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Question 1

What is required for the formation of a contract according to Restatement (2nd) of Contracts 17(1)?

Answer 1

Manifestation of mutual assent and consideration

This means both parties must agree to the terms and provide something of value.

Question 2

What does Restatement (2nd) of Contracts 50 define as acceptance?

Answer 2

A voluntary act of accepting the offer whereby the manifest assent

Acceptance must be clear and communicated.

Question 3

Under what circumstances does silence count as acceptance according to Restatement (2nd) of Contracts 69?

Answer 3

When the offeree takes benefit of offered services with opportunity to reject, or when prior dealings suggest silence implies consent

Silence does not generally imply acceptance unless specific conditions are met.

Question 4

What is the principle of pre-existing duties under Restatement (2nd) of Contracts 73?

Answer 4

Pre-existing duties are not valid consideration

This means if a party is already obligated to perform, that obligation cannot serve as consideration for a new contract.

Question 5

What are the options a court has under Restatement (2nd) of Contracts 181 regarding unconscionability?

Answer 5

• Refuse to enforce the whole contract
• Enforce the contract without the unconscionable clause
• Limit the application of the unconscionable clause to avoid an unconscionable result

Unconscionability refers to unfair or oppressive terms in a contract.

Question 6

What are the elements of Promissory Estoppel as outlined in Restatement (2nd) of Contracts 90(1)?

Answer 6

• A clear and definite promise
• Foreseeable reliance
• Actual reliance
• Injustice can only be avoided by enforcement

Promissory estoppel can enforce promises without consideration if these elements are present.

Question 7

What is the ‘Mailbox Rule’ according to Restatement (2nd) of Contracts 63?

Answer 7

Acceptance is operative once sent, unless under an option contract where it must be received

This rule clarifies when an acceptance becomes effective.

Question 8

What constitutes a valid offer?

Answer 8

• Communicated
• Directed to a person/persons
• Specify desire to enter a contract
• Invite acceptance
• Create a binding understanding

The offer must have clear terms and be communicated effectively.

Question 9

What happens if an offer is rejected?

Answer 9

The offer is terminated

Rejection includes making a counter-offer.

Question 10

What is the significance of the case Balfour in contract law?

Answer 10

It established that no enforceable agreement exists without the intention to be legally bound

A key case illustrating mutual assent.

Question 11

What is the definition of consideration in contract law?

Answer 11

A bargained-for exchange where the promise incurs a legal detriment

Consideration must be something of value exchanged between parties.

Question 12

True or False: Advertisements are generally considered offers.

Answer 12

False

Advertisements are typically invitations to treat, not binding offers.

Question 13

What is the impact of past consideration in contract law?

Answer 13

Past consideration is not allowed

A party cannot rely on past actions as consideration for a new contract.

Question 14

Fill in the blank: A _______ promise is unenforceable if it does not restrict the promisor’s right of action.

Answer 14

illusory

Illusory promises lack binding commitment.

Question 15

What is the requirement for a unilateral contract acceptance?

Answer 15

Acceptance can occur through performance of the specified act

This means the offeree must perform the action to accept the offer.

Question 16

What are the four situations that create a duty to disclose material facts?

Answer 16

• A special relationship between the parties
• Material facts impacting the bargain
• Prior statements that create misleading impressions
• Active concealment or misleading conduct

These factors determine when disclosure is legally required.

Question 17

What is misrepresentation in contract law?

Answer 17

A false statement of fact made with the requisite state of mind that causes reliance

Misrepresentation can render a contract voidable.

Question 18

What is the general rule regarding non-disclosure?

Answer 18

There is no duty to disclose material facts

However, exceptions exist based on the relationship and context.

Question 19

What is the effect of active concealment in contract law?

Answer 19

It involves efforts to prevent another party from learning a material fact

This can lead to claims of misrepresentation or fraud.

Question 20

What is a bargain in the context of seller awareness?

Answer 20

When seller is aware of a material defect which substantially impacts the value/usability

This refers to the seller’s responsibility to disclose defects that affect the transaction.

Question 21

What must a seller do if prior statements create misleading impressions?

Answer 21

They must disclose false statements made

This is crucial to ensure transparency in transactions.

Question 22

What constitutes active concealment?

Answer 22

Party engages in active effort to prevent another party from learning a fact

This includes deliberate actions taken to hide information.

Question 23

What are the elements of concealment?

Answer 23

• Active efforts to prevent another party from learning a fact
• Concealed fact was material
• Other party actually/justifiably relied
• Damage

These elements must be proven to establish concealment.

Question 24

To recover for breach of warranty, what must a buyer prove?

Answer 24

Buyer doesn’t have to establish belief in the information was warranted but that it was part of the bargain

This highlights the focus on the agreement rather than the belief in the warranty.

Question 25

What is mutual mistake?

Answer 25

Mistake by both parties about the facts surrounding a transaction at the time a contract is made ## Footnote This can lead to rescission of the contract.

Question 26

In Sherwood v Walker, what allows a contract to be rescinded?

Answer 26

Assent founded on a mistake of a material fact ## Footnote This case illustrates the significance of mutual understanding in contracts.

Question 27

What does the Lenawee Case establish about risk assumption?

Answer 27

Recission is not available to relieve a party who assumed the risk of loss in connection with a mistake ## Footnote Buyers who purchase 'as is' assume risks related to potential mistakes.

Question 28

What is unilateral mistake?

Answer 28

Mistake by ONE PARTY about the facts surrounding the transaction at the time the contract is made ## Footnote This can also impact the validity of the contract.

Question 29

What are the elements of duress?

Answer 29

* One party must commit a wrongful act * The wrongful act must preclude the other party from exercising their free will ## Footnote This includes both traditional and economic forms of duress.

Question 30

What does undue influence involve?

Answer 30

Excessive persuasion and vulnerability resulting from domination or relationship of trust ## Footnote This can lead to contracts being voidable.

Question 31

What are the two elements of unconscionability?

Answer 31

* Procedural: unjust negotiation process * Substantive: terms that are excessively unfair ## Footnote Courts may refuse to enforce the entire contract or limit its terms.

Question 32

What does the Statute of Frauds require?

Answer 32

Certain contracts must be memorialized in writing, signed by the party against whom they are to be enforced ## Footnote This helps to prevent fraudulent claims.

Question 33

What are the three potential issues under the Statute of Frauds?

Answer 33

* Contracts made in consideration of marriage * Contracts that can’t be performed within a year * Contracts to buy, transfer or pay any interest in land ## Footnote These categories are particularly scrutinized for compliance.

Question 34

What is the measure of general damages?

Answer 34

Fair market value of D performance – contract price (if seller breaches) ## Footnote This seeks to restore the non-breaching party to their expected position.

Question 35

What are reliance damages?

Answer 35

Includes expenditure while preparing to perform/performing a contract and additional expenditures caused by the breach ## Footnote These are aimed at covering costs incurred due to reliance on the contract.

Question 36

What does the avoidability doctrine entail?

Answer 36

After noticing the breach, there is a duty to do nothing which will increase damages ## Footnote This means the non-breaching party should mitigate further losses.

Question 37

What is the Hadley v Baxendale rule regarding foreseeability?

Answer 37

Damages limited to losses which arise naturally or are reasonably contemplated by both parties at the time of contract formation ## Footnote This case sets a precedent for understanding recoverable damages.

Question 38

What is the avoidability doctrine?

Answer 38

Limits non-breaching party’s damages ONLY IF comparable employment was available and refused. ## Footnote Parker had no duty to accept inferior or substantially different employment to mitigate damages.

Question 39

What was the conclusion in Hadley v Baxendale regarding lost profits?

Answer 39

Lost profits not recoverable as they were not reasonably foreseeable by the carrier at the time the contract was made. ## Footnote Damages are limited to losses that arise naturally or are reasonably contemplated by both parties at the time of formation.

Question 40

What did Victoria Laundry establish about recoverable profits?

Answer 40

Only ordinary lost profits which were foreseeable as a probable result of the breach could be recovered, not extraordinary profits. ## Footnote This distinction emphasizes the importance of foreseeability in breach of contract cases.

Question 41

What must be proven for contract damages according to Freund?

Answer 41

Contract damages must be proven with reasonable certainty. ## Footnote Freund could not recover lost royalties as the amount lost was too speculative.

Question 42

What are reliance damages?

Answer 42

A form of 'special damages' that puts the party in pre-contract position by restoring losses or expenditures made because of the breach. ## Footnote Essential reliance damages include costs of preparing to perform or performing a contract.

Question 43

What is restitution in contract law?

Answer 43

Returning value which was unfairly gained, putting the non-breaching party in as good a position as they would have been if the contract was completed. ## Footnote Restitution focuses on unjust enrichment rather than breach of contract.

Question 44

What is Quantum Meruit?

Answer 44

Foregoing a lawsuit on a breached contract and claiming only the reasonable value of the promisee’s performance. ## Footnote This is a form of restitution.

Question 45

What are the elements of unjust enrichment?

Answer 45

* D obtained a benefit at P's expense * D's retention of that benefit without compensation to P would be unfair. ## Footnote Unjust enrichment claims often arise when one party benefits from the actions of another without compensation.

Question 46

What must be shown for liquidated damages to be enforceable?

Answer 46

The damages must be difficult to ascertain when the contract was made; AND the amount stated as liquidated damages must be reasonable in light of actual and/or anticipated damages. ## Footnote This two-part test is utilized by courts.

Question 47

What are specific performance and coercive equitable relief?

Answer 47

Specific performance requires a party to perform the contract or grants an injunction prohibiting a party from doing something. ## Footnote It is granted when damages would be inadequate.

Question 48

What are express conditions in a contract?

Answer 48

Specific events or requirements explicitly stated in the contract that must occur before a party’s obligation to perform arises. ## Footnote Phrasing indicating express conditions includes 'subject to' or 'if'.

Question 49

How do courts determine if time is of the essence?

Answer 49

Time is only of the essence if it is explicitly stated or if the surrounding circumstances or conduct show that timely performance is critical. ## Footnote This can affect the enforceability of deadlines in contracts.

Question 50

What is a satisfaction clause?

Answer 50

A clause that requires performance to meet a standard of satisfaction, which must be based on good faith and reasonable person standards. ## Footnote Mattei v Hopper established that satisfaction is subject to a good faith standard.

Question 51

What is the parol evidence rule?

Answer 51

Helps determine which agreed-upon terms make up the parties' contract and governs the types of evidence a jury may hear. ## Footnote If the rule applies, it prevents the jury from hearing evidence of terms not contained in the written agreement.

Question 52

What are the steps to apply the parol evidence rule?

Answer 52

* Step 1: Main contract must be in writing * Step 2: Apply threshold rules to determine if PER applies * Step 3: Is the agreement integrated or not? * Step 4: Determine the degree of the integration * Step 5: If partial integration, determine if parol term is consistent or contradicts the writing. ## Footnote These steps help clarify when extrinsic evidence can be admitted.

Question 53

What is an express condition?

Answer 53

A condition explicitly stated in the contract that must occur before a party's obligation to perform arises. ## Footnote Courts look for clear language indicating intent for performance to depend on the occurrence of a specific event.

Question 54

What is a constructive condition?

Answer 54

A condition implied by law that requires substantial performance before the other party's obligation to perform arises. ## Footnote This concept was illustrated in Plante v Jacobs regarding construction contracts.

Question 55

What does discharge of obligations mean?

Answer 55

The liberation of a party’s contract obligations, often occurring when a party fully performs their contractual duty. ## Footnote Discharge can also occur under various legal grounds.

Question 56

What does 'discharge' refer to in contract law?

Answer 56

Liberation of a party’s contract obligations, often through full performance.

Question 57

What is the most commonly litigated ground for discharge?

Answer 57

Non-occurrence of a condition.

Question 58

What is 'waiver' in contract terms?

Answer 58

Intentional relinquishment of known rights.

Question 59

Define 'estoppel' in the context of contract law.

Answer 59

Prevents a party from asserting the non-occurrence of a condition if they misstate or fail to disclose a material fact, and the other party relies on this to their detriment.

Question 60

What does 'bad faith' entail in contractual obligations?

Answer 60

Intentional hindering of the other party’s performance.

Question 61

How can bad faith affect contract performance?

Answer 61

It can excuse the non-occurrence of a condition if it prevents the condition from happening.

Question 62

What distinguishes waiver from estoppel?

Answer 62

Waiver is about intentionally giving up a right, while estoppel involves reliance on false or misleading statements.

Question 63

What was the ruling in Schultz v Los Angeles Dons, Inc?

Answer 63

The team waived the enforcing condition requiring a player to pass a physical exam.

Question 64

What was the main issue in Prousi v Cruisers Div of KCS Intern Inc?

Answer 64

Whether an employee could enforce promises made during negotiations despite a written at-will agreement.

Question 65

What did the court decide in Prousi v Cruisers Div of KCS Intern Inc regarding estoppel?

Answer 65

The court rejected the estoppel claim due to reliance on a clear written agreement.

Question 66

What was the outcome of Fay v Moore regarding waiver and bad faith?

Answer 66

The court found both waiver and bad faith, excusing the buyer's non-performance.

Question 67

What is anticipatory repudiation?

Answer 67

Unequivocal manifestation of intent not to render the promised performance, arising before the performance is due.

Question 68

What was determined in Wallace Real Estate Investment Inc v Groves regarding assurance of performance?

Answer 68

Failure to provide reasonable assurance amounted to anticipatory repudiation, allowing contract termination.

Question 69

What are the elements of impracticability?

Answer 69

* Occurrence of an unforeseen event * Event alters the essential nature of performance * Non-occurrence was a basic assumption of the contract * Claiming party had no fault in causing the event * Party did not assume the risk.

Question 70

What happens if the impracticable performance is a material part of the agreement?

Answer 70

It is excused and the rest of the contract is discharged.

Question 71

What case addressed liability for non-performance due to an unexpected event?

Answer 71

Taylor v Caldwell.

Question 72

What was the key issue in Taylor v Caldwell?

Answer 72

Whether a party is liable for non-performance when an unexpected event makes performance impossible.

Question 73

What was the outcome of Taylor v Caldwell?

Answer 73

Obligations were discharged for both parties due to impossibility of performance.