Formation of a Contract Quiz

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Questions and Answers

What is generally true about an agreement to go out for dinner between friends?

  • Parties usually intend to be legally bound.
  • There is typically no intention to be legally bound. (correct)
  • It is always legally binding.
  • It must be written to be enforceable.

Parties to a casual dinner agreement usually intend to create a legally binding contract.

False (B)

What must be present for an agreement to be considered legally binding?

Intention by the parties.

In order for an agreement to be legally binding, there must be an intention of the parties that the agreement should be _____.

<p>legally binding</p> Signup and view all the answers

Match the following terms with their definitions:

<p>Agreement = A mutual understanding between parties. Legally binding = An agreement that is enforceable by law. Intention = The purpose behind the parties' agreement. Contract = A legally enforceable agreement between parties.</p> Signup and view all the answers

What is described as instantaneous methods of communication?

<p>Speaking in person or on the telephone (D)</p> Signup and view all the answers

Words are spoken and heard at different times during instantaneous communication.

<p>False (B)</p> Signup and view all the answers

Name one method of instantaneous communication.

<p>Speaking in person or on the telephone</p> Signup and view all the answers

What is sufficient for a contract to exist?

<p>Nominal consideration (B)</p> Signup and view all the answers

An agreement made without the intention to create legal relations is binding as a contract.

<p>False (B)</p> Signup and view all the answers

In instantaneous communication, words are _____ and heard at the same instant.

<p>spoken</p> Signup and view all the answers

Match the following communication methods with their characteristics:

<p>Speaking in person = Direct auditory communication Telephone = Auditory communication over a distance Texting = Asynchronous communication Video call = Visual and auditory communication simultaneously</p> Signup and view all the answers

What must be present for an agreement to be considered a legally binding contract?

<p>Intention to create legal relations</p> Signup and view all the answers

The ________ consideration can be sufficient to establish legal relations without needing to provide a substantial value.

<p>nominal</p> Signup and view all the answers

What does the term 'physical intimidation' primarily involve?

<p>Threats towards the safety or bodily integrity of another party (B)</p> Signup and view all the answers

What is consideration in the context of a contract?

<p>Something of value exchanged for a promise (B)</p> Signup and view all the answers

Physical intimidation is considered one of the most clear forms of intimidation.

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

What are some aspects included in the concept of 'intimidation' as mentioned?

<p>Threats to safety, health, freedom, or comfort of the other party.</p> Signup and view all the answers

Consideration is not necessary for a promise to be enforceable as a contract.

<p>False (B)</p> Signup and view all the answers

What is required to make a promise enforceable as a contract?

<p>consideration</p> Signup and view all the answers

The term used for threats to another party's bodily integrity is known as ______.

<p>physical intimidation</p> Signup and view all the answers

In a contract, consideration is defined as something of ______ that is given for a promise.

<p>value</p> Signup and view all the answers

Match the following types of intimidation with their descriptions:

<p>Physical intimidation = Threats to bodily safety Psychological intimidation = Manipulation of emotions or mental state Economic intimidation = Threats involving financial harm Social intimidation = Threats that impact social standing or relationships</p> Signup and view all the answers

What is misrepresentation in a legal context?

<p>An untrue statement of fact made during contract negotiations. (A)</p> Signup and view all the answers

Misrepresentation can only occur after a contract is signed.

<p>False (B)</p> Signup and view all the answers

What must misrepresentation do in order to be significant in a legal context?

<p>Induce the other party to enter into the contract.</p> Signup and view all the answers

Misrepresentation is defined as an untrue statement of fact made by one party to the other in the course of negotiating a __________.

<p>contract</p> Signup and view all the answers

Match the following legal terms with their definitions:

<p>Misrepresentation = An untrue statement that induces a party to enter a contract Contract = A legally binding agreement between parties Inducement = The action of persuading someone to do something Negotiation = The process of discussing terms before an agreement</p> Signup and view all the answers

Flashcards

Consideration

Something of value exchanged for a promise in a contract.

Enforceable Contract

A promise is legally enforceable when there's something of value exchanged for it.

Something of Value

It could be money, goods, services, or even a promise to do something.

Promise without Consideration

Without consideration, a promise is just an empty statement.

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Unenforceable Contract

Contracts without legally recognized consideration can't be enforced in court.

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Misrepresentation

A statement of fact made by one party to another during contract negotiations that turns out to be untrue.

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Inducement

A statement of fact in a contract negotiation that induces the other party to enter into the contract.

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Material Fact

The untrue statement of fact must be a material fact, meaning it must be important enough to have influenced the other party's decision to enter the contract.

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Statement of Fact vs. Opinion

Misrepresentation can be either a statement of fact or a statement of opinion that turns out to be false.

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Social agreements

An agreement to go out for dinner with a friend typically does not create a legally binding contract.

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Intention to be legally bound

For an agreement to be legally binding, the parties must have intended it to be so.

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Legal intention

In a legal context, the parties must have intended for their agreement to create legal obligations.

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Social agreements and legal intention

Examples of agreements that generally lack legal intention include social arrangements like dinners with friends.

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Legal intention and contracts

The presence of legal intention is a key element in determining whether an agreement is a valid and enforceable contract.

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Intention to Create Legal Relations

An agreement where both parties intend to create legally binding obligations.

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Nominal Consideration

A very small or nominal amount of consideration is enough to make a contract legally binding. It doesn't have to be equal in value to the other party's consideration.

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Lack of Intention to Create Legal Relations

Even if there is consideration, a contract is not valid if the parties did not intend to create legal obligations. It's about their genuine intention to be bound by the agreement.

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Physical Coercion

A type of coercion involving threats to someone's physical safety, health, freedom, or well-being.

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Physical Coercion

A type of coercion involving threats to someone's physical safety, health, freedom, or well-being.

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Physical Coercion

A type of coercion involving threats to someone's physical safety, health, freedom, or well-being.

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Coercion

The act of forcing someone to do something against their will by threatening their physical safety, health, freedom, or well-being.

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Physical Coercion

The most obvious form of coercion.

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Instantaneous Communication

Communication where the speaker's words are heard by the listener immediately.

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Speaking in Person

Communication methods where the speaker and listener are in the same physical location.

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Telephone

A communication technology allowing individuals to talk in real-time over long distances

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Spoken Words Heard at the Same Instant

The moment when words are spoken and heard simultaneously.

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Spoken Words

A communication method that involves using spoken language.

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Study Notes

Formation of a Contract

  • A contract begins with an offer.
  • An offer is a clear statement of terms, the offeror is willing to contract.
  • An offer allows the other party to accept, forming the basis of the agreement.
  • An invitation to treat is distinguished from an offer.
  • An invitation to treat is a statement made where a contract is not intended if the person assents to the terms.

Types of Offers

  • Advertisements: An advertisement is an invitation to treat, not an offer.
  • Display of goods: Displaying goods in a shop is an invitation to treat.
  • Auctions: An auctioneer's request for bids is an invitation to treat.
  • Tenders: Invitations to tender are invitations to treat.

Termination of an Offer

  • Rejection: Rejecting an offer terminates it.
  • Lapse of time: Offers expire after a reasonable time.
  • Death: An offer terminates if the offeror dies.
  • Conditional acceptance: A conditional acceptance is a counter-offer.

Acceptance

  • Acceptance occurs when a party agrees to the offer.
  • Acceptance must be made by the correct person.
  • Acceptance must match the terms of the offer.
  • Acceptance must be communicated to the offeror.
  • Silence is not typically considered acceptance.

Consideration

  • Consideration for a promise is needed to enforce a contract.
  • Consideration is something of value given or promised.
  • Consideration does not need to be adequate.
  • A gratuitous promise is not enforceable.
  • An agreement is not legally binding without the intention to create legal relations.
  • Commercial agreements usually imply intention.
  • Social and domestic agreements likely lack this intention.

Misrepresentation

  • Misrepresentation is an untrue statement of fact made during negotiations inducing the other party to enter the contract.
  • Fraudulent misrepresentation: A deliberate false statement made with the intention to deceive.
  • Negligent misrepresentation: A false statement made without reasonable care.
  • Innocent misrepresentation: A false statement made believing it was true.

Mistake

  • Mistake in a contract occurs when one or both parties make an error about the contract.
  • Unilateral mistake: One party is mistaken, while the other is not.
  • Mutual mistake: Both parties are mistaken.
  • To claim mistake, both parties must be mistaken.

Duress

  • Duress is wrongful pressure coercing someone into a contract.
  • Physical duress: Threat of physical harm to enter the contract.
  • Economic duress: Threatening financial harm to enforce the contract.

Formation of Contracts Through the internet

  • Contracts can be made through various online channels.
  • E-mail correspondence, websites, and interactive communication form contracts.
  • Different types of online contracts could be used in business-to-consumer, business-to-business, or consumer-to-consumer transactions.

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