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79 Cards in this Set

  • Front
  • Back
What is a contract?
An agreement that courts will enforce.
What are the 6 major requirements that must be satisfied for transactions to be treated as contracts?
Serious and definite OFFER AND ACCEPTANCE by the party to whom it was communicated. GENUINE ASSENT(not based on deceiving). LEGALITY (what the parties agree to is legal). CONSIDERATION (both sides receive something of legal value). CAPACITY: (have a completely enforceable agreement) and WRITING (placed in writing)
Who is the offeror?
The person who communicated a serious, definite proposal.
Who are the offerees?
Persons to whom the offer is made.
What three things must an offer include to be vailid?
1. The offeror must appear to create a legal obligation.
2. The terms must be definite and complete.
3. The offer must be communicated to the offeree.
The law will only recognize an offer when the offer appears...
Serious about creating a legal obligation.
What is the test of the reasonable person?
Onjective legal test used by jurors or judges to determine whether the offeror has shown an intent to contract.
The test of the reasonable person examines...
the offeror's words and conduct in light of all the relevant facts and circumstances.
Information is often communicated...
without indication of intent to contract.
T or F. Do social arrangments create legal obligations?
When is a contract incomplete and legally ineffective?
When it is missing essential information. Also, the essential terms must be identified clearly.
Instead of being offers, what are advertisements usually classified as?
When is an advertisement an offer.
When the ad is clearly worded in ways that address the problem of numerous people receiving the ad for a limited amount of product and if it asks the offeree to preform an act as a way of accepting.
True or False. A person who is not the intended offeree cannot accept the offer.
True. Nor can a person accept an offer without knowing it has been made.
Does an offer last forever once made?
No. There are many ways it can be revoked.
Time Stated in the Offer.
Offeror may state how and when the offer must be accepted.
Reasonable Length of Time
It is alive for a reasonable length of time, which depends on the surrounding circumstances.
Rejection by the Offeree
An offeree clearly rejects the offer.
Offeree's response to an offer which modifies it. Counteroffer becomes a new offer.
Death or insanity of either the offerer or offeree
Death or insanity eliminates voluntary control, thus terminating the offers.
Right to withdraw an offer before it is accepted.
What is an option?
Separate contract arising when the offeree gives the offeror something of value in return for a promise to leave an offer open.
What is a firm order?
Binding offer stating in writing how long it is to be held open.
1. Must be made by the person or persons to whom the offer was made to.
2. Must match the terms in the offer.
3. Must be communicated to the offeror.
Mirror image rule
Requires that the terms in the acceptance must exactly match the terms contained in the order.
New terms or modified terms are treated how>
1. If a party is a consumer, not a merchant, then the new or changed terms are mere proposals and not a part of the contract unless agreed to by the original offer.
2. If the parties are merchants, the new or changed terms are not a part of the contract if the original offeror objects, or in the abscence of an objection, if the terms are material.
3. If the parties are merchants, the new or changed terms are part of the contract if the original offeror is silent and the terms are minor and not material.
How is silence as a response to an offer treated?
Silence cannot be seen as acceptance unless prior specifications are made.
Unilateral contracts.
Offeror promises something in return for the offeree's performance and indicates that this performance is the way acceptance must be made.
Bilateral Contracts.
Offeree can accept offer by giving a promise to the offeror instead of performing the contracted-for-act.
What type of method of communication is used?
Whatever is effective, and it may be required by the offeror.
Genuine Agreement
Agreement to enter into a contract that is evidenced by words or conduct between the parties.
Contract in which the injured party can withdraw, thus cancelling the contract.
Backing out of the transaction by asking for the return of what you gave and offering to give back what you received.
Acting toward the contract as though one intends to be bound by it; principal's assent to unauthorized acts of an agent.
Occurs when one party uses an improper threat or act to obtain an expression of agreemnent. Can include threats of illegal conduct, threat to report a crime, threats to sue, and economic threats.
Undue Influence.
Can include a relationship and an unfair persuasion. Occurs when one party to a contract is in a position of trust and wrongfully dominates the other party.
Individual who acquires goods primarily for personal, family, or household use.
Caveat Emptor
Let the Buyer beware.
Class Action
Court procedure allowing a party to bring suit on his or her behalf and for those simalarily situated.
Cease and Desist Order
Governmental order requiring that certain improper conduct be stopped.
Consent Order
Voluntary, court enforceable agreement between the government and an offender requiring the termination of an illegal or questionable practice.
Restoring or making good a loss: repayment of money illegally obtained.
Consumer laws do what?
1. Help protect against the production and sale of substandard or dangerous consumer goods.
2. Prohibit improper trade practices.

3. Requires licenses and inspections to help ensure compliance with the law.
4. Provide remedies for persons injured.
What is the CPSC
Issues and enforces safety standards for most consumer products.
Requires that the production facilities for cosmetics, food, and drugs be clean and products be prepared from ingredients fit for humans.
Provides standardized sets of actual weights and measures to the state and local governments.
Unfair Trade Practice
Dishonest, fraudulent or anticompetitive business method. Include the following three and also unfair pricing and servicing, mislabeled goods, and used articles sold as new. Also, confusing brand name or trademark, unordered merchandising, commercial bribery, and fraudulant telemarketing and internet schemes..
The force that drives efficient businesses to create new and better prodcuts and services.
False and Misleading advertising
Advertising that improperly deceives or conceals material facts.
Game involiving three elements: payment of money or ssomething valuable to participate, a winner to be chosen at chance, and a prize to be won
Creates guidelines : 1. would be creditors must explain to their intended borrowers the methods of figuring finance charges.
2. Under certain circumstances, sellers, manufacturers,or both must brovide written warranties to their customers.

3. Businesses selling door to door must give purchasers three days to cancel contracts for a purchase of twenty five dollars or more.
Caveat venditor.
Do this by licensing laws, remedies being available to injured consumers, sanitation and food adulteration laws, and safety laws. Let the seller beware.
Privit of Contract.
Relationship or connection between parties to a legally binding agreement.
Strict liablity
Holding a defendant liable without showing of negiligence.
statement about the product's qualities or performances that the seller assures the buyer is true.
Express warranty.
Assurance of quality or performance explicitly made by the seller.
What must a warranty include.
To wwho it is extended, description of product, what makes the warrantor do, when it begins and ends...etc.
Full warranty
Express warranty that obligares the seller to repair a defective product without cost to the buyer within a reasonable time.
Limited warranty.
Warranty providing a level or protection less thann a full warranty.
Generally exaggerated sales talk.
Implied warranty
Warranty obligation implicitly imposed by law on all sellers.
This is included in warranties of title and against encumberances and warranty of fitness for a aprticular purpose.Claims of third parties against the goods.
Waranty of Merchantability
Also includes warranty against infringement.Warranty requiring that the goods fit the ordinary purposes for which goods are used.
Express warranties made by all sellers include
Warranty of conformity to seller's statement or promise. And Warranty of conformity to description, sample or model.
Sign, label, or warning reducing a bailee's duty of care: also notice of exclusion in a warranty.
Legal right in another's property as security for the performance of an obligation such as the repayment of a loan.
Debtor in a pledge who voluntarily gives up possession of the propety.
Secured transaction in which the creditor has possession of the collateral.
Pledge of tangible personal property.
Mechanic's lien
Lien against realty available to one who has supplied labr materials to improve it.
Artisan's lien
Lien for unpaid services assessed against personal property that has been improved.
Third party agreeing to being primarily liable for debt in case of default by the primary debtor.
Principal debtor
Persobn who owes thedebt or obligation/
Third party agreeing to being primarily liable for debt in case of default by the principal debtor.
Right of contribution
Cosurety who pays the full debt is entitled to judgment against the other cosureties for their proportionate share of the debt.
Party agreeing to be secondarily liable in case of default by the principal debtor.
Unsecured debt.
Debt in which the creditor lacks a secured interest in collaterall.
Court ordered procedure by w2hich a portion of a delinquent debtor's wages are paid to satisfy the debt.
Bankruptcy law.
Voluntary or involuntary. Also includes exempt property. This is federal law based procedure for the benefit and relief of creditors and their debtors in cases in which debtors are unable or unwilling to pay their debts.