BUS 204 Ch. 10 The Formation of Traditional and E-Contracts

Samuel has mental competency issues. Samuel entered into a contract with Beth, but now Samuel is petitioning the court to terminate the contract. What options does the court have in ruling in the case? Choose 2 answer choices.

1. The contract is voidable if a court has previously determined Samuel to be mentally incompetent. 2. The contract is void if Samuel has been previously determined to be mentally incompetent.

Which act or statement is a valid offer?

A detailed advertisement

Which situation would be considered sufficient consideration for a contract to exist?

Pam agrees to pay Derek $500 if he does not sit next to her in class anymore.

What happens when a party with the right to avoid a contract chooses to not avoid it?

The contract is ratified.

Which of the following is a valid offer?

Eric offers to buy Arun's house for $775,000 with no contingencies because Eric's lease ends in two months. Arun wants to think about it and six days later has not yet responded.

Lupita enters into a contract with Faith to purchase a used car. At the time they sign the contract, Lupita appears to be very intoxicated. Faith notices this but signs the contract anyway. If Lupita later decides she wants to get out of the contract:

Lupita can raise the defense of lack of contractual capacity due to intoxication.

In general, which of these contract terms is NOT required to meet the requirement of definiteness?

Acceptance

What type of acceptance requires an affirmative action for the offeree to accept that offer?

Unilateral contracts

What are the elements of consideration? Choose 2 answer choices.

1. an exchange to which the parties agree 2. something of value from each party

Which type of lack of capacity is easiest to prove?

Minor status

In general, certain terms must be included in contracts to satisfy the requirement of definiteness. What are the exceptions to this rule? Choose 2 answer choices.

1. Sales contracts under the UCC 2. Courts can complete a contract to supply some missing items.

Midwest Life Insurance sells a life insurance policy to Thiago. Under the terms of the contract between Thiago and Midwest Life, Thiago will pay $75 per month for the policy, and, upon Thiago's death, Midwest Life will pay $100,000 to Laurelei. Four years later, Thiago dies, and Midwest refuses to pay under the terms of the policy. The party entitled to sue Midwest for its failure to honor the terms of the contract is:

Laurelei, because she is a donee beneficiary.

You go out drinking and playing cards with your buddies. After you have consumed a huge amount of alcohol, you agree to sell your motorcycle to your buddy. The next morning, after you sober up, your buddy tells you what you did. Do you think your buddy can legally hold you to the deal to sell him your motorcycle?

No, he can't, if you were so intoxicated that you could not form the mental capacity to enter into a contract, and your buddy knew you were intoxicated.

Quon and Bert have signed a contract for Bert to mow Quon's grass every week in June, July, and August for a price of $40 per week. They have agreed to all the necessary terms, but Bert has not yet mowed because it is still May. What type of contract do they have?

executory

What conditions must be met for an offer to be legally accepted? Choose 2 answers.

1. Acceptance must be unequivocal with no requests for changes in the offer. 2. It may only be accepted by the intended offeree or the offeree's agent.

What factors make an agreement enforceable under the principle of quasi-contract? Choose 2 answers.

1. The enriched party knows about the benefit and keeps it. 2. One party is being enriched at the expense of the other.

Elvis agrees to provide guitar lessons to Angela's niece for three months for $600. Angela decides her niece really is not interested in guitar lessons, and assigns her rights under the contract to Jose, so Jose can use the lessons for his daughter. When Jose contacts Elvis to set up the first guitar lesson for his daughter:

Jose cannot enforce the contract against Elvis because the contract is for personal services.

What factors are used to judge if consideration is adequate to ensure a fair bargain? Choose 2 answers.

1. Promises exchanged may not be a preexisting duty. 2. Promises must be made with voluntary consent.

What elements are required for an offer to be effective under the common law? Choose 3 answers.

1. The terms of the offer must be reasonably definite so that all parties understand them. 2. The offer must be communicated to the offeree. 3. The offeror must intend to be bound by the offer.

What type of contract exists when at least one party has the option of canceling it?

voidable

Sal has ordered 100 pounds of shrimp for his restaurant from Sam every Friday for 5 years and has always paid that week's market price. One Friday, Sal decides to take a vacation but doesn't tell Sam. Sam claims they have a contract, even though it was never written down. What kind of contract do they have?

implied-in-fact

How may a revocable offer effectively be revoked? Choose 2 answers.

1. The offeror may take an action that contradicts the offer and make that known to the offeree. 2. The offeror may withdraw the offer with a clear expression.

Ellen offers to sell her 1997 Mustang convertible to Fred for $2,000. Fred agrees to pay $2,000 for Ellen's Mustang. Before Fred picks up the Mustang, Ellen discovers that the Mustang is considered a classic car and is worth much more than $2,000. Ellen refuses to sell the Mustang to Fred, stating that the consideration is insufficient. If Fred tries to enforce the deal by taking Ellen to court:

the court would probably enforce the deal because there was valid consideration on both sides.

Zayn boards the Big Rock Metro to ride downtown to his job. Zayn gives his money to the driver and takes his seat. Neither the driver nor Zayn says anything. Zayn and the bus driver:

have an implied contract.

What is the term for a contract agreement in which an offeror promises to pay after the occurrence of a specified act, and the offeree is not required to respond in words?

unilateral contract

Lilly hired Harris Lawn Service to cut her grass one summer, and paid through automatic charges to her credit card. After taking three months off for winter weather, Harris staff cut Lilly's grass for four weeks in a row before charging the fees on Lilly's credit card. Lilly protested the charges, stating she did not hire the company to cut grass for the second summer. Harris sues Lilly. What law applies? Choose 2 answer choices.

1.Lilly's silence is acceptance because of the parties' past dealings. 2. Lilly's silence is acceptance because the offeree accepted the benefit offered.