Quiz #3: Chapter 6

Question 1

Contracts

Answer 1

A special agreement, written or oral, that involves legally binding obligations between 2 or more parties.

Question 2

What is the purpose of a contract?

Answer 2

• 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.

Question 3

What are the types of contracts?

Answer 3

• express
• implied
• voidable

Question 4

Express contract

Answer 4

Parties have an oral or written agreement.

Question 5

Implied contract

Answer 5

Inferred by law.

Question 6

Voidable contract

Answer 6

One party, but not the other, has the right to escape from its legal obligations under the contract.

Question 7

What are the contract elements?

Answer 7

• offer with communication
• consideration
• agreement

Question 8

Offer with communication

Answer 8

A promise by one party to do (or not to do) something if the other party agrees to do (or not to do) something.

Question 9

Consideration

Answer 9

Requires that each party to a contract give up something of value in exchange for something of value.

Question 10

Acceptance

Answer 10

• meeting of the minds
• definite and complete
• duration
• complete and conforming

Question 11

Meeting of the minds

Answer 11

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.

Question 12

Definite and complete

Answer 12

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.

Question 13

Duration

Answer 13

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.

Question 14

Complete and conforming

Answer 14

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.

Question 15

Breach of contract

Answer 15

violation of one or more terms of the contract.

Question 16

What are the required elements to establish a breach of contract?

Answer 16

• 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.

Question 17

What are the types of competent parties?

Answer 17

• corporations
• agents
• independent contractor

Question 18

corporations

Answer 18

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.

Question 19

agents

Answer 19

one who has the power to contract for and bind another person, who is known as the principle.

Question 20

independent contractor

Answer 20

an individual who agrees to undertake work without being under the direct control or direction of another.

Question 21

legality of object

Answer 21

to be a valid contract, the contract must not violate any federal or state statute, law, rule, or regulation.

Question 22

conditions

Answer 22

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.

Question 23

performance

Answer 23

the act of doing what is required by a contract.

Question 24

what are some nonperformance defenses?

Answer 24

• fraud
• mistake of fact
• mistake of law
• duress
• illegal contract
• impossibility
• statute of limitations

Question 25

fraud

Answer 25

occurs when one party intentionally misrepresents a material fact or term of the contract and intends that the other party rely on that misrepresentation.

Question 26

mistake of fact

Answer 26

an incorrect belief regarding a fact by both parties.

Question 27

mistake of law

Answer 27

an incorrect judgement of the legal consequences of known facts.

Question 28

duress

Answer 28

the use of lawful threats or pressure to force an individual to act against his or her will. not legally binding.

Question 29

illegal contract

Answer 29

a contract whose formation, object, or performance is against the law or contrary to public policy that no court would uphold or enforce.

Question 30

impossibility

Answer 30

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.

Question 31

Statute of limitations

Answer 31

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.

Question 32

What are the types of Remedies ?

Answer 32

• specified performance
• monetary damages
• general damages
• consequential damages
• duty to mitigate damages

Question 33

Specified performance

Answer 33

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.

Question 34

Monetary damages

Answer 34

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.

Question 35

General damages

Answer 35

Can be expected to arise from a breach of contract.

Question 36

Consequential damages

Answer 36

Occur because of some unexpected, unusual, or strange development involved in a particular contract in dispute.

Question 37

Duty to mitigate damages

Answer 37

When someone has breached a contract, the other party cannot stand idly by and let damages build indefinitely.

Question 38

Employment contract

Answer 38

An agreement between an em0ployee and employer that specifies the terms of employment. Can be expressed or implied.

Question 39

Exclusive contracts

Answer 39

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.

Question 40

Noncompetitive clauses

Answer 40

• often included in employee agreements.
• agreement not to practice within agreed upon geographic area.
• should seek legal counsel.

Question 41

Transfer agreement

Answer 41

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.

Question 42

Insurance contracts

Answer 42

Insurer obligations to indemnify insured for losses caused by specified events. Insured pays fixed premiums.