Business Law Vocab Exam Questions With Valid Solutions.
Civil Law - accurate answers-typically in Europe, all laws are previously
written
Common Law - accurate answers-Laws are established as a result of events
Public Law - accurate answers-Law that interacts with the government
(criminal law, tax law)
Private Law - accurate answers-Law that interacts with people (contract law)
Business Judgement Rule - accurate answers-Directors are presumed to
comply with the duty of care and liability
- Statutory limitation of liability and insurance coverage would not apply in
case of bad faith or conflict of interests
Contract - accurate answers-agreement between two or more parties that is
legally enforceable in the event of a breach
Elements of a Contract - accurate answers-- Sufficient agreement
- Intention to create a contract
- Object
- Valid cause or consideration
Sufficient Agreement - accurate answers-- Meeting of the minds
- Offer + Acceptance = Agreement
- Objective Approach (UK + US)
- Subjective Approach (EU)
Meeting of the minds - accurate answers-Necessary to make the contract
enforceable. In some countries, this must refer at least to essential elements of
the contract
Objective approach - accurate answers-it suffices that one party reasonably
thinks that the other party has agreed
Subjective approach - accurate answers-obligations depend exclusively on the
will and intention of parties
, Object (may refer to future objects) - accurate answers-the contract must
refer to goods and services
Must be clearly determined as to its nature. If the quantity of the object that
will be subject to contract is not determined when entering into the contract,
it must be possible to determine the quantity into the future.
Goods - accurate answers-it must be possible to contract with such goods.
certain goods cannot be subject to valid contracts (i.e. illegal goods or goods of
public domain)
Services - accurate answers-Provision of services must be consistent with law
and customs
Cause - accurate answers-objective or subjective reason to enter into the
contract (relationship with illegality)
Consideration - accurate answers-- Requirement of a counterpart (benefit or
harm) in the exchange of a promise: in the absence of a bargain an informal
promise will not be enforced
- Consideration needs to be of economic value and done in exchange for the
promise (requested) but need not be adequate (equivalent in value to the
promise)
Is it necessary to comply with specific forms for the contract to be valid? -
accurate answers-No.
- As an exception, certain contracts must be in writing, and certain others
must be additionally notarized (agreements relating to land)
- Even if not mandatory, written form / notarization is strongly advisable for
evidentiary purposes
How do contracts work in practice? - accurate answers-- Offeror makes initial
promise (offer)
- Oferee can reject, agree, or counter offer
Civil Law - accurate answers-typically in Europe, all laws are previously
written
Common Law - accurate answers-Laws are established as a result of events
Public Law - accurate answers-Law that interacts with the government
(criminal law, tax law)
Private Law - accurate answers-Law that interacts with people (contract law)
Business Judgement Rule - accurate answers-Directors are presumed to
comply with the duty of care and liability
- Statutory limitation of liability and insurance coverage would not apply in
case of bad faith or conflict of interests
Contract - accurate answers-agreement between two or more parties that is
legally enforceable in the event of a breach
Elements of a Contract - accurate answers-- Sufficient agreement
- Intention to create a contract
- Object
- Valid cause or consideration
Sufficient Agreement - accurate answers-- Meeting of the minds
- Offer + Acceptance = Agreement
- Objective Approach (UK + US)
- Subjective Approach (EU)
Meeting of the minds - accurate answers-Necessary to make the contract
enforceable. In some countries, this must refer at least to essential elements of
the contract
Objective approach - accurate answers-it suffices that one party reasonably
thinks that the other party has agreed
Subjective approach - accurate answers-obligations depend exclusively on the
will and intention of parties
, Object (may refer to future objects) - accurate answers-the contract must
refer to goods and services
Must be clearly determined as to its nature. If the quantity of the object that
will be subject to contract is not determined when entering into the contract,
it must be possible to determine the quantity into the future.
Goods - accurate answers-it must be possible to contract with such goods.
certain goods cannot be subject to valid contracts (i.e. illegal goods or goods of
public domain)
Services - accurate answers-Provision of services must be consistent with law
and customs
Cause - accurate answers-objective or subjective reason to enter into the
contract (relationship with illegality)
Consideration - accurate answers-- Requirement of a counterpart (benefit or
harm) in the exchange of a promise: in the absence of a bargain an informal
promise will not be enforced
- Consideration needs to be of economic value and done in exchange for the
promise (requested) but need not be adequate (equivalent in value to the
promise)
Is it necessary to comply with specific forms for the contract to be valid? -
accurate answers-No.
- As an exception, certain contracts must be in writing, and certain others
must be additionally notarized (agreements relating to land)
- Even if not mandatory, written form / notarization is strongly advisable for
evidentiary purposes
How do contracts work in practice? - accurate answers-- Offeror makes initial
promise (offer)
- Oferee can reject, agree, or counter offer
