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Business law > Test 2 > Flashcards

Test 2 Flashcards

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1
Q

Of old how were agreements made

A

Medieval merchant guild
Courts of Chancery (equity)

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2
Q

Today contracts are…

A

Common law (judge made precedent)

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3
Q

What 3 things are not covered by the UCC

A

Intangible good
Real estate
Services

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4
Q

Uniform commercial code

A

Laws and judicial gloss governing tangible goods.

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5
Q

Offeror/promisor

A

Person making the offer (promisor used in financial contracts)
Giver

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6
Q

Offeree / promisee

A

Persons the offer was directed to.
Ower

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7
Q

Void

A

Never was a co tract to begin with

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8
Q

Voidable

A

Can be voided with correct legal steps
Involved a minor
Fraud
Duress

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9
Q

Executory

A

Not yet filled by both parties
To be filled at a later date

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10
Q

Executed

A

Fully filled by both parties

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11
Q

Quasi contract
Contract implied in law

A

Legal fiction to promote socially desired results

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12
Q

Contract implied in fact

A

Details of contract created by interactions of the parties involved

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13
Q

Unjust enrichment

A

Financial gain by mistake of another. You can be billed for services if a company put a roof on your house by mistake.

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14
Q

Bilateral

A

Promise for promise

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15
Q

Unilateral

A

Promise for an action

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16
Q

Forebare

A

Withhold an action

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17
Q

Unenforceable

A

Courts won’t enforce because some legal reason (not void or voidable)

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18
Q

Are oral contracts enforceable

A

Usually

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19
Q

Goals of the UCC

A

Uniformity
Conform to how people had done business
Create hard line rules for complex
situations with common law

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20
Q

Common law is …

A

Simple
Understandable
Draconian (no intent is considered)

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21
Q

Lex Mercatoria

A

Law of merchants
Absorbed into common law

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22
Q

4 fundamental questions of contract

A

-Was a contract made?
-Is contract enforceable?
- Was contract executed(discharged), breached; or performance was legally excused
-If breached , how shall it be enforced or what remedy shall be granted

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23
Q

4 basic elements of a contract: what 4 things must a contract have to be valid.

A

Mutual assent
Consideration
2 or more parties with legal capacity
Contract must not be illegal or contrary to public policy

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24
Q

For an offer to be valid it must be

A

Clear
Complete
Unambiguous

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25
Q

Mutual assent

A

2 parties freely and voluntarily enter into the contract.

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26
Q

UCC gap fillers

A

Price -reasonable for market/service
Quality
Place or delivery-buyer pick up at seller place of business
Time of delivery- normal business hours
Time of payment - upon receipt
Method of payment -cash or cash equivalent

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27
Q

What are the UCC gap fillers

A

Price -reasonable for market/service
Quality
Place or delivery-buyer pick up at seller place of business
Time of delivery- normal business hours
Time of payment - upon receipt
Method of payment -cash or cash equivalent

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28
Q

What 4 things are not valid offers

A

Predictions
Opinions
Statements of future intent
Negotiations

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29
Q

Ads are considered what

A

Solicitation to a buyer not an offer

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30
Q

What is needed for contract to be valid under UCC

A

Did the parties intend to contract with each other.

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31
Q

How does the UCC attempt to save a contract

A

Gap fillers
Course of performance
Course of dealing
Usage of trade

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32
Q

What is course of performance

A

Details can not be changed within the course of the same contract

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33
Q

What is course of dealing

A

How the parties of a contract have dealt with each other under previous contracts creates precedent

34
Q

What is usage of trade

A

Every trade has its on jargon and can establish contract terms within that jargon
“Truckload” is an exact quantity

35
Q

Termination and duration of offers

A

Acceptance - now it is a contract
Rejection or counteroffer
Lapse of time
Revocation of offer
Death or insanity
Destruction of subject matter
Supervening illegality

36
Q

What is an offer with reserve

A

Usually at auction
Minimum amount accepted
Auctioneer is the offeree soliciting offers does not have to accept the offer.

37
Q

What is an offer without reserve

A

Auctioneer is offer or and obligated to take the highest bid
Usually seen only at estate sales.

38
Q

What is a lapse of time within the common law

A

Face to face offer ends when one person leaves
Telephone- when hung up

39
Q

What is lapse of time according to the UCC

A

Set by the terms
Reasonable not more than 90 days
Different products have different times such as the price changes quickly reasonable under the circumstances

40
Q

What is an option

A

Agreement to keep the offer open but is not binding unless money has been exchanged

41
Q

What constitutes a firm offer

A

In writing with a signature to hold offer without payment for a given time. It is binding.

42
Q

When is a unilateral offer binding

A

When the work begins (supplies are bought) becomes irrevocable

43
Q

Types of consideration

A

Money
Action -service
Forbearance
Promise -to pay act or forbare

44
Q

What is the mirror image rule

A

For an acceptance to be valid it must match the offer exactly

45
Q

Explain “master of his offer”

A

The offerer may condition an offer’s acceptance on anything but silence.

46
Q

What is the objective theory of contracts

A

Would a reasonable person in this position believe the offeree intended to accept the offer

47
Q

What is the purpose of consideration

A

To encourage economic exchange of legal value

No moral stake

48
Q

What is the courts stance on consideration?

A

The do not evaluate adequacy of consideration unless there is fraud, duress or undue influence

49
Q

What things look like consideration but are not

A

Past consideration
Moral obligation
Pre-existing duty
Illusionary promises

50
Q

What is past consideration

A

You can not be rewarded for something that has already occurred.

51
Q

What is pre existing duty?

A

Person has a preexisting duty to not do that already. Ie drugs

52
Q

What is illusionary promise

A

Promise based on opinion “I’ll pay $2000 if I like it”

53
Q

Liquidated debt vs unliquidated debt

A

Liquidated is not in question vs unliquidated is in dispute

54
Q

When is consideration unnecessary

A

Promissory estopple
Charitable pledges
Written promise to pay debt after bankruptcy
Written promise to pay debt after statute of limitations

55
Q

What is promissory estoppel

A

Legal principle that a promise is enforceable by law even without formal consideration

56
Q

What are the 5 steps to argue promissory estoppel

A

-Def makes a promise to plaintiff
-Def knew pl would rely on the promise -Pl does rely on the promise
- Pl relying on said promise was reasonable
-Pl suffered damages as a result of promise

57
Q

Who does not have legal capacity

A

Minors
Mentally incompetent

58
Q

Why can minors not sign contracts

A

Lack of maturity, education and experience

59
Q

Contracts between adults and minors are …

A

Voidable not void

60
Q

What is disaffirmance

A

And words or actions manifesting an intent not to be bound by the contract

61
Q

When can a minor or mentally incompetent person disaffirm a contract

A

Anytime while still a minor or incompetent or within a reasonable time after

62
Q

Who can disaffirm a contract

A

Only the minor/incompetent or their legal guardian

63
Q

If a contract is disaffirmed what happens to the items

A

Minor must return in current condition if lost stolen used there is no remedy, if sold return money gained if they still have it.
Adult must return money and items to minor

64
Q

What contracts with minors can not be disaffirmed.

A

Necessities

65
Q

What is ratification

A

Opposite of disaffirm a indication that the minor/incompetent wants to be in contract

66
Q

How can a contract be ratified

A

Express words
Actions indicating intent
Failing to disaffirm within a reasonable time

67
Q

What can cause mental incompetence

A

Mental illness
alcohol
drugs
Stress
Physical illness
It’s is the claimer’s job to prove

68
Q

What contracts are illegal

A

To commit a crime
Violate a statute
Do a legal thing by an illegal manor
By a person lacking a license

69
Q

What contracts are contrary to public policy

A

No void but unenforceable if challenged in court
Ie non compete
Exculpatory clauses
Surrogacy contracts
Decided by the court

70
Q

What is exculpatory clause

A

Contract clause that shifts liability to another person

71
Q

3 criteria of a non-compete

A

Has a purpose other then stifling competition
Reasonable geographic area
Reasonable time

72
Q

Blue pencil remedy

A

A remedy that makes a contract agreeable to the court
Rarely used

73
Q

What limits exist for an exculpatory clause

A

You can not insulate yourself from negligence

74
Q

What will negate freedom of contract

A

Fraud
Misrepresentation
Duress
Undue influence
Bilateral mistake of fact
Unconscionability

75
Q

6 elements of fraud

A

Misrepresentation of fact
Misrepresented fact was material
Misrepresentation was intentional
Pl relied on the misrepresentation
Pl reliance was reasonable
Pl suffered damage

76
Q

What three things are not considered to be fraud

A

Opinions
Puffing
Silence

77
Q

Remedies for fraud

A

Rescission or compensatory and punitive damages.

78
Q

What is misrepresentation

A

Negligent tort
Same a fraud but the misrepresentation was negligent not intentional
No punitive damages can be awarded

79
Q

Elements of duress

A

Def make a threat of harm
Reasonable for pl to believe threat
Threat results in contract not otherwise signed
Pl suffered damages
May include non-criminal if motivated by malice

80
Q

Undue influence

A

Someone enters a contract with another and uses their power or position over them unfairly

81
Q

How much evidence is required to prove a mistake in terms

A

Clear and convincing

82
Q

Prima facia

A

On its face

Business law (3 decks)

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