1. Contracts Review
Chapters 7-12

2. #1T or F All serious agreements are contracts False
Prom could be serious to you!!!

3. # 2
What is a gift?
The transfer of ownership without receiving anything in return
Think presents!

4. # 3 List the three groups who can lack contractual capacity
Minors, the intoxicated and the mentally impaired.

5. #4 Charging more than the maximum allowed interest on a loan is called
Usury

6. #5 Describe the difference between a necessaries and non-necessaries
One is something necessary for survival or work the other is just nice to have.

7. #6 If an offer is altered by the offeree, what has occurred?
A Counter offer

8. #7
What is the key element in unfair persuasion?
The relationship

9. #8 T or F
For misrepresentation to occur the statement must be one of fact.
True

10. #9 What can you do to keep an offer open to you and only you?
Create an option contract where you give something of value to keep the offer open.

11. #10
Advertisements in the newspaper, on the radio or television are considered to be . . .
Invitations NOT offers

12. #11
Define Revocation:
The right to withdraw the offer before it is accepted.

13. #12
What is the difference between a unilateral and a bilateral contract?
Unilateral offeree must perform the act to show acceptance
Bilateral offeree accepts by communicating promise

14. #13 What is the Mirror Image rule?
The terms of the acceptance must exactly match the terms in the offer

15. #14 List all of the reasons why genuine agreement may be lacking:
Fraud, misrepresentation, undue influence, duress, or mistake

16. #15 In order for a statement to be material it must. . .
An important FACT that influences a parties decision about a contract.

17. #16 What can serve as consideration?
An act, a promise or a forbearance

18. #17 What are the elements of misrepresentation?
1. Untrue statement is one of fact.
2. The statement is Material
3. the victim reasonably relied on the statement

19. #18 What are the three remedies for Fraud? Rescission Damages
Punitive Damages

20. #19 Define Legal Value Must be worth something in the eyes of the law
Not Love or Friendship!

21. #20
If a contract contains a clause that allows one party to get out of it at any time for any reason it said to be?
illusory

22. #21
An output contract is
When the buyer agrees to purchase all of a particular producer’s production

23. #22 What are the three requirements of Consideration?
Each party must give an act, forbearance or promise
Must actually trade
Must have legal value

24. #23
When consideration is NOT necessary for there to be a valid contract it is said to be
Promissory Estoppel

25. #24
List all of the types of agreements that restrain free trade that we discussed in class.
Price fixing
Allocation of Markets
Covenants not to compete

26. #25 Acting as if you intend to be bound by a contract is . . .
Ratification

27. #26
Severing the child parent bond is . . .
Emancipating

28. #27 What is one legalized form of gambling? NYS lottery
Pari-mutuel betting

29. #28
Please give three examples of people who need a competency license.
Teachers, doctors, accountants

30. #29
The sale of goods is controlled by . . .
The UCC

31. #30 A contract is said to be within the statute of frauds if what?
It must be in writing

32. #31 What contracts fall with in the statute or frauds? (5)
Buy and sell goods of more than $500
Real property
Promise to pay the debt of another
Take more than a year to complete
Give something for a promise of marriage

33. #32
What is generally considered to be all essential terms in a written contract?
Names of Parties
Subject matter description
Price
Quantity
Other essential terms
Signature

34. #33 A valid offer is created by doing these three things:
Must intend to create a legal offer
Terms must be definite and complete
Must be communicated to offeree

35. #34
The absence of genuine agreement makes the contract:
Voidable

36. #35
What are the three main categories of things that cannot serve as consideration?
Existing Duties
Mutual gifts
Past performance

37. #36 Capacity in organizations is defined by:
The employee's scope of authority

38. #37 What grade will you get on this test?
It all depends on how much work you put in!