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Flashcards in -Contracts Deck (17)
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1
Q

What must a contract contain?

A

A contract must contain:

  • Offer
  • Acceptance
  • Consideration
  • Proper form (oral or written)
  • Legal subject matter
  • Two (2) Competent parties

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2
Q

What forms may acceptance of a contract take?

A

A contract can be written or oral.

It must be:

  • in the form/method required by offeror
  • mirror image - i.e. no changes in terms
3
Q

Who can accept an offer?

A

An offer must be accepted by the intended party (offeree).

Acceptance can only be made by a party who knows an offer has been made and has all of the facts - AKA a meeting of the minds.

They must intend to accept.

4
Q

What happens if an offeree accepts a contract but puts added stipulations?

A

It is not acceptance, but instead becomes a counter-offer and the original offeror is now the offeree.

5
Q

What will void an offer?

A

If offeror dies or becomes insane before acceptance, the offer is void.

The contract is binding if acceptance occurs before death/insanity.

6
Q

What actions or circumstances will revoke a contract?

A

A contract can be revoked if:

  • Offeror revokes and offeree receives revocation.
  • Offeree finds out prior to acceptance that offeror has sold the item.

In the case of an Option, an offeror cannot revoke until the time of the option has elapsed.

Initial rejection by offeree doesn’t void the option.

7
Q

What is an Option?

A

Some amount of consideration (like money) is put forth by the offeror to keep the offer open for a stated period of time.

8
Q

What is a Requirements Contract? How are they limited?

A

These are contracts where someone becomes the exclusive provider of something in exchange for consideration.

Companies can’t get locked in to one and then have market conditions force them to sell something at what has become an unreasonable price.

9
Q

What is promissory estoppel?

A

Promises to donate are legally enforceable.

Basically, you can’t tell a charity, “Hey, if you buy this $100,000 piece of land, I’ll pay for the building that will go on it” and then renege on your promise.

10
Q

What can make a contract VOID?

A

A contract can be void if:

  • Fraud in the execution
  • Formed under extreme duress - extreme Illegal
11
Q

What can make a contract VOIDABLE?

A

A contract can be voidable if:

  • Fraud in the inducement
  • Party not competent to contract
  • Formed under SIMPLE duress
  • Undue influence
12
Q

What is the result of a clerical error in a contract?

A

The contract is unenforceable.

Example: Person signs a contract to pay $500.00 to have their lawn re-seeded but due to clerical error, it actually reads $5000.00

13
Q

Contracts under the Statute of Frauds must be in what form to be valid?

A

They must be in writing.

14
Q

What makes a contract subject to the Statute of Frauds?

A

A contract is subject to the Statute of Frauds if:

  • Cannot be completed within one year
  • Involves the purchase of real estate
  • $500 + Sale of Goods
  • Co-signing and guaranteeing the debt of another
15
Q

What is the parol evidence rule?

A

Parol evidence rule prevents one party to a written contract from coming in after the fact and claiming that a certain conversation took place that conflicts with what is agreed upon in the written contract.

It also prevents using an oral argument to read into the meaning of what is written on paper.

If it’s on paper, it trumps what was agreed-upon orally prior to the written contract.

Note: does not negate oral agreements made AFTER the contract or disallow oral words from clarifying ambiguous contract language.

16
Q

What are the requirements for the assignment of a contract?

A
  • Contracts are assignable to a third-party beneficiary but must be done so in good faith.
  • Obligations may be assignable - Assignor is still liable.
  • Assignor may be released from liability if other party grants a novation.
17
Q

When can contracts be discharged by law?

A

Contracts can be discharged by law if:

  • Party under contract is bankrupt
  • Party under contract dies or is incapacitated
  • Party cannot physically complete the contract. (i.e. They are in prison so can’t finish building your house.)