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Business Law I Essentials 2e

Chapter 7

Business Law I Essentials 2eChapter 7

Chapter 7

1.

A contract is defined as an agreement between two or more parties that is enforceable by law.

3.

d

5.

b

7.

d

9.

If a person lacks the mental capacity to enter a contract, then either he or she, or his or her legal guardian, may void it, except in cases where the contract involved necessities. In most states, mental capacity is measured against the “cognitive standard” of whether the party understood its meaning and effect.

11.

A material breach is when something substantially different from what was expected under the terms of the contract is delivered, the breach is considered material.

13.

Rescission terminates the duties of both parties under the contract, while reformation allows courts to equitably change the contracts substance.

15.

Restitution restores the injured party to status quo or the position they had prior to the formation of the contract, by returning to the plaintiff any money or property given to the defendant pursuant to the contract.

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