exam 1

Question 1

liquidated debt

Answer 1

no dispute

Question 2

unliquidated debt

Answer 2

a dispute - once the debtor pays the amount agreed on by both the parties, the debt is fully discharged. can enter into a - “Accord and Satisfaction”

Question 3

The term ________ refers to the fact that the agreement in question is so unfair that it is void of conscience

Answer 3

unconscionable

Question 4

express ratification

Answer 4

An express ratification occurs when, after reaching the age of majority, a person states orally or in writing that he or she intends to be bound by the contract entered into as a minor.

Question 5

An agreement presented on a take-it-or-leave it basis is referred to as a(n) ________blank contract.

Answer 5

adhesion

Question 6

Consideration

Answer 6

what a person will receive in return for performing a contract obligation.

Question 7

preexisting duty rule

Answer 7

performance of a duty you are obligated to do under the law is not good consideration.

Question 8

Promissory estoppel

Answer 8

Promissory estoppel occurs when three conditions are met: one party makes a promise knowing the other party will rely on it, the other party does rely on the promise, and the only way to avoid injustice is to enforce the promise. (also an exception to the rule requiring concideration)

Question 9

Belinda mails Harold an offer on March 2nd. Harold receives the offer on March 4th and immediately mails a rejection. On March 5th, Harold changes his mind and mails Belinda an acceptance. Belinda receives the acceptance on March 6th and the rejection on March 7th. Is there a contract?

Answer 9

Yes, the acceptance is effective when mailed on March 5th.

Question 10

“mirror-image” rule

Answer 10

According to the “mirror-image” rule, if the terms of the acceptance do not mirror the terms of the offer, the attempted acceptance is a counteroffer.

Question 11

What’s considered material terms in an offer?

Answer 11

The subject matter, price, quantity, quality, and parties

Question 12

unilateral contract

Answer 12

promise for an act

Question 13

bilateral contract

Answer 13

promise for a promise

Question 14

Things that are not consideration

Answer 14

Illusory promise, Past consideration, and Preexisting duty rule

Question 15

-misunderstanding bc you didn’t know any better (as the buyer)
- Contracting party made a false statement of Material fact & believed the false statement to be true

Answer 15

Innocent misrepresentation

Question 16

Negligent misrepresentation

Answer 16

• Contracting party made false statement of material fact & did not know the false statement was false but should have known considering their knowledge/experience surrounding the matter.

Question 17

Fraudulent Misrepresentation

Answer 17

• Contracting party made false statement of material fact
• Contracting party knew the false statement was false (Fraud)

Question 18

Persuasive efforts of dominant party using a special relationship of trust to interfere with non-dominant party’s free choice of entering the contract (voidable)

Answer 18

Undue Influence

Question 19

when parties have a meeting of the minds, enter contracts voluntarily and contracts are not “unreasonably” unfair

Answer 19

Legal Assent

(w out asset, contract is voidable)

Question 20

When one party is forced, either physically or economically, into an agreement by a wrongful act of another

Answer 20

duress

(not legal assent)

Question 21

A false statement about a material fact that was based on an innocent belief that the false statement was true is a(n)

Answer 21

innocent misrepresentation

Question 21

When a contract is unreasonable unfair to one of the parties through either its formation or operation

Answer 21

Unconscionability

Question 22

Josh contracted with a railroad company to have his order of lumber delivered by the train the company called Westward. Actually, there were two trains that were named Westward. They were identical trains, but had different delivery times. Josh thought his goods were being delivered by Westward I which delivered goods at the end of October. Westward II had a delivery date of February. Josh thought he was contracting for Westward I and the railroad company thought he wanted Westward II. Will the court void or rescind the contract due to mutual mistake?

Answer 22

yes

Question 23

A court was asked to void a contract based on mutual mistake. The parties had entered into an agreement where the seller of goods believed that he was to deliver the goods on the truck which was designated as Route 1. However, the buyer thought he was contracting for the truck designated as Route 2. The only difference between the two trucks was the delivery date – the Route 1 shipment would be delivered one day sooner than goods shipped on Route 2. The later delivery did not really affect the buyer in any negative way. The buyer was so furious about the late delivery that he wished to teach the trucking company a lesson and requested the court to void the contract. The court will: Blank______.

Answer 23

not void the contract, since at least one of the elements of mutual mistake is missing

Question 24

Brenda went shopping for a new computer at a nearby computer store. Her salesperson, Alan, had been told by another sales associate that a free printer was to be given to any customer who purchased a new laptop. This was not the case, but Alan believed the sales associate since he had been working at the store for two years. Alan told Brenda about the free printer, and Brenda purchased the laptop. Unfortunately Brenda was charged for the printer. Brenda was very angry and went to court. The judge found that there was innocent misrepresentation, and therefore, Brenda can receive: Blank______.

Answer 24

rescission of the contract, but no damages

Question 25

Scienter is present when the party making the fraudulent assertion:

Answer 25

believed it was false or didn't care to make sure it was true or false

Question 26

A special relationship in which one person takes advantage of a dominant position in a relationship to unfairly persuade the other and interfere with that person's ability to make his or her own decision to enter into a contract is known as: Blank

Answer 26

undue influence

Question 27

Mistakes in contract law:

Answer 27

do not result from untrue statements.

Question 28

In contract law, a ________ is an erroneous belief about the facts of the contract ________.

Answer 28

mistake of fact; at the time the contract is concluded

Question 29

Concealment

Answer 29

a type of fraudulent misrepresentation, is the active hiding of the truth about a material fact

Question 30

Nondisclosure

Answer 30

the failure to provide pertinent information about the projected contract. - form of fraudulent misrepresentation

Question 31

Rule of state law requiring certain types of contracts to be in writing in order to be enforceable

Answer 31

Statue of Frauds

Question 32

What Contracts are required to be in writing to be enforceable?

Answer 32

– Contracts made in consideration of marriage (prenuptial agreements) - Contracts that cannot be performed within one year from the date of their making – Land/Real Estate Contracts – Executorship - Goods valued at $500 or more – Suretyship

Question 33

What are the exceptions to the writing requirement?

Answer 33

- Admission - Partial performance - Promissory estoppel - UCC items discussed later - Courts finding the above will enforce a contract to the extent the above facts are found

Question 34

Parole Evidence Rule

Answer 34

Oral evidence of agreement made (1) before or (2) at the same time as a writing that the parties intend to be the complete and final version of their agreement is inadmissible

Question 35

What is an Integrated Contract?

Answer 35

A contract by its terms states this is the complete and final representation of parties' agreement

Question 36

What are there Exceptions to the Parole Evidence rule?

Answer 36

- Contracts that are subsequently modified - Contracts conditioned on orally agreed-upon terms - Contracts that are not final, as they are part written and part oral - Contracts with ambiguous terms - Incomplete contracts - Contracts with obvious typographical errors - Void or voidable contracts - Prior dealings or usage of trade

Question 37

The partial performance exception to the statute of frauds covers contracts involving

Answer 37

a property interest/ land (includes all things attached to the land)

Question 38

Parol evidence is admitted to determine whether a contract is: ___ or ____

Answer 38

void or viodable

Question 39

According to the ______, parol evidence is admissible for the sake of clarification if it addresses prior dealings between the parties or usages of trade in the business they are in.

Answer 39

UCC (uniform commercial code

Question 40

In which of the following cases is parol evidence inadmissible

Answer 40

When a contract is deemed integrated by the courts

Question 41

_____damages are intended to reimburse a plaintiff for his or her loss of the benefit of the bargain

Answer 41

Compensatory

Question 42

_____ contracts contain conditions affecting performance obligations of the parties.

Answer 42

conditional

Question 43

Which is the most frequently awarded damages?

Answer 43

Compensatory

Question 44

A condition ______ is a particular event that must occur in order for a party's duty to arise

Answer 44

precedent

Question 45

A condition subsequent is a ______ event that terminates the obligations of the parties when it occurs

Answer 45

future

Question 46

Discharge by ______ refers to parties discharging their obligations by doing what they respectively agreed to do under the terms of the contract.

Answer 46

performace

Question 47

Concurrent conditions exist when the parties are to perform their obligations for each other:

Answer 47

simultaneously

Question 48

Complete performance occurs when all aspects of the parties' duties under the contract are carried out:

Answer 48

perfectly

Question 49

No willful departure from the terms of the agreement An honest effort to complete all of the contract terms Completion of nearly all of the terms of the agreement

Answer 49

Conditions that need to be satisfied for substantial performance

Question 50

What type of breach occurs when a party unjustifiably fails to substantially perform his or her obligations under the contract, thereby discharging the non-breaching party from his or her obligations under the contract?

Answer 50

material

Question 51

Discharge by performance refers to parties discharging their obligations by:

Answer 51

doing what they agreed to

Question 52

a situation when, before the actual time for performance, a contracting party decides not to complete the contract?

Answer 52

Anticipatory repudiation

Question 53

Regarding discharge by mutual agreement, discharge by novation refers to a situation in which:

Answer 53

the original parties and a third party all agree that the third party will replace one of the original parties and that the original party will then be discharged

Question 54

What occurs whenever a party fails to perform his or her obligations under the contract

Answer 54

a breach

Question 55

Which of the following terms indicates mutual consent by contracting parties to replace an old agreement with a new one?

Answer 55

Substituted contract

Question 56

A(n) ______ discharges the nonbreaching party from his or her obligations under the contract

Answer 56

material breach

Question 57

Which of the following terms refers to a situation where contracting parties replace one of the parties with a third party?

Answer 57

Novation

Question 58

When a party files for bankruptcy, the court allocates the assets of the bankrupt debtor to creditors and then issues the debtor a ______ in bankruptcy

Answer 58

discharge

Question 59

Whenever possible, courts award ______ damages rather than some form of ______ relief.

Answer 59

monetary; equitable

Question 60

Consequential damages are also referred to as ______ damages.

Answer 60

special

Question 61

____damages are rarely awarded in breach of contract cases.

Answer 61

Punitive

Question 62

In a case where no actual damages resulted from a breach of contract, the court may award the plaintiff which of the following?

Answer 62

nominal damges

Question 63

_______ damages are foreseeable damages that result from special facts and circumstances arising out of the contract itself. These damages must be within the contemplation of the parties at the time the breach occurs.

Answer 63

Consequential

Question 64

____ damages represent a trivial amount of money (typically, $1 or $5), but serve to signify that the plaintiff has been wronged by the defendant

Answer 64

nominal

Question 65

What constitutes the termination of a contract?

Answer 65

rescission

Question 66

To recover damages in a breach-of-contract case, the plaintiff must demonstrate that he or she used reasonable efforts to minimize damages resulting from the breach. This obligation is referred to as the: ______.

Answer 66

duty to mitigate one's damages

Question 67

The most common ______ remedies include rescission and restitution, orders for specific performance, and injunctions

Answer 67

equitable

Question 68

Rescission is the ______ of a contract.

Answer 68

termination

Question 69

Specific performance is sometimes called specific:

Answer 69

enforcement

Question 70

legal ability to enter into a binding agreement

Answer 70

contractural capacity

Question 71

Which type of damages are foreseeable damages that result from special facts and circumstances arising outside a contract itself?

Answer 71

Consequential damages

Question 71

Which of the following is a future event that terminates the obligations of the parties to a contract when it occurs?

Answer 71

Condition subsequent

Question 72

Sonya, an event planner, had agreed to use the rare Juliet rose for Juliet’s engagement party. However, due to an embargo against the country from where the flowers were to be imported, Sonya could not fulfill her promise. In this scenario, the contract between Sonia and Juliet may be discharged on the basis of

Answer 72

commercial impracticability

Question 73

(1) the plaintiff conferred a benefit on the defendant; (2) the plaintiff had reasonably expected to be compensated for the benefit conferred on the defendant (3) the defendant would be unjustly enriched from receiving the benefit without compensating the plaintiff for it.

Answer 73

Recovery in quasi-contract

Question 74

________occurs when a party to a contract unjustifiably fails to substantially perform his obligations under the contract.

Answer 74

Material breach

Question 75

qualities of an offer

Answer 75

Definite and certain terms (matieral terms): Price, parties, quality, quantity, subject matter communication

Question 76

Things that are not consideration

Answer 76

-Illusory promise:** - Past consideration:** - Preexisting duty rule:**

Question 77

Acceptance of offer by mail effective when...

Answer 77

mailed by offeree

Question 78

Revocation of offer (no agreement) by mail effective only when...

Answer 78

received by offeree