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Legal Environment > Contracts > Flashcards

Contracts Flashcards

1
Q

People make promises all the time, so promises have little to do with contract law

A

False

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2
Q

At a given point in time, contract law does NOT reflect what?

A

Our physical well-being

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3
Q

Promises that involve moral obligations are the basis of contract law

A

False

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4
Q

A contract is

A

A promise or agreement that can be enforced in court

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5
Q

Promisor

A

A person who makes a promise

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6
Q

Promisee

A

A person to whom a promise is made

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7
Q

An agreement that can be enforced in court, formed by two or more parties, each of whom agrees to perform or to refrain from performing some act now or in the future.

A

Contract

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8
Q

Requirements for a valid contract do NOT include

A

A fair price

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9
Q

When the court examines the objective facts surrounding contract formation, the following is examined

A

What the party said when entering the contract

The circumstances surrounding the transaction

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10
Q

Formed by words (oral, written, or by a combination)

A

Express

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11
Q

Requires no special form for creation

A

Informal

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12
Q

Requires special form for creation

A

Formal

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13
Q

Promise for a promise

A

Bilateral

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14
Q

Party to whom the offer is made

A

Offered

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15
Q

If the offeree can accept simply by promising to perform, then the contract is unilateral

A

False

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16
Q

An implied contract differs from an express contract the parties creates and defines the terms of the contract.

A

True

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17
Q

The defendant had no chance to reject the services or property

A

NOT a requirement for an implied contract

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18
Q

Executed contract

A

A contract that has been completely performed by both parties

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19
Q

Executory contract

A

A contract that has not yet been fully performed

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20
Q

You tel your roommate that you will sell him your six month old tablet. You accurately specify it’s technical details and state that the price is $100. Your roommate accepts the offer you have a

A

Express contract

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21
Q

Elliot enters into a contract to purchase JD’s house, then changes her mind. JD sues for breach of contract. The lawsuit for breach of contract will be governed by

A

A common law of contracts

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22
Q

Objective theory of contracts

A

Theory under which the intent to form a contract will be judged by outward, objective facts, as interpreted by a reasonable person, rather than by the party’s own secret, subjective intentions.

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23
Q

Agreement normally I’d evidenced by and offer and an acceptance.

A

True

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24
Q

Offer

A

A promise or commitment to perform or regain from performing some specified act in the future

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25
Q

Acceptance

A

The offeree’ notification to the offeror that the offeree agrees to be bound by the terms of the offeror’s proposal

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26
Q

The offeror must have a ____________ intention to become bound by the offer

A

Serious

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27
Q

The terms of the offer must be reasonably _________, or definite, so that the parties and court can _________ the terms of the contract.

A

Certain

Ascertain

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28
Q

The offer must be ____________ to the offeree

A

Communicated

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29
Q

An effective offer does require that a reasonable price be related to the market value.

A

False

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30
Q

In an auction, the auctioneer acts as the

A

Offeree

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31
Q

Olivia says to Jim, “I think I’ll sell my new digital camera for $100 because I’m never going to use it.” This statement constitutes…

A

A statement of future intent

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32
Q

The requirement that an offer be properly communicated to the offeree means that the offeror must inform the offeree about the offer in some effective way

A

True

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33
Q

The withdrawal of an offer by an offeror. Unless an offer is irrevocable, it can be revoked at any time prior to acceptance without liability

A

Revocation

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34
Q

Counteroffer

A

An offeree’ response to an offer in which the offeree rejects the original offer and at the same time makes a new offer

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35
Q

When the specific subject matter is the offer is destroyed before the offer is accepted, the offer automatically terminates.

A

Destruction of the subject matter

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36
Q

If the offeror or offeree dies or becomes incompetent, this offer terminates (unless the offer is irrevocable).

A

Death or incompetence of the offeror or offeree

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37
Q

When a statue or court decision makes the proposed contract illegal, the offer automatically terminates.

A

Supervening illegality

38
Q

Which of the occurrences will NOT terminate the offer?

A

Acceptance

39
Q

An acceptance must match the terms of the offer exactly in order to be valid. This is called the mailbox rule.

A

False

40
Q

A rule providing that an acceptance of an offer becomes effective on dispatch, if mail is expressly or impliedly an authorized means of communication of acceptance to the offeror

A

Mailbox rule

41
Q

You receive a letter telling you that you will start receiving a box of fresh fruit each month and that if you don’t want them, you have to reply within seven days. You ignore the offer.

A

Your silence does not constitute an acceptance of the offer

42
Q

Requires that an acceptance math the terms of an offer.

A

Mirror image rule

43
Q

Acceptance is not identical to the offer consider this a

A

Counteroffer

44
Q

An acceptance sent by means not expressly or impliedly authorized normally is not effective until it is received by the offeror.

A

True

45
Q

The offer terminates at the end of the time period specified in the offer or, if no time period is stated in the offer, at the end of a reasonable time period.

A

lapse of time

46
Q

A contract under which the offeror cannot revoke his or her offer for a stipulated time period and the offeree can accept or reject the offer during this period without fear that the offer will be made to another person. The offeree must give consideration for the option (the irrevocable offer) to be enforceable.

A

option contract

47
Q

A mistake made by both parties. If both parties are mistaken about a material fact, such as the identity of the subject matter, either party can avoid the contract. If the mistake relates to the value or quality of the subject matter, either party can enforce the contract.

A

Bilateral contract

48
Q

A mistake made by only one of the parties. Generally, the mistaken party is bound by the contract, unless the other party knows or should have known of the mistake, or the mistake is an inadvertent mathematical error in addition, subtraction, or the like that is committed without gross negligence.

A

Unilateral mistake

49
Q

An otherwise valid contract maybe unenforceable if the parties have not genuinely agreed to its terms.

A

True

50
Q

Generally a party who demonstrates that he or she did not truly agree to the terms of a contract does NOT have …

A

Sue under the statute of limitations.

51
Q

The mistake must involve some_________ fact.

A

material

52
Q

When one party makes a mistake, that party can

A

do nothing because the contract is enforceable.

53
Q

Blake purchases a mare from Childs, who says that the mare is healthy and should make a good brood mare when a little older. After two years, the horse has not foaled. A veterinarian tells Blake that the horse is incapable of breeding. If Blake sues to rescind the contract with Childs it is

A

likely that a court will allow the rescission based on a mistake of material fact

54
Q

Even when a unilateral mistake of fact was made, a contract may be enforceable if the other party to the contract knows or should have known that a mistake of fact was made.

A

True

55
Q

As a general rule, a unilateral mistake does not give the mistaken party any right to relief from the contract, except under one of the following situations

A

There was an error due to a substantial mathematical mistake that was made inadvertently and without extreme negligence

56
Q

When both parties are mistaken about a material fact, ________ party can avoid the contract.

A

either

57
Q

In a bilateral mistake situation, if the mistake relates to the value or quality of the subject matter, either party can _______ the contract.

A

enforce

58
Q

If the parties to a contract attach material different meanings to a term, a court may allow the contract to be _________ because there has been no true “meeting of the minds.”

A

rescinded

59
Q

When parties form a contract, their agreement establishes the value of the object of their transaction, not only for the moment, but for several years in the future.

A

False

60
Q

A decent that is not obvious or cannot readily be ascertained

A

Latent defect

61
Q

Any manifestation through words or conduct that amounts to an untrue statement of fact made in circumstances in which a reasonable person would not have done (failed to do) that which led to the misrepresentation

A

Negligent misrepresentation

62
Q

A false statement of fact or an act made in good faith that deceives and causes harm or injury to another

A

Innocent misrepresentation

63
Q

When an innocent party is fraudulently induced to enter into a contract, the contract normally can be avoided because that party has not voluntarily consented to its terms.

A

True

64
Q

Those in the following professions are suppose to have greater knowledge of the law than the average citizen possess 1.__________ , 2. ____________

A

real estate brokers

attorneys

65
Q

Ordinarily, any party to a contract has a duty to come forward and disclose facts that the other party does not know about.

A

False

66
Q

Senso offers to sell his car and knows that it has been in an accident. If the purchaser asks Senso if the car has had body work and Senso lies, he will have committed a(n)

A

fraudulent misrepresentation

67
Q

The presence of termites qualifies as a latent defect.

A

False

68
Q

One party’s intent to deceive the other party to a contract is known as

A

scienter

69
Q

Beatrice sells Claudia an exotic bird that Beatrice knows is on the endangered species list, but tells Claudia that it isn’t. When the federal government confiscates the bird and fines her, Claudia sues Beatrice for

A

fraudulent misrepresentation

70
Q

Scienter does NOT exist when

A

a party makes a statement that she or he sincerely believes is true.

71
Q

Scienter occurs if a party says or implies that a statement is made on some basis, such as personal knowledge or personal investigation, when it is not.

A

True

72
Q

When an innocent misrepresentation has occurred, the aggrieved party cannot rescind the contract, but usually can seek damages.

A

False

73
Q

In most states, negligent misrepresentation is equal to __________ making a misrepresentation.

A

knowingly

74
Q

To recover damages caused by fraud, proof of _______ is universally required.

A

harm

75
Q

Misrepresentation of law ordinarily does not entitle a party to relief from a contract.

A

True

76
Q

The law will not come to the aid of one who simply makes an unwise bargain.

A

True

77
Q

When a naive purchaser relies on the opinion of an expert, the innocent party maybe entitled to

A

recession or reformation

78
Q

Misrepresentation by conduct involves

A

a seller preventing a buyer from learning of some fact that is material

79
Q

Misrepresentations of a material fact can be made by

A

words or actions

80
Q

Which is NOT an element of fraud?

A

intent to improve one’s bargaining positon

81
Q

When a party is fraudulently induced into a contract, that party can

A

rescind the contract

82
Q

If defects would be ________ on inspection, the buyer cannot justifiably rely on the seller representations.

A

obvious

83
Q

A contract entered into under excessive or undue influence lacks voluntary consent and is therefore voidable.

A

True

84
Q

Jed tells his ailing mother that unless she lends him money for a business investment he will never see her again. She agrees but later changes her mind and asks for her money back. Jed claims that they have formed a binding contract. Why might the contract be voidable?

A

Because of undue influence.

85
Q

Duress is both a defense to the enforcement of a contract and a ground for the rescission of a contract.

A

True

86
Q

The use of threats to force a party to enter into a contract

A

Duress

87
Q

Generally for duress to occur, the threatening act must be wrongful or illegal and it must render the person ________ of exercising free will.

A

incapable

88
Q

Economic need is usually sufficient to constitute duress.

A

False

89
Q

the “standard-form” contract, such as that between a large retailer and a consumer, in which the stronger party dictates the terms.

A

adhesion contract

90
Q

Damages that compensate a non reaching party for the loss of the bargain

A

Compensatory damages

91
Q

Foreseeable damages that result from a party’s breach of contract

A

Consequential damages

92
Q

Knowledge by the misrepresenting party that material facts have been falsely represented or omitted with an intent to deceive.

A

scienter

Legal Environment (1 decks)

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