Business Law Today Ch.9

Unilateral Contract

"promise for an act" A contract that results when an offer can be accepted only by the offeree's perfomance.

Informal Contract

"simple contracts" A contract that does not require a specific form or method of creation to be valid.

Implied Contract

A contract formed in whole or in part from the conduct of the parties.

Void Contract

A contract having no legal force or binding effect.

Express Contract

A contract in which the terms of the agreement are stated in words, oral or written.

Executed Contract

A contract that has been fully performed by both parties.

Executory Contract

A contract that has not yet been fully performed.

Voidable Contract

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

Promise

A declaration that binds a person who makes it (the promisor) to do or not to do a certain act.

Objective Theory of Contracts

A party's intention to enter into a contract is judged by outward, objective facts as interpreted by a reasonable person, rather than by the party's secret, subjective intentions.

Promisee

A person to whom a promise is made.

Offeree

A person to whom an offer is made.

Promisor

A person who makes a promise

Offeror

A person who makes an offer

Bilateral Contract

A type of contract that arises when a promise is given in exchange for a return promise. "promise for a promise"

Unenforceable Contract

A valid contract rendered unenforceable by some statute or law.

Formal Contract

An agreement that by law requires a specific form for its validity.

Contract

An agreement that can be enforced in court. It's formed by two or more parties who agree to perform or to refrain from performing some act now or in the future.

Quasi Contract

An obligation or contract imposed by law (a court), in the absence of an agreement, to prevent the unjust enrichment of one party.

A quasi contract arises from a mutual agreement between two parties.

False

All contracts must be in writing to be enforceable.

False

Informal contracts require a special form or method of creation.

False

Valid Contract

Four elements of this contract formation: an agreement (offer and acceptance), consideration, legal purpose, and contractual capacity.

A check, like other negotiable instruments, is a formal contract.

True

A contract can be executed on one side and executory on the other.

True

A lottery is an example of an offer for an unilateral contract.

True

An executed contract is one that has been fully performed by both parties

True

An express contract does not need to be in writing.

True

An implied contract is implied from the conduct of the parties.

True

An offer to form a bilateral contract is accepted only by promising to perform the contract performance

True

Cory believes that he an Dian agreed that he would act as her personal sports trainer for seven workout sessions. In a later dispute, the existence of any contract can be judged by

a. *the parties' intent as expressed in their contract* b. what the defendant claims was the parties' intent. c. what the plaintiff claims was the parties' intent. d. what the parties agree they intended.

Ellen offers to sell her math textbook to Julia for $50. Julia does not respond. Ellen and Julia do not have a contract because they lack the requirement of

a. agreement b. capacity c. consideration d. legality

Jack promises to buy Lizette's used textbook for $60. Jack is

a. an executor. b. an offeree. c. a promisee. d. a promisor.

When Jeff's car breaks down, he asks Insta-Tow, Inc., to tow it to Huey's Repair Shop. There is no discussion of a price, and Jeff and Insta-Tow do not sign any documents. Later, Insta-Tow sends Jeff a bill. With respect to Jeff's obligation to pay the bill, this is

a. an express contract b. an implied contract c. an implied-in-law contract d. no contract

InTown Delivery Service promises to deliver a certain couch to Kurt, who promises to pay for the service. If InTown does not perform, it may be required to

a. do nothing b. make another promise c. pay monetary damages d. perform a different service

Avatar, Inc., and Bling Corporation sign a contract in which Avatar agrees to deliver t-shirts emblazoned with video game characters in exchange for Bling's promise to pay. Avatar delivers. The contract is

a. voidable b. executed c. executive d. *executory*