Chapter 9 - Contracts and Leases

Question 0

What source of contract law deals with the sale of goods?

Answer 0

Article 2 of the UCC

Question 1

What source of contract law deals with the rendering of services or the purchase of real estate?

Answer 1

Common law

Question 2

What are the 4 requirements for a contract?

Answer 2

1. offer & acceptance
2. consideration
3. capacity
4. legal purpose

Question 3

What is consideration?

Answer 3

anything of value that is exchanged by parties

Question 4

What is an implied contract?

Answer 4

a contract that is not explicitly articulated but is held to exist based on certain circumstances or on the conduct of the parties

Question 5

What does “meeting of the minds” mean?

Answer 5

the acceptance must be the mirror image of what is being offered

Question 6

What is an option contract?

Answer 6

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

Question 7

What is an illusory promise?

Answer 7

when one party fails to provide anything of value

Question 8

What is a requirements contract?

Answer 8

a buyer’s agreement to purchase all of a specified commodity from a particular seller

Question 9

What is an output contract?

Answer 9

a seller’s agreement to sell all of its output to a particular buyer

Question 10

What is a unilateral contract?

Answer 10

when a promise is exchanged for the performance of a certain act

Question 11

What is a statute of frauds?

Answer 11

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+

Question 12

What is an integration or merger clause?

Answer 12

an agreement that supersedes all prior agreements

Question 13

What is a nonreliance clause?

Answer 13

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

Question 14

what is an addenda

Answer 14

provides a way for the parties to modify the main agreement after the main contract has been signed by both parties

Question 15

what is the uniform electronic transactions act (UETA)

Answer 15

laws governing electronic transactions - sets forth 4 basic rules for parties who agree to conduct business electronically

Question 16

what are 2 requirements of a valid electronic signature

Answer 16

1. person must intend the process or mark to act as a signature
2. the electronic signature must be attributed to that person

Question 17

what is the e-sign act (electronic signatures in global and national commerce act)?

Answer 17

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

Question 18

what documents are excluded from the ueta and e-sign acts

Answer 18

wills & trusts

adoption, divorce, family law contracts

Question 19

what is a counterpart?

Answer 19

when each party signs a copy of the original page and all signature pages taken together are deemed to be one original

Question 20

what is the best evidence rule?

Answer 20

requires the introduction of the original document (contract)

Question 21

what are recitals?

Answer 21

explicit preamble or statement summarizing the parties’ intentions

Question 22

what is the only restriction to conditions in a contract?

Answer 22

one party’s obligation may not be made conditional upon some occurrence exclusively within the control of the same party

Question 23

what is an acceleration clause?

Answer 23

specifies that all remaining installments (and interest if applicable) become immediately due and payable if the buyer is late in paying any installment

Question 24

what is a liquidated damages clause?

Answer 24

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

Question 25

what is force majeure

Answer 25

problems beyond the reasonable control of a party

Question 26

what is the difference between a mistake of fact and a mistake of judgement

Answer 26

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

Question 27

what is the difference between expectation damages, reliance damages, and restitution

Answer 27

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

Question 28

what are consequential damages?

Answer 28

damages that the plaintiff is entitled to as compensation for additional losses that occur as a foreseeable result of breach

Question 29

what is mitigation of damages?

Answer 29

nonbreaching party is required to make reasonable efforts to minimize damages in the event of a breach

Question 30

what are injuctions?

Answer 30

court orders to do something or refrain from doing something

Question 31

what is rescission?

Answer 31

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

Question 32

what is promissory estoppel?

Answer 32

gives limited relief to a person who has reasonably and foreseeably relied on the promises of another

Question 33

what is quantum meruit?

Answer 33

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

Question 34

what is the comprehensive environmental response, compensation, and liability act (CERCLA)?

Answer 34

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