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Flashcards in Mod 26 Contracts Deck (119):
0

Contract

An agreement, a meeting of minds

1

Six Elements of a contract neumonic

Only
Accuracy
Can
Pass
Law
Candidates

2

Six elements of a contract (Only Accuracy Can Pass Law Candidates)

1 an Offer
2 an Acceptance
3 Consideration
4 Proper form
5 a Lawful object
6 two or more Competent parties

3

Elements of a contract:

Proper form

Sometimes writing is required

4

Offers have 3 elements

Must be...

1 Seriously intended

2 communicated

3 definite in its terms

5

Offer element:

Must be seriously intended

Would a reasonable man consider it a serious offer

6

Offer element:

Must be communicated...

By either words or actions

7

Offer element:

Must be definite in its terms

Must include price

8

Advertisements and price quotes are not official offers, they are...

Invitations to deal

9

Acceptances have 3 elements

1 must be unconditional

2 must be communicated

3 can only be accepted by party to whom it's made

10

Element of Acceptances:

Must be unconditional

Must comply with all of offeror's terms or it's a counteroffer

11

Element of Acceptances:

Must be communicated by...

Actions or words

12

The following 3 will end offers only when they are received

1 counteroffers

2 rejections

3 revocations

13

Counteroffers end offers but are...

Effective only when received

14

Rejections end offers but are only effective when...

Received

15

Revocations end offers but are effective only when received. Offeror may usually...2

1 Revoke any time before acceptance

2 even if offeror promises offer Will be open

16

Option Contracts are...

Why?

Irrevocable

Party pays consideration to keep offer open

17

In UCC Sales Firm Offers are irrevocable without consideration if made by...3

1 merchant

2 in writing and

3 guarantees offer will be held open

18

Offers end at...

Time stated

19

If no time is stated for end of an offer, the offer...

Ends at reasonable time

20

What 2 things end offers immediately, but do not end most contracts?

1 death

2 insanity

21

Destruction of subject ends...

Offer immediately

22

Sale of subject only revokes offer when...

Offeree learns of it, not when it is sold

23

Mailbox rule 3 (1 and and 2 ors)

1 an acceptance is valid when sent if properly addressed and

2 offered uses express means of communication or

3 any reasonable means if none is stated

24

Offeree uses express means of communication, what does this mean?

Means offeror said to use

25

Any reasonable means if none is stated, what does this mean?

Same means offeror used or faster means

26

If offer states acceptance net effective until received then it's...

Not effective until received

27

If offer states you must use a specific means of communication, you must...

Use that means

28

Bilateral contract

Promise for a promise (most contracts are bilateral)

29

Unilateral contract

Promise for an act (a reward)

30

Under a unilateral contract, which is a promise for an act (a reward), the offeree must...

Know of reward to accept

31

Void, define, example

Contract is unenforceable by either party

Ex. Illegal, no meeting of minds

32

Voidable, define , example

Legal contract but one party can rescind (cancel, disaffirm)

33

Consideration

Giving up of legal right

34

Consideration must be present...

For both parties

35

Considerations must be...

Mutually bargained for and legally sufficient

36

There is no requirement that the consideration be...

Of equal value

37

2 cases where consideration is not present

1 past consideration is no good

2 no consideration when party is contractually obligated to perform

38

No consideration is needed on a promise to...

Donate to charity

39

Illegal contracts are...

Why?

Void, courts won't aid either party

40

Failure to have required license makes...

All contracts void

41

Failure to have required license makes all contracts void.

What's the exception?

Contract not void if license was a mere revenue raising measure

42

Neumonic for 6 types of contracts requiring some kind of writing to be enforceable

GRIPE + Marriage

43

6 types of contracts where writing required to be enforceable, under GRIPE + Marriage

1 Goods over $500
2 Real Estate Contracts
3 Impossible contracts to perform in one year
4 Promise to answer debt of another
5 Executor's promise to be liable for debt of estate
6 Marriage contracts

44

Written contract:

Sale of Goods of $500 or more must...

State quantity

45

Written contract:

Contracts Impossible To perform in 1 year, begin measuring from...
2) When is it not?

When contract is made (not when performance begins)

46

Written contract:

Promise to answer debt of another example

Guarantor

47

Written contract:

Marriage contract example

Pre nup

48

Any type of writing that states the major terms can satisfy the Statute of Frauds, need...

2) But is enforceable...

Only be signed by 1 party

2) against the one who signed

49

Any type of writing that states the major terms can satisfy the Statute of Frauds, the terms can be stated in...

More than one document

50

Exceptions to the Statute of Frauds- no writing required even though one of six types...3

1 contract fully performed by both parties (executed)
2 contract impossible to perform in one year and one party has
fully performed
3 oral real estate deals are enforceable if buyer is in possession
And has made substantial down payment or improvements

51

Competent parties:

Minors cannot disaffirm...2

Real estate contracts or necessary contracts

52

Competent parties:

To disaffirm the minor need only...

Return what they possess or control at that time

53

Competent parties:

Minor can ratify contract after...

2) but must ratify...

Becoming and adult

2) entire contract

54

Competent parties:

Minor can disaffirm a contract but is liable for...

Torts (minor lies about age)

55

3 types of competent parties

1 minors

2 drunks

3 the insane

56

Competent parties:

Drunks can disaffirm only if...

Incapable of understanding what they did

57

Competent parties:

Insane can usually disaffirm, but once adjudicated insane...

All future contracts are void

58

Most mistakes have...

No effect on contract

59

Most mistakes have no effect on contract. 2 exceptions

1 mutual mistakes of material fact make contract void

2 material unilateral mistakes, one may disaffirm only if other party knew or should have known mistake was being made

60

Duress

Forcing someone into contract by threat of violence, economic destruction or criminal action

61

Duress makes a contract...

Voidable

62

Undue influence is...

Using a position of love, confidence or affection to overcome
another's free will in contract

63

Undue influence makes a contract...

Voidable

64

5 elements of actual fraud neumonic

MS RID

65

5 element of fraud MS RID

Material Misrepresentation of fact
Scienter
Reasonable Reliance
Intent to rely
Damages

66

elements of fraud, MSRID:

M 2

1 Must have Material Misrepresentation of fact or deliberate
concealment

2 must be a fact, opinions don't count unless given by expert

67

elements of fraud, MSRID:

S

Must have Scienter, an intent to deceive

68

elements of fraud, MSRID:

R

Must have Reasonable Reliance, victim must justifiably rely on misrepresentation

69

Constructive Fraud or Gross Negligence neumonic

2) what is different from actual fraud?

MR RID

Actual fraud has Scienter, while constructive fraud has reckless disregard for the truth

70

Reckless disregard for the truth

Making a statement without knowing if it is true or false

71

Fraud in the execution is void

Injured party did not know a contract was made

72

Fraud in the inducement is voidable

Injured party knows he made a contract, but one or mor terms is misrepresented

73

Innocent Missrepresentation, neumonic

2) the 4 elements of innocent Missrepresentation do not include

MR ID

2) Scienter it reckless disregard for truth

74

Under innocent misrepresentation, the injured party can...

Only rescind and cannot sue for money damages

75

5 elements under Constructive Fraud

Material Misrepresentation of fact
Reckless disregard for truth
Reasonable reliance
Intent to rely
Damages

76

4 elements of innocent misrepresentation

Material misrepresentation of fact
Reasonable reliance
Intent to rely
Damages

77

When evidence is inadmissible under the patrol evidence rule 2

1 evidence (oral or written) contradicting written contract is inadmissible in court

2 evidence must have occurred prior to or contemporaneous with writing

78

When evidence is admissible under the parol evidence rule, neumonic

FAME

79

When evidence is admissible under the parol evidence rule.

Can always introduce evidence of...4

Fraud or illegality
After the writing (took place after writing)
Mistakes
Explain the writing or clear up ambiguities

80

Third Party Beneficiary Contracts where A&B make contract intending to benefit third party:

Donee beneficiary

Someone you make a gift to

81

Third Party Beneficiary Contracts where A & B make contract intending to benefit third party:

Creditor beneficiary

May sue either A or B if there is a breach

82

Third Party Beneficiary Contracts where A&B make contract intending to benefit third party:

Incidental beneficiary

Not in contract so gets no rights under contract

83

Third Party Beneficiary Contracts where A&B make contract intending to benefit third party:

Donne beneficiary can only sue...

Original promisor

84

Original promisor

Person paid to deliver gift to donee beneficiary

85

Most contract rights can be...

2) most duties can be...

Assigned

2) delegated

86

An assignment or delegation does not usually require a...

Writing or consideration

87

Assignment of all rights is usually interpreted as...

Both an assignment and delegation

88

4 types of contracts that cannot be assigned or delegated (cannot assign if PIPI)

1 personal service contracts call for special skill
2 increase risk or alter performance materially
3 prohibited by contract or law
4 insurance contracts can't be assigned

89

Exception for assigning a contract prohibited by law

Can assign right to receive money even if prohibited by contract

90

Assignee gains all of...

All of assignor's rights and all his liability

91

Assignee gains all of assignor's rights and all his liability. If there is a breach...

Both assignee and assignor are liable

92

Assuming a mortgage define

Buyer purchases land already encumbered by a mortgage

93

Assuming a mortgage, 2 things that occur

1 buyer agrees to take over mortgage and buyer is liable for
mortgage

2 seller (original mortgage) is still liable for mortgage

94

Buying Subject to Mortgage

Buyer purchases land encumbered by a mortgage

95

Buying Subject to a Mortgage, 3 things happen

1 buyer doesn't agree to take over mortgage an isn't liable

2 seller (original mortgager) is only one liable for mortgage

3 buyer runs risk of foreclosure if seller doesn't pay

96

Discharge by Novation

Parties agree to replace 1 side of contract with new party

97

Discharge by Novation, 2 things creditor does

1 Creditor agrees to release old party

2 creditor agrees only to look to new party for performance

98

Discharge by breach

Material breach by one side releases other from performing

99

3 types of discharge of material breach

1 prevention of performance

2 anticipatory repudiation

3 doctrine of substantial performance

100

Prevention of performance is...

A material breach and discharges other party

101

Anticipatory repudiation define

1 party before time of performance repudiates contract

102

Anticipatory repudiation, what may injured party do...2

1 sue immediately or

2 wait until time for performance and then sue if there is a breach

103

Doctrine of Substantial Performance involves an...2

1 Unintentional but minor breach

2 breaching party may still recover but subtract damages for the
minor breach

104

Impossibility of performance will...

Release both parties from performance

105

Impossibility of performance 2 examples

1 death of party to perform services in personal service contract

2 destruction of subject matter of contract

106

Accord and satisfaction

Parties agree to change a contract by substituting performance

107

Accord is the agreement to...

Change performance (usually to pay lesser amount)

108

Satisfaction is...2

1 Satisfactory completion of the accord,

2 no discharge until satisfaction

109

Statute of Limitations does not discharge the contract, it is merely...

A bar to judicial remedies

110

Statute of limitations is always measured from...

The date of the breach

111

How many years is the Statute of Limitations for contracts? Sales?

Contracts = 6 years from breach

Sales = 4 years from breach

112

Compensatory damages are an...

Award of money to compensate for any and all harm done

113

Punitive damages are rarely awarded in...

Contracts or in sales

114

Specific performance define

party sues for a court order that other side specifically perform

115

Specific performance can only be used with...

Unique property and never in personal service contracts

116

Specific performance:

A party does not usually receive...

Specific performance and compensatory damages

117

Liquidated damages 2

1 parties agree in advance what damages will be in there is a
Breach

2 damages must be reasonable to the damage actually done and
Not a penalty

118

Rescission

Cancel the contract and restore the parties to their former position

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