Definition of Contract correct answers "a promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty". a legally binding agreement between 2 or more parties who agree to perform or to refrain from performing some a...
MGMT 209 Ch. 9 || WITH COMPLETE SOLUTIONS!!
Definition of Contract correct answers "a promise or set of promises for the breach of which
the law gives a remedy, or the performance of which the law in some way recognizes as a
duty". a legally binding agreement between 2 or more parties who agree to perform or to
refrain from performing some act now or in the future.
Objective theory of contracts correct answers the apparent intention of a party to enter into a
contract is determined by the objective, outward demonstration of his or her assent as it
would be interpreted by a reasonable person
Objective factors include correct answers 1. What the party said when entering the contract
2. How the party acted or appeared
3. the circumstances surrounding the transaction
Elements of a Contract correct answers 1. Agreement- includes and offer and acceptance
2. Consideration- legally sufficient and bargained-for consideration must be exchanged for a
promise
3. Contractual Capacity- both parties entering into the contract must have the contractual
capacity to do so.
4. Legality- purpose must be to accomplish some goal that is legal and not against public
policy.
Defenses to the Enforceability of a Contract correct answers Even if all the elements are met,
a contract may be unenforceable if these are not met:
1. Voluntary consent by both parties
2. Form: whatever form the law requires
Example of Bilateral contract correct answers Javier offers to buy Ann's digital camcorder for
$200. Javi tells Ann that he will give her $200 for the camcorder next Friday, when he gets
paid. Ann accepts Javi's offer and promises to give it to him when he pays her friday.
Example of Unilateral contract correct answers Reese says to Kim, "off you drive my car
from NYC to LA, I'll give you $1,000." Only on Kim's completion of the act does she fully
accept Reese's offer to pay $1,000. If she choses not to there are no legal consequences.
Revocation of offers for unilateral contracts correct answers The modern day view on
revocation is that the offer becomes irrevocable once performance has begun.
Express contract correct answers The terms of the agreement are fully and explicitly stated in
oral or written words
Implied Contract correct answers The terms of the agreement are inferred from the conduct of
the parties. 3 steps to establish:
1.Plaintiff furnished some service or property.
2. Plaintiff expected to be paid for that service or property, and the defendant knew or should
have known payment was expected.
3. Defendant had a chance to reject the service or property and did not.
, Quasi Contract correct answers A quasi-contract is not an actual contract, but is a legal
substitute for a contract formed to impose equity between two parties. The concept of a t is
that of a contract that should have been formed, even though in actuality it was not.
Executed Contract correct answers Contract that has been fully performed on both sides
Executory Contract correct answers Contract that has not been fully performed by the parties.
One has but one has not.
Valid Contract correct answers Has the necessary contactual elements: agreement,
consideration, contractual capacity or parties, and legal purpose.
Void Contract correct answers No contract exists, or there is a contract without legal
obligations.
Voidable contract correct answers a valid contract but one that can be avoided at the option of
one or both parties. The party having the option can elect either to avoid any duty to perform
or to ratify(make valid) the contract and both must perform.
Unenforceable contract correct answers a contract exists, but it cannot be enforced because of
a legal defense. Ex: a valid contract that is required to be in writing, but is not.
Requirements of the offer correct answers 1.Offeror must have serious intention to become
bound (INTENTION)
2. Terms of the offer must be reasonably certain, or definite, so that the parties and the court
can ascertain the terms of the contract (DEFINITE TERMS)
3. The offer must be communicated to the offer. (COMMUNICATION)
INTENTION correct answers determined by what a reasonable person in the offeree's
position would conclude that the offeror's words and actions meant.
Lucy V. Zehmer case correct answers Lucy(plaintiff) filed a suit against Zehmer(defendants)
to compel the Zehmers to transfer title of their property(Ferguson Farm) to the Lucy's for
$50,000 as the Zehmers allegedly agreed to do. Court ruled that the writing was an
enforceable contract and reversed the ruling of the lower court. The Zehmers were required to
sell their farm to the Lucy's. This illustrates the objective theory of contracts with respect to
whether a serious offer was intended.
Expression of opinion correct answers not an offer, does not indicate intention to enter into a
binding agreement
Statements of future intent correct answers future intention, not an offer
Preliminary negotiations correct answers request or invitation to negotiate is not an offer, it
only expressed willingness to discuss the possibility of entering into a contract.
Advertisements correct answers including representations made in mail-oder catalogues,
price lists, and circulars are treated not as contract offers but as invitations to negotiate.
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