Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

The Best Review On The Planet > Business Law- Genuine Agreement and Contractual Capacity > Flashcards

Business Law- Genuine Agreement and Contractual Capacity Flashcards

1
Q

Genuine Agreement

A

-When the offeror makes a valid offer and the offeree has made a valid acceptance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

How do courts decide a Genuine Agreement?

A

-Meeting of the Minds

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What are the 5 circumstances that destroy genuine agreement?

A
  1. Fraud
  2. Innocent Misrepresentation
  3. Mistake
  4. Duress
  5. Undue Influence
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Fraud

A

-A deliberate deception intended to secure an unfair or unlawful gain

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

The 5 Elements of Fraud

A
  1. A false representation of fact
  2. Knowledge of the falsity
  3. Intent to deceive
  4. Reasonable reliance by the innocent party
  5. An actual loss suffered by the innocent party
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

False representation of fact

A

-A false representation of a material existing fact

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Material Fact

A

-One that is important and matters to one of the parties

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Concealment/Passive Fraud

A

-Choosing not to reveal important information
-Seller must only disclose latent defects that cannot be seen

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

False representation of fact: Fiduciary Relationship

A

-The two parties are in a relationship of trust, there is a duty to disclose material facts

Ex. Doctor and patient, attorney and client

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Sales puffery

A

A seller is allowed to make an overstated belief about their product in order to sell it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Elements of Fraud: Representation known to be false

A

-The bad party must be aware that the statement they made was false

-SHOWN BY
-Proving actual knowledge
-Showing the statement was made recklessly

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

False Representation Intended to be Relied Upon

A

-To prove fraud, the bad party must intend that the good party will rely on the information as part of the contracts negotiations

-Must be reasonably relied upon by the other party

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Actual/Resulting Loss

A

-The innocent party must show monetary loss in order to prove fraud

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Remedies for fraud

A

-Rescind/cancel the contract
-Sue for monetary damages

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Innocent Misrepresentation

A

-The act of making an innocent statement that turns out to be false, when the person honestly believed the statement was true

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Remedy for Innocent Misrepresentation

A

-The right to rescind the contract
-You may not win damages

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Mistake

A

-Sometimes people enter into contracts believing that certain information is true when it is not

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Unilateral Mistake

A

-An error on the part of one of the parties to the contract
-A person cannot avoid a contract because of such a mistake

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Two types of unilateral mistakes

A

-Mistake as to the Nature of the Agreement
-Mistake as to the Identity of the Party

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

-Mistake as to the Nature of the Agreement

A

-People who sign an agreement are bound to it even if they have not read it/ are mistaken about its contents

Remedy: NO RECISSION

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Mistake as to the identity of the party

A

If you make an offer by letter to one party, but the wrong person mistakenly receives the offer, the mistake may be cause to void the contract

Remedy: Rescission may be granted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Bilateral Mistake

A

-When both parties to a contract are mistaken about some important fact
-Either party may avoid the contract

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Two types of bilateral mistakes

A

-Mistake as to the Possibility of Performance
-Mistake as to the Subject Matter

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

-Mistake as to the Possibility of Performance

A

-If both parties enter into a contract believing that the duties described can be performed when they actually cannot, either party may avoid the contract

Remedy: Rescission may be granted to either party

25
Q

-Mistake as to the Subject Matter

A

When both parties make a mistake regarding the subject matter of the contract

Ex. Title, quantity, quality, price, identity mistakes

RESCISSION MAY BE GRANTED

26
Q

5 elements of Fraud: Duress

A

-The overcoming of a person’s will by use of force/threat/bodily harm

27
Q

3 types of Duress

A
  1. Physical Duress
  2. Emotional Duress
  3. Economic Duress
28
Q

Physical Duress

A

-When actual physical violence is used to force someone to enter a contract

Remedy: Contract is void

29
Q

Emotional duress

A

-When the threat of physical force is used to force a person to enter a contract

Remedy: Contract is voidable

30
Q

Economic duress

A

-Threats to a person’s business/reputation that cause him/her to enter a contract without one’s consent

Remedy: Contract is voidable

31
Q

5 elements of Fraud: Undue Influence

A

-When a person uses unfair and improper persuasive pressure to force another person to enter an agreement

-Old age/mental immaturity may put someone in a weaker position

KEY FACTOR: ONE IS NOT EXERCISING FREE WILL

Remedy: contract is voidable

32
Q

Contractual capacity

A

The legal ability to enter into a contractual relationship
-People who enter into contracts are permitted by law to presume that the other party has capacity to contract (REBUTTABLE PRESUMPTION)

33
Q

Minors Rights

A

-The presumption of capacity plays a key role in contracts made by minors
-Law permits minors to rescind/void contracts

34
Q

Age of majority

A

-Also known as age of legal adulthood
-A person not of legal age is still in minority

35
Q

Emancipation

A

-Minors who are not under the control of their parents have been emancipated
-Means they are responsible for their contracts

36
Q

Abandonment

A

-A minor who marries or leaves home:
-Gives up all rights to parental support
-Is considered emancipated
-Abandoned the protection afforded him/her as a minor

37
Q

Why does the law shield minors in contract law?

A

-To protect vulnerable individuals from dishonest adults

38
Q

Reasons why minors may be vulnerable in a contract

A

-Immaturity
-Inexperience
-Lack of education
-Naivete lack of judgement

39
Q

Disaffirmance

A

the legal avoidance/setting aside of a contractual obligation

40
Q

Requirements of a voidable contract

A

-Must be disaffirmed through words/contracts
-Must disaffirm ENTIRE CONTRACT
-Must return merchandise
-Minors can be held responsible for damage/wear of goods

41
Q

When two minors enter into a contract with each other, both parties have the right to…

A

Disaffirm the contract

42
Q

Exceptions to a minors right to disaffirm

A

-Some contracts such as marriage contracts cannot be avoided as a matter of law on the ground of public policy
-Misrepresentation of age= fraud
-Minors will be held responsible for a wrongful act
-Minor is held responsible for the fair value of necessaries

43
Q

Ratification of Minors Contracts

A

-After reaching the age of majority a person can ratify contracts made during minority

44
Q

Ratification

A

The acceptance of an agreement that gives legal force to an obligation that was previously not enforceable

45
Q

Express ratification of a contract involving a minor

A

-When the individual, on reaching the age of majoirty, states that they intent to be bound by the contract

46
Q

Implied ratification of a contract involving a minor

A

-When the minor reaches the age of majoirty and behaves in a manner inconsistent with disaffirmance

47
Q

Time frame ratification with a minor

A

-If a minor fails to disaffirm a contract within a reasonable time after reaching majority age, then a court must determine whether the conduct constitutes implied ratification or disaffirmance

48
Q

Contracts that are executed is…

A

ratified

49
Q

Contracts that are still executory are..

A

disaffirmed

50
Q

Parents Liability

A

-As a general rule parents are not liable for the contracts made by minor children acting on their own

51
Q

Exceptions to parents liability

A

-Contracts for necessaries which the parents are legally required to provide
-Parents become obligated to perform the conditions of the contract even if the minor avoids liability

52
Q

Why do Mentally Impaired Persons have the right to disaffirm contracts?

A

-They are considered unable to make sound judgements

53
Q

Before a guardian is appointed by court to look after the affairs of a mentally impaired person, his/her contracts are….

A

VOIDABLE

54
Q

If a court has previously determined that a person is mentally incompetent and has a appointed a guardian, any contract made by that person is…

A

VOID

55
Q

Contracts made by a court appointed guardian are..

A

VALID

56
Q

Intoxicated persons

A

-Intoxicated people are sometimes able to disaffirm the contracts they enter into when they are intoxicated
-They must have been so intoxicated that they did not understand the purpose, nature, or effect of the transaction

57
Q

Capacity limitations: Convicts

A

People convicted of a crime

58
Q

Capacity limitations: Aliens

A

-People who are living in this country but owe their allegiance to another country

59
Q

Capacity limitations: Enemy Aliens

A

-Certain foreign-born persons designated as such during time of war

The Best Review On The Planet (26 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions