Chapt 10

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Questions and Answers

What type of law generally governs contracts?

Civil law

Common law (correct)

Administrative law

Statutory law

What is the primary function of contract law?

To require agreements to be written

To regulate the pricing of goods

To ensure promises in private agreements are enforceable (correct)

To provide public notice of agreements

What is required for a valid contract according to its elements?

Legal capacity of the parties (correct)

Written documentation

Public registration

Involvement of witnesses

How is the intention to enter into a contract determined?

By observable objective facts as interpreted by a reasonable person Signup and view all the answers

What must considerations in a contract be?

Legally sufficient and bargained-for Signup and view all the answers

Which of the following statements is true regarding contractual capacity?

Both parties must be of legal age and sound mind Signup and view all the answers

Which of the following is NOT a requirement for a valid contract?

Public announcement Signup and view all the answers

What constitutes an agreement in contract law?

An offer and an acceptance Signup and view all the answers

What is a requirement for an implied contract?

The plaintiff must expect payment for the service or property provided. Signup and view all the answers

What distinguishes an executed contract from an executory contract?

An executed contract has been fully performed by both parties. Signup and view all the answers

Which type of contract can be legally avoided at the option of one or both parties?

Voidable contract Signup and view all the answers

What makes a contract unenforceable?

It is valid but rendered unenforceable by a statue or law. Signup and view all the answers

Which of the following is true about void contracts?

They are not valid contracts from the start. Signup and view all the answers

In a mixed contract involving express and implied terms, what is essential for the defendant?

To have had the opportunity to reject the services or property and not do so. Signup and view all the answers

What characterizes an executory contract?

It has been partially performed by at least one party. Signup and view all the answers

Which of the following best describes a characteristic of a voidable contract?

It is valid until one party chooses to void it. Signup and view all the answers

What is a quasi contract primarily designed to prevent?

Unjust enrichment Signup and view all the answers

Under what condition can a party not invoke the doctrine of quasi contract?

When they confer a benefit due to misconduct or negligence Signup and view all the answers

When is the doctrine of quasi contract generally not applicable?

When an actual contract exists Signup and view all the answers

What do plain language laws aim to eliminate?

Legalese in legal writing Signup and view all the answers

Quasi contracts are imposed by which entity?

A court of law Signup and view all the answers

Which of the following is NOT a characteristic of quasi contracts?

They are based on mutual agreement Signup and view all the answers

Why were plain language laws introduced in legal writing?

To make legal language more accessible Signup and view all the answers

Which scenario would typically NOT be addressed by a quasi contract?

One party confers a benefit with consent Signup and view all the answers

What is the objective theory of contracts?

A theory emphasizing external manifestations of intent. Signup and view all the answers

Which of the following is NOT one of the four basic elements necessary for a valid contract?

Mutual Benefit Signup and view all the answers

What differentiates express contracts from implied contracts?

Express contracts are formed through explicit agreement, while implied contracts are formed by actions. Signup and view all the answers

Under what circumstances will a court impose a quasi contract?

When a party benefits at the expense of another without a formal contract. Signup and view all the answers

Which of the following rules guides courts in interpreting contracts?

The intent of the parties is evaluated based on their words and conduct. Signup and view all the answers

Which type of contract is characterized by its explicit terms and the clear communication of intent?

Express contract Signup and view all the answers

A quasi contract is typically established to ensure what?

Prevention of unjust enrichment. Signup and view all the answers

When considering the interpretation of a contract, which factor is given the least weight by courts?

Personal intentions of the party who drafted the contract Signup and view all the answers

What must federal agencies use in most forms and written communications?

Plain language Signup and view all the answers

Which situation is NOT considered ambiguous in a contract?

A term has a clear definition Signup and view all the answers

Extrinsic evidence refers to what kind of information?

Evidence not included in the document itself Signup and view all the answers

When interpreting a contract, how should individual clauses be viewed?

As subordinate to the contract's general intent Signup and view all the answers

What principle states that a reasonable, lawful, and effective meaning will be given to all terms of a contract?

The Plain Meaning Rule Signup and view all the answers

Under which condition can a court consider a contract to be ambiguous?

There is uncertainty about a provision Signup and view all the answers

In interpreting contracts, how should ambiguity be resolved?

By considering the contract as a whole Signup and view all the answers

Which of the following would NOT typically be included in plain language laws regarding consumer contracts?

Complex clauses with legal terminology Signup and view all the answers

Study Notes

Overview of Contract Law

Common law governs contracts unless modified by statutory law or administrative regulations.
Contract law ensures enforceability of private agreements, providing reliability for business transactions.
A contract consists of an agreement to perform an act, enforceable in court.

Objective Theory of Contracts

A party's intent is assessed based on objective facts, judged by a reasonable person, not by secret intentions.

Elements of a Contract

Four basic elements are required for a valid contract:
- Agreement: Involves an offer and acceptance.
- Consideration: Legally sufficient value exchanged.
- Contractual Capacity: Both parties must possess the legal ability to contract.

Types of Contracts

Contract Formation:
- Implied contracts require the plaintiff to provide a service or property expecting payment, which the defendant knew or should have known.
Contract Performance:
- Executed Contract: Fully performed by both parties.
- Executory Contract: Not yet completed.

Contract Enforceability

Voidable Contracts: Can be legally avoided by one or both parties.
Unenforceable Contracts: Valid but unenforceable due to statutory issues.
Void Contracts: Lacking legal force or effect.

Quasi Contracts

Imposed by law to avoid unjust enrichment without any contractual agreement.
Recovery is limited if the benefit is conferred unnecessarily or through misconduct.
Cannot apply when a valid contract covers the disputed matter.

Interpretation of Contracts

Plain Language Laws: Mandated use of clear and understandable language in legal writing to protect consumers.
Plain Meaning Rule: Courts identify contract ambiguity under specific conditions, such as unclear intent or multiple interpretations.
Extrinsic Evidence: Evidence outside the document that may be relevant in interpreting ambiguous terms.

Rules of Interpretation

Contracts are interpreted in a manner that preserves their lawful intentions and effectiveness.
The entire contract is read holistically, with specific clauses subordinate to the general intent.

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Test your knowledge on the key concepts and summarized cases from 'Business Law Today, Standard Edition, 12th Edition' by Roger LeRoy Miller. This quiz covers essential topics that are fundamental to understanding business law principles and practices. Perfect for students and professionals looking to refresh their legal knowledge.