Unit 4: Contracts and the Sale of Goods

Question 1

contracts relating to services, real estate, employment, and insurance are generally governed by _________ ________

Answer 1

common law

Question 2

congrat for sale and lease of goods are governed by what

Answer 2

Uniform Commercial Code (UCC)

Question 3

An agreement that can be enforced in court, formed by two or more parties, each of whom agrees to perform or to refrain from performing some act now or in the future

Answer 3

Contract

Question 4

A type of contract that arises when a promise is given in exchange for a promise

Answer 4

bilateral contract

Question 5

“a promise for a promise”

Answer 5

bilateral contract

Question 6

“promise for an act”

Answer 6

unilateral contract

Question 7

can only be accepted by completing the contract performance

Answer 7

unilateral contract

Question 8

both parties have a legal obligation

Answer 8

bilateral contract

Question 9

One party sets the terms and is the only party with any obligations

Answer 9

unilateral contract

Question 10

A contract that by law requires a specific form or method of creation, such as being executed under seal, to be valid/enforceable

Answer 10

formal contract

Question 11

AKA simple contracts, looking at substance (can be oral or written) Contract that does not require a specified form or formality in order to be valid

Answer 11

informal contract

Question 12

A contract in which the terms of the agreement are fully and explicitly stated in words, oral or written

Answer 12

express contract

Question 13

A contract formed in whole or in part from the conduct of the parties (as opposed to an express contract)

Answer 13

implied contract

Question 14

A contract that has been completely performed by both parties

Answer 14

executed contract

Question 15

A contract that has not yet been fully performed

Answer 15

executory contract

Question 16

A valid contract that may be legally avoided (canceled) at the option of one (or both) of the parties

Answer 16

voidable contract

Question 17

A contract having no legal force or binding effect

Answer 17

void contract

Question 18

what are the four requirements of a valid contract?

Answer 18

1. agreement
2. consideration
3. contractual capacity
4. legality

Question 19

Terminate agency by principal

Answer 19

revocation

Question 20

terminate agency by agent

Answer 20

renunciation

Question 21

Lending money at an unreasonably high rate of interest

Answer 21

usury

Question 22

lack of opportunity to read contract, or unintelligible language

Answer 22

procedural contract

Question 23

contract is opressive or overly harsh

Answer 23

substantive

Question 24

tangible and moveable property

Answer 24

goods

Question 25

A lease is a transfer of the right to possess and use goods for a period of time in exchange for payment

Answer 25

leases

Question 26

The great majority of contracts are discharged by performance

Answer 26

Discharge by Performance

Question 27

When a party performs exactly as agreed, the party’s performance is sad to be complete.

Answer 27

complete performance

Question 28

A party who in good faith performs substantially all of the terms of a contract can enforce the contract against the other party under the doctrine of substantial performance

Answer 28

substantial performance

Question 29

Any contract can be discharged by agreement of the parties

Answer 29

discharge by agreement

Question 30

Mutual recession is an agreement between the parties to cancel their contract, releasing the parties from further obligations under the contract

Answer 30

discharge by mutual rescission

Question 31

occurs when a valid contract is replaced with a new one, either by substituting a new party or introducing new terms

Answer 31

Discharge by novation

Question 32

does not involve a third party. The two original parties to the contract form a different agreement to substitute for the original one

Answer 32

discharge by settlement agreement

Question 33

The parties agree to accept performance that is different from the performance originally promised

Answer 33

discharge by accord and satisfaction

Question 34

contract to perform some act to satisfy an existing contractual duty that is not yet discharged

Answer 34

accord

Question 35

is the performance of the accord agreement

Answer 35

satisfaction

Question 36

* material altercation of the contract * running of the statute of limitations

Answer 36

discharge by operation of law

Question 37

if buyer breaches, right to cancel contract

Answer 37

Right to cancel contract

Question 38

if buyer rejects contract, fails to make payment, or repudiates contract.

Answer 38

right to withhold delivery

Question 39

if buyer breaches or repudiates seller and resell good

Answer 39

right to resell goods

Question 40

an action to recover identified goods in the hands of a party who is unlawfully withholding them

Answer 40

Right of Replevin

Question 41

is an assurance or guarantee by the seller or lessor about the quality and features of the goods being sold or leased

Answer 41

warranty

Question 42

Sellers warrant that they have good and valid title to the goods sold and that the transfer of title is rightfu

Answer 42

good title

Question 43

protects buyers and lessees who are unaware of any encumbrances (claims or liabilities – usually called “liens”) against goods at the time the contract is made

Answer 43

no liens

Question 44

This type of warranty of title arises automatically when the seller or lessor is a merchant

Answer 44

no infringements

Question 45

A seller’s or lessor’s oral or written promise, ancillary to an underlying sales or lease agreement, as to the quality, description, or performance of the goods being sold or leased

Answer 45

express warranties

Question 46

A seller’s or lessor’s oral or written promise, ancillary to an underlying sales or lease agreement, as to the quality, description, or performance of the goods being sold or leased

Answer 46

implied warranties

Question 47

A warranty that goods being sold or leased are reasonably fit for the ordinary purpose for which they are sold or leased, are properly packaged, and labeled, and are of fair quality

Answer 47

implied warranty of merchantability

Question 48

when an innocent party is fraudulently induced to enter into a contract, the contract usually can be avoided, because that party has not voluntarily consented to its terms

Answer 48

Fraudulent Misrepresentation

Question 49

Persuasion that is less than actual force but more than advice and that induces a person to act according to the will or purposes of the dominating party

Answer 49

Undue Influence

Question 50

Unlawful pressure brought to bear on a person, causing the person to perform an act that he or she would not otherwise perform

Answer 50

duress

Question 51

# types of remedies for breach of contract to cover direct losses and costs

Answer 51

Compensatory

Question 52

# types of remedies for breach of contract to cover indirect and foreseeable losses

Answer 52

Consequential

Question 53

# types of remedies for breach of contract to punish and deter wrongdoing

Answer 53

Punitive

Question 54

# types of remedies for breach of contract to recognize wrongdoing when no monetary loss is shown

Answer 54

Nominal

Question 55

An amount, stipulated in the contract, that the parties to a contract believe to be a reasonable estimation of the damages that will occur in the event of a breach

Answer 55

liquidated damages

Question 56

A sum inserted into a contract not as a measure of compensation for its breach but rather as punishment for a default

Answer 56

penalty

Question 57

when a person already has a legal duty to perform an action, there is no legally sufficient consideration

Answer 57

preexisting duty

Question 58

when a person makes a promise in return for actions or events that have already taken place, there is no consideration

Answer 58

past consideration