AIC 301 Study Guide Questions and Correct
Answers
contract
a legally enforceable agreement between 2 or more parties
agreements
not all __________________ are legally binding contracts
1) agreement
2) capacity
3) mutual assent
4) consideration
5) legal purpose
6) form required by law
6 elements of a legally binding contract
promisor
party making a promise
promisee
party to whom a promise is made
privity of contract
the relationship that exists between 2 parties to a contract
privity
,a party cannot sue for breach of contract without being in ______________ of contract with
the other party
third-party beneficiary
a person who is not a party to a contract but who benefits from it and has a legal right to
enforce the contract if it is breached by either of the contracting parties
breach of contract
the failure without legal excuse, to fulfill a contractual promise
agreement
must include an offer and its acceptance
offeror
party making the offer
offeree
party who makes a promise or acts in return for something offered by another party
definite
offers must include _____________ terms and be communicated to and received by the
offeree
counteroffer
if the offeree requests changes to conditions of the offer
mentally competent
all parties must be ______________ _________________ for a contract to be legally binding
,mutual assent
the act of 2 or more parties deliberately negotiating all terms to achieve consensus
consideration
something of value that is given in return for a promise
legal purpose
a contract must serve a legal purpose to be legally enforceable
form required by law
contracts must be in a proper, legally stipulated form to be binding
1) sale of real estate
2) agreements that can't be performed within 1 year
3) transactions > $500
4) agreements to pay a debt owed
4 examples of contracts that have to be in writing
bilateral contract
a contract where each party promises to perform an act in exchange for an act by the other
party
unilateral contract
a contract where one party promises to pay for the act of the other party
executed contract
contract where nothing more is required of either party to be fulfilled
executory contract
, a contract that hasn't been fully executed
express contract
contract where terms and intentions are clearly stated
implied contract
contract where terms and intentions are indicated by the actions of the parties to the contract
and the surrounding circumstances
implied-in-fact contracts
parties presumably intended, either by tacit understanding or by the assumption that it already
existed
implied-in-law contracts
an obligation that is not an actual contract but that is imposed by law because of the parties'
conduct or some special relationship between them or because one of them would otherwise
be unjustly enriched
implied-in-law contracts
sometimes called "quasi-contracts"
voidable contract
a contract that one of the parties can reject (avoid) based on some circumstances regarding its
execution
behavior
the _______________ of one of the contracting parties can make a contract voidable
void contract
Answers
contract
a legally enforceable agreement between 2 or more parties
agreements
not all __________________ are legally binding contracts
1) agreement
2) capacity
3) mutual assent
4) consideration
5) legal purpose
6) form required by law
6 elements of a legally binding contract
promisor
party making a promise
promisee
party to whom a promise is made
privity of contract
the relationship that exists between 2 parties to a contract
privity
,a party cannot sue for breach of contract without being in ______________ of contract with
the other party
third-party beneficiary
a person who is not a party to a contract but who benefits from it and has a legal right to
enforce the contract if it is breached by either of the contracting parties
breach of contract
the failure without legal excuse, to fulfill a contractual promise
agreement
must include an offer and its acceptance
offeror
party making the offer
offeree
party who makes a promise or acts in return for something offered by another party
definite
offers must include _____________ terms and be communicated to and received by the
offeree
counteroffer
if the offeree requests changes to conditions of the offer
mentally competent
all parties must be ______________ _________________ for a contract to be legally binding
,mutual assent
the act of 2 or more parties deliberately negotiating all terms to achieve consensus
consideration
something of value that is given in return for a promise
legal purpose
a contract must serve a legal purpose to be legally enforceable
form required by law
contracts must be in a proper, legally stipulated form to be binding
1) sale of real estate
2) agreements that can't be performed within 1 year
3) transactions > $500
4) agreements to pay a debt owed
4 examples of contracts that have to be in writing
bilateral contract
a contract where each party promises to perform an act in exchange for an act by the other
party
unilateral contract
a contract where one party promises to pay for the act of the other party
executed contract
contract where nothing more is required of either party to be fulfilled
executory contract
, a contract that hasn't been fully executed
express contract
contract where terms and intentions are clearly stated
implied contract
contract where terms and intentions are indicated by the actions of the parties to the contract
and the surrounding circumstances
implied-in-fact contracts
parties presumably intended, either by tacit understanding or by the assumption that it already
existed
implied-in-law contracts
an obligation that is not an actual contract but that is imposed by law because of the parties'
conduct or some special relationship between them or because one of them would otherwise
be unjustly enriched
implied-in-law contracts
sometimes called "quasi-contracts"
voidable contract
a contract that one of the parties can reject (avoid) based on some circumstances regarding its
execution
behavior
the _______________ of one of the contracting parties can make a contract voidable
void contract
