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Business Law 201
GVSU Business Law 201 chapters 10-18
113
Business
Undergraduate 2
10/14/2009

Additional Business Flashcards

 


 

Cards

Term
Requirments of a valid contract
Definition

Offer

Acceptance

Consideration

Term
Offer
Definition

One Party offers to enter into a legal agreement

-commitment to do or refrain from doing something specified in the future

Term
Acceptance
Definition
The other party must agree to the terms of the agreement
Term
Consideration
Definition
Something of value received or promised, such as money, to convince a person to make a deal
Term
Bilateral
Definition

A Promise for a Promise

(formation)

Term
Unilateral
Definition

Promise for an act

(formation)

Term
Formal
Definition

Requires a special form of creation

(formation)

Term

Informal

 

Definition

Requires no form of special Creation

(formation)

Term
Express
Definition

formed by words (oral, written, or a combination)

(formation)

Term
implied in fact
Definition

formed by the conduct of the parties

(formation)

Term
Executed
Definition

a fully performed contract

(performance)

Term
Executory
Definition

a contract not fully performed

(performance)

Term
Quasi-Contract
Definition

functional contracts created by courts  and imposed on paries inthe interests of fairness and justice. They are equitable rather than contractual

 

Term
Promisary Estopple
Definition

1. one party induces a reliance on another party

2. party relies on other

3. party gets hurt

Term
Elements to an Offer
Definition

1. must have serious intention to become bound by the other

2.Resonbaly certian and derninte terms

3. communicated to the offeree

a. advertisments

b. auctions

c. rewards

Term
termination of an Offer
Definition

1. by its own terms

2. by lapse of time

3. revocation

a. actual notice

b. constructive notice

4. rejection

a. express

b. implied

5. misc. termination rules

Term
definiteness of the terms includes
Definition

1. identification of the parties

2. identification of the object or subject matter of the contract

3. consideration to be paid

4. time of payment, delivery, or performance

Term
communication terms
Definition
the offer must be communicated to the offeree. one cannot agree to a bargainwithout knowing that it exists
Term
revocation
Definition

The offeror's act of withdrawing an offer

The offeror usually can revoke the offer as long as the revocation is communicated ot the offeree before the offeree accepts

Term

misc. termination factors

 

Definition

destruction of the subjet matter

death or incompetence of the offeror or offeree

supression illegality of the proposed contract

Term
Elements of the Acceptance
Definition

1. Voluntary

2. Mirror Image

3. COmmunication

a. silence

b. specified method

c. suggested method

d. non specific or suggested method

4. MAILBOX RULE

a. contradictory responses

b. way to avoid the mailbox rule

Term
acceptance
Definition
a voluntary act by the offeree that shows agreement to nthe terms of an offer
Term
Termination by parties
Definition
revocations
rejection
counter offer
Term
termination operation of law
Definition

lapse of time

destruction of subject matter

death to the offeror or offeree

superverning eillegality

Term
Mirror Image Rule
Definition
requires teh offeree's acceptance to match the offeror's pffer exactly
Term
Mailbox rule
Definition
if the authorized mode of communication is the mail, then an acceptance becomes valid when it is mailed not when it is recieved
Term
contradicting responsese to the mailbox rule
Definition

revocation is effective when the offeror recieves notice

 

acceptance is effective when the offeree recieves notice

Term
Elements of Consideration
Definition

1. something of legal value

2. bargained for and given in exchange  for a promise or an act

Term
legal value
Definition
something of legally sufficient  value must be given in exchange  for a promise. this make consist of a promise, a performance, or a forbearance
Term
bargained-for exchange
Definition
there must me a bargianed-for exchange
Term
3 problems with consideration
Definition

1. nothing of value

2. no bargianed-for exchange

3. special situation

Term
illusory promises
Definition
when the nature or extent of performance is too uncertain the promise is rendered illusory and unenforecable
Term
pre existing duty
Definition
a promise to do what one already has a legal duty to do does not constitue legally sufficeint consideration
Term
Past Consideration
Definition
you cannot bargain for something that has already happened in the past. it is uneforceable
Term
Minors
Definition
under the age of 18
Term
disaffirmance
Definition
the legal avoidance or setting aside of a contractual obligation. to disaffirm a minor must express his or her intent through words or conduct not to be bound to the contract
Term
majority rule
Definition
minor need only return the good subject to the contract provide the goods are in the minors possession or control
Term
minority rule
Definition
the duty to restore the adult party to the position that she or he held before the contract was made
Term
lied about age
Definition
a minor can under normal circumstances disaffirm their contract even if they have lied about their age
Term
ratification
Definition
is the act of accepting and giving legal force to an obligation that previously was not enforceable.
Term
exceptions to disaffirmance
Definition

1. necassaries

2. ratification

3. fraud or misrepresentation

Term
Disaffirmance while intoxicated
Definition
if a contract is voidable because of a persons intoxication, that person has the option of disaffirming it while intoxicated and for a reasonable time after becoming sober
Term
ratification while intoxicated
Definition
an intoxicated person after becoming sober may ratify a contract expressly or impliedly just as a minor may do on reaching the age of majority
Term
general rules of intoxication
Definition
if a person is sufficiently intoxicated when making a contract and can not understand the legal consequences the contract can become voidable. however if they are aware of the consequences it is not voidable
Term
Void contract with mental incompetent
Definition
if a court has declared a person to be mentally incompetent and appointed a legal gaurdian any contract made by that person is void from the outset
Term
voidable contract with mental incompetance
Definition
if a court has NOT declared a personmentally incompetent but that person lacked the capacity ot comprehend the subject matter, nature, and consequences of the agreement then the contract is voidable at that persons option
Term
valid contract with mental incompetance
Definition
if a court has NOT declared a person mentally incompetent and that person was able to understand the nature and effect of the contract at the time it was formed, then the contract is valid and enforeable
Term
contracts violating statutes include
Definition

1. wagering

2. blue laws

3. usury

Term
blue laws
Definition

prevent from buying on certian days

ex. not being able to buy alcohol on sundays

Term
usury
Definition
a lender who makes a loan at an interest rate above the lawful maximum rate
Term
licensing statutes
Definition
all states require that member of cerrtain proffessions or occupations obtain liceses allowing them to practice.
Term
Contracts with Negative Impacts on Society
Definition
price filing or monopolies
Term
Covenant Not to Compete
Definition
reasonable in duration, area they cover, serve business purpose, cant impose hardship on employee
Term
unconsciousable contracts
Definition

they are so unscrupolulous or grossly unfair as to be "void of contscience"

Certain circumstances bargains are so oppressive taht the courts relieve innocent parites of part or all of thier duties

Term
divisible contracts
Definition
consists of distinct parts taht can be performed separately with separate consideration provided for each part
Term
Mistake
Definition
an untrue belief about a past or existing fact
Term
Bi-lateral
Definition

Both parties are mistaken

a. relates to a basic assumption on which the contract is made

b. unjured party does not bear the risk of the mistake

Term
Unilateral
Definition

one party mistaken

 

Must show one of the following for contract to not be enforced

a. the nonmistaken party caused or had reason to know of the mistake

b. unconscionablility

Term
Elements to Misrepresentation
Definition

1. a misrepresentation of a material fact must occur

2. there ust be an intent to deceive

3. the innocent party must justifiably rely on the misrepresentation

Term
Non Disclosure
Definition

-half truths

-failing to correct a mistake when you know about it

- failng to correct a true statement that becomes false

- fiduciary relatinships

Term
concealments
Definition
a party takes specific action to conceal a fact that is material to the contract
Term
reliance on misrepresentation
Definition

the decieved party must have a justifiable reason for relying on the misrepresntation of the information given.

 

Person lies about age to car rental co.

Term

Undue Influence

 

Definition
one party can greatly influence another pary, thus overcoming that partys free will
Term
Duress
Definition

fear created by threats

 

agreement to the terms of a contract is not coluntary if one of the parties is forced inot the agreement

 

act must be wrongful or illegal

Term
Statute of Fraud
Definition

1. Marriage

2. Year Rule

3. Land

4. Estate

5. Goods

6. Secondary

Term
Statute of Fraud-Land
Definition

Contract must be written to be enforceable

everything attached to the land is included including the soil itself

Term
statue of fraud-one year rule
Definition
a contract that cannot by its own terms be performed within one year from the day after the contract is formed must be in writing to be enforceable
Term
statue of fraud-secondary
Definition
a promise made by a third party to assume the debts or obligations of a primary party to a contract if that party does not perform
Term
statute of fraud-marriage
Definition
a unilateral promise to make a monetary payment or to give property in consideration of a promise to marry must be in writting
Term
statute of fraud-goods
Definition
must have a written contract for goods purchases at $500 or more
Term
contractual liability end upon...
Definition

-occurrence or failure of a condition

-performacne or breach

-agreement of the parties

-operation of the law

-excuse

Term
Discharge by performance
Definition

complete

substantial

Term
contract discharge by breach
Definition

material breach

anticipatory repudiation

Term
contract discharge by operation of law
Definition

material operation

statute of limitations

bankruptcy

impossibility or impracticability of performance

Term
contract discharge by failure of a condition
Definition
if performance is conditional, duty to perform does not become absolute until that condition occurs
Term
contract discharge bye agreement
Definition

mutaul rescission

novation

accord and satisfaction

Term
precedant
Definition
before
Term
concurrent
Definition
same time
Term
subsequent
Definition
following
Term
express
Definition
verbal or writting (stated)
Term
implied in fact
Definition
arises from the circumstances surrounding the situation
Term
implied in law
Definition
created by law, standards
Term
discharge performances
Definition

complete

substantial

inferior/material breach

anticipatory breach

Term
complete performance
Definition
when the contract performance is completed perfectly
Term
complete discharge
Definition
completes the contract perfomance perfectly
Term
substantial performance discharge
Definition
a party in good faith completes a substantial amount of the contract
Term
material breach discharge
Definition
the non performance of a contractual duty. it is breached when it is not substantially performed
Term
anticapatory breach discharge
Definition
before either party to a contract has a duty to perform one of the parties may refuse to carry out his or her contractual obligations
Term
discharge by action
Definition

mutual agreement

accord and satisfaction

waiver

alteration

 

 

Term
mutual agreement
Definition
both parties agree
Term
discharge by accord and satisfaction
Definition
some other form of payment like painting a house in exchange for a dog
Term
waiver discharge
Definition

pattern has to be established

 

ex. i cant sue after signing waver if i hurt myself skydiving

Term
discharge by alteration
Definition
alters a written contract with out knowledge of other party, other party is not responsible now
Term
discharge by law
Definition

bankruptcy

expiration of the statute of limitations

Term
bankruptcy
Definition
exempt forever from that situation
Term
expiration of the statute of limitations
Definition
after certian time has passes you lose the chance to sue
Term
discharge by excuse
Definition

impossibility

frustration of purpose

Term
impossibility
Definition
objectively impossible by anyone
Term
frustration of purpose
Definition
benifit that you would recieve from contract can no longer be achieved
Term
commercial impractability
Definition
unforseeable event impacts the cost of the contract
Term
legal remedies for breach
Definition

must be cash

reasonable certianity

foreseeable at time of contracting

duty to mitigate

Term
types of damages
Definition

compensatory

sonsequential

nominal

puntive

Term

compensatory

 

Definition
compensate for loss of contract
Term
consequential
Definition
as a result due to the breach of the contract
Term
nominal
Definition
contract was breached and no real loss
Term
puntive
Definition
punish breaching party
Term
equitable remedies to breach
Definition

specific performance

injunctions

reformation

recission and restituion

Term
specific performances
Definition

what is being contracted is unique

never awarded in a personal service contract

Term
injunctions
Definition
the actions to stop a action from happening and $
Term
reformation
Definition
when legal remedies are not enough
Term
recission and restitution
Definition
a request to return something to its rightful owner
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