I. REVIEWING WHAT YOU LEARNED
1. Explain how a contractual agreement is reached.
To reach an agreement, the offeror makes an offer to the offeree to enter into a legally enforceable agreement. If the offeree assents to the terms of the offer, an acceptance occurs and an agreement, sometimes called a bargain comes into existence. If the offeree assents to the terms of the offer, an acceptance occurs and an agreement comes into existence.
2. Why does a contract not usually arise when a customer offers to buy a mismarked product?
A contract doesn’t usually arise when a customer offers to buy a mismarked product because the advertisement is your invitation to the reader to find you and then offer you the price you’re asking for.
3. Give an example of a contract implied in fact.
For example, if a business has for many months delivered parts that the receiving company uses to make a product and then resell, and the two parties have long since stopped exchanging terms, the parties are in an implied contract.
4. For what reason does the court impose a contract on the parties when a quasi-contract arises?
The reason is when one actually does not exist or when an express contract cannot be enforced, the court will impose a contract on the parties to prevent unjust enrichment.
5. What is the difference between a bilateral contract and a unilateral contract?
The difference is a bilateral contract containing two promises, one made by each party to the contract. Meanwhile, a unilateral contract is a contract containing only one promise in exchange for an act, often referred to as a performance.
6. Give an example of a void contract, a voidable contract, and an unenforceable contract.
An example of a void contract: an illegal contract, such as one for the sale of an item that is prohibited to be bought and sold, is void.
An example of a voidable contract: if a 16-year-old buys a car from an adult, the minor may disaffirm the contract and return the car in exchange for the money paid.
An example of an unenforceable contract: an oral contract for the sale of real property because a real estate contract is required to be in writing to be enforceable.
7. How does an executory contract differ from an executed contract?
The difference is contracts that have come into existence, but are not yet carried out are executory; contracts that are completely carried out are said to be executed.
8. Explain how a clickwrap agreement works.
The offeree enters into the contract by clicking on a dialog box, which is on the screen. Then the contract’s clickwrap was preceded by a button with text that said, “Yes, I agree to the above terms and conditions”. And Google provided the entire contract by way of a web page link, which then placed the entire agreement in a text box.
II. UNDERSTANDING LEGAL CONCEPT
1. A rejection occurs when an offeror has a change of mind and calls back an offer before it is accepted.
False (Revocation)
2. Prices on merchandise and in catalogs are usually treated as offers.
False (Invitation to negotiate)
3. Boarding a bus and putting money in the coin slot without saying anything to the driver is a quasi-contract.
False (Implied contract)
4. A bilateral contract results when someone says, “I’ll sell you my stereo for $100,” and the other party replies “I’ll buy it.”
True
5. A voidable contract is one that is valid unless voided.
True
6. An oral contract for the sale of real property is an example of a contract that is void.
False (Unenforceable)
7. Infants may ratify contracts at any time during their minority.
False (Can’t)
8. When someone says, “I’ll sell you my stereo for $100,” and the other party replies, “I’ll buy it,” a contract comes into existence, and it is in its executory stage.
True
9. It is known as a rejection when the offeree declines an offer.
True
10. A void contract is said to be a nullity.
True
III. CHECKING TERMINOLOGY
H. Contract 1. Any agreement that is enforceable in a court of law.
P. Express contract 2. A contract in which the terms are stated or expressed by the parties.
EE. Rejection 3. The refusal by an offeree of an offer
Y. Offer 4. A proposal made by an offer e capacity
D. Bilateral contract 5. A contract containing two promises, one made by each party
M. E-contract 6. A contract entered into over the Internet
A. Acceptance 7. The assent to the terms of an offer
DD. Ratify 8. Approve, confirm.
F. Clickwrap agreement 9. A contract in which an offeree enters into a contract by clicking on a dialog box on an Internet web site
JJ. Unjust enrichment 10. When one person retains money.property, or other benefit that in equity and just-tice belongs to another.
U. Majority 11. Pull age; adulthood.
N. Executed 12. Carried out or performed.
R. Infant 13. The legal name for a minor.
HH. Unenforceable contract 14. A contract that cannot be enforced for some legal reason.
L. Disaffirm or B. Avoid 15. To get out of a voidable contract; to repudiate. (Select two answers.)
II. Unilateral contract 16. Not good having no legal effect.
GG. Revocation 17. The taking back of an offer by an offeror before it has been accepted by an offeree.
AA. Offeror 18. One who makes an offer.
KK. Valid 19. Good; having legal effect.
MM. Voidable 20. Capable of being disaffirmed or voided.
Q. Implied contract 21. A contract in which the terms are not stated or expressed by the parties.
K. Counter offer 22. A response to an offer in which the terms of the original offer are changed.
J. Contract implied in law or CC. Quasi contract 23. A contract that is imposed by the court to prevent unjust enrichment (Select two answers.)
BB. Quasi 24. As if almost as it were.
V. Minor 25. Under the age of majority usually under 18.
E. Capacity 26. Legal competency.
II. Unilateral 27. A contract containing one promise in exchange for an act.
O. Executory 28. That which is yet to be executed or performed.
Z. Offeree 29. One to whom an offer is made
C. Bargain 30. Agreement.
FF. Restitution 31. Restore an injured person to his or her original position prior to a loss.
S. Invitation to deal 32. A request to an individual or the public to make an offer. (Select two answers.)
I. Contract implied in fact 33. A contract that arises from the conduct of the parties rather than from their express statements
W. Necessaries 34. Food, clothing, shelter, and medical care that are needed by an infant, but not supplied by a parent or guardian.
X. Nullity 35. Nothing; as though it had not occurred.
IV. USING LEGAL LANGUAGE
Monica placed a sign on her car that read, "FOR SALE: $1,000." Seeing the sign, Alex approached Monica and said, "I'll give you $800 for it." Monica replied, "I'll take $900 for it." The sign was a(n) invitation to negotiate or invitation to deal, Alex's statement was a(n) offer, and Monica's response was a(n) counteroffer, which required a(n) acceptance on the part of Alex to create a(n) contract. Alex did not answer immediately, causing Monica to change her mind about the $900 offer and take it back, but before she voiced her revocation, Alex answered with a(n) rejection by saying, "I don't want it at that price." Alex left Monica and took a bus to visit his nephew. This action resulted in a(n) implied contract between Alex and the bus company because the terms of the contract were not stated. Because the contract arose from the conduct of the parties, it was a contract implied in fact.
When Alex got off the bus, he noticed that he was being followed by a small poodle that looked just like the one that was advertised in the newspaper he had just read as being lost. The advertisement offered a reward of $150 to anyone who returned the lost poodle to its owner. Alex went to the address given in the newspaper and returned the dog to its owner, thus creating a(n) unilateral contract. While there, he noticed a car for sale in front of the house and said to the dog owner, "I'll take that car instead of the $150 reward." Alex was the offeror; the dog owner was the offeree. The dog owner replied, "It's a deal." At this point, the contract was in its executory stage because it had not been carried out completely. When the dog owner turns the car over to Alex, the contract will be executed.
In addition, because the terms of the contract were stated, the agreement was a(n) express contract. It was not a contract implied in law (which is also known as a(n) quasi contract) because no unjust enrichment occurred. Because both parties made promises, it was a(n) bilateral contract. The contract met the requirements of law; therefore, it was valid. Alex said to his fourteen-year-old nephew, Otto: I'll sell you my baseball glove for $15." Otto replied, "I'll buy it." This contract was voidable because of Otto's age. He was still a(n) infant/minor and could disaffirm all contracts except for necessaries unless he ratified them after reaching majority. Otto then said to Alex: "I'll bet you $2,000 that the White Sox will win the pennant this year." Alex asked: "Where will you get the money if you lose?" "From a loan shark at 50 percent per annum interest," Otto answered. This loan would involve charging a greater amount of interest than is allowed by law. Such a contract is a(n) nullity and is absolutely void. This type of agreement is not an example of a(n) unenforceable contract, which is a contract that is valid but that cannot be enforced for some legal reason.
V. PUZZLING OVER WHAT YOU LEARNED
Across
1. Any agreement that is enforceable in a court of law. CONTRACT
5. To get out of a voidable contract. AVOID
7. As if almost as it were. QUASI
10. Nothing; as though had not occurred. NULLITY
11. One to whom an offer is made. OFFEREE
16. The refusal by an offeree of an offer made by an offerer. REJECTION
17. A contract in which the terms are stated or expressed by the parties. EXPRESS CONTRACT
19. A request to an individual or the public to make an offer. INVITATION TO DEAL
20. A contract in which the terms are not stated or expressed by the parties. IMPLIED CONTRACT
Down
2. One who makes an offer. OFFEROR
3. A response to an offer in which the terms of the original offer are changed. COUNTEROFFER
4. Good, having legal effect. VALID
6. Capable of being disaffirmed or voided. VOIDABLE
7. A contract imposed by law to prevent unjust enrichment. QUASI-CONTRACT
8. The assent to the terms of an offer. ACCEPTANCE
9. A contract that arises from the conduct of the parties. IMPLIED IN FACT
12. Another name for a quasi-contract. IMPLIED IN LAW
13. Food, clothing, shelter, and medical care that are needed. NECESSITIES
14. Not good, having no legal effect. VOID
15. The taking back of an offer by an offeror before has been accepted. REVOCATION
8. Approve; confirm. RATIFY
Source: Brown, G. W., & Kauffman, K. D. (1998). Legal terminology. Prentice Hall.
Chapter 18: Formation of contract, Book 1, Pages 177-180
Edited by Nguyễn Nhật Linh
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