Contract

Question 1

What is a contract?

Answer 1

voluntary agreement between two or more parties

Question 2

Five elements needed to bind contract?

Answer 2

1. offer is made and accepted
2. mutual intent to enter contract
3. consideration is made
4. both parties have the capacity to contract
5. purpose of the contract must be legal

Question 3

Contract can be voided if signed under:

Answer 3

1. duress (constraint illegally exercised to force someone to perform an act)
2. misrepresentation
3. mistakes under certain conditions
4. fraud

Question 4

_____ in contract law is an offer that is subject to a specific time limitation, otherwise it will be voided after a ‘reasonable time limit’

Answer 4

Option

Question 5

______ can be a promise made, money, a service, or something else of value (making the offer irrevocable)
- if there is none of this, then agreement is not binding

Answer 5

Consideration

Question 6

Offer and counter-offer… what is the outcome?

Answer 6

negotiating an offer with a counter-offer defines a different contract

Question 7

_____ is a legal constraint preventing the first party from gaining advantage over the second party if the second party claims injury due to reliance on misrepresentations by the first party

Answer 7

Equitable Estoppel

Question 8

3 factors you need for Equitable Estoppel:

Answer 8

1. representation is made by one party to induce a course of action by another party
2. second party commits an act or omission because of that representation
3. there is detriment to the second party b/c of the act or omission

Question 9

_____ means some parties are not legally able to consent to a contract (i.e. minors, people with mental illness)

Answer 9

Capacity to Contract

Question 10

_______ renders a contract unenforceable

–> party must be free from this to agree to a contract

Answer 10

Economic Duress

Question 11

_____ means a party is reluctant to enter into agreement but is under influence of dominant party

Answer 11

Undue Influence

Question 12

_______ is the essential element of an agreement in contract law whereby an agreement is legal and enforceable only if it complies with the law of the land and public policy

Answer 12

legal purpose

Question 13

Mistakes and Errors in Contract Law

Answer 13

• unilateral mistake or honest error in calculation may result in unenforceable contract
• mistakes must be INNOCENT (NOT FRAUDULENT) but not apparent in contract

Question 14

\_\_\_\_\_ Rule (disputes over contracts) is applied when you have vague wording, in this case, decision will go against the person who wrote the vague conditions
--> should have written terms unambiguously

Answer 14

Contra Proferentem

Question 15

______ Rule implies the only terms you can enforce in a contract are what is WRITTEN. Written terms of a contract cannot be changed by any oral or written agreement made before or during the life of the contract if such agreement is not written into contract

Answer 15

Parol Evidence

Question 16

Implied Terms

Answer 16

• must be obvious enough that it’s not necessary to state them explicitly (in contract)
• some conditions can be implied in cases of damage claims

Question 17

_____ is the invitation to bid

–> make an offer

Answer 17

Call for Tender

Question 18

______ Contract is a contract so unfair, oppressive and one-sided that courts will not enforce

Answer 18

Unconscionable

Question 19

What is contract frustration?

Answer 19

unforeseeable events or circumstances that make a contract impossible to fulfill
- event must be a risk that was not anticipated by the parties/neither are at fault

Question 20

The _______ provides time for completion due to unforeseen events (e.g. war, riots)

Answer 20

Force Majeure Clause

Question 21

_____ means words or conduct that relieve the other party from duty to perform

Answer 21

Waiver

Question 22

_____ means it is not appropriate for the remainder of the contract to be enforced, but compensation is given for the work completed.

Answer 22

Quantum Merit

Question 23

_____ occurs when one of the parties fails to meet its obligations

Answer 23

Breach of Contract

Question 24

_______ allows parties to file for claims at a later time

Answer 24

Breach under protest

Question 25

_____ breach occurs when the outstanding issues cost more to complete than funds to be paid (cheaper to walk away)

Answer 25

International

Question 26

_______ is an equitable remedy in the law of contract, whereby a court issues an order requiring a party to perform a specific act, such to complete performance of the contract

Answer 26

Specific performance

Question 27

______ is a court order requiring the party to do something

Answer 27

Injunction

Question 28

_____ means the actions of one party make it known that obligations of contract will not be met

Answer 28

Repudiation

Question 29

_____ breach of contract is a failure to live up to a contract term before the actual time for performance has arrived. It is often occurs when one party states an intention not to fulfill or substantially fulfill a contractual obligation before it is due

Answer 29

Anticipatory

Question 30

______ Breach deprives innocent party of all substantial benefit

• termination clause
• substantial compliance

Answer 30

Fundamental

Question 31

_____ are calculated to put the innocent party in the position where they should have been (had the incident not have happened)

Answer 31

Damages

Question 32

Contract A/B (what is meant by this?)

Answer 32

Contract A (call for tender process): no negotiation involved, includes clauses in bid documents (expectations)
Contract B: the 'winning' bid enters into this contract under new circumstances

Question 33

What are the four ways to resolve contract disputes?

hint: NMAL

Answer 33

Negotitation: cheapest option
Mediation: mediator helps parties reach a consensus
Arbitration: involve a 3rd party to help decide
Litigation: lawsuit and most expensive

Question 34

______ is guaranteed compensation for harm or loss

Answer 34

Indemnification