BUSFIN 3500 Final Exam | Questions and Answers Contract promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty Contract Law falls under what jurisdiction State Elements of a Contract Agreement Consideration Lega...
Contract
promise or set of promises for the breach of which the law gives a remedy or the
performance of which the law in some way recognizes a duty
Contract Law falls under what jurisdiction
State
Elements of a Contract
Agreement
Consideration
Legal Capacity
Legal Object
Agreement
consists of an offer by one party to enter into a contract an acceptance of the terms by
the other party
Consideration
the bargained-for exchange for his or her promise under the contract
Contractual Capacity
legal ability to enter into a binding agreement
Legal Object
to be enforceable, contract cannot be illegal or against public policy
Objective Theory of Contracts
In determining whether parties intended to enter into a contract, courts look at their
objective words and behavior, no secret intentions
Sources of Contract Law
Case Law (Common Law)
Uniform Commercial Code (UCC)
Convention on Contracts for International Sales of Goods (CISG)
Requirements of Enforceable Contract
-Needs the 4 essential elements
-Legal assent; each party must have freely entered through proper means
-Proper form; some contracts that lack a writing are not enforceable
,Bilateral Contract
if the offeror wants a promise from the offeree to form a binding contract. Promise for
promise
Unilateral Contract
offeror wants the offeree to do something, most common is a reward
Express Contract
Are all clearly set forth in either written or spoken words
Implied Contract
Arise from the conduct of the parties. Needs 3 conditions:
-Plaintiff provided some property or service to the defendant
-Plaintiff expected to be paid for such property or service
-Defendant had an opportunity to reject the property or service but did not
Formal Contracts
have a special form or must be created in a specific manner. 4 types:
-Contracts under seal
-Recognizances
-Letters of Credit
-Negotiable Instruments
Informal (Simple) Contract
no formalities are required in making,
Plain-Meaning Rule
States that if a writing, or a term in question appears to be plain and unambiguous on its
face, we determine its meaning from exactly what is stated
Elements of the Offer:
-Intent
-Definite and Certain Terms
-Communication to the Offeree
Termination of the Offer (5 ways)
-Revocation by the offeror
-Rejection or counteroffer by the offeree
-Death or incapacity of the offeror
-Destruction of subsequent illegality of the subject matter of the offer
-Lapse of time or failure of other conditions stated
Revocation Exceptions
-Option Contract: in exchange for a piece of consideration, the offeror will hold the offer
open for a period of time (real estate)
, -Detrimental Reliance: If the offeree had reasonably relied on the promise to hold the
offer open and took action in reliance on that
The Acceptance
Requirements match the offer requirements
Silence as a form of Acceptance?
Cannot be used UNLESS:
-previous behavior would indicate it acceptable
-Receiving benefits with a reasonable amount of time to deny such benefits
Mirror-Image Rule:
States that the terms of the acceptance must mirror the terms of the offer. If they don’t,
no contract is formed
Mailbox Rule:
provides that an acceptance is valid when the offeree places it in the mailbox, whereas
a revocation is effective only when the offeree receives it. Not applicable if there
instantaneous communication
Effect of an Acceptance after a Rejection:
rejection is not effective until received, if you mail rejection and someone else accepts
beforehand, a valid contract exists
Exceptions to the rules of Consideration:
Promissory Estoppel which occurs when 3 conditions are met:
-One party makes a promise and either knows or should know that the other party will
reasonably rely on it
-Other party does reasonably rely on the promise
-Only way to avoid injustice is to enforce the promise
AND contracts under seal
Adequacy of Consideration
Court does not rule whether or not you made a good bargain
Illusory of Promise
I offer to sell my car for $5000, Ryan saying he'll look at it and if he likes it he'll buy, is
NOT a promise
Past Consideration
A promise cannot be based on consideration provided before the promise was made.
Past consideration is not consideration at all. UNLESS "to the extent necessary to avoid
injustice"
Preexisting Duty
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