MGMT 209 Study Guide Exam 2 questions with correct answers

Is contract law statutory or common law? CORRECT ANSWER Usually common law Can vary state by state, but is becoming more uniform Can be supplemented by State statutes Two functions of contracts CORRECT ANSWER Dictate Performance Allocate Risk Contract law definition CORRECT ANSWER System of rules for enforcing promises and the breaking of promises Least cost avoider of risks CORRECT ANSWER Better at minimizing costs associated with risks Efficient legal rules are one that enforce contracts when the risk is borne by the __________________ CORRECT ANSWER Least cost avoider of risks T/F : All contracts are mutually beneficial when negotiated CORRECT ANSWER True Become not mutually beneficial when events transpire after signing before execution