Business law ch. 5 test

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  1. Capacity
    the legal ability to enter a contract
  2. Disaffirm
    to show the intent not to live up to or avoid a contract
  3. Limitations in capacity
    • people with mental implements
    • minors
    • emancitated minor
    • intoxicated persons
    • convicts and aliens
  4. Rights and duties of minors
    • minors still in possesion of goods purchased after they disaffirm a contract must be returned
    • Minors can not pick and choose the parts of the contract they want to keep and those they want to disaffirm
    • Minors may be held to contracts for things required by law
  5. Ratification
    act of agreeing to go along with a contract that could have been avoided
  6. Usury
    charging more than maximum legal amount of interest
  7. Licensing statutes
    An agreement made with an unlicensed person is legal
  8. Public policy
    nobody should be allowed to do something that harms the public
  9. Benefit
    what a party recieves
  10. Detriment
    What a party gives up
  11. Forebearance
    not doing what you have the right to do
  12. Characteristics
    must involve a bargained for exchange, must be something of value and benefits and detriments must be legal
  13. Unconsconable contract
    an agreement in which the consideration is so far out of line and unfair it shocks the courts conscience
  14. Adhesion contract
    a take it or leave it offer made by a party who holds most of the power in the bargaining session
  15. Types of consideration
    • property, money, and services
    • A promise not to sue
    • charitable pledges
  16. Settlement
    a promise not to sue
  17. Charitable pledges
    promises of donations
  18. Promissary estoppel
    the principle that a promise made without consideration may be enforced to prevent injustice
  19. Accord and satisfaction
    a legal way to settle contractual disputes by which one party agrees to accept less than the amount due as payment in full
  20. Illusory
    Promises that are not real
  21. Gift
    something for which no consideration is recieved
  22. Guardian
    the person who looks after the affairs of an incompetent person
  23. Majority
    A person is no longer a minor when they reach the age of this
  24. Minor
    A person who has not reached the age of majority
  25. Minority
    A person who has not yet reached their 18th birthday is still in the age of this
  26. Necessaries
    Minors are held responsible for the fair value of
  27. Consideration
    The exchange of benefits and detriments by the parties to a contract
  28. Emancipated
    freeing someone from the control of another, especially a parent
  29. Statute of frauds
    A state law that requires that certain contracts be in writing so that their is evidence that the contract exists and that it has certain definitive terms
  30. Restrictive covenant
    a promise not to compete
  31. A contract is divisible
    if certain promises and actions in the contract can be performed by themselves
  32. price fixing
    discourages competition and raises prices
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Business law ch. 5 test
My business law ch. 5 test vocab
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