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Business Law · College

Business Law: Contracts Basics

Contract formation, offer and acceptance, and consideration, at an intro business law course level, distinct from bar-exam-depth contract doctrine.

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What is a contract?
An agreement between two or more parties creating mutual obligations that are enforceable by law.
Name the four essential elements of a valid contract.
Offer, acceptance, consideration, and mutual intent to be bound.
What is an offer?
A definite proposal to make a specific contract, communicated to another party with the intent to be bound if accepted.
What is acceptance?
A manifestation of willingness to be bound by the terms of an offer, communicated to the offeror.
What is consideration?
Something of value (money, goods, services, or a return promise) that each party gives up as part of the contract.
Can a contract exist without consideration?
Generally no, consideration is required for most contracts to be enforceable.
What is the mirror image rule?
An acceptance must match the terms of an offer exactly; any variation constitutes a counteroffer, not acceptance.
What is a counteroffer?
A response to an offer that changes or adds terms, which rejects the original offer and makes a new offer.
What does mutual assent mean in contract law?
Both parties must agree to the same terms, often described as a meeting of the minds.
What is an express contract?
A contract where the parties state the terms clearly in words, either written or spoken.
What is an implied contract?
A contract formed by the conduct and circumstances of the parties rather than explicit words.
What is the mailbox rule?
An acceptance is effective when properly sent (deposited with the mail carrier), even if not yet received by the offeror.
Can an offeror revoke an offer?
Yes, generally an offeror can revoke an offer at any time before acceptance.
What is a firm offer?
An offer that cannot be revoked for a set period, typically one written by a merchant regarding the sale of goods.
What is a unilateral contract?
A contract in which one party makes a promise in exchange for the other party's performance of an act.

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