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Business Law > Bus Law Exam 2 Notes > Flashcards

Bus Law Exam 2 Notes Flashcards

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1
Q

Expression of willingness of the offeror to enter a contractual agreement

A

Offer

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2
Q

person/party who initiates or makes an offer

A

Offeror:

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3
Q

person/party to whom an offer is made

A

Offeree:

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4
Q

Requirements of a Valid Offer

A 
Definite
Basis for agreement
Seriously intended Not a joke
Nor offered in jest fear or anger
Communicated from offeror to offeree
Both parties must be cognizant of the agreement
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5
Q

Invitation to Deal

A 
Advertisements
Price lists and quotation
Bids
Estimates
Not valid offers
May lead to an offer
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6
Q

Annulment or cancellation of an instrument act or promise by one doing or making it

Communicated by offeror to Offeree prior to acceptance

A

By Revocation

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7
Q

If terms are not met there is no contract

A

By terms of the offer

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8
Q 
Termination of an Offer
By Revocation
By lapse of "reasonable" period of time
By death or insanity of offeror
By Rejection
By Counteroffer
By intervening illegality
A

Termination of an Offer
By Revocation
Annulment or cancellation of an instrument, act, or promise by one doing or making it
Communicated by offeror to Offeree prior to acceptance
By terms of the offer
If terms are not met, there is no contract
By lapse of “reasonable” period of time
Depends on type of offer
By death or insanity of offeror
Insane: person afflicted with a serious mental disorder impairing ability to function
By Rejection
Refusal to accept
By Counteroffer
Intended acceptance which changes or qualifies the offer, and is a rejection of the original offer
By intervening illegality
Legal situation interfering with an offer and agreement
Ie: making a contract to kill someone

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9
Q

person afflicted with a serious mental disorder impairing ability to function

A

Insane:

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10
Q

Intended acceptance which changes or qualifies the offer and is a rejection of the original offer

A

By Counteroffer

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11
Q

Legal situation interfering with an offer and agreement

Ie: making a contract to kill someone

A

By intervening illegality

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12
Q

Agreement to an offer resulting in a contract Communicated by offeree to offeror Oral or written Including mail or telegram

A

Acceptance

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13
Q

Reality of Consent

A 
Justifiable reliance by offeree Offeree believes what offeror says is true No reason to believe otherwise Without this contract is Voidable
Influencing factors:
Misrepresentation
Fraud
Undue influence
Duress
Mistake
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14
Q

Innocent Misrepresentation

False statement made in the belief it is true

A

Misrepresentation

False statement of a matter of fact

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15
Q

Intentional or reckless false statement of a material fact upon which the injured party relied which induced the injured party to enter into a contract at his/her detriment

A

Fraud

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16
Q

Manner of Committing Fraud

A 
By express misrepresentation 
Oral or written
By concealment 
Attempting to hide information
By silence when one has a duty to speak
Not sharing information when asked or requested
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17
Q

Improper influence that is asserted by one dominant person over another without threat of harm
Often with a fiduciary relationship

A

Undue Influence

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18
Q

Person in a relationship of trust or confidence

  • family relationships
  • attorney and client
  • physician and patient
  • funeral director and family
A

Fiduciary

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19
Q

Means of removing one’s free will
Obtaining consent by threat to do harm to the person his/her family or property
Element of coercion or force
Physical emotional and financial

A

Duress

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20
Q

Mistake by one party to a contract
Mistake as to quality value or price
Mistake as to terms of contract
Generally will not render agreement defective

A

Unilateral mistake:

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21
Q

Mistake by both parties to a contract
Mistake as to nature of transaction
Mistake as to identity or existence of subject matter
Generally render agreement defective

A

Mutual mistake:

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22
Q

necessity that parties desiring to enter into contracts meet all requirements

A

Contractual Capacity:

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23
Q

Contractual Capacity Requirements:

A

Parties must have the ability to understand a contract is being made
Parties must understand the contracts general nature
Must have legal competence to contract

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24
Q

Protected Classes of Persons

Afforded special protection in contracts:

A
  • Minors
  • Insane persons
  • Intoxicated persons
  • Convicts
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25
Q

Repudiation of or election to avoid a voidable contract

A

DISAFFIRMANCE

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26
Q

Confirming of an act which was executed without authority or an act which was voidable

A

RATIFICATION

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27
Q

Items required or proper and useful for sustaining a human being at an appropriate living standard (food clothing and shelter)

A

NECESSARIES

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28
Q

That which the offeror/promisor demands and receives as the price for an offer/promise
…….
Includes money, personal property and service
Generally promises unsupported by consideration are not enforceable

A

Consideration

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29
Q

Promising to do what one is legally obligated to do
Cannot promise to drive legal speed limit
Already obligated to follow speed laws
…..

A

Invalid Consideration

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30
Q

Promising or refraining from doing that which one has no right to do
Refraining from doing something
Promising not to rob a bank

A

FORBEARANCE

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31
Q

Promises Enforceable without Consideration
Charitable pledges and subscriptions
Church or other charity organization
Legally required to honor your pledge or subscription
Depend on this for budget and expenses

A

Your subscription or pledge…

“is an offer of a unilateral contract that is accepted by creating liabilities and making expenditures”

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32
Q

Enforceable promise whereby one party justifiably acts in reliance upon the promise of another

A

Promissory Estoppel

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33
Q 
Elements of Promissory Estoppel
Offer is made
Offeror reasonably expects the promise to induce action by offeree
Offeree acts
Offeror fails to honor the offer
What can the offeree do?
A

…….
According to Promissory Estoppel
Justice requires enforcement of the promise when the offeree would be substantially harmed if it were not enforced

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34
Q

Classes of Illegal Agreements

A

Agreements to commit crimes or torts
Agreements prohibited by statute
Agreements contrary to public policy

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35
Q

Injurious to individuals and society at large

A

Agreements to Commit Crimes or Torts

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36
Q

Agreement Prohibit by Statue

A 
Usurious
Restraint of trade
Fix prices
Influence fiduciaries
Defraud creditors
Obstruct justice
Relieve liability for willful negligence
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37
Q

USURIOUS
Exceeding maximum rate of interest which may be charge on loans or consumer credit accounts
USURY
Charging a higher rate of interest than the law allows

A

Usurious Agreements

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38
Q

MAXIMUM CONTRACT RATE

Highest legal rate of interest

A

LEGAL RATE

Interest rate applied when no rate is specified

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39
Q 
Laws which seek to promote competition among businesses
.......
Prevents creation of a MONOPOLY
Prohibits contracts not to compete
Restrain (limit or prohibit) trade
Fix prices of goods and services
Unfair competitive practices
A

ANTITRUST LAWS

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40
Q

Legislation intended to promote competition among businesses by prohibiting restraint of trade

A

SHERMAN ANTITRUST ACT

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41
Q

Person or persons in a relationship of trust or confidence

A

FIDUCIARIES

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42
Q

Agreements to Influence Fiduciaries
FIDUCIARIES
Person or persons in a relationship of trust or confidence

Agreements to Defraud Creditors
Regarding payment of a debt
Money owed

Agreements to Obstruct Justice
Process of law and justice
Determined by established laws
Court judgments

A

Agreements to Relieve Liability for Willful Negligence
Agreements in which someone else “takes the blame”

Agreements Contrary to Public Policy
Contracts limiting freedom of marriage
Contracts injurious to public service or the “public good”

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43
Q

Written Contracts
Statute of Frauds
Originally enacted by the English Parliament (1677)
Present in some form in all states
Lists certain types of contracts which can only be enforced if in written form

A 
Types of Contracts in Writing
Contracts to transfer an interest in real property
Real Property (Real Estate)
Land
Objects attached to land
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44
Q

Executory bilateral contracts which cannot be completed within one year from date of making
Ensures parties do not forget contract terms
Example: Purchase of real estate with long term loan contract/mortgage
….
Agreement to become responsible for the debt (or default) of another
DEBT
Obligation to pay money or goods
DEFAULT
Nonperformance of a duty or obligation
……

A

Contracts made by executors or administrators to pay debts of an estate out of his/her personal funds
Rather than paying debts from decedent’s estate
Agreement to pay debts of another
……
Promises made in consideration of marriage
Prenuptial agreements
……
Contracts involving sale of goods or merchandise with price of $500 or more
GOODS
Moveable tangible personal property

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45
Q

Satisfactory or Complete Performance:

Contract that has been performed in a manner that would “satisfy” an ordinary reasonable person

A

Nature of Performance

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46
Q 
Impossibility of performance
Destruction of the subject matter
Occurs when subject matter of a contract is destroyed without fault of either party
...........
Intervening illegality
New laws which make the contract illegal
A

Discharge by Impossibility

47
Q

One party announces his/her intention not to perform prior to time to perform
If innocent party accepts breach of contract contract is discharged

A

Anticipatory Breach:

48
Q

Remedies for Breach of Contract

A

Damages: Sum of money awarded to injured party

Nominal Compensatory Punitive Liquidated

49
Q

Token award to symbolize vindication of wrong done to the plaintiff
Generally award of $1

A

Nominal Damages

50
Q

Award paid to injured party to cover exact amount of their loss, but no more

A

Compensatory Damages

51
Q

Award paid to the plaintiff in order to punish the defendant, not to compensate the plaintiff
AkA Exemplary (mental anguish)
Occurs most with torts
Rather than breach of contract

A

Punitive Damages

52
Q

Provision in a contract fixing the amount of damages to be paid in the event one party breaches the contract

A

Liquidated Damages

53
Q 
Remedies for Breach of Contract
Rescission:
.....
Specific Performance:
......
Injunction:
A

In addition…
Debts discharged in bankruptcy cannot be collected
Individual or business debts
Upon filing with and discharge by bankruptcy court
Creditor’s rights of action to enforce contracts of the debtor are barred
……
Statute of Limitations
Time within which right to sue must be exercised or lost
Time limits vary from state to state
Types of suits
Types of debts

54
Q

Transferring one’s rights under a contract to another party

A

Rights of Assignment

55
Q

Person to whom the promisee owes an obligation, which is discharged if the promisor performs

Example
Mary owes John $1000
Charles is Mary’s wealthy friend
Charles (promisor) makes a contract with Mary (promisee) to pay her debt to John (creditor beneficiary)

A

Creditor Beneficiary

56
Q

Transfer of title to goods from seller to buyer for consideration called the price

A

Sale

57
Q

Consideration stipulated by the contract, generally expressed in money or money’s worth
Consideration can be: money, goods, services

A

Price

58
Q

Person who deals in goods and/or has knowledge or skills related to the sale of goods

A

Merchant

59
Q

Document of conveyance which provides written evidence of one’s title to tangible person property (goods)
Provides two things
-Sellers proof of title - if questioned by buyer
-Buyers proof that goods were obtained legally

A

Bill of Sale

60
Q

Land and objects permanently attached to land

Real Estate

A

Real Property

61
Q

Passage of Title
Acceptance of goods by buyer
-Required for passage of title
-Occurs when buyer signifies that he/she will take/retain the goods

A 
Transfer of Title and Risk of Loss
Depends on:
Shipment contract
Destination contract
Sale on approval
Sale or return
62
Q

Actual and define statement of a seller, either orally or in writing, guaranteeing a standard or level of performance
Seller promises either in writing or orally assures the quality, description, or performance of the goods

A

Express Warranty

63
Q

Warranty of merchant ability (merchant seller)
Warranty of fitness for a particular purpose
The goods being sold shall be merchantable and fit for the purpose for which the seller implied

A

Types of Implied Warranties

64
Q

Designed to protect public or consumers’ interests

A

Regulatory Agencies

65
Q

Expansion of Consumer Protection
Product safety laws
-Require goods to meet safety standards
Product Safety Act (1972)
-Established the Consumer Product Safety Commission
-Which creates and enforces safety standards for many products

A

1

66
Q

Exceeding maximum rate of interest which may be charge on loans or consumer credit accounts

A

USURIOUS

67
Q

Charging a higher rate of interest than the law allows

A

USURY

68
Q

Highest legal rate of interest

A

MAXIMUM CONTRACT RATE

69
Q 
Prevents creation of a MONOPOLY
Prohibits contracts not to compete
Restrain (limit or prohibit) trade
Fix prices of goods and services
Unfair competitive practices
A

ANTITRUST LAWS function

70
Q

Regarding payment of a debt

Money owed

A

Agreements to Defraud Creditors

71
Q

Process of law and justice
Determined by established laws
Court judgments

A

Agreements to Obstruct Justice

72
Q

Agreements to Relieve Liability for Willful Negligence

Agreements in which someone else “takes the blame”

A

Agreements to Relieve Liability for Willful Negligence

73
Q

Contracts limiting freedom of marriage

Contracts injurious to public service or the “public good”

A

Agreements Contrary to Public Policy

74
Q

Originally enacted by the English Parliament (1677)
Lists certain types of contracts which can only be enforced if in written form
Present in some form in all states

A

Written Contracts

Statute of Frauds

75
Q

cannot be completed within one year from date of making
Ensures parties do not forget contract terms
Example: Purchase of real estate with long term loan contract/mortgage

A

Executory bilateral contracts

76
Q

by performance agreement impossibility acceptance of breach or operation of law

A

Discharge:

Termination of a contract

77
Q

When all terms of the contract have been fulfilled the contract is discharged by performance

A

Discharge by Performance

Performance

78
Q

Contract that has been performed in a manner that would “satisfy” an ordinary reasonable person

A

Nature of Performance

Satisfactory or Complete Performance:

79
Q

Fulfilling major terms of the contract
Contract can be discharged
Less any damages that might occur for minor breaches of contract

A

Substantial Performance:

80
Q

Mutual agreement to cancel the contract
Entering into a contract is a mutual agreement
Parties can also mutually agree to cancel the contract

A

Discharge by Agreement

81
Q

Change of one party to a contract at the mutual agreement of the original parties
You buy a house
You decide to sell the house
Another person agrees to assume your bank mortgage

A

Novation:

82
Q

Agreement made and executed in satisfaction of the rights one has from a previous contract.
You satisfy your contract with the bank when another party assumes payment of your mortgage.

A

Accord and Satisfaction:

83
Q

Impossibility of performance
Destruction of the subject matter
Occurs when subject matter of a contract is destroyed without fault of either party

A

Discharge by Impossibility

84
Q

Situation in which one of the parties to a contract fails or otherwise refuses to perform the obligation established in that contract

A

Discharge by Acceptance of Breach
Material breach of contract
Breach of Contract:

85
Q

Canceling, annulling, or avoiding
When contract is breached
Aggrieved party is released from all obligations not yet performed
Or allowed to sue for damages

A

Remedies for Breach of Contract

Rescission:

86
Q

Carrying out terms of the contract
Contracts involving sale of real estate
Sale of rare articles of personal property

A

Specific Performance:

87
Q

Judicial order or decree forbidding performance of a certain act

A

Injunction:

88
Q

Intervening illegality

New laws which make the contract illegal

A

Discharge by Operation of Law

89
Q

Method whereby one party conveys rights to another person who is not a party to the original contract (beneficiary insurance assignment to funeral home)

A

Assignment

90
Q

party making assignment

A

Assignor:

91
Q

party to who assignment is made

A

Assignee:

92
Q

Person not a party to a contract, but whom the parties intend to benefit

Example
Mrs. Jones makes pre-funded funeral arrangements for her invalid husband
Mrs. Jones and the funeral director are the contracting parties
Mr. Jones will receive benefits of the pre-funded funeral upon his death

A

Third-Party Beneficiary

93
Q

Third party beneficiary to whom no legal duty is owed and for whom performance is a gift

Example
Beneficiary named in a life insurance policy

A

Donee Beneficiary

94
Q

is a contract in which ownership of goods transfers immediately from the seller to the buyer for a price

A

A Sale

95
Q

Movable tangible personal property

IE: Food vehicles clothing furniture

A

Goods

Types of Goods:
Existing Goods
Future Goods

96
Q

Goods which are in existence and owned by the seller when the contract is made

A

Existing Goods

97
Q

Goods which are not in existence when the contract is made

“Goods to be provided at a later date”

A

Future Goods

98
Q

Specifying of goods by the buyer to the seller

A

Identification

99
Q

Seller agrees to transfer title of goods to a buyer for consideration (price)
“At a future time”

A

Contract to Sell

100
Q

Recognized as most important statute in business law
Includes provisions which regulate certain sales of goods
…….
Applies to personal property classified as goods
Personal Property
All property which is not real property

A

Uniform Commercial Code (UCC)

.........
Does Not Apply To:
Real property
Intangible personal property
Service contracts
101
Q

Evidences of ownership of personal property such as stock of corporations checks and copyrights

A

Intangible Personal Property

102
Q

Contracting for services rather than goods

A

Service Contracts

103
Q

Defines offer acceptance consideration incapacity and illegality
Applies to circumstances not covered under the UCC

A

Contract Law

104
Q

Acceptance of goods by buyer

  • Required for passage of title
  • Occurs when buyer signifies that he/she will take/retain the goods
A

Passage of Title

105
Q

Sale is not complete until the buyer approves the goods

A

Sale on Approval

106
Q

Is a complete sale with the right of the buyer to return the goods and thereby set aside the sale

A

Sale or Return

107
Q

Guarantee made by a seller that an article good or service will conform to a certain standard or will operate in a certain manner

A

Warranty:

108
Q

Warranty of title
Sale of goods implies the seller owns the item offered for sale
Warranty against patent and/or copyright infringement
Goods shall be delivered free of the rightful claim of any third party by way of patent or trademark infringement

A

Warranties imposed by the UCC:

109
Q

Warranty imposed by law

Arises automatically because the sale has been made

A

Implied Warranty

110
Q

Protection for merchant
-Limits warranty coverage to that provided by manufacturer of goods
Disclaimer on Casket Price List

A

Disclaimer of Warranties

111
Q

Usury laws
Antitrust laws
Regulatory agencies

A

Consumer Protection

Traditional protection:

112
Q

Disclosure and Uniformity

A

Truth-in-advertising
Truth-in-lending
Fair credit reporting
Federal Trade Commission Funeral Rule

113
Q

Meeting eligibility requirements prior to licensure in a regulated profession

A

Administrative law:

Business Law (4 decks)

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