Chapter 7

Question 1

The elements of a contract include?

Answer 1

1. Offer and acceptance
2. Legality
3. Consideration
4. Capacity
5. Genuine Agreement

Question 2

What is a contract?

Answer 2

A contract is defined as an agreement between two or more parties that is enforceable by law.

Question 3

What happens when a person lacks the legal capacity to enter into a contract?

Answer 3

They are a minor, mentally ill, or intoxicated, it is voidable.

Question 4

What are the ways an agreement can be invalidated?
1. Fraud
2. Misrepresentation
3. Undue influence
4. All the above

Answer 4

All the above

Question 5

Describe the concept of Promissory Estoppel.

Answer 5

Promissory estoppel is triggered when one party acts on the other party’s promise. In cases, where it is triggered, there is harm or severed injustice to the party who acted because they relied on the other party’s broken promise.

Question 6

A consideration may include any of the following except:
A. A promise
B. A gift
C. Property
D. Money

Answer 6

A gift

Question 7

Which of the following is most likely to be classified as a necessity for which a minor will be held liable on a contract?
A. A television
B. School supplies
C. Education
D. Food

Answer 7

Food

Question 8

When can a mentally incompetent person void a contract?

Answer 8

The mentally ill person’s guardian may void the contract, except for necessities.

Question 9

Define a material breach.

Answer 9

A material breach is when something substantially different from what was expected under the terms of the contract is delivered, the breach is considered material.

Question 10

Typical remedies available for a breach of contract include:
A. Money damages
B. Recission
C. Specific Performa
D. All the above

Answer 10

All the above

Question 11

Distinguish between recission and reformation.

Answer 11

Recission terminates the duties of both parties under the contract, while reformation allows courts to equitably change the contracts substance.

Question 12

Define restitution

Answer 12

Restitution restores the injured party to status quo or the position they had prior to the formation of the contract, by returning to the plaintiff any money or property given to the defendant pursuant to the contract

Question 13

What type of contract cannot receive specific performance under a court order?

Answer 13

Personal service contract

Question 14

What happens when a contract undergoes reformation?

Answer 14

The court reads that into the contract, it alters it.

Question 15

What duties do the parties owe under a contract where recission occurs?

Answer 15

None. Recission cancels out the decisions of all duties.

Question 16

If the consideration provided under a contract is substantially different than the terms of the contract required, what type of breach has occurred?

Answer 16

Material breach