Contract Law (Overview)

Question 1

civil wrong

Answer 1

lawsuit

Question 2

injunction

Answer 2

get court to tell other party to stop doing something

Question 3

elements of a contract (5)

Answer 3

1. offer
2. acceptance
3. consideration
4. capacity
5. legality
   * if missing an element, contract is not legally binding

Question 4

offeree

Answer 4

party to whom offer is made

Question 5

counter-offer

Answer 5

rejection of original offer, followed up by new offer

Question 6

expressing acceptance (2)

Answer 6

• does not always need to be expressed in words

- can be communicated by conduct or even silence

Question 7

capacity

Answer 7

legal ability to bind oneself to a contract

Question 8

aggrieved party can seek (4)

Answer 8

1. monetary relief
2. specific performance
3. rescission and restitution
4. injunction

Question 9

liquidated damages (3)

Answer 9

• parties agree ahead of time that if one party breaches, that party will pay a certain amount of money to the nonbreaching party
• damages have to be reasonable as to subject matter
• predetermined

Question 10

specific performance and example

Answer 10

• rare cases, when monetary damages will not suffice, breaching party must perform terms of contract bc money will not suffice to compensate non-breaching party
  example: sculptor

Question 11

offeror

Answer 11

party making the offer

Question 12

offer (2)

Answer 12

• a proposal to form a contract made by offeror to offeree

- promise, commitment to do something, or to refrain from doing something in the future

Question 13

acceptance (4)

Answer 13

• offeree accepts offer
• offer may be accepted only by the person to whom it is made
• offeree cant reject offer and then try to accept it
• once offer is rejected, offer dies

Question 14

legal detriment

Answer 14

some benefit exchanged between parties

Question 15

court judgement and consideration

exception

Answer 15

• courts will not use own judgement about consideration; up to the parties to decide what consideration should be paid
• exception: some types of fraud, misrepresentation, duress, or mistake in contract

Question 16

legality (2)

Answer 16

• underlying transaction must be legal for contract to be valid and enforceable
• subject matter must be legal

Question 17

what happens when contract is not performed (2)

Answer 17

• breach of contract
• court tries to place the aggrieved party in same economic position he would have had if the contract had been performed

Question 18

rescission (2)

Answer 18

• court “undoes” contract and puts parties back into positions they occupied before contract was agreed upon
• happens particularly with fraud

Question 19

restitution

Answer 19

both parties make restitution to each other by returning whatever good, property, and so on that were transferred under the contract or an equivalent amount of money

Question 20

contract

Answer 20

agreement between 2 or more parties which creates an obligation to do or not to do a particular thing

Question 21

monetary relief (2)

Answer 21

• monetary damages to put parties in same economic position as if contract had been performed
• liquidated damages

Question 22

consideration (2)

Answer 22

• must be an “exchange of value” to legally bind parties

- one party gives up or does something in return for the other party’s doing the same

Question 23

lack of capacity (3)

Answer 23

• minors (under 18)
• persons mentally incompetent
• those who lack the capacity to understand the nature and consequences of the transaction in question