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Management 311 > MGMT 311 Exam 3 - FLASHCARDS - Chapter 12 part 2 > Flashcards

MGMT 311 Exam 3 - FLASHCARDS - Chapter 12 part 2

1
Q

What is a contract that is not valid from the start and cannot be enforced? It lacks the essential elements of a legal contract and is treated as if it never existed

A

Void contract

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2
Q

What is a contract that is initially valid and enforceable, but one party has the right to cancel or void the contract if they desire?

A

Voidable contract

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3
Q

What is silence of acceptance?

A

a notion that asserts that a party’s silence or refusal to reply to an offer might be construed as acceptance of the offer

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4
Q

True or false: Acceptance is present if the offeree accepts the benefit of the offered services or goods when the offeree had an opportunity to reject the offered services or goods and knows that such services or goods were offered with the expectation of compensation?

A

TRUE

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5
Q

True of false: if there is complete absence of words and actions, there is no acceptance?

A

TRUE

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6
Q

How is acceptance in unilateral contracts?

A

Acceptance is usually evident, and is therefore unnecessary (unless the law requires it or the offeror asks for it). acceptance is affected when the performance is completed; notification of the acceptance is not necessary

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7
Q

How is acceptance in bilateral contracts?

A

communication of acceptance is necessary, because acceptance is in the form of a promise. The bilateral contract is formed when the promise is made rather than when the act is performed

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8
Q

True or false: in a bilateral contract, acceptance must be timely?

A

TRUE

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9
Q

What is the mailbox rule?

A

If the authorized mode of communication is the mail, then an acceptance becomes valid when it is dispatched (placed in the control of the U.S. Postal Service)—not when it is received by the offeror. An acceptance is timely if it is sent prior to the termination of the offer.

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10
Q

True or false: Acceptance is effective when sent if sent by authorized means of acceptance?

A

TRUE

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11
Q

What is express means of acceptance?

A

when someone agrees to the terms of an offer either by saying it or writing it down. When an offeror specifies how an acceptance should be made. Can be verbal or written

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12
Q

What is implied means of acceptance?

A

when someone shows they agree to something without saying it directly

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13
Q

What means of acceptance is this: if someone asks you if you want a cookie and you take one without saying “yes”.

A

Implied means of acceptance

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14
Q

What means of acceptance is this: If a seller offers to sell a car to a buyer for $10,000 and the buyer responds by saying “I accept your offer”

A

Express means of acceptance

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15
Q

What means of acceptance is signing a rental agreement?

A

Express means of acceptance

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16
Q

What are e contracts?

A

an agreement that is drafted, negotiated, and executed completely online

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17
Q

What are online offers?

A

Online offers are in the complete control of the seller. Terms need to be more clear and specific

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18
Q

What are the requirements for online offers?

A
  1. Acceptance of terms. A clause that clearly indicates what constitutes the buyer’s agreement to the terms of the offer, such as a box containing the words “I accept” that the buyer can click.
  2. Payment. A provision specifying how payment for the goods (including any applicable taxes) must be made.
  3. Return policy. A statement of the seller’s refund and return policies.
  4. Disclaimer. Disclaimers of liability for certain uses of the goods. For instance, an online seller of business forms may add a disclaimer stating that the seller does not accept responsibility for the buyer’s reliance on the forms rather than on an attorney’s advice.
  5. Limitation on remedies. A provision specifying the remedies available to the buyer if the goods are found to be defective or if the contract is otherwise breached. Any limitation of remedies should be clearly spelled out.
  6. Privacy policy. A statement indicating how the seller will use the information gathered about the buyer.
  7. Dispute resolution. Provisions relating to dispute settlement, which we examine more closely in the following section.
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19
Q

What are examples of online acceptances?

A

Click on agreements and Browse-Wrap Terms

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20
Q

What is an online agreement that users agree to by clicking a button or checking a box that says “I agree.”?

A

Click on agreement

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21
Q

What is a website agreement (typically the website’s terms of use or service) that aims to bind the user by virtue of the user browsing the website?

A

Bowse wrap terms

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22
Q

Are click-on agreements enforceable?

A

Yes

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23
Q

Are browse wrap terms enforceable?

A

No

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24
Q

What law recognizes electronic records as contracts and e-signatures and as valid signatures?

A

The Uniform Electronic Transactions Act (UETA) of 1999

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25
Q

What is the E-SIGN Act (Electronic Signatures in Global and National Commerce Act of 2000)?

A

No contract, record, or signature may be denied legal effect solely because it is in electronic form

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26
Q

What are exceptions of the E-sign act where we can’t sign electronically?

A

1) Court papers
2) Divorce decrees
3) Evictions
4) Foreclosures
5) Health insurance terminations
6) Prenuptial agreements
7) Wills

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27
Q

What is consideration?

A

the value given in exchange for a promise or in return for a performance

28
Q

Does legal consideration exist when one makes a promise to do something he or she had no prior legal duty to do?

A

Yes

29
Q

Does legal consideration exist when one performs an action he or she had no prior legal duty to perform?

A

Yes

30
Q

Does legal consideration exist when one refrains or promises to refrain from doing an action he or she had no prior legal duty to refrain from doing?

A

Yes

31
Q

True or false: It is not necessary that an economic or material loss be incurred by the promisee or an economic or material benefit be received by the promisor?

A

TRUE

32
Q

Is bargined for exchange about getting a good deal?

A

No

33
Q

What is bargin for exchange?

A

Both sides giving and recieving something. What sets a contract apart from a gift. Gifts are one-sided

34
Q

When does legally sufficient consideration exist?

A
  1. one makes a promise to do something he or she had no prior legal duty to do;
    2. one performs an action he or she had no prior legal duty to perform; or
    3. one refrains or promises to refrain from doing an action he or she had no prior legal duty to refrain from doing
35
Q

What was Hamer v. Sidway (NY 1891)?

A

backstory involves an uncle and 15 year old nephew. Uncle belived in richeous living. Uncle tells nephew if he promises to live richeously, he will give him 5,000 dollars. There were no laws about drinking, smoking, gambling at the time.

36
Q

What is the preexisting duty rule?

A

Doing something that one already has a legal duty to do or promising to do what one already has a legal duty to do is not legally sufficient consideration for another person’s promise.

37
Q

What is an example of preexisting rule duty?

A

the law makes it illegal to drink until 21

38
Q

Are unforeseen difficulties always an exception?

A

No. has to be something we couldn’t have prodicted would happen

39
Q

What is is when you are free to enter into a new contract but with different terms?

A

Rescission and New Contract

40
Q

True or false: preexisting duty rule dissapears with recission?

A

TRUE

41
Q

Is past consideration consideration?

A

No

42
Q

What are Non-compete Agreements?

A

Common in employment and sale of business. You are agreeing to not compete with your current employer while you work there and shortly after you leave

43
Q

What is a promise that is unenforceable due to indefiniteness or lack of mutuality, where only one side is bound to perform? The promisor has not definitely promised to do anything

A

Illusory promises

44
Q

True or false: settlements of claim must be supported by legally sufficient consideration?

A

TRUE

45
Q

What is used between creditor and debtor to settle unliquidated debts? Debts may be settled by the debtor offering to pay and creditor accepting less than creditor originally claimed. A debtor offers to pay, and a creditor accepts, a lesser amount than the creditor originally claimed was owed.

A

Accord and Satisfaction

46
Q

What is a liquidated debt?

A

one whose amount has been fixed, agreed on, settled, or exactly determined

47
Q

If a debt is liquidated, can accord and satisfaction take place?

A

No

48
Q

What is a contract in which one party forfeits the right to pursue a legal claim against the other party?

A

Release

49
Q

What are the three requirements of release?

A

Release needs to be made in good faith, signed, and have consideration

50
Q

What is Covenant Not to Sue?

A

You are substituting a contract for another legal action

51
Q

What is an example of covenant not to sue?

A

You get in a fender bender and give the other driver money in exchange for them to not sue you. If you agree to give them money and you don’t have it on hand, and you don’t give it to them, they can sue you for breach of contract

52
Q

What is used with promises which are otherwise UNenforceable; like promises without consideration?

A

Promissory Estoppel (detrimental reliance)

53
Q

What elements are required for the Promissory Estoppel doctrine to be applied?

A
  1. Clear and definite promise.
    2. Promisor expected the promisee to rely on the promise.
  2. Promisee reasonably relied on the promise by acting or refraining from some act.
  3. Promisee’s reliance is definite and resulted in substantial detriment.
  4. Enforcement of the promise is necessary to avoid injustice.
54
Q

What is an example of Promissory Estoppel?

A

Donation to a charity where the charity expects that money to come in. Donation is a gift, not a contract

55
Q

What is the legal ability to enter into a contractual relationship?

A

Capacity

56
Q

Is capacity lacking or questionable with minors, intoxicated people, and the mentally incompetent?

A

Yes

57
Q

Who is anyone under the age of 18 that is not emancipated?

A

Minors

58
Q

What is the general rule for minors?

A

a minor can enter into any contract an adult can as long as it is not against the law for a minor

59
Q

What is dissafirmance?

A

The right to walk away

60
Q

What are rights of the minor in regards to dissafirmance?

A

1) Words or conduct can be used by minor to express intent not to be bound.
2) Minors may disaffirm contracts during minority and for a reasonable period of time after attaining the age of majority.
3) A minor who is exercising his or her right of disaffirmance must disaffirm the entire contract.
4) The contract is voidable by the minor, but not by the adult.

61
Q

True or false: In a contract between a minor and adult, the contract is voidable by the minor, but not by the adult?

A

TRUE

62
Q

How is a contract voidable for a minor?

A

Minors (those under the age of 18, in most states) lack the capacity to make a contract. So a minor who signs a contract can either honor the deal or void the contract

63
Q

What are the obligations of a minor in regards to dissafirmance?

A

1) Generally, if a minor disaffirms, each party must make restitution by returning the consideration received from the other party.
2) Majority of states say – minor must only return goods that are in minor’s possession or control. Even if goods are damaged, minor still has right to disaffirm.
3) Some states say – if goods are damaged, the minor is required to compensate adult with a “reasonable” amount

64
Q

Is a contract voidable if it was made by a person who was so intoxicated that his or her judgment was impaired, and he or she did not comprehend the nature of the transaction and the legal consequences of entering into the contract?

A

Yes

65
Q

True or false: Inflation counts as an unforseen difficulty?

A

FALSE

66
Q

What was Lucy v. Zehmer?

A

The Defendant, Zehmer, writes a contract to sell land on a napkin and when the Plaintiff, Lucy, tries to enforce it, Zehmer claims he was only joking. Zehmer’s attorneys admitted that he was not too drunk to make a contract

Management 311 (25 decks)

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