Intro to Business contract test

Explain legality

Contract can not involve any illegal acts

Voidable

Contract that CAN be rejected by one party on legal grounds (teaching contract)

Explain offer

A proposal by the offeror to the offeree indicating entering a contract

Bilateral

Both sides make a guarantee

What kinds of contracts must me in writing

Marriage Year Land/rental prop. Executer Goods over $500 Suretyship

Explain consideration

The exchange of things of value that creates a bond between the parties

Explain genuine agreement

When a valid offer meets a valid agreement

Void

A contract that is not legally binding from the moment it is made

Unenforceable

A contract that is valid but a court will not enforce it

Valid

6 elements are met and contract is legally binding

Statue of fraud

Every state requires that certain kinds of contracts be in writing to be enforceable

Explain capacity

Legally being able to enter into a contract

Implied

Occur because of the actions of the parties

Elements a contract must meet

Offer Acceptance Genuine agreement Consideration Capacity Legality

Unilateral

Only one guarantee made based on the actions of another

Express

Stated in words, may be oral or written

Revocation

Taking back of an offer by the offeror before it gets accepted

Mirror image rule

The acceptance must not change the terms of the original offer in any way

Explain acceptance

The agreement of the offeree to be bound by the terms of the offeror