CONTRACT LAW

Question 1

Common Law Contract

Answer 1

Under Common Law, a contract is a legally enforceable agreement. In most instances, contract formation requires a bargain in which there is a manifestation of mutual assent to the exchange and also consideration. A valid contract is formed when there is an offer, an acceptance, and consideration.

Question 2

UCC Contract

Answer 2

Under the UCC, a contract is a total legal obligation that results from the parties’ agreement. In most instances, contract formation requires a bargain in which there is a manifestation of mutual assent to the exchange and also consideration. A valid contract is formed when there is an offer, an acceptance , and consideration.

Question 3

Bilateral Contract

Answer 3

Under Common Law, a bilateral contract is contract in which mutual promises are given as the agreed exchange for each other

Question 4

Unilateral Contract

Answer 4

Under common law, a unilateral contract is a contract in which a promise is given in exchange for actual performance by the other party. A unilateral contract can only be formed upon completion of performance; a mere promise to perform cannot bind the offeror.

Question 5

Quasi-Contract

Answer 5

Under Common law, a quasi contract is a legal substitute for a contract to be used when a court wishes to impose an obligation on a party to avoid unjust enrichment. In other words, if a party uses a technicality of contract to avoid paying for benefit actually received, a court may still force the party to pay some amount. A court may use a quasi-contract if: 1) a benefit was conferred to another, 2) there was a reasonable expectation of payment for the benefit conferred, 3) the recipient of the benefit knew or had reason to know of the expectation of payment, and 4) the recipient of the benefit will be unjustly enriched if he does not pay for the benefit.

Question 6

Implied-in-fact-contract

Answer 6

Under Common Law, an implied-in-fact-contract is an agreement presumably intended by the parties to the agreement, but not reduced to express language.

Question 7

Void Contract

Answer 7

Under common law, a void contract is an agreement that is completely without any legal effect from the beginning

Question 8

Voidable Contract

Answer 8

Under Common Law, a voidable contract is an agreement that one or both parties can elect to avoid or ratify, but is not automatically without effect.

Question 9

Unenforceable Contract

Answer 9

Under common Law, an unenforceable contract is an agreement that may be valid by formation, but is otherwise unenforceable due to an applicable defense.

Question 10

Goods

Answer 10

Under the UCC, goods are all things that are movable at the time of identification to a contract for sale. Goods do not include regular cash or currency, but goods do include money being treated as a commodity. Goods also include the unborn young of animals and growing crops to be severed from land.

Question 11

Merchant

Answer 11

Under common law, a merchant is a person who regularly deals in the type of goods involved in the transaction, or who, through his occupation, has specialized knowledge of the business practice involved

Question 12

Offer

Answer 12

Under common law, an offer is a manifestation of present contractual intent, communicated to an identified offeree, containing definite and certain terms

Question 13

Common law Option Contract

Answer 13

Under common law, an option contract is a promise that meets the requirements of a valid contract and limits the promisor’s power to revoke the offer. Under common law, separate consideration must be given for the option to be effective

Question 14

UCC Firm Offer Rule

Answer 14

Under the UCC, an offer by a merchant to buy or sell goods in a signed record that gives assurance that it will be held open is irrevocable,even without consideration, during the time stated or, if not time is stated, for a reasonable time, but for not longer than three months.

Question 15

Counteroffer

Answer 15

Under Common Law, a counteroffer is an offer made by an offeree to the offeror that relates to the same matter as the original offer, but proposes different terms.

Question 16

Acceptance

Answer 16

Under Common Law, acceptance is a manifestation of assent to the terms of an offer in the manner authorized by the offer. The accepted terms must mirror the terms of the offer for a valid acceptance under common law.

Question 17

Acceptance- If at least one party is not a Merchant

Answer 17

Under the UCC, a definite and seasonable expression of acceptance in a record operates as acceptance, even if the acceptance contains new or different terms. If at least one party to a contract is not a merchant, additional or different terms are viewed as proposals to modify the contract . Additional or different terms do not become part of the contract unless the offer agrees.

Question 18

Acceptance-If both parties are Merchants

Answer 18

Under UCC. a definite and seasonable expression of acceptance in a record operates as acceptance, even if the acceptance contains new or different terms. If both parties to a contract are merchants, additional terms will be incorporated into the contract unless: 1) the other party objects to the new terms within a reasonable time, 2) the terms materially alter the contract, or 3) the offer expressly limits acceptance to the exact terms of the offer

Question 19

Consideration

Answer 19

Under Common Law, consideration is a bargained-for legal detriment

Question 20

Illusory Promise

Answer 20

Under common law, an illusory promise is a promise that does not absolutely require a party to perform under the contract.

Question 21

Mutual Mistake

Answer 21

Under Common Law, a mutual mistake is a defense to contract formation where both parties make a mistake concerning a basic assumption of the contract, the mistake materially affects the agreement, and the adversely affected party does not bear the risk of the mistake

Question 22

Unilateral Mistake

Answer 22

Under Common Law, a unilateral mistake is where one party is mistaken as to material facts concerning the bargain (i.e., self-made physical of intellectual error). Unilateral mistake is a defense to contract only if the non-mistaken party knows or has reason to know of the mistake.

Question 23

Duress

Answer 23

Under Common Law, If assent to a contract was obtained by economic or physical threat, the contract is voidable by the person who was subject to the threat

Question 24

Undue influence

Answer 24

Under Common Law, undue influence is the unfair use of a relationship or fiduciary position to pressure another party to enter into a contract that is unjustly beneficial to the defendant

Question 25

Agreements within the Statute of Frauds

Answer 25

Under the Statute of Frauds, certain agreements must be evidenced in writing and signed by the party against whom the contract is to be enforced. Agreements that fail within the Statute of Frauds include: 1) contracts made in anticipation of marriage, 2) contracts that cannot be performed in one year, 3) land contracts, 4) promises by execution to pay estate debts out of their own funds, 5) contracts for goods with a value of at least $ 500.00, and 6) surety agreements

Question 26

Assignment of Right

Answer 26

Under common law, an assignment is the transfer of a right or benefit under a contract to a third party; the assignment transfers the rights of the assignor under the contract to the assignee

Question 27

Delegation of duties

Answer 27

Under Common Law, a delegation is the transfer of an obligation or duty under a contract to a third party; the obligor remains liable for the obligation or duty as a surety, but the primary obligation under the contract shifts to the obligee

Question 28

Parol Evidence

Answer 28

Under common Law, parol evidence is any evidence of a prior negotiation or agreement between the parties (whether oral or written) or a contemporaneous negotiation or agreement (if oral) regarding the subject matter of the contested agreement that adds to, varies from, or contradicts the contents of an integrated writing. Evidence of a contemporaneous written agreement is not parol evidence

Question 29

Parol Evidence Rule

Answer 29

Under the parol evidence rule, if the court fins a completely integrated agreement, it will not admit parol evidence to add to, vary from , or contradict the contents of the writing

Question 30

Integrated Agreement

Answer 30

Under Common Law, an integrated agreement is a writing that is intended a final expressing of an agreement

Question 31

Completely Integrated Agreement

Answer 31

Under Common Law, a completely integrated agreement is a integrated agreement adopted by the parties as a complete and exclusive statement of the terms of the agreement

Question 32

Partially Integrated Agreement

Answer 32

Under Common Law, a partially integrated agreement is any integrated agreement that is not a completely integrated agreement. A partially integrated agreement cannot be contradicted by parol evidence, but it can be supplemented by consistent additional terms

Question 33

UCC Letter of Assurance

Answer 33

Under the UCC, when reasonable grounds for insecurity arise with respect to the performance of either party, the other may, in writing, demand adequate assurance of due performance; until he received such assurance, the party can suspend any performance for a commercially reasonable time. Failure to provide assurance of due performance within 30 days is effective repudiation of the contract.

Question 34

Discharging the Duty to Perform

Answer 34

Under Common Law, discharge of contractual duties is the extinguishment of the duty of performance under the contract

Question 35

Impossibility

Answer 35

Under Common Law, impossibility discharges the duty to perform when the subject matter of the contract is destroyed or upon the death of a party that makes performance impossible

Question 36

Impracticability

Answer 36

Under Common Law, impracticability discharges the duty to perform when one of the parties to performance of the contract faces unexpected extreme and unreasonable difficulty or expenses

Question 37

Frustatuin of Purpose

Answer 37

Under Common Law, frustration of purpose discharges the duty to perform if the purpose of the contract subsequently becomes irrelevant or valueless due to a subsequent event which was not the fault of the party seeking discharge form the contract, even though the party could still technically perform

Question 38

Mutual Rescission

Answer 38

Under common Law, mutual rescission allows both parties to expressly agree to discharge performance of the contract

Question 39

Unilateral Rescission

Answer 39

Under common Law, unilateral rescission occurs when one party to the contract wants to be discharged form performance, but the other party wants performance of the contract

Question 40

Discharge by Novation

Answer 40

Under Common Law, a novation occurs when a party to a contract is replaced by a new party to the contract

Question 41

Discharge by Accord and Satisfaction

Answer 41

Under Common Law, an accord is and agreement between the original contracting parties where one party agrees to accept a different performance than the performance that was originally agreed upon. A satisfaction is performance of the accord

Question 42

Installment Contract

Answer 42

Under Common law, an installment contract is a contract that requires or authorizes performance in stages or separate lots