CH 8: Contracts Formation

Question 1

S.A. 4 Elements of a Contract

Answer 1

1. Agreement: Valid offer & valid acceptance
2. Consideration: Exchange of value
3. Capacity: understand & appreciate the consequences
4. Legality: legal purpose

Question 2

S. A. Requirements of valid offer for a contract

Answer 2

1. serious intent
2. reasonably certain terms: Quantity
3. communication of the offer

Question 3

S.A. Requirements of valid acceptance of an offer

Answer 3

1. must be clear and equivocal
2. Acceptance must mirror the offer
3. must be made in timely manner
4. must be made in appropriate manner

Question 4

S. A. ways to terminate an OFFER

Answer 4

1. revocation by the offeror
2. rejection by the offeree
3. Counter offer
4. lapse of time
5. death
6. performance become illegal

Question 5

S.A. void a contract (voidable)

Answer 5

1. a mistake
2. fraudulent misrepresentation in contracts
3. Constructive fraud (fraudulent misrepresentation without intent, i.e. innocent)
4. undue influence (untrustworthy lawyers)
5. contract under duress

Question 6

S. A. Types of Statue of Frauds

Answer 6

1. contracts involving interest in land
2. contracts that by their terms can’t be performed in less than a year
3. collateral contracts answering for the debt of another person.
4. contracts in consideration of marriage
5. sale of goods in excess of 500$

Question 7

S. A. Ways of discharging contract

Answer 7

1. parties perform their duties fully
2. failure of conditions
3. Breach by one of the parties
4. Agreement by both parties to terminate
5. By operation of law

Question 8

S. A. Ways contracts may be terminated by agreement b/w parties

Answer 8

1. Rescission: both agree to terminate
2. Novation: both agree to substitute a party
3. Substitute agreement: get into another agreement
4. accord &satisfaction: a substitute settlement agreement that terminate the original agreement

Question 9

S. A. Types of damages

Answer 9

1. compensatory
2. consequential
3. punitive damage
4. nominal damage

Question 10

S. A. Exception to assignment to another party

Answer 10

1. when the law prevents assignment
2. when the contract call for personal performance
3. when the assignment would alter the risk of the obligor
4. when contract prohibits assignment

Question 11

S.A. Exception to transferring duties to another party

Answer 11

1. when special skill or expertise is required
2. when the contract call for personal expertise
3. when special confidence of trust was placed on the obligor
4. when the contract prohibits delegation

Question 12

S. A. CH 16: Horizontal restraints (b/w companies at the same level of production;manufactures, retailers, wholesalers)

Answer 12

1. price fixing
2. group boycotts
3. horizontal market divisions
4. joint venture

Question 13

S. A. CH 16: Vertical restraints (b/w different companies)

Answer 13

1. vertical price fixing
2. territorial or customer restrictions
3. Resale price maintenance agreement

Question 14

S. A. CH16: Exemptions from the antitrust laws

Answer 14

1. labor
2. agricultural associations
3. insurance
4. foreign trade
5. professional baseball
6. lobbying and state actions