Chapter 2

Question 1

business transactions put into writing also known as “legally binding promises” are known as…

Answer 1

Contracts

Question 2

These type of contracts are formed by the actions of the parties and are not stated orally or in writing. This contract is known as…

Answer 2

Implied Contract

Question 3

These type of contracts arise from specific oral or written agreements of two or more parties. This contract is known as…

Answer 3

Express Contract

Question 4

This type of contract is described as one party making a promise to do something if another party performs a specific act. This type of contract is known as…

Answer 4

Unilateral Contract

Question 5

In this type of contract, only one person is obligated to act…

Answer 5

Unilateral Contract

Question 6

This type of contract, is formed when two parties exchange promises.

Answer 6

Bilateral Contract

Question 7

This type of contract, is one in which all of the promises or terms have not yet been fulfilled.

Answer 7

Executory Contract

Question 8

This type of contract, is one in which all promises or terms have been fulfilled

Answer 8

Executed Contract (or Discharged Contract)

Question 9

This occurs when a party to a contract allows another individual to assume all of their rights under the contract.

Answer 9

Assignment

Question 10

This occurs when all parties to the contract agree to a substitution of one of the parties to the contract by creating a new agreement.

Answer 10

Novation

Question 11

This indicates that the parties have agreed to a change in one or more of the terms of the contract.

Answer 11

Accord and Satisfaction

Question 12

In Accord & Satisfaction, what doesn’t change regarding the contract?

Answer 12

The parties to the contract

Question 13

The three levels of legality of a contract are?

Answer 13

Valid, Void & Voidable.

Question 14

This type of contract, is one that fulfills all the requirements of the law and contain consideration, legal purpose, offer, acceptance & competent parties…

Answer 14

Valid Contract

Question 15

This, is the promise offered in exchange for either an action, another promise or something of value…

Answer 15

Consideration

Question 16

If an illegal act has occurred regarding a parties promise, the contract does not have…

Answer 16

Legal Purpose

Question 17

The terms in which a tenant/buyer would like a seller/landlord to agree upon is called…

Answer 17

Offer

Question 18

Agreement to the terms of an offer is called…

Answer 18

Acceptance

Question 19

Offer and Acceptance equals…

Answer 19

Agreement of the Parties

Question 20

This requirement states that all individuals must be the legal age of 18, as well as they must be sane, sober and they must have the authority to take action regarding the property.

Answer 20

Competent Parties

Question 21

This type of contract may be considered valid and binding however not enforceable in the court of law. This type of contract is…

Answer 21

Unenforceable

Question 22

This requires that real estate contracts be in writing if they are to be enforceable in the court of law.

Answer 22

Statute of Frauds

Question 23

What is one exception to the statue of frauds?

Answer 23

In Illinois, leases w/ terms of one year or less are an exception and can be enforced even if unwritten.

Question 24

This rule prohibits courts from letting oral evidence change the terms of a written contract. (clue: the four corners of the document)

Answer 24

Parol Evidence Rule

Question 24

This limits the amount of time a party has to bring action against another party who has committed fraud or violated the terms of a contract.

Answer 24

Statute of Limitations

Question 25

This type of contract lacks the necessary provisions required by law, other essential elements or is for an illegal purpose.

Answer 25

Void Contract

Question 26

This type of contract has the elements required of a valid contract, however allows on of the parties to withdraw.

Answer 26

Voidable Contract

Question 27

This type of contract usually arises from a case in which one party is injured by the other party.

Answer 27

Voidable Contract

Question 28

When both parties have accurate knowledge of the terms and conditions of a contract, that is called

Answer 28

Mutual Consent/Real Consent

Question 29

This is the omission or distortion of facts in a transaction.

Answer 29

Misrepresentation

Question 30

This occurs when one party intentionally misrepresents or conceals facts that are relevant to the contract.

Answer 30

Fraud

Question 31

The use of force to induce another to act against his or her will

Answer 31

Duress

Question 32

A threat to use force to induce someone to act against his or her will.

Answer 32

Menace

Question 33

This occurs when someone uses their position to influence another party, thereby causing that party to do something they would not have otherwise agreed to do.

Answer 33

Undue Influence

Question 34

When one of the parties to a contract, violated the terms of the agreement without a legal reason, that is called...

Answer 34

A Breach of Contract

Question 35

The actions that can be taken when a breach of contract have occurred are...

Answer 35

Rescind(remove/cancel) the contract, ask court to award monetary damages or enforce specific performance.

Question 36

This term means to cancel a contract or treat it as if it never existed.

Answer 36

Rescind

Question 37

This monetary damage is intended to return the injured parties to the financial condition they were in before the breach occurred.

Answer 37

Compensatory Damages

Question 38

This monetary damage is intended to punish the party who breached the contract.

Answer 38

Punitive Damages

Question 39

When a party who has breached a contract is required to perform as originally agreed, that is called...

Answer 39

Specific Performance.