People make promises all the time, so promises have little to do with contract law. True or False?
False
A person to whom a promise is made has a right to expect or demand that something either will or will not happen in the future (that is the basis of contract law.)
At a given point in time, contract law does NOT reflect which of the following?
A) Our interests
B) Our physical well-being
C) Our expectations
D) Our social values
B: Our physical well-being
Promises that involve moral obligations are the basis of contract law. True or False?
False
A contract is...
A promise or agreement that can be enforced in court.
A promisor is...
A person who makes a promise.
A promisee is...
A person to whom a promise is made.
The objective theory of contracts tells us that a party's intention to enter into a legally binding agreement is judged by the personal belief of at least one of the parties. True or False?
False
The objective theory of contracts is...
A theory under which the intent to form a contract will be judged by outward, objective facts (such as what the party said when entering into the contract, how the party acted or appeared, and the circumstances surrounding the transaction) as interpreted by a reasonable person, rather than by the party's own secret, subjective intentions.
Requirements for a valid contract do NOT include...
A fair price
When a court examines the objective facts surrounding contract formation, which of the following does it NOT examine?
A) If the party had the flu while negotiating.
B) The circumstances surrounding the transaction.
C) What the party said when entering into the contract.
A: If the party had the flu while negotiating.
Pertaining to contract formation, a bilateral contract is...
A promise for a promise.
Pertaining contract formation, a unilateral contract is...
A promise of an act
Pertaining to contract formation, a formal contract...
Requires a special form for creation
Pertaining to contract formation, an informal contract...
Requires no special form for creation
Pertaining to contract formation, an express contract...
Formed by words
Pertaining to contract formation, an implied contract...
Formed by the conduct of the parties
If the offeree can accept simply by promising to perform, then the contract is unilateral.
False
Assume that Eva tells Maria that she will buy Maria a new dress if Maria reads a book by Friday night. Maria begins reading but has a chapter left to finish when Eva says she has changed her mind and will not pay for the new dress. Under the modern approach to contracts, Eva and Maria:
A) Have no contract until Maria finishes reading.
B) Formed a unilateral contract as soon as Maria began reading the book.
C) Formed a bilateral contract as soon as Maria began reading the book.
B: Formed a unilateral contract as soon as Maria began reading the book.
An implied contract differs from an express contract in that the conduct the parties creates and defines the terms of the contract.
True
Pete calls A-1 Towing when his car won't start. He tells the dispatcher the location of the car, but does not ask for a price and leaves before the tow truck arrives. He obviously does not talk to the driver and does not sign up any documents. Therefore, Pete:
A) Owes nothing because he could not reject the services if they were overpriced.
B) Owes A-1 for towing his car under an implied contract.
C) Owes A-1 for towing his car under an express contract.
B: Owes A-1 for towing his car under an implied contract.
Executory contract is...
A contract that has not as yet been fully performed.
Executed contract is...
A contract that has been completely performed by both parties.
A contract that has the necessary contractual elements: agreement, consideration, legal capacity of the parties and the legal purpose is called...
Valid contract
No contract exists, or there is a contract without legal obligations.
Void contract
A valid contract that can be enforced because there are no legal defenses against it.
Enforceable contract
A party has the option of avoiding or enforcing the contractual obligation.
Voidable contract
A contract exists, but it cannot be enforced because of a legal defense.
Unenforceable contract
If a contract is valid then that means the contract can be...
Enforceable, voidable, and unenforceable
If you void a contract then...
There is no contract
Agreement normally is evidenced by an offer and an acceptance. True or False?
True
Three Elements Necessary for Any Offer to be Effective:
The ___ must have a ___ intention to become bound by the offer.
The terms of the offer must be reasonably __, or definite, so that the parties and the court can ___ the terms of the contract.
The offer must be ___ to the offeree.
Offeror, serious
Certain, ascertain
Communicated
Pascal's new Mercedes won't start one morning and he screams to his passenger, "For a thousand bucks, I'd get rid of this car." The passenger normally CANNOT buy the car for $1000...
Because a reasonable person would know that a serious offer was not being made.
Olivia says to Jim, "I think I'll sell my new digital camera for $100 because I'm never going to use it." This statement constitutes:
A statement of future intent.
The Definiteness of Terms:
The identification of the ___.
The identification of the ___ or subject matter of the contract.
The ___ to be paid.
The ___ of ___, delivery, or performance.
Parties
Object
Consideration
Time, Payment
The Methods by Action of the Parties for Termination of an Offer:
Revocation - Unless the offer is ___, it can be revoked at any time before acceptance without ___.
Rejection - Accomplished by words or actions that demonstrate a clear ___ not to accept the offer; not effective until ___ by the offeror or the offeror's agent.
Counteroffer - A ___ of the original offer and the making of a new ___.
Irrevocable, liability
Intent, received
Rejection, offer
The Methods by Operation of Law for Termination of an Offer:
Lapse of time - The offer terminates at the end of the time period specified in the offer or, if no time period is stated in the offer, at the end of a __ time period.
Destruction of the subject matter - When the specific subject matter of the offer is ___ before the offer is accepted, the offer ___ terminates.
Death or Incomptence of the offeror or offeree - If the offeror or the offeree dies or becomes ___, this offer terminates (unless the offer is ___).
Supervening illegality - When a statue or court decision makes the proposed contract ___, the offer automactically terminates.
Reasonable
Destroyed, Automatically
Icompetent, Irrevocable
Illegal
Which of the following will NOT terminate an offer?
A) Rejection
B) Acceptance
C) Revocation
B: Acceptance
An acceptance must match the terms of the offer exactly in order to be valid. This is known as the mailbox rule. True or False?
False
The Mirror Image Rule requires that an acceptance match the terms of an offer: If the acceptance is not identical to the offe, it is considered a counteroffer.
The Mailbox Rule means that once an acceptance is sent or otherwise communicated to the offeror by an authorized means, the acceptance is effective.
True
The Mailbox Rule is...
A rule providing that an acceptance of an offer becomes effective on dispatch (upon being placed in a mailbox), if mail is expressly or impliedly an authorized means of communication of acceptance to the offeror.
Pick one item in the list below that typically is NOT included in an online offer:
A) Dispute resolution
B) Return policy
C) Disclaimer
D) Acceptance of terms
E) Future discount policies
F) Payment
G) Privacy Policy
H) Limitation on remedies
E: Future discount policies
Because individuals rarely read the underlying language in a click-on-agreement, they are always invalid. True or False?
False
A click-on-agreement is...
An agreement that arises when a buyer, engaging in a transaction on a computer, tablet device, or smartphone, indicates his or her assent to be bound by the terms of an offer by clicking on a button that says, for example, "I agre"; sometimes referred to as a click-on license or a click-wrap agreement.
___ do not require Internet users to assent to the terms before downloading certain software.
