Contracts

Question 1

CONTRACT

Answer 1

A legal enforceable agreement between competent parties who agree to perform, or refrain from performing, specific acts

Also, it’s a legal enforceable contract representing the “MEETING OF THE MINDS”(agreement) of the parties involved

Question 2

What must exist to create a contract?

Answer 2

Offer/acceptance, consideration and luck of any defenses that would otherwise cancel a contract or prevent it from being formed. MEETING OF THE MINDS between two or more parties.

Question 3

Difference between OFFER ANF OFFEREE

Answer 3

Offerer - making the offer

Offeree - gIving the offer

Question 4

Offer

Answer 4

Promise from one party to enter into a binding agreement with another party, subject to specific terms and conditions

Question 5

Withdrawal

Answer 5

An offeror ( the one making the offer) may withdraw his offer at any time prior to acceptance by the offeree (the one giving the offer)

Question 6

Counteroffer

Answer 6

A née offer by the offeree. A counter offer will terminate the previous offer.

Question 7

Rejection

Answer 7

The offeree (intended recipient of the offer) terminated an offer by rejecting it.

Basically, the offeree might reject an offer

Question 8

Laps of time

Answer 8

Some offers terminate automatically if they are not met by a specific deadline established by the parties

Question 9

Death and Insanity

Answer 9

Periods prior to accepting will determine the offer

Question 10

Acceptance

Answer 10

Act of declaring a desire to create a contract consistent with a specific offer (offers must be accepted as offers specifies)

Note: offers can be accepted in 3 different ways:

1) orally
2) written
3) by mail

Question 11

Consideration

Answer 11

Partakes bargain with one another in exchange of promises

1) nature of bargain
2) gift promises

Question 12

Nature of the bargain

Answer 12

Consideration is what both parties agree to do or refrain from doing ( pay and sell)

Question 13

Gift promises

Answer 13

These are enforceable because they contain no consideration (no reciprocal promise or legal detriment)

Question 14

Defense

Answer 14

A defense is a material defect which, if proven, either prevents a contract from forming( void) or renders an otherwise valid contract enforceable (voidable)

Question 15

Void or voidable distinctions

Answer 15

Common defenses which render a contract void or voidable include:

Incompetency, misrepresentation, mistakes, illegality and duress

Question 16

Incompetency

Answer 16

“LACK CAPACITY”

Types of incompetency:

1) legal insanity
2) non Legal insanity
3) minors
4) intoxication

Question 17

Legal insanity

Answer 17

One who has been adjudicated incompetent or insane by court

Question 18

Non legal insanity

Answer 18

A person who is actually insane, it hasn’t been declared insane by court

Question 19

Minors

Answer 19

Anyone under 18 years of age (in most states)

1) This also includes timing rejection
2) necessities

Question 20

Timing of rejection

Answer 20

The minor must reject (disaffirm) the contract with a reasonable time of becoming an adult, or the contract will be binding

Question 21

Necessities

Answer 21

The contracts of minors for certain necessities (food,clothing) nether are void nor voidable( obligates the minor; case by case determination