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Legal & Regulatory Aspects of FP > Chapter 9 - Introduction To Contracts > Flashcards

Chapter 9 - Introduction To Contracts Flashcards

1
Q

What are the 7 parts of a contract that must be in place have a legal contract?

A
  • Offer
  • Acceptance
  • Consideration
  • Legality
  • Capacity
  • Consent
  • Writing
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2
Q

What is an Offer?

A

In contract law, an act of statement that proposes definite terms and permits the other party to create a contract by accepting those terms

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3
Q

What is Acceptance?

A

Once a party receives an offer, he must respond to it in a certain way.

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4
Q

What is Consideration?

A

In contract law, something of legal value that has been bargained for and given in exchange by the parties.

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5
Q

What is Legality?

A

The contract must be for a lawful purpose.

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6
Q

What is Capacity?

A

The legal ability to enter into a contract.

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7
Q

What is Consent?

A

Certain kinds of trickery and force can prevent the formation of a contract

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8
Q

What is Writing?

A

Some types of contracts must be in writing to be enforceable.

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9
Q

What is a contract?

A

A legally enforceable agreement.

A promise that the law will enforce

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10
Q

What is a Bilateral Contract?

A

A contract where both parties make a promise

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11
Q

What is a Unilateral Contract?

A

A contract where one party makes a promise that the other party can accept only by doing something

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12
Q

What is an Executory Contract?

A

A binding agreement in which one or more of the parties has not fulfilled its obligations

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13
Q

What is an Executed Contract?

A

An agreement in which all parties have fulfilled their obligation

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14
Q

What is a Valid Contract?

A

A contract that satisfies all of the law’s requirements

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15
Q

What is an Unenforceable Contract?

A

A contract where the parties intent to form a valid bargain but a court declares that some rule of law prevents enforcing it.

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16
Q

What is a Voidable Contract?

A

An agreement that, because of some defect, may be terminated by one party, such as a minor, but not by both parties.

17
Q

What is a Void Agreement?

A

An agreement that neither party may legally enforce.

18
Q

What is an Express Contract?

A

An agreement with all important terms explicitly stated

19
Q

What is an Implied Contract?

A

A contract where the words and conduct of the parties indicate that they intended an agreement.

20
Q

What is Promissory Estoppel?

A

A doctrine in which a court may enforce a promise made by the defendant even when there is no contract.
-The defendant made a promise that the plaintiff relied on.

21
Q

What is a Quasi-Contract?

A

A legal fiction in which, to avoid injustice, the court awards damages as if a contract had existed, although one did not.
-The defendant did not make any promise, but did receive a benefit from the plaintiff.

22
Q

What is Quantum Maruit?

A

“As much as he deserved” The damages awarded in a quasi-contract case.

23
Q

What are Goods?

A

Are things that are movable, other than money and investment securities.

24
Q

Which 4 parts of contract law came from Common Law?

A

Express Contracts
Implied Contracts
Promissory Estoppel
Quasi-Contract

25
Q

What is the UCC?

A

Uniform Commercial Code - a set of laws for business transactions so they are the same across all the states (Most so far)

26
Q

What does the UCC govern compared to common law?

A

The UCC governs the sale of goods while common law principles govern contracts for sales of services and everything else..

27
Q

If a contract involves both the sale of goods and service, how do you determine whether to go by the UCC or Common Law?

A

When you have the sale of goods and services, Article 2 of the UCC governs only if the primary purpose was the sale of goods.

28
Q

What is an Offeror?

A

The party in contract negotiations who makes the first offer.

29
Q

What is an Offeree?

A

The party in the contract negotiations who receives the first offer.

30
Q

What must have happened for a Meeting of the Minds to have taken place?

A

One side must make an offer and the other must make an acceptance.

31
Q

What is a Revocation?

A

When an offer is revoked when the offeror “takes it back” before the offeree accepts.

32
Q

What is a Rejection?

A

If an offeree clearly indicates that he does not want the offer,then he has rejected it. A rejection immediately terminates the offer.

33
Q

What is a counteroffer?

A

When a party responds to an offer with a new a different proposal. A counteroffer is a rejection of the previous offer.

34
Q

What is the Mirror Image Rule?

A

A contract doctrine that requires acceptance to be on exactly the same terms as the offer. Otherwise it is counted as a counteroffer and is a rejection of the initial offer.

35
Q

When will an acceptance that adds additional or different terms create a contract?

A

Under the UCC and the battle of the forms, acceptance that adds additional and different terms will create a contract. And the additional items will often become part of the contract.

36
Q

When are the major 4 specifics on when the mirror image rule is ignored under the UCC?

A
  • For the sale of goods, the most important factor is whether the parties believe they have a binding agreement. If their conduct indicates that they have a deal, they probably do.
  • If the offeree adds new terms to the offer, acceptance by the offeror generally creates a binding agreement
  • If the offeree changes the terms of the offer, a court will probably rely on the general principles of the UCC to create a fair contract.
  • If a party wants a contract on its terms only, with no changes, it must clearly indicate that.
37
Q

When is the effective date of an acceptance?

A

An acceptance is generally effective upon dispatch, meaning the moment it is out of the offeree’s control.

38
Q

What is the effective date of a termination?

A

Terminations take effect on the date they are received.

Legal & Regulatory Aspects of FP (26 decks)

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