LSB 3213 Exam 2,.docx

What are the sources of contract law? - correct answer 1. common law 2. UCC (Uniform Commercial Code) Common law governs all contracts except when it has been modified or replaced by statutory law, such as UCC, or by administrative agency regulations. What's the purpose of policy behind contract law? - correct answer To assure the parties to private agreements that the promise they make will be enforceable. What is a promise? - correct answer A person's declaration that he/she will perform (do) or refrain from (not do) performing some present or future act. What's a contract? - correct answer From Black Law's Dictionary: An agreement between two or more persons which creates an obligation to do or not to do a particular thing. What is the objective theory of contracts? - correct answer This looks at the circumstances that determine the intent of the parties. You look at the circumstances to see if two persons formed a contract. Objective facts in the objective theory of contracts may include: - correct answer 1. What a party said when entering into the contract. 2. How the party acted or appeared. 3. The circumstances surrounding the transaction. What are the 4 requirements for a valid contract? - correct answer 1. Agreement (an offer and an acceptance) 2. Consideration (legally sufficient and bargained-for, usually $$$) 3. Contractual Capacity (all parties must be competent) 4. Legal (purpose of contract must be legal at time of execution.) A document might not be a contract if it fails along ANY of these requirements. What does Oklahoma require for a contract? - correct answer It is essential to the existence of a contract that there should be: 1. parties capable of contracting 2. their consent 3. lawful object 4. sufficient cause or consideration What are two defenses to the enforceability of a contract? - correct answer 1. parties must both voluntarily consent to form a contract or 2. the contract must be in writing to be enforceable. Examples of defenses to the enforceability of a contract? - correct answer 1. duress- threaten or coerce someone to sign a contract against their will 2. land- contracts for the sale of land must be in writing. Contract formation: - correct answer 1. Bilateral and Unilateral 2. Formal and Informal 3. Express and Implied Bilateral contracts: - correct answer If the offeree can accept simply by promising to perform, the contract is bilateral. "promise for a promise." No performance, such as a payment of funds or delivery of goods, need take place for a bilateral contract to be formed. Contract comes into existence at the moment the promises are exchanged. Unilateral contracts: - correct answer If the offer is phrased so that the offeree can accept the offer only by completing the contract performance, the contract is unilateral. "promise for an act." Contract is formed not at the moment when the promises are exchanged but at the moment when the contract is performed. What's the potential problem with unilateral contracts? - correct answer If the party substantially performs the act, then the offer cannot be revoked. Formal contracts - correct answer contracts that require a special form or method of creation (formation) to be enforceable. Informal contracts - correct answer "simple contracts" include all other contracts. no special form is required (except for certain types of contracts that must be in writing), as the contracts are usually based on their substance rather than their form. Express contracts - correct answer the terms of the agreement are explicitly stated, whether it is oral or in writing. Implied contracts - correct answer contract that is implied from the conduct of the parties. Conduct that creates and defines the terms in a contract. Requirements of implied contracts: - correct answer 1. plaintiff furnished some service or property. 2. plaintiff expected to be paid for that service or property, and the defendant knew or should have known that payment was expected. 3. the defendant had a chance to reject the services or property and did not. A contract may be a mixture of - correct answer an express contract and implied contract. Contract performance - correct answer 1. executed 2. executory Executed contract - correct answer a contract that has been fully performed on both sides