CONTRACT

Question 1

definition of contract

Answer 1

a legal enforceable agreement or a bargain

Question 2

element of contract

Answer 2

1. intention to create legal relations
2. offer and acceptance
3. consideration

Question 3

purpose of contract law

Answer 3

to protect the reasonable expectation of the parties

Question 4

definition of implied term

Answer 4

a term read-in by the court to the parties

Question 5

bilateral contract

Answer 5

an exchange of promises, each party makes and promise to the other and in return.

Question 6

unilateral contract

Answer 6

an exchange of an act for a promise, only one promise and one performance.

Question 7

postal rule

Answer 7

for non-instantaneous communication, the offer is accepted when the offeree submits the acceptance.

Question 8

general rule

Answer 8

for instantaneous communication, the offer is accepted when the acceptance is received by the offeror.

Question 9

privity of contract

Answer 9

only the parties to a contract can enforce the contract as they are the only ones who paid for the bargain and exchanged promises for performance
exceptions: assignment, trusts, agency

Question 10

misrepresentation

Answer 10

a false statement of a material fact intend to and did induce a contract.

Question 11

innocent misrepresentation

Answer 11

a false statement of a material fact by one party who unware the statement was untrue.

Question 12

fraudulent misrepresentation

Answer 12

a false statement of a material fact by one party known to be false or made willfully blind or reckless as to its truth.

Question 13

implied term in Sale of Good Act

Answer 13

1. the goods are of merchantable quality
2. the goods are durable for a reasonable time
3. the goods are fit for the particular purpose they were intended for

Question 14

firm offer

Answer 14

the offeror has left the offer open for acceptance for a certain period of time
can be revoked, when the offeror withdrawn, offeror must communicate the withdrawal to the offeree

Question 15

actual authority

Answer 15

a principle gives an agent the authority to do something on their behalf
the principle is bound by the acts of the agent

Question 16

apparent authority

Answer 16

the reasonable impression that the principle gave the agent the authority to do something on their behalf, whether principle gave or not

Question 17

ticket cases

Answer 17

the party issuing the ticket must draw attention to the exclusions of liability on the back of the ticket or on a sign at the ticket office

Question 18

rescission

Answer 18

set aside a contract, place the parties in the position they were in before signing the contract

Question 19

sufficiency consideration

Answer 19

anything of value

Question 20

adequacy consideration

Answer 20

equality in exchange

Question 21

option

Answer 21

collateral contract, the parties agree an offeror may accept the offer and the offeror may not revoke the offer for a certain period of a time

Question 22

counter-offer

Answer 22

a rejection of the original offer, but a willingness to enter a contract on different terms.

counteroffer kills the original offer completely and forever, the original one is no longer exist

Question 23

implied terms

Answer 23

1. usage and custom
2. good faith
3. for particular purpose

Question 24

duress

Answer 24

violence or a threat of violence to secure a contract

Question 25

undue influence

Answer 25

a party is manipulated into entering a contract because of a special relationship

Question 26

unjust enrichment

Answer 26

a form of restitution, requires the defendant to give back the benefit it received at the expense of the plaintiff

Question 27

void

Answer 27

invalid from the start

Question 28

voidable

Answer 28

valid unless set aside (must within a reasonable time)

Question 29

assignment

Answer 29

a transferring process, a party transfers its obligation and rights under a contract to the third party

Question 30

frustrated contract

Answer 30

some events beyond control of the parties make the performance impossible or radically different from what was intended

Question 31

frustrated

Answer 31

the subject matter of the contract no longer exists or is substantially different

Question 32

delay and laches

Answer 32

a party fails to promptly avoid the contract, it will be deemed as valid and will not be able to get it set aside.

Question 33

common mistake

Answer 33

the mistake is shared by both parties, the mistake is fundamental and directly affects what the parties agreed to.

Question 34

is common mistake void/voidable

Answer 34

void

Question 35

mutual mistake

Answer 35

the parties are at cross-purpose

Question 36

is mutual mistake void/ voidable

Answer 36

void

Question 37

non est factum

Answer 37

a party signs the document thinking it contains different terms because of the misrepresentation of the other party

Question 38

is non est factum void/ voidable

Answer 38

void

Question 39

condition subsequent

Answer 39

a term in the contract, if it occurs, terminates the contract

Question 40

anticipatory breach

Answer 40

one party by words or action indicates it does not intend to fulfill the obligations when due.

Question 41

the effect of anticipatory breach

Answer 41

the innocent party may discharge the contract and claim damages

Question 42

breach of condition

Answer 42

a material term of the contract the breach of which would substantially deprive the innocent party of the benefit of the contract

Question 43

contra proferentum rule

Answer 43

the ambiguous terms should be read against the party who drafted them

Question 44

avoid unfair contract

Answer 44

1. impossibility 2. An innocent third party has acquired rights 3. The party affirms the contract 4. fails to avoid the contract promptly

Question 45

forms of discharge

Answer 45

1. rescission 2. accord and satisfaction 3. novation 4. waiver and release

Question 46

case of intoxication

Answer 46

the intoxication prevent the party from understanding the nature of the contract

Question 47

effect of case of intoxication

Answer 47

voidable

Question 48

definition if ratification

Answer 48

a principle approves a contract negotiated without his authority ratification only fixes the document to reflect the true intentions of the parties, but will not rewrite

Question 49

element of ratification

Answer 49

1. must be clear 2. must be within reasonable time 3. must accept the whole contract 4. must have legal capacity 5. identify the principle at the time of the contract