LSB 3213 - Exam #2.docx

Elements of a contract - correct answer 1) Offer and acceptance (agreement) 2) Consideration (something of value) 3) Capacity (ability to enter into agreement) 4) Legal (legal under law) Formal Contract - correct answer Contracts that require a special form or method of creation to be enforceable (checks, drafts, promissory notes, etc) Informal Contract (simple contracts) - correct answer No special form required. (trades.. Craigslist - i'll give you subwoofer for drums. bartering) Promisor - correct answer Person making promise (guy willing to pay for someone to pay lawn) Promisee - correct answer Person to whom the promise is made (person going to receive pay for mowing lawn) 3 elements needed for offer to be effective - correct answer 1) Serious intent 2) Reasonably certain terms 3) Communication to offeree Contract - correct answer A promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty When can a offer be terminated? What terminates an offer? - correct answer Revocation - offeror's act of withdrawing (revoking) before the offer accepts Rejection - done by words or conduct will terminate the entire offer Counteroffer - is a rejection of the original offer and simultaneous making of a new offer (old car example - terminated deal) Elements of a valid consideration - correct answer Legally sufficient value: 1) a promise to do something 2) the performance of an action 3) the refraining from an action Bargained for exchange 1) distinguished contracts from gifts Mailbox Rule (deposited acceptance rule) - correct answer an acceptance of an offer becomes effective on dispatch (when offer is put in mailbox, the offer is accepted) Can silence operated as an agreement to a contract? - correct answer Yes Online "I agree" button is an acceptance? - correct answer Yes Accord and satisfaction - correct answer Debtor offers to pay, a creditor accepts and a lesser amount than the creditor originally claimed was owed. Accord = Agreement Satisfaction = performance (payment) Contracts contrary to public policy - correct answer Non-enforceable contracts because of negative impact on society -Covenants not to compete and the sale of an ongoing business (covenant when a seller of a store agrees not to open new store in same geographic area) -Restraint of Trade (blacksmith example from class) Illegal Contract - correct answer Illegal contracts are void - contracted deemed never to have existed and courts will not aid either party. BOTH parties are equally at fault (in pari delicto) Fraudulent Misrepresentation - correct answer -Lying -Intent to deceive/mislead -reliance on misrepresentation -damage and