Legal 3000 Exam 2 Ch7

Voidable contract

A contract that may be legally avoided at the option of one or both of the parties.

4 requirements for a contract to exist

Agreement Consideration Contractual capacity Legality

Alex, a small business owner, needs an accountant to complete his tax return. He drops by a local accountant's office, explains his situation to the accountant, and learns what fees she charges. The next day, he returns and gives the receptionist all of necessary documents to complete his tax return. Then he walks out without saying anything further to the accountant. What type of contract is this?

Alex has entered into an implied contract because of Alex's conduct and hers. She expects to be paid for completing the tax return, and by bringing in the records she will need to do the job, Alex has implied an intent to pay her.

If a contract term is ambiguous, a court may interpret the ambiguity against the party who drafted the term. The court may also consider extrinsic evidence when the term is ambiguous. True/False

True

Informal contracts are usually based on their substance rather than their form. Typically, businesspersons put their contracts in writing for proof of the contracts existence should a dispute arise. True/False

True

Reese says to Celia, "If you drive my car from New York to Los Angeles, I'll give you $1,000." Only on completion of the act does she fully accept Reese's offer to pay $1,000. If she chooses not to drive the car to Los Angeles, there are no legal consequences. What type of contract is this?

Unilateral contract

Unilateral contracts:

are formed when the contracts are performed.

"Formal" contracts are those which:

are required to be in a special form.

The "objective theory of contracts:"

means that a party's intention to enter into a legally binding agreement is judged by objective facts as interpreted by a reasonable person.

Voluntary consent, as applied to a contract, means that:

means the contract was not formed as a result of fraud, undue influence, mistake, or duress.

Bilateral contract

promise for a promise

Unilateral Contract

promise for an act

Formal contract

require a special form or method of creation to be enforceable. Examples Negotiable instruments Letters of credit

Implied-in-Fact contracts:

require that there be a chance to reject the service or property offered.

The common law of contracts applies to all of these except: services. sale of goods. insurance. real estate.

sale of goods.

In contract law, consideration means:

something of value is received or promised by each party.

Executed Contract

A contract that has been completely performed by both parties.

Valid contract 4 requirements

A contract that complies with all the essentials of a contract and is binding and enforceable on all parties to it. !. Offer and Acceptance 2.Legally sufficient consideration 3. Parties have legal capacity to enter a contract 4.Legal purpose

Informal contract

A contract that does not require a specified form or formality in order to be valid.

3 requirements for an implied contract

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

A court will consider a contract to be unclear, or ambiguous, in the following situations:

1. When the intent of the parties cannot be determined from the contracts language. 2. When the contract lacks a provision on a disputed term. 3. When a term is susceptible to more than one interpretation. 4. When there is uncertainty about a provision.

Uneforceable contract

A contract exists, but it cannot be enforced because of a legal defense.

Extrinsic Evidence

Any evidence not contained in the contract itself, which may include the testimony of the parties, additional agreements or communications, or other information relevant to determining the parties' intent.

Jacob offers to buy Ann's smartphone for $200. Jacob tells Ann that he will giver her the $200 for the smart phone next Friday, when he gets paid. Ann accepts Jacob's offer and promises to give him the smartphone when he pays her on Friday. What type of contract is this?

Bilateral contract

negotiable instrument examples

Checks promissory notes bills of exchange certificates of deposit

Quasi Contract

Fictional contracts that the can impose. Implied in law. They are imposed to avoid an unjust enrichment of one party at the expense of the other.

Other Rules of Interpretation

If a court finds that there is a need to determine the parties' intentions from the terms of the contract, the court will apply a number of well-established rules of interpretation.

A contract may not be valid if:

None of these choices.

If a contract is ambiguous, courts generally will:

construe any ambiguity against the party who drafted the agreement.

executory contract

contract not fully performed on both sides

To determine the parties' intent from the language used in their agreement and to give effect to that intent:

is the primary purpose of the rules of interpretation.

In interpreting an ambiguous contract, courts will:

give greater weight to handwritten or typewritten additions to the contract.

Plain Meaning Rule

if a court determines that the terms of the contract are clear from the written document alone, the plain meaning rule will apply, and the contract will be enforced according to what it clearly states

Usually, quasi contracts are:

imposed to avoid the unjust enrichment of one party at the expense of another.

Quantum meruit:

is a Latin term meaning, "as much as he or she deserves."

Implied Contract

the conduct of the parties, rather than their words, creates and defines the terms of the contract

Because law provides procedures for the enforcement of private contracts, this is possible:

the existence of a market economy.

expressed contracts

the terms of the agreement are fully and explicitly stated in words, oral or written