AIC 301 Study Guide
contract - Answers -a legally enforceable agreement between 2 or more parties
agreements - Answers -not all __________________ are legally binding contracts
1) agreement
2) capacity
3) mutual assent
4) consideration
5) legal purpose
6) form required by law - Answers -6 elements of a legally binding contract
promisor - Answers -party making a promise
promisee - Answers -party to whom a promise is made
privity of contract - Answers -the relationship that exists between 2 parties to a contract
privity - Answers -a party cannot sue for breach of contract without being in
______________ of contract with the other party
third-party beneficiary - Answers -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 - Answers -the failure without legal excuse, to fulfill a contractual
promise
agreement - Answers -must include an offer and its acceptance
offeror - Answers -party making the offer
offeree - Answers -party who makes a promise or acts in return for something offered by
another party
definite - Answers -offers must include _____________ terms and be communicated to
and received by the offeree
counteroffer - Answers -if the offeree requests changes to conditions of the offer
mentally competent - Answers -all parties must be ______________
_________________ for a contract to be legally binding
,mutual assent - Answers -the act of 2 or more parties deliberately negotiating all terms
to achieve consensus
consideration - Answers -something of value that is given in return for a promise
legal purpose - Answers -a contract must serve a legal purpose to be legally
enforceable
form required by law - Answers -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 - Answers -4 examples of contracts that have to be
in writing
bilateral contract - Answers -a contract where each party promises to perform an act in
exchange for an act by the other party
unilateral contract - Answers -a contract where one party promises to pay for the act of
the other party
executed contract - Answers -contract where nothing more is required of either party to
be fulfilled
executory contract - Answers -a contract that hasn't been fully executed
express contract - Answers -contract where terms and intentions are clearly stated
implied contract - Answers -contract where terms and intentions are indicated by the
actions of the parties to the contract and the surrounding circumstances
implied-in-fact contracts - Answers -parties presumably intended, either by tacit
understanding or by the assumption that it already existed
implied-in-law contracts - Answers -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 - Answers -sometimes called "quasi-contracts"
voidable contract - Answers -a contract that one of the parties can reject (avoid) based
on some circumstances regarding its execution
,behavior - Answers -the _______________ of one of the contracting parties can make a
contract voidable
void contract - Answers -an agreement that despite that parties' intentions, never
reaches contract status and is therefore not legally enforceable or binding
void contact - Answers -ex. agreement to commit a crime (what type of contract?)
1) fraud
2) mistake
3) duress
4) undue influence
5) innocent misrepresentation - Answers -5 factors lacking for mutual assent
fraud - Answers -an intentional misrepresentation resulting in harm to a person or an
organization
1) rescission
2) sue for damages - Answers -2 remedies that can be sought if fraud is proven
rescission - Answers -a legal act of cancelling something and making it void
sue for damages - Answers -action taken if rescission can't make the plaintiff whole
1) insured knew the fact concealed was material
2) insured concealed the fact with the intent to defraud - Answers -2 things insurers
need to prove to establish fraudulent concealment
unilateral; bilateral - Answers -mistakes can be ______________ or
_________________
duress - Answers -the use of restraint, violence, threats of violence, or wrongful
pressure to compel a party to act contrary to their wishes or interests
undue influence - Answers -the improper use of power or trust to deprive a person of
free will and substitute another's objective, resulting in lack of genuine assent to a
contract
1) gifts & wills
2) elderly persons suffering from physical ailments or dementia - Answers -2 examples
of undue influence
innocent misrepresentation - Answers -when a person makes a false statement that
they believes to be true
, innocent - Answers -courts do not award monetary damages for _________________
misrepresentation
statute of frauds - Answers -a law to prevent fraud and perjury by requiring that certain
contracts be in writing and contain the signature of the party responsible for performing
that contract
Uniform Commercial Code - Answers -a model code that has been adopted in whole or
in part by each state and whose purpose is to provide a consistent legal basis for
business transactions throughout the U.S. and its territories
signed - Answers -written contracts must be ______________ by parties
parol evidence rule - Answers -rule that exists primarily to prevent oral evidence from a
witness from being introduced that could alter the terms of the contract
parole evidence rule - Answers -applies to deeds, wills, leases, insurance policies,
releases, etc.
1) carry out the parties' assumed intention
2) achieve certainty and finality to the parties' rights & duties
3) exclude fraudulent & perjured claims - Answers -3 purposes that Parol Evidence Rule
serves
contract interpretation - Answers -governed by well accepted guidelines intended to
resolve doubts and ambiguities in existing contracts
plain meaning - Answers -a contract's language is to be read and applied according to
standard definitions, even if the parties intended a different result
entire contract - Answers -one party must fulfill all terms of the contract to be entitled to
the other party's specified act
divisible contract - Answers -one party is entitled to payment for each portion of the
contract completed
divisible - Answers -courts prefer to interpret contracts as ________________ when
possible to avoid delaying payments
handwriting; words - Answers -prioritization of changes to printed contract:
_________________ > printing
_________________ > numbers
1) contractual provision can be interpreted in more than one way
2) meaning of a provision cannot be determined - Answers -2 forms of ambiguity in
contract law
contract - Answers -a legally enforceable agreement between 2 or more parties
agreements - Answers -not all __________________ are legally binding contracts
1) agreement
2) capacity
3) mutual assent
4) consideration
5) legal purpose
6) form required by law - Answers -6 elements of a legally binding contract
promisor - Answers -party making a promise
promisee - Answers -party to whom a promise is made
privity of contract - Answers -the relationship that exists between 2 parties to a contract
privity - Answers -a party cannot sue for breach of contract without being in
______________ of contract with the other party
third-party beneficiary - Answers -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 - Answers -the failure without legal excuse, to fulfill a contractual
promise
agreement - Answers -must include an offer and its acceptance
offeror - Answers -party making the offer
offeree - Answers -party who makes a promise or acts in return for something offered by
another party
definite - Answers -offers must include _____________ terms and be communicated to
and received by the offeree
counteroffer - Answers -if the offeree requests changes to conditions of the offer
mentally competent - Answers -all parties must be ______________
_________________ for a contract to be legally binding
,mutual assent - Answers -the act of 2 or more parties deliberately negotiating all terms
to achieve consensus
consideration - Answers -something of value that is given in return for a promise
legal purpose - Answers -a contract must serve a legal purpose to be legally
enforceable
form required by law - Answers -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 - Answers -4 examples of contracts that have to be
in writing
bilateral contract - Answers -a contract where each party promises to perform an act in
exchange for an act by the other party
unilateral contract - Answers -a contract where one party promises to pay for the act of
the other party
executed contract - Answers -contract where nothing more is required of either party to
be fulfilled
executory contract - Answers -a contract that hasn't been fully executed
express contract - Answers -contract where terms and intentions are clearly stated
implied contract - Answers -contract where terms and intentions are indicated by the
actions of the parties to the contract and the surrounding circumstances
implied-in-fact contracts - Answers -parties presumably intended, either by tacit
understanding or by the assumption that it already existed
implied-in-law contracts - Answers -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 - Answers -sometimes called "quasi-contracts"
voidable contract - Answers -a contract that one of the parties can reject (avoid) based
on some circumstances regarding its execution
,behavior - Answers -the _______________ of one of the contracting parties can make a
contract voidable
void contract - Answers -an agreement that despite that parties' intentions, never
reaches contract status and is therefore not legally enforceable or binding
void contact - Answers -ex. agreement to commit a crime (what type of contract?)
1) fraud
2) mistake
3) duress
4) undue influence
5) innocent misrepresentation - Answers -5 factors lacking for mutual assent
fraud - Answers -an intentional misrepresentation resulting in harm to a person or an
organization
1) rescission
2) sue for damages - Answers -2 remedies that can be sought if fraud is proven
rescission - Answers -a legal act of cancelling something and making it void
sue for damages - Answers -action taken if rescission can't make the plaintiff whole
1) insured knew the fact concealed was material
2) insured concealed the fact with the intent to defraud - Answers -2 things insurers
need to prove to establish fraudulent concealment
unilateral; bilateral - Answers -mistakes can be ______________ or
_________________
duress - Answers -the use of restraint, violence, threats of violence, or wrongful
pressure to compel a party to act contrary to their wishes or interests
undue influence - Answers -the improper use of power or trust to deprive a person of
free will and substitute another's objective, resulting in lack of genuine assent to a
contract
1) gifts & wills
2) elderly persons suffering from physical ailments or dementia - Answers -2 examples
of undue influence
innocent misrepresentation - Answers -when a person makes a false statement that
they believes to be true
, innocent - Answers -courts do not award monetary damages for _________________
misrepresentation
statute of frauds - Answers -a law to prevent fraud and perjury by requiring that certain
contracts be in writing and contain the signature of the party responsible for performing
that contract
Uniform Commercial Code - Answers -a model code that has been adopted in whole or
in part by each state and whose purpose is to provide a consistent legal basis for
business transactions throughout the U.S. and its territories
signed - Answers -written contracts must be ______________ by parties
parol evidence rule - Answers -rule that exists primarily to prevent oral evidence from a
witness from being introduced that could alter the terms of the contract
parole evidence rule - Answers -applies to deeds, wills, leases, insurance policies,
releases, etc.
1) carry out the parties' assumed intention
2) achieve certainty and finality to the parties' rights & duties
3) exclude fraudulent & perjured claims - Answers -3 purposes that Parol Evidence Rule
serves
contract interpretation - Answers -governed by well accepted guidelines intended to
resolve doubts and ambiguities in existing contracts
plain meaning - Answers -a contract's language is to be read and applied according to
standard definitions, even if the parties intended a different result
entire contract - Answers -one party must fulfill all terms of the contract to be entitled to
the other party's specified act
divisible contract - Answers -one party is entitled to payment for each portion of the
contract completed
divisible - Answers -courts prefer to interpret contracts as ________________ when
possible to avoid delaying payments
handwriting; words - Answers -prioritization of changes to printed contract:
_________________ > printing
_________________ > numbers
1) contractual provision can be interpreted in more than one way
2) meaning of a provision cannot be determined - Answers -2 forms of ambiguity in
contract law
