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REG > Bus. Law: Contracts > Flashcards

Bus. Law: Contracts Flashcards

1
Q

A counteroffer is made when…

A
  1. An offeree purports to “accept” an offer after the offer has been withdrawn.
  2. Or, an offeree who purports to “accept” an offer, but changes one of the terms or adds a new term.
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2
Q

Can a party be entitled to recover under the contract if they breached it?

A

Yes, if they have substantially performed the contract, they are entitled to the final payment, less damages.

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3
Q

substantial performance

A

when a contractor’s performance is in some way deficient, through no willful act by the contractor, yet is so nearly equivalent that it would be unreasonable for the owner to deny the agreed upon payment.

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4
Q

necessaries

A

include food, shelter, clothing, tools of the trade, and employment services

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5
Q

When can a contract on necessaries be voided?

A

If the necessary was returned or the FV (purchase price) was paid for it.

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6
Q

For a contract to be valid…

A

legally sufficient consideration must be bargained for and exchanged.

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7
Q

bargained for and exchanged

A
  1. Consideration must be paid.
  2. What is bargained for and exchanged in a contract does not have to be of equal value. It is not unusual for one party to a contract to realize far more (or less) than what s/he paid for.
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8
Q

legal detriment & consideration

A

An agreement to refrain from doing something that a person otherwise has the right to do (legal detriment) is valid consideration for a contract.

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9
Q

Do courts generally weigh consideration to make sure it is fair for both sides?

A

No, as long as there is no indication of fraud.

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10
Q

pre-existing duty rule

A

Once a valid contract exists, unless it involves the sale of goods (UCC rules are different from common law contract rules) modifications of a contract are not binding unless both parties will receive new or additional consideration.

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11
Q

Must a price commitment be honored if no consideration has been given?

A

Yes, if its quote was given in a signed writing (output contract).

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12
Q

Which elements of a contract can be inferred?

A

The price, subject matter, time for performance and, sometimes, even the parties can be inferred in an otherwise valid offer.

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13
Q

Which elements of a contract cannot be inferred?

A
  1. Quantity can never be inferred.

2. A contract is enforceable only to the extent of the stated quantity.

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14
Q

If an offeror dies before an offer is accepted…

A

the offeror is released from the contract.

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15
Q

If a party to a contract dies…

A
  1. s/he is not released from the contract, unless it was for personal services.
  2. His/her estate will either be entitled to recovery (if the contract has been substantially performed) or will be liable for breach.
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16
Q

Are liquidated damages (you shall forfeit x amount per day late) permitted in breach of contract cases?

A

Yes, if they are reasonable in amount and calculation of damages is difficult.

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17
Q

In a real estate contract, against whom is the contract enforceable?

A

Against the signing party or parties, not against those who do not sign.

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18
Q

When a minor voids a contract for a necessary, what is the minor entitled to?

A

Anything paid in advance.

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19
Q

Is an addendum to a contract enforceable if signed by both parties?

A

No, an addendum is only enforceable if supported by new consideration.

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20
Q

How can an offer terminate?

A
  1. Lapse of time.
  2. Counteroffer by offeree.
  3. Rejection by the offeree.
  4. Withdrawal of the offer before acceptance, or death of the offeror PRIOR to acceptance.
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21
Q

When can an offer be withdrawn?

A

Any time prior to acceptance, unless the offer is supported by consideration.

22
Q

unilateral offer

A
  1. One party can only accept a contract by performance.

2. If that party performs, a valid contract is formed.

23
Q

Are advertisements offers?

A
  1. Advertisements are not generally considered offers because the advertiser does not have the requisite intent to make an offer.
  2. Specific, limited advertisements may be offers, particularly if they offer something to the “first to respond.”
24
Q

When is an enforceable option created?

A

When a promise is made in exchange for a promise; this is valid consideration to support an option contract.

25
Q

Parol Evidence Rule

A
  1. Governs the issue of whether statements outside the final written contract should be admitted.
  2. Under this rule, outside oral or written statements made prior to or contemporaneous with the written agreement can be admitted as evidence of fraud, duress and the like or to explain an ambiguous term.
26
Q

fully integrated

A
  1. Means that the contract is intended as a complete statement of everything the parties agreed upon.
  2. The words “fully integrated” in the text of the question are a tip-off that the question deals with the Parol Evidence Rule.
27
Q

What evidence is ignored under the Parol Evidence rule?

A

Any prior or contemporaneous statements which add to, modify, or vary a complete final written agreement.

28
Q

What evidence is examined under the Parol Evidence rule?

A
  1. Evidence of fraud, duress, undue influence, or of post-contract modifications.
  2. Evidence which is presented to explain an ambiguity.
29
Q

Statute of Frauds

A

contracts which cannot, by their terms, be performed within one year, must be in writing and signed in order to be enforceable.

30
Q

If A assigns B to collect from C, then…

A

B has immediate rights against C, even if C does not consent to the assignment.

31
Q

Can an incidental beneficiary pursue a claim against a company that does not properly service the intended beneficiary?

A

No.

32
Q

If A assigns the job to B, must the client C accept B’s performance?

A

As long as B fully performs, C must accept B’s performance.

33
Q

undue influence defense

A

To void the contract as having been made under undue influence, show:

  1. the existence of a trust relationship
  2. and an abuse of that trust.
34
Q

duress defense

A

Require evidence of physical coercion.

35
Q

Can a unilateral offer be withdrawn before acceptance?

A

In most cases, yes.

36
Q

Can a unilateral offer be accepted if the performing party is unaware of the offer?

A

No.

37
Q

unilateral mistake

A
  1. One party makes an error.
  2. In this case, the mistaken party cannot avoid the contract unless the other party knew, or had reason to know of the mistake.
38
Q

Is a contract involving the transfer of real estate void if not signed by both parties?

A

No. It is not void, just unenforceable.

39
Q

Does a statute of limitations make an otherwise valid contract unenforceable?

A

Yes.

40
Q

When is the validity of a contract affected?

A

When one of the elements of a contract (offer, acceptance, consideration, legality, capacity, mutuality) is lacking.

41
Q

Can an offer specify the terms under which it can be accepted?

A
  1. Yes, meaning that the mailbox rule can be modified.
42
Q

If B does not accept the offer under the offeror’s (A’s) specific terms, is A bound to the contract?

A

No, but B may still be bound to the contract even though A is not.

43
Q

Can the acceptance of goods be revoked?

A

Only if they have been inspected w/in a reasonable time frame (w/in a couple days).

44
Q

anticipatory repudiation

A
  1. Any statement by a party to a contract of an unwillingness or inability to perform the contract constitutes an anticipatory repudiation (breach) of the contract.
  2. This entitles the nonbreaching party to file suit immediately, or to demand adequate assurance of performance.
45
Q

statute of limitations

A

time for filing suit

46
Q

Can the statute of limitations be altered?

A

Under Article 2 of the UCC, parties to a contract for the sale of goods (other than consumer contracts) can decrease the statute of limitations to not

47
Q

Can a bilateral offer involving real estate be withdrawn?

A

If not supported by consideration from offeree, yes.

48
Q

What is an exculpatory clause? Is such a clause generally enforceable?

A
  1. A clause in a contract whereby one of the parties is exonerated (held harmless) for his/her own negligence is known as an exculpatory clause.
  2. Such clauses are generally unenforceable in consumer contracts, but are permitted in contracts between businesses.
49
Q

If A signs a contract w/B, specifying that A should buy materials from C, but B instead buys comparable materials from D, is B liable?

A

B does not have replace the materials if it is economically infeasible to do so.

50
Q

correct measure of damages for breach of contract

A
  1. difference between the value of system that Preston actually installed versus the value of system he should have installed.
  2. If the amount is negligible, the breaching party is not held liable for damages despite contract specifications.

REG (47 decks)

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