Business Law- Chapter 14

Question 1

Statute of Frauds

Answer 1

A state statute that requires certain types of contracts to be in writing.

Question 2

Real Property

Answer 2

The land itself, as well as buildings, trees, soil, minerals, timber, plants, crops, fixtures and other things permanently affixed to the land or buildings.

Question 3

Mortgage

Answer 3

An interest in real property given to lender a security for the repayment of a loan.

Question 4

Lease

Answer 4

The transfer of the right to use real property for a specified period of time.

Question 5

Life Estate

Answer 5

An interest in real property for a person’s lifetime; upon that person’s death, the interest will be transferred to another party.

Question 6

Easement

Answer 6

A right to use someone else’s land without owning or leasing it.

Question 7

One-year rule

Answer 7

A rule which states that an executory contract that cannot be performed by its own terms within one year of its formation must be in writing.

Question 8

Guaranty Contract

Answer 8

A promise in which one person agrees to answer for the debts or duties of another person. It is a contract between the guarantor and the original creditor.

Question 9

Guarantor

Answer 9

A person who agrees to pay a debt if the primary debtor does not

Question 10

Main purpose Exception

Answer 10

An exception to the Statute of Frauds which states that if the main purpose of a transaction and an oral collateral contract is to provide pecuniary benefit to the guarantor, the collateral contract does not have to be in writing to be enforced.

Question 11

UCC Statute of Frauds Section 2-201(1)

Answer 11

A section of the Uniform Commercial Code which states that sales contracts for the sale of goods costing $500 or more must be in writing.

Question 12

UCC Statute of Frauds Section 2A-201(1)

Answer 12

A section of the Uniform Commercial Code which states that lease contracts involving payments of $1000 or more must be in writing.

Question 13

Equal Dignity Rule

Answer 13

A rule which says that agents’ contracts to sell property covered by the Statute of Frauds must be in writing to be enforceable.

Question 14

Part Performance

Answer 14

An equitable doctrine that allows the court to order an oral contract for the sale of land and transfer of another interest in real property to be specifically performed if it has been partially performed and performance is necessary to avoid justice.

Question 15

Integration of Several Writings

Answer 15

The combination of several writing to form a single contract.

Question 16

Incorporation by Reference

Answer 16

Integration made by express reference in one document that refers to and incorporates another document within it.

Question 17

Parol Evidence

Answer 17

Any oral or written words outside the four corners of a written contract.

Question 18

Parol Evidence Rule

Answer 18

A rule that says if a written contract is a complete and final statement of the parties’ agreement, any prior or contemporaneous oral or written statements that alter, contradict or are in addition to the terms of the written contract are inadmissible in court regarding a dispute over the contract. There are several exceptions to this rule.

Question 19

Merger Clause

Answer 19

A clause in a contract that stipulates that it is a complete integration and the exclusive expression of the parties’ agreement.

Question 20

Promissory Estoppel

Answer 20

An equitable doctrine that permits enforcement of oral contracts that should have been writing. It is applied to avoid injustice.