Legal Aspect Of Business Contracts Quiz

Henry's offer is a counter offer. This is because he is responding to John's initial offer by proposing a different price for the land. A counter offer is a rejection of the original offer and the introduction of new terms for consideration. In this case, Henry is suggesting a lower price of $40,000 instead of the $50,000 initially proposed by John.

A contract is an agreement made with the intention to create legal relations. This means that both parties involved in the contract must have the intention for the agreement to be legally binding and enforceable. Without this intention, the agreement would not be considered a valid contract.

In this situation, the correct answer is "the plaintiffs cannot recover the money since a void contract exists." This means that the firm cannot legally recover the money from the infant because the contract between them is considered void. A void contract is one that is not enforceable by law, typically due to the incapacity of one of the parties involved, such as an infant. Since the infant fraudulently obtained the money and did not repay it, the firm cannot take legal action to recover the funds.

A specialty contract must be signed, delivered, and sealed to ensure its authenticity and legal validity. Sealing a contract involves affixing a seal or stamp on the document, indicating that it has been executed with the necessary formalities. This act serves as a symbol of the parties' intention to be bound by the terms of the contract and provides evidence of their agreement. By requiring a contract to be sealed, it adds an extra layer of formality and seriousness to the agreement, making it more enforceable in a court of law.

An invitation to treat refers to a preliminary stage in the formation of a contract where one party invites the other party to make an offer. In the context of a supermarket advertising goods for sale, the advertisement is considered an invitation to treat because it is an invitation for customers to make an offer to purchase the goods. The supermarket is not making a definite offer, but rather inviting customers to enter into negotiations by making an offer to buy the goods at a certain price.

The contract is void because there was no good faith. Good faith is an essential element of a valid contract, and it means that both parties must act honestly and fairly in their dealings. In this case, Tom's threat to expose a past misdeed of David's if he did not purchase the land shows a lack of good faith. David was coerced into buying the land under duress, which undermines the integrity of the contract. Therefore, the contract is considered void due to the absence of good faith.

An implied contract is a type of contract that is not explicitly stated or written down, but is understood by both parties based on their actions or behavior. It is a legally binding agreement that is inferred from the circumstances and conduct of the parties involved. Unlike an oral or written contract, an implied contract may not have explicit terms or conditions, but it is still enforceable by law.

Lapse of time refers to the termination of a contract when a reasonable period of time has passed without any action or performance by either party. This means that if a contract has a specific time limit or deadline, and that time limit has expired without any action or performance, the contract is considered terminated due to the lapse of time. In other words, the contract has become invalid or void because the required actions or performance were not completed within the specified timeframe.

The replacement of one contract for another is referred to as a merger. A merger is a business transaction where two or more companies combine to form a single entity. In this context, it means that the original contract is being replaced by a new contract as a result of the merger. This can occur when two companies merge their operations and need to consolidate their contracts or when a company acquires another company and wants to replace their existing contracts with new ones.

A hire purchase is a specialty contract. This means that it is a specific type of contract that is used for the purpose of purchasing goods or assets on credit. In a hire purchase agreement, the buyer agrees to pay a series of installments over a period of time in order to own the item at the end of the contract. This type of contract is different from a regular purchase agreement because it involves both the hiring and eventual purchase of the item.