Quiz #3: Chapter 6 Flashcards
Contracts
A special agreement, written or oral, that involves legally binding obligations between 2 or more parties.
What is the purpose of a contract?
- to specify, limit, and define agreements that are enforceable.
- forces participants to be specific in their understanding / expectations.
- serve to limit misunderstandings and offer a means to resolve disputes that arise.
What are the types of contracts?
- express
- implied
- voidable
Express contract
Parties have an oral or written agreement.
Implied contract
Inferred by law.
Voidable contract
One party, but not the other, has the right to escape from its legal obligations under the contract.
What are the contract elements?
- offer with communication
- consideration
- agreement
Offer with communication
A promise by one party to do (or not to do) something if the other party agrees to do (or not to do) something.
Consideration
Requires that each party to a contract give up something of value in exchange for something of value.
Acceptance
- meeting of the minds
- definite and complete
- duration
- complete and conforming
Meeting of the minds
Acceptance that requires a meeting of the minds (mutual assent); in other words, the parties must understand and agree on the terms of the contract. Each side must be clear as to the details, rights, and obligations of the contract.
Definite and complete
acceptance that requires mutual assents to be found between the parties. The terms must be so complete that both parties understand and agree to what has been proposed.
Duration
the offeror (the one who makes the offer) may revoke an offer at anytime prior to a valid acceptance. when the offeror does revoke the proposal, the revocation is not effective until the offeree (the person to whom the offer is made) receives it. When the offeree has accepted the offer, any attempt to revoke the agreement is too late and invalid.
Complete and conforming
the acceptance must be a mirror image of the offer. In other words, the acceptance must comply with all the terms of the offer and not change or add any terms.
Breach of contract
violation of one or more terms of the contract.
What are the required elements to establish a breach of contract?
- a valid contract was executed.
- the plaintiff performed as specified in the contract.
- the defendant failed to perform as specified in the contract.
- the plaintiff suffered an economic loss as a result of the defendants breach of contract.
What are the types of competent parties?
- corporations
- agents
- independent contractor
corporations
the ability of them to enter into a contract is limited by its power as contained in or inferred from its articles of incorporation (charters) or confined upon its general corporation law.
agents
one who has the power to contract for and bind another person, who is known as the principle.
independent contractor
an individual who agrees to undertake work without being under the direct control or direction of another.
legality of object
to be a valid contract, the contract must not violate any federal or state statute, law, rule, or regulation.
conditions
act(s) or event(s) that must occur to be performed by one party before the second party has any responsibility to perform under the contract.
performance
the act of doing what is required by a contract.
what are some nonperformance defenses?
- fraud
- mistake of fact
- mistake of law
- duress
- illegal contract
- impossibility
- statute of limitations
fraud
occurs when one party intentionally misrepresents a material fact or term of the contract and intends that the other party rely on that misrepresentation.
mistake of fact
an incorrect belief regarding a fact by both parties.
mistake of law
an incorrect judgement of the legal consequences of known facts.
duress
the use of lawful threats or pressure to force an individual to act against his or her will. not legally binding.
illegal contract
a contract whose formation, object, or performance is against the law or contrary to public policy that no court would uphold or enforce.
impossibility
contracts can become impossible to perform because certain facts might have existed at the time the contract was executed or they might have arisen subsequent to the formation of the contract. contracts that are impossible to perform do not have to be carried out by the parties to the contract.
Statute of limitations
A party to a contract who does not, within a period of time, take action to enforce contract rights by suing for damages caused by a breach of the contract or taking other action can be barred from doing so.
What are the types of Remedies ?
- specified performance
- monetary damages
- general damages
- consequential damages
- duty to mitigate damages
Specified performance
When an aggrieved party has subsequent,y complied with his or her obligations pursuant to the agreed upon terms of the contract, that party might seek specific performance as a remedy rather than monetary remuneration.
Monetary damages
Awarded in attempt to restore to the aggrieved party the money that it would have had if the other party had not breached the contract.
General damages
Can be expected to arise from a breach of contract.
Consequential damages
Occur because of some unexpected, unusual, or strange development involved in a particular contract in dispute.
Duty to mitigate damages
When someone has breached a contract, the other party cannot stand idly by and let damages build indefinitely.
Employment contract
An agreement between an em0ployee and employer that specifies the terms of employment. Can be expressed or implied.
Exclusive contracts
An organization often enters into an exclusive contract with physicians or medical groups for the purpose of providing a specific service to the organization. Generaly in ancillary services.
Noncompetitive clauses
- often included in employee agreements.
- agreement not to practice within agreed upon geographic area.
- should seek legal counsel.
Transfer agreement
Agreement in effect with other healthcare organizations to help ensure a smooth transfer of patients from one facility to another when ordered by attending physicians.
Insurance contracts
Insurer obligations to indemnify insured for losses caused by specified events. Insured pays fixed premiums.
