Contract Law Final

Question 1

Consideration

Answer 1

A bargain-for-exchange of legal value

Question 2

Bargain-for-exchange

Answer 2

Quid Pro Quo: A promise is motivated by your return promise.

Question 3

Legal Value

Answer 3

a benefit to the promisor and detriment to the promisee

Question 4

Promissory Estoppel

Answer 4

a promise that a promisor would understand to induce reliance and it would actually induce reliance and causes detriment that can only be resolved if the promise is kept.

Question 5

Material Benefit Rule

Answer 5

if the condition is a benefit to the promisor then it is not a gift.

Question 6

Past Consideration

Answer 6

is no consideration. It can not support a contract because they already did it.

Question 7

Defenses to Formation

Answer 7

1. Effect of Misunderstanding
2. Capacity
3. Statute of Fraud
4. Parol Evidence Rule

Question 8

Effect of Misunderstanding

Answer 8

there is no contract when both parties have different meanings to their promise but both parties are aware or both parties are aware

There is a contract when you have one innocent party and one guilty party. And you use the meaning attached by the innocent party.

Question 9

A promise to pay indebtedness

Answer 9

a new promise to pay your debt you have to have it in writing and pay some of it

Question 10

Capacity

Answer 10

1. Infancy: If you are under the age of 18 then you can get out of a contract if you:
   a. give all their stuff back
   b. tell them before or at a reasonable time after your 18th birthday
   c. make it clear you no longer want to be in the contract
   EXCEPTION: Necessity: if you are poor you can not get out of a necessity contract that has to do with shelter, food, education, clothing
   Ratification is when you are after 18 and you make a payment or something to continue ratifying your contract than you no longer can claim capacity
   Fraud: A kid can get out of fraud because this is what the rule is trying to protect them from
2. Mental Illness
   Traditional Cognitive Test
   a.. Did this person understand the nature and consequences of the transaction?
   b. Was the illness diagnosed by a doctor?

Modern Volitional Test

a. But for
b. the other person had reason to know of the mental illness
3. Intoxication
a. But for
b. the other person knew the person was intoxicated.

Question 11

Agreements made do not have to be in writing unless they fall under the…

Answer 11

Statute of Fraud
There are 6 ways to fall under the Statute of Fraud
1. Promise by an executor or administrator to pay debt out of their own estate
2. Promise to pay the debt of another
3. Promises made on condition of marriage
4. Promise for sale of land
5. Promise that will not be performed within one year of the making of the contract
6. Promise for the sale of goods over $500

Question 12

What is the First sufficient writing under the UCC?

Answer 12

2-201(1) In writing it has to have

1. Quantity
2. Subject Matter
3. Signature from the person denying the contract

Question 13

What is the second sufficient writing under the UCC?

Answer 13

2-201(2) In writing

1. Be between merchants
2. within a reasonable time of the oral agreement a written agreement is sent
3. party has to know of the items received
4. the receiver has 10 days to deny it after being received

Question 14

What is the third sufficient writing under the UCC

Answer 14

It does not have to be in writing or signed
2-201(3)A
the seller specifically manufactured it for the buyer than it is sufficient
or
2-201(3)B
if the person denying the contract states in court or gives a testimony that a contract was made than it is sufficient writing
or
2-201(3)C
If there was a payment made for the goods.

Question 15

What is a sufficient writing for Statute of Fraud under Common Law

Answer 15

1. Subject Matter
2. Show a contract was made between both parties
3. State with reasonable certainty the essential terms made in the contract
4. Signed by the person denying the contract.

Question 16

Parol Evidence Rule

Answer 16

If an agreement was fully intergraded then no outside evidence will be allowed. If the agreement is partially intergraded than only consistent additional terms can be shown in court.

Question 17

The intergration test

Answer 17

If the proposed evidence is consistent with the agreement does it fall under one of the following:

1. Naturally Inclusive test: would it have been something that a reasonable person would naturally have been in the agreement. Then it can not be shown in court.
2. Naturally Omission test: would it have been a term that would naturally be discussed in an outside agreement. Then it will be allowed in court.
3. Merger clause: everything that is already in the agreement is all that they were wanting to include therefore no other evidence is allowed.

Question 18

UCC Parol Evidence Rule

Answer 18

Hierarchy Terms

1. Course of performance: how have the parties been acting in this agreement.
2. Course of Dealing: how have the parties acted in past agreements
3. Trade Usage: how everyone else in the industry acts.

Question 19

Modification of Statute of Fraud agreements

Answer 19

Majority Rule: every contract modification must be in writing
Minority Rule: the only modifications that are required to be in writing are the ones required in UCC 2-201
1. Subject matter
2. Quantity
3. Signature

Question 20

Interpretations

Answer 20

When there are more than one meaning
First question the court must decide is if the word is ambiguous if no then the judge just gives the word the meaning. If the judge does say it is ambiguous then the judge leaves it for the jury to decide.

Question 21

UCC Gap Filler

Answer 21

you only need to know the Quantity the rest is reasonable.

Question 22

Open Price term (UCC GAP FILLER)

Answer 22

Reasonable price made in good faith

1. output: sell all you produced in good faith
2. Requirements: all product needed i will get from just you.

Question 23

Delivery in Single lot or several lots (UCC GAP FILLER)

Answer 23

unless otherwise stated delivery of goods must be in one single delivery. And if otherwise stated multiple deliveries price can be apportioned.

Question 24

Absence of specified place for delivery (UCC GAP FILLER)

Answer 24

place for delivery if not stated is seller’s place of business or if no business seller’s residence. if the parties know of where the goods are then the goods are there.

Question 25

Absence of specified time (UCC GAP FILLER)

Answer 25

reasonable time

Question 26

Open time for payment (UCC GAP FILLER)

Answer 26

unless otherwise stated the payment is due at place or time that buyer receives their goods.

Question 27

Open Price Term (UCC GAP FILLER)

Answer 27

a reasonable price at the time of delivery

Question 28

FOB Defined (UCC GAP FILLER)

Answer 28

“Free on Board” if the goods say free on board and signifies a place than if the goods are damaged before getting to the place it is the sellers duty to keep the goods delivered safely. If once delivered and something happens to the goods than it is now the responsibility of the buyer.

Question 29

Expressed Warranty

Answer 29

1. Seller promises specific quality
2. Buyer purchases based on the qualities the seller says.
3. Seller knows buyer is buying the goods because of what the seller said

Question 30

Puff vs Warranty

Answer 30

Puff is based on the sellers opinion and Warranty is based on the sellers facts

Question 31

Implied Warranty of Merchantability

Answer 31

1. The seller is a merchant

2. does the good do what a reasonable person would expect it to do when the buyer purchased it.

Question 32

Implied Warranty of Fitness for a Particular Purpose

Answer 32

1. The seller knows why the good is being purchased.

2. the buyer relies on the seller’s expertise in supplying the proper produce.