BUS EXAM CH 11

Common law

Contracts relating to services, real estate, employment, and insurance, for instance, generally are governed by

Any ambiguities in the contract goes against...

the one who drafted the contract

voidable contract

A contract that may be legally avoided (canceled) at the option of one of the parties (rejected by one of the parties)

Unilateral Contract

a contract that involves a promise for an act. is formed not at the moment when promises are exchanged but at the moment when the contract is performed.

Valid Contract

A contract that results when elements necessary for contract formation (agreement, consideration, legal purpose, and contractual capacity) are present.

Void Contract

A contract having no legal force or binding effect. (If the contract is illegal)

Express Contract

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

Executed Contract

A contract that has been completely performed by both parties.

executory contract

A contract that has not yet been fully performed.

offeror

A person who makes an offer.

Offeree

A person who receives an offer

promise

A person's assurance that he or she will or will not do something.

Unenforceable Contract

A valid contract rendered unenforceable by some statute or law. (an otherwise valid contract that may lack voluntary consent or is not in the proper form that the law requires)

in order for a contract to be valid it must have:

Agreement: an agreement (offer and acceptance), Consideration: supported by legally sufficient consideration, Contractual Capacity: made by parties who have the legal capacity to enter into the contract, Legality: for a legal purpose.

Contract Performance...

If one party has fully performed but the other has not, the contract is said to be executed on the one side and executory on the other, but the contract is still classified as executory.

There are many types of contracts...

They are categorized based on legal distinctions as to their formation, performance, and enforceability.

contract

a binding agreement between two or more persons that is enforceable by law

Requirements of a valid contract

agreement, consideration, contractual capacity, legality

objective theory of contracts

an agreement between parties is legally binding if an offer has been made and accepted., in the eyes of a reasonable person who is not a party to the contract,

Extrinsic Evidence

any evidence not contained in the document itself (outside evidence)

Contracts for the sale and lease of goods...

are governed by the UCC

plain meaning rule

assures there is no confusion in the contract (plain language laws help prevent confusion and ambiguities)

Implied Contract

based on conduct

implied contract

based on conduct or actions

bilateral contract

contract that involves a promise for a promise

quasi contracts

contractual obligations imposed on someone by the court to prevent unjust enrichment

Contract law is necessary to...

ensure compliance with a promise or to entitle the innocent party to some form of relief.

unjust enrichment

getting something that they werent entitled to or aware of

To an extent, plain language laws (enacted by the federal government and a majority of the states)

have helped to avoid this difficulty.

quasi means:

like or similar to

The common law governs all contracts except

when it has been modified or replaced by statutory law, such as the Uniform Commercial Code (UCC), or by administrative agency regulations.

You acquire rights and obligations, for example, when...

you borrow funds, buy or lease a house, obtain insurance, and purchase goods or services.