Practice Exam 2 Halpern Flashcards
(40 cards)
A bilateral contract is commonly defined as a promise in exchange for a promise.
T or F?
True
Implied contracts are created by written or spoken words.
T or F?
False
A contract that is valid is never unenforceable.
T or F?
FALSE
A contract can be valid (meaning it meets all the basic requirements of a contract) but still be unenforceable under certain circumstances. Examples include:
Statute of Frauds: If a contract is required to be in writing (e.g., real estate contracts) but is only oral, it may be unenforceable.
Statute of Limitations: If too much time has passed, a valid contract may no longer be legally enforceable.
Illegality: A contract that was valid when made could become unenforceable if laws change and make it illegal.
Unconscionability: A court may refuse to enforce a valid contract if it is excessively unfair.
Thus, a valid contract is not always enforceable.
Which of the following means that a contract cannot be illegal or against public policy?
Agreement
Consideration
Contractual capacity
Legal object
Mutual assent
Legal Object
Jacquelyn accepts Monique’s offer to sell her a used car for $2,000. At what point is there a binding contract between the two parties?
When Jacquelyn and Monique make the agreement
When Jacquelyn pays Monique the $2,000
When Monique delivers the car to Jacquelyn
Three business days after Jacquelyn accepts delivery of the car
Three calendar days after Jacquelyn accepts delivery of the car
When Jacquelyn and Monique make the agreement
Which of the following contracts are usually voidable?
Contracts entered into as a result of fraud
Contracts entered into as a result of duress
Contracts entered into as a result of undue influence
Contracts entered into as a result of fraud or duress, but not undue influence
Contracts entered into as a result of fraud, duress, or undue influence
Contracts entered into as a result of fraud, duress, or undue influence
As long as some of the duties under a contract have not yet been performed, the contract is considered ________.
executory
executed
implied-in-law
implied-in-fact
illusory
Executory
Wishing to sell her used business law book, Inez calls Janice and tells her that if she does not hear from her within twenty-four hours, she will assume that Janice wishes to purchase the book for $50. After the expiration of twenty-four hours, which of the following is correct regarding the status of the proposed book sale?
There is no contract because silence, as a general rule, cannot be used to form a contract.
There is no contract because the offer was not made in person.
There is no contract because the offer was not made in writing.
Janice can avoid the legal recognition of a contract, but only if she can prove by a preponderance of the evidence that she did not hear about the offer before the stated expiration time.
Janice can avoid the legal recognition of a contract, but only if she can prove beyond reasonable doubt that she did not hear about the offer before the stated expiration time.
There is no contract because silence, as a general rule, cannot be used to form a contract.
A court will enforce one party’s promise even if the other party did not promise something in exchange.
T or F?
FALSE
In general, a court will not enforce a one-sided promise unless there is consideration—meaning both parties must promise or give something of value in exchange. This is a fundamental principle of contract law.
Exceptions:
There are a few rare circumstances where a court might enforce a promise even without an exchange:
Promissory Estoppel – If one party reasonably relied on a promise to their detriment, a court may enforce the promise to prevent injustice.
Unilateral Contracts – If one party makes a promise that can only be accepted by performance (e.g., a reward for finding a lost dog), the promise may be enforced once the action is completed.
Forbearance is the promise to engage in a particular activity.
T or F?
FALSE
Forbearance = Refraining from doing something that one has a legal right to do
Suppose that Eduardo agrees to purchase Caleah’s car for $10,000. Eduardo’s payment of $10,000 is the ________ Caleah will receive for her car.
consideration
offer
conditional offer
invitation to negotiate
forbearance
consideration
Greg promises Carlos that he will stop smoking for two (2) years, if Carlos promises to pay him $5,000. Greg’s promise is considered ________.
forbearance
past consideration
an illusory promise
a preexisting duty
promissory estoppel
FORBEARANCE
refraining from doing something he has the legal right to do
Most contracts require that both parties give consideration in a contract. Which of the following is an exception to that rule?
Promissory estoppel
Forbearance
A unilateral contract
A bilateral contract
A real estate contract
Promissory Estoppel
Promissory estoppel is an exception to the requirement that both parties must provide consideration in a contract. Under this legal principle, a party can be held to a promise even without consideration if:
A promise was made.
The promisee reasonably relied on the promise.
The reliance caused significant detriment.
Enforcing the promise is necessary to prevent injustice.
This prevents one party from going back on a promise when the other party has relied on it to their detriment.
Caterer and Bride agree that Caterer will cater Bride’s wedding for $20 per plate. On the day of the wedding, Caterer determines that she needs more money and informs Bride that the price is now $25 per plate. Desperate, Bride agrees. Is the $25-per-plate contract modification enforceable?
Yes, since Bride agreed to the new $25-per-plate price
Yes, since Bride could have counteroffered but declined to do so
No, since the modification is based on an illusory promise
No, since promissory estoppel automatically prohibits the modification
No, since Caterer had a preexisting duty to Cater the wedding for $20 per plate
No, since Caterer had a preexisting duty to Cater the wedding for $20 per plate
Courtney, who does not keep up with the price of current technology, agrees to buy a used computer from Jake for $2,500. Later, Courtney’s friend Brice tells Courtney that she made a terrible deal and that she could get a better, new computer for no more than $1,000. Courtney tells Jake that she is not giving him any money because he has not been fair to her in terms of the computer price. What is the most likely result if Jake sues Courtney alleging breach of contract?
Jake will win because the court will not weigh whether a good bargain was made
Contracts made with someone who has been adjudicated insane are void.
T or F?
True
A contract of an intoxicated person for necessaries will be enforced for the reasonable value of the necessaries.
T or F?
True
Which of the following is true regarding the ability of persons suffering from a mental illness to enter into a binding contract?
Persons suffering from a mental illness never have capacity to enter into a binding contract.
Persons suffering from a mental illness have full capacity to enter into a binding contract, so long as they do not present a danger to themselves or others.
Persons suffering from a mental illness have full capacity to enter into a binding contract, so long as they inform the other party that they are either in, or in the process of seeking, professional treatment.
Persons suffering from a mental illness may have full, limited, or no legal capacity to enter into a binding contract, depending on the nature and extent of their mental deficiency.
Persons who suffer from a mental illness always have full capacity to enter into a binding contract.
Persons suffering from a mental illness may have full, limited, or no legal capacity to enter into a binding contract, depending on the nature and extent of their mental deficiency
Which of the following is true regarding an agreement to commit a crime or a tort?
An agreement to commit a crime is enforceable, but an agreement to commit a tort is unenforceable.
An agreement to commit a tort is enforceable, but an agreement to commit a crime is unenforceable.
An agreement to commit a crime is unenforceable, and an agreement to commit a tort is unenforceable unless a business tort is involved, in which case the agreement is enforceable as an implied-in-fact contract.
An agreement to commit a crime is unenforceable except an agreement to commit a white-collar crime, which is enforceable as an implied-in-law contract; and an agreement to commit a tort is unenforceable unless a business tort is involved, in which case the agreement is enforceable as an implied-in-fact contract.
Both an agreement to commit a crime and an agreement to commit a tort are unenforceable.
Both an agreement to commit a crime and an agreement to commit a tort are unenforceable.
Which of the following involves overly harsh or lopsided substance in an agreement?
Substantive unconscionability
Adhesion conscionability
Procedural unconscionability
An exculpatory clause
An in pari delicto agreement
Substantive unconscionability
Substantive unconscionability refers to contract terms that are overly harsh, one-sided, or oppressive to one party. This typically involves terms that are so unfair that they “shock the conscience” of the court, such as extreme penalties, grossly unfair pricing, or provisions that heavily favor one party over another.
When a contract is void, it may be rescinded.
T or F?
FALSE
A void contract is invalid from the start and has no legal effect, meaning there is nothing to rescind. Rescission applies to voidable contracts, where one or both parties have the option to cancel the contract due to issues like fraud, misrepresentation, or undue influence.
Since a void contract was never legally binding, there is no need to rescind it—it simply cannot be enforced.
When both parties to a contract are mistaken about either a current or a past material fact, only the party who was first mistaken can choose to rescind the contract.
T or F?
False
Unilateral or mutual are two ways to classify which of the following in contract law?
Property
Performance
Duress
Mistake
Consideration
Mistake
In contract law, mistakes can be classified as unilateral or mutual:
Unilateral mistake: When only one party is mistaken about a material fact in the contract. Generally, the contract remains enforceable unless the other party knew or should have known about the mistake.
Mutual mistake: When both parties are mistaken about a fundamental fact in the contract. In such cases, the contract may be voidable because there was no true “meeting of the minds.”
George offers to sell Penelope a ring that George found in his yard. He and Penelope look at the ring and decide that they are not sure what it is, probably just a shiny stone. Penelope pays George $10 for the ring. The ring turns out to be a diamond worth much more than $10. George wants the ring back, and Penelope refuses. What is the most likely result?
Penelope must return the ring to George due to mutual mistake.
Penelope must return the ring to George due to unilateral mistake.
Penelope must return the ring to George due to the application of equitable principles.
Penelope may keep the ring unless George can establish that she was negligent in not recognizing the ring’s true value.
Penelope can keep the ring because the parties contracted on the assumption that they did not know the value of the ring.
Penelope can keep the ring because the parties contracted on the assumption that they did not know the value of the ring.
This is a case of a mistake as to value, which generally does not provide grounds to void a contract. Both George and Penelope were aware that they were uncertain about the ring’s value when they made the agreement. Since they willingly entered into the contract under this assumption, George cannot reclaim the ring just because it turned out to be more valuable than he initially thought.
