Business Law Final

  1. Illusionary promises are enforceable?

    A) False
    B) True
    A) False
  2. Industrial Engineering, Inc., promises to give stock options to Jasmine for processes she has already designed for the firm. This promise is enforceable

    C) under no circumstances.
  3. Can past consideration be considered sufficient consideration to support a contract.
  4. If a minor enters into a contract for a necessary, can they disaffirm the contract?
    Yes, but they remain liable for the reasonable value of the goods.
  5. A unilateral mistake is a mistake by _____, making the contract ______.
    one party; enforceable
  6. A bilateral mistake is mistake by ________ and the contract _______.
    both parties; can be rescinded by either party.
  7. Unlawful pressure brought to bear on a person, causing the person to perform an act that he or she would not otherwise perform.
  8. Under what circumstances can a party be discharged from a contract?
    • Discharge by:
    • agreement
    • mutual rescission
    • novation
    • settlement agreement
    • accord and satisfaction
    • operation of law
  9. If an employment contract is breached employee is granted _______.
    compensatory damages.

    Bob was contracted for the month of May a day before his first day they cancelled his contract for $5000; He finds a job elsewhere but is only paid $3000, he can receive compensation for $2000.

    Hallmark case
  10. Special damages that compensate for a loss that is not direct or immediate (ex loss profits). The special damages must have been reasonably foreseeable at the time the breach or injury occurred in order for the plaintiff to collect them.
    Consequential damages
  11. A provision in a contract that stipulates an amount, that the parties to a contract believe to be a reasonable estimation of the damages that will occur in the event of a breach. Meant to make innocent party whole.
    Liquidated damages clause
  12. A clause that specifies a certain amount to be paid in the event of a breach or default of contract, it is designed to penalize the breaching party, not to make the innocent party whole. Agreement to the amount may not be enforced by court.
    Penalty clause
Card Set
Business Law Final