Contract Law

Question 1

Contract

Answer 1

Agreements between two or more parties enforceable in court

Question 2

Express contract

Answer 2

A contract expressed in words

Question 3

Implied contract

Answer 3

Formed via actions or as a result of a legal obligation

Question 4

Principle of unjust enrichment

Answer 4

Dispute resolution should not allow unjust enrichment of a party at the expense of others

Question 5

Four requirements for enforceability of contract

Answer 5

Capacity, mutual agreement, consideration, legality

Question 6

Bilateral contract

Answer 6

Exchange of promises

Question 7

Unilateral contract

Answer 7

A promise performed on condition of performance of an action (not binding on one party until performance)

Question 8

Executed contract

Answer 8

Fully performed contract

Question 9

Executory contract

Answer 9

A contract still in progress

Question 10

Unenforceable contract

Answer 10

Contracts that do not meet requirements of enforceability

Question 11

Void contract

Answer 11

Cannot be legally enforced under any circumstances

Question 12

Voidable contract

Answer 12

Binding only on one party

Question 13

Examples of incapacity

Answer 13

Minor, insane, intoxicated

Question 14

Right of disaffirmance

Answer 14

Right held by minor when making contract;

Question 15

Two caveats of disaffirmance

Answer 15

Innocent buyer caveat, necessaries caveat

Question 16

Innocent buyer caveat of disaffirmance

Answer 16

Third party cannot obtain goods sold by minor to innocent buyer

Question 17

Necessities caveat of disaffirmance

Answer 17

Minor need not restore necessities but must pay reasonable value

Question 18

When minor is not considered as such

Answer 18

Ab initio ratification, tort, age fraud

Question 19

Ab initio ratification (minors)

Answer 19

After reaching age of majority, can ratify contract via conduct or express agreement

Question 20

Tort caveat (minors)

Answer 20

A minor who commits a tort is held responsible for the harm unless very young

Question 21

Age fraud (minors)

Answer 21

If not obvious to other party, age fraud removes right of disaffirmance

Question 22

Insanity

Answer 22

Any mental infirmity impairing ability to make contracts; confers right of disaffirmance

Question 23

Two conditions of voidability under intoxication

Answer 23

Intoxication impaired ability to make contracts; other party was aware of intoxication

Question 24

Conditions of an offer

Answer 24

Communicates intent to enter contract, definite enough for court to determine intent, communicated to other party

Question 25

Period of acceptance for offer

Answer 25

As long as specified or for a reasonable period of time as determined by a court.

Question 26

Advertisements as offers

Answer 26

Typically not considered specific enough

Question 27

Counteroffer

Answer 27

Proposition of alternative terms to a contract than what laid out in offer; not considered acceptance

Question 28

Common law vs. UCC on manner of acceptance

Answer 28

Mailbox rule vs. any reasonable manner of acceptance

Question 29

Silence as acceptance

Answer 29

Under special circumstances, such as when conveyed in conduction, when agreed in advance that silence constitutes acceptance, or where precedent

Question 30

Mailbox rule

Answer 30

Acceptance of offer must be conveyed in similar manner to offer itself

Question 31

Four exceptions to revocation prior to acceptance

Answer 31

Options contract, written offer made by merchant to buy/sell something (UCC), promissory estoppel, unilateral contract w/o substantial performance

Question 32

Items not considered as consideration

Answer 32

Duties customarily performed by obligation; duties already owed by legal/contractual obligation; past acts

Question 33

Promissory estoppel

Answer 33

Promise relied upon to detriment may be binding, even without consideration

Question 34

Laws governing illegal consideration

Answer 34

Blue laws (alcohol), usury laws (interest rates), public policy

Question 35

Exculpatory clause

Answer 35

Clause stating one party is not liable for damage resulting from negligence

Question 36

Adhesion contracts

Answer 36

Take it or leave it contract -- standardized written contract with no room for negotiation

Question 37

Enforceability of exculpatory clause

Answer 37

Depends on if business proper for regulation, provides public service, has advantage of bargaining power, adhesion contract, placed property or person subject to risk from negligence

Question 38

Means of performing contract

Answer 38

Satisfaction of terms and obligations OR mutual rescission

Question 39

Full performance

Answer 39

Performance of all terms to full accord

Question 40

Substantial performance

Answer 40

Completion of most terms but not all; usually over half

Question 41

Payment for substantial performance

Answer 41

Pay for portion performed; deduct costs needed to finish rest of portion

Question 42

Payment for non-substantial performance

Answer 42

Quantum meruit ("going rate")

Question 43

Express conditions of contract

Answer 43

Conditions of contract stated verbally

Question 44

Implied conditions of contract

Answer 44

Part of deal but not expressly stated

Question 45

Satisfaction guaranteed

Answer 45

If explicitly stated, is enforceable

Question 46

Breach of contract

Answer 46

Failure to comply with contract terms

Question 47

Conditions for claiming breach of contract

Answer 47

Existence of breach; damages suffered

Question 48

Obligations of plaintiff

Answer 48

Obligated to attempt to mitigate damages prior to making claim of breach

Question 49

Limitation of scope for breach of contract

Answer 49

Reasonably foreseeable damages

Question 50

Anticipatory breach

Answer 50

If breach of contract is anticipated, plaintiff need not wait for breach to make claim

Question 51

Sales contracts (UCC)

Answer 51

Contracts made to sell goods

Question 52

Goods (UCC)

Answer 52

Tangibles, items tied to land (i.e. NOT services)

Question 53

Sales (UCC)

Answer 53

Transfer of title (actual ownership) to property

Question 54

Merchants (UCC)

Answer 54

People who deal in goods sold under sales contracts OR who hold themselves as having skill or knowledge in such goods

Question 55

Leasing

Answer 55

Transfer of possession/use of property for rental payments

Question 56

Leasing parties

Answer 56

Lessor, lessee

Question 57

UCC

Answer 57

Uniform Commercial Code

Question 58

UCC allows for indefinite terms if

Answer 58

intention to form contract, basis for court to grant remedies in dispute

Question 59

Requirements contract

Answer 59

Buyer commits to purchasing what is needed

Question 60

Advent v. Unisys ruling

Answer 60

Unisys failed to maintain good faith estimation of requirements by not seeking to sell computer system to other companies

Question 61

UCC Statute of Frauds - 3 requirements

Answer 61

Contracts for $500 or more not enforceable unless in writing. Written contracts considered enforceable even if missing important terms. Contracts not enforceable for goods beyond what written.