Business Law

REG — Business Law Exam: CPA — REG (Taxation & Regulation) Last Updated: June 2026 --- ## Contracts ### Elements of a Valid Contract 1. Offer — Definite, communicated to offeree, intent to be bound 2. Acceptance — Mirror image of offer (common law); any manner reasonable (UCC) 3. Consideration — Bargained-for exchange; past consideration is insufficient 4. Capacity — Legal age; mental competence 5. Legality — Legal purpose ### Common Law vs. UCC Article 2 | Issue | Common Law (services, real estate) | UCC Article 2 (goods) | |---|---|---| | Acceptance | Must mirror offer exactly (mirror image) | Can add different terms | | Modification | Requires new consideration | No consideration needed | | Output/requirements contracts | Not recognized | Recognized | > Exam Tip: If the contract involves goods (movable personal property), apply UCC Article 2. For services and real estate, apply common law. ### Contract Defenses (Voidable/Void Contracts) | Defense | Effect | |---|---| | Fraud | Voidable by defrauded party | | Duress | Voidable by coerced party | | Undue influence | Voidable by influenced party | | Mutual mistake (both parties) | Voidable by either party | | Unilateral mistake | Generally not a defense (unless other party knew) | | Illegal purpose | Void (no remedy) | | Lack of capacity (minor) | Voidable by minor | ### Statute of Frauds Certain contracts must be in writing to be enforceable: - Marriage (prenuptial agreements) - Year or more (contracts that cannot be performed within one year) - Land (real estate contracts) - Executor (promise to pay decedent's debts personally) - Goods over $500 (UCC — sale of goods ≥…