BMGT 380 Exam 2: Contracts Questions
With Verified Answers
Freedom of Contract - answer✔idea that contracts should be enforced because they are the
products of the free wills of their creators, who should, within broad limits, be free to
determine the extent of their obligations.
unilateral contracts - answer✔only one party makes a promise.
bilateral contract - answer✔both parties exchange promises and the con- tract is formed as
soon as the promises are exchanged.
executed contract - answer✔A contract is executed when all of the parties have fully per-
formed their contractual duties.
executory contract - answer✔It is executory until such duties have been fully performed.
UCC - answer✔deals with sales goods
Common Law - answer✔laws created in court. Deals with services
unconscionable contract - answer✔one that is grossly unfair or one-sided,
merchants - answer✔professionals or licensed people. They are hold to a higher standard in
contract disputes
quasi-contract - answer✔it represents an obligation imposed by law to avoid injustice, not a
contractual obligation created by voluntary consent.
is imposed when one party confers a benefit on another who knowingly accepts it and retains it
under circumstances that make it unjust to do so without paying for it.
example: when tim paints Bob's fence by accident and Bob knew. Bob has to pay for the work
done
promissory estopel - answer✔one person might rely on a promise made by another even
though the promise and the relevant circumstances are not sufficient to justify the conclusion
that a contract exists.
For example, in Ricketts v. Scothorn, a grandfather's promise to pay his granddaughter interest
on a demand note he gave her so that she would not have to work was enforced against him
after she had quit her job in reliance on his promise.
elements of a contract - answer✔made up of an offer and an acceptance of that offer. In
addition, there usually must be consideration to support each party's promise. The contract
must be between parties who have capacity to contract, and the objective and performance of
the contract must be legal.
Requirements of an offer - answer✔First, they look for some objective indication of a present
intent to contract on the part of the offeror. Second, they look for specificity, or definiteness, in
the terms of the alleged offer. Third, they look to see whether the alleged offer has been
communicated to the offeree.
general common law of revocation - answer✔The general common law rule on revocations is
that offerors may revoke their offers at any time prior to acceptance, even if they have
promised to hold the offer open for a stated period of time.
exception to the general common law of revocation - answer✔options: when people pay you to
hold an offer. Like when you put a deposit down on a house
offers for unilateral contract: with these acceptance is by doing the offer and if they do it you
can't revoke it
promissory estopel
firm offers of the sales of goods
firm offer - answer✔It needs to have:
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