Chapter 7

Question 1

Express term

Answer 1

A provision of a contract that states a promise explicitly

Question 2

Implied term

Answer 2

A provision that is not expressly included in a contract but that is necessary to give effect to the parties intention

Question 3

Entire contract clause

Answer 3

A term in contract which the parties agree that their contract is complete as written

Question 4

Contractual quantum meruit

Answer 4

the obligation on the customer is to pay a reasonable amount.

Question 5

Parol evidence rule

Answer 5

limits the evidence a party can introduce concerning the contents of the contract

Question 6

Cost plus cause

Answer 6

protection from profit being eaten through increased

Question 7

Condition subsequent

Answer 7

an event that when it occurs, brings an existing contract to an end

Question 8

condition precedent

Answer 8

an event that until it occurs, suspends the parties obligations to perform their contractual obligations

Question 9

Limitation of liability clause

Answer 9

a term of a contract that limits liability for breach to something less than would otherwise be recoverable

Question 10

exemption clause

Answer 10

a term of a contract that identifies events causing loss for which there is no liability

Question 11

Liquidated damages clause

Answer 11

a term of a contract that specifies how much one party must pay to the other in the event of a breach

Question 12

Penalty clause

Answer 12

a term which is not enforceable because it sets an exorbitant amount that one party must pay to the other in the event of breach

Question 13

Parole evidence rule exceptions

1. detective formation of the contract
2. whole agreement
3. collateral contract
4. ambiguous language
5. establish the factual matrix

Answer 13

if one part alleges fraud or mistake in the formation of the contract
if the parties intended the contract to be partly oral and partly written
if the contract language is ambiguous
of the contract as an aid to interpretation of the contract