Questions and Answers
What is a contract?
What are the characteristics of a valid contract?
Competent parties, legal purpose, offer and acceptance, consideration.
A contract can be valid if one of the parties is insane.
False
The second requirement for a valid contract is that it be formed for a ______.
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What does offer and acceptance mean in the context of a contract?
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What is consideration in a contract?
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Study Notes
Elements of a Valid Contract
- A contract is a legal agreement between two competent parties involving a promise for performance in exchange for consideration.
Characteristics of Contracts
- Key elements include:
- Competent parties
- Legal purpose
- Offer and acceptance (agreement)
- Consideration
Competent Parties
- Contracts must be established between parties considered competent under law.
- Individuals such as minors, those mentally insane, or those under the influence of alcohol or drugs are deemed incompetent to contract.
Legal Purpose
- A valid contract must be created for a legal purpose.
- Contracts formed for illegal or public policy-violating reasons are unenforceable.
Offer and Acceptance
- This element signifies mutual agreement between parties:
- One party makes an offer, which is a promise requiring an act or another promise in return.
- Acceptance occurs when the other party agrees to the terms of the offer or fulfills the proposed action.
Consideration
- Consideration is essential and refers to something of value exchanged for the performance promised in the contract.
- In insurance, the insured's consideration is the premium payment, while the insurer's consideration is the commitment to cover specific losses.
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Description
This quiz focuses on the essential components of a valid contract. Through flashcards, you will learn about legal agreements, characteristics, and the importance of competent parties. Perfect for law students or anyone looking to deepen their understanding of contract law.
