BULE 303 Final Exam Chapter
10,11,14,15,16,17,18 questions and
and answers
What are the four basic elements necessary to the formation of a valid contract?
1. Agreement. An agreement to form a contract includes an offer and an acceptance. One party
must offer to enter into a legal agreement, and another party must accept the terms of the
offer.
2. Consideration. Any promises made by the parties to the contract must be supported by
legally sufficient and bargained-for consideration (something of value received or promised,
such as money, to convince a person to make a deal).
3. Contractual capacity. Both parties entering into the contract must have the contractual
capacity to do so. The law must recognize them as possessing characteristics that qualify them
as competent parties.
4. Legality. The contract’s purpose must be to accomplish some goal that is legal and not against
public policy
What are the elements necessary for an effective acceptance?
a. Only the person receiving the offer (or their agent) can accept it.
b. The acceptance must be clear and definite.
,c. For a one-sided offer (unilateral), acceptance happens when the requested action is fully
completed, usually without needing to communicate.
d. For a two-sided offer (bilateral), acceptance can be communicated in any allowed way and is
effective as soon as it's sent
What is required for consideration to be legally sufficient?
Often, consideration is broken down into two parts: (1) something of legally sufficient value
must be given in exchange for the promise, and (2) there must be a bargained-for exchange.
Does a minor have the capacity to enter into a contract?
The general rule is that a minor can enter into any contract that an adult can, except contracts
prohibited by law for minors (for instance, the purchase of tobacco or alcoholic beverages). A
contract entered into by a minor, however, is voidable at the option of that minor, subject to
certain exceptions
What is the difference between an employee and an independent contractor?
An employee is someone who works for an employer in exchange for wages or a salary. The
employer has the right to control what the employee does and how they do it. Employees are
typically eligible for benefits such as health insurance, paid time off, and retirement plans.
, Independent Contractor One who works for, and receives payment from, an employer but
whose working conditions and methods are not controlled by the employer. An independent
contractor is not an employee but may be an agent.
Under what circumstances will courts enforce a covenant not to compete?
Noncompete Agreements & Restrictive Covenants:
Enforceable if reasonable and tied to the sale of a business.
Must have fair limits on time and geography (shorter online due to global impact).
Protects a legitimate business interest without going overboard.
State Laws Vary:
Texas: Employee must get a benefit for it to be enforceable.
California: Noncompetes are not enforceable at all.
Courts Can Adjust:
Unreasonable terms may be modified to make them fair.
10,11,14,15,16,17,18 questions and
and answers
What are the four basic elements necessary to the formation of a valid contract?
1. Agreement. An agreement to form a contract includes an offer and an acceptance. One party
must offer to enter into a legal agreement, and another party must accept the terms of the
offer.
2. Consideration. Any promises made by the parties to the contract must be supported by
legally sufficient and bargained-for consideration (something of value received or promised,
such as money, to convince a person to make a deal).
3. Contractual capacity. Both parties entering into the contract must have the contractual
capacity to do so. The law must recognize them as possessing characteristics that qualify them
as competent parties.
4. Legality. The contract’s purpose must be to accomplish some goal that is legal and not against
public policy
What are the elements necessary for an effective acceptance?
a. Only the person receiving the offer (or their agent) can accept it.
b. The acceptance must be clear and definite.
,c. For a one-sided offer (unilateral), acceptance happens when the requested action is fully
completed, usually without needing to communicate.
d. For a two-sided offer (bilateral), acceptance can be communicated in any allowed way and is
effective as soon as it's sent
What is required for consideration to be legally sufficient?
Often, consideration is broken down into two parts: (1) something of legally sufficient value
must be given in exchange for the promise, and (2) there must be a bargained-for exchange.
Does a minor have the capacity to enter into a contract?
The general rule is that a minor can enter into any contract that an adult can, except contracts
prohibited by law for minors (for instance, the purchase of tobacco or alcoholic beverages). A
contract entered into by a minor, however, is voidable at the option of that minor, subject to
certain exceptions
What is the difference between an employee and an independent contractor?
An employee is someone who works for an employer in exchange for wages or a salary. The
employer has the right to control what the employee does and how they do it. Employees are
typically eligible for benefits such as health insurance, paid time off, and retirement plans.
, Independent Contractor One who works for, and receives payment from, an employer but
whose working conditions and methods are not controlled by the employer. An independent
contractor is not an employee but may be an agent.
Under what circumstances will courts enforce a covenant not to compete?
Noncompete Agreements & Restrictive Covenants:
Enforceable if reasonable and tied to the sale of a business.
Must have fair limits on time and geography (shorter online due to global impact).
Protects a legitimate business interest without going overboard.
State Laws Vary:
Texas: Employee must get a benefit for it to be enforceable.
California: Noncompetes are not enforceable at all.
Courts Can Adjust:
Unreasonable terms may be modified to make them fair.
