MANGMT 3540: EXAM 3
55 Cards in this Set
| Front | Back |
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Reality of Consent
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concept that there is a defense to a contract unless the parties' consent is both real and voluntary
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Rescission
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court-ordered cancellation of a contract
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Reformation
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court-ordered revision of a contract to correct a mistake in reducing it to writing
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Mutual Mistake
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bilateral mistake of fact by both parties to the contract
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Unilateral Mistake
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mistake by one party to the contract
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Innocent Misrepresentation
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misrepresentation without fault
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Negligent Misrepresentation
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party makes a statement without exercising due care to ensure that the statement is true
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Fraudulent Misrepresentation
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false statement of fact, made with the intent to deceive, reasonably relied on and causing damages
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Fraud in the Execution
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lying about the nature of a document in order to obtain a person's signature
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Fraud in the Inducement
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misrepresentation as to the understood matter of the contract
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Contract of Adhesion
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contract in which the terms are dictated by the stronger party, with no real negotiation allowed
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Reasonable Expectations Test
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states that a performing party is released by complete performance when he meets the reasonable expectations of the other party in light of the entire contract
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Substantial Performance
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occurs where there is a breach of contract, but it is minor in light of entire contract (Partial Discharge)
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Material Breach
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failure to fulfill a contractual obligation which is important in light of the entire of the contract
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Immaterial Breach
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breach which is unimportant in light of the entire contract (substantial performance)
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Satisfaction Clause
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Requires one party to perform the contract to the satisfaction of the other party.
In a contract which involves a matter of taste, a satisfaction clause means there must be personal satisfaction (subjective)
Function (objective)
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Time is of the Essence Clause
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a clause in a contract that uses the words "time is of the essence" to indicate that time of performance is essential to the contract, so any time delays will be considered a material breach
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Anticipatory Repudiation
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material breach which occurs when, prior to the time performance is due, one party informs the other that it will not perform the contract
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Condition Precedent
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condition which must be fulfilled prior to a duty arising under the contract
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Condition Subsequent
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relieves a contractual duty after a certain event occurs.
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Concurrent Condition
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present in a contract when bother parties' performance is conditioned on the others' simultaneous performance
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Voluntary Rescission
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occurs when all parties to the contract agree to cancel it
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Novation
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occurs when the parties agree to cancel the old contract and enter into a new one
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Accord and Satisfaction
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occurs where there is an agreement by one party to accept a performance which is different from that required by the contract, followed by the completion of that performance by the other party
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Waiver
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voluntary acceptance by one party of the inadequate performance of the other
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Expectation Interest
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interest of a party to a contract in getting the benefit of the bargain, that is, to be placed in the same situation the party would have been in if there had been no breach
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Reliance Interest
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nonbreaching party's interest in being repaid for the const of partial performance or preparation to perform
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Restitution Interest
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interest of one party in receiving the value of the benefit he or she supplied to the other party
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Compensatory Damages
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direct damages, which naturally flow from a breach of contract and which meet the typical expectation interest of the nonbreaching parties
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Cover Price
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cost of substitute goods or substitute performance
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Consequential Damages
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indirect damages which do not necessarily flow form the breach, but which are recoverable if two conditions are met
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Incidental Damges
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costs of finding substitute performance
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Mitagation of Damages
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requirement that a non breaching party use reasonable efforts to lessen or mitigate the damages of the breaching party
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Punitive Damages
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damages awarded to punish the defendant and to deter others form similar conduct
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Nominal Damages
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small amount of damages given to a party who wins but who can show no monetary injury
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Liquidated Damages
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damages in a fixed amount agreed upon by the parties prior to any breach of contract
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Negotiable Instruments
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class of documents which can be easily transferred from one person to another
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Negotiate
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act of transferring ownership of a negotiable instrument
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indorsement
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signature of the older on the back of the instrument
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indorser
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person signing the indorsement
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indorsee
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person whom instrument is endorsed to
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Holder
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person properly in possession of a properly transferred negotiable instrument
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Order Paper
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contains an order by one person for another to pay a sum of money
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Drawer
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person signing order paper
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Drawee
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person or entity ordered to pay (Bank for a check)
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Payee
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person to be paid
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Draft
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order issued by a drawer for a drawee to pay a payee
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Check
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draft payable on demand in which a bank is the drawee
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Promise Paper
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Promise of one party to pay another
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Maker
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person who promises to pay
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Payee
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person to be paid
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Promissory Note
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promise by maker to pay a sum of money to payee at a future time
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Certificate of Deposit
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special type of promise pater, not of bank acknowledging a deposit and promising to repay at future time with interest
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Conditional Indorsement
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places a specific condition upon the right to the indorsee on the instrument
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Trust Indorsement
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indorses the instrument to a trustee
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MANGMT 3540: EXAM 1