Chapter 9 - Contract Law Flashcards
Under an adhesion contract, negotiations are:
Under an adhesion contract, negotiations are minimal or non-existent. Adhesion contracts are typically standard-form agreements created by one party (often a stronger party, such as a business) and offered to another party (usually a weaker party, like a consumer) on a “take it or leave it” basis.
Unconscionability that relates to conditions that would impair one party’s understanding of a contract and to the integration of terms into a contract is referred to as:
procedural unconscionability.
Which of the following contracts can a minor disaffirm?
Contract to purchase a car
What is the age of majority in most states?
18
Which of the following will not emancipate a minor?
Moving out of the house but still getting support from parents
If a person is adjudicated insane, then the contracts they enter into are:
void
Usury occurs when a party gives a loan at an interest rate below the legal minimum.
false
Minors have the right to disaffirm their contracts until a reasonable time after reaching the age of majority.
true
Which of the following is true of a severable contract?
Which of the following businesses cannot enforce an exculpatory clause?
public utilities
In the law, when only one party is responsible for an illegal agreement, the parties are said to be in pari delicto.
false
The phrase in pari delicto means “in equal fault” and is used in legal contexts to indicate that both parties to an agreement are equally responsible for the illegal conduct. If only one party is responsible for the illegal agreement, they would not typically be considered in pari delicto. Instead, the innocent party may have a better chance of seeking remedies or being relieved from the agreement.
Covenants not to compete in employment contracts are legal in most states.
true
An indivisible contract requires complete performance by ________
both parties
A basic test to determine whether an exculpatory clause is unenforceable is to see if the enforcing party engages in a business indirectly related to the public interest.
true
If both parties are equally responsible for an illegal agreement, the contract is:
void
What is Sufficient to Negate Mutual Assent
Mistake: Mutual Mistake of Material Fact, Not related to value
Ex: Raffles v. Wichelhaus (the Peerless Ship Case)
Misrepresentation
Fraudulent- can sue, dissolves contract
Negligent- can sue, dissolves contract
Innocent- cant sue, just dissolved contract
The parol evidence rule applies to agreements that are:
fully integrated.
A third party who is not part of the original contract but to whom duties are transferred by one of the contracting parties is known as a(n):
delegatee.
Marco signs an agreement giving Kelsey the right to receive the money he is owed from Will for the car he sold to Will. In this example, Marco is a(n):
assignor
Contractual parties who agree to receive something from each other are referred to as:
obligees
For a contract to be enforceable under the statute of frauds, it must be:
In writing
Primary obligations are not within the statute of frauds and do not have to be in writing.
true
Partial performance can override the statute’s requirement for a written agreement.
true
The statute of frauds addresses the issue of illegal contracts.
false
Which of the following is not an exception to the statute of frauds?
Admission
Mistake
Promissory estoppel
Partial performance
Mistake
Which of the following exceptions to the statute of frauds is due to a party’s detrimental reliance on the contract?
promissory estoppel
When an entire contract is conditioned on something occurring first, that first thing is known as a:
implied condition.
condition precedent.
condition subsequent.
condition concurrent.
condition precedent.
The UCC for sales contracts requires the writing to:
None of these choices are correct.
be a formal contract.
state the quantity to be sold.
name the parties to the agreement.
state the quantity to be sold.
The parol evidence rule states that oral evidence of an agreement is not admissible when it is made before or at the same time as an agreement in writing.
True
The rights to a contract can be assigned when the contract is personal in nature.
false
A delegator transfers his or her ________ to a delegatee.
duties
Which rule states that a the first assignee to give notice of assignment to the obligor is the party with rights to the contract?
English rule
Why type of third-party beneficiary is a donee beneficiary?
Intended beneficiary
Which clause states that the written agreement accurately reflects the final, complete version of the agreement?
Due process clause
Takings clause
Exculpatory clause
Merger clause
Merger
Which of the following is not required of a writing to satisfy the statute of frauds?
Consideration given for the contract.
The subject matter of the agreement.
A full signature of at least one party
Names of the parties to the contract.
Consideration given for the contract.
AGREEMENTS THAT MUST BE IN WRITING
1) any agreement for the transfer of Any interest in real Property
2) Any agreement which by its own terms cannot be performed within one year after agreement
3) Any Agreement the Consideration of which is Whether to Marry
4) surety agreement which is agreement to “make goof” on another persons debt
5) agreement for the Purchase of Goods $500 or over mrom Merchant
Which third-party beneficiaries do not have any rights to enforce a contract?
Intended beneficiaries
Creditor beneficiaries
Incidental beneficiaries
Donee beneficiaries
Incidental beneficiaries
Are all businesses Merchants?
no
Contract Interpretation
The court will endeavor to interpret
Plain Meaning Rule and the parol evidence Rule
What is the Contractual term? Word, Phrase, Sentence, Paragraph, Portion, Provision, Clause
Must be Ambiguous; not a manufacturing dispute
extrinsic evidence
Wagner V. Columbia Pictures
Exceptions to Parol Evidence Rule
(8 Exceptions)
Integration Clause (Merger Clause) in Contract
Discharge by Operation of law examples
- Bankruptcy
- Material Alteration
- Impossibility of Performance
- Commercial Impracticality of
Performance - Frustration of purpose
- Unconscionability
- Statute of Limitations
Compensatory Damages
directly and naturally flow from the breach
Incidental Damages
Indirectly and naturally flow from breach
Consequential Damages
Indirectly and unnaturally flow from breach
Hadley v. Baxendale
Nominal damages
Result from technical breach
Punitive damages
rarely awarded in contracts context
Discharge by operation of law
- bankruptcy
can discharge OR suspend performance
Discharge by operation of law
- material alteration
Trying to change what the duties are
Material Alteration vs. Accord and Satisfaction vs. Material breach
Discharge by operation of law
- impossibility of performance
ex: tornado wipes out cattle to be sold
Discharge by operation of law
- commercial impracticality of performance
Ex: lumber price spike during covid
Frustration of purpose
Ex: concert cancelled and tickets payed for
Window sales for parade
