ACCT 2700 - Final Exam - Cochran
DEF: Clause specifying that any Contract dispute will be settled according to the law of a particular jurisdiction, such as a state or country
Choice of Law Clause
DEF: Clause specifying that any contract dispute will be settled according to the law of a particular jurisdiction, such as a state or country
Choice-of-Law Clause
DEF: One of the elements of a Contract; Something promised, given, or done that has the effect of making an agreement a legally enforceable contract (something of value)
Consideration
Economically, ____________ is the most important aspect of Contracts.
Consideration
DEF: Promise or set of promises for breach of which the law provides a remedy or the performance of which the law in some way recognize a duty; An agreement that can be enforced in court; formed by two or more parties, each of whom agrees to perform or to refrain from performing some act now or in the future
Contract
DEF: One of the elements of a Contract; Legal ability to enter into a contractual relationship
Contractual Capacity
DEF: Type of claim settlement; An agreement to substitute a contractual obligation for some other type of legal action based on a valid claim
Covenant Not To Sue
DEF: In Contract Law, the withdrawal of an Offer by an Offeror
Revocation
Referring to Terminations of Offers, what are the types of Action of the Parties?
Revocation of the Offer by the Offeror Rejection of the Offer by the Offeree Counteroffer by the Offeree Silence as Rejection
Regarding Consideration, what does Bargained for Exchange mean?
Something of legal value must be exchanged between the parties (Both parties must give and get Consideration)
What does it mean when a Contract is Void?
The Contract has no legal force or binding effect
What is the Accord in Accord and Satisfaction?
The agreement
Regarding claim settlements, when will a Release be binding?
The agreement is made in good faith (honestly) The release contract is in a signed writing (required in many states) The contract is accompanied by consideration
T/F: An Offer can only be withdrawn in the same way it was offered (if it was written, it has to be a written withdrawal, etc.).
True
T/F: Courts rarely permit contracts to be avoided due to intoxication.
True
T/F: Generally, the law does not protect someone from entering into an unwise Contract.
True
T/F: If any one of the elements of a Contract is missing, no Contract will be formed.
True
T/F: If the Offeree does nothing with the Offer, the Offer is considered terminated/rejected.
True
T/F: Many businesses succeed or fail based on how well their Contracts are working.
True
T/F: Parties must show mutual voluntary assent to terms of Contract.
True
T/F: Promises made in return for actions or events that have already taken place are unenforceable.
True
T/F: Silence cannot constitute as Acceptance (unless the Offeror and Offeree have done business together and the Offer that is made is like other Offers they have done before)
True
T/F: What a contract is or what it means can be inferred from the parties' conduct and the Reasonable Person Standard.
True
Why do many undeveloped countries remain undeveloped?
Underdeveloped countries remain undeveloped due to the lack of contract law
DEF: Type of Valid Contract enforceability rendered unenforceable by some statute or law
Unenforceable
DEF: Type of Contract that includes a promise for an act
Unilateral
A Contract entered into a mentally incompetent person (that was not previously declared mentally incompetent) may be _____ if the person had capacity at the time the Contract was formed.
Valid
DEF: Type of Contract enforceability that results when the elements necessary for Contract formation (agreement, consideration, contractual capacity, and legality) are present
Valid
What are the types of Contract enforceability?
Valid Void
If a person enters into a Contract while intoxicated, they are considered competent and the Contract is _____ or ________.
Valid Voidable
DEF: Type of Contract enforceability that results when no contract exists
Void
If a court has previously determined that a person is mentally incompetent, any Contract made by that person is ____.
Void
Contracts made by mentally incompetent persons can be ____, ________, or _____.
Void Voidable Valid
DEF: Type of Valid Contract enforceability that may be legally avoided (canceled) at the option of one of the parties or courts
Voidable
If a court has not previously judged a person to be mentally incompetent but the person was incompetent at the time the Contract was formed, the Contract may be ________.
Voidable
What are the types of Valid Contracts?
Voidable Unenforceable Enforceable
Acceptance of a Contract must be unequivocal in that it...
Was clearly indicated Complies with the Mirror Image Rule
How do we determine what a Contract and/or its terms means?
We determine what a contracts and/or its terms means by what the parties did, not by what the parties tell us they meant
Regarding Consideration, why does a Promise have value?
because people can rely on the Promise being enforced
Regarding Consideration, why does Performance have value?
because the action often is often awarded money or an award
Why won't courts consider Adequacy of Consideration?
because value is up to the eyes of the buyer and values change over time
DEF: The refraining from an action that one has a legal right to undertake
Forbearance
DEF: Type of Contract that requires a special form for creation, must be written, and must follow specific codes required by the state
Formal
DEF: A provision in a contract designating the court, jurisdiction, or tribunal that will decide any disputes arising under the contract
Forum-Selection Clause
What must be included in the Agreement of E-Contracts?
Forum-Selection Clause Choice of Law Clause Click-On Agreement
DEF: A person's assurance that he or she will or will not do something; has no legal duty or obligation to do
Promise
DEF: A person to whom a promise is made
Promisee
Contract law deals with the formation and keeping of ________.
Promises
DEF: A person who makes a promise
Promisor
What is the function of Contract Law?
Provide stability and predictability for commerce Allows business people to plan and invest for the future Assures the parties to private agreements that the promises they make will be enforceable
DEF: Equitable remedy created by courts and imposed on parties in the interest of fairness and justice; Imposed to avoid the unjust enrichment of one party at the expense of another
Quasi Contract
DEF: Type of claim settlement; A contract in which one party forfeits the right to pursue a legal claim against the other party
Release
DEF: Element of an Agreement; The voluntary act (expressed or implied) by the Offeree that shows assent to the terms of an Offer; The offeree's notification to the offeror that the offeree agrees to be bound by the terms of the offeror's proposal
Acceptance
DEF: Type of claim settlement; An agreement for payment (or other performance) between two parties, one of whom has a right of action against the other
Accord and Satisfaction
What can a claim be settled through?
Accord and Satisfaction Release Covenant Not To Sue
An Offer may be terminated prior to Acceptance by either...
Action of the Parties Operations of Law
DEF: One of the elements of a Contract; includes an offer and an acceptance (One party must offer to enter into the Contract and another party must accept the terms of the offer); A meeting of two or more parties in regard to the terms of a contract; usually broken down into two events—an offer by one party to form a contract, and an Acceptance of the offer by the person to whom the Offer is made
Agreement
What are the elements of a Contract?
Agreement Consideration Contractual Capacity Legality
Regarding Consideration, why does Forbearance have value?
Because it is not doing something that you have the legal right to do in exchange for something that has legal value
Why aren't Illusory Promises valuable?
Because the Promisor has not definitively promised to do anything
DEF: Type of Contract that includes a promise for a promise
Bilateral
What are the types of Contract formation categories?
Bilateral and Unilateral Formal and Informal Expressed and Implied
DEF: A contract that is entered into in cyberspace and is evidenced only by electronic impulses (such as those that make up a computer's memory)
E-Contract
DEF: An electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record
E-Signature
DEF: Type of Valid Contract enforceability that can be enforced because there are legal defenses to it
Enforceable
DEF: Type of Contract performance in which a Contract has been fully performed on both sides
Executed
What are the types of Contract performances?
Executed Executory
DEF: Type of Contract performance in which a Contract has not been fully performed on either side
Executory
DEF: Type of Contract that is formed by words
Expressed
When might intent be lacking in making an Offer?
Expressions of opinions Statements made in jest, frustration, anger Statements of future intent Preliminary negotiations or invitations to negotiate Advertisements Auctions
T/F: Courts typically will consider Adequacy of Consideration.
False
T/F: If the Offer calls for a specific way of Acceptance, it can still be accepted other ways.
False
T/F: Preexisting Duty constitutes as legally sufficient Consideration.
False
DEF: Type of Contract that is formed by the conduct of the parties
Implied
DEF: Type of Contract that requires no special form for creation
Informal
Referring to Terminations of Offers, what are the types of Operations of Law?
Lapse of Time Destruction of the Subject Matter Death or Incompetence of the Offeror or Offeree Supervening Illegality of the Proposed Contract
DEF: One of the elements of a Contract; The principle that states that the Contract's purpose must be to accomplish some goal that is legal and not against public policy
Legality
What are the elements of Consideration?
Legally Sufficient Value Bargained for Exchange
DEF: Periods experienced by those who are mentally incompetent due to age or illness in which their intelligence, judgment, and will are temporarily restored
Lucid Intervals
DEF: This rule provides that an Acceptance of an offer becomes effective on dispatch
Mailbox Rule
DEF: States that in order for the Contract to be valid, the Offer and Acceptance must be exactly alike
Mirror Image Rule
Regarding Consideration, what are the types of Legally Sufficient Value?
Money, property, etc. Promise Performance Forbearance
Regarding Contractual Capacity, what does it mean when someone's legal ability to enter into a Contractual relationship is Not Present?
Not Present refers to mental incompetence (Insane)
DEF: A theory under which the intent to form a contract will be judged by outward, objective facts as interpreted by a reasonable person, rather than by the party's own secret, subjective intentions
Objective Theory of Contracts
DEF: Element of an Agreement; A promise or commitment to perform or refrain from performing some specified act in the future
Offer
DEF: The party to whom an Offer is made
Offeree
DEF: The party who initiates the Offer
Offeror
What are the requirement for an Offer?
Offeror is serious about his/her offer and is intentional in the Offer Terms must be definite Offer must be communicated to Offeree
DEF: Something given or some act done in the past, which cannot ordinarily be Consideration for a later bargain
Past Consideration
What rule does the judge start with if the parties are unclear about the meaning of their Contract?
Plain Meaning Rule
DEF: A promise to do what one already has a legal duty to do
Preexisting Duty
What are some Agreements that lack Consideration?
Preexisting Duty Past Consideration Illusory Promises Gift Promises
In the Agreement of E-Contracts, what must be available to both parties?
The full contract must be available to both parties through at least a hyperlink
What happens when the judge enforces the Plain Meaning Rule?
The judge will read the contract and interpret it how it plainly means
How are Contracts an economic necessity?
They allow people to change their own position in reliance on the promise If a business cannot rely on the promises of others, they would not invest in them
What is the most important function of Contracts?
They facilitate planning
T/F: A Gift Promise is unenforceable by courts because there isn't adequate Consideration.
True
What does Adequacy of Consideration concern?
the fairness of the bargain
What is the Satisfaction in Accord and Satisfaction?
the performance (usually payment) that takes place after the Accord is executed