Chapter 10

Question 1

What are the elements of a valid contract?

Answer 1

• offer
• acceptance
• agreement
• consideration—both sides have to get something
• valid purpose—must be legal and enforceable (can’t have a contract with a hitman)
• competent parties—both parties must understand and engage in the process (incompetent parties include minors and if there is alcohol involve

Question 2

Bilateral contract

Answer 2

my promise for your promise it becomes binding—2 promises

Question 3

Unilateral

Answer 3

performance based on one side (commissioning an artist) (offeror may change their mind half way through the process)

Question 4

What do we mean when we say a contract is executory?

Answer 4

something still to be done

Question 5

what do we mean by an executed contract?

Answer 5

a contract is done

Question 6

Can a contract be both executed and executory?

Answer 6

yes, one party may pay before the other party carries out their portion

Question 7

What is a valid contract?

Answer 7

enforceable

Question 8

What is an unenforceable contract?

Answer 8

law may change making it illegal

Question 9

what is a voidable contract?

Answer 9

never had any validity—dead on arrival, unenforceable from beginning, started with an illegal purpose. One or more parties have the ability to avoid the obligation if they wish (minors, misrepresentation) ex. Ring vendor in Waldo’s example.. corvette and minor example

Question 10

What is an express contract?

Answer 10

Expressed the terms of contract orally or in writing

Question 11

How do we imply a contract in fact?

Answer 11

• The facts will indicate the intent to contract—coke machine not dispensing cola after you insert money, you can sue coke for the money. Going to the library every week and the bartender assuming you’ll get a beer

Question 12

Explain and give examples of quasi contract. Is the intent to contract present?

Answer 12

• Driveway payment example

* No intent to contract, unjust enrichment

Question 13

Explain promissory estoppel

Answer 13

• Promissory estoppels= you can’t get your offer back. Stopped from taking back the offer
• Occurs when we must do it in equity

o Offer
o Offeree must change their position, material and substantial change
o Foreseeable to the offeror
o The change must be detrimental
 WMU contracts builders to build new dorm
 Prime contractor subcontracts specialists
 Prime contractors takes subcontractors prices and factors that into bid for WMU
 WMU accepts job
 Contacts subcontractors about acceptance—subcontractors retract bid and ask for more money
 Example of promissory estoppel—courts enforce the original prices

Question 14

Where does contract law come from?

Answer 14

comes from common law and Uniform Commercial Code (all 50 states have adopted it, addresses sales of goods– movable, tangible property at time of sale)
sometimes mixes with common law- is it service or goods?

Question 15

What two factors must be present in order for a statement to be considered an offer?

Answer 15

• terms must be clear, understandable

* clear you are making an offer

Question 16

Is an advertisement generally considered an offer? Why? When might one be considered an offer?

Answer 16

• No, simply an invitation to negotiate
• Exceptions= very specific
• If you make an offer with no intent to live up to it (trying to just get customers into the store) you are subject to being sued

Question 17

In an auction, who is making the offer and who is accepting?

Answer 17

• When you bid you are making an offer, if the bid makes it you have a contract

Question 18

What do “with reserve” and “without reserve” mean?

Answer 18

• Auction with reserve= they have a minimum price for the item, if it doesn’t get to that price they don’t have to sell it
• Auction without reserve= must accept the highest bid
• Shill= someone working for the auction running the bid up= fraud