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Legal Studies > Chapter 4: Contracts > Flashcards

Chapter 4: Contracts Flashcards

1
Q

Contract

A

Based on promises voluntarily made

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2
Q

What are the 5 elements of a contract?

A

Offer, Acceptance, Consideration, Capacity, Legality

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3
Q

Unilateral Contract

A

Promise for an act (reward for finding a lost dog)

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4
Q

Bilateral Contract

A

Promise for a promise (painter painting house); Can sue if they don’t follow through

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5
Q

Expressed Contract

A

Stated in direct terms; Can be written or oral (ex: I will see you my car for $1,000)

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6
Q

Implied Contract

A

Arises by implication of law (ex: implied that you will pay when going to doctor)

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7
Q

Valid Contract

A

Satisfies all requirements of an enforceable agreement

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8
Q

Voidable Contract

A

Binds one party but gives other option to withdraw (Children)

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9
Q

Void Contract

A

Element of contract has no legal force or effect (illegal contract, gambling debt)

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10
Q

Unenforceable Contract

A

Satisfies elements of a valid contract but won’t be enforced by the court (sale of land)

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11
Q

Offer

A

Proposal by one party to another manifesting an intention to enter into a valid contract

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12
Q

Elements of an Offer

A

Intent to contract, Definite terms, Offer must be communicated

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13
Q

Advertisements

A

Merely an invitation to negotiate, never an offer because merchant never has unlimited supply of product

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14
Q

How long does an offer stay open?

A

Can be revoked at anytime before its acceptance, or can be terminated my own terms

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15
Q

Acceptance

A

A manifestation by the offer to be bound by the terms of the offer

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16
Q

Counteroffer

A

Rejects the original offer and becomes a new offer that the other person can accept or reject

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17
Q

Postal Reorganization Act

A

Unsolicited product sent in the mail is a gift; silence can not constitute acceptance

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18
Q

Auction With Reserve

A

Auctioneer is merely inviting people to make offers, and no contract is formed until the gavel is struck

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19
Q

Auction Without Reserve

A

The highest bidder obtains the item regardless of the bid

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20
Q

Sealed Bid

A

Rules are similar to auction; request for bid is merely an invitation to negotiate and the bid is an offer

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21
Q

Mailbox Rule

A

Acceptance on dispatch and revocation on receipt

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22
Q

Phone Call

A

Fastest mean of communication is okay

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23
Q

Consideration

A

Both sides must give up something and receive something in return for their promises

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24
Q

Quid Pro Quo

A

Bargain for exchange (must be of legal value); Can also be a benefit

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25
Q

Illusory Promise

A

One in which the act of performance is left solely up to one party (ex: I will buy as many books from you as I want at 10/book)

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26
Q

Moral Obligation

A

Insufficient to support consideration (ex: a parent promises to give child money out of love, does not legally have to)

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27
Q

Past Consideration

A

A current promise to pay for something in the past

28
Q

Pre-exisiting Duty

A

Builder can not demand more money for building a house because he has not done more than what he was contracted to do

29
Q

Pre-existing Obligation

A

Builder asks for more money to build house but promises to add storm windows

30
Q

Co-Signer

A

Person signing onto an agreement if you don’t have enough credit on your own

31
Q

Surety

A

Whoever signs the document is agreeing to be primarily liable of debt (if you fold, bank can go directly after parents and sue)

32
Q

Guarantor

A

Person is secondarily liable (if you default, bank has to go after you first and then they can go after parents)

33
Q

Gift

A

Not grounds to sue

34
Q

Adequacy of Consideration

A

Can be unequal unless fraud, undue influence, or duress

35
Q

Undue Influence

A

Because of your relationship with a person, they put their guard down because they trust you

36
Q

Capacity

A

A party who does not have capacity to contract lacks mutual assent to bargain

37
Q

Insane People

A

Lack capacity; Must return product in same condition received

38
Q

Children

A

Lack capacity; Must return what is left of product

39
Q

What is the exception to capacity?

A

Necessary (food, shelter medical care)

40
Q

Legality

A

An illegal contract is one that calls for the performance of a crime, tort, or is against public policy

41
Q

Statue of Frauds

A

Certain types of contracts must be in writing and be signed

42
Q

Elements of Statue of Frauds

A

Contract cannot be performed in one year, Sale or lease of land, Liable for debt of another, Sale of goods over $500

43
Q

Exceptions to Statue of Frauds

A

Specially made goods (business cards), Goods received by buyer, Person admits oral contract, Unjust enrichment

44
Q

Electronic Signature in Global and National Commerce Act

A

Electronic Signature is valid

45
Q

Uniform Commercial Code

A

Purpose is to make uniform laws involving commercial transactions involving sales, banking, and secured transactions (excludes real estate)

46
Q

Which article deals with the sale of goods?

A

Article Two

47
Q

Merchant

A

Person who deals with goods of that kind

48
Q

Entrustment

A

The giving of possession of goods to a merchant who deals with goods of that kind

49
Q

What does Section 2-403 say about Joe getting his ring back?

A

The customer who bought the ring gets is because Joe gave the diamond to the merchant; Want merchants to be able to transfer products in ordinary course of business; Protects customer in good faith

50
Q

What happens if a repairman sells a car to a different person?

A

He can’t do this because he is not a merchant and the customer would not have been given certificate of ownership

51
Q

Risk of Loss

A

Section 2-508 governs who has the risk of loss in the absence of an agreement

52
Q

Shipment Contract

A

When contract requires seller to ship goods, risk of loss passes to buyer when conforming goods are delivered to carrier (what seller wants)

53
Q

Destination

A

When contract requires seller to deliver the goods to a specific destination, risk of loss will not pass until the goods are delivered to that destination (what buyer wants)

54
Q

Bailment

A

The delivery of personal property by the owner to another person (third party) to hold

55
Q

Bailee

A

The third person holding the goods

56
Q

Who has the risk of loss when goods are being shipped?

A

When subject to bill of landing, risk passes to buyer upon receipt of documents

57
Q

Who has the risk of loss when the goods are in possession of the third party?

A

If goods not covered by documents of title, risk passes to buyer when bailee tells the buyer that the buyer has the right to possession

58
Q

Who has the risk of loss when the seller has the good and the buyer is to pick them up at store?

A

If the seller is a merchant, risk passes to the buyer only on recipe of the goods

59
Q

What happens if a good is damaged while a merchant is holding the item you bought?

A

If they offer to hold the product for you, they are responsible if something goes wrong

60
Q

What happens if the good you purchased from a neighbor gets stolen?

A

Buyer has risk of loss because they bought from a non-merchant

61
Q

Requirement of Good Faith

A

Under the Uniform Commercial Code, every contract imposes an obligation of good faith

62
Q

What happens if an element of the contract, such as price, is missing?

A

Code mandates that the price will be what is reasonable at the time of delivery

63
Q

What does the Code say about consideration?

A

If merchant says that they will keep an offer open for a week, it must stay open for that long

64
Q

Click-wrap License

A

Agreement provided by the distributor or manufacturer of software which is contained in the packaging of the product and contains non-negotiable terms and conditions imposed by seller; Accept before you install

65
Q

Shrink-wrap License

A

Buy box at store with plastic around it; By ripping plastic off and installing disk, you are agreeing to terms and conditions; By using it, you are agreeing to terms

Legal Studies (10 decks)

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