Accounting Business Law Exam 3

Simplified Terms 1st then go back and add the Slides entirely star the simplified terms

What is Contract Law:

Is the set of rules that makes agreements between people legally enforceable.

Contract Law (Simplified):

If 2 or more people agree to do something, contract law makes sure everyone keeps their promises- or faces consequences if they don’t.

What is a Contract:

A contract is a legally binding agreement between people (or businesses).

Example: You agree to pay $10 for a pizza, and the restaurant agrees to give you the pizza. That’s a contract!

Promissory Estoppel: (Simplified)

A promise can be enforced even without a contract if someone relied on it and got hurt.

Promissory Estoppel= Exception for Fairness

Promissory Estoppel: (Slide definition)

Is another doctrine which allows the recipient of a promise to enforce a contract in court.

Promissory Estoppel: (Explained)

3 Easy Parts to Understand It:

1) A promise was made

2) Someone relied on that promise

3) They were harmed because the promise was broken

Key Idea:

It’s about fairness, not technical contract rules

The law says: You can’t promise something, let someone rely on it, and then walk away if it harms them.

One-Line Memory Trick:

If you rely on a promise and get hurt, the law may protect you.

Unjust Enrichment:

Someone gets a benefit they didn’t earn, and it would be unfair for them to keep it without paying.

Simple Idea: No one should get something for free if it’s unfair.

Example:

• A contractor accidentally paints your house.

• You see it happening and don’t stop them.

• Your house looks great.

It would be unfair for you to keep that benefit for free.

So you may have to pay.

Quasi Contract:

A fake (not real) contract created by the court to fix unfair situations.

Simple Idea: The court pretends there is a contact to make things fair.

Example:

• A doctor treats you in an emergency

• You didn’t agree beforehand

No real contract

BUT

The court says you should still pay

Unjust Enrichment vs Quasi Contract

How They Relate:

Unjust enrichment= the problem (unfair benefit)

Quasi contract= the solution (court fixes it)

Easy Way to Remember:

Unjust Enrichment= unfair gain

Quasi Contract= court-created fix

One-Line Summary

If someone unfairly benefits, the court may step in and act like a contract exists to make it fair.

Objective Intent: (Definition)

Courts look at what you said and did, not what you secretly meant.

Objective Intent: (Simple Ideas, Example, Why the rule exists)

Simple Idea:

The law asks:

Would a normal person think this was a real agreement?

NOT

What were you thinking inside your head?

Example: You sign a contract without reading it

You can’t say: I didn’t mean to agree

Court says: You acted like you agreed, so you’re bound

Key Idea= Actions > Thoughts

Why This Rule Exists:

If courts relied on hidden thoughts: Anyone could escape a contract by saying “I didn’t mean it”

So instead, courts use objective intent to keep things fair and predictable.

Objective Intent: (Memory Trick)

One-Line Memory Trick: It’s not what you meant, it’s what it looked like

4 Requirements of a Contract are:

Agreement

Consideration

Contractual Capacity

Legality

4 Requirements of a Contract: (Simplified)

Agreement: Both people agree to same deal

Simple meaning: “We both said yes to the same thing.” (This includes offer + acceptance)

Consideration: Both sides give something of value

Simple meaning: A trade happens- not just a free promise.

Key Idea: This is what turns a promise into a contract

Contractual Capacity: The people must be able to legally agree

Simple Meaning: They are old enough and mentally able to make a contract

Legality: The contract must be about something legal

Simple Meaning: The deal cannot be about something illegal

Four Requirements of a Contract: (Examples)

Agreement Example:

“I’ll sell you my car for $500.”

“Okay, deal.”

Consideration Example:

You give $500

They give you a car

→That exchange is what makes it a real contract

Contractual Capacity Example:

4 Requirements of a Contract: (Quick Example)