LAW 2221 Final Dove Troy University

What are the four required elements of a valid contract?

Agreement, consideration, capacity, legality.

What are the three requirements of an offer?

Intent, definite terms, communication to offeree.

Are advertisements usually offers? Why or why not?

No — they are invitations to negotiate unless they use 'first come first served' or 'while supplies last.'

What is the mirror image rule?

Acceptance must match the offer exactly (common law).

Under the mailbox rule, when is acceptance effective?

When it is sent.

Name three ways an offer can terminate by operation of law.

Lapse of time, death of offeror, destruction of subject matter

What are the two parts of consideration?

Legally sufficient value + bargained-for exchange.

What is the preexisting duty rule?

You cannot use a duty you already owe as new consideration.

What is past consideration?

Something given in the past — not valid consideration.

What is an illusory promise?

A promise with no real commitment (not enforceable).

What is promissory estoppel?

A clear promise + reasonable reliance + detriment + injustice without enforcement.

What are the three major capacity issues?

Minors, intoxication, mental incompetence.

What is the effect of a contract made by a minor?

It is voidable by the minor.

What happens to illegal contracts?

They are void.

What are the types of contract fraud?

Misrepresentation of material fact + intent + reliance + damages.

What is duress?

Wrongful threat that prevents free will.

What is undue influence?

Pressure from a trusted relationship that overcomes free will.

Name three contracts that fall under the Statute of Frauds (common law).

Real estate, contracts not performable within one year, goods over $500 (UCC).

What does the parol evidence rule do?

Excludes outside evidence that contradicts a written contract.

What is substantial performance?

Performance that is not perfect but close enough; no material breach.

What is a material breach?

A serious breach that defeats the purpose of the contract.

What is the default standard of performance?

Reasonable person standard.

What does 'time is of the essence' mean?

Deadlines are strict; delays are material breaches.

What are compensatory damages?

Direct losses from the breach.

What are consequential damages?

Indirect losses (like lost profits) that were foreseeable.

What is the duty to mitigate?

The non-breaching party must minimize damages.

What is specific performance?

Court order to perform the contract; used for unique goods or real estate.

What does UCC apply to?

Sale of goods (tangible + movable).

What does common law apply to?

Real estate and services.

What is the definition of 'merchant' under UCC?

One who regularly deals in the goods of the contract.

Does UCC require definite terms in offers?

No — terms may be open if intent exists and a remedy is possible.

What term usually cannot be open under UCC?

Quantity (unless output or requirements contract).

What is a merchant's firm offer?

A written, signed promise by a merchant to keep an offer open up to 3 months, no consideration required.

Under the UCC, can acceptance be by shipment?

Yes.

Additional terms can become part of the contract between merchants unless they materially change the offer.

Battle of forms

Are contract modifications enforceable without consideration under UCC?

Yes — if made in good faith.

What is an express warranty?

A seller's statements or model describing the goods.

What is the implied warranty of merchantability?

Goods are fit for ordinary purpose; applies only to merchants.

What is the implied warranty of fitness?

Buyer relies on seller's skill to select suitable goods.

How can implied warranties be disclaimed?

"As is" or conspicuous writing; fitness must be in writing.

What is the main purpose of law in business?

Stability and predictability.

What are the three main sources of law?

Constitution, statutes, common law.

What is precedent?

Using past cases to decide future cases.

What is stare decisis?

Courts follow prior decisions unless strong reason not to.

What is administrative law?

Regulations created by agencies.

What is the difference between substantive and procedural law?

rights and duties; process for enforcing rights.

What is a legal remedy?

Money damages.

What is an equitable remedy?

Non-money remedy like injunction or specific performance.

What is civil liability?

Legal responsibility for civil wrongs.

What is a claim?

Assertion of a right.

What are the three branches of the federal government?

Legislative, executive, judicial.

What does the Commerce Clause allow Congress to regulate?

Interstate commerce (channels, instrumentalities, substantial effects).

What is federalism?

Shared power between federal and state governments.

What does the Supremacy Clause say?

Federal law is the supreme law of the land.

What does procedural due process require?

Notice and a hearing.

What is a suspect classification?

Race, national origin — trigger strict scrutiny.

What is subject matter jurisdiction?

Power of a court to hear a specific type of case.

What are the two requirements for diversity jurisdiction?

Citizens of different states + amount in controversy > $75,000.

What is personal jurisdiction?

Court's power over the parties.

What is the minimum contacts test based on?

Fairness and reasonable expectations.

What happens if you ignore a complaint and summons?

Default judgment.

What is mediation?

Neutral third party helps parties negotiate a voluntary settlement.

What is arbitration?

Neutral third party issues a binding or nonbinding decision.

What are interrogatories?

Written questions answered under oath (discovery).

What are the four elements of negligence?

Duty, breach, causation, damages.

What is res ipsa loquitur?

"The thing speaks for itself" — accident implies negligence.

What is defamation?

False statement harming reputation.

What is false imprisonment?

Intentionally confining someone without justification.

What is criminal act + mental state called?

Actus reus + mens rea.

What is the burden of proof in criminal cases?

Beyond a reasonable doubt.

How does law support economic freedom?

By creating a predictable system that allows businesses to operate and invest confidently.

Why is stability important in business law?

Businesses need reliable expectations to plan contracts and long-term decisions.

What are statutes?

Written laws passed by legislatures.

What are local ordinances?

Laws created by city or county governments.

What is the role of courts in a common law system?

Interpreting and applying law; creating precedent.

What distinguishes code law systems from common law?

Code law uses comprehensive written statutes; common law relies on judicial decisions.

What is the purpose of stare decisis?

Ensures legal consistency by following prior decisions.

Why do judges interpret statutes?

To clarify ambiguous language and apply it to cases.

What are administrative regulations?

Rules made by administrative agencies.

What is the function of enabling statutes?

They establish agencies and define their powers.

What are Restatements used for?

Persuasive guidance summarizing common law principles.

What are model codes?

Proposed laws (like the UCC) designed for states to adopt.

What is the key difference between civil and criminal law?

private disputes; offenses against society.

What does substantive law define?

Legal rights and duties.

What does procedural law define?

Processes for enforcing rights.

What is a legal claim?

A request for a legal remedy based on a violated right.

How is liability defined?

Legal responsibility for harm or wrongdoing.

What are damages?

Money awarded to compensate a plaintiff.

What is an equitable remedy?

A non-monetary court order, like an injunction.

What is the purpose of legal analysis?

Applying rules to facts to reach a conclusion.

Why does business ethics matter?

Ensures responsible behavior beyond legal compliance.

What is the Constitution's main role?

Structuring government and protecting individual rights.

What are enumerated powers?

Powers explicitly granted to Congress.

Why do we have separation of powers?

To prevent concentration of authority.

What are checks and balances?

Mechanisms to ensure each branch limits the others.

What is Congress's key function?

Creating laws.

What is the President's key function?

Enforcing laws.

What is the judicial branch's function?

Interpreting laws.

What is judicial review?

The power to invalidate unconstitutional laws.

What does the Commerce Clause regulate?

Interstate commerce.