Legal Environment of Business Chapter 11

  1. Bilateral
    a promise for a promise
  2. Unilateral
    a promise for an act (acceptance is the completed-or substatial-performance of that contract by the offeree)
  3. Formal
    requires a special form for contract formation
  4. Informal
    requires no special form for contract formation
  5. Express
    formed by words (oral, written, or a combination)
  6. Implied in Fact
    formed at least in part by the conduct of the parties
  7. Executed
    a fully performed contract
  8. Executory
    a contract not yet fully performed
  9. Valid
    a contract that results when the elements necessary for contract formation exist
  10. Voidable
    a contract that may be legally canceled at the option of one or both of the parties
  11. Unenforceable
    a valid contract rendered unenforceable by some statute or legal defense
  12. Void
    a contract that has no legal force or binding effect; treated as if the contract never existed
  13. Intent
    the offeror must have a serious, objective intention to become bound by the offer. Offer made in anger, jest, or undue excitement do not qualify. Other situations that may lack the required intent include (a) expressions of opinions; (b) statements of future intent; (c) preliminary negotiations; and (d) traditionally, agreements to agree in the future
  14. Definiteness
    the terms of the offer must be sufficiently definite to be ascertainable by the parties or by a court
  15. Communication
    the offer must be communicated to the offeree
  16. By Action of the Parties
    an offer can be revoked or withdrawn at any time before acceptance without liability. A counteroffer is a rejection of the original offer and the making of a new offer
  17. By Operation of Law
    an offer can terminate by (a) lapse of time, (b) destruction of the subject matter, (c) death or incompetence of the parties, or (d) supervening illegality
  18. Acceptance
    • 1. This can be made only by the offeree or the offeree's agent
    • 2. Must be unequivocal. Under the common law (mirror image rule), if new terms or conditions are added to the acceptance, it will be considered a counteroffer
  19. Consideration
    the value given in exchange for a promise. A contract cannot be formed without sufficience of this
  20. Elements of Considerations
    something of legally sufficient value must be given in exchange for the promise; and (b) there must be bargained-for exchange
  21. Adequacy of Consideration
    This relates to "how much" consideration is given and whether a fair bargain was reached
  22. Agreements that Lack Consideration
    This happens when preexisting duty or past consideration exist
  23. Promissory Estoppel
    when injustice can be avoided only by enforcing a promise that would otherwise be unenforcable, this doctrine might allow a contract to be enforced
  24. Contractual Capacity
    the legal ability to enter into a contractual relationship. Situations in which this is lacking include being a minor, intoxicated, or mentally incompetent
  25. Covenant Not to Compete
    a contractual promise of one party to refrain from conducting business similar to that of another party for a certain period of time and within a specified geographic area
  26. Unconscionable
    a term used to describe a contract or clause that is void on the basis of public policy because one party, as a result of disproportionately bargaining power, is forced to accept terms that are unfairly burdensome and that unfairly benefit the dominant party
Card Set
Legal Environment of Business Chapter 11
Legal Environment of Business Chapter 11