LSB 3213 Exam 2.docx

What are the sources of contract law? - correct answer Common Law & UCC What is the purpose/policy behind contract law? - correct answer To assure the parties to private agreements that the promises they make will be enforceable What is the objective theory of contracts? - correct answer This looks at the circumstances that determine the intent of the parties. What are two defenses to the enforceability of a contract? - correct answer The parties must both voluntarily consent to a form, a contract, or the contact must be in writing to be enforceable. What is a bilateral contract? - correct answer Offeree must only promise to perform (a promise for a promise) What is an unilateral contract? - correct answer Offeree can accept the offer only by completing the performance (a promise for an act) What does the law permit someone to do to prevent an unfair result? - correct answer If the party substantially performs the act, then the offer cannot be revoked. What is a formal contract? - correct answer A contract that requires a special form or method in order to be enforceable. What is an informal contract? - correct answer A contract that does NOT require a specified form or method of formation in order to be enforceable. What is an express contract? - correct answer The terms of the agreement are explicitly stated, whether it is oral or it is in writing. What is an implied (in fact) contract? - correct answer Conduct creates and defines the terms of the contract. What is the executed degree of contract performance - correct answer A contract has been fully performed by both (or all) parties. What is the executory degree of contract performance? - correct answer A contract that has NOT been fully performed by one or more parties. What if a contract has other defenses that prevent it from being enforceable? - correct answer An otherwise valid contract that is rendered unenforceable by some statute or law. How do courts interpret contracts? - correct answer A court will enforce a contract according to its obvious terms. What is required for the parties to have an agreement? - correct answer Offer and acceptance. What happens once the parties reach an agreement? - correct answer If the other elements of a contract are present, a valid contract is formed. What should a business person do before agreeing to settle? - correct answer He/she should determine and negotiate the specific terms of a settlement before telling the court a case has settled. What's an exception to the general rule? - correct answer An offer can require specific terms to make the contract definite. What is an option contract? - correct answer A type of irrevocable offer that is held open for a specified period of time in return of consideration. What about offers made to the general public - how can these be properly revoked? - correct answer In the manner in which it was originally communicated. What is a counteroffer? - correct answer This is where a party rejects the original offer and simultaneously makes a new offer. What is common law? - correct answer Any change in terms automatically terminates the offer and substitutes the counteroffer. What is a lapse by time? - correct answer An offer terminates by law when the period of time specified in the offer has passed. What is unequivocal acceptance? - correct answer The acceptance cannot impose new conditions on or change the terms of the original offer. When is it required to communicate an acceptance of the offer? - correct answer The offeree has to notify the offeror of acceptance for a bilateral contract (promise for a promise)