Law for Business
Mr. Bernstein
Study Questions
November 24, 2014
1. Offer and Acceptance, pp 110-120
a. Why is contract law so important to building a successful competitive
economic system?
b. What are the six requirements of an enforceable contract and who
was the teacher for each?
1.
2.
3.
4.
5.
6.
2. Genuine Agreement, pp 126-130
a. Define:
1. Rescission
2. Ratification
b. Do you think it is ethical to convince another party to sign a contract
by:
1. Threatening illegal actions, such as violence or blackmail?
2. Threatening to report a crime?
3. Threatening to sue?
c. Does American contract law generally reflect the ethics of our
people?
3. Mistake, Misrepresentation and Fraud, pp 131-135
a. Unilateral Mistakes, if not induced by the other party, generally do
not invalidate contracts, but Mutual Mistakes do. T
F
b. If a misrepresentation is intentional or reckless, is it Fraud and can
result in compensatory damages AND at times punitive damages. T F
4. Mutual Consideration, pp 140-153
a. For a contract to be legal, consideration must be somewhat equal,
according to a reasonable, average person. T F
b. The promise of refraining from an action is not considered
consideration. T F
c. Name a situation where Mutual Consideration is not required to
make a contract valid (hint: known as the doctrine of promissory
estoppel)
5. Capacity, pp 156-167
a. Name three types of persons who lack capacity to contract:
1.
2.
3.
b. Is it a businessman or citizen’s responsibility to insure they are
contracting with a counterparty who has authority to sign?
__________ Is it a businessman or citizen’s responsibility to insure
their counterparty meets the three capacity requirements listed in
(a)? __________________
6. Illegal Contracts and Enforceability of Illegal Contracts, pp 168-179
a. While our courts generally hope to enforce contracts, other laws will
in almost all cases take precedence over contract law. T F
b. Ordinarily our courts do not help EITHER party to an illegal contract.
T F
c. Unconscionable contracts are ones which are grossly unfair and
which parties would not accept under normal circumstances. Will
courts typically enforce unconscionable contracts, as long as the
signees had legal capacity? _____________
d. Courts can enforce portions of a contract and declare illegal portions
invalid. T F
7. Statute of Frauds, pp 181-187
a. Do all contracts need to be written to be valid?
b. Name four types of contracts that in New Jersey must be in writing to
be valid?
1.
2.
3.
4.
c. Why would a party wish to avoid signing a contract?
8. How Contracts are Interpreted, pp 188-195
a. True or False – In general, written contract terms will be given
priority over oral conversations.
b. To insure written contracts terms are without any doubt given
priority over oral contracts, or any other written contracts, clear
language is often included in a contract. Create an example of an
“integration clause”:
9. Transfer of Obligations and How Contracts Are Satisfied, pp 197-207
a. Define “Assignment” of contract rights
b. Name the most common example of contract assignment, one we
are all likely to encounter in our adult lives.
c. Generally, parties may only assign contractual rights if
_______________________________________________________.
10. Remedies for Breach of Contract, and Denial of Remedies for Breach of
Contract, pp 210-219
a. Can an injured party refuse to perform their duties if the breach of
contract is minor?
If not, what can they do?
b. When filing suit, the injured party must specify the remedy they seek:
Specific Performance, Damages (money) or Recission T F
c. Can an injured party seek both monetary damages and specific
performance?
d. Must an injured party seek to mitigate damages? Provide an
example.
a. Define “Statute of Limitations”.
11. Sales Contracts and Transfer of Ownership, pp 229-238
a. Must delivery and sales be made at the same time for a valid sales
contract?
If not, what document should a businessman receive
when the sales becomes final?
b. Define “Unconscionable” Sales Contracts
c. Does ownership and the risk of loss transfer at the same time?
not, give an example.
If
a. Give an example of a barter transaction.
b. In what way are Merchants held to different standards than
casual sellers? Why?
12. Power to Transfer Ownership, pp 247-250
a. Homogenious goods of an commonly interchangeable nature are
known as fungible, and ownership of these goods can be transferred
without inspection necessary. T F
b. Negotiated Bills of Lading allow oil or lumber in transit to be bought
and sold multiple times before arriving at their destination. T F
13. Risk of Loss and Insurable Interest, pp 251-254
a. What type of delivery indicates where the seller must deliver and
where risk transfer occurs?
b. What type of delivery requires payment, and risk transfer, at
delivery?
c. When is ownership transferred at an auction?