BLAW 2301 Exam 2 All terms

What are the four required elements of a valid contract?

Agreement (offer and acceptance), consideration, capacity, and legality

What is consideration?

Something of legal value exchanged between parties; both must benefit and it cannot be something already legally required

What makes a contract valid?

It is enforceable in court, legal, includes consideration, and has mutual agreement

What is an unenforceable contract?

A contract that exists but cannot be enforced by the court

What is a void contract?

A contract that is invalid from the beginning and has no legal effect

What is a voidable contract?

A valid contract that one party may legally cancel

What is a bilateral contract?

A contract where both parties promise to perform

What is a unilateral contract?

A contract where only one party is required to perform

What is an executed contract?

A contract that has been fully performed and signed

What is an executory contract?

A contract where performance has not yet been completed

What is an express contract?

A contract with terms stated orally or in writing

What is an implied contract?

A contract formed by conduct rather than explicit words

What is an offer?

A serious promise with definite terms communicated to another

What must an offer include to be valid?

Serious intent, definite terms, and communication to the offeree

What is acceptance?

A voluntary, timely, and unequivocal agreement to an offer

Can silence be acceptance?

No, unless there is a duty to speak and conduct shows acceptance

What is the mirror image rule?

Acceptance must exactly match the offer

What is a counteroffer?

A rejection of the original offer and proposal of new terms

When does an offer lapse?

After a reasonable amount of time has passed with no acceptance

What is a breach of contract?

Failure to perform promised obligations under a valid contract

What is legally sufficient consideration?

Doing something not legally required or refraining from a legal right

Does consideration have to be fair in value?

No, courts do not require adequacy

What is not valid consideration?

Past consideration, preexisting duty, illusory promises

What is an illusory promise?

A promise that does not actually bind a party

What is accord and satisfaction?

Accepting a lesser amount to settle a disputed debt

What makes a contract illegal?

It violates law or public policy

What contracts violate public policy?

Non-compete clauses, unconscionable contracts, exculpatory clauses

What does 'as-is' mean?

The buyer accepts the item in its current condition

Who lacks contractual capacity?

Minors, intoxicated persons, mentally incapacitated persons

Are minors’ contracts valid?

Yes, but voidable at the minor’s option

What is disaffirmance?

A minor canceling a contract

Are parents responsible for minors’ contracts?

No, unless they co-signed or fraud was used

What is ratification?

Accepting a contract after gaining capacity

What is fraudulent misrepresentation?

Intentionally lying about a material fact that causes harm

Can opinions be fraud?

Generally no, unless given by an expert to a relying party

What is a mistake of value?

A mistake about worth; contract is still enforceable

What is a mistake of fact?

A material fact error that can make a contract voidable

When is a written contract required?

$500+ goods, over one year, real estate, commercial contracts, paying another’s debt

What is the Statute of Frauds?

A law requiring certain contracts to be in writing

What allows an oral contract despite Statute of Frauds?

Partial performance, promissory estoppel, UCC exceptions

What must a valid written contract include?

Consideration, signatures, and a date

What is an intended beneficiary?

A third party meant to benefit and who can sue

What is an incidental beneficiary?

A third party who cannot sue

When do beneficiary rights vest?

Consent, reliance, or fulfillment of conditions

What is assignment?

Transferring contract rights to a third party

What rights cannot be assigned?

Personal contracts, illegal assignments, increased risk to obligor

What is delegation?

Transferring duties to a third party

Does delegation remove responsibility?

No, delegator remains liable

If a contract price is lower or higher than expected, can it be voided?

No. Price/value differences alone do not void a contract

When can parties renegotiate a contract?

Only when BOTH parties voluntarily agree and no duress exists

What is commercial impracticability?

When unforeseen events make performance extremely difficult or unfair, allowing discharge

If a contract has a typo and the other party accepts before correction, is it binding?

Yes. Acceptance forms the contract at that price

Does a math or calculation mistake change a contract?

No. Calculation errors are the responsibility of the party who made them

If a contract promises a certain quality or caliber of work and it decreases, what occurs?

Breach of contract