BUL 4421 Final Exam | FAU Gendler Business Law Study Guide & Practice
Contract - (answer)A promise or set of promises for the breach of which the law gives a remedy or the
performance of which the law in some way recognizes a duty.
Agreement - (answer)Consists of an offer by one party, called the offeror, to enter into a contract and an
acceptance of the terms of the offer by the other party, called the offeree.
Consideration - (answer)The bargained-for exchange; what each party gets in exchange for his or her
promise under a contract.
What a legal entity receives in return for performing a contract obligation.
Contractual Capacity - (answer)The legal ability to enter into a binding agreement.
Who does not have Contractual Capacity? - (answer)Those under the age of majority, people suffering
from a mental illness, and sufficiently intoxicated persons
Objective Theory of Contracts - (answer)We base the existence of a contract on the parties' outward
manifestations of intent and we base its interpretation on how a reasonable person would interpret it.
Subjective intent is not relevant.
Bilateral Contract - (answer)A promise in exchange for a promise. As soon as the promises exchanged, a
contract is formed and the parties' legal obligations arise.
Unilateral Contract - (answer)Requires performance in order to form a contract (i.e. a promise + a
requested action). The offeror wants the offeree to do something, not promise to do something.
Express Contract - (answer)The terms of the contract are all clearly set forth in either written or spoken
words.
Implied Contract - (answer)Arise not from words but from the conduct of the parties.
, BUL 4421 Final Exam | FAU Gendler Business Law Study Guide & Practice
Void Contract - (answer)Not a contract at all. Either its object is illegal or it has some defect so serious it
is not a contract.
Voidable Contract - (answer)One or both of the parties had the ability to either withdraw from the
contract or enforce it.
Option Contract - (answer)The offeree gives the offeror consideration in exchange for holding the offer
open for a specified period of time.
Revocation - (answer)The offeror can revoke the offer at any time unless the offeree entered into an
option contract with the offeror. Revocation is effective when the offeree receives it.
Rejection - (answer)Another way to terminate the offer, effectuated by the offeree. Regardless of how
long the offer was stated to be open, once the offeree rejects it, it is termintated.
Counteroffer - (answer)an offer made by an offeree to his offeror relating to the same matter as the
original offer and proposing a substituted bargain differing from that proposed by the original offer.
Terminates the original offer.
Destruction or subsequent Illegality of the subject matter - (answer)If the subject matter of the offer is
destroyed or becomes illegal, the offer immediately terminates.
Lapse of Time - (answer)If the offer states it will be held open for only a certain time, it terminates when
that time expires.
In the absence of such a time condition, the offer will expire after the lapse of a reasonable amount of
time.
Authorized Means of Acceptance - (answer)If the offer specifies that acceptance must be communicated
by a specific mode, that mode is the only means for accepting the offer. If no mode of communication is
specified in the offer, any reasonable means of acceptance is valid. For a unilateral contract only
performance by the offeree constitutes a valid acceptance.
Contract - (answer)A promise or set of promises for the breach of which the law gives a remedy or the
performance of which the law in some way recognizes a duty.
Agreement - (answer)Consists of an offer by one party, called the offeror, to enter into a contract and an
acceptance of the terms of the offer by the other party, called the offeree.
Consideration - (answer)The bargained-for exchange; what each party gets in exchange for his or her
promise under a contract.
What a legal entity receives in return for performing a contract obligation.
Contractual Capacity - (answer)The legal ability to enter into a binding agreement.
Who does not have Contractual Capacity? - (answer)Those under the age of majority, people suffering
from a mental illness, and sufficiently intoxicated persons
Objective Theory of Contracts - (answer)We base the existence of a contract on the parties' outward
manifestations of intent and we base its interpretation on how a reasonable person would interpret it.
Subjective intent is not relevant.
Bilateral Contract - (answer)A promise in exchange for a promise. As soon as the promises exchanged, a
contract is formed and the parties' legal obligations arise.
Unilateral Contract - (answer)Requires performance in order to form a contract (i.e. a promise + a
requested action). The offeror wants the offeree to do something, not promise to do something.
Express Contract - (answer)The terms of the contract are all clearly set forth in either written or spoken
words.
Implied Contract - (answer)Arise not from words but from the conduct of the parties.
, BUL 4421 Final Exam | FAU Gendler Business Law Study Guide & Practice
Void Contract - (answer)Not a contract at all. Either its object is illegal or it has some defect so serious it
is not a contract.
Voidable Contract - (answer)One or both of the parties had the ability to either withdraw from the
contract or enforce it.
Option Contract - (answer)The offeree gives the offeror consideration in exchange for holding the offer
open for a specified period of time.
Revocation - (answer)The offeror can revoke the offer at any time unless the offeree entered into an
option contract with the offeror. Revocation is effective when the offeree receives it.
Rejection - (answer)Another way to terminate the offer, effectuated by the offeree. Regardless of how
long the offer was stated to be open, once the offeree rejects it, it is termintated.
Counteroffer - (answer)an offer made by an offeree to his offeror relating to the same matter as the
original offer and proposing a substituted bargain differing from that proposed by the original offer.
Terminates the original offer.
Destruction or subsequent Illegality of the subject matter - (answer)If the subject matter of the offer is
destroyed or becomes illegal, the offer immediately terminates.
Lapse of Time - (answer)If the offer states it will be held open for only a certain time, it terminates when
that time expires.
In the absence of such a time condition, the offer will expire after the lapse of a reasonable amount of
time.
Authorized Means of Acceptance - (answer)If the offer specifies that acceptance must be communicated
by a specific mode, that mode is the only means for accepting the offer. If no mode of communication is
specified in the offer, any reasonable means of acceptance is valid. For a unilateral contract only
performance by the offeree constitutes a valid acceptance.
