Contracts - 13

Question 1

If you can foresee the damaages that will result from a breach of contract and you are the non breacher - what will happen

Answer 1

It you can foresee the damages then you can take action to prevent or reduce losses

These will effect the amount of monetary damages that could be recoved

Question 2

What are action that reduce a non breaching parties losses called

Answer 2

This is the mitigation of damages - they reduce the losses

Question 3

What happens to a contract if you have a mutual mistake of fact

Answer 3

it is voidable

Question 4

What if you have a mutual mistake of fact

Answer 4

This wont void a contact, but may cause the parties to renegotiate the price

Question 5

What is you have a unilateral mistake of value or fact

Answer 5

This is when one of the parties to the contract make a mistake in value or fact but the correct info was available to them and

This does NOT void a contact

Question 6

What if you have a mutual mistake of value

Answer 6

This wont void the contract, but may cause you to reevaluate the price

Question 7

When is a contract with minor enforceable

Answer 7

A contract entered into with a minor is only voidable by the minor

Question 8

What if the party has a preexisting duty - like police to catch a thief

Answer 8

if you promise to give them money of they do - not enforceable because it is already their job

Question 9

What is the patrol evidence rule

Answer 9

This define what evidence can be admitted into court

All contemporaneous oral agreements BEFORE the contract the contradict what was in the written contract - is barred

Question 10

Under patrol evidence rule can oral modification AFTER a contract was signed be admissible

Answer 10

Yes they are because after wards

Question 11

When can you assign rights

Answer 11

This is when you can delegate the duties to another

• doesn’t have to be in writing - can be oral
• does not require notice to assignee - don’t need their consent
• what you do need is that the assignors intent to transfer

Question 12

Who is an obligor and obligee

Answer 12

The obligor provide something to the obligee

the obligee gets the benefit

The obligor is the parent that is required to pay child support to the obligee ( child

Obligor is contractually commuted

Question 13

What is an assignor and assignee

Answer 13

assignor is a person who first entered into a contract to sell a piece of property. They can then turn around and assign the proceeds for the sale ( of the contract) to a third party- the assignee

AN assigner transfers rights they hold to another entity

The assignee gets the benefit. They get the benefit assigned to them.

Question 14

IF you are assigned the benefit A -> B-> C you are C can you sue A if they do not pay you

Answer 14

Yes - this is because you as C are the third party Called the “intended creditor beneficiary” and is owed the rights.

C can sue A

Question 15

When is a liquidating damages clause enforceable

Answer 15

It is only enforceable if it is a reasonable approximation of the loss resulting from the breach

• Not enforceable if it is considered punitive damages
• Not enforceable even if the breach was intentional

Question 16

Can a seller demand specific performances

Answer 16

Nope - only the buyer can demand specific performances

Question 17

If you have an original note that the 2 parties later agreed to satisfy with a lower amount can the receiving party later sue them?

Answer 17

No - if you pay the debt earlier than the due date and it was accepted. The party receiving it will ( by accepting the lower amount of money) the contract will have been considered to be satisfied and the original note will have been discharged

Question 18

When can you or can’t you assign the rights over to a third party

Answer 18

You generally can unless

• it materially changes the contract or responsibilities if the parties involved
• it is forbidden - like personal services

Question 19

Can you assign option contract right

Answer 19

Yes - no special reason not too

Question 20

can you assign malpractice insurance policy right

Answer 20

NO - because this would materially change the contract and therefore it is forbidden

Question 21

Void or voidable?

Undue influence by a dominant party in a confidential relationship.

Answer 21

Voidable Undue influence by a dominant party in a confidential relationship merely renders the contract voidable, not void.

Question 22

Void or Voidable

Duress through improper threats.

Answer 22

Voidable

Duress through improper threats merely renders the contract voidable, not void.

Question 23

Void or voidable

Duress through physical compulsion.

Answer 23

Void

Question 24

Void or Voidable

Mutual mistake as to facts forming the basis of the contract.

Answer 24

Voidable

Mutual mistake as to facts forming the basis of the contract merely renders the contract voidable, not void

Question 25

Parole Evidence Rule

Answer 25

The parol evidence rule does not bar evidence of subsequent modifications of a written contract. It does bar evidence of all prior agreements, oral or written, that contradict the later written contract.

Question 26

Can state of frauds be satisfied by a combination of written documents

Answer 26

Yes it can

Question 27

What are the $ rules with stature of frauds

Answer 27

The sales of Goods must be more than $500.

This money level isn’t important for other types of contracts

Question 28

Who must sign the contract in order for it to qualify for breach of contract

Answer 28

the contract needs to be signed by the defendant being charged

The plaintiff does not have to have signed

Question 29

When can you discharge a contract

Answer 29

• When a party is prevented from performing the contract
• When the contract is satisfied
• when the parties agree to the discharge
• by operation of law
• by a breach of contract

Question 30

WHAt are the exceptions to the writing requirement for goods over $500

Answer 30

SPAM

If the goods are Specifically made for you -

It the contract is already partially executed - you already get half of them

If the contract has already been admitted into court

If you are a manufacturer - and do not reposed in 10 day s- bound by silence

Question 31

What happens to your contracts if you are ruled insane

Answer 31

contracts you entered be fore ruled insane are voidable

contract you enter AFTER you are ruled insane are void

Question 32

Are contract to make a gift enforceable

Answer 32

No - the contract lacks consideration lacks money

Question 33

Does past consideration support a contract

Answer 33

no - if you did something in the past - it does not make it relevant to a brand new contract

Question 34

What is a liquidating damages provision

Answer 34

this is a predetermined amount of money that must be paid as damages for failure to perform under a contract

Question 35

when are liquidating damages considered valid

Answer 35

they are valid as long as they are considered reasonable - and not punitive

Question 36

do you need to have a written contract to assign an interest in a sum of money to someone else

Answer 36

NO - its not covered by the statute of fraud and therefore is valid - without it having to be in writing

Question 37

How does it work when you take out an insurance policy one one person where a second person is the beneficiary

Answer 37

This is a valid assignment

the gain does not have to be part of the specific insurance policy

Question 38

If you are a merchant and seller make an offer and it has no expiration date - what does that mean

Answer 38

Under UCC - if offer will remain open for a reasonable period of time

This is the mailbox rule

Which means that a contract is formed on the day you mail in the acceptance offer - not when it is received

Question 39

What is fraud in the indictment

Answer 39

one part male misrepresentations to induce the other party to enter into the contract

Question 40

What is the defense of unconscionability

Answer 40

The contract terms are extremely unfair to one person in eh contract

Question 41

Who is entitled to sue as a intended beneficiary

Answer 41

You are only entitled to sue under a contract if you are an intended beneficiary - not an incidental one

Question 42

What is accord and satisfaction

Answer 42

This is the agreement by the parties to a contract to substitute the performance of n alternate duty to discharge the original duty

Question 43

when can a minor disaffirm a contract

Answer 43

up to a reasonable time after reaching eh age of majority

Question 44

Under a personal service contract will going bankrupt or dying cause a discharge of a parties duties

Answer 44

if you are RECEIVING service
- dying no - service go to your estate
bankruptcy - no still get the service

If you are the party GIVING service ‘

• if you die - the contract is discharged
• if you go bankrupt - discharge of duties

Question 45

What if you have a patent

Answer 45

Patents are unique. Therefore, a court will generally grant the remedy of specific performance because other remedies are inadequate substitutes for a unique patent.

Question 46

What is novation

Answer 46

A novation refers to the substitution of one contractual agreement for another.

Question 47

Rules on stature of limitations

Answer 47

• computed from the date of the alleged breach
• applies to all contract both oral and written
• means that a claim must be filed in a certain period of time
• the limitation are determined for each category of legal claim, not individually

Question 48

What is a rescission

Answer 48

Rescission is the cancellation of a contract and restoration of the situation that existed before it was made.

Question 49

what is a revocation

Answer 49

It is a withdrawal of an offer prior to its acceptance

Question 50

What i a release

Answer 50

Release involves the discharge of a party from any remaining obligations under a contract.

Question 51

Void or voidable?

fraud in inducement

Answer 51

Voidable

Question 52

Void or voidable

physical coercion

Answer 52

Void

Question 53

Void or Voidable

fraud in the execution

Answer 53

void

Question 54

Does an offer have to be in writing it if is for more than 1 year

Answer 54

A contract has to be in writing that is over 2 years , but an offer does not have to be in writing

Question 55

Is a fax acceptable for a written acceptance

Answer 55

Yes it is considered acceptable

Question 56

If you specify that the offer needed to be received by a date would it be valid if the office was closed that date

Answer 56

No because you specified that it need to be received by that date and if they were not there to receive it - they did not get it and therefore it is not effective when sent

Question 57

If you sent something by fax on the proper date, but they did not receive it because they were closed what is the result

Answer 57

The offer would not have failed because it was NOT sent timely - it failed because it was NOT received by them on a timely basis

Question 58

If you reject an offer inside the window can you later ( inside the window) accept it

Answer 58

No - its terminated when you reject it the first time

Question 59

Can you assign punitive damages to a breach of contract

Answer 59

No not usually for a breach of contract

usually for wrongdoing

Question 60

can you orally accept an offer for a job that take up more than 1 year

Answer 60

no - you must have a written contract for that

Question 61

does an offer have to have a date or time

Answer 61

no - it will remain open for a reasonable amount of time

Question 62

On January 15, East Corp. orally offered to hire Bean, CPA, to perform management consulting services for East and its subsidiaries. The offer provided for a three-year contract at $10,000 per month. On January 20, East sent Bean a signed memorandum stating the terms of the offer. The memorandum also included a payment clause that hadn’t been discussed and the provision that Bean’s acceptance of the offer would not be effective unless it was received by East on or before January 25. Bean received the memorandum on January 21, signed it, and mailed it back to East the same day. East received it on January 24. On January 23, East wrote to Bean revoking the offer. Bean received the revocation on January 25.

What was the effect of the event(s) that took place on January 20?

What was the effect of the event(s) that took place on January 21?

What was the effect of the event(s) that took place on January 23?

What was the effect of the event(s) that took place on January 24?

What was the effect of the event(s) that took place on January 25?

Answer 62

What was the effect of the event(s) that took place on January 20?

Submission of a written offer.

What was the effect of the event(s) that took place on January 21?

Attempted acceptance of an offer. Since East’s offer indicated that acceptance must be received by January 25 to be effective, the mailbox rule does not apply. Bean’s acceptance was not valid when it was mailed on January 21. It will be valid when received.

What was the effect of the event(s) that took place on January 23?

Attempted revocation of an offer.

What was the effect of the event(s) that took place on January 24?

Formation of an enforceable contract. On January 24, upon receipt of the signed acceptance by Bean, an enforceable contract was formed. Since the revocation mailed on January 23 was not effective until received by Bean, as of January 24, there has been an offer and a valid acceptance resulting in a valid contract.

What was the effect of the event(s) that took place on January 25?

Invalid revocation because of prior acceptance of an offer. The revocation mailed by East on January 23 would not have been effective until it was received by Bean on January 25. Prior to Bean receiving the revocation, however, East received Bean’s valid acceptance of the offer resulting in an enforceable contract. As a result, the revocation was invalid.

Question 63

On March 1, East Corp. orally engaged Snow Consultants to install a corporate local area network system (LAN) for East’s financial operations. The engagement was to last until the following February 15 and East would pay Snow $5,000 twice a month. On March 15, East offered Snow $1,000 per month to assist in the design of East’s Internet homepage. Snow accepted East’s offer. On April 1, citing excess work, Snow advised East that he would not assist with the design of the homepage. On April 5, East accepted Snow’s withdrawal from the Internet homepage design project. On April 15, Snow notified East that Snow had assigned the fees due Snow on the LAN installation engagement to Band Computer Consultants. On April 30, East notified Snow that the LAN installation agreement was canceled.

What was the effect of the event(s) that took place on March 1?

What was the effect of the event(s) that took place on March 15?

What was the effect of the event(s) that took place on April 5?

What was the effect of the event(s) that took place on April 15?

What was the effect of the events(s) that took place on April 30?

Answer 63

What was the effect of the event(s) that took place on March 1?
Formation of an enforceable contract.

What was the effect of the event(s) that took place on March 15?

Formation of an enforceable contract. On March 15 East made a valid offer which Snow accepted. As a result, an enforceable contract was formed.

What was the effect of the event(s) that took place on April 5? ‘

mutual rescission

What was the effect of the event(s) that took place on April 15?

Valid assignment of right

What was the effect of the events(s) that took place on April 30?

breach of contract