business law exam 3
1. signatures of the parties 2. names of the parties 3. purpose of the agreement
A memorandum may include:
guaranty
A(n)______ to pay the debts or settle the wrongdoings of another if he or she does not make settlement personally is not enforceable unless it is written.
may not be delegated.
Athletes are hired because of their special personal skills; because of this, their services under a contract:
duties
In a contract, the term ________means tasks and performances, but not responsibilities.
substantial
In a private-service contract, the party who hires the specific person to perform certain duties has a(n) ____________interest in having only the hired person perform.
assignment.
In most states, the law permits parties to a contract to transfer their rights to another by:
Uniform Commercial Code (UCC).
It is stated that the terms of a written contract may not be changed by evidence of any prior agreement but may be explained, or supplemented, in the:
altered.
Most rights are assignable, except in cases in which the obligations of the parties would be significantly:
$500
The UCC as a required that sales of personal property for ___ or more must be in writing.
personal-service contract
a contract in which services that require a unique skill, taken, ability, and so forth are provided by a specific person
Sunday agreement
a contract made on a sunday; in a small number of jurisdictions, such contracts are invalid unless they are ratified on a weekend
specific performance
a court order directing a person to perform- or not perform- as he or she agreed to do in a contract
restraining order
a court order prohibiting the performance of a certain act. in some states, a _____ is temporary
clean hands
a court will not touch an illegal contract even if one party is out the money or service. courts require that parties to a lawsuit have ____, meaning that they are not using illegal acts as the basis for their lawsuits.
material alteration
a deliberate change or alteration of an important element in a written contact that affects the rights or obligations of the parties
frustration of purpose
a doctrine that states that where both parties know the purpose of a contract and, through no fault of either party, the reason for the contract no longer exists, the contract is terminated
sherman antitrust act
a federal statute that forbids certain agreements that tend to unreasonably inhibit completion, fix prices, allocate territories, or limit production
Robinson-Patman Act
a federal statute that makes it unlawful to discriminate, directly or indirectly, in matters involving product pricing, advertising, and promotion. the purpose of the act is to ensure that no one customer has an advantage over others
Statute of Frauds
a law requiring certain contracts to be in writing to be enforceable
government-granted franchise
a legal monopoly in which a state or federal government grants a person or firm a license to conduct a specific business, usually an essential service
restraint of trade
a limitation on the full exercise of doing business with others
tender of payment
a money offer of payment of an obligation
injunction
a permanent (unchanged) court order prohibiting the performance of a certain act
third-party beneficiary
a person who is not a party to a contract but is intended by the contracting parties to benefit as a consequence of a contract
incidental beneficiary
a person who will benefit as an indirect consequence of a contract, although that was not the intent of the contracting parties
administrator
a personal representative named by the court to perform as the executor would in instances in which the deceased person has not left a will
executor
a personal representative named in a will to handle matters involving the estate of a deceased person
guaranty
a promise to pay the debts or settle the wrongdoings of another if he or she does not make settlement personally
auction sale
a sale in which goods are sold to the highest bidder
monopoly power
a situation in which one or more people of firms control the market in a particular area or for a particular product
exculpatory clause
a statement in a contract that releases one party form liability resulting from his or her own negligence throughout the performance of a contract
liquidated damages clause
a statement wherein damages are explicitly set in the event one of the parties breaches an agreement
memorandum
a written contract or agreement
promissory note
a written promise to pay a specified sum of money
void and unenforceable
agreement with an illegal purpose is usually ___.
contact is divisible
agreement with an illegal purpose is usually void and unenforceable. however if the _______ unrelated parts- and if one or more parts have legal purpose, the those components are enforceable
void
agreements in restraint of marriage are___
gambling agreement
an agreement in which performance by one party depends on the occurrence of an uncertain event
champerty
an agreement to encourage a lawsuit in which one or more of the parties have no legitimate interest
illegal and unenforceable
an agreement to wrongfully use ones influence is
unlicensed transaction
an agreement with a person who does not have a required license
prenuptial agreement
an exchange of promises made by personal planning to marry is known as a ___
antenuptial or prenuptial agreement
an exchange of promises made by persons planning to marry
tender of performance
an offer to perform that is considered evidence of a partys willingness to fulfill the terms of a contract
tender of goods
an offer to provide the goods agreed upon that is considered evidence of a party's willingness to fulfill the terms of a contract
natural monopolies
are subject to a greater degree of regulation than other businesses and are responsible to administrative agencies, boards or public service commissions
novation
as situation in which all parties to a contract agree to a significant change to a contract
written or oral
in general, an assignment may be either ___. However, if the original contact is required to be in writing under the Statute of Frauds, the assignment also must be in writing.
examples of contracts that might be made on a Sunday or on a legal holiday and ratified on a weekday are contracts
involving the payment of a note, the delivery of merchandise, and the repair of equipment
real property (real estate)
is land and items permanently attached to the land, such as buildings or trees (all other property is considered personal property). all contracts to sell ___ or any interest in it must be in writing to be enforceable.
Statute of Frauds does not prohibit
it is important to note that ___ a person from legally entering into oral contacts for certain kinds of agreements; it only specifies that certain contacts must be in writing to be enforceable
duties
it is important to note that the term ____ means tasks and performance, not responsibilities. a person who agrees in a contract to perform a particular task may generally delegate this task to someone else but is still responsible for getting it done.
blue laws
statutes and local ordinances that regulate the creation and performance of certain types of contracts on Sundays and legal holidays
antenuptail or prenuptial agreement
such contract is enforceable only if it is reduced to writing before the marriage takes place.
Delegation
the Uniform Commercial Code states, "No ____ of performance relieves the party delegation of any duty to perform or any liability for breach"
trustee
the ___ is then empowered to sell the assets and exercise contract rights for the benefit of the creditors of the bankrupt person of firm.
delegation
the appointment of a third party by a party to an existing contract to perform contractual duties that do not involve unique skills, talents, abilities, and so on
interest
the charge for using borrowed money, generally expressed as an annual percentage of the amount of the loan (principal)
enforceable
the element proper form requires that certain contracts must be in writing to be _____
franchisee
the independent company in a franchise agreement
mitigate
the obligation of the injured party to protect the other party from any unnecessary damages
franchisor
the parent firm in a franchise agreement
guarantor
the party who guarantees the promises assigned
assignor
the person who transfers his or her rights in an assignment
parol evidence rule
the rule that any spoken or written words in conflict with what the written contract states cannot be introduced as evidence in a court of law
executory contracts(contracts that have yet to be preformed
the state of frauds applies only to ____ . however, once a contract has been completed, it cannot be canceled merely because it was not in writing- even though it should have been.
assignee
the third party to whom rights are transferred in an assignment
assignment
the transfer of a contact right to a third party who can receive the benefits of the contract
ambiguous (double meaning)
there are numerous exceptions to the parol evidence rule. perhaps the most common exception occurs when oral evidence series to clear up an ____ part of an agreement
exception
there is an _____ to the written requirement for contracts to sell real property. this occurs when there has been partial performance of an oral agreement, thus proving the existence of the contract.
while zoning regulation are intended to provide security for the citizens of a community
they also may act as legal restraints of trade because they restrict where and how businesses may operate
licensed
to protect the public, most states require persons engaged in certain businesses, professions, and occupations to be ____
illegal and unenforceable
unless specifically permitted by law, agreements to suppress or eliminate competition are ____
assignable nor delegable
usually contacts for personal services are___
changed
(parol evidence rule) The uniform commercial code specifically states that the terms of a written contract may not be ____ by evidence of any prior agreement but may be explained or supplemented
bankruptcy
a condition in which a person or business is legally recognized as unable to pay legitimate debts
usury
charging interest higher than the law permits
Statute of Frauds six contracts that must be in writing to be legally enforceable
1. agreement by an executor or administrator to pay the debts of a deceased person 2. agreement to answer for the debts of another 3. agreement that cannot be complete in less than one year 4. agreements made in contemplation of marriage 5. agreements to sell any interest in real property 6. agreements to sell personal property for $500 or more
agreements that violate government statutes are not enforceable by the courts EX:
1. agreements made on Sundays or legal holidays 2. gambling and wagering agreements 3. usurious agreements 4. unlicensed transactions
three broad classifications of illegal agreements
1. agreements that are contrary to (conflicting with) 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
three types of contacts that may not be assigned
1. contracts that include assignment restriction 2. contract for which assignments are prohibited by law or public policy 3. contracts that require personal services
exceptions to the parol evidence rule
1. incomplete contracts 2. contract that contain obvious typographical errors 3. contracts that are partly written and partly oral 4. voidable contact 5. subsequent oral modification of contracts( courts may rule that oral evidence is admissible
some agreements are unenforceable because they are contrary to the interests of the public
1. obstruct or prevent 2. restrain marriage 3. interfere with public services 4. defraud creditors and other persons 5. contain exculpatory clauses
memorandum must contain the following information
1. the names of the parties 2. the purpose of the agreement 3. a description of the consideration promised 4. the date and place where the contract was made 5. the signature of the parties
two ways in which third parties can be affected by a contract
1. third-party beneficiaries 2. incidental beneficiaries
novation of contract
Person A was contracted by Person B to build a beach house. Soon after, Person A was unable to complete the entire house, and hence assigned Person C to complete the contract, after seeking Person B's approval. In this example, the obligation of Person A is discharged and this is a:
incidental beneficiary
Randy and Donald were property developers, and decided to construct a condominium in a certain neighborhood. Jim, who owned a chain of restaurants, heard of this agreement, and opened a new restaurant in the same neighborhood even before the condominium construction began. However, the plan for the condominium was not approved by the state authorities, and the project was cancelled. Jim suffered losses as a result, but he had no rights in the contract because he was a(n):
are affected by it
Third parties to a contract are those who are not a party to the contract but who:
That the oral agreement fell outside the statute of frauds if the plaintiff satisfied the main purpose doctrine.
What did the appellate court rule in the case in the text, Power Entertainment Inc., v. Football League Properties Inc., involving the enforceability of an alleged oral agreement by which the plaintiff assumed a third party's debt owed to the defendant in return for the defendant transferring a licensing agreement to the plaintiff?
That it was up to a jury to decide matters including whether the parties intended to be bound by the oral agreement and whether an email contained the material terms of the oral contract.
What was the result in Stewart Lamle v. Mattel Inc., the case in the text in which the plaintiff claimed that in discussions Mattel agreed to a three-year license agreement to distribute a board game the plaintiff created, and that the agreement was confirmed by Mattel through an email, but that Mattel later wrongfully refused to enter into a written contract and follow through with the deal?
court-appointed administrator.
When a person dies before settlement of his assets, the estate is settled by a:
The court ruled that FCC violated a nonassignability clause and was therefore unable to recover on its claim.
Which of the following was the result on appeal in Forest Commodity Corp. ("FCC") v. Lone Star Industries Inc., the case in the text in which the Forest Commodity Corp. denied that it violated a contractual nonassignability clause and claimed that it was entitled to recover on a breach of contract claim because the defendant did not fully perform?
Legality of purpose
_______________ is one of the essential elements of a valid contract.
void and unenforceable
because agreements to defraud lack the element of legality of purpose, they are ____
executor or an administrator
either ____ had legal authority to arrange for the distribution of the assets of a deceased person, and in such a position may be inclined to promise to pay debts of the deceased personally
illegal
monopoly is ___ because it results in a restraint of trade
breach of contract
when a party to a contact refuses to perform as required by the contract or performs in an unsatisfactory manner
anticipatory breach
when a party to a contract announces his or her intention to break the contract in the future
substantial performance
when a party to a contract, in good faith, executes all of the promised terms and conditions of the contact with the exception of minor details that do not affect the real intent of their agreement
impossibility of performance
when unforeseen circumstances make it impossible to fulfill the terms of a contact; in these cases, the contract is considered void
