chapter 8
elements demonstrated to establish fraud
- an intent to deceive -a justified reliance on the misstatement by the innocent party -a misrepresentation of fact
examples of contracts that lack legality of purpose
-a contract that requires commission of a tort -a contract that requires the violation of public policy
a characteristic of minors in relation to their capacity to be bound by a contract is that they ______
-can only be bound to contractual promises involving necessaries of life
Writing Required by Statute of Frauds
1- an agreement for a bank mortgage 1- lily promises bob that she will buy his car for 1000 1- a basketball team promises a player a two year contract for 10 million 2-frank the farmer agrees to give a coal company mining rights under his land 2- holly's mom promises pete that she will pay him back the 5000. Holly owes pete 2- frank the farmer promises to sell danielle the developer 100 acres of his farm land
Oral Contract Enforceable
1- mike agrees to pay lady gaga 10,000 to perform at his birthday party 1-allied construction promises to build a 50 story building for a developer 1- Holly promises pete that she will pay him back the 5000 she owes him 2-celia's roommate promises to buy her bike for $200 2-Bianca promises to paint a mural at cindy's house next week but it took 5 yrs to complete 2-tim promises to build ivy a house at some point within the next two years
Which of the following contracts are required to be in writing by the Statute of Frauds?
An insurance policy taken by a person.
Which of the following contracts are required to be in writing by the Statute of Frauds?
Contract for a mortgage.
Which of the following is not an exception to the Statute of Frauds' requirement that contracts involving the sale of goods for $500 or more be in writing?
Contract for the sale of goods where the buyer will use the goods to perform a service.
Which of the following contracts does the Statute of Frauds require to be in writing?
Hiring an employee for two years for a salary of $1000.
Which of the following is true?
If a contract can be performed within a year, the contract need not be in writing.
Which of the following is an exception to the Statute of Frauds requirement?
Judicial admission for the sale of goods.
Which of the following is an exception to the Statute of Frauds requirement?
Part performance of sale of land.
Linda bought a bag that was priced at $600. She did not sign a contract despite the rule that a sale of a good over $500 requires a written agreement. Why?
The agreement to buy and sell occurred immediately.
If a sale of a good over $500 requires a writing, why do customers typically not sign a contract when they purchase a computer at a retail store for more than $500?
The agreement to buy and the actual sale occur almost simultaneously.
Dave bought an audio CD, of his favorite band for $800. He did not sign a contract despite the rule that a sale of a good over $500 requires a written agreement. A dispute about the existence of an agreement to buy or sell the CD is unlikely. Why?
The sale of the CD is quickly executed.
When is an oral contract enforceable?
When it is possible to perform a contract within one year.
When is an oral contract enforceable?
When the payment for a contract for goods has been made and accepted.
express contract
a buyer discusses the terms and conditions of the purchase of an apartment with the property dealer before signing the agreement
bilateral contract
agreement containing mutual promises
unilateral contract
agreement involving one promise
implied in fact contract
an individual asks a corporate attorney for professional advice on setting up a business
a person's ability to be bound by a contract is referred to as
capacity
in the context of contract formation, the receipt of a legal benefit or the suffering of a legal detriment is known as
consideration
A judicial remedy that prevents one party in a contract from receiving unjust
implied in law contract
an executory contract
it is an agreement in which the parties have not yet performed their agreement
an executed contract
it is an agreement in which the parties have performed their promises
an enforceable contract
it is created when a court upholds the validity of promises made by parties to perform or to pay the consequences for the failure of performance
a contract is a _____
legally enforceable promise or an exchange of promises
standard contract law requires that the acceptance of an offer to contract must match the offer exactly to create a binding contract, this is known as ____________ rule
mirror image rule
The Statute of Frauds requires that all of the following contracts be in writing except:
paying a gardener $600 to plant a vegetable garden.
covenants not to compete are important because they_______
protect employers from having the employees they train leave them and compete against them
bilateral contract example
rex promises to sell a painting to liz in return for her promise to pay the requested amount
section 2-207 of the uniform commercial code ucc changes the mirror image rule for contracts involving
sale of goods
every state has adopted some version of article 2 of the uniform commercial code that has resulted in
state contract law being relatively uniform in the area of goods contract
The law requiring that certain contracts be in writing is known as the
statute of frauds
The law requiring that certain contracts be in writing is known as the:
statute of frauds.
the acceptance of an offer to contract becomes legally binding when the offeree deposits the acceptance with the postal service. This is known as ______
the mailbox rule
an offeror
the person making the offer
an offeree
the person to whom the offer is made
an aspect of the doctrine of promissory estoppel is that ______
the promisor must know that the promisee is likely to rely on the promise
in the context of the exception to the writing requirement of the statute of frauds, which of the following is true of judicial admissions
the statute of fraud based defense disappears if there is a judicial admission
identify a feature of an implied in law contract
there is no actual contractual agreement involved
identify the various aspects of consideration in contract formation
-consideration need not be money -consideration must be a part of both parties understanding of the contract terms -valid consideration can include any promise to do something one has no obligation to do
contracts covered by the statute of frauds
-contracts for mining rights -contracts involving collateral promise to pay another's debt
true statements about the acceptance of contractual offers
-in general silence alone does not imply acceptance of an offer -a specific action made by an offeree may constitute acceptance
true statements about contract law in private enterprises
-it enables private agreements to be legally enforceable -it provides enormous precision and flexibility in business dealings
exceptions to the writing requirement of the statute of frauds
-rules involving goods -part performance -judicial admissions
mistake made by parties involved in a contractual agreement
-the contract is made voidable if the mistake is one of fact as opposed to value
true statements about the termination of offers to contract by operation of law
-the termination of an offer by operation of law occurs when the object of the contract is legally eliminated -the circumstances in which contract law automatically dictates that an offer has expired must occur before its acceptance
acts lead to the termination of an offer to contract
-when the offeree rejects the offer before the acceptance -when the offeree fails to accept by a deadline defined in the offer
The Statute of Frauds requires that all of the following contracts be in writing except:
a promise to build a home in less than one year.
Unlike an enforceable contract, an unenforceable contract is one in which
a defense exists that denies the legal enforcement of the agreement
requirement for the parties to a contract to have a mutual understanding of the underlying facts and essential terms is referred to as _____
a meeting of the minds
true of an implied in fact contract
acceptance can be made without explicit language
unilateral contract
accepted by performing a requested act
bilateral contract
accepted by the offeree's making the required promise
an unenforceable contract
created when a non performing party has a justifiable reason for noncompliance with a promise
Alfred agreed to design the interiors of his neighbor's restaurant for $1,000. While discussing about it, they agreed that it would take 14 months. He managed to finish it in 10 months. The agreement is:
enforceable because the work could be completed within one year.
Steve said that he would do a wildlife photo shoot for Archie's wildlife magazine for $1,000. Their oral agreement stated that the photo shoot would be completed within 15 months. Actually, the photo shoot could be completed within one year. The agreement is:
enforceable because the work could be completed within one year.
Vicki hired Patty to paint murals in her house for $5000. Their oral agreement stated that the murals would be completed within 18 months. Actually, the murals could be completed within one year. The agreement is:
enforceable because the work could be completed within one year.
t/f preexisting obligations and prior consideration constitute consideration
false
in contracts that are not between merchants selling goods, a promise to keep an offer open for a certain time period must be supported by the offeree's consideration. Such agreement to not revoke an offer is called a(n)________
option
t/f in certain situations, the law requires contract to be in a written, signed format rather than in oral form
true
t/f the judicial admissions exception to the writing requirement of the statute of frauds is most important when the acknowledged oral contract is for the sale of goods
true
t/f undue influence in contractual agreements often arise when people weakened by age or illness are persuaded to enter into a disadvantageous contract by someone who has a special relationship of power and trust over the party
true
A(n)______ contract is created when an agreement is enforceable because all the essential requirements are present
valid
a contract that appears to be an agreement but lacks an essential requirement for enforceability and validity is known as a(n)____ contract
void
true statement about a firm offer
when a merchant offering goods promises in writing that the offer will not be revoked for a period not to exceed 3 months
