06.01 Formation (Contracts) Flashcards
What are the two sources on contract law?
Common Law and Uniform Commercial Code (UCC).
What is common law?
Law derived from court rulings.
What does common law apply to?
Applies to contracts with the following subject matters: real estate and services.
What does the UCC apply to?
Applies to the sales of goods.
What is the UCC?
A code that was developed by business people, attorneys, and legal scholars to be adopted by individual states so that interstate commerce could be done more uniformly and easily.
How does the UCC define goods?
The UCC, specifically Article 2: Sales, defines goods as tangible personal property such as cars, appliances, boats, airplanes, clothing, phones, bicycles, and pets.
What is an express contract?
An express contract is a contract formed wholly by oral and/or written words. Some contracts are required to be in writing, but whether written or oral, they are called express contracts.
What is an implied contract?
An implied-in-law or implied-in-fact contract is one that arises because of the circumstances created by the parties and because of their conduct. This type of contract results not from express language between the parties but through their actions and the surrounding circumstances.
What are written or verbal contracts?
Written or verbal contracts are a subset of express contracts. Certain types of contracts must be in writing under the statute of frauds or they are not enforceable in court. However, verbal contracts not covered by the statute of frauds are valid and enforceable.
What is a bilateral contract?
A bilateral contract is one in which both sides make a promise. Most business contracts are bilateral contracts.
What is a unilateral contract?
A unilateral contract is one in which one side makes a promise in exchange for an action or performance from the other side. This type of contract is formed by action required by one party in exchange for a promise by the other party. Once the party required to act begins that action, the contract has been accepted, and the promising party is bound to do as promised.
What is a void contract?
A void contract is one for an illegal purpose or that violates the law. A void contract cannot be enforced by the courts because enforcement would violate public policy and encourage illegal conduct.
What is a voidable contract?
A voidable contract is one that can be set aside because one party has protection under the law and thus has the right to opt out of the contract.
What is an unenforceable contract?
An otherwise valid contract that cannot be enforced because of a statutory or other legal defense is an unenforceable contract.
What is an executed contract?
An executed contract is a contract that has been fully performed by both involved parties.
