Chapter 8: contracts, classifications, formation

Question 1

basics of a contract

Answer 1

Involves a promise or commitment (exchanges of promises or commitments) to do or to not do something

May not need to be formal or written

Promise to perform/not perform

Legally enforceable
Improves buyer/seller relationship

Question 2

sources of contract law

Answer 2

legislation

common law

Question 3

legislation vs common law with respect to contract law

Answer 3

legislation - uniform commercial code, contracts for goods

common - judges decisions, contracts for anything other than goods

Question 4

Classifications of contract law

Answer 4

bilateral/unilateral
express
implied in fact
implied in law

Question 5

bilateral contract

Answer 5

promise for a promise

I promise to sell my car if you promise to pay 30,000

Question 6

unilateral contract

Answer 6

Promise for performance

When you bring me the 30,000 cash in hand, i will give you my car

Question 7

enforcements of contracts

Answer 7

enforceable - court can uphold

unenforceable - party has justifiable reason for not performing

void - lacks complete enforceability

voidable - one party has right to withdraw

valid - essential requirements present

Question 8

contract performance types

Answer 8

executed - promises performed

executory - promises not yet performed

Question 9

4 steps for forming a contract

Answer 9

1. Must be an agreement reached between 2 or more parties, one party makes an offer and the other accepts the offer
2. Must be an agreement supported by an exchange of consideration - something of legal value being given
3. Parties must confess legal capacity - contract must be legal and parties must be of capacity
4. Contract must be in correct form

Question 10

Acceptance of a contract

Answer 10

bilateral - promise
unilateral - performance
mirror image rule
silence = acceptance
deposited = acceptance
mailbox rule - once contract is in the mailbox, it is accepted then

Question 11

offer termination

Answer 11

Someone passes away

something becomes illegal

contract provision

lapse of time

rejection

revocation - too much time until accepted (can revoke anytime before acceptance also)

destruction of subject

Question 12

what must a contract be supported by in order to be reached

Answer 12

Agreement reached must be supported by a valid consideration

Something with legal value and bargained for

Question 13

promissory estoppel

Answer 13

legal doctrine that allows a promise to be enforced even without a formal contract

Reliance on promise

Question 14

capacity of parties - considerations

Answer 14

minors - under 18

intoxicated persons

mentally incompetent or impaired

Question 15

In vino veritas

Answer 15

one under the influence of alcohol is more likely to speak their hidden feelings and desires

Engaging in alcohol intake on purpose may not take away your capacity

Question 16

When are contracts voidable

Answer 16

fraud
misrepresentation
duress - force/threat
undue influence
mistake - mutual/unilayeral
mutual assent

Question 17

oral contracts

Answer 17

Generally as enforceable as written agreements
Informal

Everyday examples:
Buying fast food
Vending machines

Having things in writing eliminates confusion

Question 18

Statute of frauds - what contracts must be written?

Answer 18

land

debts of others

1 year

goods > $500

Question 19

3rd party rights to contracts

Answer 19

3rd parties may be involved in contracts

Intended (have rights of enforcement) or unforeseen (don’t have rights)

creditor, donee, incidental