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Business Law 7
Chapter Seven- (Gordon W.Brown -textbooK)
| Question | Answer |
|---|---|
| contract | is an agreement between two or more competent parties, based on mutual promises, to do or refrain from doing some particular thing that is neither illegal or impossible. A obligation or a duty that can be enforced in a court of law. |
| promisor | The contracting party who makes a promise is known as the |
| promisee | while the one to whom the promise is made is the |
| obligor | The party who is obligated to deliver on a promise or undertake some act of performance is called the |
| obligee | while the contracting party to whom this party owes an obligation is called the obligee |
| or | who makes |
| ee | made to |
| Why are contracts necessary? | Contracts essentially lay out the terms of an agreement. |
| principle of mitigation | states that the innocent party is not permitted to take advantage of the breach by deliberately raising the level of damages that the other party will have to pay as a consequence of the breach. |
| Punitive damages | damages that are designed to punish the offender |
| Punitive damages additions | Usually, these aren't permitted in contract law. where there are clear cases of fraud, punitive damages may be assessed |
| will theory | general principal of law that states that a contract will exist once all of the parties with legal capacity to contract have actually accepted all obligations and benefits under the contract, and have exchanged, or promised to exchange, things of value |
| equity value theory/ equity theory | hich stated that a contract would be valid only if the things exchanged were of equal value. |
| equity theorgy replace by | will theory,with the advent of industrial capitalism, the equity theory became unworkable most of the time |
| Bartering involves | an exchange of services and/or goods that are equal in value, rather than an exchange of money |
| formalist theory | looks at a contract to see of certain elements – offer, acceptance, mutual assent, capacity, consideration, and legality – exist. |
| what happens after elements in formalist theory are found ? | if each element is present, then a contract exists regardless of what the parties may argue after the fact. |
| Uniform Commercial Code or UCC | is a unified set of statutes designed to govern almost all commercial transactions. |
| Article 2 of the UCC | which sets down the rules that govern sale-of-goods contracts. |
| Is every agreement a contract ? | No! While all contracts are agreements, not all agreements are contracts. |
| Privity means | that both parties have a legally recognized interest in the subject of a contract if they're to be bound by it. |
| five basic categories | "vvu", valid, void, voidable, and unenforceable.unilateral and bilateral. |
| void | illeagle contact "a contract to buy cocaine" |
| valid | contract is one that is legally binding and fully enforceable by the court |
| voidable | contract is one that may be avoided or canceled by one of the parties. Contracts between minors are voidable for example. |
| unenforceable | contracts cannot be upheld by a court of law. Even when a contract has all the elements of a complete contract, it can still be unenforceable. |
| example of an unenforcable contract | If, for example, your boss orally promised to give you a bonus, it may be an unenforceable contract because the promise to pay the employee to something he‘s already obligated to do is considered to be a gratuity not a contract. |
| valid | contract is one that is legally binding and fully enforceable by the court |
| voidable | contract is one that may be avoided or canceled by one of the parties. Contracts between minors are voidable for example. |
| unenforceable | contracts cannot be upheld by a court of law. Even when a contract has all the elements of a complete contract, it can still be unenforceable. |
| example of an unenforcable contract | If, for example, your boss orally promised to give you a bonus, it may be an unenforceable contract because the promise to pay the employee to something he‘s already obligated to do is considered to be a gratuity not a contract. |
| unilateral contract | is an agreement in which one party makes a promise to do something in return for an act of some sort. A reward contract is a unilateral contract. |
| With a bilateral contract | both parties make promises. If one of the two parties fails to keep the promise, there is a breach of contract, and the injured party has the right to ask the court to resolve the situation. |
| express contract | requires some sort of written or spoken expression indicating a desire to enter the contractual relationship " receipt " |
| implied contract is created by | the actions or gestures of the parties involved in the transaction. |
| Example of an implied contract | This is the type of contract that occurs when you get gas at a self-serve station – all parties enter the contract freely, and the intentions and actions of the parties are clear. |
| informal contract aka | simple contract |
| informal contract | ny oral or written contract that is not under seal |
| formal contract | must be written, signed, witnessed, and placed under the seal of all parties. It must also be delivered. |
| executory contract | s a contract that hasn't yet been performed by all parties. When a contract has been completely and satisfactorily carried out by both parties |
| executed contract | Once a contract's executed, there's no longer an active agreement and so the contract is only valuable when a dispute exists. |
| Formalist | contract law focuses on the six elements of offer, acceptance, mutual assent, capacity, consideration, and legality |
| unenforceable | A(n) _____ contract is one that, because of some rule of law, cannot be upheld by a court of law |
| A quasi contract | type of contract is formed to remedy unjust enrichment |
| False | The remedy phase of a contract trial is designed to compensate the innocent party for any loss she has suffered and to punish the wrongdoer |
| False | A contract that exceeds $1 million in value may still be described as an informal contract. |
| False | Brad contracts with Matt to have Maria killed and agrees to pay him $50,000. A court will declare this contract voidable. |
| True | In states still requiring the seal or formal contract, it is sufficient to write the work seal after the signature. |
| True | All bilateral contracts are express contracts. |
| implied-in-fact contract. | A contract implied by the direct or indirect acts of the parties is known as a(n) |
| The quasi-contract | does not result from the mutual assent of the parties. |
| False | In all states the use of the seal, in agreements related to the sale and transfer of real property, is not required. |
| Executed contracts | are valuable only if a dispute about the agreement occurs |
Created by:
bluebird17