Contracts - Barbri

Question 1

How is an implied-in-fact contract formed?

Answer 1

By manifestations of assent other than oral or written language (i.e. by conduct). Where a person knowingly accepts offered benefits, such conduct, viewed objectively, may be said to manifest an agreement to the conferral of such benefits, resulting in a K implied in fact.

• Courts will often find an acceptance where an offeree silently accepts offered benefits

Question 2

Explain the doctrine of “promissory estoppel”

Answer 2

A promise is enforceable to the extent necessary to prevent injustice if the promisor would reasonably expect to induce action or forbearance of a definite and substantial character, and such action or forbearance is in fact induced.

Question 3

May all duties be delegated?

Answer 3

Generally, but duties involving personal judgment and skill may not be delegated.

Question 4

What is a “delegation” of duties?

Answer 4

A transfer of contractual duties to a third party.

Question 5

Does the party delegating her duties remain liable on the contract?

Answer 5

Yes, even if the third person expressly assumes the duties.

Question 6

Is a provision in a contract stating that contractual rights may NOT be assigned usually effective?

Answer 6

No.

Question 7

When is a buyer entitled to recission of the contract?

Answer 7

A buyer is entitled to recission of the contract on the grounds of mutual mistake.

Question 8

What is “recission”?

Answer 8

A remedy that discharges the contractual duties of the parties and puts an end to the transaction, leaving the parties as though the contract had never been made.

Question 9

What is unilateral recission?

Answer 9

Results where one of the parties desires to rescind but the other party refuses to agree to a recission.

Question 10

What is needed for unilateral recission to be granted?

Answer 10

The party desiring recission must have adequate legal grounds. For example, a mutual mistake of a material fact.

Question 11

What is “mutual recission”?

Answer 11

Where the contract is discharged by an express agreement.

Question 12

Does the contract need to be executory for mutual recission?

Answer 12

Yes.

Question 13

If a modification to a contract falls within the statute of frauds, can it be made orally?

Answer 13

No.

Question 14

What happens when a seller ships nonconforming goods?

Answer 14

This amounts to both an acceptance of the offer and a breach of the newly formed contract

Question 15

What does proper accommodation make a shipment of nonconforming goods?

Answer 15

This makes the shipment a counteroffer rather than an acceptance

Question 16

When a past obligation would be enforceable except for a technical defense to enforce it, what is the cure?

Answer 16

A new promise in writing will be enforceable even in the absence of any new consideration.

Question 17

When will a court consider “moral” consideration sufficient?

Answer 17

Where a technical defense, such as the statute of limitations bars enforcement of the prior obligation and a new promise is made in writing, the court will consider “moral” consideration sufficient consideration for the new agreement

Question 18

What is a novation?

Answer 18

Where the obligee expressly consents to the delegation of duties and releases the original obligor from liability on the K.

Question 19

What is a misunderstanding?

Answer 19

When contract language is ambiguous and has at least two possible meanings and where neither party is aware of the ambiguity at the time of contracting. No contract will be formed unless both parties happened to have intended the same meaning.

Question 20

When does “frustration of purpose” exist?

Answer 20

It exists when the purpose of a contract has become valueless by virtue of some supervening event not the fault of the party seeking discharge.

Question 21

When is a contract divisible?

Answer 21

If:

1. the performance of each party is divided into two or more parts under the K;
2. the number of parts due from each party is the same; and
3. the performance of each part by one party is the agreed-upon equivalent of the corresponding part from the other party (are they related to each other)