1
BUSINESS LAW EXAM 2 STUDY GUIDE
WITH EXACT SOLUTIONS |
GUARANTEED PASS
What is a contract? - Correct Answer-An agreement between
two or more persons that is enforceable
Characteristics of an enforceable contract - Correct Answer--
Agreement (Offer and Acceptance)
- Consideration
- Legality
- Capacity
- Consent
- Writing
Defenses to Contract formation - Correct Answer-legality,
capacity, lack of mutual assent, form of contract (these are
elements of an enforceable contract, but they only seem to
come up when one side is trying to get out of a contract)
Seven key characteristics: Offer - Correct Answer-All
contracts begin when a person or a company proposes a deal.
It might involve buying something, selling something, doing a
job, or anything else. But only proposals made in certain ways
amount to a legally recognized offer.
Seven key characteristics: Acceptance - Correct Answer-Once
a party receives an offer, he must respond in a certain way.
Seven key characteristics: Consideration - Correct Answer-
There has to be bargaining that leads to an exchange between
, 2
the parties. Contracts cannot be a one-way street; both sides
must receive some measurable benefit.
-Special emphasis on the word "exchange"
Seven key characteristics: Legality - Correct Answer-The
contract must be for a lawful purpose. Courts will not enforce
agreements to sell cocaine, for example.
Seven key characteristics: Capacity - Correct Answer-The
parties must be of sound mind
Seven key characteristics: Consent - Correct Answer-Certain
kinds of trickery and force can prevent the formation of a
contract
Seven key characteristics: Writing - Correct Answer-While
verbal agreements are often contracts, some types of contracts
must be in writing to be enforceable
Offeror - Correct Answer-person proffering the offer
Offeree - Correct Answer-Person to whom the offer is
presented
Three questions to ask about a contract - Correct Answer--Is it
certain that the defendant promised to do something?
-If she did promise, is it fair to maker her honor her word?
-If she did not promise, are there unusual reasons to hold her
liable anyway?
Noncompetition agreement - Correct Answer--A contract in
which one party agrees not to compete with another
-2 doctors w/ practices w/in ten miles suit
, 3
Types of Contracts - Correct Answer-bilateral, unilateral,
express, implied, executory, executed
Bilateral contract - Correct Answer--A promise for a promise
-Each party makes a promise to do something
"I will do x, you will do y"
Unilateral Contract - Correct Answer--one party makes a
promise, that the other may only accept through performance
-less common
-"I'll give $100 to anyone who finds my dog"
Express Contract - Correct Answer-The parties to a contract
explicitly state all of the important terms to the contract
Implied Contract - Correct Answer-Words and/or conduct of
the parties indicate that the parties intend to create an
enforceable contract
Executory Contract - Correct Answer--An agreement where
one or more of the parties has not fulfilled their obligations
under the contract
-Contract made for a movie but movie hasn't been made yet
Executed Contract - Correct Answer--An agreement where
both parties have fulfilled all of their requirements under the
contract
-When the contract is "finished"
Valid Contract - Correct Answer--All necessary elements are
present making the contract binding and enforceable.
-No problems in any of the basic 7 areas
, 4
-Will be enforced by the court
Enforceable contract - Correct Answer-a valid contract that
can be enforced because there are no preexisting legal
defenses.
Unenforceable contract - Correct Answer--A contract exists,
but it cannot be enforced because of a legal defense
-Example: if K is not written and it should be
Voidable Contract - Correct Answer--An agreement that may
be terminated by one of the parties
-i.e. when a contract is formed under duress or one of the
parties commits fraud
-i.e. offeror says Spielburg will be directing a movie when he
actually is not. Other party has the OPTION to void the
contract. Can stay in the contract if they want to though
Void agreement - Correct Answer--A contract that neither
party can enforce, because the bargain is illegal or one of the
parties had no legal authority to make it
Sources of contract law - Correct Answer--Common law
-Restatement 2nd of contracts
-Uniform commercial code (UCC)
Common law (source) - Correct Answer--State specific case
law regarding contracts
-Pertains to all contracts EXCEPT for the sale of goods
Restatement 2nd of Contracts (source) - Correct Answer-not
directly binding in any state but is persuasive
BUSINESS LAW EXAM 2 STUDY GUIDE
WITH EXACT SOLUTIONS |
GUARANTEED PASS
What is a contract? - Correct Answer-An agreement between
two or more persons that is enforceable
Characteristics of an enforceable contract - Correct Answer--
Agreement (Offer and Acceptance)
- Consideration
- Legality
- Capacity
- Consent
- Writing
Defenses to Contract formation - Correct Answer-legality,
capacity, lack of mutual assent, form of contract (these are
elements of an enforceable contract, but they only seem to
come up when one side is trying to get out of a contract)
Seven key characteristics: Offer - Correct Answer-All
contracts begin when a person or a company proposes a deal.
It might involve buying something, selling something, doing a
job, or anything else. But only proposals made in certain ways
amount to a legally recognized offer.
Seven key characteristics: Acceptance - Correct Answer-Once
a party receives an offer, he must respond in a certain way.
Seven key characteristics: Consideration - Correct Answer-
There has to be bargaining that leads to an exchange between
, 2
the parties. Contracts cannot be a one-way street; both sides
must receive some measurable benefit.
-Special emphasis on the word "exchange"
Seven key characteristics: Legality - Correct Answer-The
contract must be for a lawful purpose. Courts will not enforce
agreements to sell cocaine, for example.
Seven key characteristics: Capacity - Correct Answer-The
parties must be of sound mind
Seven key characteristics: Consent - Correct Answer-Certain
kinds of trickery and force can prevent the formation of a
contract
Seven key characteristics: Writing - Correct Answer-While
verbal agreements are often contracts, some types of contracts
must be in writing to be enforceable
Offeror - Correct Answer-person proffering the offer
Offeree - Correct Answer-Person to whom the offer is
presented
Three questions to ask about a contract - Correct Answer--Is it
certain that the defendant promised to do something?
-If she did promise, is it fair to maker her honor her word?
-If she did not promise, are there unusual reasons to hold her
liable anyway?
Noncompetition agreement - Correct Answer--A contract in
which one party agrees not to compete with another
-2 doctors w/ practices w/in ten miles suit
, 3
Types of Contracts - Correct Answer-bilateral, unilateral,
express, implied, executory, executed
Bilateral contract - Correct Answer--A promise for a promise
-Each party makes a promise to do something
"I will do x, you will do y"
Unilateral Contract - Correct Answer--one party makes a
promise, that the other may only accept through performance
-less common
-"I'll give $100 to anyone who finds my dog"
Express Contract - Correct Answer-The parties to a contract
explicitly state all of the important terms to the contract
Implied Contract - Correct Answer-Words and/or conduct of
the parties indicate that the parties intend to create an
enforceable contract
Executory Contract - Correct Answer--An agreement where
one or more of the parties has not fulfilled their obligations
under the contract
-Contract made for a movie but movie hasn't been made yet
Executed Contract - Correct Answer--An agreement where
both parties have fulfilled all of their requirements under the
contract
-When the contract is "finished"
Valid Contract - Correct Answer--All necessary elements are
present making the contract binding and enforceable.
-No problems in any of the basic 7 areas
, 4
-Will be enforced by the court
Enforceable contract - Correct Answer-a valid contract that
can be enforced because there are no preexisting legal
defenses.
Unenforceable contract - Correct Answer--A contract exists,
but it cannot be enforced because of a legal defense
-Example: if K is not written and it should be
Voidable Contract - Correct Answer--An agreement that may
be terminated by one of the parties
-i.e. when a contract is formed under duress or one of the
parties commits fraud
-i.e. offeror says Spielburg will be directing a movie when he
actually is not. Other party has the OPTION to void the
contract. Can stay in the contract if they want to though
Void agreement - Correct Answer--A contract that neither
party can enforce, because the bargain is illegal or one of the
parties had no legal authority to make it
Sources of contract law - Correct Answer--Common law
-Restatement 2nd of contracts
-Uniform commercial code (UCC)
Common law (source) - Correct Answer--State specific case
law regarding contracts
-Pertains to all contracts EXCEPT for the sale of goods
Restatement 2nd of Contracts (source) - Correct Answer-not
directly binding in any state but is persuasive
