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Contract Law Flashcards

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1
Q

Jane states, “I will sell my Accounting text for $30 to the first person in this room who raises his or her hand.” John raises his hand. This contract is classified as a ____ contract.

A

bilateral

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2
Q

An agreement supported by consideration between two or more persons with competent capacity for a legal purpose.

A

contract

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3
Q

The two sources of contract law are ___ ___ and __ ___of the ___ ___ ___ (___) also known as “Sales.”

A

common law ; Article 2 of the Uniform Commercial Code (UCC),

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4
Q

The ___ is codified in statutory form and ___ ___ (for exam purposes) is the law developed in judicial decisions on contracts.

A

UCC; common law

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5
Q

A rejection is effective when it is ___.

A

received.

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6
Q

Acceptance is generally effective when ___.

A

dispatched

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7
Q

A contract for the sale of an office building is governed by ___ ___.

A

common law

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8
Q

A contract with illegal subject matter is ___.

A

void.

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9
Q

A contract formed by the conduct of the parties is classified as an ___ or ___ ___ ___ contract.

A

implied; implied-in-fact

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10
Q

A contract that is formed wholly by oral and/or written words is an___ contract.

A

express

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11
Q

A contract for the sale of a mobile home is governed by ____ ____.

A

UCC Article 2

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12
Q

Kay, an art collector, promised Hammer, an art student, that if Hammer could obtain certain rare artifacts within two weeks, Kay would pay for Hammer’s post-graduate education. At considerable effort and expense, Hammer obtained the specified artifacts within the two-week period. When Hammer requested payment, Kay refused. Kay claimed there was no consideration for the promise. Hammer would prevail against Kay based on ____ contract.

A

unilateral

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13
Q

By going to the doctor, you have an ___ agreement to pay.

A

implicit

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14
Q

The text of the letter from Bridge Builders, Inc. to Allied Steel Co. is as follows:

We offer to purchase 10,000 tons of No. 4 steel pipe at today’s quoted price for delivery two months from today. Your acceptance must be received in five days.

Bridge Builders intended to create a (an) ___ contract.

A

bilateral

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15
Q

A contract that has been fully performed by both parties to that contract is considered a (an) ___ contract.

A

executed

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16
Q

___ ___ applies to service and real estate contracts.

A

Common law

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17
Q

What are the Requirements for the Formation of a Contract?

A

Offer, Acceptance, Consideration, Capacity of the parties, Legality, Writing (when required).

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18
Q

What are the 3 Requirements of a Valid Offer?

A
  1. Present intent
  2. Definite Terms
  3. Communication of Offer
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19
Q

When can an offer be revoked?

A

Anytime BEFORE acceptance (not after)

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20
Q

A revocation is effective when ___.

A

received

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21
Q

What is an “option contract”?

A

an option is an agreement that allows the offeree time to make a decision on whether to enter into the contract

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22
Q

A merchant’s firm offer is a form of options governed under/by the ___ ____

A

UCC Article 2

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23
Q

What are the 4 requirements for a merchant firm offer under UCC Article 2?

A
  1. offer made in writing
  2. made by the merchant
  3. provides a stated time that the firm offer is open (NO LONGER than 3 mths)
  4. No consideration necessary
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24
Q

What is the max amt of time that a merchant firm offer can remain open? What is required for a firm offer to remain open for longer than that max amt time?

A

3 mths; consideration is required to hold a firm offer open for longer than 3 mths

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25
Q

If the offeror of a merchant firm offer is a non-merchant, the rules for ___ ___ apply and ____ is necessary.

A

common law; consideration

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26
Q

What is the “mirror image rule” followed by common law?

A

Acceptance of an offer must be absolute, unequivocal, and unqualified. Any variation in the terms results in a counteroffer and rejection.

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27
Q

A counteroffer is a form of ___.

A

rejection

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28
Q

Conditional acceptance is a form of a ____.

A

counteroffer

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29
Q

How does one spot a conditional acceptance of an offer/counteroffer?

A

use of prepositional phrases during acceptance

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30
Q

List the 3 certain events under which offers will terminate “by operation of the law”.

A
  1. death/insanity of offeror or offeree
  2. destruction of specific subject matter of the offer
  3. illegality of the subject matter
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31
Q

List any EXCEPTIONS to the 3 certain events under which offers will terminate “by operation of the law”.

A
  1. death/insanity of offeror or offeree - EXCEPT for OPTIONS
  2. destruction of specific subject matter of the offer - EXCEPT if the items that were destroyed are fungible goods or commodities
  3. illegality of the subject matter - NO EXCEPTIONS!!
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32
Q

Acceptance of an offer is essential to the ___ of a contract.

A

FORMATION

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33
Q

What is the general rule for termination of offers by lapse of time?

A

Lapse of time - general rule – An offer automatically terminates at the end of a stated period for its existence, or if no period is stated, it terminates after a reasonable period has lapsed.

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34
Q

An offer that states that it will be kept open for a stated period can still be revoked at any time prior to acceptance unless it is a ___ ___ or ___.

A

firm offer or option.

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35
Q

What is the general rule for a unilateral offer?

A

Unilateral offer - general rule – Acceptance takes place upon completion (total performance) of the act required by the offer. Generally, no notice to the offeror is required, unless such is required by law (see UCC 2-206(2)), or the offeror would have no means to know that the act has been completed.

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36
Q

What is the general rule for for a bilateral offer?

A

Bilateral offer - general rule – Acceptance (promise) must be absolute, unequivocal, unconditional, and communicated to the offeror.

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37
Q

Before answering ANY question on acceptance of offers, what should you ask yourself FIRST??? Then, what should you do?

A

Determination of acceptance is controlled by whether the UCC Article 2 or common law applies. Before answering any question on acceptance, be sure to ask “Is this contract governed by the UCC or common law?” Then apply the appropriate rules for acceptance according to the source of law that governs the contract.

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38
Q

In common law, which applies to contracts involving real property and services (employment), any deviation in the terms of acceptance from those in the offer constitutes a ____, not an ____.

A

counteroffer; acceptance

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39
Q

Under UCC 2-207, the question of whether there has been an acceptance depends on whether the parties are ___ or ____.

A

merchants or nonmerchants.

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40
Q

For both merchants and nonmerchants, a ___ ___ (not ____ ____) that does not change any terms results in a contract.

A

definite expression of acceptance (not conditional acceptance)

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41
Q

For nonmerchants, if there is a definite statement of acceptance (not conditional acceptance) followed by some additional terms, a ___ is ___, but without the ___ ___.

A

a contract is formed, but without the additional terms.

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42
Q

For merchants, if there is a definite statement of acceptance (not conditional acceptance) followed by additional terms, there is a ___ ____ the ___ ___ UNLESS -

i. The additional terms are material, such as a waiver of warranties.
ii. The offer specifically states, “This offer is limited to these terms.” In this situation, a contract is formed, but without the additional terms in the acceptance.
iii. The offeror objects within a reasonable time after receiving the acceptance to the additional terms.

A

contract WITH the additional terms

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43
Q

For merchants, if there is a definite statement of acceptance (not conditional acceptance) followed by additional terms, there is a contract WITH the additional terms UNLESS ?

A

i. The additional terms are material, such as a waiver of warranties.
ii. The offer specifically states, “This offer is limited to these terms.” In this situation, a contract is formed, but without the additional terms in the acceptance.
iii. The offeror objects within a reasonable time after receiving the acceptance to the additional terms.

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44
Q

If sent by an authorized medium, the acceptance is effective, that is, a contract is formed at what point?

A

at the moment the offeree delivers the acceptance to the authorized medium - even if it is never received by the offeror.

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45
Q

An ___ ___ is the same or faster method of communication used by the offeror if no method is specified in the offer.

A

authorized medium

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46
Q

Often called the mailbox rule, if the offeree uses the authorized means, once the acceptance to a mail-authorized offer is dropped in a mailbox, there is ___ of the ___, regardless of any ____ or _____.

A

acceptance of the offer, regardless of any delays or nondelivery

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47
Q

The mailbox rule applies only to ___ ____ and not to offers, counteroffers, rejections, or revocations.

A

acceptance communication

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48
Q

The mailbox rule applies only to acceptance communication and NOT to?

A

not to offers, counteroffers, rejections, or revocations.

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49
Q

Offers, counteroffers, rejections, and revocations are effective only when ___ ____.

A

actually received.

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50
Q

If the offer has an authorized means that is expressly specified as the means of acceptance and the offeree uses a means other than the means specified, it is considered a ____ and ____.

A

counteroffer and rejection

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51
Q

If the offer has an authorized means that is expressly specified as the means of acceptance and the offeree uses a means other than the means specified, it is considered a counteroffer and rejection BECAUSE ?

A

because the offeree has violated the terms of the offer and the mirror image rule.

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52
Q

If the offer has no authorized means specified, and the offeree sends acceptance by an unauthorized means, such as using a slower method of communication than that used by the offeror, then the acceptance is effective when??

A

only when received by the offeror.

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53
Q

Under ___ ___, the same method of communication is often required.

A

common law

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54
Q

Silence is not an acceptance unless ??

A

the offeree’s actions indicate an attempt to accept or the offeree (such as soliciting the offer) has a duty to reject.

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55
Q

A description applied to items of which each unit is identical to every other unit, such as in the case of grain, oil, or flour.
These goods are those that can readily be estimated and replaced according to weight, measure, and amount.

A

Fungible goods

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56
Q

Green, a retail fruit seller, offers to sell Red five bushels of apples. Before Red accepts, Green’s apple orchard crop is destroyed by frost. Red can still accept and bind Green to a contract. WHY?

A

Apples are considered fungible goods

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57
Q

Revocation of a revocable offer is effective when ___ by the ____.

A

received by the offeree

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58
Q

A “firm” offer by a merchant offeror in the sale of goods under the Uniform Commercial Code is ___ even though no ____ is received by the offeror.

A

irrevocable; consideration

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59
Q

Present intent requires that the parties do something more than preliminary negotiations. What are 4 examples of items that are NOT considered valid OFFERS?

A

a.
Price lists – Invites a buyer to offer to purchase at the seller’s listed prices (usual notation: “price subject to change”). Price lists are not offers but invitations to buyers to offer to buy at that price.
b.
Solicitation of bids – A solicitation invites bids (offers) to perform certain duties. The bid is the offer; the solicitation is not an offer.
c.
Auctions – The seller, through an auctioneer, invites bids (offers) from prospective buyers. The buyer, not the seller, is the offeror.
d.
Negotiations – Expressions of possible offers or future offers are not valid offers.

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60
Q

___ ___ are not offers but invitations to buyers to offer to buy at that price.

A

Price lists

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61
Q

A ____ invites bids (offers) to perform certain duties. The bid is the offer; the ____ is not an offer.

A

solicitation; solicitation

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62
Q

The seller, through an auctioneer, invites bids (offers) from prospective buyers. Who is the offeror in this situation?

A

The buyer, not the seller, is the offeror.

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63
Q

Expressions of possible offers or future offers are not ___ ___.

A

valid offers.

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64
Q

Under common law, definite and certain terms require ?

A

identification of the parties, the subject matter, the price stated, and the time for performance.

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65
Q

Terms of the offer must be definite enough to cover the ___ ___ for ____ (same for ____).

A

legal minimums for formation (same for acceptance).

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66
Q

UCC Article 2 ___ the requirements of certainty and the definiteness of the terms. The UCC Article 2 requires only that the offer ___ the ___ ___ and ___ if ___ than ____is being sold).

A

relaxes; identify the subject matter; quantity; more than one

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67
Q

The offer must be ____ by the offeror or authorized agent and ____ by the offeree or authorized agent.

A

communicated; received

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68
Q

Revocations are effective when they are received so they must be ____.

A

communicated.

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69
Q

Contracts for services like window repair are generally ___ ___ contracts, which means that they are governed by common law principles

A

common law

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70
Q

Contracts governed by ___ ___ ___ principles allow a valid contract to be made without stating a price.

A

Uniform Commercial Code

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71
Q

For common law service contracts, when must the PRICE of a service be agreed upon in order for a contract to be valid? Why?

A

BEFORE work is done!!! A common law contract must include enough information for a court to be able to fashion a remedy. A court cannot set a fair remedy if there is no price mentioned in the agreement.

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72
Q

List the types of contracts with uncertainty of total performance.

A

Requirements Contracts; AND

Output Contracts.

73
Q

When are preliminary negotiations considered offers?

A

Preliminary negotiations are generally not offers unless such negotiations includes price lists, solicitation of bids, and auctions with reserve.

74
Q

When is the revocation of a public offer effective?

A

Effective if made in the same medium as the offer.

75
Q

If sent by authorized medium, an acceptance is effective when ?

A

effective when delivered to the medium;

76
Q

If sent by unauthorized medium, an acceptance is effective when ?

A

effective when received by offeror, provided that the offer is still open.

77
Q

Describe the general rule of revocation.

A

An offer can be revoked at any time before acceptance unless offer is irrevocable.

78
Q

What happens under UCC if there are additional terms in an acceptance?

A

The acceptance is a counteroffer and a rejection.

79
Q

What conditions must exist for the acceptance of a bilateral offer to take place?

A

Acceptance must be unequivocal and communicated to the offeror.

80
Q

List the three types of irrevocable offers.

A

Options;
Sales of goods firm offers;
Offers irrevocable by estoppel.

81
Q

When is a revocation by the offeror effective?

A

When offeree knows of or receives revocation.

82
Q

What happens under UCC if there are additional terms in acceptance and the parties are nonmerchants?

A

There is a contract, but without the additional terms.

83
Q

When does the acceptance of an unilateral offer occur?

A

Takes place upon completion of the act required by the offeror.

84
Q

How is serious intent (objective intent) measured?

A

Measured by a reasonable person’s interpretation of the circumstances.

85
Q

Describe the requirements of “definite terms” of an offer under Common Law.

A

OFFER REQUIRES = Objective intent to contract; Communication
AND
the following
***“definite terms”:
subject matter, price, payment terms, time for performance, etc.;

86
Q

Describe the requirements of “definite terms” of an offer under Uniform Commercial Code (UCC).

A

OFFER REQUIRES = Objective intent to contract; Communication
AND
the following
***“definite terms”:
subject matter and quantity if more than one;
NOTE: UCC will supply the remaining terms if not in the offer.

87
Q

Who will supply the remaining terms of an agreement, under UCC, if not specified in the actual offer?

A

UCC

88
Q

What happens under UCC law if there are additional terms in acceptance and the parties are merchants?

A

There is a contract with the additional terms unless those terms are material, are objected to, or if the offer was specifically limited to its terms.

89
Q

When are advertisements considered offers?

A

Advertisements are generally not offers UNLESS they only invite acceptance.

90
Q

List the requirements of a firm offer for the sales of goods.

A
  1. Offeror is a merchant;
  2. Offeror using a signed writing;
  3. Assures offer will remain open for a stated period of time (without consideration not to exceed three months, regardless).
91
Q

____ consists of the benefit promised by the offeror (promisor) and the legal detriment promised or performed by the offeree (promisee).

A

Consideration

92
Q

In a ___ contract, both the offeror and offeree are promisors (those making a promise) and promisees (those receiving the promise).

A

bilateral

93
Q

Both sides in a bilateral contract must have___ and ___ for valid consideration to be present and the ___ on one side induces the ___ on the other side. The exchange of the detriment is ___ ___ by the parties.

A

benefit and detriment; detriment ; detriment ; bargained for

94
Q

___ ___ is often defined as doing what you are free not to do and not doing what you are free to do.

A

Legal detriment

95
Q

Legal detriment must be something of ___ ___, which means that it can be measured by dollars and/or market value.

A

Legal value

96
Q

Courts do not generally examine the amount of consideration as long as it is actually exchanged. There can be differences in values on each side because the value of the promises is not the key. The controlling factor is whether the ___ ___ is considered ___ ___ so as not to be considered a gift.

A

value promised isconsidered legally sufficient

97
Q

What element of consideration that distinguishes gifts from contracts??

A

The controlling required factor of a contract is whether the value promised isconsidered legally sufficient.

98
Q

What is the element of consideration means that the promise induces the detriment on each side? Example: You are willing to sign the deed for title to your house because the buyer is willing to pay you $121,000.

A

Bargained-for exchange

99
Q

A ___ ___ is one that exists under a valid contract or perhaps by law and is an enforceable obligation.

A

preexisting duty

100
Q

What is the general rule for “preexisting legal duty” with regards to detriment and consideration?

A

You cannot obtain more detriment from the other party in order to perform what you are already legally obligated to do. You are not entitled to more payment (consideration) for what you are already legally obligated to do.

101
Q

When the modification of a COMMON LAW contract requires additional consideration, it MUST occur on ___ ___ of a contract in order to be valid and enforceable!!

A

BOTH sides

102
Q

List the exceptions to the preexisting duty rule.

A
  1. Rescission and new contract – The mutual rejection by both parties to a contract of their existing contract (rescission) and then making a new one ($155,000 to build the house above).The consideration consists of both sides giving up their rights under the original agreement in exchange for a new one. They are doing what they do not have to do in waiving those original contract rights.
  2. UCC modification for contracts for the sale of goods – Under the UCC, the parties are permitted, in good faith, to modify their contracts even without additional consideration (detriment) on both sides. UCC 2-209(1).
  3. Unforeseen hardship – If the parties to a contract have no idea about an undisclosed hardship to the accomplishment of a contractual duty then they have not necessarily bargained that risk to one party or the other of a contract. Therefore, when that hardship occurs then the promise of additional consideration to overcome the hardship is an exception to the preexisting duty rule.
103
Q

What type of contract is one in which a buyer agrees to purchase all that he or she needs for his or her home or business from the seller?

A

UCC requirements contract

104
Q

For what type of contract is the quantity is left open, but under the UCC, this type of agreement is enforceable to allow businesses and buyers to operate on an as-needed basis?

A

UCC requirements contract

105
Q

What type of contract is one in which a seller agrees to sell all that it produces to a particular buyer?

A

UCC output contract

106
Q

Under the UCC, what type of open-ended quantity agreement is a valid contract that is supported by consideration if the contract is based on an established production or ability to produce by the seller and the seller is required to sell its production to the buyer?

A

UCC output contract

107
Q

An ___ is an agreement to waive legal rights, releasing another party from legal obligations.

A

accord

108
Q

____ is the actual payment of the amounts agreed to in the accord.

A

Satisfaction

109
Q

The detriment on both sides of a(n)___ is both parties agreeing to do something that they are not legally required to do (settle a claim) or not doing what they could legally do (bring a lawsuit to recover on their rights).

A

an accord

110
Q

A ___ ___ is one in which the amount due and owed is clear to both parties.

A

liquidated debt

111
Q

An ____ ____ is one in which the parties acknowledge that money is due and owed, but they disagree on the amount.

A

unliquidated debt

112
Q

A promise to pay for an act already completed is without (not ___-___) ___.

A

bargained-for; consideration.

113
Q

What is the term for a legal principle that bars a party from denying or alleging a certain fact owing to that party’s previous conduct, allegation, or denial?

A

Estoppel

114
Q

What is the term for a promise, that induces another party to rely on that promise and results in the party materially changing their position, stops the other party from refusing to honor that promise based on a claim of no valid consideration?

A

Promissory estoppel

115
Q

The ___ ___ ___is the time the law imposes by statute for bringing a suit to enforce legal rights.

A

statute of limitations

116
Q

A modification of a contract under the ___ ___ requires both sides to furnish new detriment.

A

common law

117
Q

A ___ ____ ____ between Jane and her accounting firm is valid even if Jane could terminate the contract at any time during the year upon giving the accounting firm one month’s notice.

A

term employment contract

118
Q

A contract that promises to pay the debt of another must be in writing under the ___ ___ ___.

A

Statute of Frauds

119
Q

A ___ ___ is when the party who is promising to pay the debt of another is not the original promisor for the loan.

A

collateral promise

120
Q

A ___ person who guarantees to pay for someone else’s debt if he or she should default on a loan obligation.

A

Guarantor

121
Q

List the Types of Contracts that Must Be in Writing under the Statute of Frauds.

A

A. Guaranty of debt contracts;
B. Contracts involving an interest in real property;
C. Contracts impossible to perform within one year of formation;
D. Contracts for the sale of goods priced at $500 or more;
E. Promises of executors for personal liability for debts of the estate.

122
Q

A contract that promises to pay the debt of another must be in writing under the Statute of Frauds. This requirement does not apply to ____ ____.

A

original promises

123
Q

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?

A

Exceptions to the writing requirement for real property rule –

  1. Payment of some or all of the purchase price has been made; and
  2. The buyer is in possession of the land by living there (residential) or proceeding to develop it (commercial land); and/or
  3. The buyer has made valuable improvements
124
Q

The term for “existing or occurring in the same period of time”.

A

contemporaneous

125
Q

The term for “uncertainty or inexactness of meaning in language.”

A

ambiguity

126
Q

The ___ ____ ___ applies to complete and unambiguous written contracts and makes any evidence that would modify or alter the written contract terms inadmissible.

A

parol evidence rule

127
Q

The elements of promissory estoppel are typically:

A

A clear and definite offer;

Reasonable expectation of reliance on the offer;

Reasonbale reliance on the offer by the party receiving the offer; and

Detriment as a result of reliance on the offer.

128
Q

The ___ ____ ___ sets forth requirements that must be met in order for a writing to be sufficient.

A

Statute of Frauds

129
Q

A ____ oral agreement is one that allegedly existed before or at the time the written contract was signed, and evidence pertaining to one cannot be introduced.

A

contemporaneous

130
Q

When can a covenant not to compete be enforced?

A

When it is:
Part of a contract;
Necessary to protect one party, such as the buyer of a business;
Reasonable in geographic scope and time.

131
Q

Under what circumstances can a unilateral mistake become a defense?

A

When other party knew or should have known of a mistake.

132
Q

Describe the differences between fraud and misrepresentation.

A
  1. Fraud always have malicious intent, Misinterpretation may not have malicious intent to deceive if it happens negligently through a misstatement and/or omission of a material fact(s);
  2. Fraud is a civil wrong which entitles a party to claim damages in addition to the right to rescind the contract. Parties to a contract claiming misrepresentation only have the right to rescind the contract and there can be no suit for damages.
133
Q

A forcing of a party to enter into a contract under the fear or threat of violence to that party or member of his or her family, or use of economic pressure to overcome the party’s free will is termed ___.

A

duress

134
Q

What is the effect of an illegal covenant in a contract?

A

The court can declare the covenant void;

The court can interpret the covenant in order to have it fall within the law.

135
Q

Describe a formation mistake.

A

When mistake is a clerical/computation error so large that other party should have known.

136
Q

List the types of assent defenses that can be used to invalidate the formation of a contract.

A
  1. Mistake;
  2. Misrepresentation;
  3. Fraud;
  4. Duress;
  5. Undue influence.
137
Q

List the remedies for lack of mutual assent.

A
  1. Rescission;
  2. Damages;
  3. Modification.
138
Q

List the elements for misrepresentation or fraud.

A
  1. Misrepresentation of statement of fact;
  2. Intent to deceive;
  3. Reliance on the misrepresentation.
139
Q

List the two types of contractual mistakes that can occur.

A
  1. Mutual (bilateral) mistake (defense);

2. Unilateral mistake (not always a defense).

140
Q

What types of contracts are enforced against minors?

A
  1. Contracts for necessaries or necessities;

2. Contracts that they ratify after reaching the age of majority.

141
Q

What is the effect of illegal subject matter on a contract?

A

It makes the contract void.

142
Q

List the elements that constitute a fraud.

A
  1. Intentional Deceit (or negligent misrepresentation);
  2. Deceit of a Material Fact;
  3. Reliance of the party deceived.
143
Q

When do bilateral mistakes create a binding contract?

A

When mistake is due to -

  1. Value, or
  2. Quality.
144
Q

What is the term for an occurrence in which one party induces another party to enter into a contract by overcoming his or her free will through an abuse of a position of confidence?

A

undue influence

145
Q

What is meant by substantial performance?

A

Substitute performance done in good faith.
Substituted performance is for practical purposes just as good.

Party can be compensated for substitution.

146
Q

By a valid contract, when a new party is substituted for one of the original parties thereby terminating (discharging) the original contract, this is referred to as ___.

A

novation

147
Q

List the ways a contract can be discharged.

A

By occurrence of failure of a condition;
By performance or breach of contract;
By agreement;
By operation of law.

148
Q

List the ways a contract can be considered impossible or impracticable.

A

Death or Insanity;
Destruction of Specific Subject Matter;
Illegality;
Commercial Impracticability.

149
Q

List the types of contractual discharge that can occur by agreement or party action.

A 
Release;
Waiver;
Mutual Recission;
Novation;
Accord and Satisfaction.
150
Q

List the ways a contractual obligation can be discharged by operation of law.

A

Material Alteration;
Statute of Limitations;
Bankruptcy Decree;
Impossibility or Impracticability of performance.

151
Q

What happens when a condition precedent fails?

A

The duty to perform is discharged.

152
Q

A relinquishment of a right due to a party’s breach is called a ___.

A

waiver

153
Q

A remedy to give a reasonable value benefit to one party and avoid an unjust enrichment received by the other party is referred to as a ___ ___ ___.

A

quasi-contract recovery

154
Q

List the various types of conditions that can exist in contract sales.

A

Precedent;
Subsequent;
Concurrent.

155
Q

A specific sum is agreed to be paid in the formation of the contract in the event that in the future the contract is breached is referred to as ___ ___.

A

liquidated damages

156
Q

List the types of damages available for remedies.

A

Nominal;
Compensatory;
Punitive;
Liquidated.

157
Q

All costs or loss actually suffered and proved caused by the breach is referred to as ____ ____.

A

compensatory damages

158
Q

Other than damages, what are the remedies for contract breaches?

A

Specific Performance;

Rescission.

159
Q

A ___ ___ is an enforceable mutual agreement to discharge all contract obligations and restore the parties to their pre-contract positions.

A

mutual rescission

160
Q

The undoing of a contract so as to return the parties to their original position is referred to as ___.

A

rescission

161
Q

What requirements must be present for the enforceable liquidated damages provisions of a contract?

A
  1. Damages difficult to estimate if a breach;

2. The amount stated is a reasonable sum estimate (not a penalty).

162
Q

____ is an unconditional offer to perform by one who is ready, willing, and able to do so.

A

Tender

163
Q

Performance that does not vary greatly from the performance promised in the contract is ___ ___.

A

substantial performance

164
Q

A ____ condition is something that must be present or occur before a party has a duty to perform.

A

precedent

165
Q

A condition ___ is something that must be present or occur after a duty to perform has arisen. This condition ___ must be present in order to hold a party liable on the contract, i.e., required to complete the contract duties.

A

subsequent; subsequent

166
Q

A ___ ___ ___ is the nonperformance of a contractual duty.

A

breach of contract

167
Q

A breach of contract is considered material when the performance is not at least ___.

A

substantial

168
Q

____ ____ occurs when, before either party has the duty to perform, one party refuses to perform.

A

anticipatory repudiation

169
Q

___ is the process by which a contract is canceled and the parties are returned to the positions they occupied prior to forming it.

A

Rescission

170
Q

A ____ condition is one in which each party’s duty to perform under a contract is dependent upon the other party’s absolute duty to perform at the same time.

A

concurrent

171
Q

An ___ is acceptance of an offer and satisfaction by accord is a discharge of the contract.

A

accord

172
Q

___ by accord is a discharge of the contract.

A

satisfaction

173
Q

The two methods of discharge of the original contract are by ____ (agreement to accept a different performance) and ___ whereby the substituted performance is performed, and ___ ___, whereby both parties agree to the discharge of their obligations (mutual rescission).

A

accord ; satisfaction ; mutual rescission

174
Q

The ___ _____ ___is the maximum period of time within which a plaintiff must file an action in an appropriate court to receive judicial remedies.

A

statute of limitations

175
Q

The running of the statute of limitations bars access to ____ ____.

A

judicial remedies

176
Q

If a party is in ___ ___ ____ ____, the nonbreaching party is discharged from his or her performance of the contract

A

material breach of a contract

177
Q

A statute of limitations sets a fixed period (usually four years) that is the maximum amount of time a party has to file a lawsuit. In a breach of contract case, the period begins at the time the contract is ___.

A

breached.

178
Q

To be valid and enforceable, at the time the contract was entered into, damages must be difficult to estimate in the event of a breach, and the amount set as damages must be a reasonable estimate (not excessive). If the amount is unreasonable (excessive), the liquidated damage clause is deemed a ____ and the clause is ___.

A

penalty ; unenforceable

REG CPAExcel - Business Law (10 decks)

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