Shared Flashcard Set

Details

Business Law: Ch. 12-16
Test Two
83
Business
Undergraduate 2
03/26/2012

Additional Business Flashcards

 


 

Cards

Term
Contract
Definition
legally binding agreement
Term
Elements of a Contract
Definition

1. agreement

2. competent parties

3. genuine assent

4. consideration

5. lawfull objective

6. form required by law

 

Term

Parties to a contract

 

Definition

Promisor (obligor)

and

Promisee (obligee)

 

 

Term
Privity
Definition
parties of a contract stand in privity
Term
Privity of Contract
Definition
Relationship between the parties of a contract
Term
Formal Contract
Definition

Enforced because the formality with which they are executed is considered sufficient to signify the parties' intent to be bound by it.

 

Contract by Seal

Recognizance - K of record

Term
Informal Contracts
Definition

Any K that isn't formal

 

Enforceable because they represent an agreement of the parties

 

 

Term
Express Contract
Definition
One in which the terms of the agreement are manifested by their words (oral or verbal)
Term
Implied Contract
Definition

agreement shown by the acts and conduct of the parties

 

 

Term
Valid Contract
Definition
an agreement that is binding and enforceable
Term
Voidable Contract
Definition

an agreement that is otherwise binding and enforceable,

but because of circumstances,

it may be rejected at the option of one party.

Term
Void Agreements
Definition
Without legal effect because it cannot be enforced
Term
Executed Contract
Definition
A K that's been completely performed
Term
Executory Contract
Definition
Something in the K remains to be done
Term
Bilateral Contract
Definition
an agreement under which one promise is given in exchange for another
Term
Unilateral Contract
Definition
only one party makes a promise in return for an act
Term
Option Contract
Definition
a K to hold an offer to make a K open for a fixed time
Term
Right of First Refusal
Definition
the right of a party to meet the terms of a proposed contract before it's executed
Term
Quasi Contract
Definition
an obligation imposed by law to prevent unjust enrichment in the absence of a k
Term
Quantum Meruit
Definition
As much as he or she deserved
Term
Offer
Definition
a promise that is conditional upon an act, a forbearance, or a return promise
Term
Definite by Incorporation
Definition
a K can be made definite by reference to another writing, prior dealings, or trade practices
Term
definiteness
Definition
an offer and resulting K must be definite and certain
Term
implied terms
Definition
not all terms need to be expressed and can be implied by law or conduct
Term
divisible contracts
Definition
when the agreement consists of two or more parts and calls for corresponding performances
Term
Requirements Contract
Definition
a K to buy all requirement of the buyer from the seller
Term
Output Contract
Definition
a K of a producer to sell its enter production or output to a given buyer
Term
Exceptions to Definiteness
Definition
1. Requirements Contract
2. Output Contract
Term
Terminating an Offer
Definition
1. Revocation
2. Counteroffer
3. rejection
4. lapse of time
5. death or disability
6. subsequent illegality
Term
Option Contract
Definition
a binding promise to keep an offer open for a stated period of time

requires consideration
Term
Firm Offer
Definition
an offer that states that it is to be irrevocable fora period of time
Term
Mailbox Rule
Definition
acceptance of offer effective upon postage. Revocation of offer effective receipt.
Term
Contractual Capacity
Definition
the ability to understand that a K is being made and to understand its general meaning
Term
Status Incapacity
Definition
some classes of persons are declared by law to lack contractual capacity
ex. minors
Term
Factual Incapacity
Definition
may exist when a person does not understand that a K is being made or its general nature due to mental condition (meds, drugs, alcohol, illness, or age)
Term
Minor's power to avoid contracts
Definition
a minor can affirm or ratify a K on attaining majority: performing it, expressly approving it, or allowign reasonable time to lapse w/o avoidance
Term
Misrepresentation of Age
Definition
most states says it doesn't affect the minor's ability to avoid a K
Term
Restitution for Original Consideration Intact
Definition
when the minor still has what was received, he/she must return it
Term
Status Quo Ante
Definition
original position of the parties
Term
Restitution for Original Consideration Damaged or Destroyed
Definition
minor avoids K and must return what remains
Term
Contracts for Necessaries
Definition
a minor can dis-affirm a K for necessaries but must pay the reasonable value for the furnished necessaries.
Term
Contracts a Minor Cannot Avoid
Definition
1. educational loans
2. Ks for medical care
3. Ks made while running a busn
4. one provided by court
5. one made in performance of legal duty
6. those related to banking, insurance, or stock
Term
Intoxicated Persons
Definition
Capacity and validity are not affected so long as the party knew that a contract was being made

voidable if not
Term
Unilateral Mistake
Definition
mistake by one of the parties does not affect the contract when the mistake is unknown to the other party
Term
Mutual Mistake
Definition
K is voidable by the adversely affected party if the mistake has a material affect on the agreed exchange
Term
Reformation
Definition
remedy by which a written instrument is corrected when it fails to express the actual intent of both parties because of fraud, accident, or mistake.
Term
Intentional Misrepresentation
Definition
fraud classified in law of Tort
Term
Fraud
Definition
the making of material misrepresentation of fact with:
1. knowledge of falsity or reckless indifference
2. intent the listener relies on it
3. listener does rely on it.
4. listener is harmed
Term
Negligent Misrepresentation
Definition
predicated on a negligently made false statement - no due care regarding information

K voidable at option of harmed party
Term
Nondisclosure
Definition
serves to make a K voidable, especially if there was active concealment

general rule that a party doesn't have to volunteer information
Term
Exceptions to the general rule of nondisclosure
Definition
1. unknown defect or condition
2. confidential relationship
3. active concealment
Term
Undue Influence
Definition
occurs when the dominating person obtains any benefit from a K made with the dominated person

K then voidable
Term
Duress
Definition
makes a K to avoid harm: physical and economic duress
Term
consideration
Definition
what each party to a K gives up to the other party in the agreement
Term
Bargained-for-Exchange
Definition
promise for a promise
Term
Benefit-Detriment Approach (consideration)
Definition
consideration defined as a benefit to promisor or a detriment to the promisee.
Term
Forbearance
Definition
Refraining from doing an act that an individual has a legal right to do
Term
Illusory Promises
Definition
a promise that in fact does not impose any obligation on the promisor
Term
Conditional Promise
Definition
depends on the occurrence of a specified condition in order for the promise to be binding
Term
Preexisting Legal Obligations
Definition
doing or promising to do what you already have a legal obligation to do is not consideration
Term
Composition of Creditors
Definition
the creditors of on debtor mutually agree to accept a fractional part of their claims in full satisfaction of the claims.
binding and supported by consideration
Term
Past Consideration
Definition
a promise based on a party's past performance lacks consideration
Term
Moral Obligations
Definition
most states say promises made on moral obligations lack consideration and are not enforceable
Term
Exceptions to the Laws of Consideration
Definition
1. charitable subscriptions - pledges lack consideration
2. uniform commercial code abolished the requirement in some situations
Term
UCC Exceptions to Laws of Consideration
Definition
1. merchant's written firm offer
2. written discharge of a claim for an alleged breach of K
3. agreement to modify a K for sale of goods
Term
Promissory Estoppel
Definition
quasi contract
promisor may be prevented from asserting that his/her promise is unenforceable because it gave no consideration
effective when:
1. promisor makes promise that lacks consideration
2. promisor intends that promisee rely on promise
3. promisee does
4. enforcement of promise is only way to avoid injustice
Term
Effect of Illegality
Definition
contract void
Term
Exceptions to Effect of Illegality
Definition
1. protection of one party - law the agreement broke intended to protect one party
2. unequal guilt - least guilty party granted relief
Term
Partial Inequality
Definition
an agreement may involve the performance of many promises, some illegal and some not. the legal ones can be enforced provided they can be separated from the illegal ones
Term
Good Faith and Fairness
Definition
every K has an implied obligation that neither party will do anything that will have the effect of destroying or injuring the right of the other to receive the fruits of the K
Term
Procedural Unconscionability
Definition
deals with freedom of assent resulting from inequality of bargaining power, absence of real negotiations, or a surprise resulting from hiding a disputed term in long document or fine print
Term
substantive unconscionability
Definition
occurs when the Ks terms are so one-sided as to shock the conscience or are so extreme as to the more and business practices of the time and place
Term
Public Policy
Definition
protection from that which tends to be injurious to the public, contrary to public good, or violates an established interest in society
Term
Licensed Callings or Dealings
Definition
if license is required to protect the public from unqualified people, a K made by an unqualified person is unenforceable
Term
Usery
Definition
money loaned at a higher rate of interest than the law allows
Term
Validity in Contracts
Definition
1. valid
2. voidable
3. void ab initio (to be treated as invalid from the outset)
4. valid but unenforceable (not in writing)
Term
Intent
Definition
objective - what they say
subjective - what they think
Term
Non-genuine assent
Definition
1. accident
2. mistake
3. misrepresentation
4. negligent misrepresentation
5. fraud
6. duress
Term
In Pari Delicto
Definition
equal in guilt
Term
Doctrine of Unconscionability
Definition
says some things are put into Ks that are profoundly unfair (strong seller and weak buyer)that courts won't uphold
Term
Unconscionable Clause
Definition
the clause in the K that is profoundly unfair
Term
Contract of Adhesion
Definition
the K because it contains an unconscionable clause
Term
Covenants not to Compete
Definition
Where: in employment agreements and sale of businesses

What: enforceable if they are reasonable in scope (breadth, time, distance)
Supporting users have an ad free experience!