Contracts

Question 1

What are the elements of a contract?

Answer 1

1) Mutual Assent
2) Consideration
3) No Defenses

Question 2

What does mutual assent mean?

Answer 2

There has been an offer and acceptance

Question 3

What does consideration mean?

Answer 3

There has been a bargained for exchange OR a substitute for consideration (i.e. promissory estoppel, detrimental reliance, or good faith modification under the UCC)

Question 4

What does are the defenses to contract formation?

Answer 4

Mistake OR Lack of capacity OR Illegality OR Statute of Frauds

Question 5

What is the Statute of Frauds (MY LEGS)

Answer 5

1) Marriage
2) Any contract that can’t be performed in a year
3) Anything relating to land
4) Executory (pay debt of estate out of own funds)
5) Goods over $500
6) Suretyship (guaranty)

Question 6

When is revocation by offeror effective?

Answer 6

Effective when received

Question 7

What are the methods an offeror can use to revoke an offer?

Answer 7

Express revocation or implied (e.g., offer discovers offeror sold subject matter to someone else)

Question 8

What are the limitations on a Offeror’s power to revoke an offer?

Answer 8

Option contract, merchant’s firm offer, detrimental reliance, beginning performance on unilateral contract

Question 9

What is a unilateral contract?

Answer 9

A contract in which the offeror requires performance rather than a promise. The offeror-promisor promises to pay upon the completion of the requested act by the promisee. Once the act is completed, a contract is formed. In such contracts, there is one promisor and one promisee

Question 10

What is a bilateral contract?

Answer 10

A contract consisting of mutual promises i.e. a promise for a promise, in which each party is both a promisor and a promisee

Question 11

Under Article 2 if the terms of acceptance include new terms do the new terms stay in (if both parties are merchants)?

Answer 11

Yes

Question 12

Under Article 2 if the terms of acceptance include new terms do the new terms stay in (if only one party is a merchant)?

Answer 12

No, only the original terms stay in

Question 13

If the seller is a merchanr when does risk of loss pass to the buyer?

Answer 13

When the buyer takes physical posswssion of the goods

Question 14

If the seller is not a merchant when does risk or loss pass to the Buyer?

Answer 14

Upon tender of delivery