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Legal Environment of Business
7th Edition, Cheeseman, Chapters 9-21
45
Business
Undergraduate 3
10/09/2013

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Term
Forming the Contract
Definition
|Advertisement| ~> Offer (offeror)+Acceptance (offeree)+Validation (consideration)=|K| ~>Performance ~> |Breach| ~> Remedy
Term
Contract(K)
Definition
Legally enforceable promise
Term
Objective Theory of Contracts
Definition
Neither side judges..3rd party needed
Term
Unilateral Contract
Definition
Acceptance, Validation, and Performance merge into one. EX: buying something at the store
Term
Express Contract
Definition
When parties have been very clear on what is wanted from contract
Term
Implied Contract
Definition
3rd party needed...terms were implied
Term
Void Contract
Definition
Law won't recognize/allow contract
Term
Voidable Contract
Definition
One party can get out of the contract..(legal disability)
Term
Mirror Image Contract
Definition
Offeree must accept or reject the exact offer made by the offeror
Term
Revocation
Definition
The offeror revokes the offer (but only until acceptance/rejection)
Term
Lapse of Time
Definition
Reasonable amount of time unless offeror specifies
Term
Mode of Acceptance
Definition
Offeree must accept in same manner as the offer was made
Term
Mail Box Rule
Definition
Valid when mailed, not received
Term
Privity of Contract
Definition
Only the 2 parties who form the contract can enforce it
Term
Covenant
Definition
Unconditional promise within K
Term
Condition
Definition
-Event that must occur before the covenant becomes binding
-Starts with "If" or "Provided that"
Term
Force Majeure
Definition
"Act of God"
Term
Statute of Limlitaions
Definition
You only have so long to sue other party for breached K. 4 years from breach
Term
Breaching Party
Definition
Caused the breach
Term
Aggrieved Party
Definition
-Party that didn't cause the breach
-Has responsibility to keep damages as low as possible
Term
Remedy
Definition
What the court does to make the aggrieved party whole
Term
2 Types of Breaches
Definition
-Minor: Partial Breach; can only sue for damages
-Material: monetary funds would not be sufficient; Rescind contract
Term
Normal Remedy
Definition
Monetary Damages
-Compensatory
-Incidental & Consequential
-Punative
Term
Liquidated Damage Clause
Definition
Set amount for damages
ex. Buyout Clause
Term
Specific Performance
Definition
Court orders breaching party to go through with duties
Term
Injunction
Definition
Court orders a party not to do something
Term
Covenant of Good Faith and Fair Dealing
Definition
Promise to complete duties to best ability; Every K presumes this
Term
UCC
Definition
Uniform Commercial Code
Term
What does the UCC cover?
Definition
Covers goods only. Not services
Term
Title
Definition
written document that says who owns goods
Term
Risk of Loss
Definition
Who has to replace goods if damaged during shipping?
A: Person who holds the title
Term
Common Courier
Definition
Someone who regularly ships goods for others; Bailee
Ex: FedEx
Term
Perfect Tender Rule
Definition
If the seller fails to deliver goods exactly as specified in the K, the...
•buyer can reject all goods
•buyer can accept all goods (and sue for damages
•buyer can accept some goods and reject others (and sue for damages)
Term
Sellers Right to Cure
Definition
has a reasonable amount of time to correct his/her own breach
Term
Buyers Right to Cover
Definition
After a reasonable amount of time, buyer can seek substitute goods from another seller
Term
Reasonable Assurances
Definition
when buyer has reasonable doubt that seller can't come through, the buyer can then seek assurance
Term
Warranty
Definition
seller saying that if something goes wrong with product, seller will make it right
Term
Express Warranty
Definition
Can be given from any seller to any buyer. Negotiated
Term
Puffing
Definition
Building your product up but don't....
1. Give express warranty
2. Commit Fraud
Term
Fraud
Definition
Knowing the info I'm giving you, so you buy my product, is wrong
Term
Good Faith Purchaser for Value
Definition
1. Buying from a reputable merchant
2. Pay with currency
Term
Implied Warranty of Fitness for Human consumption
Definition
Product is safe to consume
Term
Warranty of Good Title
Definition
Seller owned product before selling
Term
Warranty of No Security Interest
Definition
When a consumer buys a product from a merchant, it is sold without a security interest
Term
"As is"
Definition
No warranties attached. type of disclaimer
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