Business Law - Test Study Notes Review
CONTRACTS - Written. Oral. Implied.
Freedom of contract - what parties agreed to in the first place is unrestricted to the court. Equal bargaining position. Acting Voluntarily.
People can enter in any kind of contract as long as it meets the common law requirements.
Law of contracts: common law or case law.
CONSENSUS - parties must reach a mutual agreement. Equal bargaining positions. Free to enter as they choose. Involves offer and acceptance. Consensus can be inferred (indirect)
CONSIDERATION - commitment of both parties to do something. The consideration is the price each is willing to pay in order to be in the contract.
CAPACITY - legally capable to understand; enter the bargain. Limitations are placed on: infants, insane, intoxicated, aliens, sometimes Native people, & corporations.
LEGALITY - must be legal; not against public policy.
INTENTION - both parties must be serious when striking the bargain & both must intend that legally enforceable obligations will result from it.
FORMAL CONTRACT - is sealed (use of a seal)
SIMPLE CONTRACT or PAROL CONTRACT - verbal or written but not under seal.
EXPRESS CONTRACT - where parties expressly started their agreement, either verbally or in writing.
IMPLIED CONTRACT - INFERRED from the conduct of parties.
Ex. Vending machine - inferred (indirect).
VALID CONTRACT - agreement legally binding on both parties.
VOID CONTRACT - is not legally binding because something is missing. Void Contract - No Contract.
VOIDABLE CONTRACT - is valid but one party has the right to escape.
UNENFORCEABLE CONTRACT - example: required to be in writing under the Statute of Frauds but is not. Courts won't enforce unenforceable contract.
ILLEGAL CNTRACT - involves the performance of unlawful act. It is void.
BILATERAL CONTRACT - both parties make commitments; assume obligations. Offer - Acceptance.