Business Law Chapter 8

Front 1

bilateral contract

Back 1

A type of contract that arises when a promise is given in exchange for a return promise.

Front 2

contract

Back 2

An agreement that can be enforced in court; formed by two or more competent parties who agree, for consideration, to perform or to refrain from performing some legal act now or in the future.

Front 3

executed contract

Back 3

A contract that has been completely performed by both parties. Ex: In real estate I pay and you give me the house

Front 4

executory contract

Back 4

A contract that has not as yet been fully performed. At least one of the parties has not performed.

Front 5

express contract

Back 5

A contract in which the terms of the agreement are stated in words, oral or written.

Front 6

formal contract

Back 6

A contract that by law requires a specific form, such as being executed under seal, for its validity.

Front 7

implied-in-fact contract

Back 7

A contract formed in whole or in part from the conduct of the parties (as opposed to an express contract).

Front 8

objective theory of contracts

Back 8

A theory under which the intent to form a contract will be judged by outward, objective facts (what the party said when entering into the contract, how the party acted or appeared, and the circumstances surrounding the transaction) as interpreted by a reasonable person, rather than by the party’s own secret, subjective intentions.

Front 9

offeree

Back 9

A person to whom an offer is made.

Front 10

offeror

Back 10

A person who makes an offer

Front 11

promise

Back 11

An assertion that something either will or will not happen in the future. A promise to do something or not to do something in the future.

Front 12

promisee

Back 12

A person to whom a promise is made.

Front 13

promisor

Back 13

A person who makes a promise.

Front 14

quasi contract

Back 14

A fictional contract imposed on parties by a court in the interests of fairness and justice; usually imposed to avoid the unjust enrichment of one party at the expense of another. No contract exists. Ex: Person unconscious--> used $250 of medical supplies

Front 15

unenforceable contract

Back 15

A valid contract rendered unenforceable by some statute or law.

Front 16

unilateral contract

Back 16

A contract that results when an offer can be accepted only by the offeree’s performance.

Front 17

valid contract

Back 17

A contract that results when the elements necessary for contract formation (agreement, consideration, legal purpose, and contractual capacity) are present. Valid contracts may be enforceable, voidable (a party may elect to void or ratify), or unenforceable (wasnt in writting).

Front 18

void contract

Back 18

A contract having no legal force or binding effect. No contract

Front 19

voidable contract

Back 19

contract that may be legally avoided (canceled, or annulled) at the option of one or both of the parties

Front 20

What is the definition of a contract

Back 20

1. Agreement offer and acceptance
2. Consideration
3. Contractual capacity
4. Legality

Front 21

Agreement

Back 21

An agreement includes an offer and an acceptance. One party must offer to enter into a legal agreement, and another party must accept it

Front 22

Consideration

Back 22

Promises must be supported by legally sufficient and bargained-for consideration. (something of value received or promised, to convince a person to make a deal)

Front 23

Contractual Capacity

Back 23

This concerns characteristics that qualify the parties to a contract as competent. the 2 parties must have contractual capacity to enter a contract. The law must recognize them as possessing characteristics that qualify them as competent parties. Ex: In the U.S. we look out for parties like the elderly. Ex: Adults taking advantage of minors getting into contract

Front 24

Legality

Back 24

A contract's purpose must be to accomplish a goal that is not against public policy. Contract has to be legal. Ex: No contract with illegal acts like dog fighting (illegal) therefore contract not legal

Front 25

Defenses to a contract

Back 25

1. Genuineness of Assent
2. Form

Front 26

Genuineness of Assent

Back 26

The apparent consent of both parties must be genuine
-Objective Theory

Front 27

Form

Back 27

A contract must be in whatever form the law requires (some contracts must be in writing)

Front 28

Each category of contracts signifies a legal distinction regarding what in a contract?

Back 28

1. Contracts formation
2. Performance
3. Enforceabiliy

Front 29

Bilateral Contracts

Back 29

The exchange of mutual promises. This is a promise for a promise. To accept the offer, the offeree need only promise to perform. Offers are normally revocable until accepted. Ex: If I pay you $1000 if you promise to paint my fense and both you all agree then you can sue for breech of contract

Front 30

Unilateral Contract

Back 30

Offer requests performance. No promise. Ex: If you paint my fence I will give you $1000. Asking you to do something and not to agree/promise. Cause the person d/n promise/agree you cannot be sued for breech of contract. This is a promise for an act.

Front 31

How does a problem arise in a Unilateral Contract

Back 31

When the promisor attempts to revoke the offer after the promisee has begun performance but before the act has been completed

Front 32

How can a Unilateral Contract be irrevocable?

Back 32

Offer is irrevocable once performance has been substantially undertaken

Front 33

Unilateral Contract Examples

Back 33

1. If you drive my car from Chicago to Boulder then I will give you 1000 on completion. If the person does not accept the offer there is no legal consequences.
2. Contets, lotteries, and other competitions offering prizes are also examples if a person complies with the rules of the contest
3. Policy Academy example... the plaintiffs had accepted by passing the required medical and psychological examinations and they won

Front 34

Revocable Bilateral Contracts

Back 34

Offers are normally revocable until accepted

Front 35

Types of Contracts

Back 35

1. Bilateral
2. Unilateral
3. Formal
4. Informal
5. Express
6. Implied in fact

Front 36

Formal Contract

Back 36

requires a specific form, such as being executed under seal for its validity.
Ex: Check paid to the order of

Front 37

What do formal contracts include?

Back 37

1. Contracts under seal
2. recognizances: is an acknowledgment in court by a person that he or she will perform some specified obligation or pay a certain sum if he or she fails to perform Ex: Surety bond or a personal recognizance bond
3. negotiable instruments: Include checks, notes, drafts, and certificates of deposit
4. Letters of credit

Front 38

Contract Performance

Back 38

Contracts are also classified according to their state of performance
1. Executed Contract
2. Executory Contract

Front 39

Executed Contract vs. Executory Contract

Back 39

Ex: Will drives car to chicago and I don't pay
Will: executor
I: executory

Front 40

What do Quasi Contracts not arise from?

Back 40

They do not arise from any agreement, express or implied, between parties themselves.

Front 41

Quasi Contracts are imposed to avoid?

Back 41

Unjust enrichment: based on the theory that individuals should not be allowed to profit or enrich themselves inequitably at the expense of others

Front 42

Quasi Contract examples

Back 42

1. Medical aid $ is owed to a doctor who saves a unconcious persons life because of it
2. Lessee does renivations to his apartment and tries to leave the costs to the lessor and the lessee is wrong--> No quasi Contract because it is qualified as "unjust enrichment"

Front 43

What contracts arent actual contracts

Back 43

Implied-in-law and Quasi because they are imposed on parties by courts