Chapter 2 Contracts Flashcards
When can the defense of impossibility of performance be raised?
When the promisor commits to doing something that becomes impossible through no fault of his own.
The state was awarded _______ damages based on damages that were too speculative to calculate for contract breaches agreed to by the bridge construction company.
a. general
b. consequential
c. nominal
d. liquidated
c. nominal
The excuse of impossibility of performance can be used when:
a. difficulty of the task is deemed too high for the agreeing party
b. the scope of the interested parties has expanded
c. the agreeing party has purposefully made it impossible for them to complete the task
d. the task is impossible for one party to perform, based on no fault of that party
d. the task is impossible for one party to perform, based on no fault of that party
What is accord and satisfaction?
A compromise settlement of a contract claim. Accord is the agreement substituted for the original contract, and satisfaction is the performance of the substituted agreement.
What circumstances terminate the power of the offeree to accept a pending offer?
- death or insanity of the offeror
- if the subject of the contract is made illegal prior to acceptance
- if the subject matter of the contract dies or is destroyed prior to acceptance
A contract not performed within one year of the date of agreement must comply with:
a. the parole of evidence rule
b. the wishes of the party who proposed the contract
c. federal regulations
d. the statute of frauds
d. the statute of frauds
What is meant by restitution?
A remedy that attempts to restore the parties to the same status they had before the contract was formed, or to compensate the injured party for the value of the benefit bestowed on the other party to the contract.
What four circumstances of intent can negate a contract?
Duress
Undue influence
Mistake-about an assumption in the contract
Fraud and misrepresentation
Which elements of a contract result in mutual assent, which if often referred to “a meeting of the minds?”
a. offer and acceptance
b. offer and consideration
c. consideration and enforcement
d. offer and enforcement
a. offer and acceptance
In an accord and satisfaction, the creditor is willing to accept the debtor’s payment of ______ that is offered as payment in full for the disputed claim.
a. a lesser amount
b. debt and interest
c. the debt
d. collateral
a. a lesser amount
Which of the following is true about amendments?
a. they cannot be added once parties have entered into a binding contract
b. they cannot be changed once parties have entered a binding contract
c. the elements required for creating an amendment are the same as those for binding contracts
d. entering a contract does not qualify the parties to add amendments
c. the elements required for creating an amendment are the same as those for binding contracts
Stephon is describing the elements of the contract. Which of the following would not necessarily be included?
a. offer
b. negotiation
c. acceptance
d. consideration
b. negotiation
How long can a contract exist without being performed before it must comply with the requirements of the statute of frauds?
One year
What is always true about a novation?
a. the old contract is terminated and the new contract has additional parties
b. the old contract remains in force and is duplicated with one new party
c. the old contract is terminated and the new contract has at least one different party.
d. the old contract remains in force with an amendment barring additional parties
c. the old contract is terminated and the new contract has at least one different party.
Types of contracts that involve interests in land and that fall within the statute of frauds include all of the following except:
a. mortgages
b. easements
c. leases longer than one year
d. licenses
d. licenses
What are the essential elements of a valid contract
offer-a promise with unequivocal language communicated to the offerree
acceptance-acceptance by the offered, conformance with the terms of the offer, timely, communication of acceptance
consideration-that which is bargained for in exchange for a promise of performance
What happens to a contract offer if the offeror dies?
a. the death terminates the power of the offeror dies.
b. the offer may be transferred to a third party
c. a representative may sign the offer
d. the offeree may change the consideration
a. the death terminates the power of the offeror dies.
A remedy that attempts to restore the parties to the same status they had before a contract was formed is called a(n):
a. injunction
b. liquidation
c. restitution
d. specific performance
c. restitution
Performance in contractual terms reflects which of the following?
a. doing the acts required by the contract
b. doing the acts in the time specified
c. doing the acts required in the manner stipulated and time and place required
d. doing the acts for a reasonable consideration
c. doing the acts required in the manner stipulated and time and place required
What does an amendment to a contract change?
Only those terms addressed in the amendment
If a party lacks intent to form a contract but does accept the offer, that party:
a. has no legal defense
b. has an excuse for non-performance
c. will not have the opportunity to add amendments
d. is bound to the terms of the contract
b. has an excuse for non-performance
What is novation?
A three-party agreement whereby the original party is discharged from his or her obligations and a new party acquires the obligations. The results is that the old contract is terminated and the new contract, with the same content but with at least one different party is created.
In what instances are contracts related to real estate not required to be in writing in order to satisfy the statute of frauds?
- an agreement forming a partnership to trade or otherwise deal with real estate
- contracts for the purchase and sale of fixtures (items that are part of a building-HVAC, etc.)
- contracts regarding crops
- licenses-a privilege to enter land and to do certain acts
- construction agreements to build a structure or undertake other improvements of land
What are the elements required to form a binding amendment or modification to a contract?
Same as a contract
offer-a promise with unequivocal language communicated to the offerree
acceptance-acceptance by the offered, conformance with the terms of the offer, timely, communication of acceptance
consideration-that which is bargained for in exchange for a promise of performance
What are general damages?
Those damages that arise from a default of a party under a contract. Also called expectation damages.
If an amendment fails for any reason (such as non-enforceability):
a. the original contract governs
b. the original contract is void
c. the amendment can still be valid
d. the parties must agree on a new contract
a. the original contract governs
Mrs. Palovska, the seller, and Mr. Dalmas, the buyer, decide to amend their contract. Mr. Dalmas owes Delphi Lending, Inc., money for purchase of the property. The amendment of the original contract serves to:
a. address all terms in the original contract
b. address only the terms mentioned in the amendment
c. modify the first term addressed in the amendment only.
d. ensure the original contract remains intact.
b. address only the terms mentioned in the amendment
