

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

32

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

Sherman Antitrust Law

33

Person or persons in a relationship of trust or confidence

Fiduciaries

34

Agreement in which someone else “takes the blame.”

Agreements to relieve liability for willful negligence:

35

Regarding payment of a debt.
Money owed.

Agreements to defraud creditors

36

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

Agreements contrary to public policy:

37

Statute of Frauds

• 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

Types of contracts in writing:

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

39

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.

Executory bilateral contracts

40

Obligation to pay money or goods

debt

41

Non-performance of a duty or obligation

default

42

Rather than paying debts from decedent’s estate.
Agreement to pay debts of another.

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

43

Promises made in consideration of marriage.

Prenuptial agreements.

44

- movable, tangible, personal property.

goods

45

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

Discharge of contracts

46

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

Performance

47

• Satisfactory or complete performance.
• Contract that has been performed in a manner that would “satisfy” an ordinary, reasonable person.

Nature of performance:

48

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

Substantial performance

49

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

Discharge by Agreement