Legal and Contractual Principles in Business Law and Organizational Commitment

What is the legal ability to enter into a contractual relationship called?

Capacity

What types of contracts are considered voidable?

Contracts can be voidable by parties who are minors, temporarily insane or incompetent, or very intoxicated.

What are void contracts?

Contracts adjudged insane or incompetent by a court, lacking any capacity to contract.

What happens to illegal contracts?

Illegal contracts cannot be enforced by either party.

What is an example of a legal change affecting contracts?

The 2011 Executive Order prohibited US companies from selling products in Syria, leading Ford to terminate a dealership agreement.

What are exculpatory clauses?

Also called waivers or releases, they release one or both parties from tort liability for ordinary negligence but not for willful conduct, intentional torts, fraud, or gross negligence.

What was the outcome of Lin v Spring Mountain Adventures, Inc.?

The enforceability of the release from liability signed by Lin was questioned after she suffered injuries while skiing.

What are the benefits of a written contract?

Written contracts provide evidence of terms, legal obligations, allowable excuses for non-performance, and agreed-upon remedies.

What are 'Reality of Consent' defenses in contract law?

Defenses such as fraud, duress, undue influence, and mistake that can negate the genuineness of assent.

What are the elements of fraud in contract law?

Misrepresentation or omission of a material fact, intent to deceive, justifiable reliance, and injury.

What constitutes duress in contract law?

Improper threat of physical force to induce another to enter into a contract.

What is undue influence?

Improper influence, often by a fiduciary, that induces another to enter into a contract for the benefit of the trusted person.

What happens if both parties are mistaken about a material fact in a contract?

The contract may be voidable.

What is the Statute of Frauds?

A law that requires certain contracts to be in writing to be enforceable.

What types of contracts must be in writing according to the Statute of Frauds?

Contracts for the sale of goods over $500, sale of real estate, contracts that cannot be completed within one year, and contracts made in consideration of marriage.

What are the ways parties can be discharged from their contractual duties?

Complete performance, mutual agreement to rescind, performance being objectively impossible, or occurrence of an event covered by a force majeure clause.

What is a minor breach of contract?

When a party has substantially performed contractual duties, allowing the non-breaching party to sue for damages.

What is a material breach of contract?

When the breaching party's inferior performance impairs or destroys the value of the contract to the non-breaching party.

What are compensatory damages?

Damages awarded to compensate the non-breaching party for loss of the bargain.

What is the duty to mitigate damages?

The non-breaching party must minimize the damages suffered as a result of the breach.

What is specific performance in contract law?

A court order requiring the breaching party to perform the contract if the subject matter is unique.

What is affective commitment in organizational behavior?

A form of organizational commitment based on emotional attachment to the organization.

What are the three types of organizational commitment?

Affective commitment, continuance commitment, and normative commitment.

What factors influence organizational commitment?

Workplace diversity, perceived organizational support, and the changing employee-employer relationship.

What is the EVLN model in organizational behavior?

A model describing how employees react to negative events through Exit, Voice, Loyalty, and Neglect.

What are the strongest predictors of affective commitment?

Organizational support, leadership, fairness, and the negative impact of role ambiguity.