Business Law 140 Riolo Mesa College Exam Two
What is a Merchant?
2. Engaged in purchase or sale
3. of “goods”
4. Involved in contract
5. Knowledgeable/constructive knowledge
Why is it important to be a merchant in a dispute resolution?
Because they are knowledgeable and held to a higher standard
What is an Assignment?
Legal transfer of a benefit
What is a Delegation?
Legal transfer of detriment
What is Novation?
The substitution of a new contract in place of the old one
When can a 3rd party beneficiary never enforce the terms of the original contract?
When their incidental
3 Ways to move from incidental to intended
1. Performance rendered directly to party
2. 3rd party controls details on contract
3. Expressly named in contract
3 Ways to move from intended to invested
1. Manifest assent
2. Detrimental reliance
3. Conditions of the contract matured
Who is the only 3rd party beneficiary that can enforce the terms of the contract?
What is the perfect tender rule?
The seller is required to deliver the goods in a reasonable conforming manner to the buyers expectations
If perfect tender rule is broken you can
3. Accept some/reject some
then notify seller
then wait for the seller to cure
What is a Destination Contract?
Seller liable until the goods get into the final destination and into the hands of the buyer
What is a Shipping Contract?
Sellers liability ends when they give the goods to the shipper
What is an Output Contract?
producer agrees to sell entire production to the buyer, who in turn agrees to purchase the entire output
What is a Requirement Contract?
one party agrees to supply as much of a good or service as is required by the other party, and in exchange the other party will obtain its goods or services exclusively from the first party
What is a Warranty?
A warranty is an assurance by the seller in which the buyer relies on
What is an Expressed Warranty?
Communicated in words
What is an Implied Warranty?
Not expressly communicated but understood as reasonably applied (meeting of the minds)
What is the Implied Warrant of Merchantability?
Implied warrant that when you buy something, it would be suitable for the purpose a reasonable person would buy it for
What is a Disclaimer?
Statement to notify customer and to limit liabilities
What is Product Liability?
1. Legal liability
2. Manufactures, Sellers, and Leasers
3. Of “goods”
5. Injury or damage
6. Consumers, Users, and Bystanders
What are 3 Affirmative defenses to Product Liability?
1. Assumption of risk
2. Product misuse
3. Comparative negligence
Product vs. Strict liability
strict liability doesn’t have to prove a cause
What is the Mailbox Rule?
an offer is considered accepted at the time that the acceptance is mailed
What is Usury?
Illegally high interest rate
What is Anticipatory Repudiation?
Belief that a party does not intend to live up to their obligations under the contract.
What is Mitigation of damages?
duty on plaintiff to minimize the damages caused by defendant
What is a bilateral contract?
exchange in promises
What is a unilateral contract?
acceptance by preformance
What are 7 clauses?
1. Arbitration Cause – no litigation
2. Form Selection Clause – Mutually agree with jurisdiction
3. Merger Clause – Everything is written
4. Modification Clause – Anything changed and signed in writting
5. Exculpatory Clause – waiver the right to sue for negligence
6. Liquid Damage Clause – Predetermined amount if you don’t preform
7. Force Majeure Clause – (act of god) impossible to preform because of nature or natural disasters
What is an Contract?
1. An Agreement
2. Enforceable in court
3. 2+ Competent People
4. For valid consideration “bargain for exchange”
5. Legal right or duty
6. Now or in the future
What are 8 things that can happen to an offer?
-specific to order
5. Revoke / Resend / Void
6. DSM (Destruction of Subject Matter)
7. Death of one of the parties
8. Subsequential Illegality
What is a Formal Contract?
written (some type of form)
What is an Informal Contract?
What is an Implied Contract?
not communicated but understood
What is an Expressed Contract?
What is a Quasi Contract?
fictional contract by judge to avoid unjust inrichment
What are the 3 affirmative defenses to a contract?
2. Impossibility of performance
3. Comercial impracticality
What is an Accord?
An agreement to receive less
What is a Third Party Beneficiary?
One who benefits from a contract but not a party in contract
What is an Incidental Beneficiary?
3rd party who indirectly benefits from contract
What is an Intended Beneficiary?
A 3rd party who benefits from contract intentionally
What are 5 Equitable Principals related to contracts?
1. Promissory estoppel
2. Unjust inrichment
4. Quazi Contract
What is the U.C.C (Uniform Commercial Code)? And when is it used
Statute of frauds
2. Goods over $500
5. Services that take longer than 1 year