Business Law Today

1-Contract law provide rules to determine which contract terms will be enforced and which promises must be kept. True or False 2-A is an assertion that something either will or will not happen in the future. A: 3-A contract needs two requirement and Agreement is required to form a contract, regardless of whether it is formed in the traditional A: 4- which is generally defined as: The value given in return for a promise, A: -Common law governs all contracts except when it has been modified or replaced by statutory law, such as the Uniform Commercial Code (UCC),1 or by administrative agency regulations. A: 6-Which contracts generally are governed by the common law of contracts. A Services B Real estate C Employment D Insurance E All of the above A: 7-Contracts for the sale and lease of goods, however, are governed by the ? to the extent that the UCC has modified general contract law. A: ucc The Definition and Function of a Contract -A is an agreement that can be enforced in court. It i s formed by two or more parties who agree to perform or to refrain from performing some act now or in the future. A: 9-Contract law assures the parties to private agreements that the promises they make will be enforceable A: 10- A person who makes a promise A: 11- A person to whom a promise is made ( usually a buyer ) A: 12-In determining whether a contract has been formed, the element of is of prime importance.A: 13-Stating the clear intent of the (contract) or Objectiveness a contract that can be understood by others and not the issuing party. (subjective) is considered intent. A: 14-In contract law, intent is determined by what is referred to as the of not by the personal or subjective intent, or belief, of a party. A: 15- Objective facts that must be included in a contract. (1) What the party said when entering into the contract, (2) How the party acted or appeared, and The circumstances surrounding the transaction.All of the above A: Objective Theory of Contracts A theory under which the intent to form a contract will be judged by outward, objective facts (what the party said when entering into the contract, how the party acted or appeared, and the circumstances surrounding the transaction) as interpreted by a reasonable person, rather than by the party’s own secret, subjective intentions. 16- Ability to enter freely into contractual arrangements. , A freedom protected by the U. S. Constitution in Article I, Section 10 A:NOTE: Because freedom of contract is a fundamental public policy of the United States, courts rarely interfere with contracts that have been voluntarily made. Exemption For example, illegal bargains, agreements that unreasonably restrain trade, and certain unfair contracts made between one party with a great amount of bargaining power and another with little power generally are not enforced. Requirements for a valid contract 17- An agreement to form a contract includes an One party must offer to enter into a legal agreement and the other party must accept the terms of the offerA: 18- Any promises made by the parties must be supported by legal sufficient and bargained for consideration ( something of value must be received) A: something of value must be exchange by both parties I. e (money for beer) 19- Both partties entering into a contract must have the contractual capacity to do so the law must recognize them as being competent qualified parties A: 20- The contract must be to accomplish a goal that is legal and not against the law A: 21- A person who makes an offer ( seller) or ( buyer)A: 22- is the party to whom the offer is made A: 23-One person agrees to buy another person’s automobile for a specified price this is an example of: A: Example Javier offers to buy Ann’s digital camera for $200. Javier tells Ann that he will give her the cash for the camera on the following Friday, when he gets paid. Ann accepts Javier’s offer and promises to give him the camera when he pays her on Frida y. Javier and Ann have formed a bilateral contract. A promise for a promise No delivery of goods (money or merchandise has taken place) 4- . , a contract that is a â€Å"promise for an act. † In other words, the contract is formed not at the moment when promises are exchanged but rather when the contract is performed. A: EXAMPLE 8. 2 Reese says to Celia, â€Å"If you drive my car from New York to Los Angeles, I’ll give you $1,000. †Only on Celia’s completion of the act? bringing the car to Los Angeles? does she fullyaccept Reese’s offer to pay $1,000. If she chooses not to accept the offer to drive the car to Los Angeles, there are no legal consequences. 5-Contest and prizes are considered unilateral contract a (promise for an act) A : The contest offeror can change the initial offer of the prize winnings. But they must have a clause that states that they reserve the right to change the terms of the contest. ( discrambler) if the contestant sues he or she will most likely loose because she agreed to all the terms when signing up. A unilateral contract is usually not revocable unless stated. If I agree to buy someones boat upon arrival at my dock, and I call that person and said I want to cancel.If the person is halfway or really close to my dock it is considered (performance has been substantially undertaken,) the offeror cannot revoke the offer. I can not undue the contract and I am legally binded to go thru with the offer. 26-Formal contracts includes: Negotiable instruments, which include A Checks, B Drafts, C Promissory notes D Certificates of deposit E All of the above A: 27- A contract that by law requires a specific form, such as being executed under seal, for its validity. A: 8- : Contracts that are simple but might be in writing. A: 29- A contract in which the terms of the agreement are stated in words, oral or written. A: In an express contract, the terms of the agreement are fully and explicitly stated in words, or al or written. A signed lease for an apartment or a house is an express written contract. 30- A contract formed in whole or in part from the conduct of the parties (as opposed to an express contract). A:For an implied-in-fact contract to arise, certain requirements must be met. Normally, if the following conditions exist, a court will hold that an implied contract was formed: The plaintiff furnished some service or property. The plaintiff expected to be paid for that service or property, and the defendant knew or should have known that payment was expected (by using the objective-theory-of- contracts test discussed on page 201). The defendant had a chance to reject the services or property and did not. EXAMPLE 8. 4 You need an accountant to fill out your tax return, so you find a local ccounting firm and drop by to talk to an accountant and learn what fees will be charged. The next day, you return and give the receptionist all the necessary information and docu- ments, such as W-2 forms. Then you walk out the door without saying anything expressly to the accountant. In this situation, you have entered into an implied-in-fact contract 31- A contract that has been completely performed by both parties. A: 32- A contract that has not as yet been fully performed. A: 3- A valid contract has the four elements necessary for contract formation: A An agreement (offer and acceptance), B Supported by legally sufficient consideration, C Made by parties who have the legal capacity to enter into the contract D For a legal purpose E All of the above 34 A contract is the result when the elements necessary for a contract f formation ( agreement, consideration, legal purpose and contractual capacity are met A: 35-Voidable Contract A contract that may be legally avoided (canceled, or annulled) at he option of one or both of the parties. A: 36- A valid contract rendered unenforceable by some statute or law. A: As a general rule, for example, contracts made by minors are voidable at the option of the minor Additionally, contracts entered into under fraudulent conditions are voidable at the option of the defrauded party. Contracts entered into under legally defined duress or undue influ- ence are also voidable 37 A contract having no legal force or binding effect.A: 38- A fictional contract imposed on the parties by a court in the interests of fairness and justice; usually imposed to avoid the unjust enrichment of one party at the expense of another. A: Usually, quasi contracts are imposed to avoid the unjust enrichment of one party at the expense of another. The doctrine of unjust enrichment s based on the theory that individuals should not be allowed to profit or enrich themselves inequitably at the expense of others. 39- A meeting of two or more inds in regard to the terms of a contract; usually broken down into two events? an offer by one party to form a contract and an acceptance of the offer by the person to whom the offer is made. A: 40- An offer and a n acceptance. One party offers a certain bargain to another party, who then accepts that bargain. A: 41- A promise or commitment to perform or refrain from performing some specified act in the future. Three elements are necessary for an offer to be effective: 1 There must be a serious, objective intention by the offeror. . The terms of the offer must be reasonably certain, or definite, so that the parties 3 The offer must be communicated to the offeree EXAMPLE 8. 14 Marcus Business Machines contacts your corporation and offers to sell â€Å"from one to ten MacCool copying machines for $1,600 each; state number desired in acceptance. † Your corporation agrees to buy two copiers. Because the quantity is specified in the acceptance, the terms are definite, and the contract is enforceable. EXAMPLE 8. 15 Tolson advertises a reward for the return of her lost cat.Dirk, not knowing of the reward, finds the cat and returns it to Tolson. Ordinarily, Dirk cannot recover the reward becau se an essential element of a reward contract is that the one who claims the reward must have known it was offered. A few states would allow recovery of the reward, but not on contract principles? Dirk would be allowed to recover on the basis that it would be unfair to deny him the reward just because he did not know about it. 42- the seller may reserve the right to confirm or reject the sale even after â€Å"the hammer has fallen. In this situ- ation, the seller is obligated to notify those attending the auction that sales of goods made during the auction are not final until confirmed by the seller A: 43- , the goods cannot be withdrawn by the seller and must be sold to the highest bidder. A: 44- Agreement to agree agreements to agree may be enforceable agree- ments (contracts) if it is clear that the parties intend to be bound by the agreements. preliminary agreement constitutes a binding contract if the parties have agreed on all essential terms and no disputed issues remain to b e resolved. 10