Business Law 1 Final Exam (Ch 10-13)

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  1. Agreement
    The manifestation by two or more persons of the substance of a contract
  2. Offeror
    The party who makes an offer
  3. Offeree
    The party to whom an offer has been made
  4. Offer
    The manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his asseent to that bargain in invited and will conclude it
  5. Three Requirements of an Offer
    • 1. The offeror must objectively intent to be bound by the offer.
    • 2. The terms of the offer must be definite or reasonably certain.
    • 3. The offer must be communicated to the offeree
  6. Objective Theory of Contracts
    A theory that says the intent to contract is judged by the reasonable person standard and not by the subjective intent of the parties.
  7. Rewards
    • An award given for performance of some service or attainment. To collect a reward, the offeree must.
    • 1. have knowledge of the reward offer prior to completeing the requested act
    • 2. perform the requested act
  8. Auction with Reserve
    An auction in which the seller retains the right ot refuse the highest bid and withdraw the goods from sale. Unless expressly stated otherwise, an auction is an auction with reserve.
  9. Terminate an Offer by Act of the Parties
    • 1. Revocation
    • 2. Rejection
    • 3. Counteroffer
  10. Revocation
    Withdrawal of an offer by the offeror that terminates the offer
  11. Rejection
    Express word or conduct by the offeree to reject an offer. Rejection terminates the offer
  12. Counteroffer
    A response by an offeree that contains terms and conditions different from or in addition to those of the offer. A counteroffer terminates the previous offer.
  13. Termate an Offer by Operation of Law
    • 1. Supervening Illegality
    • 2. Lapse of Time
    • 3. Destruction of the Subject Matter
    • 4. Death or Incopetency
  14. Acceptance
    A manifestation of ssent by the offeree to the terms of the offer in a manner invited or required by the offer as measured by the objective throy of contracts.
  15. Mirror Image Rule
    A rule which states that for an acceptance to exist, the offeree myst accept the terms as stated in the offer.
  16. Acceptance Upon Dispatch (Mailbox Rule)
    A rule which states that an acceptance is effective when it is dispatched, even if it is lost in transmission.
  17. Consideration
    Something of legal value given in exchange for a promise.
  18. Two Requirements of Consideration
    • 1. Legal Value
    • 2. Bargained for Exchange
  19. Gift Promise
    A promise that is unenforceable becuase it lacks consideration
  20. Five Promises That Lack Consideration
    • 1. Illegal Consideration
    • 2. Illusory Promise
    • 3. Preexisting Duty
    • 4. Past Consideration
  21. Equity Doctrine of Promissory Estoppel
    An equitable doctine that prevents the withdrawal of a promise by a promisor if it will adversely affect a promisse who has adjusted his or her positio in justifiable reliance on the promise. (Read Pg 202-203)
  22. Infancy Doctrine
    A Doctrine that allows minors to disarrirm (Cancel) most contracts they have entered into with adults
  23. Dissafrimance
    The act of a m inor to rescind a contract under the infancy doctrine. Disaffirmance may be done orally, iin writing, or by the minors conduct.
  24. Ratification
    The act of a minor after the minor has reached the age of majority by which he or she accepts a contract entered into when he or she was a minor
  25. Legal Insanity
    A state of contractual incapacity as determined by law
  26. Intoxication Defense
    A person who is under contractual incapacity becuase of ingestion of alcohol or drugs to the point of incompetence
  27. In Pari Delicto
    A situaion in which both parties are equally at fault in an illegal contract
  28. Minor Duty of Restoration
    A rule that states that a minor is obligated only to return the goods or property he or she has recieved from the adult in the condition it is in at the time of disaffirmance
  29. Exculpatory Clause
    A contractual provison that relieves one (or both) of the partied to a contract from tort liability for ordinary negligence. Also known as a release of liability clause.
  30. Covenant not to compete
    A contract that provided that a seller of a business or an employee will not engage in a similar business or occupation within a specififed geographical area for a specified time following the sale fo the business or termination of employment. Also called a non compete clause.
  31. Unconscionable Contract
    A contract that courts reuse to enforce in part or at all becuase it is so oppressive or manigestly unfair as to be unjust.
  32. Contract in Restrain of Trade
    A contract that unreasonably restains trade.
  33. Contract Contrary to Public Policy
    A contract that has a negative impact on society or that interferes with the publics safety and welfare
  34. Licensing Statute
    A statute that requires a person or business to obtain a license from the government prior to engaging in a specified occupation or activity
  35. Mutual Mistake of Fact
    A mistake made by both parties concerning a material fact that is important to the subject matter of a contract
  36. Mutual Mistake of Value
    A mistake that occurs if both parties know the object of the contact but are mistaken as to its value
  37. Four Element to Prove Fraud
    • 1. The wrongdoer made a false representation of material fact.
    • 2. The Wrongdoer intended to decieve the innocent party.
    • 3. The innocent party justifiably relied on teh misrepresentation.
    • 4. The onnocent pary was injured.
  38. Duress
    A situation in which one party threatens to do a wrongful act unless the other party enters into a contract
  39. Undue Influence
    A sutuation in which one person takes advantage of another persons mental, emotional, or physical weakness and unduly persuads that person to enter into a contract; the persuasion by the wrongdoer must overcome the free will of the innocent party
  40. Termination of an Offer by Operation of Law (4 ways)
    • 1. Destruction of the subject matter
    • 2. Death or incompetency
    • 3. Supervening illegality
    • 4. Lapse of time
  41. Destruction of the Subject Matter (Definition)
    The subject matter of an offer is destroyed prior to aceptance through no fault of either party
  42. Death or Incompetency (Definiton)
    Prior to the acceptance of an offer, either the offeror or the offeree dies or becomes incompetent
  43. Supervening Illegality (Definition)
    Prior to the acceptance ofa n offer, the object of the offer is made illgal by statute, regulation, court decision, or other law
  44. Lapse of Time (Defintion)
    An offer terminated upon the expiration of a stated time in the offer. If no time is stated, the offer terminated after a "reasonable time"
  45. Legal Value (Definition)
    Support for a contract when either (1) the promisee suffers a legal detriment or (2) the promisor revieces a legal benefit
  46. Bargained for Exchange (Definiton)
    Exchange tat parties engage in that leads to an enforcable contract
  47. Promises That Lack Consideration (4)
    • 1. Illegal consideration
    • 2. Illusory Promise
    • 3. Preexisting duty
    • 4. Past consideration
  48. Illegal Consideration (Definiton)
    Promise to regrain from doing an illegal act
  49. Illusory Promise (Definition)
    Promise in which one or both parties can choose not to perform their obligation
  50. Preexisting Duty (Definiton)
    Promise based on teh preexisting duty of the promisor to perform
  51. Past Consideration (Definition)
    Promise based on the past performance fo the promise.
Card Set:
Business Law 1 Final Exam (Ch 10-13)
2012-12-19 04:15:03
Business Law Cheeseman Husson Dr Speronis

Business Law 1, Final Exam, Husson University, Dr. Speronis
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