Study Guide Exam 2 Flashcards
(26 cards)
What are the elements of a valid contract?
Offer, acceptance, consideration, legality, capacity, mutual consent
Example: Alice sells Bob her car for $5,000; if Bob is a minor, the contract is voidable.
What is consideration in a contract?
Something of value exchanged between parties, such as money, services, or promises
Example: Jane promises to paint Mike’s house for $500.
What is a counteroffer?
A response that rejects the original offer and presents new terms
Example: John offers to sell a bike for $300; Sam offers $250 instead.
What does the statute of frauds require?
Certain contracts must be in writing to be enforceable
Examples include real estate sales and contracts over $500.
What is the parol evidence rule?
Prevents oral or written statements made before the contract from contradicting the final written agreement
Example: A signed lease stating ‘no pets’ prevails over verbal agreements.
Define a unilateral contract.
A contract where one party makes a promise accepted through performance
Example: A reward offer for returning a lost item.
What constitutes substantial performance?
When a party fulfills most contract obligations with minor deviations
Example: A contractor builds a house but installs different tiles.
What is fraudulent misrepresentation?
False statements made knowingly to induce someone into a contract
Example: A car dealer falsely claims a vehicle has never been in an accident.
What is a purchase order?
An offer to buy goods
Example: Ordering 500 widgets at $2 each.
What is a confirmation memo?
Confirms details of an oral contract under the UCC’s statute of frauds
Example: A written confirmation after a phone agreement.
What is the difference between shipment and destination contracts?
Shipment contract: risk transfers when goods are shipped; Destination contract: seller is responsible until goods reach the buyer
What does ‘cover’ refer to in contract law?
Buyer finds a substitute if seller breaches
Example: Buying wheat elsewhere if the supplier fails to deliver.
What are implied warranties?
Merchantability and fitness for a particular purpose
Example: A toaster must toast bread; a recommended product must work as intended.
List the four elements of negligence.
- Duty
- Breach
- Causation
- Damages
What is proximate cause?
Determines if harm was foreseeable
Example: In Palsgraf v. Long Island Railroad, harm was too indirect to hold the railroad liable.
Define strict liability.
Liability without fault, typically in defective products or dangerous activities
Example: Selling a faulty airbag that injures drivers.
What is libel?
Written defamation that damages someone’s reputation
Example: A newspaper falsely claiming a business commits fraud.
What is the assumption of the risk doctrine?
If someone voluntarily engages in a risky activity, they cannot sue for injuries
Example: A fan hit by a foul ball cannot sue the baseball team.
In Augstein v. Leslie, what type of contract was determined?
Unilateral contract
Leslie’s promise of a reward for a lost laptop was upheld.
In Leonard v. PepsiCo, what was the decision regarding advertisements?
Pepsi’s fighter jet ad was not an enforceable offer
What was the issue in Italian Cowboy Partners v. Prudential Ins.?
Fraudulent misrepresentation
What was decided in Hemlock Semiconductor v. SolarWorld?
Market collapse did not excuse contractual obligations
What was the outcome of Palsgraf v. Long Island Railroad?
Harm was unforeseeable, so no liability
What was the ruling in Association of Private Sector Colleges v. Duncan?
Education Dept. rules were valid
