Chapters 7-9

Question 1

contract

Answer 1

a legally enforceable agreement that is created when two or more competent parties agree to perform, or to avoid performing, certain acts that they have a legal right to do and that meet certain legal requirements

Question 2

tangible personal property

Answer 2

personal property that can be moved

Question 3

offer

Answer 3

a proposal made by one party (The offeror) to another person (the offeree) that indicates a willingness to enter into a contract

Question 4

offeror

Answer 4

the person making a proposal

Question 5

offeree

Answer 5

the person to whom a proposal is made

Question 6

acceptance

Answer 6

an indication made by the offeree that he or she agrees to be bound by the terms of the offer

Question 7

mutual agreement

Answer 7

the state of mind that exists between an offeror and an offeree when a valid offer has been accepted, and the parties know what the terms are and have agreed to be bound by them.

Question 8

Mutual agreement is also known as

Answer 8

meeting of the minds

Question 9

consideration

Answer 9

the promise to give up something of value that a party to a contract has a legal right to keep, or to do something that the party is not otherwise legally required to do.

Question 10

competent

Answer 10

being mentally capable of understanding the terms of a contract

Question 11

legality of purpose

Answer 11

the requirement that the intent of a contract be legal for the contract to be enforceable

Question 12

proper form

Answer 12

the requirement that the form of a contract be correct for the terms of the contract to be enforceable

Question 13

oral contract

Answer 13

an agreement that is not in writing or signed by the parties

Question 14

written contract

Answer 14

an agreement that is reduced to writing on a permanent surface

Question 15

express contract

Answer 15

a contract that explicitly states the agreement of the parties either orally or in writing

Question 16

implied contract

Answer 16

a contract that does not explicitly state the agreement of the parties but in which the terms of the agreement can be inferred from the conduct of the parties the customs of the trade, or the conditions or circumstances

Question 17

formal contract

Answer 17

a speciality contract that is written and under seal

Question 18

simple contract

Answer 18

an informal contract made without seal

even though the subject matter of the contract may be extremely complex and may involve huge amounts of money

Question 19

entire contract

Answer 19

an agreement that is made up of two or more parts, in which each part is dependent upon the others

Question 20

divisible contract

Answer 20

an agreement that is made up of two or more parts, each part being independent of the others

Question 21

executory contract

Answer 21

an agreement in which some future act or obligation remains to be performed under its terms

Question 22

executed contract

Answer 22

a record of an agreement that has been completed in all respects by all the parties

Question 23

valid contract

Answer 23

an agreement resulting in an obligation that is legally enforceable

Question 24

void contract

Answer 24

a contract that is not enforceable from the beginning because it lacks one of the requirements of a valid contract

Question 25

voidable

Answer 25

an agreement that can be rejected by one of the parties for a legally acceptable reason.

Question 26

request for proposal

Answer 26

a request for an offer or an invitation to negotiate that can be accepted or rejected by the person calling for a bid.

Question 27

invitation to trade

Answer 27

an announcement published for the purpose of creating interest and attracting a response by many people. It is not considered a valid offer because it does not contain sufficient words of commitment to sell.

Question 28

public offer

Answer 28

a general offer to the public

Question 29

mailbox rule

Answer 29

a rule that states that an acceptance sent via the postal system or by courier is effective when sent

Question 30

counteroffer

Answer 30

a response to an offer in which the terms and conditions of the original offer are changed.

Question 31

termination by lapse of time

Answer 31

when an opportunity to form a contract ends because the offeree fails to accept an offer within the time specified

Question 32

revocation

Answer 32

the calling back of an offer by the offeror before the offer has been accepted or rejected

Question 33

rejection

Answer 33

the express or implied refusal by an offeree to accept an offer

Question 34

option contract

Answer 34

a contract that has a provision to keep an offer open for a certain period of time

Question 35

fraud

Answer 35

the intentional misstatement or nondisclosure of a material (essential) fact made by one party in an attempt to influence the action of another party

Question 36

puffing

Answer 36

a general expression of opinion, typically in a sales context, that is used to persuade a prospective purchaser to buy. It does not constitute a misrepresentation of material fact

Question 37

misrepresentation

Answer 37

a misstatement of a material fact that results in inducing another to enter into an agreement to his or her injury

Question 38

mistake

Answer 38

a belief that is not in accord with the facts

Question 39

undue influence

Answer 39

the improper use of excessive pressure by the dominant member of a confidential relationship to connive the weaker party to enter a contract that greatly benefits the dominant party

Question 40

duress

Answer 40

the act of applying unlawful or improper pressure or influence to a person to gain his or her agreement to a contract

Question 41

contract of adhesion

Answer 41

a contract drawn by one party that must be accepted as is on a take it or leave it basis

Question 42

unconscionable contract

Answer 42

a contract that is so one-sided that it is oppressive and gives unfair advantage to one of the parties