10/8/13

Question 1

What defines consideration?

Answer 1

Bargain for exchange that must consist of some legal value (clearly & exclusively determined by the parties)

Question 2

What does mutuality do?

Answer 2

Makes the contract valid

Question 3

What is the difference between past and future consideration?

Answer 3

Past consideration: not valid (must be in the present)

Future consideration: valid (enforceable)

Question 4

What does a pre-existing legal duty do?

Answer 4

When someone is under a pre-existing legal duty to perform, any promise of payment or compensation is not enforceable

Question 5

What is the statute of frauds?

Answer 5

Certain types of contracts, if they are to be enforceable, must be contained in writing and signed by the respective party/parties to be charged

Question 6

Which types of contracts are subject to the statute of frauds?

Answer 6

1. Surety contracts
2. All contracts concerning real estate/property
3. Any contract for the sale of goods (not services) starting at $500 or more
4. Any leases with a lease hold period for a year or more
5. Any contract which by its very terms and conditions cannot be performed or completed within 1 year from the date the contract was executed

Question 7

What is a surety contract?

Answer 7

2 parties where one is concerned about the financial security of the other party; 3rd party can act as guarantor

Question 8

What is a 3rd party beneficiary?

Answer 8

Not a party to the primary contract itself, but being benefitted under the contract as a result of the intent of the two parties to the contract

Question 9

What is a creditor beneficiary?

Answer 9

3rd party beneficiary who is owed a debt by one of the parties to the contract (other party to the contract, called the promisor, promises to pay off the debt upon completion of the contract)

Question 10

Who can the creditor beneficiary sue if the promisor fails to pay off the debt?

Answer 10

Either one of the parties

Question 11

What is an intended donee beneficiary?

Answer 11

3rd party beneficiary who is being benefitted under the contract because of the donative intent of one of the parties

Question 12

Who can the intended donee beneficiary sue if the promisor fails to pay?

Answer 12

Promisor only

Question 13

What is an assignment?

Answer 13

Assignor transfers everything to assignee (assignor is out of the contract, 3rd party assignee is new party to the contract)