Exam #2 - Contracts Flashcards
1
Q
A decision by a person to do or not do a certain act is a…
A
promise.
2
Q
A promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty is a…
A
contract.
3
Q
What is the objective theory of contracts?
A
a party’s intention to enter into a legally binding agreement is judged by outward, objective facts
4
Q
What are the five elements of a contract?
A
- competent parties
- agreement (offer + acceptance)
- consideration
- lawful purpose
- proper form
5
Q
When a contract is unilateral…
A
there is a promise for an act.
6
Q
When a contract is bilateral…
A
there is a promise exchanged for a promise.
7
Q
When a contract is formal…
A
it requires a special form for creation.
8
Q
When a contract is informal…
A
it requires no special form for creation.
9
Q
When a contract is express…
A
it is formed by words.
10
Q
When a contract is implied…
A
it is formed by the conduct of the parties.
11
Q
A contract that has been fully performed by both sides is known as an…
A
executed contract.
12
Q
A contract that has NOT been fully performed by both parties is an…
A
executory contract.
13
Q
Contracts implied in law are also known as…
A
quasi-contracts.
14
Q
Standardized language in a contract that is considered relatively non-negotiable by the party proposing it is…
A
BOILERPLATE
15
Q
True or False: Most contracts are fully performed / abided by.
A
TRUE
16
Q
True or False: Most contract disputes are settled in court.
A
FALSE - most are settled outside of court; it’s rare to see a contract dispute in court
17
Q
A contract that HAS to be in writing is a…
A
negotiable instrument
18
Q
A negotiable instrument both:
A
- is something of value
- represents something of value
19
Q
In the check example for negotiable instruments, what is the negotiation?
A
giving the check to the person (transfer of the instrument from one party to another)
20
Q
In the check example for negotiable instruments, what is the presentment?
A
the person taking the check to the bank
21
Q
In the check example for negotiable instruments, what is the unconditional endorsement?
A
signing the back of the check, making it the “bearer paper”
22
Q
In the check example for negotiable instruments, what is the conditional endorsement?
A
writing “for deposit only” under your signature on the back of the check (it makes it so that you can only deposit the check in the account of the above signature)
23
Q
When both parties promise in advance, that’s a ___________ contract.
A
bilateral
24
Q
When one party promises in advance while another performs, that’s a ____________ contract.
A
unilateral
25
When a contract is an "executory contract," this means...
that nothing has been performed / been fulfilled yet.
26
When a contract is "partially executed," this means...
some performance of the contract has taken place.
27
When a contract is "full executed," this means...
everything is done.
28
When a contract is "valid," it's...
recognized and enforceable.
29
When a contract is "void ab initio," this means it was...
void from the beginning.
30
When a contract is "voidable," it...
might be valid, might be void, depends on circumstances.
31
This principle states that, if the court is trying to figure out what a contract means, it will take an outside person.
The objective theory of contracts
32
This principle looks specifically at what a normal, ordinary person would think certain phrasing means in the contract.
The reasonable person standard
33
This principle states that, in a contract, words mean what they usually mean.
The plain meaning rule
34
This principle considers only the final agreement in contract interpretation.
The integrated document rule
35
This principle states that the court can strike out what they want from a contract.
The severability principle or "blue pencil" rule
36
This principle is when one party has the power to draft an agreement and the court interprets in the way that is least favorable to the party who wrote it.
Construction against the drafter
37
This principle examines how you have previously performed in the contract.
Course of performance
38
This principle examines how you have dealt with the other party in the past.
Course of dealing
39
This principle examines the industry standard / how those in the industry interpret this language.
Usage of trade
40
What is another common phrase used to describe agreement in a contract?
"meeting of the minds"
41
A manifestation of the willingness to enter into a bargain is also known as an...
offer.
42
A offer must...
- have reasonably clear terms
- be communicated to the offence
43
The test of both OFFER and ACCEPTANCE is...
INTENT!
- subject to the "reasonable person standard"
44
What four things are NOT offers?
"that's not an offer, that's SAES!"
Solicitations to Offer
Advertisements
Expressions of Opinions
Statements of Future Intent
45
Why are advertisements not an offer?
If they were an offer, they would have to suffer breach of contract every time an item sells out.
46
What terminates an offer?
- revocation
- death or incompetence of offeror or offeree
- rejection
- destruction of the subject matter
- supervening illegality
- the passage (expiration) of time
47
Acceptance of a contract must be the combination of...
state of mind + act / manifestation
48
True or False: Silence = acceptance
FALSE
49
What is the "mailbox rule?"
Acceptance of a contract is valid when it is mailed.
50
Hollis is trying to sell her car. She sends a notice in the mail to persons A, B, and C. Assume all of the following receive the letter on Thursday:
Person A mails the acceptance on Friday, but it doesn't get to Hollis until Monday.
Person B doesn't reply.
Person C calls Hollis on Saturday to accept the offer.
Who is Hollis contractually obligated to?
Because of the mailbox rule, Person A.
51
Any material change to an offer is called a...
counteroffer
52
Explain the Lucy v. Zehmer case.
buyer = Lucy
farmer = Zehmer
- Zehmer gets drunk and sells Lucy the farm for cheap.
- Zehmer sues and wins in trial court, who does not enforce it as a contract.
- Zehmer was intoxicated but that's NOT A DEFENSE in contract law (you made the decision to drink!).
- Lucy appeals and gets the appeal.
- Lucy wins, Zehmer has to give up the farm to Lucy.
- Court uses "reasonable person" and "objective theory of contracts".
53
In revocation, who revokes?
the offeror
54
True or False: Revocation is never effective until actually communicated.
TRUE - no "mailbox rule!"
55
True or False: An offer can be revoked after it's been accepted.
FALSE - Once an offer is accepted, it cannot be revoked.
56
Acceptance is accepted when ...
Revocation is valid when ...
Acceptance is accepted when it's mailed.
Revocation is valid when it's received.
57
A mutual obligation, or a mutual exchange of something of value, is...
consideration.
58
In electronic contracts, what is a "choice of forum" clause?
When you sign it, you consent to personal jurisdiction in a certain location.
59
In electronic contracts, what is a "choice of law" clause?
When you sign it, you consent to laws within the chosen forum.
60
In electronic contracts, what is a "shrink wrap" agreement?
When you buy a physical copy of the software, you automatically sign the license when you open it.
61
In electronic contracts, what are "click on" / "click through" / "click wrap" agreements?
They note that you don't have to actually read the terms to be bound by them (when you download the software, for example, you sign the agreement).
62
What two pieces of legislature made e-signatures count as real signatures?
1. the Uniform Electronic Transactions Act
2. ESIGN (federal law)
63
"forebearance" is the same thing as...
consideration
64
Consideration must be:
- valuable
- legal
- possible
(almost VIP if the "I" is a lowercase "L")
65
True or False: Consideration must be either present or past.
FALSE -
Consideration must be either present or future -- cannot be past!!
66
True or False: Moral obligations are sufficient consideration.
FALSE
67
True or False: Gifts are not sufficient consideration.
TRUE
68
What is the "mere peppercorn" theory?
The court states that whatever the individual is willing to accept a bargain for ($5, a cigar, a pack of gum, etc.) is enough.
69
"Courts will not unmake bargains _________ ___________."
unwisely made
70
True or False: You cannot make a new promise to do something if you're already obligated to do it.
TRUE!
This is the "pre-existing duty rule." It doesn't count as adequate consideration if you were already obligated to do it.
71
What are examples of situations for which there would not be adequate consideration under the pre-existing duty rule?
- your job already requires you to do the action
- you already have another contract that requires you to do the action
72
What are the five requirements for promissory estoppel?
Please Remember Professor's Dowd Example
1. unqeuivocal Promise
2. reliance was Reasonable
3. Promisor either knew or should have known
4. Detrimental reliance on the promise
5. not to Enforce would be inEquitable
73
Describe the Fr. Dowd promissory estoppel example.
- Students clean up campus after a football game out of the goodness of their heart.
- Fr. Dowd comes by and is very touched, promises them a tuition break for the following semester.
- Because the families anticipate having extra money, they buy a new car.
- When that next semester comes, they still get the invoice for tuition.
- It can't count as a contract because it qualifies as a gift (past consideration!).
74
Go through all of the aspects of promissory estoppel for the Fr. Dowd example.
1. unequivocal Promise
(yes, he made a promise to them)
2. Reasonable reliance
(reasonable to think because he's the president of the university and has that kind of power)
3. Promisor should have known
(should have known that they'd take his word seriously)
4. Detrimental reliance
(purchased a car, proof of thinking he'd go through with the promise)
5. not to Enforce would be inequitable
(conclusion after all previous points)
75
The remedy for promissory estoppel is...
the enforcement of the promise
76
A contract implied in law is also known as a...
quasi-contract
77
What is unjust enrichment?
Party B knows that Party A thinks it's a contract but doesn't correct them, Party B accepts Party A's performance without doing anything to stop it.
78
Describe the window-washing example.
- The window washer comes while you're on the phone.
- They try to motion to you and you hold up your hand.
- The window washer reads this as a "yes" and washes all of your windows.
- You accept their performance (don't try to stop them from washing you windows) but do not plan to pay them, as you never said yes (this is "unjust enrichment").
79
The remedy for unjust enrichment is...
quantum meruit
("the amount one deserves")
In most cases, it denotes a claim for a reasonable sum in respect of services supplied to the defendant.
80
Capacity as a matter of law is also known as...
infancy.
81
What is the rule on voidability of a contract as it pertains to infancy?
A contract is voidable at the option of the INFANT, not the adult!
82
If an infant is in a contract, since it's voidable, they have two options:
- ratification
- disaffirmance
83
If an infant chooses to ratify their contract, what does this mean?
They choose to remain in it / continue to be contractually bound by it.
84
True or False: The ratification of a contract for an infant can be express or implied.
TRUE!
For example, they could call the car dealership and say that you intend to be bound by the terms (express) OR
they could make the next car payment / continue performance accordingly (implied).
85
If an infant chooses to disaffirm their contract, what does this mean?
They can back out available to a certain reasonable time after reaching the age of majority.
86
In order for an infant to successfully disaffirm a contract, what must be true?
- must be communicated to the other party
- must be clear + unequivocal
- must return "as much of the consideration as the infant has" as possible
87
What is the exception to an infant disaffirming a contract?
necessaries!
These include things like food, clothing, shelter. If a court determines that it's for something necessary, the infant cannot negate it.
88
Infancy must be used as a _______, not a _________.
shield, not a sword
89
True or False: The law states that you deal with an infant at your own peril.
TRUE
90
What is the burden of proof for a criminal case?
beyond a reasonable doubt
91
What is the burden of proof for a civil case?
mere preponderance
92
What is the burden of proof for a fraud case?
clear and convincing
93
What are issues of capacity as a matter of fact?
- intoxication
- insanity / mental impairment
94
In order for intoxication to be a defense, you must be intoxicated...
"beyond all reason and understanding."
95
Under insanity / mental impairment, "competence" is considered to be...
a very low standard; able to understand contract obligations
96
True or False: Personal services contracts will not survive lack of competence.
TRUE
97
True or False: Financial services contracts will not survive lack of competence.
FALSE
98
Agreement is comprised of...
OFFER and ACCEPTANCE
99
The offeror
makes the offer.
100
The offeree
accepts / denies the offer.
101
True or False: Rejection of the offer by the offeree automatically terminates it.
TRUE
102
If you change impose new conditions change on the original terms of the offer, does that count as an acceptance?
NO! That is a rejection and counteroffer.
103
A seller and buyer who frequently do business together agree in advance on the terms and conditions that will apply to all transactions subsequently conducted electronically. This is called a...
partnering agreement
104
What must be true in order for there to have been consideration?
1. something of legally sufficient value must be given in exchange for the promise
2. there must be a bargained-for exchange
105
What does the doctrine of freedom have to do with consideration?
According to the doctrine of freedom, the fairness of the bargain ("Are the items exchanged of equal value?") is up to the parties to decide; they are free to bargain as they wish.
106
Promises that are without consideration and unenforceable because the promisor has not definitely promised to do anything are...
illusory promises.
107
In this type of contract, the buyer and seller agree that the buyer will purchase from the seller all of the goods of a designated type that the buyer needs.
a requirements contract
108
In this type of contract, the buyer and seller agree that the buyer will purchase from the seller all of which the seller produces.
an output contract
109
In a release...
one party forfeits the right to pursue a legal claim against the other party.
110
What is the difference between promissory estoppel and a quasi-contract?
Promissory estoppel -- promise made
Quasi-contract -- no promise made at all
111
In both promissory estoppel and a quasi-contract...
the court imposes contractual obligations without the existence of a contract
112
A contract has lawful purpose if...
the subject matter of the contract is legal.
113
What are some examples of illegal contracts?
crime, gambling, usury, restraint of trade
114
What is a covenant not to compete?
When a company prevents you from working for a competitor after you leave.
115
What is another option a company could impose in place of a covenant not to compete?
an NDA (non-disclosure agreement)
This bars an individual from disclosing confidential or proprietary information FOREVER.
116
If you're court-ordered to disclose something after having signed an NDA, you can get a __________ to protect you.
subpoena
117
Name characteristics of contracts that are unenforceable.
- the terms are unconscionable (manifestly unfair)
- people give up legal rights
- terms are unreadable or not adequately communicated
- inequality of bargaining power
- contract is discriminatory
118
True or False: Monopolies and oligopolies are illegal.
FALSE
119
Under *mistakes, fraud, and voluntary consent*, what is a unilateral mistake?
a mistake made by one party
120
What is the general rule for unilateral mistakes?
no right to relief
121
Under *mistakes, fraud and voluntary consent*, what is a bilateral mistake?
both parties are wrong about some aspect of the contract
122
What is the general rule for bilateral mistakes?
either party can get a rescission of the contract
123
What is "rescission" versus "status quo ante?" Why does it matter in the context of bilateral mistakes?
"rescission" = undoes the contract
"status quo ante" = must be restored how it was prior to the contract
If you can't get it status quo ante, then you can't get rescission. You have to settle for damages instead.
124
Under *mistakes, fraud and voluntary consent*, what is innocent misrepresentation?
the person believes the statement to be true, doesn't know it's false and would have no reason to know
125
What is the general rule for innocent misrepresentation?
the non-mistaken party cannot seek damages, but they can get rescission or reformation
126
Under *mistakes, fraud and voluntary consent*, what is negligent misrepresentation?
false statement of fact, the speaker doesn't know the information is false but the law says that because of your position or expertise you should know
127
Negligence =
duty to know
128
What is the remedy for negligent misrepresentation?
rescission + damages
129
A false statement of fact that appears to be factual but isn't really true is...
misrepresentation
130
Under *mistakes, fraud and voluntary consent*, what is fraud?
false statement of material fact with the INTENT TO DECEIVE
131
The intent to deceive is also known as...
scienter
132
True or False: Silence can be fraud, but only if there is a duty to speak.
TRUE
133
True or False: For it to be rendered as fraud, there must be a statement of fact (not opinion).
TRUE
134
What is the general rule for fraud?
You can rescind the contract (get rescission)
135
Under *mistakes, fraud and voluntary consent*, what is undue influence?
manipulation of a personal or intimate relationship or a relationship of trust for personal gain
136
A relationship of trust is also known as __________.
fiduciary
137
Name examples of fiduciary.
- guardian / conservator
- power of attorney
- trustee
- attorney
- broker / financial adviser
- officer
- director
- manager
138
You have a presumption of undue influence if you have...
fiduciary duty + personal gain
139
What is the general rule for undue influence?
If you can prove undue influence, the contract can be rescinded and you can get damages.
140
Under *mistakes, fraud and voluntary consent*, what is duress?
the use of threat of illegal force or harm
141
What are examples of duress?
blackmail, extortion, threat of violence
142
What is the general rule for duress?
rescind the contract
143
Contractual capacity is the same thing as...
competent parties.
144
Lawful purpose is the same thing as...
legality.
145
In almost all states, the state of majority is...
18 years old.
146
Minority status may be terminated in some states by...
- marriage
- emancipation
147
As a minor, the legal avoidance of a contractual obligation is...
disaffirmance.
148
As a minor, the act of accepting and giving legal force to an obligation that previously was not enforceable is...
ratification.
149
When a loan is made at an interest rate above the lawful maxim, that's called...
usury.
150
Contracts that are "contrary to public policy" mean that they're...
technically private but involve acts that would negatively impact society (such as selling a child).
151
What is procedural unconscionability?
inconspicuous print, legalese, one party's lack of opportunity to read the contract or ask questions about its meaning
152
What is substantive unconscionability?
occurs when contracts, or portions of contracts, are oppressive or overly harsh
153
What do exculpatory clauses do?
They release a party from liability in the event of monetary or physical injury no matter who is at fault
examples: health clubs, amusement parks, etc.
154
In general, illegal contracts are...
VOID!
- The court deems it never to have existed.
- The court doesn't aid either party.
155
LOOK AT WHAT HAPPENED IN THE HALLMARK CASE
156
What is the most common remedy for breach of contract?
damages!
157
How to calculate compensatory damages?
(what you would have paid)
-
(what you actually paid)
158
This type of damages for breach of contract includes direct losses and costs caused by the breach.
compensatory damages
159
This type of damages for breach of contract is foreseeable before the breach occurs.
consequential damages
160
Lost wages are an example of...
consequential damages
161
This type of damages for breach of contract is often considered non-economic damages.
punitive damages
162
True or False: Punitive damages are almost never available in contract cases.
TRUE
163
True or False: Punitive damages are almost never available in tort cases.
FALSE - They're almost always available in tort cases.
164
This type of damages for breach of contract is damages "in name only."
nominal damages
165
What are nominal damages?
in name only
Conduct was wrongful but little-to-no actual economic loss occurred.
166
This type of damages for breach of contract are a provision put in the contract as an estimated monetary amount.
liquidated damages
167
"If you breach, it will cost us $$."
This is an example of a provision of...
liquidated damages
168
What are the possible equitable remedies?
r-r-rizz!
rescission
reformation
restitution
injunction
specific performance
169
This type of equitable remedy rescinds the contract, undoes it, nullifies it.
rescission
170
This type of equitable remedy restores "status quo ante."
rescission
171
This type of equitable remedy states that the parties must return property that was exchanged.
restitution
172
This type of equitable remedy allows courts to rewrite or complete the contracts in accordance with the parties' actual intent.
reformation
173
When is reformation available?
when a contract is incomplete, vague, or ambiguous
174
This type of equitable remedy is the ability to reclaim property that another party has.
replevin
175
This type of equitable remedy directs a party to follow some sort of action.
injunction
176
This type of injunction orders someone to do something.
mandatory
177
A mandatory injunction...
orders for someone to do something
178
Specific performance is also considered a...
mandatory injunction
179
This type of injunction tells someone to cease doing something.
prohibitory
180
True or False: Injunctions are never available for personal service contracts.
TRUE
You can't force someone to do something well.
181
In quasi-contract language, if the other party doesn't have the opportunity to reject the performance, that's called...
officious intermeddling
182
What is the acronym to remember which types of contracts have to be in writing?
SMILE $500
Surety
Marriage
1 year
Land
Executor
$500
183
The "S" in SM1LE $500 stands for...
Surety
184
Surety is when...
you have a contract to pay someone else's debts
185
True or False: In surety, you can go after the obligor / surety / guarantor whenever you want.
FALSE - You can only go after them if the primary first proves unable to pay.
186
For surety, obligation must be conditional. What is an example of this?
I will pay the debt IF he cannot pay.
187
The "M" in SM1LE $500 stands for...
Marriage
188
The marriage contracts in SM1LE $500 refer to contracts...
by which you are prompted or induced by a marriage.
189
True or False: The marriage contracts in SM1LE $500 refer to contracts necessary to get married.
FALSE - They refer to contracts by which you are prompted or induced by a marriage, such as prenuptial agreements.
190
The "1" in SM1LE $500 stands for...
1 year
191
The 1 year in SM1LE $500 means that...
contracts that cannot be performed in one year must be in writing.
192
The "L" in SM1LE $500 stands for...
Land
193
The Land in SM1LE $500 means that...
contracts that convey an interest in land must be in writing.
194
What does "land" actually mean in law?
The physical land itself and fixtures of the land
195
For "fruits of the land," what is the rule?
- if cut or harvested, = personal property
- if the tree is physically on the property, = land
196
The "E" in SM1LE $500 stands for...
Executor
197
The Executor in SM1LE $500 means that...
contracts that make a conditional promise to pay the debts of someone else if they die must be written.
198
What do state intestacy laws do?
Determine how your property is going to be distributed after your death.
199
The "$500" in SM1LE $500 means that...
contracts for the sale of goods over $500 must be written.
200
True or False: The $500 in SM1LE $500 refers to both goods and services.
FALSE - Goods, not services!
201
When will courts enforce an oral contract for the sale of goods?
- part of the goods have already been accepted by the buyer
- the buyer has already paid part of the purchase price
- the party admits there's a contract
- the goods are custom-made
202
What is the "parole evidence rule?"
When there is a written contract, oral agreements that preceded the written agreement cannot be introduced into evidence.
203
Someone who is bound by a contract must either:
1. PERFORM according to the terms of the agreement, or
2. argue that performance has been EXCUSED
204
Once a party has performed in a contract, their duties are...
"fully discharged"
205
If there are conditions precedent, then...
a contract cannot be come into existence before certain actions take place.
206
If there are conditions subsequent, then...
a contract that has already come into existence will be negated by the trigger of certain actions.
207
"If the house passes inspection, we will buy it."
This is an example of...
conditions precedent
208
"You are employed at a law firm. If you do not pass the bar exam, your employment will be terminated."
This is an example of...
conditions subsequent
209
In this way to discharge a contract, the contract is performed 100% to each party's satisfaction.
complete performance
210
True or False: There is no breach of contract in complete performance.
TRUE
211
In this way to discharge a contract, something less than absolute performance is completed, but it still satisfies the contract provisions.
substantial performance
212
True or False: There is no breach of contract in substantial performance.
TRUE
213
What is the remedy for substantial performance?
Damages are okay, only for the difference in value between what was contracted for and what was received.
214
In this way to discharge a contract, there is a new agreement created and the performance of the new agreement.
accord and satisfaction
215
In accord and satisfaction, the "accord" refers to...
the creation of a new agreement
216
In accord and satisfaction, the "satisfaction" refers to...
the performance of the new agreement
217
True or False: In satisfaction, the old obligation is discharged and the new one is performed.
TRUE
218
True or False: There is no breach of contract in accord and satisfaction.
TRUE
219
In this way to discharge a contract, one announces in advance that they will not perform a contract.
anticipatory repudiation
220
What are the options that the non-repudiating party has in the instance of anticipatory repudiation?
- wait to see if the other party will perform
- find (immediately!) another party to perform
- treat repudiation as final and sue for breach
221
True or False: There is no breach of contract in anticipatory repudiation.
FALSE - the breaching hasn't taken place yet, but it will
222
In this way to discharge a contract, you agree to release someone else from a contract and accept someone else's performance instead.
novation
223
In this way to discharge a contract, the contract will be breached and the parties know it so they opt to negotiate outside of court instead of going to litigation.
settlement
224
True or False: There is no breach of contract in settlement.
FALSE
225
In this way to discharge a contract, there is no way the contract could have been performed anymore.
impossibility of performance
226
In impossibility of performance, what is objective impossibility? Name examples.
NO ONE could perform the contract due to an unforeseeable supervening event or unexpected hardship.
- egg seller, all the birds have bird flu
- storm
- war
- act of terrorism
- death
- disability
227
What is the contract language for objective impossibility?
"Act of God," vis major, force majere
228
In impossibility of performance, what is supervening illegality? Name an example.
The contract becomes illegal and both parties are released.
- bars / alcohol sellers after Prohibition
229
In impossibility of performance, what is commercial impractiability?
Something happens that makes performance much more difficult.
230
In impossibility of performance, what is commercial frustration? Name an example.
Something happens outside the control of either party, but within the control of someone else.
- sporting event canceled due to a baseball strike
231
True or False: There is no breach of contract in impossibility of performance.
FALSE
232
In this way to discharge a contract, there is a failure to meet the fundamental terms of agreement.
breach
233
Breach is often purely what kind of decision?
economic
234
True or False: For breach of contract, the remedies are economic, NOT punitive.
TRUE
235
What is the non-breaching party obligated to do in the case of a breach?
Mitigate their losses
236
The Uniform Commercial Code was originally based upon which statute?
New York's Negotiable Instrument Law
237
A contract where both parties have promised to perform is called a ___________ contract, whereas a contract where one party performs and the other party has promised to perform is known as a _____________ contract.
bilateral ; unilateral
238
A contract where neither party has performed yet is known as a/an ____________ contract. A contract where only one party has performed but the other party has yet to perform is considered partially ____________. A contract where both parties have fully performed is considered fully ____________.
executory ; executed ; executed
239
Principles of contract interpretation:
The principle whereby a court will interpret a contract (or a part thereof) according to what is rational or commonly understood.
objective theory of contracts
OR
reasonable person standard
240
Principles of contract interpretation:
The principle whereby a court will interpret a contract (or a provision thereof) by looking at how the parties have interacted with each other on previous agreements
course of dealing
241
Principles of contract interpretation:
The principle whereby a court will interpret a contract (or a provision thereof) by examining how the parties have interacted with each other on the contract that is now in dispute
course of performance
242
Principles of contract interpretation:
The principle whereby a court will interpret a contract (or a part thereof) by examining how the issue in dispute is typically done in the relevant industry
usage of trade
243
Principles of contract interpretation:
The principal whereby the court will be permitted to strike any provision or part of a contract that is illegal or unconscionable, while leaving the rest of the contract intact and enforceable
severability principle
OR
"blue pencil" doctrine
244
Principles of contract interpretation:
The principle whereby a court will interpret a contested provision of a contract by looking at the meaning of the contract as a whole
integrated document rule
245
Principles of contract interpretation:
The principle whereby a court will choose between two contested interpretations of a contract (or a provision thereof) by accepting the interpretation of the party who did not write the agreement
construction against the drafter
246
Which of the following are generally NOT considered to be offers? (Choose all that apply, but remember that incorrect answers will result in point deductions.)
a. Solicitations to commence bargaining
b. A promise to hold an offer open
c. Advertisements
d. Expressions of opinion
e. Statements of future intent
a, c, d, and e
247
True or False: An offer can be revoked by the offeror at any time before the offeree accepts it.
TRUE
248
An acceptance which attempts to change the terms of an offer is really a/an [____].
rejection and counteroffer
249
Which of the following statements is true regarding acceptance and revocation?
a. Acceptance is effective when mailed, but revocation is not effective until is it received.
b. Revocation is effective when mailed, but acceptance is not effective until it is received.
c. Both acceptance and revocation are effective when mailed.
d. Neither acceptance nor revocation are effective until they are received.
a. Acceptance is effective when mailed, but revocation is not effective until is it received.
250
True or False: Under the Uniform Commercial Code, as opposed to common law, the acceptance must be the "mirror image" of the offer, or else it is ineffective.
FALSE
251
The Uniform Electronic Transactions Act is:
a. a state statute that makes electronic contracts and electronic signatures enforceable.
b. a federal statute that makes electronic contracts and electronic signatures enforceable.
c. an international convention that makes electronic contracts and electronic signatures enforceable.
d. a U.S. Supreme Court decision that makes electronic contracts and electronic signatures enforceable.
a. a state statute that makes electronic contracts and electronic signatures enforceable.
252
True or False: E*SIGN is a federal statute that was written to preempt the Uniform Electronic Transactions Act.
FALSE
253
Which of the following is a slang term for the electronic contract (sometime called an "end user licensing agreement," or "EULA") that you enter into when you download software?
a. a "shrinkwrap" agreement
b. a "clickwrap" agreement
c. a "clickbait" agreement
d. a "shrinkclick" agreement
b. a "clickwrap" agreement
254
Which of the following statements is true of acceptance? (Choose all that apply, but remember that incorrect answers will result in point deductions.)
The offeror controls the terms of acceptance.
The offeree controls the terms of acceptance.
Silence cannot equal acceptance.
Silence may equal acceptance if the offeror states so specifically in the offer.
If no method of acceptance is specified by the offeror, then the offeree may choose any means reasonably calculated to reach the offeror.
If no method of acceptance is specified by the offeror, then the offeree must choose the method which is best calculated to reach the offeror.
Acceptance requires state of mind plus communication to the offeror.
If acceptance and revocation pass in the mail, whichever was sent first will control.
If acceptance and revocation pass in the mail, the acceptance will control.
The offeror controls the terms of acceptance.
Silence cannot equal acceptance.
If no method of acceptance is specified by the offeror, then the offeree may choose any means reasonably calculated to reach the offeror.
Acceptance requires state of mind plus communication to the offeror.
If acceptance and revocation pass in the mail, the acceptance will control.
255
The rule that courts will look only to whether or not consideration exists is sometimes called the:
"mere peppercorn" theory
256
Barbara and Jamir have entered into a contract whereby Barbara has agreed to buy Jamir's car for $13,000. Before she takes possession of the vehicle or pays Jamir anything, however, Aleesha offers Jamir $15,000 to buy his car. If Jamir tells Barbara, "I will still sell you the car if you match Aleesha's offer," which of the following statements is true? (Choose all that apply, but remember that incorrect answer options will result in point deductions.)
Jamir may accept Aleesha's offer since Barbara has neither paid for the car nor taken possession of it.
Jamir must give Barbara the opportunity to match Aleesha's offer before he sells the car to Aleesha.
Jamir may not ask Barbara to pay an additional $2000 because of the pre-existing duty rule.
If Jamir sells the car to Aleesha at the higher price, he has breached his contract with Barbara.
Jamir may not ask Barbara to pay an additional $2000 because of the pre-existing duty rule.
If Jamir sells the car to Aleesha at the higher price, he has breached his contract with Barbara.
257
Please match the statements below with the correct equitable remedy: either promissory estoppel or quasi-contract.
- detrimental reliance
promissory estoppel
258
Please match the statements below with the correct equitable remedy: either promissory estoppel or quasi-contract.
- unjust enrichment
quasi-contract
259
Please match the statements below with the correct equitable remedy: either promissory estoppel or quasi-contract.
- unequivocal promise
promissory estoppel
260
Please match the statements below with the correct equitable remedy: either promissory estoppel or quasi-contract.
- person performs believing there to be a contract
quasi-contract
261
Please match the statements below with the correct equitable remedy: either promissory estoppel or quasi-contract.
- remedy is quantum meruit
quasi-contract
262
Please match the statements below with the correct equitable remedy: either promissory estoppel or quasi-contract.
- remedy is enforcement of the promise
promissory estoppel
263
Please match the statements below with the correct equitable remedy: either promissory estoppel or quasi-contract.
- person promising either knows or should have known that the other party would rely on the promise
promissory estoppel
264
Please match the statements below with the correct equitable remedy: either promissory estoppel or quasi-contract.
- there is no remedy if the person against whom relief is sought had no opportunity to reject the performance
quasi-contract
265
When looking at contractual competence, competence based on age is capacity as a matter of ________, while competence based upon mental state is capacity at a matter of ________.
statute / statutory law
fact
266
Contracts in restraint of trade are
a. examples of electronic contracts.
b. disfavored by the courts.
c. governed exclusively by state law.
d. enforceable as long as both parties have signed them.
b. disfavored by the courts.
267
True or False: Intoxication is generally considered to be a defense to a contract.
FALSE
268
Please identify all of the following statements that accurately describe infancy in contract law. (Choose all that apply, but remember that incorrect answers will result in point deductions.)
An infant can generally disaffirm most contracts at any time before reaching the statutory age of majority.
An adult, upon discovering that (s)he has entered into a contract with an infant, can disaffirm the contract before the infant reaches the statutory age of contractual majority.
"Infant" means the same as "minor."
Disaffirmance is a remedy that is essentially identical to rescission.
An infant can generally disaffirm most contracts at any time before reaching the statutory age of majority.
