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MGMT 211 Swim > Chapter 4 > Flashcards

Chapter 4 Flashcards

1
Q

Contacts have 2 functions which are:

A

Performance

Risk Allocation

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2
Q

Are all promises contracts?

A

No, promises must have legal requirements to be a contract

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3
Q

Expressed v. Implied Contracts

A

Expressed Contracts
-written or oral contracts

Implied Contracts

  • inferred from conduct of parties
  • Ex: sitting in barbers chair and you know you have to pay at the end
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4
Q

Quasi Contracts

A

-not true contract

  • RARELY ever win in court
  • judge fills out missing element
  • prevents unjust enrichment

Ex: Keith Swim doesn’t pay you after you do his yardwork because you don’t have a yardwork permit

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5
Q

Unconditional Contracts

A
  • must perform duty

- no matter what

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6
Q

3 Types of Conditional Contracts

A

Conditional Subsequent

  • contract begins immediately
  • contract ends if specified event happens

Conditional Precedent
-contract begins if/when specified event occurs first

Conditional Concurrent
-contract doesn’t begin until other party does something
-you don’t have to perform until they perform or vice versa
Ex: buying a house

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7
Q

Unilateral v. Bilateral Contracts

A

Bilateral Contracts
-offeree is a promisor
-offerer is a promisor
Ex: You promise to paint my house and I promise to pay you

Unilateral Contracts
-only offer is a promisor
-offeree accepts the contract by 100% of job
Ex: You complete all 20 things on Keith Swim’s yard work to-do list

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8
Q

How does enforcement differ from Unilateral Contracts and Bilateral Contracts?

A

Unilateral
-enforced once offeree fully completes job
Bilateral
-enforced once promise is made by offeree

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9
Q

Executed Contracts vs. Executory Contracts

A

Executed Contract
-contract is 100% done

Executory Contract
-contract not fully completed by 1 or both parties
Partially Executed Contract

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10
Q

Valid Contract, Void Contract, Voidable Contract, and Unenforceable Contracts

A

Valid Contract

  • legal
  • enforceable by law

Void Contract

  • illegal
  • not enforceable by law

Voidable Contract

  • 1 or both parties can terminate contract
  • can terminate with no liability

Unenforceable Contract
-contract was once legal and enforceable
-no longer legal and enforceable
-can be sued for time when Unforceable Contract was once legal
Ex: law changes

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11
Q

Most common type of law suit in American Court System filed?

A

Breach of Contract

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12
Q

Who makes Contract Law

A
  • determined by states
  • vary from state to state
  • becoming more uniform
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13
Q

6 Elements to a contract

A 
Mutual Agreement
Consideration
Capacity 
Legality
Genuine and real assent to the contract
Some contracts must be in writing
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14
Q

Element of a contract - Mutual Agreement

What are the two elements of a Mutual Agreement

A

Offer

Acceptance

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15
Q

Explain the parts to an offer

A

Intent
-must intend to bind other party to legal obligation

Definite Terms and Conditions

  • clearly stated
  • must define contract length (quantity)

Communicated to the Offeree
-offeree must know about reward to receive money for return of lost dog

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16
Q

5 ways an Offer can be terminated

A

Revocation

  • offeror takes back his offer
  • ONLY if offeree hasn’t accepted yet

Rejection
-offeree says no

Lapse of time
-Option Contract (promise to keep contract open to a person for a specified amount of time… can’t sell to someone else)

Counteroffer

Termination by law

  • law makes contract illegal
  • offeree goes insane or dies
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17
Q

What is the term for when a law makes a contract illegal

A

Intervening illegality

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18
Q

Explain the element of a contract called Consideration

A
  • something of value given up in exchange for another
  • Legal Detriment
  • Legal Benefit
  • courts do not care if Fair Trade or not
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19
Q

What are the two parts of Consideration element of a contract?

A

Legal Detriment

  • promise to give up a legal right
  • or refrain from act

Legal Benefit

  • legal right to something
  • is acquired through the promise
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20
Q

All minors can void out of a contract except for contracts concerning these 4 things:

A 
Enlistment in the Military 
Necessities 
Marriage Contracts
Statues
 -banking, insurance, public transportation, student loans
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21
Q

Illusory Promises

A
  • fake promise
  • looks like both parties are binded but only one is

Ex: I promise to give you supplies for your business on the 31st of each month and you promise to pay me $1500 each month

Some months I won’t have to perform, but you must pay EVERY month

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22
Q

Does a minor owe restitution when they Disaffirms (gets out) of contract

A

Depends
-no restitution owed

  • can have to pay restitution by returning item loaned
  • minor doesn’t have to pay for missed payments though
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23
Q

What does minor Ratification mean

A

Means a minor stays in contract when they turn 18

  • ratifies by continuing performance (Ex: keep making payments)
  • can ratify orally
24
Q

Misrepresentation of Age by a minor - What happens when they want out of contract

A
  • states usually allow them to disaffirm

- growing trend to keep minor binded to contract

25
Intoxicated People - Contract Capacity
- if drunk during contract - can void out when sober - hard to prove DRUNK - have to be so drunk you did not even understand what you were doing
26
Adjudicated Insane and Unadjudicated Insane
Adjudicated Insane - person previously proved to be insane - insane person can void contract anytime Unadjudicated Insane - person proved to be insane after they enter contract - insane person can ratify (continue) contract - insane person can void contract - insane person owe restitution if void contract
27
Two types of contracts that violate Legality element of a Contract
Unconscionable Contract -contract that is grossly unfair to one party over other Exculpatory Agreement -contract that releases party from consequence resulting from negligence or wrongful acts EX: Airline is not responsible if their pilot gets drunk and plane goes down and everyone dies
28
Explain Genuine and Real Assent to the Contract
Parties must freely and voluntarily enter into a contract Mistake Fraud Duress Undue Influence
29
Concerning Genuine and Real Assent to the Contract What happens if there is a Mistake
Unilateral Mistake (one party is mistaken) - court offers no relief to mistaken party - mistaken party CANNOT void - given no fraud took place ``` Bilateral Mistake (both parties mistaken) -Mutual mistake of value --- no relief ``` - Mutual mistake on material fact(wording) in contract) - either party can void contract - relief is given to either party depending on mistake
30
Explain Fraud and the 4 ways it's classified
Misrepresentation Intent to deceive other party Justifiable Reliance on misrepresented Information Innocent party Injury
31
Explain Duress
Forcing someone to sign a contract against their will Ex: breaking their leg
32
Undue Influence
-mentally taking control of another's mind Ex: Having sex with 99 year old man so he puts you in his will
33
5 ways contracts are required to be written under the Statue of Frauds
- items over $500 - if promise cannot be performed within a year - if there is transfer of interest in real property - promise to obligations of others (promise to someone's work that is already required by them) - promise made in contemplation of marriage
34
Parole Evidence Rule
Orally evidence cannot be used to contradict written evidence
35
4 exceptions to Parole Evidence Rule
Oral evidence can be used IF: - oral evidence is explaining an agreement that was made to change material fact of contract - oral evidence is explaining an ambiguous/incomplete part of the contract - oral evidence is being used to prove that the contract itself is VOID or VOIDABLE - oral evidence is used to fill in the gaps
36
Breach of Contract/Incomplete Performance Explain Substantial Performance and Material Breach
Substantial Performance - job is mostly done but not fully - still get paid for job (Payment - Damages for Incomplete work) Material Breach - performance on job is TOTALLY wrong - innocent party gets out of contract free - guilty party responsible for damages
37
5 Ways to Terminate a contract
Rescission Novation Accord and Satisfaction Discharge by Impossibility Repudiation
38
Explain Accord and Satisfaction - Ways to terminate a contract
When neither parties can agree on the amount the other owes them I think I owe you $200 and you think I owe you $300 Example of Accord -I offer you $250 Example of Satisfaction - you accept my $250 - terminates the contract - ONLY for unliquidated debt NOTE: If my debt to you was liquidated (I actually owe you $300).... then you can still sue for other $50 If my debt to you was unliquidated (no way to tell the amount I owe you)... then you can't come after me in court
39
Recission
- both parties agree to terminate contact without performance - restitution owed
40
Novation
- one party completely thrown out of contract - thrown out party REPLACED - new contract created
41
Accord and Satisfaction
- ONLY for unliquidated debt - parties agree to get out of contract - parties accept partial performance from eachother
42
Repudiation
- party notifies other in advance they will not perform - innocent party can wait and see - innocent party can treat contract as breached - innocent party can VOID out
43
What is a another name for Monetary Damages?
Legal Damages
44
What type of damages do torts and contracts have?
Contracts - Monetary Damages - equitable Damages - NO PUNITIVE DAMAGES Torts - monetary damages - equitable Damages - punitive damages
45
4 ways a contract can be discharged by Impossibility
- subject matter of contract (ex: building) is destroyed - one party of a person service dies (person cannot be replaced) - change in law makes contract illegal - performance becomes commercially impractical (too expensive now)
46
Which of the following is the most common when there is a breach of contract? Compensatory Damages Monetary Damages Equitable Remedies
Monetary Damages
47
3 types of Legal Damages or Monetary Damages
Compensatory Damages -make victim whole again Consequential Damages - cover cost incurred by victim resulting from the breach - after the breach costs that come up Liquidated Damages - damages specified in contract before it start - receive these if other person breaches the contract
48
4 Types of Equitable Remedies
Rescission and Restitution - undo/cancel existing contract - if money has already been paid from one party to other than --> Restitution is owed Reformation -rewrites contract to make it say what it was supposed to say Specific Performance - court requires party to perform a certain way - RARE cause courts don't want to supervise it Mitigation of Damages -requires innocent party to reduce damages they are currently incurring EX: You rent out a house to Joe. Joe breaches the contract when he doesn't pay rent and moves out. Joe owes you Consequential Damages (money you could be receiving right now if he didn't breach). The court orders you to find a new tenant to keeps Joe's damages he will pay to you down
49
What are the 4 types of Agencies?
Agency by Agreement Agency by Ratification Agency by Apparent Authority (Agency by Estoppel) Agency by Operation of the Law
50
Agency by Ratification
- agent is not working with principal - agent enters into agreement anyway with 3rd party - if alleged principal accepts agents actions(called ratification, then principal bound to contract with 3rd party - if alleged principal denies agent's actions, then agent is bound to contract with 3rd party
51
Agency by Apparent Authority (Agency by Estoppel)
- agent is not working with principal and has no authority - agent acts like he is working with principal - 3rd party can bind Principal to contract even though they didn't know about agent who was acting like he worked for the principal - principal has to convince 3rd party that agent is capable of representing them - principal can get in trouble if they don't stop rogue agent if they know about him
52
Agency by Agreement
- written or oral | - if written, then it has Power of Attorney
53
Agency by Operation of Law
-in emergencies -law implies relationship Ex: babysitter signs off for kid to have surgery when parents are not there
54
What is a disclosed, Partially disclosed, and Undisclosed agreement?
Partially Disclosed - 3rd party knows agent represents a principal - 3rd party does not know principal Disclosed - 3rd party knows agent represent principal - 3rd party knows principal Undisclosed - 3rd party only knows agent - does NOT know agent represents a principal
55
Who is liable in a Partially Disclosed and Disclosed conract
If agent has Actual Authority - principal liable to 3rd party - agent not liable for anything If agent has Apparent Authority - principal still liable to 3rd party - agent is liable to principal for disobeying
56
Who is liable in an Undisclosed Contract
If agent has Actual Authority - principal liable to 3rd party - principal must indemnify agent If agent has No authority -principal not liable

MGMT 211 Swim (17 decks)

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