Law: Quiz 2

What is required for a valid contract?

1.Agreement/mutual assent 2. Consideration 3.Capacity 4. Legality

What type of legal system would a government that based its laws on the tenets of Islam have?

A religious-based legal system.

Pete has been fired from his job and believes that he has been wrongfully terminated. As he decides how to fight the perceived injustice, how can he best mitigate his damages?

Actively seek new employment as soon as possible. -Mitigation or lessening damages would best be accomplished by seeking new employment to keep lost wages to a minimum.

Example of Statutory Law (UCC)

BigCo sells five laptop computers to a retailer -contract for the sale of goods (laptop computers)

Abel sends Baker a letter: "I offer to perform consulting services for six months at $100/month." Baker signs "I agree." This contract fits into which category?

Bilateral

Hybrid Predominantly Goods

Contract for installation (10%) and goods (90%) -price allocation clearly shows in favor of goods

Objective Intent

How the offeree interprets the offeror's words and conduct

Example of Common Law

Jonah agrees to provide consulting for a fee -consulting is a personal service

Which of the following elements of a contract pertains to the fact that there is an offer and agreement between the involved parties?

Mutual assent -The necessary elements of a contract are mutual assent, capacity to contract, consideration, and legal purpose. Mutual assent represents that there is an offer and acceptance between the two parties.

Subjective Intent

Offeror's actual intent -NOT RELEVANT

Hybrid: Predominantly Services

Peter contracts to paint a portrait of Jasper -This contract involves providing personal services that will result in a good being exchanged

The civil law system is based on the ______ legal heritage.

Roman

The mirror image rule is not enforced under UCC standards. (true or false)

True -The UCC provides that acceptance may be made in any reasonable manner and need not be a mirror image of the offer.

Compensatory damages cover a broad spectrum of losses for recovery of ________ damages suffered by the non-breaching party.

actual

Abel sends Baker a text message: "I will provide landscaping for your office park for $500 per trip." Baker calls Abel and says, "I agree to your landscaping offer." The Abel-Baker contract fits into which category?

bilateral -A bilateral contract involves two promises and two performances

If one party to a contract uses any form of unfair coercion to induce another party to enter into or modify a contract, the coerced party may avoid the contract on the basis of _____.

duress -If one party to a contract uses any form of unfair coercion to induce another party to enter into or modify a contract, the coerced party may avoid the contract on the basis of duress. Violence, economic threat, and threat of extortion are three categories of duress recognized by law.

Your cousin, who is a CPA, calls you and says that a client paid him in diamonds and he's selling them. If you purchase one of those diamonds, at the time of the sale your cousin would be considered a merchant of those diamonds. (true or false)

false -A merchant is one that is regularly engaged in the sale of a particular good. Your cousin is not a merchant because he doesn't regularly sell diamonds or other jewels.

Susan offered to pay Roger $50 to walk her dog for the next 8 days. Roger responded that he was available to walk the dog for the next 8 days for a fee of $60. Roger's statement is an acceptance of Susan's offer. (true or false)

false -An acceptance is the offeree's expression of agreement to the terms of the offer. The offeree's response operates as an acceptance only if it is the precise mirror image of the offer. Since Roger changed the terms of Susan's offer, he effectively rejected Susan's original offer, and proposed a counteroffer (for the increased fee).

Beata is moving to New Mexico and offers to sell her television to Ariana. Ariana is not sure if she can afford it and asks for a week to decide. If Beata agrees to hold the offer open for a week and makes the promise in writing, Beata has given Ariana a firm offer.

false -Firm offers may be made only when the offeror is a merchant.

Helsel goes to see a physician concerning a particularly harsh flu. The doctor examines him, prescribes medication, and gives him a bill for medical services. This agreement falls into which of the following categories of contracts?

implied -The doctor-patient example is an implied contract.

When performance of an obligation has become illegal subsequent to the contract but prior to performance, the contract will most likely be terminated on the basis of _____.

impossibility -A supervening illegality occurs when the performance of a contract becomes illegal after contract formation but prior to performance. Supervening illegality terminates the contract on the basis of impossibility.

Common law jurisdictions adhere to the concept of ________, whereby a court may strike down a piece of legislation if it violates an overriding principle of law.

judicial review

A ________ is one that is regularly engaged in the sale of a particular good.

merchant

Legal systems that are made of two or more different legal systems are known as

mixed legal systems. -Mixed legal systems are made of two or more different legal systems.

Max and Lew have entered into a contract for Lew to paint Max's house. The contract specifically states that the job was to be completed by August 25. Lew completes the job on August 26. Max has suffered no loss due to the delay. The job was otherwise done exactly to all contract requirements and specifications. If Max sues Lew for breach of contract due to the missed completion date and if the courts were to award damages, what type of damages would most likely be awarded?

nominal damages -Nominal damages may rarely be awarded when a breach of contract has occurred but no injury has resulted.

The CISG provisions do not apply to transactions in which one party is a _______.

nonmerchant

Under the concept of ______, nations are exempt from jurisdiction in other nations' courts.

sovereign immunity

Builders Inc., an experienced contractor, requested a bid from a supplier for lumber needed to complete a project. When responding to the bid, the supplier made a clerical error, and offered $30,000 worth of lumber for $3,000. Builders sent an e-mail accepting the offer. If this situation turns into a legal dispute,

the Court is likely to find that this is a unilateral mistake. However, since Builders knew (or should have known) that there was a mistake, the supplier will not be held to the $3,000 quote. -This is an example of a unilateral mistake. There was a clerical error by the supplier. Builders, as an experienced contractor, knew or should have known that the $3,000 bid was much too low for the amount of lumber involved. In these kinds of situations, courts will typically allow the mistaken party to void the contract when the nonmistaken party had reason to know of the mistake, or his actions caused the mistake.

Generally, with respect to a merchant's firm offer, the Uniform Commercial Code (UCC) provides that the offer can be irrevocable for a maximum period of _____.

three months

The common law legal system allows judges to fill in gaps in the law that are not covered by a statute. (true or false)

true -Common law allows the courts to create laws when there is no applicable statute or existing case law on the subject.

The Foreign Corrupt Practices Act was created to prevent bribery of foreign officials. (true or false)

true -The FCPA was primarily enacted to prevent American companies from bribing foreign officials.

The World Trade Organization (WTO) has certain authority over disputes about trade barriers. (true or false)

ture -The WTO does have certain authority over disputes regarding trade barriers.

A contract that meets all of the statutory requirements to form a contract but is subject to a legal defense is a(n) ____________ contract.

unenforceable -Although a contract may have all of the required elements, it may still be unenforceable due to a defense (such as the statute of frauds).

Hyde hires an arsonist to set a warehouse on fire for $1,000. This agreement is legally ____________.

void -Illegal contracts, either the substance or the transaction, are void from the outset.

Revocation

when the offer is revoked by the offeror prior to acceptance

The civil law system relies heavily on ________ to define the laws.

written codes