Contracts

Question 1

When an offer cannot be withdrawn?

Answer 1

Generally, unless consideration is given to keep an offer open, the offeror can withdraw an offer at any time prior to its acceptance by the offeree, even an offer that the offeror states is irrevocable.

However, a firm offer made by the offeror in a signed writing is irrevocable for the stated time period, where such period is three months or less, provided that the offeror is a merchant.

For purposes of this rule, a merchant includes not only a person who regularly deals in the type of goods involved in the transaction or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction, but also any businessperson when the transaction is of a commercial nature.

the firm offer rule applies to any sale of goods by a merchant, regardless of whether the buyer is or is not a merchant

a firm offer, may be subject to a condition.

Question 2

SOF service contract

Answer 2

A contract that cannot be performed within one year from its making because of the constraints of the terms of the agreement falls within the Statute of Frauds and is unenforceable unless made in writing.

Question 3

Economic Waste concept in a breach of contract action

Answer 3

When breach of a construction contract results in a defective or unfinished construction, if the award of damages based on the cost to fix or complete the construction would result in economic waste, then a court has the discretion to award damages equal to the diminution in the market price of the property caused by the breach.

Economic waste occurs when the cost to fix or complete the construction is clearly disproportional to any economic benefit or utility gained as a result.

However, if the breach is willful, and only completion of the contract will give the nonbreaching party the benefit of its bargain, then a court may award damages based on the cost to fix or complete the construction, even if that award would result in economic waste.

Question 4

Seller’s acceptance of buyer’s offer

Answer 4

Question 5

Essential Contract Terms

Answer 5

Question 6

Undue Influence

Answer 6

Question 7

Implied -in-fact contract

Answer 7

Question 8

The Parol Evidence rule

Answer 8

Question 9

When can court reform a written contract

Answer 9

Question 10

Bilateral v. Unilateral Contracts

Answer 10

Question 11

Mutual mistake contracts are voidable when

Answer 11

Question 12

Irrevocable Offers

Answer 12

Question 13

When disclosure is required to avoid misrepresentation

Answer 13

Question 14

Contract modification

Answer 14

Question 15

Elements of valuable consideration

Answer 15

Question 16

What is the timeline and procedure to demand assurances

Answer 16

Question 17

Who has priority to the assigned benefits under a contract as a third party

Answer 17

Question 18

When will a check satisfy unpaid debt

Answer 18

Question 19

Different types of beneficiaries

Answer 19

In general, an intended beneficiary is one to whom the promise of the performance will satisfy the obligation of the promisee to pay money to the beneficiary or the circumstances indicate that the promisee intends to give the benefit of the promised performance. An intended beneficiary has a right to enforce the contract against the promisor.

Donee beneficiary

If the promisee entered the contract for the purpose of conferring a gift on a third party, then the third-party intended beneficiary is given the right to sue the promisor.

Question 20

What is a valid offer

Answer 20

A statement is an offer only if the person to whom it is communicated could reasonably interpret it as an offer. It must express the present intent of a person to be legally bound to a contract. The primary test of whether a communication is an offer is whether an individual receiving the communication would believe that he could enter into an enforceable deal by satisfying the condition.

Question 21

Is it a valid acceptance if the offeree knew the subjective intent of the offeror is to not sell

Answer 21

Although in contract law, intent is generally determined by an objective standard and not by the subjective intent or belief of a party, when an offeree is aware of the other’s party’s subjective intent not to enter into a contract, the offeree’s agreement to enter into a contract does not constitute a valid acceptance.

Question 22

Refrain from groundless civil action is sufficient consideration?

Answer 22

An agreement to refrain from pursuing a civil action that would have been groundless is insufficient consideration to support a settlement agreement.

Question 22

Infancy contract voidable?

Answer 22

When a contract is made by an infant, it is voidable by the infant but not by the other party. This means that the infant may either disaffirm (void) the contract and avoid any liability under it or choose to hold the adult party to the contract. The disaffirmance must be effectuated either before the infant reaches the age of majority or within a reasonable time thereafter.

Although an individual who disaffirms a contract because of infancy is required to restore any benefits received under the contract if possible, an individual who is unable to do so may nevertheless disaffirm the contract, even though the inability to do so is due to the individual’s own carelessness.

Question 23

SOF exceptions

Answer 23

the Statute of Frauds does not apply to a contract where the goods have been received and accepted.

full performance by either party to the contract will generally take the contract out of the Statute of Fraud under the one-year rule.

Question 24

Incapacity of contract

Answer 24

An individual who is the subject of a court-ordered guardianship over that individual’s property lacks the capacity to enter into a contract. Consequently, any contract purportedly entered into by such an individual is void. void rather than merely voidable where a guardianship over an individual’s property has been recognized by a court, the seller’s lack of actual knowledge of the guardianship or the individual’s inability to contract is irrelevant.

Question 25

Delivery of the goods who bears the risk of loss

Answer 25

the delivery of the goods by the seller to the buyer pursuant to a contract generally shifts the risk of loss to the buyer

Question 26

How to waive contract condition

Answer 26

A party whose duty under a contract is subject to a condition can waive the condition, either by words or by conduct. A party who chooses to continue with a contract after a condition is not satisfied effectively elects to waive that condition.

Question 27

The defense of impracticability is available if

Answer 27

(i) an unforeseen event occurs; (ii) the nonoccurrence of which was a basic assumption on which the contract was based; and (iii) the party seeking discharge is not at fault.

Question 27

When can a price term be supplied

Answer 27

Under the UCC a court can find that a contract for the sale of goods was formed if (1) the parties intended to contract, and (2) there is an objective standard to fill in any missing term. Typically, in the sale of goods, quantity is the key term that must be specified. As long as the parties intend to create a contract, the UCC “fills the gap” if other terms, such as the time or place for delivery, or even the price of the goods, are missing.

Question 28

Battle of the forms rule

Answer 28

Question 29

Factors considered to determine material breach

Answer 29

Question 30

When party assumes risk of mistake

Answer 30

Question 31

Mailbox rule when rejection is sent first and then acceptance

Answer 31

Depends on which one is received first

Question 32

Can warranty of fitness for a particular purpose be disclaimed?

Answer 32

Yes

Question 33

Modifications to a contract does not need to be in writing unless

Answer 33

It brings a no SOF contract to a SOF contract

Question 34

Will untimely assurance make the contract voidable

Answer 34

Yes, but not if the buyer still wants to proceed

Question 35

An accomdation/noncomforming goods

Answer 35

Serves as a rejection and counter offer if said explicitly.

Question 36

Impracticality assumption of risk

Answer 36

The person who know it might happen assumes the risk

Question 37

When will a promise to make a gift be enforceable

Answer 37

although a promise to make a gift is generally unenforceable for lack of consideration absent detrimental reliance on the promise by the promisee, here the exchange of such promises constituted valid consideration.

Question 38

Does UCC provide for attorney's fees

Answer 38

No they are not recoverable in the absence of a contract provision allowing them

Question 39

Modification requirement for construction contract

Answer 39

No writing needed if can be completed in an year

Question 40

Seller's response to buyer's offer

Answer 40

Question 41

Assignment of contract

Answer 41

An assignee takes all of the rights of the assignor as the contract stands at the time of the assignment. However, the assignee takes those rights subject to any defenses that could be raised against the assignor. Payment by the obligor to the assignor can be raised as a defense, provided the payment was made before the obligor had notice of the assignment. even an assignment in breach of a contract can be enforced by the assignee subject to any defenses the obligor would have had against the assignor

Question 42

Delegation is release of liability?

Answer 42

When obligations are delegated, the delegator is not released from liability, and recovery can be had against the delegator if the delegatee does not perform, unless the other party to the contract agrees to release that party and substitute a new one (i.e., forms a novation).

Question 43

Timing to object to an acceptance letter

Answer 43

If both parties are merchants and a memorandum sufficient against one party is sent to the other party, who has reason to know its contents, and the receiving party does not object in writing within 10 days, then the contract is enforceable against the receiving party even though he has not signed it.

Question 44

Can repudiation be retracted?

Answer 44

Repudiation may be retracted so long as the other party has not canceled the contract or materially changed position.

Question 45

How can a novation be implied

Answer 45

A novation may be express or implied after delegation if (i) the original obligor repudiates liability to the original promisee and (ii) the obligee subsequently accepts performance of the original agreement from the delagatee without reserving rights against the obligor.

Question 46

SOF exceptions

Answer 46

The UCC Statute of Frauds generally requires a writing when there is a contract for the sale of goods with a value of $500 or more. However, a writing is not required if (i) the goods are to be specially manufactured for the buyer, (ii) the goods are not suitable for sale to others in the seller's ordinary course of business, and (iii) the seller has made “either a substantial beginning of their manufacture or commitments for their procurement.”

Question 47

Non rewrittable contract

Answer 47

Generally, a written contract may be reformed to correct a mistake and thereby reflect the parties’ agreement. However, when there is a mistake as to the quantity term in a signed writing that would otherwise satisfy the Statute of Frauds, the contract is enforceable only to the extent of the quantity actually stated in the writing. T

Question 48

Nonconforming order after the time elapses?

Answer 48

Although the perfect tender rule generally applies to a sale of goods, the seller has a right to cure a defective tender—even after the time for performance under the contract has elapsed—if the seller had reasonable grounds to believe that the buyer would accept the goods despite the nonconformity. In curing the defect, the seller must notify the buyer of its intent to do so and effect the cure within a reasonable time.

Question 49

Order of performances

Answer 49

Question 50

UCC Gap fillers

Answer 50

Question 51

Effective revocation

Answer 51

a revocation of an offer is only effective if the offeree has received the revocation.

Question 52

As between merchants, an additional term contained in the acceptance is automatically included ?

Answer 52

is automatically included in the contract unless the offer expressly limits acceptance to the terms of the offer, the offeror has already objected to the additional terms or does so within a reasonable time, or the term materially alters the original contract. A term that results in surprise or hardship if incorporated without the express awareness by the other party materially alters the original contract. Terms that usually do not materially alter the contract include reasonably limiting remedies.

Question 53

auction

Answer 53

In the absence of language to the contrary, the auction of an item is with reserve, and the items may be withdrawn from sale any time before the completion of the sale is announced.

Question 54

A threat to breach a contract is duress?

Answer 54

A threat to breach a contract can, but does not necessarily, constitute duress. Such a threat constitutes duress when it breaches the duty of good faith and fair dealing.

Question 55

revocable assignment

Answer 55

no consideration

Question 56

SOF marriage

Answer 56

it is subject to the Statute of Frauds. The Statute of Frauds applies to this promise because the act of marriage was consideration for the promise.

Question 57

Installment contract recovery right

Answer 57

Where a party to a contract breaches the contract and the only remaining duty with respect to the contract is the payment of money in installments, this breach does not give the other party a claim to damages for total breach.

Question 58

No oral modification clause

Answer 58

Question 59

Revocable advertisement

Answer 59

Question 60

Identification of future goods to contract

Answer 60

Question 61

Misrepresentation needs to be intentional or fraudulent?

Answer 61

No as long as it is material

Question 62

Gap fillers common law

Answer 62

Non essential terms reasonable under the circumstances for both parties.

Question 63

The principle of reasonable expectations

Answer 63

Question 63

Divisible contracts

Answer 63

Question 64

The duty of good faith

Answer 64

Question 65

Damages for substantial performance v. material breach

Answer 65

Question 66

Can you cure a fraudulent misrepresentation?

Answer 66

A fraudulent misrepresentation need not be material, and may make the contract voidable at the adversely affected party’s option. However, the contract is no longer voidable if, following a misrepresentation but before the deceived party has avoided the contract, the facts are cured so as to be in accord with the facts that were previously misrepresented.

Question 67

No assumption of risk applied in

Answer 67

antique goods

Question 68

How can an intended beneficiary sue for breach of contract

Answer 68

If the promisee tells the intended beneficiary about the contract and should reasonably foresee reliance, and the beneficiary does so rely to his detriment, then the intended beneficiary may sue the promisee for his breach of the contract.

Question 69

Exceptions to preexisting duty rule

Answer 69

Question 69

Express agreement trumps course of dealing?

Answer 69

Yes

Question 70

Attempt's actus reus

Answer 70

Question 71

Third party beneficiary contract enforcement

Answer 71

Question 72

Exceptions to mail box rule

Answer 72

Question 73

Contracts unenforceable on public policy grounds can still be enforced if

Answer 73