Business Law ch 5-8

135 cards

Blaw ch 5-8�


 
  
Created Jan 8, 2011
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kmunoz784

 

 
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1
A contract is
 
A contract is a legally enforceable agreement between two or more competent persons.
2
A valid contract is
 
A valid contract is one that is enforceable by the courts and it has five requirements:Mutual...
3
All contracts are
 
 
All contracts are agreements, but not all agreements are contracts; only those agreements enforceable...
4
Contracts are classified as:
 
 Valid contracts, void agreements, and voidable contractsExpress and impliedFormal* and...
5
A void agreement is
 
a. A void agreement is one that is of no legal effect.
6
A voidable contract is
 
A voidable contract is one that may be set aside by at least one of the parties.
7
An express contract is
 
An express contract is one in which the parties express their intentions by words at the time...
8
A formal contract is
 
A formal contract is one that must be in a special form or be created in a certain way.
9
An implied contract is
 
An implied contract is one in which the duties and obligations that the parties assume are...
10
A simple contract is
 
A simple contract is a contract other than a formal contract.
11
An executory contract is
 
An executory contract is one in which the terms have not been fully carried out by all parties.

12
An executed contract is
 
An executed contract is one in which the terms have been fully carried out by all parties.
13
unilateral contract.
 
A contract in which an act is done in consideration for a promise is a unilateral contract.
14
A bilateral contract consists of
 
A bilateral contract consists of a mutual exchange of promises to perform some future acts....
15
A quasi contract is
 
A quasi contract is the imposition of rights and obligations by law when no real agreement...
16
What provision does the law allow if a party to a contract fails or refuses to perform it?
 
If a party to a contract fails or refuses to perform it the law allows the other party an appropriate...
17
How does a contract differ from an agreement?
 
A contract differs from an agreement in that the parties to a contract intend to be legally...
18
When is a contract actually unenforcable agreement? Can it be made enforcable?
 
A contract is actually an unenforceable agreement when the law requires it to be in a particular...
19
what 2 items must be expressed in order to have an express contract?
 
Both the parties' intention to contract and the terms of the agreement must be expressed in...
20
how must a sealed contract be executed?
 
In order to execute a contract under seal, the word "seal" or the letters "L.S." should appear...
21
What is a recognizance?
 
A recognizance is a type of formal contract in which obligations are entered into before a...
22
Why are most business contracts written rather than oral?
 
Most business contracts are written rather than oral to avoid disputes about the terms of the...
23
Explain the difference between an executor and a executed contract?
 
An executor contract is one in which the terms have not been fully carried out by all the parties...
24
Are all contracts the result of mutual promises by both parties?
 
No, unilateral contracts are the result of only one promise. The other party makes no promise,...
25
When will the law impose a contract when no real contractc exists?
 
The law will impose a contract when no real contract exists when a failure to do so would result...
26
State the five requirements for a valid contract.
 
To be valid, a contract must be: based on mutual agreement, made by competent parties, supported...
27
Describe the types of contracts and how they differ from agreements.
 
A contract is a legally enforceable agreement between two or more competent people. An agreement...
28
Explain the difference between a contract and a quasi contract
 
A quasi contract is not a true contract because the parties have not made an agreement. But...
29
contract
 
legally enforcable agreement
30
breach of contract
 
failure to perform contractual obligations
31
valid contract
 
contracts enforcable by law
32
void
 
of no legal effect
33
unenforcable contract
 
agreement that is not currently binding
34
voidable contract
 
enforcable agreement that may be set aside by one party
35
express contract
 
contract with the terms of the agreement specified in words
36
implied contract (implied in fact contract)
 
contract with major terms implied by the parties' conduct
37
formal contract
 
contract with special form or manner of creation
38
recognizance
 
obligation entered into before a court to do an act required by law
39
negotiable intrument
 
document of payment, such as a check
40
written contract
 
contract with terms in writing
41
oral contract
 
contract with terms spoken
42
executory contract
 
contract not fully carried out
43
executed contract
 
fully performed contract
44
unilateral contract
 
contract calling for an act in consideration for a promise
45
bilateral contract
 
contract consisting of mutual exchange of promises
46
quasi  (implied by law contract)
 
imposition of rights and obligations by law without a contract
47
unjust enrichment
 
one benefiting unfairly at another's expense
48
An agreement is reached when
 
An agreement is reached when one party makes an offer and the other party accepts the offer....
49
There are three requirements of a valid offer:
 
The offer must be definite. The offer must be seriously intended. If it is made in jest,...
50
Advertisements, window displays, price lists, etc., are
 
are not offers, but are invitations for customers to make offers.
51
Duration of an offer is affected by the following factors:
 
An offer may be revoked by the offeror at any time prior to acceptance, An option cannot be...
52
A proper acceptance of an offer creates a contract.
 
The acceptance may be by words, oral or written, or by some act which clearly shows an intention...
53
counteroffer
 
If the offeree varies or qualifies the terms of the offer, even if intending to accept the...
54
The offeree may
 
The offeree may make an inquiry without rejecting the offer.
55
When an offer is made by mail
 
When an offer is made by mail, the contract is completed when the acceptance is mailed unless...
56
If an offeree accepts by telegram
 

 
  1. If an offeree accepts by
    telegram, the agreement is completed when...
57
Careful and prudent persons can avoid many difficulties by
 
stipulating in the offer how and when acceptance must be made.
58
Explain the 2 essential elements of a contract
 
The two essential elements of a contract are an offer, either expressed or implied and an acceptance,...
59
list the 3 requirements for a valid offer
 
The three requirements for a valid offer are: the offer must be definite, it must appear to...
60
under what circumstances can an offer be definite and yet the price not be definite
 
A businessperson may make a definite offer that is not definite as to price. The offeror may...
61
what are common types of invitations to make an offer
 
Common types of invitations to make an offer include advertisements, window displays, catalogs,...
62
when may an offer be revoked?
 
An offer may be revoked at any time prior to acceptance.
63
What is the effect of death or insanity of the offeror on an offer?
 
Death or insanity of the offeror automatically terminates an offer, even if the offeree is...
64
explain one instance in which silence constitutes acceptance of an offer?
 
Silence constitutes acceptance of an offer when the offeree accepts the benefit of offered...
65
How is a "reasonable time" after which an offer would "lapse" determined?
 
What is judged a reasonable length of time varies with each case depending on the circumstances.
66
explain the consequences when an intended acceptance varies or qualifies the offer
 
An intended acceptance that varies or qualifies the offer is a counteroffer that rejects the...
67
what is the "mailbox rule"?
 
the "mailbox rule" states that if there is no requirement of delivery, a properly mailed acceptance...
68
Discuss the requirements for a valid contract.
 
A valid contract is created by agreement of the parties. This agreement exists when one party...
69
Explain the difference between and offer and invitation to make an offer
 
An offer is a proposal to make a contract and, if accepted, binds the offeror. An acceptance...
70
Summarize the rules affecting the duration of an offer
 
The rules affecting the duration of an offer are: an offer may be revoked any time prior to...
71
Define a counteroffer
 
A counteroffer is a response to an offer which does not accept the offer, but changes or qualifies...
72
State the way to accept and offer made by mail.
 
An offer received by mail may be accepted in any reasonable manner uniess the offer specifies...
73
offer
 
a proposal to make a contract
74
offeror
 
person who makes an offer
75
offeree
 
person to whom an offer is made
76
option
 
binding promise to hold an offer open
77
firm offer
 
a merchant's signed, written offer to sell or purchase goods saying it will be held open
78
acceptance
 
assent to an offer resulting in a contract
79
counteroffer
 
offeree's response that rejects offer by varying its terms
80
minor
 
person under the legal age to contract
81
necessaries
 
items required for living at a reasonable standard
82
disaffirmance
 
repudiation of a voidable contract
83
ratification
 
adult indicatiing contract made while a minor is binding
84
convict
 
person found guilty by court of a major criminal offense
85
consideration
 
what promisor requires as a price for a promise
86
composition of creditors
 
when all of the multiple creditors settle in full for a fraction of the amount owed
87
forbearance
 
refraining from doing something
88
promissory estoppel
 
substitute for consideration when another acts in reliance on a promisor's promise
89
In order that an agreement may be enforceable at law
 
In order that an agreement may be enforceable at law, all parties must have the legal and mental...
90
Those whom the law considers at least in some degree incompetent to contract are
 
(a) minors, (b) mentally incompetent persons, (c) intoxicated persons, and (d) convicts.
91
Minors in most states are
 
 Minors in most states are persons under eighteen years of age
92
Minors are the sole judges as to
 
Minors are the sole judges as to whether or not they wish to be bound on voidable contracts.
93
A minor is
 
A minor is liable for the reasonable value of necessaries actually supplied.
94
Many states have special laws making minors
 
Many states have special laws making minors liable on their business contracts.
95
Disaffirmance means the repudiation of a contract.
 
A minor has the legal right to disaffirm a voidable contract at any time during minority or...
96
Ratification is
 
is indicating one's willingness to be bound.

A minor may ratify a voidable contract...
97
One can safely contract with a minor for nonnecessaries by
 
One can safely contract with a minor for nonnecessaries by having an adult co-sign, making...
98
As a general rule, a minor (other than a very young child) is
 
As a general rule, a minor (other than a very young child) is fully liable for torts.
99
contracts with the mental
 
A contract made by a person who is incompetent but who has not been so declared by a court...
100
A contract made by one who is so intoxicated
 
A contract made by one who is so intoxicated as to be incapable of understanding the nature...
101
Laws of the various states differ with regard to
 
Laws of the various states differ with regard to the capacity of a convict to contract.
102
what is the legal presumption regarding capacity to contract, and what is the effect of this...
 
The legal presumption regarding capacity to contract is that all parties have this capacity....
103
what choices does a minor have regarding the enforceability of most contractsmade with an adult?
 
A minor who contracts with an adult may avoid the contract or treat the contract as valid and...
104
with regards to contracts of minors, what are necessaries?
 
Necessaries are items required for a minor to have a reasonable standard of living that are...
105
if minors engage in a business in the same manner as persons having legal capacity, what is...
 
If minors engage in business in the same manner as persons having legal capacity, their contracts...
106
what is the obligation of a minor on disaffirming a contract?
 
When disaffirming a contact, minors must return whatever they may have received under the contract...
107
when and how may a minor ratify a voidable contract?
 
A minor may ratify a voidable contract only after attaining majority. Ratification may be oral,...
108
If Gordon, a minor, lies about his age to induce an adult to enter a contract, is he guilty...
 
Yes. If a minor misrepresents his or her age and the adult with whom he or she contracts relies...
109
what is the effect in most states of a person being formally adjudicated incompetent?
 
In most states, contracts made by a person who has been formally adjudicated incompetent are...
110
can a person who has not been judicially declared insane and has only intervals of insanity...
 
A person who has not been declared by a court to be insane and has only intervals of insanity...
111
explain the enforceability of contracts made by people who have become so intoxicated that...
 
Contracts made by people who have become so intoxicated that they cannot understand the meaning...
112
Identify classifications of individual who may not have the capacity to contract.
 
Persons who are minors, mentally incompetent, intoxicated, or convicts may not have the capacity...
113
Define disaffirmance.
 
Disaffirmance is the repudiation of, or the election to avoid, a contract.
114
Explain how a minor's contract can be ratified.
 
A minor's contract can be ratified only after the minor attains majority. Ratification may...
115
Discuss reasons other than age that may impair a person's capacity to contract.
 
A number of reasons within or beyond a person's control result in mental incompetence and make...
116
Consideration is
 
Consideration is whatever the promisor demands and receives as the price for a promise.Consideration...
117
The law does not prohibit
 
The law does not prohibit bargains, nor does it attempt to measure the value each party receives...
118
Consideration may be
 
Consideration may be the performance of an act or the making of a promise to refrain from performing...
119
A partial payment of a past-due debt is
 
A partial payment of a past-due debt is not consideration to support the creditor's promise...
120
There are three kinds of consideration that are deemed invalid:
 
There are three kinds of consideration that are deemed invalid: If consideration in an...
121
There are several exceptions to the requirement of consideration for a contract:
 
(a) voluntary subscriptions, (b) debts of record, (c) promissory estoppel, and (d) modification...
122
When does a promise constitute consideration?
 
A promise constitutes consideration when the promise imposes an obligation on the person making...
123
may a promise that is conditional constitute consideration?
 
Yes, a promise that is conditional is consideration even if the condition is unlikely to occur.
124
what is the general rule about the adequacy of consideration?
 
The general rule is that the adequacy of the consideration is irrelevant because the law does...
125
what is a composition of creditors?
 
A composition of creditors is an arrangement in which there is more than one creditor and each...
126
is there consideration when a secured note for a lesser amount is given and accepted in discharge...
 
Yes. When a secured note for a lesser amount is given and accepted in discharge of an unsecured...
127
george agrees to remodel a kitchen for harry for $30k, but after beginning work asks Harry...
 
Because George is already obligated to do the work for $30,000, the promise to pay an additional...
128
If a boy promises his father that he will not own and operate an automobile until he is 18...
 
Yes. The promise of one party is consideration for the promise of the other. For the father,...
129
is a promise to pay a debt discharged by bankruptcy enforceable? explain
 
A promise to pay a debt discharged by bankruptcy is enforceable if approved by the bankruptcy...
130
under what theory will courts enforce a promise to pay a voluntary subscription?
 
Courts will enforce a promise to pay a voluntary subscription under the theory that each subscriber's...
131
when will courts apply the doctrine  of promissory estoppel?
 
Courts will apply the doctrine of promissory estoppel when the promisor should reasonably expect...
132
Define Consideration.
 
Consideration is whatever the promisor demands and receives as the price of a promise.
133
Explain when part payment constitutes consideration
 
Part payment constitutes consideration when the amount of the debt is in dispute and a lesser...
134
Give three examples of insufficient or invalid consideration.
 
Consideration is insufficient or invalid when it consists of performing or promising to perform...
135
Recognize when consideration is not required.
 
Consideration is not required for a voluntary subscription, a debt of record, in the case of...


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