LGLS 3610: Final
Class 7: Contracts and Franchising - Answer-
LLC (Limited Liability Company) - Answer-A hybrid form of business enterprise that offers the limited
liability of a corporation and the tax advantages of a partnership.
The advantages of being and LLC - Answer--Members of L L Cs are shielded from personal liability in
most situations.
-Another advantage of the L L C is its flexibility in regard to taxation
Management of an L L C - Answer-L L C members have two options for managing the firm:
1. A "manager-managed" L L C
2. A "member-managed" L L C
•unless the articles of organization specify otherwise, an L L C is assumed to be
member managed.
Franchise - Answer-Any arrangement in which the owner of a trademark, trade name, or copyright
licenses another to use that trademark, trade name, or copyright in the selling of goods or services
Franchisee - Answer-One receiving a license to use another's (the franchisor's) trademark, trade name,
or copyright in the sale of goods and services
Franchisor - Answer-One licensing another (the franchisee) to use the owner's trademark, trade name,
or copyright in the selling of goods and services
,Types of Franchises - Answer-1.Distributorships
2.Chain-style business operations
3.Manufacturing arrangements
Contract - Answer-An agreement that can be enforced in court; formed
by two parties, each of whom agrees to perform or to refrain from performing some act now or in the
future
Offerer - Answer-A person who makes an offer.
Offeree - Answer-A person to whom an offer is made.
Bilateral Contract - Answer-A promise made in exchange for another promise
Unilateral Contract - Answer-promise in exchange for an act
Formal Contract - Answer-An agreement that by law requires a specific form for its validity.
informal contract - Answer-simple oral or written contract
Express Contract - Answer-An agreement with all the important terms explicitly stated
Implied Contract - Answer-a contract that comes about from the actions of the parties
Executed Contract - Answer-A contract that has been completely performed by both parties.
, executory contract - Answer-A contract that has not yet been fully performed.
Voidable Contract - Answer-An agreement that may be terminated by one of the parties
Void Contract - Answer-A contract having no legal force or binding effect.
Requirements of a Valid Contract - Answer-1. Agreement
2. Consideration
3. Contractual Capacity
4. Legality
Element 1: Agreement - Answer-A meeting of two or more minds in regard to the
terms of a contract.
• Agreement is usually broken down into two events:
1. An OFFER by one party to form a contract
2. An ACCEPTANCE of the offer by the person to whom the offer is made
Offer - Answer-A promise or commitment to perform or refrain from performing some specified act in
the future.
Acceptance - Answer-The offeree's notification to the offeror that the offeree agrees to be bound by the
terms of the offeror's proposal.
Element 2: Consideration - Answer-Generally, the value given in return for a promise or a performance
Agreements That Lack Consideration - Answer-1. preexisting duty
Class 7: Contracts and Franchising - Answer-
LLC (Limited Liability Company) - Answer-A hybrid form of business enterprise that offers the limited
liability of a corporation and the tax advantages of a partnership.
The advantages of being and LLC - Answer--Members of L L Cs are shielded from personal liability in
most situations.
-Another advantage of the L L C is its flexibility in regard to taxation
Management of an L L C - Answer-L L C members have two options for managing the firm:
1. A "manager-managed" L L C
2. A "member-managed" L L C
•unless the articles of organization specify otherwise, an L L C is assumed to be
member managed.
Franchise - Answer-Any arrangement in which the owner of a trademark, trade name, or copyright
licenses another to use that trademark, trade name, or copyright in the selling of goods or services
Franchisee - Answer-One receiving a license to use another's (the franchisor's) trademark, trade name,
or copyright in the sale of goods and services
Franchisor - Answer-One licensing another (the franchisee) to use the owner's trademark, trade name,
or copyright in the selling of goods and services
,Types of Franchises - Answer-1.Distributorships
2.Chain-style business operations
3.Manufacturing arrangements
Contract - Answer-An agreement that can be enforced in court; formed
by two parties, each of whom agrees to perform or to refrain from performing some act now or in the
future
Offerer - Answer-A person who makes an offer.
Offeree - Answer-A person to whom an offer is made.
Bilateral Contract - Answer-A promise made in exchange for another promise
Unilateral Contract - Answer-promise in exchange for an act
Formal Contract - Answer-An agreement that by law requires a specific form for its validity.
informal contract - Answer-simple oral or written contract
Express Contract - Answer-An agreement with all the important terms explicitly stated
Implied Contract - Answer-a contract that comes about from the actions of the parties
Executed Contract - Answer-A contract that has been completely performed by both parties.
, executory contract - Answer-A contract that has not yet been fully performed.
Voidable Contract - Answer-An agreement that may be terminated by one of the parties
Void Contract - Answer-A contract having no legal force or binding effect.
Requirements of a Valid Contract - Answer-1. Agreement
2. Consideration
3. Contractual Capacity
4. Legality
Element 1: Agreement - Answer-A meeting of two or more minds in regard to the
terms of a contract.
• Agreement is usually broken down into two events:
1. An OFFER by one party to form a contract
2. An ACCEPTANCE of the offer by the person to whom the offer is made
Offer - Answer-A promise or commitment to perform or refrain from performing some specified act in
the future.
Acceptance - Answer-The offeree's notification to the offeror that the offeree agrees to be bound by the
terms of the offeror's proposal.
Element 2: Consideration - Answer-Generally, the value given in return for a promise or a performance
Agreements That Lack Consideration - Answer-1. preexisting duty
