Term
List the elements of a contract
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Definition
- Agreement – one party’s offer and another party’s acceptance of that offer
- Capacity to contract – a legal qualification that determines one’s ability to enter into an enforceable contract
- Consideration – something of value from the promisee that the promisor requested or bargained for in a contract
- Legal purpose – a legal purpose that is consistent with sound public policy
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Term
| Can a party that is not in privity of contract ever sue for breach of the contract? |
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Definition
| Ordinarily, a party cannot sue for breach of contract without being in privity of contract with the other party, unless that person is a third-party beneficiary of the contract. |
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Term
Are implied contracts actual agreements between the parties?
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Definition
| Yes, implied contracts are agreements that are intended by parties, either by tacit understanding or by the assumption that it existed, even though the parties might not have expressed their agreements explicitly |
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Term
| List the elements of an offer |
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Definition
- Intent to contract – offerer must intend, or appear to intend, to create a legal obligation if the offeree accepts the offer
- Definite terms – make an agreement enforceable and make it possible to determine whether the parties have fulfilled their promises and to calculate damages
- Communicate to Offeree – offeree cannot accept a proposal before knowing it
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Term
| Are advertisements offers? |
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Definition
| No they are invitations to negotiate or to make an offer, expressing no present intent to contract |
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Term
| How does a court determine reasonable certainty to determine whether an offer exists? |
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Definition
| Reasonable certainty means generally identifying the contracting parties, the contract’s subject matter, the price and the time of performance. The courts must ask whether the offer’s terms are clear enough to provide a basis for a remedy if default occurs. |
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Term
| List five factors regarding duration and termination that are key to determining whether an offer is binding? |
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Definition
- Lapse of time – offer ceases to be binding when the time the offer specifies expires or, absent a specific time, when a reasonable amount of time passes.
- Operation of law – rules of law apply automatically to a situation without any act by the parties
- Offeree’s rejection – when the offeree notifies the offeror of an intention not to accept
- Counteroffers – any proposal the offeree makes to the offeror that varies in some material way from the original offer
- Offeror’s revocation -– revocation or withdrawal from an offer any time before acceptance
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Term
| List the elements of acceptance |
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Definition
- The acceptance must be made by the offeree
- The acceptance must be unconditional and unequivocal
- The offeree must communicate the acceptance to the offeror by appropriate word or act
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Term
| Can silence ever be acceptance? |
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Definition
| No and language in an offer cannot circumvent this rule |
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Term
| Identify parties that might be incompetent to contract |
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Definition
- Minors
- Insane persons
- Intoxicated persons
- Artificial entities (such as insurers) that are restricted by law or corporate charter from entering into certain contracts
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Term
| What are minors’ rights and duties under their contracts? |
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Definition
| The law protects minors from disposing of their property while they are underage. Generally, a minor can assert minority as a defense against liability in contracts, except those involving the purchase of necessaries. |
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Term
| What are the rights and duties of parents under minors’ contracts? |
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Definition
| Parents are generally not liable for minor children’s contracts unless a parent cosigns, the child has acted on the parent’s behalf or at the parent’s direction, or a parent has neglected or refused to pay for necessaries for the minor |
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Term
| What are insane persons’ rights and duties under contracts? |
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Definition
| Any agreement entered by a person adjudged by a court to be insane is void, except for a contract for necessaries. A contract by a person who claims to be insane, but has not been judged so by a court, is voidable under certain conditions |
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Term
| Under what circumstances will intoxication allow a party to avoid a contract? |
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Definition
An intoxicated person can avoid a contract if the person did not know a contract was forming or did not understand the legal consequences of acts purporting to form the contract
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Term
| Can and insurer avoid a contract entered into in a state in which the insurer is unlicensed? |
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Definition
| No, the insurer cannot assert its own wrongdoing as a defense and policies sold by insurers not licensed to do business in a state are enforceable against them |
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