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Business Law > Exam 2 > Flashcards

Exam 2 Flashcards

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1
Q

Unilateral contract

A

One party makes a promise

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2
Q

Bilateral contract

A

Two parties make a promise

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3
Q

Executory contract

A

Contract has been made, but one ore more parties have not fulfilled their obligations

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4
Q

Executed contract

A

Occurs when all parties have fulfilled their obligations

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5
Q

Valid contract

A

All conditions fulfill the law’s requirements

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6
Q

Unenforceable agreement

A

Occurs when the parties intend to form a valid bargain, but a court declares that some rule of law prevents enforcing it

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7
Q

Voidable contract

A

Occurs when the law permits one party to terminate the agreement

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8
Q

Void agreement

A

One that neither party can enforce, usually because the purpose of the deal is illegal or because one of the parties had no legal authority to make a contract

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9
Q

Express contracts

A

Agreements with all important terms explicitly stated

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10
Q

Implied contract

A

The words and conduct of the parties indicate that they intended an agreement

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11
Q

Promissory estoppel

A

The defendant made a promise that the plaintiff relied on

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12
Q

Quasi-contract

A

The defendant received a benefit from the plaintiff, and the plaintiff reasonably expected to be paid for the benefit and the defendant knew this

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13
Q

Letter of intent

A

A letter that summarizes the negotiating process; a letter might help distinguish a serious party from one with casual interest, summarize the progress made, and assist the parties in securing necessary financing

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14
Q

Termination by revocation

A

Occurs when the offeror “takes it back” before the offeree accepts

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15
Q

Termination by rejection

A

If an offeree clearly indicates he does not want to take the offer, then he has rejected it and it can never be accepted

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16
Q

Counteroffer

A

Occurs when it responds to an offer with a new and different proposal; previous offer is terminated with counteroffer

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17
Q

Termination by expiration

A

If offeror sets time limit for offer and you respond after the time period has expired, offer is no longer valid; With no time limit, offeree has reasonable time to decide

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18
Q

Termination by operation of law

A

If an offeror dies or becomes mentally incapacitated, the offer terminates automatically and immediately

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19
Q

Acceptance requirements

A

Doesn’t have to say “I accept” or even use words; if no words are spoken or actions are done to indicate acceptance, the deal is not accepted

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20
Q

Mirror Image Rule

A

Requires that acceptance be on precisely the same terms as the offer

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21
Q

Noncompete agreement

A

Sometimes called a covenant not to compete; an employee promises not to work for a competitor for some time after leaving his company

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22
Q

Noncompete agreement terms for business sale

A

Enforceable if reasonable in time, activity, and territory

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23
Q

Exculpatory clauses

A

There are contracts that attempt to release businesses from liability in the event of injury to another party

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24
Q

Unconscionable contracts

A

Is one that a court refuses to enforce because of fundamental unfairness

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25
Q

Capacity

A

Concerns the legal ability of a party to enter a contract in the first place

26
Q

Consent

A

Refers to whether a contracting party truly understood what she was getting into and whether the agreement was made voluntarily

27
Q

Disaffirm

A

To give notice of refusal to be bound by an agreement

28
Q

Rescind

A

Both parties mutually agree to terminate a contract

29
Q

Restitution

A

a minor who disaffirms a contract must return the consideration he has received, to the extent he is able; status quo rule states the adult or store is only required to return its profit margin to the minor if minor cannot return consideration

30
Q

Consent fraud

A

Begins when a party to a contract says something that is factually wrong

31
Q

Bilateral mistake

A

Occurs when both parties negotiate based on the same factual error; contract is voidable by injured party

32
Q

Unilateral mistake

A

Occurs when one party enters an agreement under a mistaken assumption

33
Q

Duress

A

This is an improper threat made to force another party into a contract if victim had no reasonable alternative

34
Q

Collateral promise

A

When one person agrees to pay the debt of another as a favor to that debtor; must be in writing

35
Q

Contract writing requirements

A

Writing must be signed by defendant and must state with reasonable certainty the name of each party, the subject matter, and all essential terms

36
Q

Parol evidence

A

Refers to anything (apart from written contract itself) that was said, done, or written before the parties signed the agreement or as they signed it

37
Q

Integrated contract

A

Is a writing that the parties intend as the final, complete expression of their agreement and parol evidence does not apply

38
Q

Material fact

A

One on which one would affect a reasonable person’s decision; an objective piece of information

39
Q

Strict performance

A

This requires one party to perform its obligations precisely, with no deviation from the contract terms; party is generally not required to fulfill this unless the contract demands it and such a demand were reasonable

40
Q

Substantial performance

A

This occurs when one party fulfills enough of its contract obligations to warrant payment

41
Q

Good faith

A

Parties that agree to contract must carry out obligations in good faith

42
Q

Material breach

A

This is a breach that substantially harms the innocent party for which it would be hard to compensate without discharging the contract

43
Q

Anticipatory repudiation

A

One party notifies the other that it will not perform its obligation

44
Q

Statue of Limitations

A

This begins to run at the time of injury and will limit the time within which the injured party may file suits

45
Q

Impossibility of a contract

A

If performing a contract is truly impossible, a court will discharge the agreement

46
Q

True impossibility

A

Destruction of subject matter; death of promisor in a personal services contract; illegality

47
Q

Commercial impracticality

A

Means some event has occurred that neither party anticipated and fulfilling the contract would now be extraordinarily difficult and unfair to one party

48
Q

Frustration of purpose

A

Means some event has occurred that neither party anticipated and the contract now has no value for one party

49
Q

Remedies: Expectation

A

What party would have received from fulfilled contract

50
Q

Remedies: Reliance

A

Injured party proves money was spent in reliance on agreement, so he should receive compensation

51
Q

Remedies: Restitution

A

Objective is to restore injured party to benefit she provided

51
Q

Remedies: Equitable

A

More than money damages; injunctions

51
Q

Mitigation of damages

A

A party injured by breach may not recover for damages that he could have avoided with reasonable efforts; party is expected to keep damages he can control low

52
Q

Liquidated damages

A

A provision stating in advance how much a party must pay if it breaches; other party may treat as immediate breach

53
Q

Warranty

A

These are contractual assurance that goods will meet certain standards

54
Q

Express warranty

A

These are ones that the seller creates with his words or actions

55
Q

Implied warranty

A

Just because no promise was made doesn’t mean seller isn’t responsible if good sold doesn’t work

56
Q

Implied warranty of merchantability

A

Means that the goods are fit for the ordinary purposes for which they are used

57
Q

Implied warranty of fitness for a particular purpose

A

Where seller knows about a particular purpose for which buyer wants the goods, and knows buyer is relying on seller’s judgement, there is (unless excluded or modified) an implied warranty that goods shall be fit for such purpose

58
Q

Rescission

A

Calls contract off

59
Q

Specific performance

A

Court forces breaching party to fulfill bargain

60
Q

Privity of contract

A

No recovery unless consumer had contractual relationship with manufacturer

Business Law (1 decks)

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