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What is a contract?
an agreement that is legally enforceable
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What are the 5 elements that are essential for an agreement to be a contract?
- mututal serious intent
- capacity of the parties involved (age, mental ability)
- legality of the purpose (cannot be for an illegal agreement)
- consideration (receive sth in return)
- in writing (only by certain agreements)
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What are the remedies for breach of contract?
- monetary -- putting the plaintiff in the position he/she would have been if the contract had been fully performed
- performance -- court ruling to enforce performance
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Why is there a necessity for a system to enforce contracts?
reliability (if there is a reliable system, businesses are more likely to enter into contracts)
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Which state did not adopt the UCC and why?
Louisianna -- its legal system is derived from the French legal system
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What are the 3 requirements for something to be considered a good?
- personal property
- moveable
- tangible
Example: mobile home, cell phone, laptop etc.
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What kind of contracts are covered by the UCC?
contracts for the sale of goods
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What does UCC stand for?
Uniform Commercial Code
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Which two laws apply to contracts?
- UCC (sale of goods)
- common law (all other)
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What is the predominant purpose test and what is it used for?
- It is used to determine the main purpose of a contract if it is a mix of sale of a good and something else, to determine the law the contract is covered under.
- What is the major purpose of the contract? Sale or other part?
Example: purchase of a tv and its installment - predominant purpose is the sale, so it is covered under UCC
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What are the two appoachment methods to contract law?
- rule oriented
- result oriented
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What is the rule oriented approach to contract law and its objectives?
- using strict rules in deciding contract disputes
- contracts are hard to make and hard to break
- objective: enhance predictability and certainty of contracts
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What is the result oriented approach to contract law and its objectives?
- using concepts like "justice" and "fairness" in deciding contract disputes
- contracts are easier to make and easier to break
- objective: achieve justice and fairness in individual cases
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What is the Restatement of Contracts?
a compilation of common law contract principles
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What are the 5 classifications of contracts?
- express and implied contracts
- bilateral and unilateral contracts
- valid, void, voidable, and unenforceable contracts
- executed and executory contracts
- formal and informal contracts
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What is an implied contract?
terms of the contract are implied by the behavior of the parties under the circumstances at the time
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What is an expressed contract?
the terms of the contract are stated in words, either oral or in writing
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What is a bilateral contract?
a promise is made in return for another promise
the contract is formed the moment the return promise is made
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What is a unilateral contract?
a promise is made in return for the performance of a requested act
the contract is formed the moment the requested act is fully performed
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What is a valid contract?
a contract that meets all of the essential elements
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What is a void contract?
a contract that has no legal effect, because it has not been created in the first place (eg under duress)
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What is a voidable contract?
a contract where at least one of the parties has the right to avoid the contract (eg. fraud => victim's choice)
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