Contracts

Question 1

When is a contract created?

Answer 1

When there is mutual asset (offer and acceptance) and
Consideration

Question 2

What is an offer?

Answer 2

Objective manifestation of the willingness by the offeror to enter into an agreement that creates the power of acceptance in the offered

Question 3

What are the essential terms under common law?

Answer 3

Parties
Subject matter
Price
Quantity

Question 4

What are the essential terms for UCC?

Answer 4

Quantity

UCC will fill all other gaps

Question 5

How can an offer be terminated?

Answer 5

Lapse of time
Death or mental incapacity
Destruction or illegality
Revocation

Question 6

What is the UCC Firm offer rule?

Answer 6

Offer to buy or sell goods are irrevocable if:

1) offeror is a merchant
2) assurance the offer will stay open and
3) assurance is in a signed writing by the offeror

Merchant: person who regularly deals in the type of goods involved or hold himself as having knowledge or skill in the good involved

Question 7

When is there acceptance?

Answer 7

When there is an objective manifestation by the offeree to be bound by the terms of the offer.

Question 8

What if there are different or additional terms under common law?

Answer 8

Acceptance must mirror offer.

Additional or different terms is a rejection of the original offer and is a counteroffer.

Question 9

What if there are different or additional terms under UCC?

Answer 9

Included

Unless merchant and materially alters original contract, or the offer limits acceptance, or objected within a reasonable time after receiving.

Question 10

What is consideration?

Answer 10

A legal detriment or bargained for exchange.

Question 11

What is needed for modification under common law?

Answer 11

Modification must be supported by consideration

Question 12

What is needed for modification under UCC?

Answer 12

Good faith: honesty in fact and fair dealing in accordance with reasonable commercial standards.

Question 13

What is accord?

Answer 13

Party agrees to accept performance that differs from the performance that was promised in the contract in satisfaction of the party existing duty’s

Question 14

What is satisfaction?

Answer 14

The performance of the accord agreement.

Question 15

What is the rule of Promissory Estoppel?

Answer 15

Can enforce a promise without consideration if:

1. Promised should reasonably expect it to induce action or forbearance on the part of the promised or a 3rd party
2. The promise does induce such action or forbearance and
3. Injustice can be avoided only by enforcement of the promise

Question 16

What are defenses to formation?

Answer 16

Mutual mistake
Unilateral mistake
Misunderstanding
Misrepresentation, nondisclosure or fraud
Undue influence
Duress
Capacity to contract

Question 17

What is the material benefit rule (promise binding without consideration)

Answer 17

When a party performs an unrequested service for another party that constitutes a material benefit, permits the performing party to enforce a promise of payment.

Question 18

What is an implied in fact contract?

Answer 18

Persons assent to an offer is inferred by the persons conduct.
To be bound the person must intend the conduct but also know or have reason to know that his conduct may cause the offeror to understand the conduct as assent to the offer

Question 19

What is the implied warranty of fitness for a particular purpose?

Answer 19

Implied whenever the seller has reason to know that the buyer has a particular use for the goods and the buyer is relying upon the sellers skill to select the goods.

Question 20

What falls under the statute of frauds?

Answer 20

Mr SOUR

marriage
Surety
One year rule
UCC over $509
Real estate

Question 21

What is the parol evidence rule? Tested July

Answer 21

Prevents a party to a written contract from presenting extrinsic evidence of a prior or contemporaneous agreement that contradicts the terms of the contact as written.

Question 22

How must you perform under common law?

Answer 22

A party who substantially performs can recover on the contract even though full perform are has not been tendered

Question 23

How must you perform under the UCC?

Answer 23

Perfect tender

Question 24

What is anticipatory repudiation?

Answer 24

Unequivocal manifestation the party cannot or will not perform their obligations.

Non breaching party may treat as breach as sue immediately or ignore and demand performance.

If time for performance has not passed then must wait until due before filing suit

Question 25

When can anticipatory repudiation be retracted?

Answer 25

Until the promised
1) acts in reliance on the repudiation
2) signifies acceptance of the repudiation or
3) commences an action for breach of contract

Question 26

What is prospective inability to perform?

Answer 26

A party can demand assurance of performance of there are reasonable grounds for insecurity about the other party’s ability or willingness to perform.

Once requested performance may be suspended until provided.

Failure to give in a reasonable time can be treated as repudiation

Question 27

What is the normal measure of damages on contracts and what does it do?

Answer 27

Expectation damages: meant to put the non reaching party in the same position as if the contract had been performed.

Question 28

What are consequential damages?

Answer 28

Result naturally from the beach but need not be the usual result of the breaching party’s conduct only FORESEEABLE RESULT of the breach

Question 29

MITIGATION: a party cannot recover damages for a loss that the party could have avoided by reasonable efforts

Question 30

What is foreseeable?

Answer 30

Must be foreseeable by the reaching party in order to be recoverable

Question 31

If a party commits a medial breach they are limited to restitution damages NO UNJUST ENRICHMENT