Business Law Chp 8-15

on general release

a written agreement in which an aggrieved party can discharge in whole or in part a claim resulting from an alleged breach of contract

Necessaries

goods and services that are essential to a minor's health and welfare

coming of age rule

in common law, the view that a person's legal birthday is 12:01 a.m. of the day before his or her actual birthday

Abandonment

in contract law, the condition that exists when a minor has left home and given up all rights to parental support

Disaffirmance

in contract law, to indicate by a statement or act an intent not to live up to the terms of a contract

Promisee

in the making of a contract, the party to whom a promise is made

Promisor

in the making of a contract, the party who makes a promise

Illusory Promise

one that consists of an indefinite, open-ended statement purporting to be an agreement

Mailbox Rule

a rule that states that an acceptance sent via the postal system or by courier is effective when sent

True

Consideration is one of the element of a contract

False

Contracts made while a person is intoxicated are voidable by either party

True

Courts sometimes enforce a contract that lacks consideration because it is socially beneficial.

1. Agreements made in Sunday's or legal Holidays 2. Gambling and wagering agreements 3. Usurious agreements 4. Unlicensed transactions

Agreements that violate government statutes

False

An agreement based on an illusory promise is enforceable if the purpose of the agreement is legal.

invitation to trade

An announcement published for the purpose of creating interest and attracting a response by many people. It's not considered a valid offer because it does not contain sufficient words of commitment to sell.

True

An emancipated minors contacts for necessaries are valid.

Preexisting Duty

An obligation that a party is already bound to by law or by some other agreement. The party may not use this as consideration in a new contract.

True

An offer that includes specific time limits expires automatically when the time is up unless the offer or chooses to extend the offer

False

An offer to pay for a benefit after it has been received is enforceable

True

A contract considered shockingly unjust or unfair is an unconscionable contract

True

A contract in which consideration is based on a promise that is i possible to fulfill cannot be enforced.

False

A contract made a person while intoxicated must be ratified in writing within 30 days

Sunday agreement

A contract made on a Sunday; in a small number of jurisdictions, such contracts are invalid unless they are ratified on a weekday.

True

A contract of adhesion is characterized by unequal bargaining power of the parties.

False

A contract performed because "it is the right thing to do" is an example of forbearance consideration.

True

A contract ratification must apply to the entire contract.

True

A contract resulting from the use of undue influence is voidable at the option of the party wrongfully influenced

False

A contract with a minor can be ratified by either party

True

A direct, unqualified rejection terminated an offer

Puffing

A general expression of opinion, typically in a sales context, that is used to persuade a prospective purchaser to buy. It does not constitute a misrepresentation of material text.

True

A general release allows for the discharge of a debt because it is viewed as forbearance, a form of consideration.

True

A minor is considered emancipated, and hence responsible for his or her contracts, upon marriage.

True

A minor is responsible for his her torts and crimes

False

A minors disaffirmance must bring writing to be effective

True

A newspaper advertisement of goods for sale is usually considered an invitation to trade

minor

A person who has not yet reached the age of majority

True

A person who is of legal age and at least normal mentality is considered a competent party.

False

A persons legal birthday is the same as the day in which his or her birthday is celebrated

True

A promise of inaction, or forbearance, can be valid consideration.

False

A promise to do something that one is already required to do either by law or by contract is valid consideration.

Request for Proposal (RFP)

A request for an offer or an invitation to negotiate that can be accepted or rejected by the person calling the bid

counter offer

A response to an offer in which the terms and conditions of the original offer are changed.

Valid Offer

1) definite and certain 2) communicated to the offeree 3) made with a serious intention 4)

True

Certain agreements are not enforceable because they lack consideration

1) agreements that are contrary to the common law 2) agreements that have been declared illegal by statute 3) agreements the courts have found to be against the security or welfare of the general public

Classifications of illegal agreements

True

For a contract to be dissolved because of a mistake, the law usually requires that the mistake be mutual.

True

Fraud may be committed either by spoken or written words or by acts or conduct.

False

If a person knowingly makes a false statement of a material fact in a contract with the intent that the other party rely on it, the person making such false statement can be charged with puffing.

False

If an advertisement contains a positive promise and a positive statement of what the advertiser expects in return, the courts will usually hold that the advertisement is an offer.

Emancipation

In contract law, the condition that exists when minors are no longer under the control of their parents and are responsible for their contracts.

True

In order for an acceptance of an offer to be valid, it must be communicated to the offer or and it must be unconditional

True

In some states a minor may avoid a contract, even if he or she falsely represented himself or herself.

True

Intentional concealment of material facts is just as fraudulent as making false statements

False

No contract is enforceable without consideration

1. Lapse of Time 2. Revocation 3. Rejection 4. Death or incapacity 5. Destruction or illegality

Offers are terminated by:

True

Past consideration is a promise to repay someone for a benefit after it had been received

False

Pledges and subscriptions are never legally enforceable because they lack the element of consideration.

False

Preexisting duty refers to existing debts that must be paid

UCC 2-204

The omission of one or more essential terms does not necessarily make the offer invalid as long as the contract contains sufficient information to suggest that the parties intended to enter into a contract

Consideration

The promises exchanged by the parties to a contract: to give up something of value they have a legal right to keep, such as money or property

1. A misstatement or nondisclosure of a material fact. 2. Knowledge of its falsity or reckless disregard of its truth. 3. Intent to cause the other party to enter into the agreement. 4. Reliance by the injured party. 5. Harm to the injured party (financial, physical, or both)

Proving a fraud case, a plaintiff must demonstrate:

False

Ratification of a minors contracts must be in writing to be effective.

Blue Laws

State statutes and local ordinances that regulate the creation and performance of certain types of contracts on Sundays and legal holidays.

False

The UCC states that additional consideration is always required in the modification of an existing contract

duress

The act of applying unlawful or improper pressure or influence to a person to gain his or her agreement to a contract

age of majority

The age at which a person is legally recognized as an adult and is bound by the terms of his or her contract

True

The responsibility of determining whether or not a person is competent rests with anyone who enters into a contract with the person.

interest

The charge for using borrowed money, generally expressed as annual percentage of the amount of the loan (principal)

1. Legality 2. Adequacy 3. The possibility of performance

Three essential characteristics of valid consideration

True

The courts generally do not rule on the adequacy if consideration.

True

The distinction between fraud and misrepresentation is important because the remedies available to an injured party are different

fraud

The intentional misstatement or non disclosure of a material (essential) fact made by one party in an attempt to influence the actions of another party.

True

The law regards actions of minors that result in emancipation as abandonment

False

The mailbox rule states that an acceptance sent via the postal system or by courier is effective when received by the offer or.

Past Consideration

a promise to repay someone for a benefit after it has been received

False

Upon reaching legal age, a minor must ratify earlier completed contracts in writing.

True

When a contract is ratified, the entire contract must be ratified, not merely a part of it.

False

When the UCC was written, it was intended that the unconscionable clause would apply only to contracts for services.

False

When threats are used to force someone to enter into a contract, the agreement may be dissolved by either party.

mistake

a belief that is not in accord with the facts

Contract of Adhesion

a contract drawn by one party that must be accepted as is on a take-it-or-leave-it basis

Option Contract

a contract that has a provision to keep an offer open for a certain period of time

unconscionable contract

a contract that is so one-sided that it is oppressive and gives unfair advantage to one of the parties

public offer

a general offer to the public at large

Misrepresentation

a misstatement of a material fact that results in inducing another to enter into an agreement to his or her injury

Competent Party

a person of legal age and at least normal mentality who is considered by law to be capable of understanding the meaning of a contract and is permitted to enter into a valid contract

Gratuitous Promise

a promise that does not require some benefit in return

pledge

a promise to donate money to a church, temple, mosque, hospital, college, cultural institution, or other charitable organization

Barren Promise

a promise to pay an existing debt or to obey the law, or a similar promise of something already owed

gambling agreement

an agreement in which performance by one party depends on the occurrence of an uncertain event

Ratified

an approval of a contract made by a minor after reaching majority

incompetent

being unable to make binding contracts due to having an unsound mind and being unable to safeguard one's own interests and affairs

Moral Consideration

something that a person is not legally bound to do but that he or she may feel bound to do because of love, friendship, honor, sympathy, conscience, or other reason

Contractual Capacity

the ability to make a valid contract

Revocation

the calling back of an offer by the offeror before the offer has been accepted or rejected

rejection

the express or implied refusal by an offeree to accept an offer

Undue Influence

the improper use of excessive pressure by the dominant member of a confidential relationship to convince the weaker party to enter a contract that greatly benefits the dominant party

Birthday rule

the modern view that a person attains a given age on the anniversary date of his or her birth

forbearance

the promise to refrain from doing something that a party has a legal right to do

Termination by lapse of time

when an opportunity to form a contract ends because the offeree fails to accept an offer within the time specified