BLAW Exam 2: Set 1

fraud

Berry enters into a contract with Clyde for a guided tour of Deep Canyon. Clyde represents that he is an experienced, knowledgeable guide, when in reality he has never been in the canyon. Berry is most likely a victim of: a. undue influence b. unconscionability c. fraud d. mistake

contractual capacity

Both parties entering into the contract must have the _______________ _____________ to do so. The law must recognize them as possessing characteristics that quality them as competent parties.

unilateral contract

If the offer is phrased so that the offeree can accept the offer only by completing the contract performance, the contract is a: ("promise for an act")

substitute means

If the offeree accepts the offer by a ___________ _________, the acceptance may still be effective if the substituted method serves the same purpose as the authorized means. Contract not formed until acceptance is received by the offeror.

accepted; compensate

If the offeree has an opportunity to reject an offer but does not, it is implied that he has ____________ the goods or services and agreed to _________________ the offeror according to the terms of the offer.

prior dealings

If the offeror and offeree have ________ ____________, the offeree has the duty to reject or risk being bound by his silence.

extinguished

Illya owes Jenny $1,000. In a separate deal, Kasey owes Illya $1,000. Illya unconditionally assigns his rights in the deal with Kasey to Jenny. Illya's right to the $1,000 is then: a. incidental b. unchanged c. assigned to a court d. extinguished

avoid any duty to perform or ratify the contract

In a voidable contract, the party having the option can elect either to:

a

In an exchange of e-mails, Rob, a landlord, and Sam agree to a lease of a certain apartment for one year. Under the Statute of Frauds, this lease is enforceable provided: a. the e-mail is signed by the party against who enforcement is sought b. the parties print and sign a hard copy of a document titled "Lease." c. no one else signs a lease for the apartment before Sam moves in d. there is outside evidence, such as security deposit, of the lease

timely

In bilateral contracts, acceptance must be ___________. The general rule says that it qualifies if acceptance is made before the offer is terminated.

revocable

In contract law, offers are normally _____________ until accepted.

element of intent

In determining whether a contract has been formed, the ____________ ______ __________ is of prime importance.

agent receives it

In most states, a revocation is effective when the offeree's or offerees' ________ ___________ ______.

accord; satisfaction

In the ________, one party undertakes to give or perform, and the other to accept, in satisfaction of a claim, something other than that on which the parties originally agreed. ______________ is the performance (usually payment) that takes place after the accord is executed.

true

In the majority of states, a creditor's acceptance of a lesser sum than the entire amount of a liquidated debt is not satisfaction, and the balance of the debt is still legally owed. T/F

substantially undertaken

In unilateral contracts, once performance has been ______________ ____________, the offeror cannot revoke the offer.

equitable; legal

Quasi contracts are _____________ rather than _________ contracts.

c

Ralph enters into a contract with Skye to buy her land based on her assertion that the land is open to development. After the sale, Ralph learns that only a small section of the land can be built on—a local law prohibits construction on the rest of the property. Ralph can: a. avoid the contract due to a mistake in value b. avoid the contract due to fraud c. not avoid the contract because persons are assumed to know the law d. avoid the contract due to a mutual mistake

unilateral contract

Reese says to Celia, "If you drive my car from New York to Los Angeles, I'll give you $1,000." Only on Celia's completion of the act-- bringing the car to Los Angeles-- does she fully accept Reese's offer to pay $1,000. If she chooses not to accept the offer to drive the car to Los Angeles, there are no legal consequences. This is a:

1. did not know he was entering into a contract 2. lacked the mental capacity to understand its nature, purpose, and consequences

a party who is not determined to be mentally incompetent by a court of law may avoid a contract if at the time of contracting, that person:

objective theory of contracts; reasonable

a party's intention to enter into a legally binding agreement, or contract, is judged by outward, objective facts: the facts are as interpreted by a _____________ person, rather than by the party's own secret, subjective intentions

promise

a person's declaration that he will perform or refrain from performing some present or future act

enforceable; consideration

a promise by a debtor to pay a previous debt barred by the statute of limitations is ______________-- no additional _______________ is necessary

letters of credit

a type of formal contract frequently used in international sales contracts that are agreements to pay contingent on the purchaser's receipt of invoices and bills of lading

option contract

a type of irrevocable offer that is held open for a specified period of time in return of consideration

voidable contract

a valid contract that can be legally avoided, canceled, or annulled by one or both of the parties

revocation, rejection, or counteroffer

an offer can be terminated by action of the parties by:

action of the parties or operation of law

an offer can be terminated either by:

definite

an offer can require specific terms to make the contract:

irrevocable

an offer that can not be taken back by revocation:

unenforceable contract

an otherwise valid contract that can not be enforced because of certain legal defenses against it in the form of some statute or law

extrinsic evidence

any evidence not contained in the document itself, such as the testimony of parties and witnesses, additional agreements or communications, or other relevant information

consideration

any promises made by the parties to the contract must be supported by legally sufficient and bargained-for __________________ (something of value received or promised, such as money, to convince a person to make a deal)

negotiable instruments

are formal contracts because, under the Uniform Commercial Code (UCC), a special form and language are required to create them

mirror image rule

at common law, any change in terms automatically terminates the offer and substitutes the counteroffer

counteroffer

rejection of original offer and the simultaneous making of a new offer

exculpatory clauses

release a party from liability in the event of monetary or physical injury no matter who is at fault; enforceable when they are not against public policy, are not ambiguous, and do not shield parties from intentional conduct

express contract

the terms of the agreement are fully and explicitly stated in words, oral or written

rescission

the unmaking of a contract that returns the parties to their pre-contract positions

acceptance

the voluntary statement or act from the offeree that indicates his/ her assent (agreement) to the terms of the offer:

quasi contracts (contracts implied in law)

fictional contracts that the courts impose on the parties "as if" the parties had entered into an actual contract

unenforceable

Promises made in return for actions or events that have already taken place are _______________.

-contracts in restraint of trade -contracts to commit a tort -unconscionable contracts -adhesion contracts -exculpatory clauses -discriminatory contracts

contracts contrary to public policy:

-usurious loans -gambling contracts -contracts to commit a crime -contracts by unlicensed persons

contracts contrary to statute:

void, voidable, or valid

contracts made by mentally incompetent persons can be:

contracts in restraint of trade

contracts that tend to reduce competition for the provision of good or services in a market

unconscionable contracts

contracts whose bargains are so oppressive that the courts relive innocent parties of part or all of their duties

1. agreement 2. consideration 3. contractual capacity 4. legality

four requirements of a valid contract:

-legally sufficient value -bargained for exchange

generally, consideration must have:

remedy; sue

A ___________ already exists if a party is unjustly enriched as a result of a breach of contract: the non-breaching party can _______ the breaching party for breach of contract.

accord; must be in dispute

A basic rule is that there can be no satisfaction unless there is first an: In addition, for accord and satisfaction to occur, the amount of the debt:

promises are exchanged

A bilateral contract comes into existence at the moment the:

express and implied contracts

A contract may be a mixture of these two types of contracts and contain some terms of each:

missing terms

A court can supply ____________ _________ if the parties intend to form a contract.

make or remake; claim

A court will normally not _______ or __________ a contract, nor will it interpret the language according to what the parties _________ their intent was when they made it.

valid contract; legally binding

A person deemed by court to be mentally incompetent cannot form a ________ ___________. In other situations, capacity may exist, but contract is not _____________ _____________.

express written contract

A signed lease for an apartment or house is an:

contract is performed

A unilateral contract is formed at the moment when the:

d

ActioNOW and Becca enter into an oral contract in which Becca agrees to work on a project for ActioNOW for eighteen months. This contract is enforceable by: a. Becca b. ActioNOW c. any third party, such as ActioNOW's clients d. none of the choices

d

Air Flo, Inc., and Banyan Grove Apartments enter into an oral contract in which Air Flo agrees to provide air-conditioning and heating maintenance for Banyan Grove's facilities for two years. This contract is enforceable by: a. Banyan Grove b. Air Flo c. any third party, such as HVAC supplies provider d. none of the choices

implied contract

Alex, a small-business owner, needs an accountant to complete his tax return. He drops by a local accountant's office, explains his situation to the accountant, and learns what fees she charges. The next day, he returns and gives the receptionist all of the necessary documents to complete his return, then he walks out without saying anything further to the accountant. In this situation, Alex has entered into an __________ ___________ to pay the accountant the usual fees for her services.

a

Alice and Bart enter into a contract for the sale of Canyon Ranch. To be enforceable, this contract must be: a. in writing or evidenced by a written memorandum b. signed in a sufficient manner by both parties c. substantiated by reliable, external evidence d. all of the choices

void; in pari delicto (equally at fault)

An illegal contract is ________ and both parties are usually considered to be:

false

An unenforceable contract is deemed unenforceable because a party failed to satisfy a legal requirement of the contract. T/F

cosign; conditions of the contract; liability

Businesses normally require parents to __________ any contract made with a minor. The parents are personally obligated under the contract to perform the _____________ of the ____________, even if their child avoids ______________

a

Car Lot's salesperson Dick offers to sell Ernie, who is twenty years old, a car. Dick intentionally misrepresents the vehicle's use and repairs. In reliance, Ernie buys the car. To prove fraud, Ernie does not have to show that: a. ernie is under twenty-one b. dick misrepresented material facts c. ernie justifiably relied on dick's misrepresentations d. dick intentionally deceived ernie

bilateral contract

Communication of acceptance: With a ___________ ___________, communication of acceptance is necessary because of mutual exchange of promises.

unilateral contract

Communication of acceptance: With a ____________ ___________, acceptance is evident and notification is not necessary.

unilateral contracts

Contests, lotteries, and other competitions involving prizes are examples of offers to form:

minority; reasonable period; entire contract; expressed or implied

Contract can be disaffirmed at any time during ___________, or for a _______________ __________ after minor is emancipated. Minor must disaffirm the __________ ___________. Disaffirmance can be ______________ or ____________.

voidable; defrauded party

Contracts entered into under fraudulent conditions are ____________ at the option of the _____________ __________.

voidable

Contracts entered into under legally defined duress or undue influence are:

voidable

Contracts made by mentally incompetent persons and intoxicated persons may also be:

voidable; minor

Contracts made by minors are generally _____________ at the option of the _________ (with certain exceptions).

either Ed or Far East

Ed orally agrees with Far East Restaurant to provide delivery service to its customers for six months. This contract is enforceable by: a. either Ed or Far East b. Far East only c. any interested third party, such as a Far East customer d. none of the choices

the reasonable value of the goods

Elena, a minor, obtains fruits and vegetables on credit from Fred at Growers' Market. Later, Elena disaffirms the purchase. She owes Fred: a. nothing b. the retail value of the goods c. the goods d. the reasonable value of the goods

offeror; offeree

Every contract involves at least two parties. The ________ is the party making the offer, while the __________ is the party to whom the offer is made.

Flo

Flo agrees to assume a debt owed by Guitars Inc. to Home Bank. The agreement is not in writing. To be enforceable under the "main purpose" rule, the promise must be for the benefit of: a. Guitars Inc. b. Flo c. Home Bank d. any third party, such as a Guitars Inc. customer

d

Flora enters into a contract with Global Shipping, Ltd., to insure and ship a painting from France to the United States for a certain price. Global makes a mistake in adding the costs, which results in a contract price that is $1,000 less than the true cost. Most likely, a court would: a. enforce the contract as is b. award damages to Flora for the mistake c. award damages to Global for the mistake d. allow the parties to rescind the contract

expressed in their contract

Generally, a court will interpret the language to give effect to the parties' intent as:

true

Generally, silence (or inaction) cannot constitute acceptance, but there are exceptions. T/F

unjustly enriched

Generally, the courts do not care if one wrongdoer in an illegal contract is ___________ ______________ at the expense of the other.

restitution

Gina, a minor, enters into a contract to buy a tractor from Herb, an adult. The deal is set aside. Restoring Herb to the position he held before the contract is the duty of: a. emancipation b. restitution c. ratification d. disaffirmance

either Guardian or Hedge

Guardian Security, Inc., and Hedge Fund Corporation enter into an oral contract under which Guardian agrees to provide security services for Hedge's offices for as long as Hedge needs them. This contract may be enforceable by: a. Hedge only b. any interested third party, such as a Hedge shareholder c. either Guardian or Hedge d. none of these choices

-interpret the ambiguity against the party who drafted the term -consider extrinsic evidence

If a contract term is ambiguous, a court may:

fraud, undue influence, mistake, or duress

If a contract was formed as a result of any of these conditions, the contract may not be enforceable.

avoided

If a voidable contract is ____________, both parties are released from it.

ratified

If a voidable contract is ____________, both parties must fully perform their respective legal obligations.

false

If all four requirements of a valid contract are met, the contract is enforceable. T/F

executory; executed

If an illegal contract is ____________, neither party can enforce it; if it has been ____________, neither party can recover damages

express oral contract

If one classmate calls another on the phone and agrees to buy her textbooks from last semester for $200, this is an:

executed; executory; executory

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

estopped

If requirements to establish promissory estoppel are met, the promisor will be ____________, or prevented, from asserting the lack of consideration as a defense.

c

Intoxicated and not aware of the consequences, Grady agrees to a two-year phone service contract with Horizon, Inc., at more than the average market price. This contract is: a. not enforceable because the contract favors Horizon b. enforceable c. not enforceable if Grady was intoxicated enough to lack mental capacity d. not enforceable because contracting parties can change their minds

executed; executory; executed

Jackson Inc. agreed to buy ten tons of coal from the Northern Coal Company. Northern delivered the coal to Jackson's steel mill, where it is being burned. At this point, the contract is ___________ on the part of Northern and _____________ on Jackson's part. After Jackson pays Northern, the contract will be ____________ on both sides.

bilateral contract

Jacob offers to buy Ann's smartphone for $200. Jacob tells Ann that he will give her the $200 for the smartphone next Friday, when he gets paid. Ann accepts Jacob's offer and promises to give him the smartphone when he pays her on Friday. Jacob and Ann have formed a:

only if it is in writing

Lewis tells a representative of Musical Instruments, Inc., that he will pay for Nora's trumpet if she does not. Lewis does not secure any personal benefit for this promise. This promise is enforceable as a contract: a. only if it is in writing b. only if Nora agrees to it c. only if the value of the trumpet is more than $500 d. any of the choices

an assignor

Merry Music Inc. and Nina enter into a contract for Nina to write six songs for which Merry Music agrees to pay her. Nina transfers her right to payment under the contract to Omni Artists Agency. In the transfer of rights, Nina is: a. an obligator b. a delegator c. an assignor d. a third party beneficiary

true

Minors can disaffirm contracts even when they have misrepresented their age. T/F

b

Moe threatens physical harm to force Norel to contract to pay him for protecting her store against vandalism and destruction. Nobel may: a. recover from her insurer for the cost b. rescind the contract or refuses to comply with its terms c. recover from the local police for their failure to protect her store d. do nothing once she has agreed to pay

undue influence

Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in OptiBank through Newt's investment firm. Unknown to Mona, Newt realizes a commission from the investment. Most likely, Mona may rescind the contract on the basis of: a. duress b. undue influence c. mistake d. fraud

true

Most gambling contracts are illegal and unenforceable. T/F

true

No performance, such as payment of funds or delivery of goods, need take place for a bilateral contract to be formed. T/F

1. the plaintiff furnished some service or property 2. the plaintiff expected to be paid for that service or property, and the defendant knew or should have known the payment was expected 3. the defendant had a chance to reject the services or property and did not

Normally, if the following condition exist, a court will hold that an implied contract was formed:

fraud

Olive, the owner of Olive's Orchard, contracts to sell its harvest to Pure Foods, Inc. Later Olive refuses to perform. Pure Foods files a suit to enforce the contract. Olive and Pure Foods are in a state that does not recognize the doctrine of unconscionability. To defend successfully against enforcement of the contract on similar grounds, Olive might rely on traditional notions of: a. mistake b. materiality c. fraud d. value

valid contract

Once an agreement is reached, if the other elements of a contract are present, a ________ ___________ is formed.

false

Parents are usually liable for contracts made by minor children acting on their own. T/F

c

Retail Outlets, Inc., contracts with Smooth Paving Inc. to grade and pave a parking lot. Smooth assigns the contract to Tough Road Company, which has a poor record of completing projects. Retail could most successfully argue that the contract cannot be assigned because: a. ​retail did not receive adequate consideration for the assignment. b. ​Tough Road was not an original party to the deal c. ​​the assignment will materially increase the risk of nonperformance d. retail did not consent to the assignment

disaffirm the contract

Rita, a minor, misrepresents her age as twenty-one and signs a contract with Sporty Motors to buy a sport utility vehicle (SUV. In most states, Rita may: a. disaffirm the contract only if she makes full payment b. not disaffirm the contract due to the misrepresentation c. disaffirm the contract only if she returns the SUV in good condition d. disaffirm the contract

undue influence

Ruth, who is Sal's guardian, convinces him to buy a certain parcel of land from Tyrone at a greatly inflated price. Ruth may be liable for: a. duress b. fraud c. undue influence d. mistake

Uniform Commercial Code (UCC)

Sale and lease contracts are governed by the:

face of the instrument

Sometimes referred to as the plain meaning rule, when a contract's writing is clear and unequivocal, a court will enforce it according to its obvious terms, and the meaning of the terms must be determined from the ________ _____ ______ ______________, or from the written document alone.

promisor; promisee; proposer and offeree

The ____________ makes the promise and the _____________ is the person to whom the promisor made the promise. These individuals can also be called the:

eighteen years; marriage

The age of majority (when a person is no longer a minor) for contractual purposes is ____________ __________ in almost all states. Some states provide for the termination of minority on ____________.

voidable

The agreement may be _____________ even with voluntary intoxication if the person was intoxicated enough to lack mental capacity.

enforceable

The contract is _______________ if the person understood the legal consequences of the agreement despite intoxication.

legal

The contract's purpose must be to accomplish some goal that is ________ and not against public policy.

actual contract

The doctrine of quasi contracts generally cannot e used when there is an _________ ___________ that covers the matter in controversy.

mutual assent

The parties must agree on the terms of the contract and manifest to each other their _________ _________ to the same bargain.

void and contract

The terms ________ and ____________ are contradictory.

requirements contract

a buyer and seller agree that the buyer will purchase all of the goods of a designated type that the buyer needs, or requires, from that seller

-accord and satisfaction -release -covenant not to sue

a claim may be settled through:

writing

Typically, businesspersons put their contracts in ____________ (including electronic records) to ensure that there is some proof of a contract's existence should disputes arise.

this intent

Under the plain meaning rule, the words-- and their plain, ordinary meaning-- determine the intent of the parties at the time that they entered into the contract. A court is bound to give effect to the contract according to:

unjust enrichment

Usually, quasi contracts are imposed to avoid the _________ ________________ of one party at the expense of another.

enforceable, voidable, or unenforceable

Valid contracts may be:

extrinsic evidence

When a contract is clear and unambiguous, a court cannot consider:

express authorization

When an offeree specifies how acceptance should be made, __________ _____________ is said to exist. The contract is not formed unless the offeree uses that specified mode of acceptance.

trade customs and usage; locale

When considering custom and usage, a court will look at the _________ ___________ and __________ common to the particular business or industry and to the _________ in which the contract was made or is to be performed.

-express terms -course of performance -course of dealing -custom and usage of trade

When interpreting contractual terms, what elements are given the greatest weight, in order?

illusory

When the promisor has the option to cancel the contract before performance has begun, the promise is:

bilateral or unilateral

Whether a contract is classified as ____________ or ____________ depends on what the offeree must do to accept the offer and bind the offeror to a contract.

past consideration

________ ______________ is no consideration because the bargained for exchange element is missing. One can bargain for something to take place in the present of future, but not in the past.

duty and good faith

________ and ________ ___________ are usually sufficient to obtain compliance with a promise, but when price changes or adverse economic factors make contract compliance costly, these elements may not be enough.

contract law

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

express and implied

___________ and ___________ contracts are actual or true contracts formed by the words or actions of the parties.

intoxication

a condition in which a person's normal capacity to act or think is inhibited by alcohol or some other drug

voidable or valid

a contract entered into by an intoxicated person can be either:

release

a contract in which one party forfeits the right to pursue a legal claim against the other party; bars any further recovery beyond the terms stated in the release

1. the parties' intent cannot be determined from the contract's language 2. the contract lacks a provision on a disputed term 3. a term is susceptible to more than one interpretation 4. when there is uncertainty about a provision

a contract is unclear or ambiguous when:

legal purpose

a contract is valid and enforceable only if it is formed for a:

informal contract

a contract that does not require a specified form (except for certain types of contracts that must be in writing) or method of formation in order to be valid; also called simple contract

executed contract

a contract that has been fully performed by both (or all) parties

executory

a contract that has not been fully performed by one or more parties

valid contract

a contract that has the elements necessary to entitle at least one of the parties to enforce it in court; a contract with agreement, consideration, contractual capacity, form, and legality

adhesion contract

a contract that is written exclusively by one party and presented to the other on a take-it-or-leave-it-basis

formal contract

a contract that requires a special form or method in order to be enforceable

unenforceable and void

a contract to commit a crime is:

void contract

a contract with no legal or binding effect

plain meaning rule

a court will enforce a contract according to its obvious terms when it is clear and unequivocal

accord and satisfaction

a debtor offers to pay, and a creditor accepts, a lesser amount than the creditor originally claimed was owed

usury

a lender who makes a loan at an interest rate above the lawful maximum commits:

intent; words or conduct; entire contract

a minor must express his or her ___________, through __________ or ____________, not to be bound to the contract; the minor must disaffirm the _________ ____________, not merely a portion of it

reasonable value of the goods

a minor who enters into a contract for necessaries (basic needs such as food and clothing) may disaffirm the contract but remains liable for the:

expressly or impliedly

a minor who has reached the age of majority can ratify a contract _____________ or ______________

mailbox rule (deposited acceptance rule)

acceptance is effective when offeree uses authorized means of acceptance; if U.S. mail, acceptance becomes valid upon dispatch, not receipt; does not apply to instantaneous communications

inconsistent

acts of conduct _____________ with an intent to disaffirm will also ratify the contract

-preexisting duty -past consideration -illusory promises

agreements that lack consideration include:

license

all states require that certain professionals (e.g. physicians) obtain a ___________ from the state

liquidated debt

amount has been ascertained, fixed, agreed on settled, or exactly determined

in writing

an agreement does not necessarily have to be:

contract

an agreement formed by two or more parties who agree to a promise/ set of promises, and is enforceable in court; a promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty

offer and acceptance

an agreement to form a contract includes an:

doctrine of unjust enrichment

based on the theory that individuals should not be allowed to profit or enrich themselves inequitably at the expense of others

sales and leases

common law governs all contracts except:

adequacy of consideration

concerns the fairness of the bargain; general rule is that a court will not normally question this based solely on the comparative value of the things exchanged

implied contract

conduct of the parties creates and defines the terms of the contract; sometimes called an implied-in-fact contract

bargained for exchange

consideration must provide the basis for the bargain struck between the contracting parties; the item of value must be given or promised by the promisor in return for the promisee's promise, performance, or promise of performance

-bilateral vs unilateral contracts -formal vs informal contracts -express vs implied contracts

contracts can be classified according to how and when they are formed, and three such classifications include:

voluntary consent and form

defenses to the enforceability of an otherwise valid contract:

-identification of the parties -object or subject matter of the contract -consideration to be paid -time of payment, delivery, or performance

definiteness of terms: generally, an offer must express the following items:

bills of lading

documents evidencing receipt of, and title to, goods shipped

plain language laws

enacted by the federal government and a majority of the states and have helped alleviate disputes on the legal meaning and effect of a contract

-justifiable ignorance of the facts -being a member of a protected class who may enforce an otherwise illegal contract -withdrawing from an illegal agreement before any illegality occurs -a contract entered into due to fraud, duress, or undue influence -severable contracts that consist of distinct parts which can be performed separately, with separate consideration provided for each part

exceptions to the general rule regarding contract illegality:

intoxicated; becoming sober; consideration received

if a contract is voidable because one party was intoxicated, that person must disaffirm while still _______________ or within a reasonable time after ____________ _________; the person claiming intoxication typically must be able to return all ________________ _______________

void

if a court has previously determined a person to be mentally incompetent, any contract made by that person is:

liquidated

if a debt is _____________, accord and satisfaction cannot take place

ratification or disaffirmance

if a minor fails to disaffirm a contract within a reasonable time after reaching the age of majority, then the court must determine whether the conduct constitutes _____________ or ________________

reasonable period of time

if no time period for acceptance is specified, the offer terminates at the end of a:

bilateral contract

if the offeree can accept by simply promising to perform, the contract is a: ("promise for a promise")

illegal and unenforceable

if the statute's purpose is to protect the public, a contract with an unlicensed practitioner is usually:

enforce; fine

if the statute's purpose is to raise government revenues, a court may ___________ the contract and __________ the unlicensed person

illusory; unenforceable

if the terms of the contract express such uncertainty of performance that the promisor has not definitely promised to do anything, the promise is said to be ____________, without consideration and ________________.

offer; accept

in an agreement to form a contract, one party must _________ to enter into a legal agreement, and another party must _________ the terms of the offer.

negotiable instruments

include checks, drafts, promissory notes, bills of exchange, and certificates of deposit

noncompete agreements

included in employment contracts and prohibits employees from working for competitors or starting businesses for a specified period of time after termination of employment; legal in most states if the specified period of time (of restraint) is not excessive and the geographic restriction is reasonable

contractual capacity

legal ability to enter into a contractual relationship

-a promise to do something that one has no prior legal duty to do -the performance of an action that one is otherwise not obligated to undertake -the refraining from an action that one has a legal right to undertake (called a forbearance)

legally sufficient value may consist of:

subject to the contract; possession or control; restitution

many courts hold that the minor need only return the goods ___________ to the ____________, provided the goods are in the minor's ________________ or _____________; some states place an additional duty of _______________ on the minor to restore the adult party to the position she or he held before the contract was made

-lapse of time -destruction of the subject matter -death or incompetence of the offeror or offeree -supervening illegality

methods by which an offer can be terminated by operation of law:

void

none of the parties have any legal obligations if a contract is ________, and a contract can be deemed this way because one of the parties was determined by court to be mentally incompetent, for instance, or because the purpose of the contract was illegal

emancipation

occurs when a child's parent or legal guardian relinquishes the legal right to exercise control over the child

substantive unconscionability

occurs when contracts, or portions of contracts, are oppressive or overly harsh

revocation

offer can be withdrawn by the offeror anytime before offeree accepts the offer through:

procedural unconscionability

often involves inconspicuous print, unintelligible language ("legalese"), lack of an opportunity to read the contract or ask questions about its meaning, or a disparity in bargaining power between the who parties such that the weaker party's constant is not voluntary

incompetent

only the ____________ party has the option of disaffirming his contractual obligations

disaffirm; bound

only the minor may ____________ a contract; any adult party to the contract remains _________ unless and until the minor's disaffirmance releases her

-terms -whole -separately; standardized -commonly accepted -specific; general language -greater weight -against the drafter -clarify the contract -express; performance; dealing; custom and usage

other rules of contract interpretation: -a reasonable, lawful, and effective meaning will be given to all of a contract's ________ as much as possible -contracts are interpreted as a __________ -terms that are negotiated _______________ are given greater weight than _________________ terms -words will be given their ordinary, _____________ _____________ meanings -__________ wording given greater weight than ___________ ______________ -written or typewritten given ___________ __________ than preprinted -ambiguous terms will be interpreted ___________ the ___________ -trade usage, prior dealing, and course of performance can be used to __________ the ____________ -____________ terms are given the greatest weight, followed by course of _______________, course of _____________, and __________ and _________ of trade, in that order

unliquidated debt

parties give up right to contest amount in dispute, and thus consideration is given; in these circumstances, acceptance of a lesser sum operates as satisfaction, or discharge, of the debt because there is valid consideration

discriminatory contracts

party promises to discriminate on the basis of race, color, national origin, religion, gender, age, or disability are contrary to both statue and public policy, and unenforceable

-unforeseen difficulties -rescission -new contract

preexisting duty exceptions:

preexisting duty

promise to do what one already has a legal duty to do that does not constitute legally sufficient consideration

fairness and justice

quasi contracts are imposed in the interest of:

-must be a clear and definite promise -promisee must justifiably rely on the promise -promisee reasonably relied on the promise by acting or refraining from some act -promisee's reliance was definite and resulted in substantial detriment -justice will be served by enforcing promise

requirements to establish promissory estoppel:

negative impact

some contracts are not enforceable because of the _____________ ____________ they would have on society

prohibit disaffirmance

some states have enacted laws to ___________ ________________ in situations where minors misrepresent their age, especially while engages in business as an adult

recover a debt

statutes of limitations in all states require a creditor to sue within a specified period to:

covenant not to sue

substitute contractual obligation for some other type of legal action based on a valid claim; does not always bar further recovery

express ratification

takes place when the individual has reached the age of majority and states orally or in writing that she/ he intends to be bound by the contract

implied ratification

takes place when the minor, on reaching the age of majority, indicates an intent to abide by the contract or when a person enters into a contract while still intoxicated and fails to disaffirm the contract within a reasonable time after becoming sober

unequivocal acceptance

the acceptance cannot impose new conditions on, or change the terms of, the original offer

ratification

the act of accepting and giving legal force to an obligation that previously was not enforceable

-interpretation of ambiguous contractual provisions -outcome of litigation

the admissibility of extrinsic evidence can significantly affect the court's:

output contract

the buyer and seller agree that the buyer will purchase from the seller all of what the seller produces, or the seller's output

form

the contract must be in whatever _________ the law requires, such as some contracts that must be in writing to be enforceable

guardian; legal obligations

the court will appoint a ____________ who will represent the mentally incompetent individual and enter into binding _________ _______________ on his or her behalf

gambling

the creation of risk for the purpose of assuming it

hardship or inequitable cases

the doctrine of promissory estoppel was initially applied to situations involving the promise of gifts or donations to a charity on which the charity detrimentally relied, but courts began to apply estoppel to:

destruction of the subject matter

the event of evidence being destroyed, and if it occurs before acceptance of the offer, then the offer is canceled

1. promises that induce detrimental reliance, under the doctrine of promissory estoppel 2. promises to pay debts that are barred by a statute of limitations 3. promises to make charitable contributions

the following types of promises may be enforced despite the lack of consideration:

adult; minors; voidable; exceptions

the general rule is that a minor can enter into any contract that an _________ can, except contract prohibited by law for ___________; a contract entered into by a minor is ______________ at the option of that minor, subject to certain ________________

disaffirmance

the legal avoidance, or setting aside, of a contractual obligation

rejection

the offeree terminates the offer by words or by conduct; effective only when it is received by the offeror or their agent

formation, performance, and enforceability

there are many types of contracts and they are categorized based on legal distinctions as to their:

legally sufficient considerations; promissory estoppel

traditionally, charitable subscriptions were unenforceable because they did not have __________ __________ ______________; however, modern day view is to make exceptions to the general rule by applying the doctrine of ____________ ____________

death or incompetence of the offeror or offeree

two conditions of party members that automatically terminate the offer unless it is an irrevocable offer:

-offeror must have a serious intention to be bound by the offer -the offer's terms must be reasonably certain or definite -the offer must be communicated to the offeree

under common law, for an offer to be effective the requirements of the offer are:

terminates the offer

under supervening illegality, a statute or court decision that makes an offer illegal automatically:

1. what a party said when entering into the contract 2. how the party acted or appeared 3. the circumstances surrounding the transaction

under the objective theory of contracts, objective facts may include:

promissory estoppel (detrimental reliance)

under this doctrine, a person who has reasonably and substantially relied on the promise of another may be able to obtain some measure of recovery

consideration

usually defined as the value given in return for a promise (in a bilateral contract) or in return for a performance (in a unilateral contract)

illegal; void; interest

usurious contracts are __________ and may be ________ in their entirety, although most states simply limit the ___________ the lender is permitted to collect

to assure the parties to private agreements that the promises they make will be enforceable

what is the function of contract law?

to determine the parties' intent from the language used in their agreement and to give effect to that intent

what is the primary purpose of the rules of interpretation?

-expressions of opinion -statements of future intent -preliminary negotiations or invitations to negotiate -advertisements (invitations to negotiate) -live and online auctions -agreements to agree -preliminary agreements

where intent may be lacking-- the following statements are not offers:

purpose of the statute

whether a contract with an unlicensed person is legal and enforceable depends on the:

under no circumstances

​Gavin takes out an insurance policy on his car. Gavin can assign his policy to a third party: a. under any circumstances b. as long as he does so in writing c. under no circumstances d. if a court approves the assignment