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

    • JOINT VENTURE CONTRACT CAN BE ENTERED

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

    • A VALID CONTRACT

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

    A PARTY WHO BREAKS OFF NEGOTIATIONS IN BAD FAITH

    <p>is liable for losses (A)</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 (B)</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 (A)</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 (A)</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 DUTY OF GOOD FAITH

    <p>parties should not enter into the negotiation process if not sincerely aimed at entering into contractual relations (A)</p> Signup and view all the answers

    ADEQUACY OF CONSIDERATION

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

    CONSIDERATION IS

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

    CONTRACT

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

    MEMORANDA/TERMS OF AGREEMENT

    <p>lay down the state of the negotiation process (B)</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

    UNILATERAL CONTRACT

    <p>involves one promise by one party and an act by another (A)</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

    EXPRESS CONTRACT IS

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

    NEGOTIATION ends

    <p>when minds meet or if they don't meet within a reasonable time (C)</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

    UN CONVENTION ON CONTRACTSFOR THE INTERNATIONAL SALE OF GOODS WAS ADOPTED IN 1980

    <p>in vienna (A)</p> Signup and view all the answers

    AN ADVERTISMENT

    <p>can be an offer if it is specific to an identified or identifiable person or group (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 (C)</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 (C)</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 because a person should not be allowed to benefit from his own ignorance or carelessness (C)</p> Signup and view all the answers

    MATERIAL MISTAKE PERTAINS TO

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

    LOI

    <p>may contain binding provisions (C)</p> Signup and view all the answers

    IN CASE OF RELEVANT MISTAKE THE CONTRACT IS

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

    JUSTIFIABLY RELIED UPON MEANS THAT

    <p>the mistaken party must have reasonably relied upon the misrepresentation (B)</p> Signup and view all the answers

    FRAUD IS

    <p>a misreprensentation of a material fact, made knowingly, with the intent to defraud, justifiably relied upon, causing injury to the other party (B)</p> Signup and view all the answers

    MADE KNOWINGLY

    <p>includes careless indifference to the truth (C)</p> Signup and view all the answers

    THE DEFRAUDED PARTY can

    <p>rescind the contract or affirm the contract (A)</p> Signup and view all the answers

    IN INTERNATIONAL CONTRACTS GOOD FAITH CONCEPT

    <p>neither a) nor b) (A)</p> Signup and view all the answers

    CONTRACT LAW IS A FOUNDATION UPON WHICH ARE BUILT

    <p>other areas of business law (B)</p> Signup and view all the answers

    A MISTAKE IS LEGALLY RELEVANT IF IT IS

    <p>material (A)</p> Signup and view all the answers

    ACCORDING TO UNIDROIT PRINCIPLES DUTY OF GOOD FAITH

    <p>can never be excluded or limited by the parties (A)</p> Signup and view all the answers

    SUBJECTIVE INTENT

    <p>is legally relevant only if is manifested by words or actions (B)</p> Signup and view all the answers

    PRELIMINARY AGREEMENTS

    <p>are agreements whereby the parties undertake to conclude an agreement subject to certain conditions (A)</p> Signup and view all the answers

    AGENCY

    <p>is a type of business organization (A)</p> Signup and view all the answers

    PRINCIPAL

    <p>is any person for whom an agen acts (B)</p> Signup and view all the answers

    TYPES OF JOINT VENTURES ARE

    <p>contractual v/corporate jv (B)</p> Signup and view all the answers

    THE SUBJECT MATTER IN AN INTERNATIONAL CONTRACT FOR THE SALE OF GOODS IS

    <p>the transfer of ownership of movable goods (B)</p> Signup and view all the answers

    PRINCIPLE OF PERSONALITY RELATES TO

    <p>the new entity created by partners in jv (C)</p> Signup and view all the answers

    UN CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS

    <p>is binding for the ratifying parties only (B)</p> Signup and view all the answers

    CISG IN RESPECT OF PARTIES HAVING THEIR PLACES OF BUSINESS IN A RATIFYING STATE

    <p>applies unless the parties exclude or limit its application (C)</p> Signup and view all the answers

    IN CASE OF BREACH OF A PRELIMINARY AGREEMENT THE BREACHING PARTY SHALL BE LIABLE FOR

    <p>damages, expenses and specific performance contained in the envisaged contract (B)</p> Signup and view all the answers

    IN FRANCHISE AGREEMENT THE MAIN OBLIGATION OF THE FRANCHISOR IS

    <p>to provide franchisee with expertise (B)</p> Signup and view all the answers

    DISTRIBUTION CONTRACT IS

    <p>a sale purchase contract (B)</p> Signup and view all the answers

    DOCUMENT AND CONTRACT

    <p>the document is only evidence of the mental that constitutes the actual contract tract is the content of the document (C)</p> Signup and view all the answers

    IN CASE OF BREACH OF CONFIDENTIALITY

    <p>the non-breaching, even if suffered no losses, will be entitled to recover the benefit received by the other (A)</p> Signup and view all the answers

    GREEN FIELD INVESTMENT MEANS THAT

    <p>partners in jv create a new company (A)</p> Signup and view all the answers

    JOINT VENTURE AGREEMENT IS

    <p>a contract whereby two or more enterprises agree to pool their resources for the purpose of attain a certain business objective (B)</p> Signup and view all the answers

    UNDUE INFLUENCE

    <p>occurs when one of the parties takes advantage of another by reason of the superior position (C)</p> Signup and view all the answers

    AN OFFER MUST

    <p>indicate a clear intent, be deJnite, be communicated (B)</p> Signup and view all the answers

    QUASI CONTRACT are intended

    <p>to avoid unjust enrichment (B)</p> Signup and view all the answers

    FRAUD to be relevant must

    <p>cause an injury to the other party (A)</p> Signup and view all the answers

    L.O.I.

    <p>may contain binding provisions (C)</p> Signup and view all the answers

    L.O.I.

    <p>outlines the chief terms of a perspective deal (C)</p> Signup and view all the answers

    MEMORANDA / TERMS OF AGREEMENT

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

    PRELIMINARY AGREEMENTS

    <p>are agreements whereby the parties undertake to conclude an agreement subject to certain conditions (B)</p> Signup and view all the answers

    AN AGENT

    <p>is usually not indipendent contractor (A)</p> Signup and view all the answers

    AN AGENT

    <p>may be an employee (B)</p> Signup and view all the answers

    SOLE AGENCY MEANS THAT

    <p>principal is prevented from appointing new agents in the territory (B)</p> Signup and view all the answers

    Study Notes

    FAS Definition

    • FAS means foreign alien state

    Unilateral Mistake

    • A contract is binding in cases of unilateral mistake, except when the other party knows or should have known about the mistake.
    • If the other party knows or should have known, the contract is not binding.

    Joint Venture Contracts

    • Can be entered into by companies.
    • Can also be entered into by both companies and individuals.
    • Can also be entered into by individuals only.

    Valid Contract

    • Meets all legal requirements and is enforceable by either party.
    • An effective and enforceable contract.

    Party Breaking Off Negotiations

    • A party that ends negotiations in bad faith is liable for losses.
    • Must restart negotiations.

    Offer Revocation

    • An offer can be revoked by the offeror.
    • Exceptions include: option contracts, unilateral contracts, UCC exception, promissory estoppel.
    • Can be revoked in any case except in specific instances.

    Quasi-Contract

    • Created by operation of law on behalf of unconscious party.
    • Aimed to avoid unjust enrichment of one party at the expense of another.
    • Created by law in order to avoid unjust enrichment of one party at the expense of another.

    Unstated Terms in Offers

    • Unstated terms in an offer can be clarified before an agreement is reached.
    • Terms may depend on common sense.
    • They must be clarified before the agreement is reached.

    Material Breach of Contract

    • In case of material breach, the non-breaching party has options.
    • They can demand performance.
    • Or demand discharge of the contract.

    Voidable Contract

    • Binding on either party, but only enforceable by one party.
    • One party has the choice of enforcing or withdrawing.
    • Both parties are bound by the agreement.

    Duty of Good Faith in Negotiations

    • Parties should not fail to fulfill their obligations.
    • Parties should not withdraw from negotiations once started.
    • Parties should not intend to negotiate in bad faith.

    Consideration

    • Consideration is the price or something a party provides in exchange for something else from the other party.
    • Consideration is a rule to be enforced binding upon the parties in a contract.

    Memorandum/Terms of Agreement

    • Not necessarily legally binding statements.
    • They do, however, outline the current state of negotiation.

    Essential Elements of a Contract

    • Essential elements include mutual agreement (or implied agreement), consideration, subject matter & capacity.

    Implied Contract

    • A contract that can be inferred by conduct.
    • A contract can be inferred by a judge or a reasonable person.

    Unilateral Contract

    • One party makes a promise, and the other party performs an act in response.

    Void Contract

    • Cannot be enforced.

    Express Contract

    • A legally enforceable agreement stated clearly in words or writing.

    Negotiation End

    • Negotiation concludes when both parties reach an agreement.

    Offer Elements

    • An offer must clearly identify the good or service.
    • State the essential terms of the contract.
    • An advertisement is generally not considered an offer but an invitation to offer.
    • Some advertisements could constitute an offer if they specify a particular person.

    Acceptance

    • Acceptance must be communicated.
    • The method of communication must be reasonable.

    Consideration Definition

    • Consideration is something of value exchanged between parties.
    • Consideration must be something of value to either party to make the contract valid.

    Valid Contract Period

    • A contract lasts for a specified or a reasonable time if no specific period is mentioned.

    Breach of Agreement

    • When a party fails to fulfill their responsibilities in an agreement (legally enforceable contract) according to the terms of the agreement.

    Misrepresentation

    • A false statement about a material fact made knowingly by one party, intending to induce justifiable reliance by another party.
    • This can make the contract voidable.

    Fraud

    • A misrepresentation of a material fact made knowingly with the intent to defraud
    • The other party justifiably relies on the misrepresentation, causing injury.

    Material Mistake

    • A mistake related to a relevant fact, value, or opinion.
    • A mistake can make a contract voidable and not binding either party.

    Justifiable Reliance

    • The mistaken party must have reasonably relied on the misrepresentation.
    • This involves the intent to defraud to be justifiable.

    Joint Venture & Agreement

    • A joint venture means an agreement by 2+ businesses for a business project.
    • Joint Venture contract determines the means of accomplishing the shared goal.

    International Sales Contracts

    • CISG (Convention on Contracts for the International Sale of Goods) is a set of rules for handling discrepancies for parties who are citizens of different nations and have made a contract.
    • It has rules determining the validity and rules about international business deals and contracts.
    • The convention is binding on the parties if they choose it to be binding upon them.

    Preliminary Agreements

    • Preliminary agreements are not binding agreements.
    • They are steps in negotiating.
    • Some agreements have conditions that must be met before the final agreement is signed.

    Types of Joint Ventures

    • Different types are identified to clarify the goals, expectations and procedures for the venture.

    Green Field Investment

    • A process of creating a new company.

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    Description

    Test your knowledge on key concepts of contract law, including definitions, unilateral mistakes, joint ventures, and the nature of valid contracts. This quiz will help solidify your understanding of the critical elements that define enforceable agreements and the legal implications of breaking negotiations.

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