Contract

Question 1

Contract void reasons

Answer 1

Lack of express authority
Duress
Undue influence

Question 2

Quasi contract

Answer 2

An implied in law rather than express agreement which results when one of parties has been unjustly enriched at the expense of the other.

There no binding agreement present to keep the unjust enrichment from happening.

Question 3

Contract statue

Answer 3

To add info
I.e. Revenue seeking statue or regulatory in nature

Revenue seeking statue will not void the contract. I.e. the unlicensed contractor complete a project and require payment from the client. The client can’t void the contract without payment to the contractor just because he doesn’t have the license as long as the license is required from revenue seeking statue.

Question 4

Assignment of right

Answer 4

Invalid when made without assignor ‘s intent to transfer

Add more info

Question 5

Breach of contract

Answer 5

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In what case

Question 6

Promissory estoppel

Answer 6

I.e. Promise to donate money to charity which the charity relied upon .

Legally binding despite lack of consideration

Promise estoppel when:

1. Detrimental reliance on a promise
2. Reliance on the promise is a reasonable and foreseeable
3. Damage results (injustice) if the promise is not enforce

Question 7

Statue of frauds

Oral or written contract requirement

Who is required to sign

Answer 7

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Types of Contracts that Must Be in Writing under the Statute of Frauds
1. Guaranty of debt contracts (promise to pay debt of other)

2. Contracts involving an interest in real property. Exception to writing requirement for real property rule
   This exception applies when the parties have behaved in such a way and provided evidence beyond their own words that there was some kind of contract relationship between them. The partial performance exception requires the following:
   Payment of some or all of the purchase price has been made
   The buyer is in possession of the land by living there (residential) or proceeding to develop it (commercial land)
   The buyer has made valuable improvements.
3. Contracts impossible to perform within one year of formation. One year starting from the date of acceptance Or making of the contract. Exception: If a contract has been finished, or fully performed, a party may then sue to enforce payment, even if the contract is not in writing.
4. Contracts for the sale of goods priced at $500 or more
5. Promises of executors for personal liability for debts of the estate

Person who is charged is required to sign, not all parties.

Question 8

UCC vs Common law

Answer 8

Uniform commercial code:

1. Sale of goods
2. Goods and service combined ( goods are main focus )

Common law: required more details to valid the contract:

1. Real estate
2. Services ( employment)

Question 9

Expressed contract
Vs.
Implied or implied in fact contract
Vs.
Quasi contract / implied by law

Answer 9

Express contract:
Formed by oral or written words ( see statue of fraud whether to require oral or written)

Implied or implied in fact contract: ( applied for service)
Contract form based on service/ conduct of the parties or based on factual circumstances . I.e. See doctor

Quasi contract or implied in law: (applied for goods)
Contract imposed by courts or by law when some performance has gone forward without implied or expressed contract. The law create protection for one party and prevent the other from unjust enrichment.
I.e. A make copy order for B without contract. However B still obligated to pay

Question 10

Unilateral vs. Bilateral contract

Answer 10

Unilateral contract:
Promise in exchange for action/ performance from the other side.
I.e. A pay someone $$ to clean A’s house

Bilateral:
Promise exchanged for promise
I.e. Bank loan A $$ exchanged for A promise to pay monthly

Question 11

Factors discharge parties obligation

Answer 11

1. Accord and satisfaction
2. Mutual rescission

Accord and satisfaction : both party agree to satisfy contract in specific way

Mutual rescission : mutual agree not to go through with the contract

Question 12

Oral contract enforceable in what condition?

Answer 12

When it feasible to perform in 1 year

Question 13

Parole evidence rule

Answer 13

Under the parol evidence rule, a fully integrated contract (one that is complete, unambiguous, and without defenses in formation) cannot be contradicted, varied, or altered by evidence of the parties’ prior negotiations, prior agreements, or contemporaneous oral agreements.

Exceptions:
1. Any subsequent written or oral agreements may be presented as evidence.

2. Defense of contract : if the seller used fraud or mistake or the duress to get the acceptance by the buyer, then the buyer can have oral evidence admitted to show that there is no valid contract.
3. Modifying different from clarifying evidence clarify the contract is allowed.

Question 14

Assignment of contract permit for contract to purchase what?

Criteria for a valid assignment?

Answer 14

Permit for purchase vehicle, real estate, business

But not for personal services

Condition for a valid assignment is Not materially increase the other party’s risk or duty.

Question 15

Accord and satisfaction

Answer 15

Accord & satisfaction involve agreements for substituted performance/payment method rather than originally obligations in the contract.
I.e. A engage contract with B to build a desk for $100. When the desk delivered A offer to pay $80 and a shopping voucher. B agree that mean “accord”. Therefore A satisfies its obligation.

Question 16

Remedy for breach of contract

Answer 16

1. Specific performance is generally used when money damages will not suffice such as when the subject matter of the contract is unique or rare. I.e. A patent sale, real estate sale, collections sale…

Question 17

Give consideration

When a person is in a position to give consideration ?

Answer 17

To give consideration, a person must promise to do something new or something not already obligated to do.

If the debt is rightfully disputed, a debtor is not under a preexisting obligation to pay the full amount. In offering to pay $500, the offeror is promising to do something he or she does not otherwise have to do ‐‐ pay $500. This promise, then, is consideration that supports the forgiveness of the rest of the disputed debt.

Question 18

What is equitable doctrine of clean hands ?

Answer 18

Add info

Question 19

Remedy for Innocent misrepresentations as to material facts.

Answer 19

Rescission (revoke contract) . Return both parties to their positions right before the contract formed.

Question 20

Novation

Answer 20

A novation is an 3 parties agreement whereby a new agreement substitutes one contracting party for another.

I.e. Moss was substituted for Wren, and Wren was discharged of all liability.

Question 21

What generally must be included in a writing in order to satisfy the UCC Statute of Frauds regarding the sale of goods for?

Answer 21

Only the quantity term must be included in the writing.

Failure to include the time of payment will not cause the writing to fail to satisfy the UCC Statute of Frauds because a reasonable time of payment will be inferred.

Failure to include other terms of the contract, including price, will not result in an insufficient writing either. The Code implies that the parties will in “good faith” determine a reasonable price.

Question 22

Example of an intended third‐party donee beneficiary..

Answer 22

Beneficiary of insurance policy.

Question 23

Void vs Voidable

Answer 23

Void (more certain). I.e. once a person has been adjudicated incompetent by a court with proper jurisdiction all future contracts with that person are void.

Voidable (a possibility to be voided). I.e. a contract with a mentally incompetent person to be voidable, the contract must have been created prior to that person’s being adjudicated incompetent by a court with proper jurisdiction.

Question 24

Minor & Disaffirm a contract & Age

Answer 24

Minors may disaffirm a contract before they turn 18 at any time and then for a reasonable time after they turn 18. A reasonable time is not likely to be more than, say, six months to a year. However, two days is very clearly within the reasonable time window.

Question 25

Revenue-seeking licensing statute

vs. Regulatory licensing statue

Answer 25

an agreement that violates a statute is illegal, making such agreement unenforceable. However, if the statute in question is a revenue‐seeking licensing statute (in contrast to a regulatory licensing statute), the agreement would still be enforceable. This is an exception to the general rule. The plumbing licensing statute is a revenue‐seeking licensing statute; thus, the contract violating the statute will still be enforceable for its full amount

Question 26

A covenant not to compete

How to determine the covenant not to compete is enforceable or not.

Answer 26

A covenant not to compete to be enforceable, the agreement must be necessary to protect Lynx’s legitimate interests. In deciding the issue, the court will balance employee’s ability to obtain other employment against employer’s right to protect its business.

Question 27

Definition of requirement contract.

Answer 27

A requirements contract is one in which one party agrees to buy all of a specified good which that party may require for use in his/her own business.

In a contract which Cobb had contracted to buy a specific amount of heating oil (100,000 gallons). This is not a requirement contract as “specific” not “all”

Question 28

Remedy: Reformation

Answer 28

Reformation is a remedy used to correct a mutual or unilateral mistake. Reformation allows for the contract to be rewritten so that it is in agreement with the original intentions of the contract. In this case, the party is seeking rescission; he wants to cancel the contract and return both parties to their precontract positions.

Question 29

Misrepresentation

Answer 29

Misrepresentation may involve an innocent misstatement made in good faith (i.e., there is no scienter or intent to mislead).

To rescind a contract because of a misrepresentation, the rescinding party must prove that there was a misrepresentation of a material fact, that there was reliance on this fact, and that there was injury as a result.

Question 30

Liquidated damages become a penalty

Answer 30

Liquidated damages become a penalty, they are void. They cross into penalty territory when then penalty is equal to or more than the actual contract cost.

Question 31

What constitute a valid contract?

Answer 31

Valid contract includes offer and acceptance, consideration (computer for $400), neither party lacks legal capacity and contract formation is legal.

Question 32

Statue of limitation

Answer 32

Need info

1. Start to run when breaching happen

Question 33

Define person under guardianship & contract with them enforceable or not.

Answer 33

Person under guardianship is person lacking mental capacity to manage their affair & have been declared so.

Contracts with them are void.

Question 34

What happen when offeror dies before the contract got accepted by the offeree?

Answer 34

Because the death of an offeror automatically and immediately terminates an offer to contract. This is true regardless of whether the offeree has received notice of the death. However, if acceptance occurs prior to the death of the offeror, manifestation of mutual assent is present and it will be binding.

Question 35

Types of damages

Answer 35

Liquidated damages are those agreed to in a contract to set the amount of damages in the event of breach of contract.

Punitive damages are not allowed in contract law.

Question 36

Reformation

Answer 36

Reformation applies to written contracts containing ambiguities.

Question 37

Restitution

Answer 37

Restitution involves both parties to a contract returning whatever they have received under the agreement. In this question, neither party rendered any performance, therefore restitution would be an inappropriate remedy.

Question 38

Unconscionability

Answer 38

Unconscionability arises when there is a great disparity in the bargaining powers of the contracting parties, through which one party exploits the other.

Question 39

Duress

Answer 39

Duress is the actual or threatened causing of an action or inaction which, contrary to a party’s free will and judgment, forces him/her to enter into a contract. I.e. Dash’s retention of workpapers caused Reese to pay the higher‐than‐contracted price against her free will; thus the contract is voidable at Reese’s option based on ordinary duress.

Question 40

Undue Influence

Answer 40

Undue influence involves the forcing of a party to enter into a contract by taking unfair advantage of a relationship of trust between the two parties or by taking unfair advantage of another party’s weakness of mind.

Question 41

Executed contract vs Executory contract

Answer 41

Executed contract: be completed immediately.
i.e. buying a product, pay and own the product

Executory contrant: completed over a period of time. i.e. lease contract