Contracts Flashcards
Business Law
What must a contract contain?
Offer, Acceptance, Consideration, Proper form (oral or written), Legal subject matter, 2 Competent parties
Business Law
What forms may acceptance of a contract take?
Can be written or oral Must be in the form/method required by offeror Must be mirror image - i.e. no changes in terms
Business Law
Who can accept an offer?
Must be accepted by intended party (offeree) Acceptance can only be made by a party who knows an offer has been made and has all of the facts - AKA a meeting of the minds They must intend to accept
Business Law
What happens if an offeree accepts a contract but puts added stipulations?
It is not acceptance; but instead becomes a counter-offer and the original offeror is now the offeree
Business Law
When is an offeror bound by a contract?
When they RECEIVE the acceptance. If the offeree rejects; then accepts - whatever gets to the offeror first is what is binding.
Business Law
What will void an offer?
If offeror dies or becomes insane before acceptance; offer is void. Contract is binding if acceptance occurs before death/insanity.
Business Law
What actions or circumstances will revoke a contract?
Offeror revokes and offeree receives revocation Offeree finds out prior to acceptance that offeror has sold the item In the case of an Option; offeror cannot revoke until the time of the option has elapsed Initial rejection by offeree doesn’t void the option.
Business Law
What is an Option?
Some amount of consideration (like money) is put forth by offeror to keep the offer open for a stated period of time
Business Law
What is a Requirements Contract? How are they limited?
These are contracts where someone becomes the exclusive provider of something in exchange for consideration Companies can’t get locked in to one and then have market conditions force them to sell something at what has become an unreasonable price
Business Law
What is promissory estoppel?
Promises to donate are legally enforceable Basically; you can’t tell a charity; Hey; if you buy this $100;000 piece of land; I’ll pay for the building that will go on it; and then renege on your promise
Business Law
What can make a contract VOID?
Fraud in the execution Formed under extreme duress - extreme Illegal
Business Law
What can make a contract VOIDABLE?
Fraud in the inducement Party not competent to contract Formed under SIMPLE duress Undue influence
Business Law
What is the result of a clerical error in a contract?
The contract is unenforceable. Example: Person signs a contract to pay $500.00 to have their lawn re-seeded but due to clerical error; it actually reads $5000.00
Business Law
Contracts under the Statute of Frauds must be in what form to be valid?
They must be in writing.
Business Law
What makes a contract subject to the Statute of Frauds?
o Cannot be completed within one year o Involves the purchase of real estate o $500+ Sale of Goods o Co-signing and guaranteeing the debt of another
