Chapter 10 Business Law

Front 1

The function of contract law

Back 1

-Ensures compliance with a promise and entitles a nonbreaching party to relief when a contract is breached
-all contractual relationships involve promises, but all promises do not establish contractual relationships

Front 2

-a promise for the breach of which the law gives a remedy or the performance of which the law recognizes as a duty (an agreement that can be enforced in court)
-may be formed when two or more parties promise to perform or to refrain from performing some act now or in the future

Back 2

Contract

Front 3

Requirements of a valid contract:

Back 3

1) agreement
2) consideration
3) contractual capacity
4) legality

Front 4

-this requirement includes an offer and acceptance
-one party must offer to enter into a legal agreement, and another party must accept the offer
- there must be a meeting of the minds

Back 4

Agreement

Front 5

-promises must be supported by legally sufficient and bargained-for consideration

Back 5

Consideration

Front 6

-these include characteristics that qualify the parties to a contract as competent

Back 6

Contractual Capacity

Front 7

-a contract's purpose must be to accomplish a goal that is not against public policy

Back 7

Legality

Front 8

Contract Formation

Back 8

-Bilateral vs. Unilateal
-Formal vs. Informal
-Express vs Implied

Front 9

-this is the premise for a promise to accept the offer, the offeree need only promise to perform
-a promise for a promise

Back 9

Bilateral Contract

Front 10

-this is a promise for an act-the offeree can accept only by performance
-a promise for an act

Back 10

Unilateral Contract

Front 11

-requires a special form for creation to be enforceable (i.e. negotiable instruments which include checks and other drafts, promissory notes, and certificates do deposit)

Back 11

Formal Contract

Front 12

-requires no special form for creation

Back 12

Informal Contract

Front 13

-formed by words
-fully and explicitly states the terms of the agreement in words (oral or written)

Back 13

Express Contract

Front 14

-formed by the conduct of the parties

Back 14

Implied Contract

Front 15

Requirements for an implied contract:

Back 15

1) the plaintiff must have furnished some service or property
2) the plaintiff must have expected to be paid and the defendant knew or should have known that payment was expected
3) the defendant had a chance to reject the service or property and did not

Front 16

-in the absence of an actual contract, a court may impose this type of contract to avoid the unjust enrichment of one party at the expense of the other

Back 16

Quasi Contract

Front 17

T/F: persons are not normally liable for benefits thrust on them

Back 17

True

Front 18

T/F: a quasi contract cannot be imposed if there is an actual contract that covers the area in controversy

Back 18

True

Front 19

-"as much as he or she deserves"
-essentially describes the extent of compensation owed under a contract implied in law

Back 19

Quantum meruit

Front 20

Interpretation of contracts includes:

Back 20

-plan-language laws
-the plain meaning rule
-other rules of interpretation

Front 21

-the federal government and most states require an agreement and other legal documents and forms to be written clearly, coherently, and in words of common, everyday meaning

Back 21

Plan-language laws

Front 22

-when writing is clear and unequivocal, it will be enforced according to its plain terms
-the meaning of the terms is determined from the written document alone

Back 22

The plain meaning rule

Front 23

Other rules of interpretation:

Back 23

1) a reasonable, lawful, and effective meaning is given to all terms
2) a contract is interpreted as a whole; individual, specific clauses are considered subordinate to the contract's general intent. All writings that are a part of the same transaction are interpreted together.
3) terms that were negotiated separately are given greater consideration than standard terms and terms that were not negotiated separately.
4) a word is given its ordinary, common meaning, and a technical word it's technical meaning unless the parties clearly intended otherwise.
5) specific, exact wording is given greater weight than general language.
6) written or typewritten terms prevail over preprinted ones
7) when the language has more than one meaning, it is interpreted against the party who drafted the contract
8) evidence of usage of trade, course of dealing, and course of performance mat be admitted to clarify meaning

Front 24

The two most import things in a contract:

Back 24

1) WHO
2) WHAT