Exam 3 Flashcards
What are the three requirements to make a valid offer?
- Intent
- Definiteness
- Communication
How can someone terminate an offer?
They can reject the offer or make a counteroffer, or if the offer included the time in which they want the response by and the time goes by, that is a rejection. The offer can also be terminated by the operation of law.
What is an option contract?
An option contract keeps an offer open for a set of period of time provided consideration has been paid.
What are the three things an acceptance of an offer must be?
Unconditional, unequivocal, and legally communicated
What is the mailbox rule?
An acceptance is effective when it is placed in the mail; revocation is effective when it is received by the offeree.
What is a unilateral contract?
a contract that can only be accepted by the offerees action
What is consideration of a contract?
Consideration is something given of legal value in exchange for a promise and has to exist on both sides of a contract
What is capacity?
Capacity means that a contracting party has the ability to understand the agreement they are entering into. The right to disaffirm is only given to the one who lacks capacity.
What is an adhesion contract?
is when one party has greater bargaining power than the other party.
What is consent?
a lack of consent can occur when one or both parties lack knowledge and are this unable to consent to the terms of agreement.
What is fraud?
When one party defraud the other, the defraud party had the ability to collect damages ad rescind the agreement. The elements of fraud are:
- misstatement of material fact that the defrauding party knew to be false
- intent to deceive
- reliance on the statement
- proximate cause
- damages
What is undue influence?
occurs when a party misuses their position of trust to influence the other party to enter into an agreement
What is duress?
When one party threatens the other party into an agreement
Most states adopted a form of the statute of fraud which requires a writiing for what kinds of contracts?
- sale of land
- contracts that cannot be performed within one year
- promises to pay the debt of another
- promises by an administrator to personally pay the debts of the estate
- promises made in consideration of marriage
- contracts for the sale of goods over $500
What is promissory estoppel?
one of the parties rely to his detriment on statements made by the other, but there is no contract established.
What is the parole evidence rule?
prevents oral evidence from being introduced in court to contradict the written terms of an agreement
What are the remedies to breach in contract?
- Rescission
- Restitution
- Specific Performance
- Reformation
What is rescission (in reference to breaches in contract)?
a remedy of by which a contract is cancelled and the parties are restored to their original circumstances, prior to entering the contract
What is a quasi contract?
used in oder to prevent unjust enrichment
What is restitution (in reference to breaches in contract)?
Restitution is where both parties must return goods, property or money previously exchanged
What is specific performance (in reference to breaches in contract)
calls upon the performance of the act in the contract to be carried out. Thus occurs in cases where the consideration is considered unique, scarce, or not available in contracts for personal services.
What is reformation (in reference to breaches in contract)?
an equitable remedy that allows a contract to be rewritten to reflect the parties true intentions
What is the uniform commercial code?
the statutory law in every state but the common law of contracts is evolving.
Article 2 of the UCC expressly apples to the contracting for the sales of goods. Goods must be tangible, movable and of personal property.
What is an express warranty?
written or verbal guarantee that a product will meet a certain level of quality and reliability
