Chapter 9 - Contracts and Leases Flashcards
What source of contract law deals with the sale of goods?
Article 2 of the UCC
What source of contract law deals with the rendering of services or the purchase of real estate?
Common law
What are the 4 requirements for a contract?
- offer & acceptance
- consideration
- capacity
- legal purpose
What is consideration?
anything of value that is exchanged by parties
What is an implied contract?
a contract that is not explicitly articulated but is held to exist based on certain circumstances or on the conduct of the parties
What does “meeting of the minds” mean?
the acceptance must be the mirror image of what is being offered
What is an option contract?
a separate agreement requiring the offeree to pay something to the offeror for the privilege of having the offer left open for a longer period of time
What is an illusory promise?
when one party fails to provide anything of value
What is a requirements contract?
a buyer’s agreement to purchase all of a specified commodity from a particular seller
What is an output contract?
a seller’s agreement to sell all of its output to a particular buyer
What is a unilateral contract?
when a promise is exchanged for the performance of a certain act
What is a statute of frauds?
requires parties to put certain types of agreements in writing
contracts subject to the statute of frauds:
cannot be performed within 1 year, involve the transfer of interests in real property, agreeing to assume another person’s debt, prenuptial contracts, sale of goods $500+
What is an integration or merger clause?
an agreement that supersedes all prior agreements
What is a nonreliance clause?
both parties confirm that they have not relied on any representations or promises that might have been made during the course of the negotiations other than those set forth in the written contract
what is an addenda
provides a way for the parties to modify the main agreement after the main contract has been signed by both parties
what is the uniform electronic transactions act (UETA)
laws governing electronic transactions - sets forth 4 basic rules for parties who agree to conduct business electronically
what are 2 requirements of a valid electronic signature
- person must intend the process or mark to act as a signature
- the electronic signature must be attributed to that person
what is the e-sign act (electronic signatures in global and national commerce act)?
a signature, contract, or other record may not be denied legal effect, validity, or enforceability solely because it is in electronic form.
governs only transactions in interstate and foreign commerce
what documents are excluded from the ueta and e-sign acts
wills & trusts
adoption, divorce, family law contracts
what is a counterpart?
when each party signs a copy of the original page and all signature pages taken together are deemed to be one original
what is the best evidence rule?
requires the introduction of the original document (contract)
what are recitals?
explicit preamble or statement summarizing the parties’ intentions
what is the only restriction to conditions in a contract?
one party’s obligation may not be made conditional upon some occurrence exclusively within the control of the same party
what is an acceleration clause?
specifies that all remaining installments (and interest if applicable) become immediately due and payable if the buyer is late in paying any installment
what is a liquidated damages clause?
build in a specific amount that one party will pay the other party if it does not perform its obligations by the deadline
the amount should reflect the parties’ best estimate of actual damage that would result from delay in performance
what is force majeure
problems beyond the reasonable control of a party
what is the difference between a mistake of fact and a mistake of judgement
mistake of fact occurs when parties make a mistake about the actual facts underlying the transaction
mistake of judgement occurs when the parties make an erroneous assessment about the value of some aspect of what is being bargained for - not grounds for undoing a contract
what is the difference between expectation damages, reliance damages, and restitution
expectation damages - compensate the plaintiff for the amount it lost as a result of the defendant’s breech of contract. puts the plaintiff in the position it would have been in if the contract had been fufilled.
reliance damages - compensate plaintiff for any expenditures made in reliance on a contract that was subsequently breeched. returns plaintiff to position they were in before contract was formed.
restitution - puts both parties back in the same position they were in before the contract was formed
what are consequential damages?
damages that the plaintiff is entitled to as compensation for additional losses that occur as a foreseeable result of breach
what is mitigation of damages?
nonbreaching party is required to make reasonable efforts to minimize damages in the event of a breach
what are injuctions?
court orders to do something or refrain from doing something
what is rescission?
in some situations (such as mistake or misrepresentation) in which enforcing the contract would be unfair, a court may cancel the contract and order restitution
what is promissory estoppel?
gives limited relief to a person who has reasonably and foreseeably relied on the promises of another
what is quantum meruit?
used to recover the value of products or services provided in the absence of a contract in a situation in which the products/services were clearly needed but the party receiving the benefit could not agree to purchase them
what is the comprehensive environmental response, compensation, and liability act (CERCLA)?
the current owner or operator of real property can be liable for the cleanup of all hazardous waste on the property even if it was dumped there by a previous owner
