People make promises all the time, so promises have little to do with contract law.
A.) Our Physical well-being
B.) Our interests
C.) Our social values
D.) Our expectations
Promises that involve moral obligations for the basis of contract law.
-Buying the services of a lawyer
The objective theory of contracts tells us that a party’s intention to enter a legally binding agreement belief of at least one of the parties.
A.) The circumstances surrounding the transaction.
B.) What the party said when entering into the contract.
C.) If the party had the flu while negotiating.
– Formal, Informal
– Express, Implied
If the offeree can accept simply by promising to perform, then the contact is unilateral.
A.) Formed a unilateral contract as soon as Maria began reading the book.
B.) have no contract until Maria finishes reading the book.
C.) formed a bilateral contract as soon as Maria began reading the book.
An implied contract differs from an express contract in that the conduct the parties created and defines the terms of the contract.
A.) executed because the gas station attendant did what you asked.
B.) executed because you have a full tank of gas.
C.) executory because you have yet to pay the attendant.
Contracts for the sale of kidneys are void because it is illegal to sell human body parts.
Implied contracts and quasi contracts are the same.
Because courts impose quasi-contract obligations as if the parties had entered into an actual contract, these are equitable rather than legal contracts.
A.) quid pro quo
B.) quantum meruit
C.) caveat emptor.
You pay for a trial three-month subscription to a magazine. You do not renew, but continue to receive another year’s issues. The magazine company sues you, but you owe nothing.
Generally, the doctrine of quasi contract cannot be used when there is an actual contract.
Courts seek out the most sophisticated meanings of terms in contracts in order to interpret them.
A.) When the intent of the parties can be determined form the contract’s language.
B.) When a term is susceptible to more than one interpretation.
C.) When there is no uncertainty about any of the provisions of the contract.
The law does NOT allow courts to examine extrinsic evidence in order to interpret ambiguities in a contract because the law does not allow it.
– A contract will be interpreted as a whole.
– Terms subject to separate negotiation will be given greater consideration than standardized terms.
– A word is given its ordinary meaning.
– Specific and exact wording will be given great consideration than general language.
– Written (or typewritten) terms prevail over preprinted ones.
When the language has more than one meaning, it will be interpreted against the party who drafted the contract.
A.) Since it is an employment contract, the team may hire or fire him for any or for no reason.
B.) Since most people would agree that this is conduct unbecoming to a public figure, the team could fire him.
C.) The team would need to see if the plain meaning of the contract to determine if this behavior was in violation of the contract.
D.) The team would be able to fire the quarterback only if the board of directors of the corporation voted to do so.
A.) Only if it was allowable in the contract.
B.) Only if it reasonable as related to the quarterback’s behavior.
C.) Only if it is a reasonable amount of money.
D.) Only if the quarterback makes more than that per month.
A.) Yes, since anything stated in the negotiation process of a contract is allowable in a breach of contract action.
B.) Yes, but only if the term “good behavior” was ambiguous.
C.) Yes, but only if the term “good behavior” was not ambiguous.
D.) No, they could only bring in that evidence if the term good behavior was specifically defined in the contract.
Agreement normally is evidenced by an offer and an acceptance.
2. The terms of the offer must be reasonably certain, or definite, so that the parties and the court can ascertain the terms of the contract.
3. There offer must be communicated to the offeree.
An effective offer does require that a reasonable price be related to market value.
2. The identification of the object of subject matter of the contract.
3. The consideration to be paid.
4. The time of payment, delivery, or performance.
The requirement that an offer be properly communicated to the offeree means that the offeror must inform the offeree about the offer in some effective way.
2. Rejection- Accomplished by words or actions that demonstrate a clear intent not to accept the offer; not effective until received by the offeror or the offeror’s agent.
3. Counteroffer- A rejection of the original offer and the making of a new offer.
2. Destruction of the subject matter- When the specific subject matter of the offer is destroyed before the offer is accepted, the offer automatically terminates.
3. Death of Imcompetence of the offeror of offeree- If the offeror or offeree dies or becomes incompetent, this offer terminates (unless the offer is irrevocable)
4. Supervening illegality- When a statute of court decision makes the proposed contract illegal, the offer automatically terminates.
An acceptance must match the terms of the offer exactly in order to be valid. This is known as the mailbox rule.
The mailbox rule means that once an acceptance is sent or otherwise communicated to the offeror by an authorized means, the acceptance is effective.
An acceptance sent by means not expressly or impliedly authorized normally is not effective until it is received by the offeror.
B.) Dispute resolution
E.) Limitation on remedies
F.) Future discount polices
G.) Acceptance of terms
H.) Return policy
Because individuals rarely read the underlying language in a click-on agreement, they are always invalid.
– Issues associated with the use of the product
When deciding questions about the enforceability of terms in shrink-wrap agreements, one important factor courts take into account is whether the buyer learned of the shrink-wrap terms before or after the parties entered into the contract.
As a Texas resident, when you are dissatisfied with video games you buy on the Internet, you typically can sue in Texas state courts.
One way online sellers and buyers can prevent disputes over e-contract signatures is to form a partnering agreement.
A record is information that is inscribed on a tangible medium or stored in an electronic retrievable file.
The UETA covers only electronic records and signatures relating to transactions.
A.) Transactions for which the parties have not previously agreed to conduct by electronic means.
B.) The electronic records and signatures relating to a transaction.
C.) Transactions that have been negotiated for a contract via e-mail.
– The State’s procedures or requirements are consistent with the E-SIGN Act.
– The State does not give priority to one type of technology.
– The state law was enacted after the E-Sign Act and refers to it.
The E-SIGN Act governs if—
– The modifications are inconsistent with the E-SIGN Act/
B.) as a valid signature
C.) as an invalid signature
Once an electronic record leaves the control of the sender or comes under the control of the recipient, it has been sent.
A.) The United Nations Convention on the Use of Electronic Communications in International Contracts.
B.) The International Convention on Trademark Disputes.
C.) The Hague Convention on the Choice of Court Agreements.
A.) If Jack does not accept the $100,000, there is no valid contract for the sale of the business or for the non-competition agreement.
B.) If Jack does not accept the $100,000, there is a valid contract for the sale of the business, without a non-competition clause.
C.) If Jack does not accept the $100,000, he may not sell the frozen food, but only for a reasonable amount of time.
D.) Jack cannot change his mind, since he stated that he would probably accept $100,000 additional for the non-competition agreement.
A.) No, once an offer is made, it can never be revoked.
B.) No, unless the offer states that it is revocable.
C.) Yes, as long as he actually communicates the revocation to Hal and Sophia (or their agent) prior to acceptance.
D.) Yes, and there is no need to actually communicate the revocation to Hal and Sophia (or their agent) prior to acceptance.
A.) Yes, but only for sale of the restaurant, without the non-competition agreement.
B.) Yes, for the sale of the restaurant with the non-competition agreement for the extra $100,000.
C.) Yes, for the sale of the restaurant with non-competition agreement for the extra $75,000.
D.) There would be no valid contract.
A.) Yes, a valid contract was formed on July 15th when the letter of acceptance was sent.
B.) Yes, a valid contract was formed on July 20th when the letter of acceptance was received.
C.) Yes, a valid contract was at the time that Jack opens the letter and actually reads it.
D.) No, because Hal and Sophia informed Jack that they did not want to buy the business prior to Jack receiving the letter of acceptance.
A.) Yes, between Vinny and Oscar for $4,000 now and 1,000 in a month.
B.) Yes, between Vinny and Oscar for $5,000 cash since that was the first offer accepted.
C.) Yes between Vinny and Maria for $5,500 since Maria gave the highest offer.
D.) Yes, between Vinny and Oscar, if Oscar is willing to pay $5,500.
A.) Yes, it is implied that she can test drive the car before a contract was formed.
B.) Yes, since most people prefer cars with air conditioning.
C.) Yes, she wanted a car with air conditioning so she could later say she meant for it to be in the contract.
D.) No, the only condition in her acceptance was that it pass a smog inspection.
1. Legal Value- Something of legally sufficient value must be given in exchange for a promise. This may consist of a promise, a performance, or a forbearance.
2. Bargained-for exchange- There must be a bargained-for exchange.
Carmen agrees to cook 20 dinners for Hal. In exchange, Hal will repair all of the plumbing in Carmen’s house. Carmen has offered legally sufficient consideration because Carmen has promised something of value.
Something does not have to be of direct economic or financial value to be considered legally sufficient consideration.
– a duty imposed by law
A.) Senior Citizens
B.) Residents with work visas
C.) Emancipated minors
Jenkins agrees to repaint Celia’s apartment in exchange for her used tablet device. When he is three-fourths finished, he says he will not continue unless she also gives him her used smartphone. His legal position is such that he can receive the smartphone in exchange for finishing the job because he has given good and fair consideration in exchange.
Past consideration is the equivalent of no consideration.
If two parties substitute a new contract for an old one and the court finds that there was a preexisting duty, then the new contract will be invalid because there was no consideration.
A.) an accord and satisfaction
B.) an accord
C.) a satisfaction
A basic rule is that there can be no satisfaction unless there is first an accord.
An accord and satisfaction can be used to settle any contract dispute with respect to any type of debt.
A.) an indefinite promise
B.) that justice be better served by enforcement of the promise
C.) a signed writing explained the promise
If a promise is made without consideration, it can never be enforced.
2. The promisor should have expected that the promise would rely on the promise.
3. The promisee reasonably relied on the promise by acting or refraining from some act.
4.The promisee’s reliance was definite and resulted in substantial detriment.
5. Enforcement of the promise is necessary to avoid injustice.
Promissory estoppel and the doctrine of quasi contract are equivalent.
Yolanda’s parents tell her that if she builds a house with her own funds on land that they own, they will give her the land. If they refuse to do so after Yolanda finishes the house, she will NOT be able to use the doctrine of promissory estoppel because it does not apply to family disputes.
A debtor who promises to pay a previous debt even though recovery is barred by the statute of limitations makes an enforceable promise that does not need consideration.
A.) a religious organization
B.) Alcoholic’s Anonymous
C.) a college or university
D.) the Human Society
E.) United Fund
F.) the US Treasury
A.) enforceable because the $10,000 is the consideration for the agreement.
B.) unenforceable because their agreement was not in writing.
C.) enforceable because Lila made a promise to Joanne, which is the same as a contract.
D.) unenforceable because there is no bargained-for exchange.
a. Wes can receive the extra books in exchange for doing more work, as he has given good and fair consideration in exchange.
b. Mary can sue for breach of contract, because Wes had a preexisting duty to do all of the work.
c. Wes will only get one more book, because two is too many more to be fair.
d. Mary must give Wes the additional books.
a. a covenant not to compete.
b. no contract.
c. a release of suit.
d. a covenant not to sue.
b. concerted satisfaction.
c. delimited accord.
d. covenant not to sue.
a. Mia may recover the $450 from Chuck because consideration is not necessary in an implied contract.
b. Mia may not recover the $450 from Chuck because there was no bargained-for exchange.
c. Mia may recover the $450 from Chuck because she reasonably and substantially relied on Chuck’s promise.
d. Mia may not recover the $450 from Chuck because she did not have a contract with Chuck by formally accepting his offer.
Courts generally assume the existence of contractual capacity.
When a minor who has entered into a contract opts to avoid that contract, she or he can choose the particular portions of the contract to disaffirm.
A.) Can disaffirm this contract only if she has turned 18.
B.) Can return the bracelet and get all of her money back.
C.) Can return the bracelet, but will only receive 50 percent of what she paid for it.
Adults who enter into contracts with minors can also avoid their contractual duties just as the minor can do so.
Three of those additional duties:
– The minor is responsible for the ordinary wear and tear for the returned property.
– The minor is responsible for the depreciation of that returned property.
A.) be unsuccessful because he waited too long.
B.) be successful, because he acted within a reasonable time.
C.) be unsuccessful unless he obtains court approval.
2. Necessaries [Rollover definition- Necessities required for life, such as food, shelter, clothing, and medical attention; may include whatever is believed to be necessary to maintain a person’s standard of living or financial and social status]– minors remain liable for the reasonable value of necessaries (goods and services).
3. Ratification [Rollover definition- The act of accepting and giving legal force to an obligation that previously was not enforceable.] — After reaching the age of majority, a person can ratify a contract that he or she formed as a minor, thereby becoming fully liable for it.
– If a person was sufficiently intoxicated to lack the mental capacity to comprehend the label consequences of entering into the contract, the contract may be voidable at the option of the intoxicated person.
– An intoxicated person may disaffirm the contract at any time while intoxicated and for a reasonable time after becoming sober but must make full restitution. Contracts for necessaries are voidable, but the intoxicated person is liable for the reasonable value of the goods or services.
– After becoming sober, a person can ratify a contract that she or he formed while intoxicated, thereby becoming fully liable for it.
A.) the store clerk knew that he was intoxicated.
B.) he lacked the mental capacity to enter into the contract.
C.)his capacity to act would be classified as “legally unstable.”
– If a court has declared a person to be mentally incompetent and has appointed a legal guardian, any contract made by that person is void from the outset.
– If a court has not declared a person mentally incompetent, but that person lacked the capacity to comprehend the subject matter, nature, and consequences of the agreement, then the contract is voidable at the person’s option
– If a court has not declared a person mentally incompetent and that person was able to understand the nature and effect of the contract at the at the time it was formed, then the contract is valid and enforceable.
A.)prove that a court had previously judged her to be incompetent.
B.) prove that she lacked adequate mental capacity when she bought the car.
C.) prove that the salesperson talked her into buying the car.
All gambling contracts in the United States are illegal?
Gambling is the creation of risk for the purpose of assuming it?
Contracts to commit an immoral act, such as selling a child, and contracts that prohibit marriage are contrary to public policy.
A.) An exculpatory clause.
B.) A contract in restraint of trade.
C.) A divisible, or severable, contract.
All covenants not to compete are contrary to public policy and therefore illegal.
A.) Be deemed against public policy because the restaurant business is not competitive.
B.) Be deemed contrary to public policy because of excessive duration and unreasonable geographic restriction.
C.) Be deemed not contrary to public policy.
Courts frequently engage in employment contract reformation.
Because persons are assumed to be reasonably intelligent, courts rarely come to their aide just because they have made foolish bargains.
– Substantive Unconscionability
Factors that courts consider:
– Is the print inconspicuous?
– Is the language unintelligible
– Did one party lack an opportunity to ask question about the contract?
– Was there a disparity of bargaining power between the parties?
Factors that courts consider:
– Does a provision deprive one party of the benefits of the agreement?
– Does a provision leave one party without a remedy for nonperformance by the other?
Exculpatory clauses release a party from liability in the event of monetary or physical injury no matter who is at fault.
A.) Exculpatory clauses found in rental agreements for commercial property.
B.) Exculpatory clauses in bungee jumping contracts.
C.) Exculpatory clauses in contracts with employees.
D.) Exculpatory clauses in residential property leases.
– Skiing Facilities
– Skydiving organizations
– Golf-cart Concessions
When one party has no reason to know that the contract is illegal, that party can often recover any benefits conferred in a partially executed contract.
If any insurance company violates a statute when selling insurance, the purchaser can still enforce the policy and recover from the insurer.
A.) The contract is valid unless Jack did not know he was entering into the contract or lacked the mental capacity to comprehend its nature.
B.) The contract is voidable by any party.
C.) The contract is voidable only if Jack’s intoxication was involuntary.
D.) The contract is void.
A.) That Jack was voluntarily intoxicated at the time of the negotiations and signing of the contract.
B.) That the contract is void.
C.) That Jack, by waiting two years ratified the contract.
D.) That Jack was intoxicated very often.
A.) The contract would be void, as covenants not to compete are a restraint of trade.
B.) The contract would be void as covenants not to compete are only valid when they are part of a valid employment contract.
C.) The contract for the sale of the business would be valid, but the covenant not to compete will be void.
D.) The covenant not to compete must be reasonable in geographic scope to be valid.
A.) The contract would be void due to illegality.
B.) The contract would be void since the parties are in pari delicto.
C.) The contract would likely sever the illegal part of the contract and allow for the contract for the sale of the business to be enforced.
D.) The contract would likely be voidable by Jack.
A.) Cannot return the bracelet, because she has kept it too long.
B.) Can return the bracelet, but she will only get 50 percent of what she paid for it.
C.) Can return the bracelet and get her money back.
D.) Can disaffirm this contract only is she has turned eighteen.
A.) the store clerk knew he was intoxicated.
B.) a reasonable person would have known that he was intoxicated.
C.) his capacity to act would be classified as “legally unstable.”
D.) he lacked the mental capacity to enter into the contract.
A.) prove that a court had previously judged her to be mentally incompetent.
B.) prove that the salesperson talked her into buying the car.
C.) prove that the car dealership did not take adequate precautions to prevent sales to mentally disturbed individuals.
D.) prove that she lacked adequate mental capacity when she bought the car.
A.) will not be enforced.
B.) will be enforced despite Craig’s winning or losing.
C.) will be enforced unless Craig loses the case.
D.) will be enforced only if Craig wins.
An otherwise valid contract maybe unenforceable if the parties have not genuinely agreed to its terms.
A.) Sue under the statute of limitations.
B.) Carry out the contract.
C.) Rescind (cancel) the contract.
Even when a unilateral mistake of fact was made, a contract may be enforceable if the other party to the contract knows or should have known that a mistake of fact was made.
A.) There was an error due to a substantial mathematical mistake that was made inadvertently and without extreme negligence.
B.) The contract was not carefully examined by one of the parties.
C.) The mistake occurred because one of the parties did not print out a page in the contract.
When parties form a contract, their agreement establishes the value of the object of their transaction, not only for the moment, but for several years in the future.
When an innocent party is fraudulently induced to enter into a contract, the contract normally can be avoided because that party has not voluntarily consented to its terms.
The law will not come to the aid of one who simply makes an unwise bargain.
Misrepresentation of law ordinarily does not entitle a party to relief from a contract.
B.) real estate brokers
C.) licensed psychologists
The presence of termites qualifies as a latent defect.
Ordinarily, any party to a contract has a duty to come forward and disclose facts that the other party does not know about.
Scienter occurs if a party says or implies that a statement is made on some basis, such as personal knowledge or personal investigation, when it is not.
When an innocent misrepresentation has occurred, the aggrieved party cannot rescind the contract, but usually can seek damages.
A contract entered into under excessive or undue influence lacks voluntary consent and is therefore voidable.
a. Those under the care of psychiatrists
b. Those under guardianships
c. Those under the care of physicians
d. Mentally incompetent people
e. Those attending community college
f. Elderly people
g. Those under the care of psychologists
A.) Because of undue influence.
B.) Because of duress.
C.) Because of unilateral mistake.
Duress is both a defense to the enforcement of a contract and a ground for the rescission of a contract.
Economic need is usually sufficient to constitute duress.
A.) undue influence.
B.) economic duress.
C.) fraudulent misrepresentation.
Most adhesion contracts are standard-form contracts that contain fine print provisions that shift a risk ordinarily born by one party to the other.
A.) A unilateral mistake does not relieve the party who made the mistake from contract liability.
B.) A mistake of value usually relieves the liability under a contract.
C.) A mutual mistake relieves liability under a contract.
D.) The mistake was immaterial.
A.) No, because it is a unilateral mistake, and therefore whoever made the mistake cannot use it as a defense.
B.) No, because it is a mutual mistake between Vinny and the newspaper, therefore any contract could be rescinded.
C.) Yes, because a unilateral mistake always allows contracts to be rescinded by either party.
D.) Yes, since the mistake would be obvious to a reasonable person.
A.) Probably because he would have scienter.
B.) Probably not because he would have scienter.
C.) Probably not because there is no statement of a material fact since he did not say he was a medical doctor.
D.) Probably since he is giving his opinions of the merits of Gensol.
C.) false representation
D.) justifiable reliance
A.) ratification of the contract
C.) rescission and damages, if out of pocket expenses were incurred as a result of the fraud
A.) a beveled mistake.
B.) an allowable mistake
C.) unilateral mistake.
D.) mutual mistake.
A.) undue influence.
B.) fraudulent misrepresentation.
D.) mistake, which allows he contract to be rescinded.
B.) unilateral mistake.
C.) fraudulent misrepresentation.
D.) undue influence.
A.) reclaim the money, as it was a gift; there was no consideration.
B.) seek to avoid the contract on the basis of undue influence.
C.) claim that she was defrauded.
D.) seek to avoid the contract on the basis of duress.
A.) require Margaret to pay all of the costs of arbitration.
B.) refuse to enforce the mandatory arbitration provision.
C.) allow Margaret to return the vehicle to the dealer in return for the monies paid to the dealer.
D.) enforce the mandatory arbitration provision.
Every state has a statute specifying what types of contracts must be in writing and we refer to such a statute as the Statute of Frauds.
An exchange of e-mails that evidences the parties’ agreement usually is sufficient to satisfy the writing requirement.
B.) a new car.
C.) a new college textbook.
– Contracts that cannot by their terms be performed within one year from the day after the date of formation.
– collateral , or secondary, contracts, such as promises to answer for the debt or duty of another.
– Promises made in consideration of marriage.
– Under the Uniform Commercial Code, contracts for the sale of goods priced at $500 or more.
The Statute of Frauds operates as a defense to the enforcement of an oral contract for the sale of land.
a. the parties’ memory of their contract terms is not reliable for longer than a year.
b. because of the Statute of Frauds, there is no objective theory of contracts.
c. most contracts are invalid if they last for more than a year.
– If the contract can possibly be preformed within a year, the contract does not have to be in writing to be enforceable.
One Year from the Day after the Date of Contract Formation
– If performance cannot possibly be completed within a year, the contract must be in writing to be enforceable.
A.) does not need to be in writing.
B.) must be in writing based on the one-year rule.
C.) must be in writing under the Uniform Commercial Code (UCC).
A collateral promise is one made by a third party to assume the debts or obligations of a primary party to a contract if the primary party does not perform.
A primary obligation and a collateral promise are the same.
A collateral promise and a secondary obligation are the same.
Your uncle says to your boyfriend that he will pay him $30,000 if he marries you. Such a promise must be in writing to be enforceable.
Prenuptial agreements must be in writing to be enforceable.
Sometimes courts enforce oral contracts that should be in writing when partial performance is an unmistakable indication that one party believes that there is a contract.
A.) If the buyer promised to make payment on the contract next year.
B.) If the buyer is a minor.
C.) If the buyer paid part of the price, taken possession, and made permanent improvements to the land.
If a party against whom enforcement of an oral contract admits that a contract for the sale was made, the contract will still be unenforceable.
a. There must be no way to avoid injustice except to enforce the promise.
b. The reliance must have been foreseeable to the person making the promise.
c. The promisee must have justifiably relied on the promise to his or her detriment.
d. The potential damages must be less than $500.
Under the Uniform Commercial Code, oral contracts for customized goods may be enforced in certain circumstances.
b. phone conversation.
d. sales slip.
e. order confirmation.
The written contract need not consist of a single document in order to constitute an enforceable contract.
– Contracts for the sale of goods priced at $500 of more
– Customized goods
– Admissions (quantity)
– Partial performance
– Merchants confirmed in writing
a. additional evidence is not admissible to show the meaning of the terms.
b. additional evidence is admissible to show the meaning of the terms.
c. the court will conclude that the contract is legally defective.
– Note, though, that oral modifications may not be enforceable under the Statute of Frauds .
– Oral evidence can be introduced in all cases to show that the contract was voidable or void .
– When the terms of a written contract are ambiguous and require interpretation , evidence is admissible to show the meaning of the terms.
– When the written contract is incomplete in that it lacks one or more of the essential terms, the courts allow additional evidence to “fill in the gaps.”
– Parol evidence is admissible to correct an obvious typographical error.
Under the Uniform Commercial Code, courts allow the introduction of practices and customs generally allowed in a particular industry to shed light on the meaning of certain contract provisions.
a. evidence from outside the contract is excluded.
b. only prior dealings can be used to supplement the written contract.
c. only the buyer can dispute the contract.
If a contract is partially integrated, evidence of consistent additional terms is admissible to supplement the written agreement.
– Intended to be a complete and final embodiment of the terms of the parties’ agreement
Parol Evidence Inadmissible
-For example, evidence of a prior negotiation that contradicts a term of the written contract would not be admitted.
Not Fully Integrated
– Omits an agree-on term that is consistent an agreed-on term that is consistent with the parties’ agreement
Parol Evidence Admissible
-For example, if the contract is incomplete and lacks one of more of the essential terms, parol evidence may be admitted.
a. has repealed all of the statute except the provisions relating to collateral promises and land transfers.
b. has repealed all of the statutes except the provisions relating to the one-year rule.
c. repealed the statute entirely.
The Convention on Contracts for the International Sale of Goods (CISG) incorporates the original Statute of Frauds provisions.
The second contract is for the sale of the building that the restaurant is in for $250,000. The third is for the original sign that was outside the restaurant that Jack had in his garage for $400. Which of these agreements violates the Statute of Frauds?
A.) The sale of the building only.
B.) The sale of the building and the intellectual property.
C.) The sale of the intellectual property and the sign.
D.) All of the agreements violate the Statute of Frauds.
A.) Jack can bring in the evidence of the oral agreement because of the parol evidence rule.
B.) Jack cannot bring in the evidence of the oral agreement because of the parol evidence rule.
C.) Jack could likely rescind the entire contract if Hal and Sophia do not turn over the fish.
D.) The parol evidence rule would not apply since it is an integrated contract.
A.) Jack will be able to bring in parol evidence of the oral terms even though this is a fully integrated contract because of the typographical error.
B.) Jack will be able to bring in parol evidence of the oral terms even though this is a fully integrated contract because the price term is ambiguous.
C.) Jack will be able to bring in parol evidence of the oral terms because this is a fully integrated contract.
D.) Jack will not be able to bring in parol evidence of the oral terms even though this is a fully integrated contract because of the typographical error.
a. must be in writing based on the one-year rule.
b. does not need to be in writing.
c. must be in writing under the Uniform Commercial Code (UCC).
d. must be in writing because it is collateral.
a. No, under the nuptial rule.
b. Yes, under the first-definer rule.
c. Yes, under the evidentiary rule.
d. No, under the main purpose rule.
a. promissory estoppel.
c. partial performance.
d. parol evidence
a. the legal description written on a separate piece of paper not attached to the contract, but in the same envelope.
b. the legal description written on a separate piece of paper, attached to the contract with a paperclip.
c. the legal description written in the contract itself.
d. the legal description written on a separate piece of paper and mailed separate from the contract.
a. They can ask the court to rewrite the contract.
b. They are bound by the writing under the Statute of Frauds.
c. They can offer evidence of the consideration that supported their contract.
d. They can offer parol evidence to clarify the clerical error.
When you take out a mortgage loan to buy a house, the financial institution from which you obtained the mortgage will always be the place to where you send your mortgage checks.
The assignee’s rights are subject to the defenses that the obligor has against the assignor—the assignee obtains only those rights that the assignor originally had.
a. oral or written
b. oral only
c. written only
All assignments of an interest in land can be either oral or written.
-The contract is personal in nature.
-The assignment significantly changes the risk or duties of the obligor.
-The contract prohibits assignment.
a. valid because Vasquez is just as good a teacher as Alfredo.
b. is invalid because no consideration was given for the contract assignment.
c. is not valid because the contract is for personal services from Alfredo.
You have an insurance policy covering your 2014 Toyota Camry. You assign your insurance contract to your good friend Ochea so that his car can be insured. The assignment is effective.
When there is an anti-assignment clause in a contract, then ordinarily the contract cannot be assigned.
– The assignment of rights in real estate often cannot be prohibited because such a prohibition is contrary to public policy in most states.
– The assignment of negotiable instruments cannot be prohibited.
– In a contract for the sale of goods, the right to receive damages for breach of contract or payment of an account owed may be assigned even though the sales contract prohibits such an assignment.
a. transferring personal property to foreigners.
b. transferring the ownerships of land.
c. moving from one state to another.
The two major problems that arise when notice of the assignment is not given to the obligor:
– There is the potential for discharge by performance to the wrong party.
Duties cannot be assigned, but they can be delegated.
-when performance by a third party will vary materially from that expected by the obligee.
-when the contract prohibits delegation.
a. not be allowed because it involves personal services.
b. be allowed because it is an assignment rather than a delegation.
c. be allowed because it involves professional, not personal, services.
A valid delegation of duties does not relieve the delegator of obligations under the contract.
Courts normally construe “assignments of all rights” as implying both an assignment of rights and a delegation of duties of performance.
a. A duty to transport printer paper by truck within a city.
b. A duty to supply ice to a concession stand.
c. A duty to perform brain surgery.
a. a third-party delegator.
b. third-party intended beneficiary.
c. third-party assignor.
Allowing a third party to sue the promisor directly circumvents the “middle person” (the promisee) and thus reduces the burden on the courts.
When a contract is made for the expressed purpose of giving a gift to a third party, the third party, called the donee beneficiary, can sue the promisor directly to enforce the promise.
a. recourse because she is a donee beneficiary, and therefore an intended beneficiary.
b. no recourse because she is an incidental beneficiary.
c. no recourse because of lack of privity of contract.
2. The third party brings a lawsuit on the promise.
3. The third party demonstrates her or his consent to the promise at the request of the promisor of promisee.
– To whom performance is rendered directly and/or
– Who has the right to control the details of the performance or
– Who is designated a beneficiary in the contract
= Can sue to enforce the contract
– Who benefits from a contract but whose benefit was not the reason for the contract and/or
– Who has no rights in the contract
= Cannot sue to enforce the contract
A.) Fourth National Bank made an assignment.
B.) Fourth National Bank made a delegation.
C.) Bank of North America became an intended third party beneficiary.
D.) Bank of North America became an incidental third party beneficiary.
A.) Fourth National Bank only.
B.) Bank of North America only.
C.) Fourth National Bank or Bank of North America, but not both together.
D.) Bank of North America and Fourth National Bank acting jointly and severally.
A.) Jack has made an assignment.
B.) Jack has made a delegation.
C.) Hal and Sophia became intended third party beneficiaries.
D.) Hal and Sophia became incidental third party beneficiaries.
A.) Hal and Sophia can refuse the service from Spray-Wash for any reason because they are under no obligation to accept a delegation.
B.) Hal and Sophia can refuse service from Spray-Wash because their expectations are materially altered.
C.) If Spray-Wash does not do the job, Hal and Sophia may not recover from Jack, but only from Spray-Wash.
D.) If Spray-Wash does not do the job, Hal and Sophia can recover from both Spray-Wash and Jack.
A.) Maria (or the Fresh Air Fund) is an intended or done third party beneficiary.
B.) Maria (or the Fresh Air Fund) is an incidental third party beneficiary.
C.) Maria (or the Fresh Air Fund) is unrelated to the contract.
D.) Maria (or the Fresh Air Fund) is in privity of contract.
A.) No, since she is not in privity of contract.
B.) Yes, since she is in privity of contract.
C.) Yes, because she is an incidental third party beneficiary.
D.) Yes, because she is an intended or donee third party beneficiary.
a. will probably be effective even though the duty involves personal services.
b. will probably not be effective, because the duty involves personal services.
c. is not a delegation at all; it is an assignment.
d. will be allowed based on the doctrine of alienation.
a. Can only hold Travis liable
b. Cannot hold anyone liable
c. Can hold Jose, Travis, or both liable
d. Can only hold Jose liable
a. third-party delegator.
b. third-party intended beneficiary.
c. third-party assignor.
d. third-party substantial performer.
a. an incidental beneficiary, who has no right to sue Jorge.
b. a creditor beneficiary, who has a right to sue Jorge.
c. a vested beneficiary, who has a right to sue Jorge.
d. a donee beneficiary, who has no right to sue Jorge.
In most contracts, promises of performance are not expressly conditioned or qualified; instead, they are absolute promises.
– contracts for the purchase of very expensive paintings
– for the purchase of race horses
Conditions subsequent typically operate to terminate a party’s absolute promise to perform.
a. condition subsequent.
b. condition precedent.
c. condition consequent.
Generally, conditions precedent are common, and conditions subsequent are rare.
Courts may imply conditions from the purpose of the contract or from the intent of the parties.
The great majority of contracts are discharged by fulfilling conditions subsequent.
a. future and past.
b. remote and local.
c. complete and substantial.
2. The performance must not vary greatly from the performance promised in the contract. An omission, variance or defect in performance is considered minor if it can easily be remedied by compensation (monetary damages).
3. The performance must create substantially the same benefits as those promised in the contract.
If performance is substantial, the other party’s duty to perform is mitigated.
a. Sonja would only have to pay half of the contract price.
b. Sonja would have to pay the contract price in full because Power acted in good faith and its performance was substantial.
c. Sonja is not required to pay Power because performance deviated from the contract.
Because substantial performance is not perfect, the other party is entitled to damages equal to the cost to bring the object of the contract into compliance with its terms. Under all circumstances the latter statement is always correct.
a. she only has to pay half of the contract price.
b. she must pay Dr. Helpern the full contract price.
c. she is not obligated to pay Dr. Helpern.
a. the nonbreaching party has the right to sue for damages resulting from the breach.
b. the breaching party has a cause of action to sue for damages resulting from the breach.
c. the parties must cancel the contract and create a new one.
Once a minor breach has been cured, the nonbreaching party must resume performance of the contractual obligations.
Only a material breach discharges the nonbreaching party from the contract.
a. a discharge by agreement is fully accepted.
b. sharp fluctuations in market prices make it extremely difficult to perform as promised.
c. one party experiences a sudden increase in business that makes it worthwhile to drop an existing, valid contract.
If no time for performance is stated in the contract, a reasonable time is implied.
(Ordinarily prevents the creditors from enforcing most of the debtor’s contracts.
Agreements to rescind only affect executed contracts.
a. must be evidenced by writing a record.
b. must be done orally only.
c. can be done orally or in writing.
2) an agreement by all parties to a new contract.
3) extinguishing the old obligation (discharge the prior party)
4) a new contract that is valid.
If the parties do not expressly discharge the old contract when writing up a novation, it will be impliedly discharged if the new contract’s terms are inconsistent with the old contract’s terms.
a. Discharge by rescission
b. Discharge by accord and satisfaction
c. Discharge by settlement agreement
d. Discharge by novation
e. Discharge by court order
2) when the specific subject matter of the contract is destroyed
3) when a change in law renders performance illegal
In situations of commercial impracticability, the added burden of performing not only must be extreme, but also must not have been known by the parties when the contract was made.
Frustration of purpose typically involves an event that increases the cost or difficulty of performance.
a. The contract is reformed by the courts.
b. Performance is suspended until the temporary impossibility ceases.
c. The contract is rescinded.
A.) a condition precedent.
B.) a condition subsequent.
C.) a concurrent condition.
D.) a condition mandate.
A.) a condition precedent.
B.) a condition subsequent.
C.) a concurrent condition.
D.) a condition mandate.
A.) a material breach of the contract by Jack.
B.) a substantial breach of contract by Jack.
C.) complete performance by Jack.
D.) substantial performance by Jack.
A.) Hal and Sophia could back out of the deal since the contract was not fully performed.
B.) Hal and Sophia would still have a duty to perform on the contract, and would be out the amount that it cost them to clean the restaurant.
C.) Hal and Sophia would still have a duty to perform on the contract, but could then sue Jack for the cost of the cleaning.
D.) Hal and Sophia would still have a duty to perform on the contract, but could then sue Jack for three times the cost of the cleaning.
A.) Jack has the right to do so, since the sale has not yet taken place.
B.) Jack has anticipatorily repudiated the contract, but Hal and Sophia must wait until the date of the closing to consider the contract to be breached.
C.) Jack has anticipatorily repudiated the contract and Hal and can immediately consider the contract to be breached.
D.) Jack has anticipatorily repudiated the contract and therefore the courts treat the contract as a mutual rescission.
a. an implied condition.
b. a concurrent condition.
c. a condition subsequent.
d. a condition precedent.
a. concurrent condition.
b. condition novatis.
c. condition subsequent.
d. condition precedent.
a. complete performance.
b. incomplete performance.
c. material breach.
d. substantial performance.
a. has been substantially performed.
b. is a reformation.
c. is not valid.
d. is a novation.
a. buyer is out of luck, because the contract is discharged by objective impossibility.
b. estate (or successor) of the service provider may sue for the profits that would have been earned had the contract been fulfilled.
c. estate (or successor) of the service provider must make a good faith effort to provide a timely replacement.
d. buyer can sue the estate of the deceased to recover the cost of obtaining a replacement or for other particular costs incurred.
Compensatory damages replace what was lost because of what the breaching party did and for this reason are often said to “make the person whole.”
Compensatory damages are reduced by any loss that the nonbreaching party has avoided.
a. Lost profits to a factory when parts to a broken machine are not delivered at the time specified in the contract.
b. Cost of reimbursement of ticket sales when a music group does not show.
c. Loss of profits for goods that the buyer planned to resell immediately, but did not receive.
d. The difference between the contract price and the market price of land that was sold to someone else.
Punitive damages are generally awarded in lawsuits for breach of contract.
Punitive damages are generally awarded in lawsuits for breach of contract.
2. Was the amount set as damages in a reasonable estimate and not excessive?
a. Professional athlete contracts
b. Construction contracts
c. Professional singer contracts
d. Contracts for college tutoring services
e. Professional contracts for TV talk show hosts
f. Professional dancer contracts
c. Specific performance.
e. Monetary damages.
b. Undue influence.
e. Minor clerical errors.
f. Lack of capacity to contract.
Restitution might be available when there has been misconduct by a party in a confidential or other special relationship.
a. It avoids arranging another contract.
b. It avoids problems of collecting the judgment.
c. It provides the exact bargain promised in the contract.
d. No judge has to be involved.
e. Actual performance may be more valuable than monetary damages.
Contracts for the sale of goods usually qualify for specific performance.
a. Because there are rarely any lawsuits for breach of such contracts.
b. Because courts rarely want to monitor contracts for personal services, which usually require the exercise of personal judgment or talent.
c. Because most personal service contracts contain a not-to-sue clause.
When the parties have completely and exactly expressed their agreement in writing, the equitable remedy of reformation is available.
(Compensatory, Consequential, Punitive , Nominal, Liquidated)
– Recission and restitution
– specific performance
Legal obligations arise under the doctrine of quasi contract because the law considers that the party accepting the benefits has made an implied promise to pay for them.
a. As an alternative to suing for damages.
b. When justice requires that the party receiving the benefit pay the reasonable value for it.
c. When a well-written contract is executed.
d. When one party has partially performed under a contract that is otherwise unenforceable.
– The party conferred the benefit with the reasonable expectation of being paid.
– The party did not act as a volunteer in conferring the benefit.
– The party receiving the benefit would be unjustly enriched if allowed to retain the benefit without paying for it.
A waiver erases a past breach, and the contract continues as if that breach had never occurred.
There are rarely any good reasons to waive a breach of contract.
a. When the new breach is completely unrelated to the previous breach.
b. When a pattern of conduct that waives a number of successive breaches occurs.
c. When the contract specifies that no breach can occur.
A waiver prevents the nonbreaching party from declaring that the contract has terminated or been rescinded.
Many contracts have provisions that state that the only remedy for breach is replacement, repair, or refund of the purchase price.
-limitation of liability clauses
A.) Yes, emergencies allow cancellation of the contract in all cases.
B.) Yes, since he has an offer where he can make more money.
C.) No, an emergency never affords relief under a contract.
D.) No, since the emergency did not make performance impossible, he must finish the job.
A.) Yes, he was under contract to finish it so a court would order him to specifically perform.
B.) No, specific performance is an equitable remedy, and equitable remedies are never allowed in contract actions.
C.) No, specific performance is not allowed in this case because Spud has another job.
D.) No, specific performance is not allowed in this case because money damages are available.
A.) No, since breaching a contract is usually held to be a business decision (not an act of moral turpitude) punitive damages are very rarely awarded in contract cases.
B.) Yes, punitive damages are designed to punish, and would be available.
C.) Yes, if Oscar can show that Spud made more money on the other job.
D.) Yes, unless Spud can prove that the other job was an emergency.
A.) Spud, if Oscar can prove Spud will make more money on his other job.
B.) Oscar, since he is in privity of contract with Vinny.
C.) Spud, since Oscar is trying to mitigate his damages.
D.) Oscar, since the damages would not be mitigated.
A.) The money he already paid Spud in advance.
B.) The cost to finish the job.
C.) Advertising expenses that he already paid.
D.) All of these choices are correct.
A.) No, that would be consequential damages which are not allowed in contract cases.
B.) No, lost profits are never allowed to be recovered because they are speculative.
C.) Yes, if Oscar can show that this loss was a reasonably foreseeable result of the breach, and $3,000 is a good estimate of the loss.
D.) Yes, but only if Oscar can show that Spud’s breach was not due to a true emergency.
A.) a liquidated damages provision.
B.) a mitigation provision.
C.) a specific performance provision.
D.) a waiver provision.
A.) at the time that the contract was entered into, it must be hard to estimate the damages for a breach.
B.) the amount set as damages is a reasonable estimate of the actual damages and not a penalty.
C.) Both “at the time that the contract was entered into, it must be hard to estimate the damages for a breach” and “the amount set as damages is a reasonable estimate of the actual damages and not a penalty” are correct.
D.) Neither “at the time that the contract was entered into, it must be hard to estimate the damages for a breach” and “the amount set as damages is a reasonable estimate of the actual damages and not a penalty” are correct.
A.) Rescission and restitution.
B.) Specific performance.
D.) Quasi contract.
a. expected profits from the contract.
b. nothing, because she breached the contract before Jackson began work and he suffered no loss.
c. the contract price.
d. the contract price plus interest.
a. do nothing, because she is the innocent party and thus has no legal duties.
b. wait until Gordon is prepared to build the wall and drain.
c. mitigate her damages.
d. absorb all of the costs associated with the property erosion caused by Gordon’s breach.
b. specific performance.
b. quasi contract.
c. specific performance.
a. a penalty.
b. a waiver of breach.
c. an exculpatory clause.
d. a breach.
a. a valid liquidated damages clause.
b. a dormant commerce clause.
c. a revisionary clause.
d. an exculpatory clause.