R7-M2 Contracts 1

Question 1

what is a contract?

Answer 1

• define: a promise that the law will enforce or legally enforceable agreement or legally sufficient
• forms of contract:
  + express: language, oral, or written
  + implied-in-fact: conduct. ex: doctor and patient
  + implied-in-law or quasi-contract: remedy. ex: A give B $10 down payment to buy B’s house. B later backs out. A can recover the down payment

Question 2

what are sources of law?

Answer 2

1. Common law (IMPORTANT):
   - generally derived from court.
   - includes: Real estate, Insurance, Services, and Employment (RISE)
2. Uniform commercial code (UCC) sale article: sales of goods (movable things)

Question 3

what are 3 elements of a legally enforceable contract?

Answer 3

If these 3 requirements are met, enforceable contract and remedies are available
- agreement made up of an offer and an acceptance
- exchange of consideration (something of legal value)
- lack of defenses

Question 4

what are types of offers?

Answer 4

• an offer for sale of goods: generally need only include the quantity term. ex: I offer to sell 100 widgets
• an offer to create a contract under common law must include:
  + identity of the offeree and the subject matter
  + the price to be paid
  + the time of performance
  + the quantity involved
  + the nature of the work to be performed

Question 5

How to terminate of offer?

Answer 5

• to create a contract, an offer must be accepted BEFORE it is terminated
• terminate either by act of either party (revoke or reject) or by operation of law ( death of a party (exception if there is option contract in place))
• Exception: if offeree paid the offeror to keep the offer open or buy time (called an option contract), the offeror cannot revoke the option upon agreement.

Question 6

what are rules of acceptance?

Answer 6

• mailbox rules: the acceptance is effective when sent by offeree not received by offeror. mailbox rule exception if the offeror indicates specific time and if acceptance is received after that specific time, then the acceptance is ineffective. it becomes counteroffer

Question 7

what is consideration?

Answer 7

• a price of contracting
• past or moral consideration (detrimental reliance): if something had already been given or performed BEFORE the promise was made, it will not satisfy the “bargain” requirement
• charity or gift: are unenforceable because of lack of consideration

Question 8

what is unilateral contract?

Answer 8

• a contract that is formed when performance is given in exchange for a promise made in an offer
• only one promise is made
• consideration is required