ACCT 324 EXAM 1 REVIEW

implied conditions

conditions that are inferred from the nature and language of the contract and are not explicitly stated. If the implied conditions are met, the party could be discharged from the contract

Jorge offers to build Larry a garage for $20,000. The offer stated that acceptance in person was required. Within a reasonable time, Larry e-mailed Jorge his acceptance. Which of the following statements is true about this situation?

Larry has not accepted the offer as required by the offeror, and there is no contract.

conpensatory damages

Money awarded to a plaintiff as reimbursement for her or his losses; based on the amount of actual damage or harm to property, lost wages or profits, pain and suffering, medical expenses, disability, etc.

monetary damages

Money claimed by or ordered paid to a party to compensate for injury or loss caused by the wrong of the opposite party.

How is an offeror's intent to be bound by an agreement demonstrated?

The courts determine an offeror's intent based upon how a reasonable person would interpret the offeror's words and actions.

Under the "mirror-image" rule, if the offeree's acceptance is with terms that are not identical to the offeror's terms, then which of the following is true?

The offeree's attempted acceptance is considered a counteroffer rather than an acceptance.

Condition Concurrent

The party's duty to perform requires that each party perform for the other at the same time. If one party offers to perform his duty and the other party does not, he can sue the other for nonperformance

When can silence generally be used as a form of acceptance?

When the parties agree that silence will be an acceptance

express conditions

conditions in the contract that are usually preceded by words such as provided that, if, or when. if these conditions are not met, a party could be discharged from the contract

Material Breach

discharges the non breaching party from his obligations under the contract

objective impossibility

it can't be done

subjective impossibility

it would be very difficult to carry out the contract

Which rule says that the terms of an acceptance must reflect the terms of an offer?

mirror-image rule

Formation of a contract begins when the party initiating the contract, called the ________, makes an offer to another party, called the ________.

offeror; offeree

A valid offer includes?

offers communicated by the offeror to the offeree's agent.

condition subsequent

the party has a duty to perform until a future event occurs that discharges the party from the obligation

condition precedent

the party's duty to perform arises after a particular event occurs; if the event never occurs, the party's duty to perform never arises and the parties are thus discharged from the contract

Novation

the substitution of a new party in place of an old one

If nothing is stated to the contrary in the terms of an auction, the auction is presumed to be ________, which means that the seller is merely expressing intent to receive offers.

with reserve