CHP 32 - General Contract Law

Question 1

Contract

Answer 1

Agreement between 2+ parties to perform or refrain from performing some act

Question 2

4 legal status’ of a contract

Answer 2

• Valid
• Valid but unenforceable
• Void
• Voidable

Question 3

Valid

Answer 3

Meets legal requirements.
-Written ones are enforceable within a statutory period

-Oral : Generally enforceable with some exceptions

Question 4

Valid but unenforceable

Answer 4

State law requires that some contracts are only enforceable if in writing.

There’s no legal recourse to enforce performance

Question 5

Void

Answer 5

is not valid and therefore not a contract at all

Question 6

Voidable

Answer 6

Initially appears to be valid but is subject to rescind due to disability

Question 7

Voidable VS Void

Answer 7

A void contract does NOT require an act of disaffirmation to render it unenforceable

Question 8

What makes a contract valid

Answer 8

1. Competent Parties
2. Mutual Consent
3. Valuable Consideration
4. Legal Purpose
5. Voluntary Act of Good Faith

Question 9

What makes a competent party

Answer 9

• Legal Age
• Mental Competency
• Legitimate authority

Question 10

Mutual Consent AKA

Answer 10

Offer and acceptance/meeting of the minds

Question 11

Statute of Limitations

Answer 11

Time restriction

Question 12

Statue of Frauds

Answer 12

Contract must be in writing to be enforceable

Question 13

Uniform Electronic Transactions Act

Answer 13

Makes it legal to use electronic signatures

Question 14

Termination of Offer

Answer 14

• acceptance (becomes contract)
• Rejection
• Withdrawal
• Lapse of Time
• The offeree changes the offer
• Death or insanity

Question 15

Define Parol

Answer 15

An oral contract

Question 16

Express Contract

Answer 16

All terms have been stated and agreed

Question 17

Implied Contract

Answer 17

Any Parties acts as if there is a contract

Question 18

Bilateral Contract

Answer 18

Both parties promise to perform

Example: Earnest money

Buyer promises to pay, seller promises to deliver title

Question 19

Unilateral Contract

Answer 19

Only one party promises

Example: An option

Question 20

Executed Contract

Answer 20

Fully performed and fulfilled

Question 21

Executory Contract

Answer 21

performance not yet completed

Question 22

Unconscionable Contract

Answer 22

unduly favors the party with superior bargaining power

Question 23

Adhesion Contract

Answer 23

Dictated by the party who has the greater bargaining advantage

Not unconscionable bc it doesn’t unfairly exploit but there’s no true meeting of minds

Question 24

Aleatory Contract

Answer 24

Effects are triggered by occurrence of a chance event

Example: Insurance policies

Question 25

Performance

Answer 25

Partial or sufficient

Question 26

Infeasibility

Answer 26

Valid contract canceled bc it's not possible to perform

Question 27

Mutual agreement to terminate or renounce

Answer 27

Novation

Question 28

Cooling Period Rescission

Answer 28

Cancellation without injury within statutory period of time Revoke contract at anytime before the other party has performed its obligations

Question 29

Revocation

Answer 29

Cancellation by one party without consent of the other

Question 30

Abandonment

Answer 30

Party fails to perform contractual obligations

Question 31

Operation of law

Answer 31

rights and liabilities of parties change due to law Example: BK

Question 32

Breach of contract

Answer 32

Failure to perform AKA Default

Question 33

Legal remedies for default

Answer 33

Rescission Forfeiture suit for damages Suit for specific performance

Question 34

Types of compensation for damages

Answer 34

Liquidated and unliquidated damages

Question 35

Liquidated

Answer 35

When compensation is known via contract

Question 36

Unliquidated

Answer 36

Contract does not specify amount

Question 37

Reformataion

Answer 37

Legal action filed when Contract has mechanical or clerical error that needs to be corrected

Question 38

When does a counteroffer become a contract

Answer 38

When the offeree accepts without changing

Question 39

When does an offer become a contract

Answer 39

When the offeree gives the offeror notice of the acceptance

Question 40

If an offeree alters any part of an offer and then signs it ______

Answer 40

The original offer is extinguished and the offeror is not bound by any agreement

Question 41

A buyer withdraws an offer before acceptance what is the status of the offer

Answer 41

The offer is extinguished along with the sellers right to accept it

Question 42

A seller signs a listing agreement and then decides not to sale does the broker have any recourse

Answer 42

YES possibly

Question 43

If the offer accepted is vague which necessary condition may be found missing

Answer 43

Mutual consent