Chapter 7

Question 1

Express contract

Answer 1

Parties have an oral or written contract

Question 2

Implied contract

Answer 2

Inferred by law, based on the conduct of the parties such as a handshake

Question 3

Voidable contract

Answer 3

One party, but not the other has the right to escape from it’s legal obligations under the contract

Question 4

Executed contract

Answer 4

One that has met all terms and obligations of the parties to the contract

Question 5

Enforceable contract

Answer 5

One that is valid, legally binding in which one party breaches it, the other will have an appropriate legal remedy

Question 6

Elements of a contract

Answer 6

1. Offer/communication - promise of one party to do or not do something if the other party agrees to do or not do something
2. Consideration - to give up something of value in exchange for something of value
3. Acceptance - formally accept an offer

Question 7

Acceptance involves 4 criteria:

Answer 7

1. Meeting of the minds
2. Definite and complete
3. Duration
4. Complete and confirming

Question 8

Breach of a contract involves 4 criteria:

Answer 8

1. A valid contract was executed
2. The plaintiff performed as specified in the contract
3. The defendant failed to perform as specified
4. The plaintiff suffered economic loss from the breach

Question 9

Corporate contracts

Answer 9

Limited by what is contained in the articles of the incorporation/charter

Question 11

Concept of apparent authority

Answer 11

Appearance of being the agent of another (employer or principle) with the power to act for the principal

Question 12

Agent

Answer 12

One who has the power to contract for and bind another person to the contract

Question 13

Condition

Answer 13

Event that must happen by one party or before the other party has any responsibility to perform under the contract (express/implied)

Question 14

Performance

Answer 14

The act of doing what is required by the contract

Question 15

Contract fraud

Answer 15

When at least one part in a contract knowingly misrepresents a material fact contained in the contract and intends that the other party rely on that misrepresentation

Question 16

Mistakes of fact

Answer 16

Mistaken believe that certain “facts” are true (both parties must have made the mistake)

Question 17

Mistake of law

Answer 17

Misunderstanding or interpreted the law incorrectly

Question 18

Duress

Answer 18

Use of unlawful threats or pressure to force an individual to act against their will

Question 19

Illegal contract

Answer 19

The contract is against the law or contrary to public policy that no court will uphold or enforce it

Question 20

Statue of limitations

Answer 20

Can be limited from taking legal action if not done so in a timely period

Question 21

Monetary damages

Answer 21

Awarded in an attempt to restore the aggrieved party the money that it would have had if the other party had not breached the contract

Question 22

General damages

Answer 22

Those that can be expected to arise from a breach of contract

Question 23

Consequential damages

Answer 23

Those that occur because of some unexpected, unusual, or strange development involved in the contract

Question 24

Employment contract

Answer 24

Written document that sets forth the terms of the employment

Question 25

Sherman Anti-trust Act + Clayton Act

Answer 25

Preventing and eliminating unlawful tying contracts, price discrimination, corporate mergers and acquisitions (to prevent monopoly), and interlocking directorates = maintaining competitive markets!