Business Law Exam 3 Notes

    Master this deck with 41 terms through effective study methods.

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    Created by @kinsley_c

    What defines a contract?

    Requires agreement, consideration, capacity, and legality.

    What is the function of contract law?

    Provides stability and predictability for commerce.

    What distinguishes bilateral contracts from unilateral contracts?

    Bilateral involves a promise for a promise; unilateral involves a promise for an act.

    What are the four requirements for a valid contract?

    Agreement, consideration, contractual capacity, and legality.

    What happens if a promisor breaches a contract?

    The promisee can sue for breach of contract.

    What is a quasi-contract?

    A fictional contract imposed by courts to avoid unjust enrichment.

    What is the 'Plain Meaning' Rule?

    Contracts are enforced according to their clear and obvious terms.

    What is required for an offer to be valid?

    Serious intention, definite terms, and communication to the offeree.

    How can an offer be terminated?

    By rejection, revocation, or operation of law.

    What is the 'Mirror Image' Rule?

    Acceptance must match the offer exactly without new conditions.

    What constitutes consideration in a contract?

    Value exchanged for a promise or performance.

    What is legally sufficient value?

    Something of value, such as money or a promise.

    What is the general rule regarding adequacy of consideration?

    Courts typically do not evaluate the adequacy of consideration.

    What is an express contract?

    Formed by words, either spoken or written.

    What is an implied contract?

    Formed by the conduct of the parties involved.

    What distinguishes a valid contract from an unenforceable contract?

    Valid contracts have no defenses against them; unenforceable contracts do.

    What is the role of consideration in a unilateral contract?

    It is the performance that the offeree must complete to accept the offer.

    What happens if terms of a contract are ambiguous?

    Courts may admit extrinsic evidence to clarify the terms.

    What is the significance of the reasonable person standard?

    It determines the intention behind offers and contracts based on objective behavior.

    What is required for online acceptance of a contract?

    Clear indication of intent to be bound, such as clicking 'I Accept'.

    What is the effect of silence in contract acceptance?

    Generally, silence does not constitute acceptance.

    What is preexisting duty?

    A legal obligation that cannot serve as consideration for a new contract.

    What happens if unforeseen difficulties arise in a contract?

    An additional exchange agreed upon by both parties constitutes consideration.

    What is past consideration?

    Acts or events that have already occurred cannot be used as consideration.

    What are illusory promises?

    Promises that lack definite commitment and are not enforceable.

    What is a release in contract law?

    A contract that forfeits rights to pursue a legal claim against another party.

    How does a covenant not to sue differ from a release?

    It does not bar further recovery, unlike a release.

    What is promissory estoppel?

    An equitable remedy to prevent injustice due to reliance on a promise.

    What defines contractual capacity?

    The legal ability to enter into a contractual relationship.

    What is the age of majority for contracts in most states?

    18 years old.

    What is disaffirmance?

    The legal avoidance of a contract by a minor.

    What must a minor do to disaffirm a contract?

    Return the goods or consideration received.

    What are the exceptions to a minor's right to disaffirm?

    Marriage contracts and contracts for necessaries.

    What is ratification in contract law?

    Giving legal force to an obligation that was previously unenforceable.

    How does intoxication affect contract validity?

    Contracts can be voidable if the person was intoxicated and lacked understanding.

    What is the requirement for disaffirmance by an intoxicated person?

    Must disaffirm while intoxicated or within a reasonable time after sobriety.

    What defines mental incompetence in contract law?

    Contracts can be void, voidable, or valid based on mental capacity at the time.

    What is required for a contract to be enforceable?

    It must be formed for a legal purpose.

    What happens to contracts contrary to statute?

    They are illegal and therefore void and unenforceable.

    What are unconscionable contracts?

    Contracts that are grossly unfair and void of conscience.

    What is the effect of legality on executed contracts?

    Neither party can recover damages if the contract has been performed.