Chapter 8: Introduction to Contracts

Business Law - Midterm

In a unilateral contract:

substantially undertaking performance prevents the offeror from revoking the offer

Which of the following creates a bilateral contract?

a sale of goods with payment at delivery

What is the term for a contract agreement in which an offeror promises to pay after the occurrence of a specified act, and the offeree is not required to respond in words?

unilateral contract

What type of contract exists when at least one party has the option of canceling it?

voidable

What factors make an agreement enforceable under the principle of quasi-contract?

• the enriched party knows about the benefit and keeps it

• one party is being enriched at the expense of the other

Sal has ordered 100 pounds of shrimp for his restaurant from Sam every Friday for 5 years and has always paid that week’s market price. One Friday, Sal decides to take a vacation but doesn’t tell Sam. Sam claims they have a contract, even though it was never written down. What kind of contract do they have?

implied-in-fact

Quon and Bert have signed a contract for Bert to mow Quon’s grass every week in June, July, and August for a price of $40 per week. They have agreed to all the necessary terms, but Bert has not yet mowed because it is still May. What type of contract do they have?

executory

When party A and B form a contract and both parties fully perform, the contract is considered:

executed

Contests, lotteries, and competitions with prizes are common examples of:

unilateral contracts

When ambiguity in a contract's language exists, a court will:

interpret the terms against the drafting party

If an individual shopping for groceries opens a bottle of water from their cart and drinks it before they have paid for their items:

a quasi-contract has been created

When an agreement fails to qualify as an enforceable contract, but one of the parties breaches the agreement, the non-breaching party:

may sue for unjust enrichment

Zayn boards the Big Rock Metro to ride downtown to his job. Zayn gives his money to the driver and takes his seat. Neither the driver nor Zayn says anything. Zayn and the bus driver:

have an implied contract

Mia contracted with Greencare Lawn Service for a pest treatment on Mia’s lawn for $1,000. Pat lives next door to Mia. Greencare mistakenly treats Pat’s lawn instead of Mia’s. Pat watched them perform the treatment while looking through the window of his living room, but did not go outside and stop them. When Greencare seeks payment from Pat, Greencare can probably receive:

from Pat an amount less than the contract amount that will reimburse Greencare for expenses incurred, in order to avoid unjust enrichment.

Jones Construction Company is building a series of new subdivisions in Newtown over the next two years. Jones enters into a verbal agreement with Harley Concrete Inc. to construct all the driveways and sidewalks in the subdivisions that Jones will be building. Jones and Harley agree on a price of $130 per cubic yard and that Jones will pay Harley at the end of each project. Harley completes the first project, which is four sidewalks and sixteen driveways, and bills Jones for the project. Jones decides that the price is too high and refuses to pay, claiming that they have no obligation to pay because the parties did not have a valid contract. If Harley sues Jones for payment the court would probably:

apply quasi contract theory and award the fair market value of the work that Harley completed

Maryanne offers to sell her 2015 Mustang convertible to April for $15,000, and April agrees to those terms. April brings the $15,000 to Maryanne, and Maryanne promises to deliver the Mustang to April the next day after she has it detailed. At this point, Maryanne and April have:

an executory contract

Brindley has an old shed on her property that needs to be removed. She posts the following ad on Facebook: “Shed needs to be gone. You take down and haul away. (Much of the wood is reusable.) $100 to the first person to show up and haul this away.” This is an example of a(n):

unilateral contract