New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

Final Exam Notes

by: Anna Claire Loftis

Final Exam Notes ACCT 2700

Anna Claire Loftis
GPA 3.35

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

all notes except Ch. 16 and one day of class.
Business Law
Robert Hollis Cochran
Study Guide
50 ?




Popular in Business Law

Popular in Accounting

This 9 page Study Guide was uploaded by Anna Claire Loftis on Wednesday May 4, 2016. The Study Guide belongs to ACCT 2700 at Auburn University taught by Robert Hollis Cochran in Spring 2016. Since its upload, it has received 15 views. For similar materials see Business Law in Accounting at Auburn University.


Reviews for Final Exam Notes


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 05/04/16
1 o 9 ▯usiness Law Final Exam Guide: ▯ Chapter 11: Contracts - Nature & Terminology▯ ——————————————————————▯ ▯ Progressive Societies: power was once based on status and power//monarch//strongest male to contract▯ Prevalence of Contracts (EVERYONE WILL DEAL W/CONTRACTS)▯ - even water/electricity/going to Starbucks.. it’s all about contracts▯ ▯ Sanctity of Promises: ▯ - Rooted in Western tradition.. must fulfill your promises▯ - morally important ▯ - economic necessity▯ Responsibility & “Taking Care of Your Own Self-Interest”▯ - you are the only one concerned for your own self interest▯ - survival of the fittest▯ ▯ Overview of Contract Law: ▯ - Sources ▯ - common law (except sales/leases)▯ ▯ UCC - Sales/leases▯ FUNCTION: provides stability and predictability for commerce▯ ▯ DEFINITION: promise or set of promise, for breach- law provides a remedy OR the law forces that you perform your promises▯ ▯ words, determination of what a contract is - based on what parties DO NOT say: inferred from conduct ▯ ▯ Most important reason court enforces contracts - contracts are the foundation of our economy▯ ▯ Contract law emphasizes personal responsibility and accountability▯ ▯ -lAgreement▯a Contract: ▯ - Consideration (Value)- sort the value our for YOURSELF, value in the eye of the beholder▯ - Contractual Capacity- mental capacity and age (aka minors vs. adults)▯ - Legality- not all agreements are legal▯ ▯ In the business world most contracts are bilateral!!▯ ▯ ▯NOW!!!! ▯ Contract Formation: ▯ 2 of9 - Bilateral: promise for a promise▯ - Unilateral: promise for an act▯ - Informal: NO special form (law didn’t interfere) MOST CONTRACTS▯ - Express: formed by words, terms = specifically stated▯ - Implied: formed by conduct of the parties (very efficient)▯ ▯ An expressed contract does NOT have to be written. ▯ A formal contract must be in writing. ▯ ▯ Contract Performance: ▯ - Executed- fully performed on both sides▯ ▯ Executory- NOT fully performed on either side▯ Contract Enforceability: ▯ - Valid: agreement, consideration, contractual capacity and legality▯ - Void: NO CONTRACT▯ - Voidable: (unenforceable)▯ ▯ Exhibit 11-2 in BOOK.▯ ▯ Quasi Contracts implied in law- no actual contract, equitable remedy created by courts (created ▯ontract)▯ “Plain Meaning” Rule - if terms are unclear courts may admit extrinsic evidence ▯ ▯ Contracts are interpreted as a WHOLE▯ ▯ Terms negotiated separately are given greater weight!▯ ▯ Words given ordinary/common meaning▯ ▯ -nterpretation of Contracts: ▯ - written/typewritten greater weight▯t▯ - ambiguous terms interpreted against drafter▯ ▯ Ch. 12: Agreement in Traditional & E-Contracts: ▯ ———————————————————————▯ ▯ Agreement = offer and acceptance▯ - parties are the OFFEROR and the OFFEREE▯ - parties must throw mutual assents to terms of contract▯ contract is formed▯s reached, if the other elements of a contract are present, a valid ▯ Requirements of the OFFER: ▯ - offeror’s serious intention- contract is judged by what a reasonable person in the offeree’s position would conclude about the offer▯ 3 of9 - Definite Terms: identification of parties, object or subject matter of contract consideration to be paid, time of payment, delivery, or performance a court can supply missing terms if parties - Communication to Offeree▯▯ ▯ Objective Theory of Contracts: the Judge is going to look at what the parties DID not what they say in court.▯ ▯ Lucy vs. Zimmer: Zimmer fake sold some land for an unreasonably high price bc he thought his neighbors did not have that kind of money and everyone signed the “fake” contract. The contract ended up being valid in court.▯ ▯ -hExpressions of Opinion: not offers. ▯ - Statements made in jest, frustration, or anger▯ - Statements of Future Intent: not offers▯ - Preliminary Negotiations or Invitations to Negotiate: not offers▯ ▯ * YOU MUST TAKE CARE OF YOUR OWN SELF INTEREST▯ ▯ Special Offer Situations: ▯ - Advertisements: not offers (invitation to negotiate)▯ - reserve ▯ NOT an offer, but invitation for offers through an auctioneer, auctions w/and w/out - w/reserve: can withdraw goods ▯ - w/out reserve: cannot withdraw goods▯ ▯ Ch. 13 Contracts- Consideration▯ ——————————▯ ▯ Consideration (value) ▯ - Legally Sufficient Value: value, promise, performance, or forbearance▯ - Bargained for Exchange: something of legal value must be exchanged btw parties: NOTH bargain)▯ust get and give consideration (the right to say yes or no/ must provide basis for ▯ Consideration doesn’t have to do w/intent▯ ▯ Promise MADE- won’t necessarily be enforced▯ ▯ * agreement made - won’t necessarily be enforced▯ ▯ * agreement made into a contract.▯ Something of value promised, given, or done▯ ▯ Case 13. 1 Hamer vs. Sidway:▯ promised not to smoke, gamble, cuss etc. at college for 10K (aka forbearance) * this is a restraint of a right▯ 4 o 9 ▯ Adequacy of Consideration:▯ - General Rule: ▯ - courts typically will not consider adequacy(satisfaction) of consideration▯ - the law does not protect a person from entering an unwise contract▯ - rarely courts may look at the contract if there is a large “shockingly inadequate” disparity in ▯ the amount consideration exchanged - IS THER REALLY CONSENT?▯ Do both sides of the contract have equal consideration? NO, someone is making a profit▯ Where is consideration in a contract? Both must bring, both must receive (if they don’t - gift/ promise, and courts don’t recognize them▯ why do we have to have consideration in a contract?▯ ▯ A redistribution of wealth… bad idea▯ ▯ Consideration doesn’t have to be equal▯ Cost has nothing to do w/value- in the eye of the beholder▯ ▯ Agreement that lack consideration: ▯ - Pre-existing Duty: a person can already legally can do something▯ - Past Consideration: bargained for exchange element is missing NOT CONSIDERATION▯ - Illusory Promises: promisor has not def. promised to do anything (NO PROMISE AT ALL)▯ ▯ Gift Promises: consideration vs. nothing from other party▯ If Eddie agrees to quit smoking for $1,000- valid consideration.▯ ▯ Settlement Claims: ▯ - Accord (new agreement) and Satisfaction (w/out going to court)▯ - occurs when new agreement (and consequently the old) is completed▯ - MUST be a contract DISPUTE (Not a breach of contract) over debt owed (amount)▯ - debtor offers to pay a lesser amount than the creditor purports to be owed▯ ▯ SKIP SECTION 5▯ ▯ Statute of Limitation- if they don’t enforce debt collection within the pre-arranged amount of time… OH WELL. haha you don’t have to pay▯ ▯ ▯haritable: don’t spend money “promised” to you▯ Chapter 14: Contracts: Capacity and Legality▯ ——————————————————————▯ Contractual Capacity: ▯ - legal ability to enter into a contractual relationship▯ - not all persons have the capacity to enter into a contract▯ - incompetency▯ - minors▯ - incompetency▯ - contracts void if you’re declared insane▯ - if you’re later determined by a court to be insane - contract voidable▯ 5 of9 - “lucid” intervals - valid (interval of sanity)▯ ▯ incompetence b/c of intoxication - today mostly VALID▯ Legality: ▯ - Contracts contrary to Public Policy: Generally, VOID.▯ - Health, Safety, Welfare, Morals Ex. Stripper▯ - Contracts in Restraint of trade are generally VOID▯ - Exception: Covenant not to compete and sale of an ongoing Business▯ ▯ -oCov. not to Compete- type, geographic terms, time (same business, 2 year, 75 miles)▯ - Cov. not to compete in Employment- enforceable as long as time and geographic terms are reasonable▯ ▯ Discriminatory Contract: ▯ - Not Allowed. (Race, Color, Origin, Religion, gender, age, disability)▯ ▯ Effect of Legality: ▯ ▯ if there’s an illegal contract, the courts leave the parties where they find them.▯ Chapter 15: Contracts - Mistakes, Fraud, and Voluntary Consent▯ —————————————————————————————▯ ▯ When is consent- consent?▯ ▯ Ex. Godfather▯ ▯ -oMistake▯may be unenforceable… ▯ - Misrepresentation▯ - Undue Influence▯ - Duress▯ ▯ A mistake of fact - may be canceled. Unilateral mistake - one party made a mistake can’t be cancelled unless other party knows or should have known that a mistake of fact was made ▯ ▯ Mistakes of Value - enforceable by either party▯nded by either party▯ ▯ No One knows the value of anything.▯ ▯ a bilateral contract is a promise for a promise▯ ▯ Fraudulent Misrepresentation: ▯ - voidable by innocent party▯ ▯ innocent fraud- innocent party can rescind contract but usually can’t seek damages▯ Duress: enter under fear or threat, VOIDABLE▯ ▯ 6 of9 Contractual Capacity: ▯ - Minors - Disaffirmance ▯ - minor must disaffirm the entire contract ▯ - -wo general rules▯ - conduct willful, wanton, egregious, irresponsible (VALUE OF CONSIDERATION AT RESALE)▯ ▯ You can enter into a contract, just not valid…▯ ▯ Chapter 17: ▯ ——————▯ ▯ - Privity of Contract:▯ - only original parties▯ - - nothing to do with PRIVACY▯ -xcassignment or delegation ▯ - third party beneficiary contract▯ ▯ Transfer of contractual rights (assignment) duties (delegation)▯ ▯ Rights that can’t be assigned: ▯ - if assigned materially changes risk or duties of obligor ▯ - when the contract expressly prohibits assignment▯ ▯ Delegator: delegation of duty ▯ Delegatee: duty is owed▯ Delegations: duties in a bilateral contract to a third party▯ - 3rd party must agree▯ - Delegator must perform the duties if 3rd party doesn’t (even if they agreed)▯ ▯ Duties can’t be delegated: ▯ - when duties are personal in nature (painter, Taylor Swift, Willie Nelson, etc.) #specialtrust▯ - when 3rd party performance varys material form expected by obligee▯ - when contract prohibits delegation▯ ▯ Effect of a Delegation- ▯ - delegator remains liable▯ ▯ -swhen an “assignment of All rights” is made this both an assignment and a delegation▯ ▯ Assignment of All Rights: ▯ - both assignment and delegation▯ ▯ Second Exception to privity of Contract:▯ - Intended beneficiaries - 3rd party can enforce contract▯ 7 of9 - Incidental beneficiaries - NO 3rd party rights ▯ DONE - NO DONEE/CREDITOR▯ ▯ ▯ ▯ Ch. 18: Performance & Discharge In Traditional & E-Contracts▯ ———————————————————————————-▯ ▯ 1. a condition occurring OR not occurring ▯ract by…▯ 2. full performance breach by other party▯ 3. agreement of parties▯ 4. operation of law▯ ▯ Conditions- possible future events by which performance of a legal obligation or termination of an existing obligation will happen▯ ▯ -yPrecedent- performed before released▯ - Subsequent- performance before you perform your conditions (EX. full pay by a company to a newly NEEDED pharmacist who hasn’t quite finished her schooling yet, but who is on track to finishing within the semester)▯ - Concurrent▯ ▯ Types of Performance: ▯ - Complete (100%) Up To Par Performance▯ - Inferior (< 90%) MATERIAL breach (OF NO USE ANYMORE.)▯ ▯ Know the difference btw substantial and inferior: basically a substantial performance may have a detail or two off, but all in all the product/thing could work without the detail. An inferior product usually can NOT be used for what it was contracted for.▯ ▯ Performance to the Satisfaction of Another: ▯ - Reasonable Person standard unless contract explicitly states 3rd party “approval”▯ Non-Material Breach of Contract:▯ - Duty to perform is not excused and the non-breaching party must resume performance of the contractual obligations undertaken▯ ▯ Material Breach of Contract: KNOW (aka Inferior)▯ - Occurs when performance isn’t substantial▯ - Non-breaching party is excused from performance and entitled to damages▯ ▯ -iif no time is stated in contract, reasonable time is implied▯ ▯ Discharge by Mutual Rescission: ▯ 8 o 9 - if executory, parties must make a new contract, oral or written▯ - if one party has performed, agreement to rescind(cancel/rescind) must have additional consideration▯ Ex) ATT&T and Samsung: They had a multi-million dollar contract to create the newest/coolest/ hippest flip phone. Apple came out with the iPhone. That contract was mutually nulled and then a new contract was created to make a new off brand smart phone. ▯ ▯ Discharge by Novation: Substitute- you’re no longer part of the deal!!▯ - both parties agree to substitute a new 3rd party for one of the original parties▯ - REQUIREMENTS: previous valid obligation etc.▯ ▯ -iaccord: new contract over disagreement▯ - satisfaction: aka performance of accord▯ ▯ Discharge by Operation of Law:▯ - Material Alteration innocent party is discharged after material alteration▯ - BLAH BLAH BLAH. ETC (don’t need to know)▯ ▯ Impossibility of Performance: ▯ - CAN’T PERFORM IT = discharge (aka death, incapacitation, destruction of subject matter, changes in law)▯ - objective impossibility of performance: supervening event was not foreseeable▯ ▯ DONT’ NEED TO KNOW REST▯ ▯ LOOK AT DISCHARGE CHART!▯ ▯ ▯ Ch. 19: Breach of Contract & Remedies ▯ ——————————————————▯ Most Common Remedies are… ▯ rest)▯s, Rescission and Restitution, & Special Performance (etc. you don’t need to know the ▯ Damages: 8 ▯ - MOST COMMON breach of contract remedy!! ▯ - The goal is to “make the party whole” or give them the “benefit of their bargain.” ▯ - Types: ▯ - Compensatory- monetary remedy to what was lost▯ - Consequential- special damages that resulted in additional loss, damages that go beyond the contract▯ - Nominal- don’t worry about this▯ - Punitive- additional damages available to the plaintiff due to bad behavior on the defendant’s part▯ - a breach of contract IS NOT a wrong ▯ - a breach of contract IS NOT a crime▯ ▯ 9 of9 Mitigation of Damages: if a breach of contract occurs, the injured #innocent party has a duty to reduce the damages that he/she suffered (Ex. You bought a blue paint color, and the company sent you the wrong color… CALL THE COMPANY and tell them so you can switch.)▯ ▯ Parker vs. MGM: MGM cancelled a movie deal with Shirley McClain and unreasonably wanted this talented singer/dancer to appear in a different movie - which was a Western. She SHOULD NOT have to appear in that particular film. (If the western film flopped, it would reflect poorly on the talented Shirley.) If they had asked for a different singer/dancer film… sure- Shirley should appear in the film since she signed a multimillion dollar contract already.▯ ▯ You don’t need to know Liquidated Damages.▯ ▯ Equitable Remedies: ▯ - A party performed and the other party doesn’t even start his/her performance.▯ - Rescission = contract cancelled and both parties are returned to their original standings & Restitution = both parties get everything back (money, property, goods etc.)▯ - Special Performance = calls for performance of act promised in a contract (sale of land/ contracts for personal services)▯ ▯ A reformation occurs when fraud or mutual mistake is present in a contract. The written wahoo.ct incorrectly states the parities’ true intentions. The contract is then reformed/rewritten.


Buy Material

Are you sure you want to buy this material for

50 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Bentley McCaw University of Florida

"I was shooting for a perfect 4.0 GPA this semester. Having StudySoup as a study aid was critical to helping me achieve my goal...and I nailed it!"

Jennifer McGill UCSF Med School

"Selling my MCAT study guides and notes has been a great source of side revenue while I'm in school. Some months I'm making over $500! Plus, it makes me happy knowing that I'm helping future med students with their MCAT."

Jim McGreen Ohio University

"Knowing I can count on the Elite Notetaker in my class allows me to focus on what the professor is saying instead of just scribbling notes the whole time and falling behind."


"Their 'Elite Notetakers' are making over $1,200/month in sales by creating high quality content that helps their classmates in a time of need."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.