Business Law Flashcards
What are the items that constitute an offer?
An offer is a statement by an offeror that gives the recipient the power to form a contract by accepting before the contract is terminated.
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What is a unilateral contract?
A unilateral contract is a contract that is formed when performance is given in exchange for a promise made in an offer. The offeree can accept only by performing the act requested in the offer; the offer cannot be accepted by making a counter-promise.
What are the terms that must be defined in an agreement?
- Identity of the offeree and the subject matter.
- Price to be paid
- Time of performance
- Quantity involved, and
- Nature of work to be performed
What is the mailbox rule?
An offer is considered accepted the moment the offeree mails their letter, rather than when the offeror receives the letter in the mail.
Uniform Commercial Code vs Common Law.
Under common law, if an offer is changed, this constitutes a rejection and a counter-offer is considered a brand-new offer. On the other hand, the UCC allows a counter-offer to be considered part of the original offer and creates a binding contract depending on the specifics.
How can a defense of Fraud be proven?
- Misrepresentation of material facts by the defrauding party.
- Intent to deceive (Scienter).
- Intent to induce reliance.
- Reasonable reliance.
- Damages
What is the parole evidence role?
The parol evidence rule prohibits evidence of prior oral or written agreements that seek to contradict the terms of a fully integrated contract (i.e., one intended as the complete agreement).
What is Duress?
Duress occurs when a person overcomes the will of another through wrongful force or threats of imminent force (physical). Economic duress generally is not recognized as a defense to contract, and even where it is, it is usually required that the party taking advantage of the other party’s poor financial condition must have caused the poor condition.
Void vs Voidable distinctions
Void
Fraud in execution
Duress - Physical
Illegality
Adjudicated incompetency
Voidable
Fraud in inducement -deceived into signing
Innocent misrepresentation
Duress - Economic
Undue influence
Mutual and unilateral mistake
Minority
Intoxication - impairment of judgment
What is the statute of limitation and how is it applied?
The statute of limitation; provides that a
legal action must be commenced in a certain time. The running of the statute of limitations bars access to judicial remedies, i.e., it does not make the contract invalid or void in any way.
The statute of limitations for breach of contract usually begins to run on the occurrence of the breach.
Under the statutes of Fraud, what are the contracts which are required to be in writing?
- Marriage
- Contracts that cannot be performed in one year.
- Interest in land
- Contracts by executioners or by similar representation to pay debts out of personal funds.
- Contract for sale of goods for $500 or more.
- Surety - to pay the debt of another.
What is the Statue of Frauds?
The statute of frauds is a legal concept that requires certain types of contracts to be executed in writing. It requires written proof of the material terms of the agreement to be evidenced by a written signed by the party being sued.
What is the difference, between novation and a substituted contract?
In a novation, the agreement is unchanged but one of the original parties is released and a new party is substituted in their place. In a substituted contract, the original parties are both released from the original agreement but are both bound by a new agreement.
As at Common Law, fraud is a defense to a contract under UCC
Misrepresntation of material fact
Actual and justifieable reclient
Induce
Damages
Scienter
Why is the mirror image rule not applicable under UCC?
Under the sales article, an acceptance is effective if it states new or different terms. In a contract between merchants the terms of the acceptance controls unless the offeror objects or the changes to the terms are material.
