UNL BLAW 371 Exam 4 Steve Russell ch.10&12 UPDATED ACTUAL QUESTIONS
AND CORRECT ANSWERS
Freedom of Contract means responsibilities to those who agree to create binding relationships
Restatement of Contracts (2d) The manifestation of willingness to enter into a bargain, so made as to justify
another person in understanding that his assent to the bargain is invited and will
conclude it.
Uniform Commercial Code (UCC) covers contracts for sale of goods, many countries rely on Code Law only for
their basic legal framework
Lex Mercatoria the law of merchants that originated in English Courts
Binding Promise contractual, enforceable, must meet the requirements of a contract
Purpose of contract law Provide a legal mechanism for dealing with people
non-binding promise non-contractual, if a party fails to perform a non-binding promise, contract law
does not provide a remedy.
Express Contract Direct statement by the parties of the promises made,
May be oral or written,
Key terms expressly agreed upon by the parties.
Implied Contract Actions and circumstances infer and define the terms of the contract, May be
words, conduct, gestures, Contracts are implied at law.
Elements of a Valid Contract 1. An Agreement, through
Offer and Acceptance
2. Consideration
3. Contractual Capacity
4. Legality
5. Genuine Consent
Meeting of Minds about the contract
6. Writing (Can sometimes be oral)
If necessary under Statute of Frauds
Intent Reasonable Person believes the Offer is Real
Preliminary Negotiations A request or invitation to negotiate is not an offer. It only expresses a willingness
to discuss the possibility of entering into a contract
, Ads Most advertisements are regarded as invitations for others to submit an offer to
buy
Communication of Offer and Acceptance Define Terms and Conditions, as well as communicate them to the other party.
Termination or Withdrawal of Offer 3 Ways
Revocation
Rejection
By Operation of Law
Option Contracts Option contract is a separate offer and requires additional consideration. (aka
Monetary)
Counter Offer If Conditions are added or removed from the offer
Termination as a Matter of Law intervening illegality, destruction of subject matter, death or insanity of offeror or
offeree
Bilateral Contracts 2 promises
A promise in exchange for a promise
Ex: I promise to pay you $250 to trim my trees; you promise to trim my trees.
If promise is broken, there may be responsibility if losses are incurred.
Unilateral Contracts Only 1 promise
A promise in exchange for a performance
Ex: I promise to pay you $250 to trim my trees; you say nothing but later trim
them.
Once performance has occurred, the other party's duty arises to fulfill his/her
promise.
Acceptance 1. Unconditional
Must be a mirror image (Acceptance equals the exact terms of the offer) of the
offer
If conditions are added, that creates a counteroffer
2. Unequivocal ( Direct Statement of assent to the offer)
3. Properly Communicated (
Consideration Something of value or something bargained for in exchange for a promise.
Keeps Contract from being a Gift
Promissory Estoppel Promisor is estopped (prevented) from denying a promise.
Capacity Refers to the legal ability to create a contract
Void Voidable and Valid Contracts If there is no capacity, the contract is void
If there is partial capacity, the contract is voidable - may disaffirm
AND CORRECT ANSWERS
Freedom of Contract means responsibilities to those who agree to create binding relationships
Restatement of Contracts (2d) The manifestation of willingness to enter into a bargain, so made as to justify
another person in understanding that his assent to the bargain is invited and will
conclude it.
Uniform Commercial Code (UCC) covers contracts for sale of goods, many countries rely on Code Law only for
their basic legal framework
Lex Mercatoria the law of merchants that originated in English Courts
Binding Promise contractual, enforceable, must meet the requirements of a contract
Purpose of contract law Provide a legal mechanism for dealing with people
non-binding promise non-contractual, if a party fails to perform a non-binding promise, contract law
does not provide a remedy.
Express Contract Direct statement by the parties of the promises made,
May be oral or written,
Key terms expressly agreed upon by the parties.
Implied Contract Actions and circumstances infer and define the terms of the contract, May be
words, conduct, gestures, Contracts are implied at law.
Elements of a Valid Contract 1. An Agreement, through
Offer and Acceptance
2. Consideration
3. Contractual Capacity
4. Legality
5. Genuine Consent
Meeting of Minds about the contract
6. Writing (Can sometimes be oral)
If necessary under Statute of Frauds
Intent Reasonable Person believes the Offer is Real
Preliminary Negotiations A request or invitation to negotiate is not an offer. It only expresses a willingness
to discuss the possibility of entering into a contract
, Ads Most advertisements are regarded as invitations for others to submit an offer to
buy
Communication of Offer and Acceptance Define Terms and Conditions, as well as communicate them to the other party.
Termination or Withdrawal of Offer 3 Ways
Revocation
Rejection
By Operation of Law
Option Contracts Option contract is a separate offer and requires additional consideration. (aka
Monetary)
Counter Offer If Conditions are added or removed from the offer
Termination as a Matter of Law intervening illegality, destruction of subject matter, death or insanity of offeror or
offeree
Bilateral Contracts 2 promises
A promise in exchange for a promise
Ex: I promise to pay you $250 to trim my trees; you promise to trim my trees.
If promise is broken, there may be responsibility if losses are incurred.
Unilateral Contracts Only 1 promise
A promise in exchange for a performance
Ex: I promise to pay you $250 to trim my trees; you say nothing but later trim
them.
Once performance has occurred, the other party's duty arises to fulfill his/her
promise.
Acceptance 1. Unconditional
Must be a mirror image (Acceptance equals the exact terms of the offer) of the
offer
If conditions are added, that creates a counteroffer
2. Unequivocal ( Direct Statement of assent to the offer)
3. Properly Communicated (
Consideration Something of value or something bargained for in exchange for a promise.
Keeps Contract from being a Gift
Promissory Estoppel Promisor is estopped (prevented) from denying a promise.
Capacity Refers to the legal ability to create a contract
Void Voidable and Valid Contracts If there is no capacity, the contract is void
If there is partial capacity, the contract is voidable - may disaffirm
