Contracts

Question 1

Express Contract

Answer 1

elements of contract are laid out in specific detail.

Question 2

Mailbox Rule

Answer 2

states that acceptance is valid once it has been posted by mail, email, or fax even if the offeror hasn’t received it or never ends up receiving it.

Question 3

Mutual Assent

Answer 3

Two parties come to an agreement of the contract terms (aka: meeting of the minds)

Question 4

Acceptance

Answer 4

Offeree agrees to give something of value (consideration) in exchange for goods or services

Question 5

Offer

Answer 5

something of value which is given in exchange for something from another party

Question 6

Specific Performance

Answer 6

ensures that the terms of the contract be performed as written

Question 7

Revoke

Answer 7

an offeror can do this before accepting an offer

Question 8

Contract Discharge

Answer 8

a contract is considered to be discharged when two parties have completed all terms of the contract

Question 9

Unilateral Contract

Answer 9

an open contract where one person makes an offer (offeror) and anyone is able to accept that offer (offeree)

Question 10

Bilateral Contract

Answer 10

a contract between two parties

Question 11

Is the offeror or offerer legally bound in a unilateral contract?

Answer 11

offeror

Question 12

Is the offeror or offerer legally bound in a bilateral contract?

Answer 12

both

Question 13

Formal Contract

Answer 13

written agreement typically registered with a court which must be signed by all parties

Question 14

Material Breach of Contract

Answer 14

one party violated the terms of the contract that significantly affects the outcome of the promise.

Question 14

6 Elements of a Contract

Answer 14

• offer
• agreement
• consideration
• mutuality
• capacity
• legality

Question 14

Informal Contract

Answer 14

an agreement, either written or orally, usually of a simple nature

Question 15

Non-Material Breach of Contract

Answer 15

one party violated the terms of the contract in a minor way.

Question 16

Performance

Answer 16

when both parties fulfill the terms of a contract.

Question 17

Rescind

Answer 17

Revoke a contract.

Question 18

Objective Theory of Contracts

Answer 18

states that a contract is legally binding when an offer made by one party is accepted by the other party

Question 19

Objective Standard

Answer 19

ensures that mutual assent was present when the contract was created

Question 20

Illusory Promise

Answer 20

a contract that lacks mutuality

Question 21

Implied in fact

Answer 21

terms of contract not expressed but the facts are implied

Question 22

Implied in law (quasi contracts)

Answer 22

terms of contract are not expressed but it is implied that if services are rendered, payment will be received. typically used to curve unjust enrichment

Question 23

When can an offer be revoked?

Answer 23

Anytime by the offeror prior to acceptance

Question 24

When can an offer be terminated?

Answer 24

• death of either party
• insanity of either party
• death or destruction of the person or thing required to perform the contract terms
• counteroffer

Question 25

Prior Agreement Clause

Answer 25

states that one party is allowed to terminate the contract if prior plans cause the party to become unable to fulfill the terms of the contract and must be written into the contract.

Question 26

Entire Agreement Clause

Answer 26

states that either party cannot argue that there were additional terms to the contract based on a previous agreement.

Question 27

Mirror Image Rule

Answer 27

states that an offeree’s acceptance of terms must mirror the offeror’s terms

Question 28

Revocation (Withdrawal)

Answer 28

when an offeror no longer intends for an offer to go forward. must be received by the offeree prior to the offeree putting their acceptance in the mail

Question 29

Rejection

Answer 29

when an offeree does not want the offer. must be sent to the offeror prior to any acceptances that might of occurred.

Question 30

Unjust Enrichment

Answer 30

occurs when a party receives a product/service without a contract & does not pay for it

Question 31

Executed Contracts

Answer 31

terms of contract have been executed or completed

Question 32

Executory Contracts

Answer 32

terms of contract are ongoing and executed over a set period of time

Question 33

Promisor

Answer 33

party who makes the promise

Question 34

Promisee

Answer 34

party who receives the promise

Question 35

Intentional Beneficiary

Answer 35

Non-party receives direct benefit of a contract

Question 36

Incidental Beneficiary

Answer 36

Non-party receives indirect benefit of a contract

Question 37

Third Party Beneficiary

Answer 37

Non-party that directly or indirectly receives some benefit from a contract

Question 38

Assent

Answer 38

expression of approval

Question 39

Donee Beneficiary

Answer 39

indirectly benefits from a contract between two principal parties when one party, the promisee, attempts to give a gift

Question 40

Creditor Beneficiary

Answer 40

receive benefits when there is a legal duty for a promise to perform

Question 41

Assignment of Rights

Answer 41

the handing off of an existing contract’s obligations, rights, and/or benefits to another party

Question 41

Assignee

Answer 41

receiving party

Question 41

Assignor

Answer 41

benefiting party of a contract

Question 43

Obligee

Answer 43

recipient of the responsibilities of the contract

Question 44

Novation

Answer 44

occurs when a new obligor takes over the obligations of an old one

Question 45

Delegee

Answer 45

a person who delegates the duties to another party

Question 46

Essential terms of a contract

Answer 46

terms that must be defined in the offer & includ:
1. price
2. parties
3. time frame
4. scope of duties

Question 47

Definite & Certain terms

Answer 47

meaning that a reasonable person is capable of readily understanding the terms

Question 48

Requirements of a legally binding contract

Answer 48

1. clear intent
2. communication between the parties
3. definite proposal