Contract Law Overview

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Questions and Answers

FAS means

foreign alien state

free on board (correct)

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 not binding, except when the other party knows or should have known the mistake

the contract is binding

Joint venture contract can be entered

only by companies

only by individuals

by both companies and Individuals (correct)

A valid contract

is an effective and enforceable contract Signup and view all the answers

A party who breaks off negotiations in bad faith

is liable for losses Signup and view all the answers

An offer can be revoked by the offeror

always except in case of option contract, unilateral contracts, UCC exception, promissory estoppel Signup and view all the answers

A quasi-contract is created

by operation of law in order to avoid unjust enrichment of one party at the expense of another Signup and view all the answers

In an offer unstated terms

may be implied or inferred by common sense Signup and view all the answers

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

either performance or breach Signup and view all the answers

A voidable contract

is binding on one party who has the option to withdraw from it or enforce it Signup and view all the answers

According to the duty of good faith

parties should not fail in fulfilling their obligations Signup and view all the answers

Adequacy of consideration

is not an issue in court Signup and view all the answers

Consideration is

something a party provides in exchange for something from the other party Signup and view all the answers

Contract

is a rule binding upon the parties Signup and view all the answers

Memoranda/Terms of agreement

lay down the state of the negotiation process Signup and view all the answers

The essential elements of a contract are

capacity, mutual agreement, consideration and legality of subject matter Signup and view all the answers

Unilateral contract

involves one promise by one party and an act by another Signup and view all the answers

Pre-emption right is the right

to be offered shares in a company before they are made available to anyone else Signup and view all the answers

Express contract is

stated in words, written or oral, or partly written and partly oral Signup and view all the answers

Study Notes

Contract Law Study Notes

Contract Types:
- Unilateral contract: One promise by one party, and an action by the other.
- Bilateral contract: Two promises made by each party.
- Express contract: Stated in words (oral or written).
- Implied contract: Inferred by conduct or circumstances.
Essential Elements of a Contract:
- Mutual agreement (offer and acceptance).
- Consideration (something of value exchanged).
- Capacity (parties must be legally competent).
- Legality of subject matter (contract must be for a lawful purpose).
Offer and Acceptance:
- Offer: A proposal to enter into a contract.
- Acceptance: Unconditional agreement to the terms of the offer.
- An advertisement is generally not an offer, but an invitation to offer.
Termination of an Offer:
- Revocation (offeror withdraws the offer).
- Rejection (offeree refuses the offer).
- Counteroffer (rejects the original offer and proposes new terms).
- Lapse of time (offer expires after a reasonable time).
- Death or incapacity of the offeror or offeree.
Consideration:
- Something of value given in exchange for something else.
- Past consideration is not valid consideration.
Intention to Create Legal Relations:
- Parties must intend their agreement to be legally binding.
Capacity:
- Parties must be of legal age and sound mind.
Legality of Subject Matter:
- Contract must be for a lawful purpose.
Mistake:
- Unilateral mistake: One party is mistaken, but the contract is often still binding.
- Material mistake: A mistake that is significant enough to impact the validity.
- Relevant mistake: Mistake about a relevant fact, value, or opinion could render the contract voidable.
- Voidable contract is binding on a party who has the option to withdraw or enforce it.
- A void contract is not valid and unenforceable.
Misrepresentation:
- A false statement of fact that induces someone to enter a contract.
- Fraudulent misrepresentation: Requires intent to deceive.
- Innocent misrepresentation: Made without intent to deceive.
Breach of Contract:
- Failure to fulfill the terms of a contract or obligation.
Remedies for Breach of Contract:
- Monetary damages (compensatory, punitive).
- Specific performance (court order to fulfill the contract).
Quasi-Contracts:
- Contracts implied by law to prevent unjust enrichment.

International Contract Law

CISG (Convention on Contracts for the International Sale of Goods):
- Governs international sales contracts.
- Binding on parties whose places of business are in ratifying states, unless they exclude its application.
- Applies where relevant.
Material Breach: The non-breaching party may demand performance or termination.

Other Terms

CIF: Cost, Insurance, and Freight
Good Faith: Honesty and fair dealing in contractual negotiations and performance.
Preliminary agreement: Agreements where parties intend to enter into a contract but subject to conditions.
Agency: One party (agent) acts on behalf of another party (principal).
Joint Venture: Two or more parties who pool resources for a specific business purpose.
Green Field Investment: Establishing a new business.
Distribution contract: Agreement where a supplier gives rights to an intermediary to sell its products in a particular territory.

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Description

This quiz covers the fundamental aspects of contract law, including different types of contracts, essential elements that constitute a valid contract, and the processes involved in offer and acceptance. Test your understanding of unilateral, bilateral, express, and implied contracts, as well as how offers can be terminated.