Legal Exam 3 – Advanced Business Law, Contracts, Torts, and Regulatory
Compliance Study Guide
What do modern definitions of a contract center on? - ✔✔promises
What are the elements of a contract? - ✔✔-They are constant
-Agreement, consideration, legal capacity to contract, lawful subject matter, and genuine
consent to the contract
What is an express contract and how is it created? Must an express contract be made in writing
to be enforceable? - ✔✔Express contract is if there is a written or oral expression of intent by
the parties to legally enter into a legally binding agreement. No, it can also be verbally said too
to be enforced `
What is an implied contract and how is it created? - ✔✔· Arises from the actions rather than
the expressions of the parties
· The way the parties have acted with respect to each other, courts may infer that an agreement
exists
What is an executory contract? - ✔✔contract that has not been fully performed
What is a quasi-contract and when would the courts find one? - ✔✔a fictitious contract
created by the court in order to adapt the case to a given remedy; found whenever the court
feels it will assure a just and equitable result between the parties
In what ways can an offer be terminated by the parties? - ✔✔· By the offeror withdrawing it
· By the offeree rejecting the offer
· Through time lapse, by inaction of the offeree
, In what ways can an offer be terminated by operation of law? - ✔✔· Through intervening
illegality. Occurs when a court decision or, usually legislation makes an offer illegal.
· Subject matter is destroyed
· The mental or physical incapacity or death or the offeror or offeree.
What is consideration? - ✔✔· Something of value or something bargained for in exchange for a
promise
· Distinguishes contracts from gifts
Can either party enforce an agreement if consideration is missing? - ✔✔No
Will the courts enforce a contract if a party to the agreement discovers that the value of his
consideration is way below market price? - ✔✔Yes, they leave the bargaining to the members
of the party and do not interfere on the basis of a bad deal
What types of contracts are voidable? - ✔✔· Agreements where one party is still a minor
· Contracts involving fraud, deceit or trickery
· Contracts made when one party was drunk, incapacitated, or not of legally sound mind to form
a contract
What categories of people have the right to disaffirm a contract? - ✔✔· people who are
infants, intoxicated, or insane
Is a contract enforceable against a person with partial or limited capacity? - ✔✔· Yes, unless
that person decides to disaffirm
What would make a contract illegal? - ✔✔If the subject matter violates a state or federal
statute or common law or is contrary to public policy
Compliance Study Guide
What do modern definitions of a contract center on? - ✔✔promises
What are the elements of a contract? - ✔✔-They are constant
-Agreement, consideration, legal capacity to contract, lawful subject matter, and genuine
consent to the contract
What is an express contract and how is it created? Must an express contract be made in writing
to be enforceable? - ✔✔Express contract is if there is a written or oral expression of intent by
the parties to legally enter into a legally binding agreement. No, it can also be verbally said too
to be enforced `
What is an implied contract and how is it created? - ✔✔· Arises from the actions rather than
the expressions of the parties
· The way the parties have acted with respect to each other, courts may infer that an agreement
exists
What is an executory contract? - ✔✔contract that has not been fully performed
What is a quasi-contract and when would the courts find one? - ✔✔a fictitious contract
created by the court in order to adapt the case to a given remedy; found whenever the court
feels it will assure a just and equitable result between the parties
In what ways can an offer be terminated by the parties? - ✔✔· By the offeror withdrawing it
· By the offeree rejecting the offer
· Through time lapse, by inaction of the offeree
, In what ways can an offer be terminated by operation of law? - ✔✔· Through intervening
illegality. Occurs when a court decision or, usually legislation makes an offer illegal.
· Subject matter is destroyed
· The mental or physical incapacity or death or the offeror or offeree.
What is consideration? - ✔✔· Something of value or something bargained for in exchange for a
promise
· Distinguishes contracts from gifts
Can either party enforce an agreement if consideration is missing? - ✔✔No
Will the courts enforce a contract if a party to the agreement discovers that the value of his
consideration is way below market price? - ✔✔Yes, they leave the bargaining to the members
of the party and do not interfere on the basis of a bad deal
What types of contracts are voidable? - ✔✔· Agreements where one party is still a minor
· Contracts involving fraud, deceit or trickery
· Contracts made when one party was drunk, incapacitated, or not of legally sound mind to form
a contract
What categories of people have the right to disaffirm a contract? - ✔✔· people who are
infants, intoxicated, or insane
Is a contract enforceable against a person with partial or limited capacity? - ✔✔· Yes, unless
that person decides to disaffirm
What would make a contract illegal? - ✔✔If the subject matter violates a state or federal
statute or common law or is contrary to public policy
