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Business Law1 Final
West's Business Law and Professor Maggs
| Question | Answer |
|---|---|
| Sources of Contract Law | common law for all contracts except sales and leases which use UCC |
| Definition of Contract | promise or set of promises for breach of which the law provides a remedy or the performance of which that law in some way recognizes as a duty |
| Objective Theory of Contracts | use circumstances to determine intent of parties, objectively by looking at outward facts and actions |
| Elements of a Contract | Agreement, consideration, contractual capacity, defense (legality, genuineness of asset, form) |
| Bilateral Contracts | promise for a promise, offeree must only promise to perform. contract is formed upon acceptance of proposed agreement. |
| Unilateral Contracts | promise for an act, offeree can accept the offer only by completing the contract performance |
| Contracts are Irrevocable when | performance has already begun |
| Expressed vs Implied in Fact | express: words oral or written that outline the terms implied in fact: conduct creates and defines the terms of the contract Requirements: P furnished goods and services, P expected to be paid, and D had the chance to reject and did not |
| Executed vs Executory | Executed: a contract that has been fully performed on both sides Executory: a contract that has not been fully performed on one side or the other or both |
| Contracts are Valid and enforceable when... | they contain agreement, consideration, capacity and legality |
| Contracts are void when | no contract ever existed |
| Contracts are voidable when | valid contract can be rescinded; can also be ratified |
| Quasi-Contracts | fictional contracts created by courts imposed on parties for the interest of fairness and justice equitable remedies- prevent unjust enrichment Quantum Meruit- as much as deserved |
| Interpretation of Contracts | plain meaning rule contract interpreted as a whole terms that are negotiated separately are given greater weight specific wording is given greater weight than general written or typewritten is given greater weight than preprinted |
| Ambiguous terms in Interpretation of contracts | courts attempt to interpret in a reasonable, lawful, effective manner ordinary, common meaning given to words |
| Agreement | Agreement = offer and acceptance. Parties must show mutual assent to terms of contract. “Mirror Image” rule Once an agreement is reached, if the other elements of a contract are present, a valid contract is formed. |
| Requirements of the Offer | Offeror’s serious intention. Definiteness of terms. Communication to Offeree. |
| Offeror’s Serious Intention | Offeror must express “serious intention” for offer to be valid “acceptable” Contract is judged by what a reasonable person in the Offeree’s position would conclude about the offer (Objective Theory of Contract). |
| Serious Intention: Non offers Serious Intention: Non-Offers | Offers made in anger, jest, or undue excitement are usually not offers. Expressions of opinion, Statements of intention or preliminary negotiations, Advertisements, Catalogues, Price Lists, and Circulars are treated as invitations to negotiate |
| Offer – Serious Intention (Auctions) | Good “offered” to highest bidder Higher bid invalidates all lower bids Bid can be revoked prior to fall of gavel Bid can be rejected by auctioneer Offeror must accept highest bid Winning bid is accept. of offer at fall of gavel Auction without reserve (e) |
| Offer-Definiteness of Terms | Terms (Expressed or Implied). Need all terms for Contract formation Identification of the parties. Object or subject matter of the contract. Consideration to be paid. Time of payment, Delivery, or Performance. |
| Offer-Communication | Offeree’s knowledge of the offer – communication:Directly by the Offeror, or Use of Agents. Offer able to be accepted only after offeree receives communication of it Offeree cannot “accept” offer not aware of – Contract not formed; no “meeting of minds” |
| Termination of the Offer | An offer may be terminated prior to acceptance by either: Action of the Parties; or Operation of Law. Offer cannot be terminated after acceptance At that time, contract is formed |
| Termination by | Revocation of the offer by the Offeror: Offer can be withdrawn anytime before Offeree accepts the offer. Effective when the Offeree or Offeree’s agent receive revocation (same as communication of offer). |
| Exceptions to Termination Action | Irrevocable Offers. Option Contract: Promise to hold an offer open for a specified period of time in return for consideration. Detrimental Reliance or Promissory Estoppel: Offeree relies on offer to his or her detriment |
| Termination by | Rejection by the Offeree (expressed or implied) terminates the offer. Effective only when it is received by the Offeror or agent. A counteroffer by the Offeree is a rejection of the original offer Mirror Image Rule: acceptance to match offer exactly |
| Termination by | Lapse of Time. Offer terminates by law when the period of time specified in the offer has passed or terminates at the end of a reasonable period Destruction of the Subject Matter Death or Incompetence Supervening Illegality of the Proposed Contract. |
| Acceptance | Acceptance is the Voluntary act (expressed or implied), by the Offeree that, shows assent (agreement), to the terms of an offer. Unequivocal: The “Mirror Image” Rule. |
| Silence as Acceptance | Acceptance of Services by Silence Prior Dealings and Acceptance Shipper sends routine shipment,duty to pay for what not rejected Solicited Offers. Offeree outlines terms of offer looking for; has a duty to reject offer that meets terms. |
| Mode and | Mail Box Rule -Acceptance becomes effective on dispatch to offeror; revocation of offer valid only when (received by) offeree. Provided Acceptance: Dispatched through authorized means of communication. Offeror specifies how acceptance should be made |
| Authorized Means of Acceptance: Exceptions to Mailbox Rule | If acceptance is not properly dispatched by the Offeree. If Offeror specifies that acceptance not effective until received. If offeree sends rejection then acceptance, whichever is received first is given effect. |
| Unauthorized Means of Acceptance. | Acceptance not effective until it is received by the Offeror. If timely sent and dispatched it is considered to have been effective on its dispatch. |
| Technology and Acceptance Rules | But traditional rules may not apply to acceptances via Fed Ex, email, or fax. Generally, ‘mailbox rule’ does not apply to online offers (acceptance/rejection via computer is instantaneously communicated to offeror). |
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