MIDTERM CONTRACTS

FRAUD

A misrepresentation of a material fact made with the intent to deceive, relied upon by the other party to his or her detriment.

BILATERAL CONTRACT

A promise for a promise.

UNILATERAL CONTRACT

A promise for an act

LEGAL DUTY RULE

A promise to do what one is already legally bound to do is not consideration.

OFFER

A proposition made by one party to another, manifesting a present intention to enter into a valid contract and creating a power in the other person to create a valid contract by making an appropriate acceptance.

2. Exemplify an implied-in-fact contract

Auctioneer, doctor's visit, and the like.

CONSIDERATION

A benefit conferred or a detriment incurred; a basic requirement of every valid contract.

A promise for a promise is an example of: A bilateral contract A unilateral contract A formal contract An executory contract

A bilateral contract*

An example of a contract malum se is A contract in restraint of trade A contract that is usurious A contract for gambling A contract that violates the Statute of Frauds

A contract in restraint of trade*

10. What is an output contract?

A contract in which one party agrees to purchase all products produced by the other party.

IMPLIED-IN-FACT CONTRACT

A contract in which the promises of the parties are inferred from their actions as opposed to specific words.

VOIDABLE CONTRACT

A contract that one party may avoid at his or her option without being in breach of contract.

OPERATION OF LAW

A manner in which rights and obligations devolve on a person without the act or cooperation of the party himself or herself.

12. When does the offeror of a unilateral contract lose his or her ability to revoke?

After the offeree has made a substantial beginning on the requested performance

An essential element of an offer is Manifestation of present intent Communication to the offeree Certainty of the terms All of the above

All of the above*

An example of lack of contractual capacity is A minor A drunk A person on drugs All of the above

All of the above*

OUTPUT CONTRACT

An agreement whereby one party agrees to buy or sell all the goods produced by the other party.

What is contractual capacity?

Being over the age of consent, not being under the influence of drugs or alcohol, and understanding the nature of the contract.

All written contracts are Formal Valid Bilateral Executed

Bilateral* [could also be tested with Chapter 4]

How can illusory promises become enforceable and binding?

By the act of the parties creating definiteness in the terms

23. Violating a state usury law is malum prohibitum. T OR F

TURE

PROMISSORY ESTOPPEL

Doctrine in which promises not supported by consideration are given enforceability if the promisee had detrimentally relied on the promises.

10. Anyone who knows of an offer may accept it. T OR F

FALSE

12. An offeree of a unilateral contract never has to notify the offeror of his or her acceptance T OR F

FALSE

14. An offer may always be revoked by the offeror before acceptance by the offeree. T OR F

FALSE

16. A rejection is only effective on receipt by the offeror. T OR F

FALSE

17. Moral consideration may be legally sufficient to create a contract. T OR F

FALSE

18. Promissory estoppel is an example of contractual consideration. T OR F

FALSE

19. The monetary value of the consideration is determinative of its legal value. T OR F

FALSE

21. A minor may avoid all contracts entered into upon reaching his or her majority. T OR F

FALSE

24. Fraudulently inducing a person to enter into a contract is prohibited by the Statute of Frauds. T OR F

FALSE

8. A contract will be enforced even though one party has a unilateral right to decide the nature of the contractual performance. T OR F

FALSE

5. Give two examples of a formal contract.

Guarantee, charitable subscription

To be deemed sufficient, the consideration of a contract must Have monetary value Be fair Have legal value Be a moral obligation

Have legal value*

One party's unlimited right to decide the nature of the contractual performance is; A quasi contract Illusory Promissory estoppel None of the above

Illusory*

When one party has subjective control of the contract terms, the contract is Void Illusory An example of promissory estoppel A quasi-contract

Illusory*

The difference between fraud and misrepresentation is the element of: Intent Detriment Materiality Believability

Intent*

The Statute of Frauds Is concerned with misrepresentation Is concerned with perjury Is a common law doctrine Is a federal standard

Is concerned with perjury*

16. What is meant by the "sufficiency of the consideration"?

Legal detriment or legal benefit.

Caveat Venditor means Violating statutory law Violating common law Let the buyer beware Let the seller beware

Let the seller beware*

ACCEPTANCE:

Manifestation of assent in the manner requested or authorized by the offeror.

7. What are the elements of every valid offer?

Manifestation of present contractual intent; Certainty and definiteness of the terms; and Communication to the offeree.

UNDUE INFLUENCE

Mental duress by a person in a close and particular relationship to the innocent party.

UNILATERAL MISTAKE

Misconception of the subject matter of a contract by only one party to the contract; may be enforceable.

What are the five elements of contractual fraud?

Misrepresentation Of a material fact With intent to deceive Relied upon by the other party To his or her detriment.

MISREPRESENTATION

Mistakes of a material fact relied upon by the other party to his or her detriment; no intent to defraud.

9. How does the UCC affect the requirements of a valid offer?

More leeway given to merchants; no need to have all of the terms spelled out

What are the essential factors for contractual consideration?

Must be bargained for and have legal value.

An example of valid consideration is Past gifts Moral obligations Property of nominal value None of the above

None of the above*

An output contract is Illusory Unconscionable Voidable None of the above

None of the above*

1. What are the six requirements to create a valid contract?

Offer, acceptance, consideration, capacity, legality, and intent.

Are voidable contracts enforceable?

Only at the option of the party who can avoid the contract.

How can an offer be terminated?

Operation of law or act of the parties.

8. What are the four essential terms of a valid offer?

Parties, subject matter, time, and price

If a contract term is ambiguous the contract is: Probably void Probably enforceable Probably unconscionable Probably unenforceable

Probably enforceable*

How does the Mailbox Rule affect rejections of offers?

Rejection is effective when received, acceptance when mailed-contract depends on the expectations of the offeror.

Court doctrines used to interpret contracts are Precedents Statutory regulations Stare decisis Rules of construction

Rules of construction*

STATUTE OF FRAUDS

Statute mandating that certain contracts must be in writing to be enforceable.

11. The Mailbox Rule determines the timing of the acceptance of a bilateral contract. T OR F

TRUE

15. Lapse of time can act to terminate an offer. T OR F

TRUE

20. Guarantees require no separate consideration. T OR F

TRUE

22. Contracts deemed malum in se are totally unenforceable.

TRUE

25. If both parties to a contract are unaware of an ambiguity in the terms, the contract will be enforced according to what both think. T OR F

TRUE

26. The difference between fraud and negligent misrepresentation is the intent of the parties. T OR F

TRUE

27. Contracts of adhesion are examples of contracts induced by duress. T OR F

TRUE

5. Silence is acceptance of an implied-in-fact offer. T OR F

TRUE

6. Time is an essential term of an offer. T OR F

TRUE

7. A court of law never implies terms that the parties have imperfectly covered. T OR F

TRUE

9. A unilateral contract can never be accepted by words. T OR F

TRUE

consideration is the bargain aspect of the contract. T OR F

TRUE

MAILBOX RULE:

The acceptance of a bilateral contract is effective when properly dispatched by an authorized means of communication.

MUTUALITY OF CONSIDERATION

The bargain element of the contract; that each side must give and receive something of legal value

The bargain element of a contract is The price The offer The consideration The intent

The consideration*

CONTRACTUAL CAPACITY

The legal ability to enter into a contractual relationship.

The person who can accept an offer is known as The acceptor The offeror The assignee The offeree

The offeree*

PROMISOR

The one who gives consideration in a bilateral contract.

Give an example of mental duress.

Threatening to injure a person's relative to induce signing a contract.

"Necessaries" do not include Transportation Education Insurance Medical Care

Transportation*

The Parol Evidence Rule prohibits oral testimony that Shows failure of consideration Explains ambiguities Shows fraud Varies the terms

Varies the terms*

3. Explain the difference between a void contract and unenforceable contract.

Void: never existed Unenforceable: valid but not legally capable of being performed.

A contract that one party may avoid with being in breach is: Void Valid Voidable Executory

Voidable

4. When is a contract executory?

When there are still promises or duties to be carried out

A non-essential term of an offer is Writing Parties Price Subject Matter

Writing*

1. All contracts are considered bilateral under the law. f or t

false

2. Contracts inferred by the acts of the parties are known as quasi-contracts. t or f

false

4. A formal contract is a written contract. T or F

false

3. A contract may be both valid and unenforceable. T or F

true