Business Law I: Contracts I Flashcards Preview

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Flashcards in Business Law I: Contracts I Deck (28):
1

Contract Definition

An agreement supported by consideration between two or more persons with competent capacity for a legal purpose

2

Sources of Contract Law

1. UCC
2. Common Law

3

Statute Definition

An act of legislature that declares, proscribes, or commands something; a specific law, expressed in writing

4

UCC vs Common Law

1. UCC applies to sale of goods (tangible personal property)
2. Common Law applies to service and real estate contracts

5

Express Contract

A contract formed wholly by oral and/or written words

6

Implied/implied-in-fact contract

A contract formed, at least in part, based on the conduct of the parties or based on the factual circumstances

7

Quasi-/implied-in-law contract

A contract imposed by the courts or by law when some performance has gone forward, even though there is no express/implied contract

8

Bilateral contract

A type of contract in which both sides make a promise. A promise is made by one party in exchange for a promise from the other party. *Most contracts are bilateral contracts

9

Unilateral Contract

A type of contract in which one side makes a promise in exchange for an action or performance from the other side

10

Executed Contract

A contract that has been fully performed by both parties to that contract

11

Executory Contract

A contract that has not yet been fully performed by the involved parties

12

Partially executed contract

A contract that has been performed in part... One side has performed the contractual obligation

13

Valid contract

A contract that has been legally formed and meets the necessary requirements for formation

14

Void contract

A contract that lacks a legal purpose or is in violation of the law... cannot be enforced by the courts b/c enforcement would violate public policy and encourage illegal conduct

15

Voidable contract

An otherwise valid contract that can be set aside b/c one party has protection under the law (fraud in formation or minors)

16

Unenforceable contract

An otherwise valid contract that cannot be enforced b/c of a statutory or other legal defense (courts will not enforce, but parties still can)

17

Parties to a contract (2)

1. Offeror: party who makes the offer
2. Offeree: party w/ right to accept the offer

18

Requirements for formation of a contract (4)

1. Offer
2. Acceptance
3. Consideration
4. No defenses

19

Requirements of a valid offer (3)

1. Present Intent
2. Definite Terms
3. Communication of the offer

20

Termination of offer: Revocation

An offer can be revoked at any time prior to acceptance

21

Irrevocable Offer: Options (3)

1. Offeror cannot withdraw the offer during the option period
2. Offeree has right (not requirement) to accept during option period
3. Offeree's rejection during option period does not end the option

22

Irrevocable Offer: Merchant's Firm offer (8)

UCC Article 2
1. in writing
2. made by a merchant
3. states that it will be kept open (max 3 months)
4. does not require consideration
5. once 1-4 are present, offeree holds irrevocable offer for time stated
6. if parties want more than 3 months, consideration required
7. if offeror is nonmerchant, common law applies, consideration required
8. valid firm offer is just like common-law option (cannot be revoked and ends only upon expiration)

23

Contract Rejection

offer is terminated at any time prior to acceptance (verbal/writing) - rejection is effective when RECEIVED

24

Counteroffer

when made any time prior to acceptance is a form of rejection

25

Acceptance: Unilateral offer

takes place upon completion (total performance) of the act required by the offer

26

Acceptance: Bilateral offer

acceptance (promise) must be absolute, unequivocal, unconditional, and communicated to the offeror

27

Common Law Mirror Image Rule

contracts involving real property and services... any deviation in the terms of acceptance constitutes a counteroffer, not an acceptance

28

Acceptance under UCC Article 2

Depends on merchant/nonmerchant
1. for both, a definite expression of acceptance that does not change any terms
2. for nonmerchants, if definite statement of acceptance followed by additional terms, a contract is formed w/o additional terms
3. for merchants, if definite statement of acceptance followed by additional terms, contract is formed WITH additional terms