Contract Law Basics Quiz
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Questions and Answers

FAS means

  • free on board (correct)
  • al foreign alien state
  • free allotment security

    • In case of unilateral mistake

  • the contract is binding, except when the other party knows or should have known the mistake (correct)
  • the contract is binding
  • the contract is not binding, except when the other party knows or should have known the mistake

    • A joint venture contract can be entered

  • by both companies and individuals (correct)
  • only by companies
  • only by individuals

    • A valid contract

    <p>is a contract that meets all legal requirements and can be enforced by either party (B)</p> Signup and view all the answers

    A party who breaks off negotiations in bad faith

    <p>is liable for loses (C)</p> Signup and view all the answers

    An offer can be revoked by the offeror

    <p>always except in case of option contract, unilateral contracts, u.cc. exception, promissory estoppel (C)</p> Signup and view all the answers

    A Quasi-contract is created

    <p>by operation of law in order to avoid unjust enrichment of one party at the expense of another (C)</p> Signup and view all the answers

    In an offer unstated terms

    <p>may be implied or inferred by common sense (A)</p> Signup and view all the answers

    According to CISG in case of material breach, the non-breaching party may

    <p>either performance or breach (B)</p> Signup and view all the answers

    A voidable contract

    <p>is binding on one party who has the option to withdraw from it or enforce it (A)</p> Signup and view all the answers

    According to the duty of good faith

    <p>parties should not fail in fulfilling they obligations (C)</p> Signup and view all the answers

    Adequacy of consideration

    <p>is not an issue in court (A)</p> Signup and view all the answers

    Consideration is

    <p>something a party provides in exchange for something from the other party (A)</p> Signup and view all the answers

    A contract

    <p>is a rule binding upon the parties (A)</p> Signup and view all the answers

    Memoranda/terms of agreement

    <p>lay down the state of the negotiation process (C)</p> Signup and view all the answers

    The essential elements of a contract are

    <p>capacity, mutual agreement, consideration and legality of subject matter (C)</p> Signup and view all the answers

    A unilateral contract

    <p>involves one promise by one party and an act by another (B)</p> Signup and view all the answers

    Pre-emption right is the right

    <p>to be offered shares in a company before they are made available to anyone else (C)</p> Signup and view all the answers

    An express contract is

    <p>stated in words, written or oral, or partly written and partly oral (C)</p> Signup and view all the answers

    Negotiation ends

    <p>when minds meet or if they don't meet within a reasonable time (B)</p> Signup and view all the answers

    An offer

    <p>must state the essential terms of the proposed contract (C)</p> Signup and view all the answers

    The UN Convention on Contracts for the International Sale of Goods was adopted in 1980

    <p>in Vienna (C)</p> Signup and view all the answers

    An advertisement

    <p>is not an offer but just an invitation to offer (C)</p> Signup and view all the answers

    An offer lasts

    <p>for the specified period of time or, if not specified, for a reasonable time (A)</p> Signup and view all the answers

    Acceptance

    <p>must be addressed in any manner or by any medium so long as reasonable (A)</p> Signup and view all the answers

    The intent of the parties is to be determined

    <p>from the words and actions taken as a whole (A)</p> Signup and view all the answers

    During the period of time during which the offer is to remain open it may expire

    <p>in case of rejection, counteroffer, death or incompetency of either offeror or offeree (A)</p> Signup and view all the answers

    Past consideration (something already performed without expectation of obtaining something in return)

    <p>is not binding since it was not bargained for in the current transaction (B)</p> Signup and view all the answers

    In case a party fails to read what he signs

    <p>the contract is binding (C)</p> Signup and view all the answers

    Material mistake pertains to

    <p>a relevant fact, value or opinion (A)</p> Signup and view all the answers

    L.O.L

    <p>is not a binding agreement (B)</p> Signup and view all the answers

    In case of relevant mistake, the contract is

    <p>voidable (C)</p> Signup and view all the answers

    Study Notes

    FAS Definition

    • FAS stands for foreign alien state

    Unilateral Mistake

    • Contract is binding, except when the other party knows or should know of the mistake
    • Contract is not binding if the other party knows or should know of the mistake

    Joint Venture Contract

    • Can be entered into by companies
    • Can be entered into by companies and individuals
    • Can be entered into by individuals only

    Valid Contract

    • Meets all legal requirements and is enforceable by either party
    • Is an effective and enforceable contract

    Party Breaking Off Negotiations in Bad Faith

    • Liable for losses
    • Bound to restart the negotiation

    Offer Revocation

    • Generally allowed, except in option contracts, unilateral contracts, etc.
    • Offers can be revoked in specific cases

    Quasi-Contract

    • Created by operation of law to avoid unjust enrichment of one party
    • Created by operation of law for unconscious parties

    Unstated Terms in an Offer

    • Terms should be clarified before agreement for offers
    • Terms may be implied by common sense

    Material Breach (CISG)

    • Non-breaching party can demand performance or breach and discharge if a breach is material

    Voidable Contract

    • Binding on one party but can be enforced by the other
    • Binding on one party, but the other party can choose whether to enforce

    Duty of Good Faith

    • Parties should fulfill obligations and not withdraw from negotation
    • Parties should not enter into negotiations if not sincerely seeking contract

    Consideration

    • Price or something exchanged for goods
    • Something provided by one party in exchange for something from the other party

    Contract Enforceability

    • Contract is a rule binding parties and is enforceable
    • Contract is a rule to be enforced as a law

    Memorandum/Agreement

    • May or may not be legally binding
    • Lays out details of the negotiation process

    Contract Essential Elements

    • Oral/written agreement
    • Capacity
    • Mutual agreement
    • Consideration
    • Legality of subject matter

    Implied Contract

    • Inferred by conduct
    • Inferred by a judge or reasonable person

    Unilateral Contract

    • One promise made by one party, other party performs
    • Involves a unilateral conduct

    Pre-Emptive Right

    • Right to buy shares at a lower price
    • Right to buy company shares before they are made available publicly

    Void Contract

    • Cannot be enforced

    Express Contract

    • Agreement that is clearly and unequivocally shown
    • Can be stated in words, writing or both

    Negotiation Ends

    • When minds meet or a reasonable time if no agreement
    • Needs good faith

    Offer

    • Clearly identifies goods/services
    • States essential terms
    • Generally not an offer; invitation to offer
    • Specific offers to individuals/groups can be an offer

    Acceptance

    • Clear and unconditional
    • Can be addressed in a reasonable manner
    • Can be implied by actions
    • Can occur within specified or reasonable time

    Consideration (In Contract)

    • Any lawful alteration of responsibility exchanged
    • Given for another consideration; something given for something
    • Lawful exchange of responsibilities, service or goods

    Intent of Parties

    • Determined by words and actions
    • Found in the document itself
    • Determining a party's intent for contract

    Offer Expiration

    • Offer expires within the specified or reasonable time

    Past Consideration

    • Not generally binding unless a new agreement follows
    • Something already performed, with no expectation of obtaining something else in return

    Material Mistake

    • Concerns related facts, values or opinions
    • Contract can be voidable because of a mistake

    Justifiable Reliance

    • Mistaken party reasonably relied on misrepresentation
    • Party had a reasonable belief in misrepresentation

    Fraud

    • Misrepresentation of relevant facts, intent to defraud
    • Justifiable reliance, causing injury to other party

    Made Knowingly

    • Means actual knowledge
    • Includes careless indifference to the truth

    Defrauded Party's Options

    • Rescind or affirm the contract

    Acceptance of Contract

    • Must be clear and unconditional

    Types of Joint Ventures

    • Incorporated, contractual, bilateral, multilateral

    International Contracts

    • Conventions/principles guide good faith
    • Contracts guided by good faith
    • Subject-matter of contract

    Subject Matter of International Contracts

    • Transfer of movable goods

    Preliminary Agreements

    • Not binding, but part of negotiation
    • Parties agree to contract later

    Preliminary Agreements

    • Part of negotiation process for contracts
    • Agreements outlining future contractual terms

    Agency

    • Business organization

    Breach of Preliminary Agreement

    • Breach of agreement is subject to damages, expenses, costs, and specific performance
    • Relevant to the agreement

    Distribution Contract

    • Type of sale/purchase contract
    • Alternatively a hiring method of a market advisor

    Breach of Confidentiality

    • Non-breaching party can be compensated
    • Damages are potentially recoverable based on breach actions

    Green Field Investment

    • New company formation by partners
    • Creating a new company, partners invest resources

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    Description

    Test your knowledge of fundamental concepts in contract law, including definitions and types of contracts like joint ventures and enforceable agreements. This quiz covers essential principles such as unilateral mistakes, quasi-contracts, and the implications of bad faith negotiations.

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