Simple Contracts Flashcards
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Questions and Answers

What consequences should Peter expect after this week's security check?

He will receive another monetary fine.

Which of the following is not a recommended action to perform before signing a contract?

  • Negotiate any terms you disagree with.
  • Ask questions about unclear items.
  • Read the contract carefully.
  • Sign the contract, putting question marks next to items that don't make sense. (correct)

    • Why is understanding the terms of a contract important for both parties involved?

    Understanding the terms of a contract is important because a person must be certain of the obligations towards the other party, and must also be aware of penalties incurred if those obligations are not met.

    A written contract is not legally binding until _____

    <p>it is signed by all parties involved.</p> Signup and view all the answers

    What is the consideration in the contract between Bob and Suzie?

    <p>Both the removal of a beehive and the payment of $120.00.</p> Signup and view all the answers

    What is required to have a legally valid contract?

    <p>The contract must represent a valid agreement between parties and an exchange of something of value between parties must have occurred or been promised to occur.</p> Signup and view all the answers

    Why are verbal contracts generally discouraged?

    <p>Without a physical signature, they can be very difficult to enforce.</p> Signup and view all the answers

    If it is completely impossible to put a contract in writing, which of the following would be the best substitute?

    <p>A video or audio recording of the verbal agreement.</p> Signup and view all the answers

    According to the contract, which of the following is not a responsibility of the buyer?

    <p>Notify the bank if a payment is going to be late</p> Signup and view all the answers

    Which of the following is not a change Robert should ask Cindy to make to the contract?

    <p>Change the number of payments to 17 to include the down payment</p> Signup and view all the answers

    If Kyle decides to split the missing payment into two parts and pay it over the next two months, which of the following statements is false?

    <p>Kyle's monthly payments for the next two months will remain $1,200</p> Signup and view all the answers

    Which of the following events invalidates the contract Susan signed with Super Video?

    <p>The clerk completed the transaction without providing a receipt</p> Signup and view all the answers

    According to the contract, what does Kyle need to do if he cannot make his monthly payment by the first of the month?

    <p>Other than pay the monthly payment, Kyle does not need to do anything</p> Signup and view all the answers

    In forming a contract, 'consideration' is _____.

    <p>the items of value exchanged according to the contract</p> Signup and view all the answers

    Which action invalidates the contract Kyle signed?

    <p>Not notifying his bank about splitting the payment</p> Signup and view all the answers

    Which of the following statements is true regarding Susan's movie rental?

    <p>It would cost about the same to keep or return the movie</p> Signup and view all the answers

    How much will Susan owe Super Video if she returns both movies today, both of which are three days late?

    <p>$9.00</p> Signup and view all the answers

    According to the rental agreement, which of the following is not a responsibility of the customer?

    <p>Return a rental item kept out thirteen days past the due date</p> Signup and view all the answers

    What should Tim expect to pay extra for not refueling after renting the car?

    <p>$57.88</p> Signup and view all the answers

    Which is not a responsibility of the rental agency representative?

    <p>Refuel the vehicle before the Renter drives it away</p> Signup and view all the answers

    What action invalidates the contract Tim signed with the rental agency?

    <p>The representative not having Tim initial by the fuel level on the Check-Out sheet</p> Signup and view all the answers

    In forming a contract, the 'meeting of the minds' is _____.

    <p>an agreement between all parties involved in the contract of the details of the contract</p> Signup and view all the answers

    Why are verbal contracts generally discouraged?

    <p>Without a physical signature, they can be very difficult to enforce</p> Signup and view all the answers

    In the event a car is found parked overnight by a homeowner, how will the HOA act on the first infraction?

    <p>They will send a written warning</p> Signup and view all the answers

    Study Notes

    Home Loan Contracts

    • Principal and interest divided into 360 monthly payments; payments due the first day of each month.
    • Late payment considered delinquent if not received by the 1st; late charge of $75 if not received by the 15th.
    • Failure to pay by the month's end reported to credit agencies.
    • Payments may be split into three equal installments if notification is given within one week of delinquency.

    Car Purchase Agreements

    • Buyer may need to adjust the total number of payments to reflect down payment inclusion.
    • Clarity is essential in detailing payment structure in contracts.

    Rental Agreements

    • Rentals due back by midnight on the due date; late charge of $1.50 per day.
    • Items not returned by the fifth day considered sold, incurring purchase cost plus late fees.
    • Valid rental agreement requires proper notification of due dates to customers.

    Consideration in Contracts

    • Consideration is defined as items of value exchanged in a contract, e.g., services rendered and payment.

    Responsibilities in Contracts

    • Contract parties must understand their obligations.
    • Contracts are legally binding once signed by all parties involved.

    Avoiding Contract Issues

    • Ensure both parties are aware of penalties for failing to meet obligations.
    • Verbal contracts can lead to enforcement difficulties without written documentation.

    Ignoring Contracting Requirements

    • A signed rental agreement does not protect the agency if check-out procedures are inadequate (e.g., lack of fuel level verification).
    • Late fees and purchase fees can accumulate based on the terms of rental agreements.

    Revisions to Contracts

    • Always review and possibly adjust contract terms to reflect accurate work estimates and protection against unforeseen costs.
    • Ensure all involved parties agree on essential contract details.
    • Understanding the "meeting of the minds" concept is essential for valid agreements, ensuring all parties are on the same page regarding contract terms.
    • Contract law principles stress the importance of enforceability and mutual obligations between the parties.

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    Description

    Test your knowledge of simple contracts with these flashcards. Each card presents key concepts and excerpts relevant to home loan agreements and payment terms. Perfect for students or anyone needing a refresher on the basics of contract law.

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