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MGMT 211 EXAM 2 Chapter 4 - Flashcards
executory contract |
not been fully performed by either party |
express contract |
terms of agreement fully and explicitly stated in words, written or oral |
implied in fact contract |
implied from conduct of parties |
objective standard |
what the enforcement and interpretation of a contact is based on/ what would a reasonable person do in a like situation |
reasonable person test |
objective standard |
quasi contract |
'sort of' or almost a contract but something missing and therefore, not a true contract |
implied in law contracts |
quasi contracts |
unconditional contract |
duty of performance is absolute when only occurrence necessary to require performance is passage of time |
conditional contrast |
something other than passage of time must occur before performance is required/ no duty to perform if condition has not been met |
offeror |
... |
offeree |
... |
promisor |
offeror always promises to do or not to do something |
promisee |
... |
bilateral contract |
return promise if required/ both parties are promisors |
unilateral contract |
offer phrased in such a way that offeree can accept only by performance |
executory contract |
contract that has not been fully performed by both parties |
executed contract |
fully performed by both parties |
partially executed |
truly refers to executory contact, but also referring to situation where one party has completed their part of the contract when other party to contract has not |
valid |
one with all elements necessary to entitle at least one of the parties to enforce it in court |
void |
no contract at all/ not recognized by the law |
voidable |
valid contracts, but one of parties to contract has right to avoid his or her contractual obligations without incurring legal liability/ at least one of the parties is able to void the contract / option not a requirement |
unenforceable contract |
valid contract that cannot be enforced because of certain legal defenses/ perfectly valid contract, but then law changes and contract becomes unenforceable ` |
agreement |
mutual assent of parties which is fundamental to formation of a contract |
offer |
promise that expresses the willingness of a party, offeror, to enter into an enforceable agreement regarding a particular subject/ offer made to offeree |
three elements to an offer |
intent, definite terms and conditions, and offer must be communicated to offeree |
preliminary negotiations |
... |
revocation |
most obvious way for offer to terminate through revocation of offer by offeror/ offeror takes back or revokes his offer prior to acceptance by the offeree, and like the offer must be communicated to offeree and is not effective until communicated to offeree |
rejection |
most obvious way for an offer to terminate through rejection of offer by offeree |
lapse of time |
is stated time expires without acceptance then offer terminated |
option contract |
... |
counteroffer |
important form of rejection |
"mirror image" |
terms accepted must be exact terms of offer, nothing more or nothing less |
mailbox rule |
acceptance improperly dispatched then acceptance not valid until received by offeror |
consideration |
something of value that given up in return for promise of other party to the contract |
illusory promise |
expression cloaked in promissory terms that does not actually involve a commitment by the promiser |
promissory estoppel detrimental alliance |
may be used if person makes promise under circumstance such that it is easy to foresee that a reasonable promisee would be induced to rely on the promise and if the promisee changes his position in reliance on the promise, and if the promise is not kept |
contractual capacity |
ability of contracting party to understand that contract being made and understand its general nature |
restitution |
if minor disaffirms executed contract, there may be corresponding duty to return the object of contact to other party/ only required if minor able |
ratification |
after reaching age of majority, individual can ratify contracts formed as minor, thus removing ability to disaffirm |
unconscionable contract |
grossly unfair one sided contracts where one person taking advantage of situation and exculpatory agreements |
exculpatory agreement |
releases one party from the consequences brought about by his or her wrongful acts of negligence |
unilateral mistake |
mistake by only one party gives no relief to the contract terms |
mutual mistake of value |
no relief |
mutual mistake of material fact |
relief/ either party to contract can void |
fraud |
(1) misrepresentation has occurred (2) attempt to deceive (3) innocent party has been injured
only refers to misrepresentations of fact that consciously intended to mislead another |
duress |
when someone forces another person to enter into contract against his or her will |
undue influence |
someone mentally takes control of another person and substitutes their will for that of the victim |
statutes of frauds |
require certain contracts in writing, dare back to early English law when parties to a suit could not testify in their own behalf |
parol evidence rule |
prohibits introduction of oral testimony, or extraneous writings that contradicts or varies from terms of written contracts |
discharged |
when both parties performance is complete |
complete performance |
when the performance is within the bounds of reasonable expectations |
substantial performance |
performance that is only slightly below what is reasonably expected, and incomplete and insufficient performance occurs when the performance is well below what is reasonably expected and constitutes material breach of contrac |
material breach of contract |
... |
condition precedent |
clause in contract that identifies some condition or obligation-triggering event that must occur prior to the creation of obligation under the contract |
condition subsequent |
condition that follows, or is subsequent to the duty to perform/ operates to terminate party's absolute promise to perform |
concurrent conditions |
when parties expressly or impliedly are to perform their respective duties simultaneously |
rescission |
parties can form new contract for express purpose of discharging original contract |
novation |
substitues new party for one of the original parties |
accord and satisfaction |
parties must agree to accept performance that is different from the performance originally promised |
accord |
agreement between parties for different performance/ not binding until satisfaction is made |
satisfaction |
performance of substituted obligation |
unliquidated debt |
debt that is truly in dispute, neither party can prove exact amount owed |
subsequent illegality |
declaring the subject of contract to be illegal |
commercial impracticability |
allows parties to discharge contracts when the performance that was originally contemplated turns out to be massively more difficult or more expensive than could have been originally anticipated |
repudiation anticipatory breach |
one of the parties to the contract, prior to the required time of performance announces that he will not perform as required under the contract/ material breach |
punitive damages |
damages that are designed to punish the defendant for breaching the contract/ not awarded in breach of contract cases |
legal remedy |
... |
equitable remedies |
... |
monetary damages |
most common remedy awarded for breach of contract/ goal is to compensate non breaching party for loss of bargained for exchange |
compensatory damages |
designed to compensate injured party for loss of the bargain |
consequential damages |
arise from breach as result of special needs or unique position of the buyer/ caused by special circumstances beyond contract itself |
liquidated damages |
amounts the parties may stipulate in their contract that a certain amount shall be paid in case of default |
rescission |
action to undo or cancel a contract and return the parties to the position they occupied prior to forming the contract |
restitution |
... |
reformation |
remedy used to rewrite the contract to express true agreement between parties |
specific performance |
court orders the breaching party to perform the exact bargain promised in the contract |
principal |
p |
agent |
... |
power of attorney |
written agreement |
ratification |
... |
agency by estoppel |
prevented or estopped from denying the agency relationship |
undisclosed agency |
one of the major reasons for entering into agency relationship is to hide identity of principal |
disclosed agency |
when agent tells third party that he is only an agent and that there is a principal and identity of the principal |
partially disclosed agency |
when agent tells third party that he is just an agent and that there is a principal but does not disclose the identity of that principal |
vicarious liability |
... |
scope of the employment |
... |
acceptance |
offeree's expression of assent/ agreement to exact terms of offer
must be unconditional, unequivocal, legally communicated |
agency law |
principal appoints agent to represent principal in business dealing with third party |
apparent authority |
agency by estoppel; no actual authority, third party can bind principal by actions of principal through agent, alleged principal does not have to know agent is acting on their behalf, third party thinks agent represents principal, principal must lead third party to believe agent can represent principal |
expressed authority |
... |
general agency |
... |
implied authority |
... |
injunction |
... |
option contract |
... |
special agency |
... |
undue influence |
... |