Exam II

Question 1

Reasons for Contracts

Answer 1

protect bus and personal/property rights
provides stability in bus. relationships
reduces costs
establishes self regulation
provides remedies
lessens dependence on good faith

Question 2

Three important parts of the definition of Contracts

Answer 2

promise
enforceable
has consequences

Question 3

What does UCC stand for?

Answer 3

Uniform Commercial Code - governs transactions regarding goods

Question 4

Which type of law governs contracts over services?

Answer 4

common law

Question 5

Legislative (statutes) Contract Law governs the sale of ______.

Answer 5

goods

Question 6

Describe the UCC

Answer 6

issued in 1952 to facilitate interstate commerce issues
generally uniform
all states except LA have
article 2 (transactions)

Question 7

What is the Law Merchant?

Answer 7

the UCC is based off of this
medieval Europe used to deal with traveling merchants in periodic markets
temporary nature of things required quick responses to disputes and remedies

Question 8

Under implied warranties in the UCC, what is merchantability?

Answer 8

the seller of goods must be of fair quality and conform to labeling requirements

Question 9

Under implied warranties in the UCC, what is fitness for a particular purpose?

Answer 9

goods must be suitable for the buyers purpose if the seller is aware of what that purpose is

Question 10

What are the 2 implied warranties?

Answer 10

Merchantability
Fitness for a Particular Purpose

**must conform to this even if NOT expressly stated

Question 11

Def: bilateral contracts

Answer 11

Mutual promises: 2 promises, 2 rights, 2 duties
Promise in exchange for a promise
*most bus. contracts are bilateral

Question 12

How is this an example of a bilateral contract?

I will sell you my book for $200.

Answer 12

Seller: promise to deliver
Buyer: right to book

Seller: right to receive $
Buyer: promise to pay $

Question 13

Def: unilateral contracts

Answer 13

Agreements with 1 promise and only 1 party is committed to perform
Aka
Promise made in exchange for performance

Question 14

How is this an example of a unilateral contract?

I will give you a $1000 bonus for reaching 15% sales increase.

Answer 14

One promise - to pay
Right to receive $

• no one forces you to reach the goal

Question 15

Def: express contracts

Answer 15

interactions where parties discuss the promised terms of their agreement

Question 16

Def: implied-in-fact contracts

Answer 16

contracts that come with the conduct of the parties
ex. asking a lawyer for advice; you have to pay them @ rate but this may not have been discussed
must contain same elements of express contracts
law will automatically add terms unless parties specifically agree to leave them out

Question 17

Def: implied-in-law contracts

quasi contracts

Answer 17

judicial remedy to prevent unjust enrichment of a party at the expense of the other
only happens when there’s no actual contract to cover the dispute
**mostly when parties tried to create a contract but it was void or unenforceable

Question 18

Def: enforcement

Answer 18

courts uphold the validity of the promises

Question 19

Def: unenforceable

Answer 19

justifiable reason for noncompliance with a promise

*must prove denial of legal enforcement

Question 20

Def: valid

Answer 20

when an agreement is enforceable because all of the essential requirements are present

Question 21

Def: void

Answer 21

appears to be an agreement, but lacks some essential requirement for it to be enforceable

Question 22

Def: voidable

Answer 22

agreement where at least 1 party has the right to withdraw from a promise without incurring legal liability
*they’re enforceable until the party declares them as void