Business Law Contracts 8-11

Question 1

Promise

Answer 1

A declaration by a person to do or not to do a certain act

Question 2

Functions of contract law

Answer 2

Determines what kinds of promises will be legally binding and enforces procedures surrounding contract law

Question 3

Requirements of a contract

Answer 3

Agreement, Consideration, Contractual Capacity, and Legality

Question 4

What could make a contract unenforceable?

Answer 4

lacking voluntary consent or is not in the legally required form

Question 5

Bilateral vs. Unilateral

Answer 5

Bilateral is a promise for a promise, Unilateral is a promise for an act

Question 6

Formal vs. Informal

Answer 6

Formal requires a special form for creation, Informal does not

Question 7

Express vs. Implied

Answer 7

Express means formed by words, Implied means formed by the conduct of the parties

Question 8

Void

Answer 8

No contract exists, or there is a contract without legal obligation

Question 9

Quasi Contracts

Answer 9

Implied in law

Question 10

Enforceable Contract

Answer 10

A valid contract that can be enforced because there are no legal defenses against it

Question 11

Voidable Contract

Answer 11

A party has the option of avoiding or enforcing the contractual obligation

Question 12

Unenforceable Contract

Answer 12

A contract exists, but it cannot be enforced because of a legal defense

Question 13

Agreement

Answer 13

The parties must agree on the terms of the contract

Question 14

Elements of an Effective Offer

Answer 14

It must be a serious and objective intention, must be sufficiently definite, and communication

Question 15

Examples of nonoffers

Answer 15

Expressions of opinion, Statements of future intent, Preliminary negotiations, advertisements, catalogs, price lists, and circulars

Question 16

Irrevocable offers

Answer 16

Firm offers cannot be taken back

Question 17

Acceptance

Answer 17

A voluntary act by the offeree that shows assent, or agreement, to the terms of an offer.

Question 18

What can cause the termination of an offer as per operation of law?

Answer 18

Lapse of time, Destruction of the specific subject of matter, Death or Incompetence, Illegality

Question 19

What actions can cause the termination of an offer?

Answer 19

Revocation, Rejection, Counteroffer

Question 20

Click on agreements

Answer 20

when a buyer completes a transaction on a computer. Indicates his/her assent to be bound by the terms of an offer by clicking on a box.

Question 21

Browse-wrap terms

Answer 21

terms that an internet user does not have to read

Question 22

Shrink-wrap Agreement

Answer 22

terms expressed inside the box. The party who opens the box is informed that, by keeping the goods, he or she agrees to the terms of the agreement.

Question 23

Electronic Signatures in Global and National Commerce Act of 2000 (E-Sign Act)

Answer 23

No contract, record, or signature may be “denied legal effect” solely because it is an electronic form

Question 24

The Uniform Electronic Transactions Act (UETA)

Answer 24

Was adopted by most states to create rules to support enforcement of e-contracts, provides validity of e-signatures and may ultimately create more uniformity among the states in this respect

Question 25

Consideration

Answer 25

The value given in return for a promise

Question 26

Adequacy of Consideration

Answer 26

“How much” consideration is given and whether a fair bargain was reached. A court may question this if fraud, undue influence, or duress is involved.

Question 27

Promissory Estoppel

Answer 27

When a promisor expects a promise and the promisee does not act on it.

Question 28

Contractual Capacity

Answer 28

The legal ability to enter into a contractual relationship

Question 29

Minors and Contracts

Answer 29

Minors can enter into a contract, provided that the contract is not prohibited by law for minors. They are voidable.

Question 30

Intoxicated persons and contracts

Answer 30

A contract entered into by an intoxicated person is voidable at the option of the intoxicated person, however, they must prove that their judgement was severely impaired

Question 31

Contracts contrary to Statute

Answer 31

Contracts to commit a crime, Usury, Gambling, Licensing statutes

Question 32

Contracts in restraint of trade

Answer 32

Contracts to reduce or restrain free competition are illegal and prohibited by statutes. A covenant not to compete is an exception.

Question 33

Voluntary consent

Answer 33

may be lacking because of mistake, fraudulent misrepresentation, undue influence, or duress

Question 34

Elements to Establish Fraud

Answer 34

• A misrepresentation of a material fact must occur.
• There must be an intent to deceive.
• The innocent party must justifiably rely on the misrepresentation

Question 35

Undue Influence

Answer 35

The party being taken advantage of does not exercise free will in entering into a contract.

Question 36

Duress

Answer 36

The use of threats to force a party to enter into a contract

Question 37

Statute of Fraud

Answer 37

designed to prevent fraud by requiring that certain types of contracts be in writing or be evidenced by a written memorandum or electronic record.

Question 38

Examples of written contracts

Answer 38

Sale, Lease, and mortgage on land, the one year rule

Question 39

Collateral Promise

Answer 39

made by a third party to assume the debts or obligations of a primary party to a contract if that party does not perform

Question 40

minimum price of goods to be in writing

Answer 40

$500

Question 41

Exceptions to the statute of fraud

Answer 41

Partial Performance, admissions, Promissionary estopel

Question 42

What constitutes a writing?

Answer 42

• A signed written or electronic memorandum
• A confirmation, invoice, sales slip, check, fax, or e-mail