Contractual Relationships I: Chapter 10 Flashcards
What is the purpose of a contract?
Contracts exist to make business matters more predictable
judicial restraint
a court taking a passive role and requiring parties to fulfill whatever obligations they agreed to (whether the deal was wise or foolish)
judicial activism
where a court will ignore certain provisions of a contra t or an entire agreement if the judge believes that enforcing the deal would be unjust
4 elements of a contract
Agreement, consideration, legality, and capacity
Agreement
one party must make a valid offer and the other party must accept it
Consideration
There has to be a bargaining that leads to an exchange between the parties
Legality
The contract myst be for a lawful purpose
Capacity
The parties must be adults of sound mind
Consent
Neither party may trick or force the other into the agreement
Written Contracts
Some contracts must be in writing to be enforceable
Third Party interests
Some contracts affect people other than the parties themselves
Performance and Discharge
If a party fully accomplishes what the contract requires, his duties are discharged
Remedies
A court will award money or other relief to a party injured by a breach of contract
Contract
a promise that the law will enforce
Noncompetition Agreement
a contract in which one party agrees not to compete with another in a stated type of business
Bilateral Contract
a binding agreement in which each party has made a promise to the other
Unilateral Contract
a binding agreement in which one party has made an offer that the other can accept only by action, not words
Express Contract
a binding agreement in which the parties explicitly state all important terms
Implied Contract
a binding agreement created not by explicit language but by the informal words or conduct of the parties
Executory Contract
a binding agreement in which one or more of the parties has not fulfilled its obligations
Executed Contract
a binding agreement in which all parties have fulfilled all obligations
Valid Contract
a contract that satisfies all of the law’s requirements
Unforceable Agreement
occurs when the parties intend to form a valid bargain but a court declares that some rule of law prevents enforcing it
Voidable Contract
an agreement that, because of some defect, may be terminated by one part, such as a minor, but not by both parties