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CPCU 530 > Contract Law > Flashcards

Contract Law Flashcards

1
Q

Four elements of a contract (to be legally enforceable)

A

Agreement

Capacity to contract

Consideration

Legal purpose

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2
Q

Requirements of a valid offer

A

Intent to contract

Definite terms

Communication to the other party

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3
Q

Factors considered for duration and termination

A

Lapse of time

Operation of law

Offeree’s rejection

Counteroffers

Offeror’s revocation

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4
Q

Counteroffer

A

Proposal that varies in some material way from the original offer

Terminates original offer and constitutes a new offer

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5
Q

Requirements for acceptance

A

Acceptance made by offeree

Acceptance is unconditional and unequivocal

Offeree must communicate acceptance by appropriate word or act

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6
Q

Forbearance

A

Act of giving up or the promise to give up a legal right

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7
Q

Substantial performance

A

Performance of the primary, necessary terms of an agreement

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8
Q

Parties who may lack capacity to contract

A

Minors

Insane persons

Intoxicated persons

Artificial entities

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9
Q

Conditions to avoid a contract re: insanity/intoxication

A

Person did not know contract was forming

Person did not understand legal consequences of acts from contract

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10
Q

Ultra vires

A

An attempted contract not within corporate powers

Contracts “beyond its power”

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11
Q

Consideration necessary to make a promise

A

A return promice

Act performed

Forbearance from acting

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12
Q

Consideration

A

Something of value or bargained for and exchanged by the parties to a contract

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13
Q

Five types of consideration

A

Valuable

Forbearance

Present

Future

Binding promises

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14
Q

Good consideration

A

Based on love, affection, or moral duty

Not sufficient to support a contract

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15
Q

Valuable consideration

A

Consideration necessary and sufficient to support a valid contract

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16
Q

Three types of consideration insufficient to form a binding contract

A

Past consideration

Promises to perform existing obligations

Compromise and release of claims

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17
Q

Promissory estoppel

A

Permits enforcement of a promise made without consideration in order to prevent injustice

18
Q

Promissory estoppel application

A

Party has made a promise expecting another to act

Other party has justifiably relied on the promise to his or her detriment

Only enforcement would achieve justice

19
Q

Usury

A

Charging of illegally high interest rate on a loan

20
Q

Exculpatory clause

A

Contractual provision purporting to excuse a party from liability resulting from negligence or otherwise wrongful act

21
Q

In pari delicto

A

If both parties are equally at fault, contract is not enforceable

22
Q

Severable contract

A

Contract that includes two or more promises (court can enforce separately)

23
Q

Genuine assent

A

Actual assent to form a contract or their indication of intent by actions or words

24
Q

Five factors counter to genuine assent

A

Fraud

Mistake

Duress

Undue influence

Innocent misinterpretation

25
Q

Six elements of fraud

A

(1) a false representation of a (2) material fact (3) knowingly made with (4) intent to deceive (5) on which the other party has placed justifiable reliance (6) to his or her detriment

26
Q

Concealment defense for an insurer (two things)

A
  1. Insured knew concealed fact was material
  2. Insured concealed with intent to defraud
27
Q

Unilateral mistake

A

Perception by one party to a contract that does not agree with the facts

Does not ordinarily affect a contract

28
Q

Statute of Frauds

A

Law to prevent fraud and perjury by requiring certain contracts be in writing and contain signature of party responsible for performing contract

29
Q

Situations in which contracts must be written

A

Sale of land

Will take more than one year

To pay another’s debt

Consideration of marriage

Sale of goods > $500

Sale of real property or legal interests in real property (realty)

30
Q

Uniform Commercial code

A

Model code providing contract for sale of goods > $500 must be in writing

31
Q

Parol evidence rule

A

Assumption that all prior negotiations, etc, were merged into final, written contract

If there is a written contract, any separate writings (prior to acceptance) are not applicable

32
Q

Order of importance when determining changes in a printed contract

A

Handwriting over typewriting

Typewriting over printing

Words over figures

33
Q

If provision can have more than one reasonable meeting

A

Courts adopt interpretation least favorable to the party who put the provision into the contract

34
Q

Creditor beneficiary

A

Third-party owed a debt to be satisfied by performance of contract

35
Q

Donee beneficiary

A

Receives benefit of a contract’s performance as a gift from the promisee

36
Q

Incidental beneficiary

A

No contractual rights but benefits from a contract even though it is not the intent of the parties to the contract

37
Q

Novation

A

Substitution of a third party for one of the original parties to a contract, releasing the original party from rights and obligations under the contract

38
Q

Three conditions of contracts for discharge of contractual obligation

A

Nonfulfillment

Condition concurrent

Condition subsequent

39
Q

Condition concurrent

A

Event that must occur at the same time as another condition

40
Q

Condition subsequent

A

Event that, if it occurs, discharges a duty of performance

41
Q

Anticipatory breach

A

Unequivocal indication before performance is due that he/she will not perform when performance is due

Does not apply to unilateral contracts

42
Q

Materiality of breach

A

Extent to which breaching party has performed

Willfulness of the breach

Extent to which nonbreaching party has obtained benefits

CPCU 530 (8 decks)

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