Contract Law: Intention and Capacity
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Questions and Answers

Which type of agreements are generally presumed not to intend legal relations?

  • Domestic/Social Agreements (correct)
  • Investment Agreements
  • Corporate Agreements
  • Commercial Agreements
  • Under what circumstance can a minor typically contract?

  • Only for essential items (correct)
  • If both parties agree to the contract terms
  • For any item of personal interest
  • For non-essential items
  • What distinguishes an offer from an invitation to treat?

  • An invitation to treat is stronger than an offer.
  • An offer requires consideration to be binding.
  • An offer is a clear proposal that becomes binding upon acceptance. (correct)
  • An offer is subject to negotiation.
  • How can puffery in advertising be characterized?

    <p>As exaggerated claims not meant to be taken literally.</p> Signup and view all the answers

    What is the legal status of online offers made without explicit terms?

    <p>They are considered invitations to treat.</p> Signup and view all the answers

    Which situation could render a contract voidable due to capacity issues?

    <p>An intoxicated individual signs a contract.</p> Signup and view all the answers

    What does Puffery refer to in advertising?

    <p>Exaggerated statements not intended to be taken literally.</p> Signup and view all the answers

    In a commercial context, what is the presumption regarding the intention to create legal relations?

    <p>There is a presumption of legal intention.</p> Signup and view all the answers

    What distinguishes an offer from a mere invitation to treat?

    <p>An offer must be clear and definitive.</p> Signup and view all the answers

    Which of the following statements is true regarding the revocation of an offer?

    <p>An offer can be revoked anytime before acceptance.</p> Signup and view all the answers

    How are internet transactions typically treated in terms of offers?

    <p>Online offers are invitations to treat unless otherwise stated.</p> Signup and view all the answers

    Who among the following can typically enter into a binding contract?

    <p>A corporation acting within its authorized purpose.</p> Signup and view all the answers

    Which of the following statements best characterizes domestic or social agreements?

    <p>They typically have no intention of creating legal relations.</p> Signup and view all the answers

    Study Notes

    • Both parties must intend to form a legally binding agreement for a contract to be valid.
    • Domestic and social agreements, such as family promises, are generally presumed not to have an intention to create legal relations.
    • Commercial agreements are presumed to have an intention to create legal relations, unless otherwise stated.

    Capacity to Contract

    • Minors (under 18 years old) generally lack the capacity to enter into contracts, except for essentials like food and shelter.
    • Individuals who are mentally incapacitated or intoxicated may have contracts deemed voidable if they could not understand the agreement and the other party knew this.
    • Corporations can enter into contracts like individuals but must act within their authorized purposes.

    Offer and Acceptance

    • An offer is a clear proposal that becomes legally binding upon acceptance.
    • An invitation to treat is not an offer but an invitation to negotiate, such as advertisements.
    • Offers can be revoked anytime before acceptance, even if a promise was made to keep the offer open.

    Puffery

    • Puffery refers to exaggerated claims that are not meant to be taken literally, such as "best coffee in the world!"
    • Puffery is not legally binding.

    Internet Transactions

    • Online offers are generally considered invitations to treat unless they explicitly state otherwise.
    • Definition: Both parties must intend to form a legally binding agreement for it to be enforceable.
    • Presumptions:
      • Domestic/Social Agreements: Presumed not to intend legal relations (e.g., family promises).
      • Commercial Agreements: Presumed to intend legal relations, unless clearly stated otherwise.

    Capacity to Contract

    • Certain individuals have limited capacity to make binding contracts:
      • Minors (under 18): Generally can't contract, except for essentials like food and shelter.
      • Mentally Incapacitated/Intoxicated Individuals: Contracts may be voidable if they couldn't understand the agreement and the other party was aware of this.
      • Corporations: Can contract like individuals, but only within their authorized purposes.

    Offer and Acceptance

    • Offer: A clear proposal that becomes binding once accepted.
    • Invitation to Treat: Not an offer, but an invitation to negotiate (e.g., advertisements).
    • Revocation: Offers can be withdrawn anytime before acceptance, even if promised to stay open.

    Puffery

    • Definition: Exaggerated claims not meant to be taken literally (e.g., “Best coffee in the world!”).
    • Effect: Not legally binding.

    Internet Transactions

    • Online Offers: General offers made online are considered invitations to treat unless they explicitly state otherwise.

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    Description

    This quiz focuses on the fundamental principles of contract law, including the intention to create legal relations and the capacity to contract. Key concepts such as the presumption of intention in different agreements and the rules surrounding minors and mental incapacity are explored. Test your knowledge of offer and acceptance in contract formation as well.

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