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Bar Exam > CONTRACTS > Flashcards

CONTRACTS Flashcards

1
Q

What does the Uniform Commercial Code (UCC) apply to?

A

Transactions in goods

Common law applies to everything else, such as services.

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2
Q

What is required for the creation of an offer?

A

Intent to enter into a contract plus specific terms

Specific terms include price, quantity, and identity of the parties.

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3
Q

What are the four ways to terminate an offer?

A
  • Lapse of time
  • Rejection
  • Revocation
  • Death or incapacity of offeror
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4
Q

What is a firm offer under the UCC?

A

An offer by a merchant in a signed writing that can be held open for a maximum of three months.

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5
Q

How can an option contract be defined?

A

A promise to hold open the offer plus consideration for that promise.

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6
Q

How is acceptance effective according to the mailbox rule?

A

Acceptance is effective when sent.

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7
Q

What is the ‘mirror image’ rule in common law?

A

The acceptance must be the exact match of the offer.

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8
Q

Under the UCC, what is unique about acceptance?

A

An acceptance does not need to mirror the offer and may include additional terms.

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9
Q

What constitutes consideration in a contract?

A

A bargained-for exchange

Consideration cannot include a promise to make a gift, moral obligation, past consideration, or an illusory promise.

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10
Q

What is required to modify a contract under common law?

A

Consideration is needed to modify a contract.

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11
Q

What is ‘perfect tender’ in the context of the UCC?

A

The seller must provide goods that conform exactly to the contract.

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12
Q

What is anticipatory repudiation?

A

When a party unequivocally indicates they will not perform the contract.

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13
Q

What is the definition of frustration of purpose?

A

When an unforeseeable event frustrates the primary purpose of the contract known by both parties.

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14
Q

What are express warranties?

A

Affirmations of fact about the goods or a sample of the goods that cannot be disclaimed.

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15
Q

What is the implied warranty of merchantability?

A

A warranty that goods are fit for their ordinary purpose, made by a merchant.

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16
Q

What is required for a limitation of remedies clause to be enforceable?

A

It must not be unconscionable or fail of its essential purpose.

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17
Q

What is the general rule regarding contract interpretation?

A

Express terms control.

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18
Q

Fill in the blank: A unilateral contract can only be accepted by _______.

A

full performance.

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19
Q

True or False: A requirements contract will fail for lack of quantity.

A

False.

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20
Q

What is required for a seller to have the right to cure after a buyer rejects goods?

A

Time must be left to perform under the contract or the seller reasonably believed the buyer would accept the goods.

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21
Q

What happens if a buyer accepts goods?

A

The buyer may not reject them but may later revoke acceptance.

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22
Q

What is a condition subsequent in contract terms?

A

An event that cuts off a duty.

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23
Q

What is considered a ‘bargained-for exchange’?

A

Consideration that is mutually agreed upon by both parties.

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24
Q

What does the UCC require for modifications to a contract?

A

Only good faith is needed.

25
Q

What controls the interpretation of contracts?

A

Express terms control.

Courts also consider course of performance, course of dealing, and trade usage.

26
Q

What does the UCC provide for terms not stated in a contract for the sale of goods?

A

Default rules act as gap fillers, e.g., a reasonable price at the time of delivery if no price is stated.

27
Q

What is the Parol Evidence Rule (PER)?

A

The PER applies when a party wants to add a term from preliminary negotiations to a final written agreement.

28
Q

What happens if there is a complete integration of a contract?

A

No terms will be admitted into evidence.

29
Q

What is a merger or integration clause?

A

A clause stating ‘this is the full and final agreement.’

30
Q

What are the conditions under which consistent additional terms may be admitted?

A

If there is a partial integration.

31
Q

What does the Parol Evidence Rule not apply to?

A

Formation defenses, interpretation of a term, failure of a condition precedent, clerical error, or later modification.

32
Q

What rights do Intended Third-Party Beneficiaries (TPBs) have under a contract?

A

They have rights once their rights vest.

33
Q

What factors determine if a TPB is intended?

A
  • Express designation in the contract
  • Performance directly to the TPB
  • TPB has any rights
  • Relationship between the TPB and the promisee
34
Q

What is the key difference between delegation and assignment?

A

Delegation involves duties; assignment involves rights.

35
Q

Under what conditions may a party delegate duties under a contract?

A

Unless the contract prohibits it or involves special skill, judgment, or trust.

36
Q

What is required for a delegation to occur?

A

Neither consent, consideration, nor writing is needed.

37
Q

What is the Statute of Frauds (SOF)?

A

It requires a writing signed by the party to be charged that evidences a contract.

38
Q

Which contracts fall under the Statute of Frauds (MYLEGS)?

A
  • Contracts made in consideration of marriage
  • Contracts that cannot be performed within a year
  • Contracts for the sale of land
  • Promises made by an executor to pay a debt from his own estate
  • Contracts for the sale of goods for $500 or more
  • Surety contracts
39
Q

What exceptions exist for the Statute of Frauds regarding land?

A

Part performance when actions evidence a contract.

40
Q

What are the exceptions to the Statute of Frauds for the sale of goods?

A
  • Merchants confirmatory memo exception
  • Seller has made a substantial beginning in manufacture
  • Judicial admissions
  • Part performance
41
Q

What is required for a surety promise to fall within the SOF?

A

Unless the main purpose is to serve a pecuniary interest of the person making the promise.

42
Q

What constitutes incapacity under contract law?

A

Minors, mentally incompetent, or intoxicated persons.

43
Q

What is duress in contract law?

A

When a party threatens to commit a wrongful act that would threaten the other party’s finances, property, well-being, or life.

44
Q

What is undue influence?

A

Unfair persuasion by a person in a position of trust or dominance.

45
Q

What is mutual mistake in contract law?

A

Both parties are mistaken about a basic assumption of fact that materially affects the exchange.

46
Q

What is unilateral mistake?

A

One party knows or has reason to know of the other party’s mistake.

47
Q

What happens in case of mutual misunderstanding?

A

There is no contract if both parties have a different understanding of a material term.

48
Q

What is the consequence of an illegal subject matter in a contract?

A

The contract is void.

49
Q

What are the two elements of unconscionability?

A
  • Procedural unconscionability
  • Substantive unconscionability
50
Q

What does expectation damages refer to?

A

The loss of value of the breaching party’s performance plus incidental and consequential damages minus expenses saved.

51
Q

What are incidental damages?

A

Damages related to avoiding loss from the breach.

52
Q

What are consequential damages?

A

Damages that are foreseen at the time the contract is entered into.

53
Q

What does a seller receive if they breach and the buyer has goods?

A

The difference between the market price and contract price plus incidental and consequential damages.

54
Q

What is specific performance?

A

An equitable remedy usually available for unique goods or land contracts.

55
Q

What is an injunction?

A

An equitable remedy that tells a party to do or not do something.

56
Q

What is rescission in contract law?

A

Undoing the contract when it is void or voidable.

57
Q

What is restitution?

A

Recovering the value of the benefit conferred.

58
Q

What are liquidated damages clauses?

A

Enforced if damages are difficult to estimate at the time the contract was made.

59
Q

What are penalties in contract law?

A

Not permitted under contract law.

Bar Exam (14 decks)

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