business law exam 3

promises

a person’s assurance that they will/will not do something.

Promisor

person who makes promise

promisee

person to whom a promise is made

contract law

to what extent society allows people to make legally binding promises, distinguishes between promises that create only moral obligations and promises that are legally binding, what excuses for breaking promises are acceptable, which promises are contrary to public policy or the good of society and are therefore invalid

UCC

Uniform Commercial Code. Created so contract law will remain static across 50 states to make interstate commerce easy

contract

agreement that is enforceable formed by two parties who agree to perform/not perform an act not/in the future.

Agreement, consideration, legality, capacity

the four components of contracts

objective theory of contracts

The intent to form a contract will be judged by outward objective facts as interpreted by a reasonable person, rather than by the party’ own secret subjective intentions

objective facts

what a party said when entering into the contract, how a party acted of appeared, the circumstances surrounding the transaction

defenses to enforceability of a contract

the consent of both parties must be voluntary, if it was formed under fraud, undue influence, mistake, or duress, it is not enforceable, and the contract must have the lawful, proper form (be in writing if required)

bilateral contract

offeree accepts by performing act

unilateral

is a one-sided legal agreement where one party (the offeror) makes a promise in exchange for the other party's (the offeree) actual performance of a specific act. [1, 2]

informal contract

no specified form it has to be in legally

formal contract

legally the contract has to be in a specific form

express contract

the terms of the agreement are fully and explicitly stated in words (oral or written)

implied-in-fact contract

implied from the conduct of the parties

executory contract

not yet fully performede

executed contract

has been fully performed

valid contract

can be enforced in court

voidable contract

valid, but can be voided by a party

void contract

never a contract to begin with because some essential element is missing ex. one party is a minor

unenforceable contract

cannot be enforced because of a legal defense against it.

quasi contract

not actual contract. objective theory of contract is not met but there is still kind of a contract.imposed to avoid unjust enrichment. recovery is limited.

extrinsic evidence

evidence related to contract but not actually in contract. Includes testimony and additional agreements and communication.

agreement

a meeting of two or more minds in regard to the terms of a contract. An offer and an acceptance. does not have to be in writing

offer

a promise or commitment to perform or refrain from performing some act in the future. Must have serious intent, terms have to be reasonably certain, offer has to be communicated by offeree.

expressions of intent (not an offer)

opinions, future intent, preliminary negotiation, invitations to bid, advertisements, the time of payment, delivery, or performance.

termination of offers

actions of parties (revocation (withdrawal of offer by offeror), rejection, counteroffer) and actions of law (ex. it becomes illegal)

revocation of offer

offeror says they can’t give offer anymore or does actions that are contrary to offer

rejection of offer

by word or contract, counteroffer, changes to terms submitted by offeror

mirror image rule

offeree has to accept exactly what offeror says

offer terminated by law

when the period of time specified by offeror terminated, when new law comes out that invalidates offer

silence is unacceptable as an agreement

in bilateral contracts is silence acceptablei

silence is acceptable as an agreement

in unilateral contracts is silence acceptable

mailbox rule

an acceptance of an offer becomes effective on dispatch (when mail is sent, not when mail is received)