LGS Chapter 12

Question 1

What type of law deals with the formation and keeping of promise?

Answer 1

Contract Law

Question 2

A person’s assurance that he or she will or will not do something

Answer 2

Promise

Question 3

A person who makes a promise is known as?

Answer 3

Promisor

Question 4

A person to whom a promise is made

Answer 4

Promisee

Question 5

T/F- The common law governs all contracts except when it has been modified or replaced by statutory law, such as the Uniform Commercial Code (UCC) or by administrative agency regulations

Answer 5

True

Question 6

Services Real Estate
Employment
Insurance
are all covered by what law?

Answer 6

Common Law

Question 7

What does the Uniform Commercial Code (UCC) contracts relate to?

Answer 7

The sale of goods (Article 2)
The lease of goods (Article 2A)

Question 8

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

Answer 8

Contract

Question 9

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

Answer 9

Objective Theory of Contracts

Question 10

1) What a party said when entering into the contract
2) How a party acted or appeared
3) The circumstances surrounding the transaction
What are these an example of?

Answer 10

Objective Facts

Question 11

What are the 4 requirements that must be met before a valid contract exists?

Answer 11

1) Agreement
2) Consideration
3) Contractual Capacity
4) Legality

Question 12

An agreement to form a contract includes an offer by one party to enter into the agreement and an acceptance of the terms of the offer by another party

Answer 12

Agreement

Question 13

Any promises made by the parties to the contract must be supported by legally sufficient and bargained- for consideration ( something of value received or promised, such as money, to convince a person to make a deal)

Answer 13

Consideration

Question 14

Both parties entering into the contract must have the contractual capacity to do so- that is, the law must recognize them as possessing characteristics that qualify them as competent parties

Answer 14

Contractual Capacity

Question 15

The contract’s purpose must be to accomplish some goal that is legal and not against public policy

Answer 15

Legality

Question 16

What are 2 defenses to the enforceability of a contract

Answer 16

1) Voluntary Consent
2) Form

Question 17

What is it called when the contract must be in whatever form the law requires

Answer 17

Form

Question 18

What are the 3 types of contracts?

Answer 18

1) Formation
2) Performance
3) Enforceability

Question 19

a type of contract that arises when a promise is given in exchange for a promise

Answer 19

Bilateral Contract

Question 20

T/F- Performance, such as payment of funds or delivery of goods, needs to take place for a bilateral contract to be formed

Answer 20

False, no performance is needed

Question 21

A contract that results when an offer can be accepted only by the offeree’s performance

Answer 21

Unilateral Contract

Question 22

T/F-A bilateral contract is formed not at the moment when promises are exchanged but at the moment when the contract is performed

Answer 22

True

Question 23

a contract that by law requires a specific form, such as being executed under seal, to be valid

Answer 23

Formal Contract

Question 24

Negotiable instruments ( checks, drafts, promissory notes, bills of exchange, and certificates of deposit) are formal contracts because the UCC requires a special language to create them
These are examples of what form of contracts?

Answer 24

Formal Contracts

Question 25

A contract that does not require a specified for or formality in order to be valid

Answer 25

Informal Contract

Question 26

a contract in which the terms of the agreement are fully and explicitly stated in words, oral or written

Answer 26

Express Contract

Question 27

A signed lease for an apartment is an example of what type of contract?

Answer 27

Express Contract

Question 28

A contract formed in whole or part from the conduct of the parties ( as opposed to an express contract)

Answer 28

Implied Contract

Question 29

If the following conditions exist, a court will hold that an implied contract was formed:

Answer 29

The plaintiff furnished some service or property ( completion of tax return) The plaintiff expected to be paid for that service or property, and the defendant knew or should have known that payment was expected (defendant was aware of fee for service The defendant had a chance to reject the services or property and did not

Question 30

a contract has been completely performed by both parties

Answer 30

Executed Contract

Question 31

a contract that has not yet been fully performed

Answer 31

Executory Contract

Question 32

If one party has fully performed but the other has not, the contract is said to be what?

Answer 32

on executed on the side and executory on the other, but the contract is still classified as executory

Question 33

a contract that results when the elements necessary for contract formation (agreement, consideration, contractual capacity, and legality) are present

Answer 33

Valid Contract

Question 34

a valid contract rendered unenforceable by some statute or law

Answer 34

Unenforceable Contract

Question 35

T/F- Certain contracts must be in writing, and if they are not, they will not be enforceable except in certain exceptional circumstances

Answer 35

True

Question 36

a contract that may be legally avoided (canceled) at the option of one of the parties

Answer 36

Voidable Contract

Question 37

A contract having no legal force or binding effect

Answer 37

Void Contract

Question 38

Name the different types of Formation contracts

Answer 38

Bilateral Unilateral Formal Informal Express Implied

Question 39

Name the different types of Performance contracts

Answer 39

Executed Executory

Question 40

Name the different types of Enforceability contracts

Answer 40

Valid Unenforceable Voidable Void

Question 41

a promise or commitment to perform or refrain from performing some specified in the future

Answer 41

Offer

Question 42

Reese says to Celia, “If you drive my car from New York to Los Angeles, I’ll give you $1,000.” Only on Celia’s completion of the act—bringing the car to Los Angeles—does she fully accept Reese’s offer to pay $1,000. If she chooses not to accept the offer to drive the car to Los Angeles, there are no legal consequences. What type of contract would this be if Celia accepts and does the act?

Answer 42

Unilateral

Question 43

Alex, a small-business owner, needs an accountant to complete his tax return. He drops by a local accountant’s office, explains his situation to the accountant, and learns what fees she charges. The next day, he returns and gives the receptionist all of the necessary documents to complete his return. Then he walks out without saying anything further to the accountant.

Answer 43

In this situation, Alex has entered into an implied contract to pay the accountant the usual fees for her services. The contract is implied because of Alex’s conduct and hers. She expects to be paid for completing the tax return, and by bringing in the records she will need to do the job, Alex has implied an intent to pay her.