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REG Law > Contracts > Flashcards

Contracts Flashcards

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1
Q

What are the 6 elements of a contract?

Only Accuracy Can Pass Law Candidates

A 
an Offer
an Acceptance
Consideration
Proper form (sometimes writing is required)
a Lawful object
two or more Competent parties
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2
Q

What are the three elements an offer must have?

A

Must be:

1) seriously intended
2) communicated
3) definite in its terms (must include price)

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3
Q

T/F

Advertisements & Price Quotes are considered offers?

A

FALSE

They are invitations to deal

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4
Q

What are the three elements of acceptance?

A

Must be:

1) unconditional
2) communicated by words or actions
3) accepted only by the party to whom the offer was made

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5
Q

What ends an offer?

A

1) when counteroffers are received/communicated
2) when rejections are received/communicated
3) when revocations (annulments) are received/communicated
4) death/insanity
5) at the time stated in the offer. if no time stated, after a reasonable time
6) destruction/sale of the subject matter

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6
Q

This is a promise for a promise contract

A

a bilateral contract

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7
Q

This is a promise for an act contract

A

a unilateral contract

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8
Q

This is a contract that is unenforceable by either party, basically an illegal contract

A

a void contract

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9
Q

this is a legal contract but one party can rescind, cancel, or disaffirm

A

a voidable contract

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10
Q

this is giving up of a legal right

A

Consideration

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11
Q

T/F

In a contractual setting, consideration must be present for one of the two parties

A

FALSE

It must be present for both parties

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12
Q

Consideration must be ____ for and _____

A

Mutually Bargained

Legally Sufficient

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13
Q

T/F

Consideration between two parties for a contract must be of equal value

A

FALSE

There is no requirement that the consideration be of equal value

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14
Q

T/F

No consideration is needed on a promise to donate to charity

A

TRUE

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15
Q

T/F

Past consideration is no good (if you find out about a promise for a reward after doing an action, you can’t enforce that promise)

A

TRUE

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16
Q

T/F

Failure to have a required license makes all contracts void, unless the license was a mere revenue raising measure

A

TRUE

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17
Q

What 6 contracts require writing to be enforceable? (GRIPE + M)

A

1) Goods ($500 or more, must state quantity)
2) Real estate contracts
3) Impossible to perform contracts in 1 year
4) Promise to answer the debt of another
5) Executor’s promise to be liable for the debt of an estate
6) Marriage

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18
Q

What are the three exceptions to the Statute of Frauds (the 6 contracts required to be in writing)

A

1) the contract is fully performed by both parties
2) contract impossible to perform in one year but one party has already fully performed
3) oral real estate deals when the buyer is in possession and has made a substantial down payment or made substantial improvements

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19
Q

When can drunks disaffirm a contract?

A

Only if they are incapable of understanding what they did

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20
Q

When can the insane disaffirm a contract? Does this have any consequences?

A

Insane can usually disaffirm, but once adjudicated insane, all future contracts are void

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21
Q

T/F

A minor can disaffirm real estate contracts or necessary contracts

A

FALSE

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22
Q

T/F

A minor can ratify a portion of a contract after becoming an adult

A

FALSE

They can ratify the contract but must ratify the entire contract

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23
Q

T/F

Minors can disaffirm a contract even if they lied about their age when getting into it - the other party should have double checked

A

FALSE

Minors are still liable for torts (fraud) and this includes lying about their age to get into a contract. They can disaffirm the contract but they are liable for their torts.

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24
Q

Mutual mistakes of a material fact result in what kind of contract?

A

A void contract - no meeting of the minds

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25
Q

A unilateral material mistake will result in what kind of contract?

A

A voidable contract, one can disaffirm if the other party knew or should have known a mistake was being made

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26
Q

This is forcing someone into a contract by the threat of violence, economic destruction, or criminal action

A

Duress

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27
Q

Duress in which the parties knew what they were entering into results in what kind of contract?

A

Voidable

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28
Q

Duress in which (one of) the parties did not know what they were entering into results in what kind of contract?

A

Void

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29
Q

This is using a position of love, confidence, or affection to overcome another’s free will in a contract

A

Undue influence

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30
Q

Undue influence results in what kind of a contract?

A

Voidable

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31
Q

Common Law Fraud is another term for what?

A

Actual Fraud

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32
Q

Fraud in the inducement is another term for what?

A

Actual Fraud

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33
Q

Actual Fraud has what 5 elements? (MS RID)

A 
M - Material Misrepresentation
S - Scienter (intent to deceive)
R - Reasonable Reliance
I - Intent to rely
D - Damages
34
Q

Constructive Fraud/Gross Negligence has what 5 elements? (MR RID)

A 
M - Material Misrepresentation
R - Reckless disregard for the truth
R - Reasonable Reliance
I - Intent to rely
D - Damages
35
Q

This is when the injured party does not know a contract was being made

A

Fraud in the Execution

36
Q

Fraud in the Execution causes which kind of contract?

A

a Void contract. No meeting of the minds

37
Q

This is when the injured party knows they made a contract, but one or more terms are misrepresented

A

Fraud in the Inducement

38
Q

Fraud in the Inducement causes what kind of contract?

A

Voidable

39
Q

What are the 4 elements of Innocent Misrepresentation? (MR ID)

A

M - Material Misrepresentation
R - Reasonable Reliance
I - Intent to Rely
D - Damages

40
Q

T/F

If an injured party suffered innocent misrepresentation, they can rescind or sue for monetary damages

A

FALSE

They can rescind but they cannot sue for monetary damages

41
Q

When is evidence admissible under the parol evidence rule? (FAME)

A

F - Fraud or Illegality is evidenced
A - After the writing of the contract took place evidence
M - Mistakes
E - Explanations of the writing to clear up ambiguities

42
Q

When is evidence inabmissible under the parol evidence rule?

A

1) Evidence contradicting the written contract

2) Evidence that occurred before the writing of the contract

43
Q

This is a beneficiary that you make a gift to that is directly mentioned in the contract

A

Donee Beneficiary

44
Q

This is a beneficiary that may receive a benefit from the contract, but is not specifically mentioned or intended to benefit from the contract

A

Incidental Beneficiary

45
Q

T/F

The Donee Beneficiary can sue either party for breach of contract

A

FALSE

The donee beneficiary can only sue the original promisor for breach of contract

46
Q

T/F

The Creditor Beneficiary can sue either party if there is a breach in a contract

A

TRUE

47
Q

T/F

The incidental beneficiary can sue for breach of contract

A

FALSE

The incidental beneficiary gets no rights under the contract

48
Q

T/F

Assignments and delegations are the same thing

A

TRUE

49
Q

What contracts cannot be assigned or delegated? (PIPI)

A

P - Personal service contracts calling for special skills
I - increased risk or materially altered performance if assigned/delegated
P - prohibited by contract or law
I - insurance contracts

50
Q

T/F

You can assign your rights to receive money even if it is prohibited by the contract

A

TRUE

51
Q

T/F

An assignee gains all of the assignor’s rights and all of his liability

A

TRUE

52
Q

T/F

When an assignor assigns their rights and liabilities to an assignee, they are released of liability

A

FALSE

If there is a breach, BOTH the assignor and the assignee are liable

53
Q

What is the difference between assuming a mortgage and buying subject to a mortgage?

A

When assuming a mortgage, the buyer purchases land that already has a mortgage and the buyer agrees to take over the mortgage and be liable for it. The seller is still liable for the mortgage, though, if the buyer defaults.

When buying subject to a mortgage, the buyer purchases land that already has a mortgage but the buyer doesn’t agree to take over the mortgage and is not liable for it. The seller is the only one liable for the mortgage; however, the buyer runs the risk of foreclosure if the seller doesn’t pay

54
Q

This is when parties agree to replace 1 side of a contract with a new party. The creditor agrees to release the old party and to only look to the new party for performance

A

Discharge by Novation

55
Q

This is when one party, before the time of performance, says “I’m not going to perform”

A

Anticipatory Repudiation

56
Q

This is the agreement to change performance (usually to pay a lesser amount)

A

Accord

57
Q

T/F

Punitive damages may be rewarded in common law contracts or in sales

A

FALSE

Punitive damages are rarely rewarded in these cases

58
Q

T/F

A party can sue for specific performance in personal service contracts

A

FALSE

You can NEVER sue for specific performance in a personal service contract

59
Q

T/F

A party can sue for specific performance for many reasons, one of which relating to unique property

A

FALSE

A party CAN sue for specific performance relating to unique property, however this is usually the only reason

60
Q

These are spelled out in the contract in advance to specify what should be done if there is a breach

A

Liquidating Damages

61
Q

This is when you cancel the contract and restore the parties to their former position

A

Rescission

62
Q

A ______ offer exists when the offeror expects acceptance of an offer by action of the offeree. This forms a _____ contract when the offeree acceps the contract through performance of the offeror’s required action

A

a Unilateral Contract (both)

63
Q

This is an implied-in-law contract, rather than express agreement, which results when one of the parties has been unjustly enriched at the expense of the other. This law creates such a contract when there is no binding agreement present to keep the unjust enrichment from occurring

A

Quasi Contract

64
Q

T/F

A contract for services, rather than a sale of goods, is embodied by common law

A

TRUE

65
Q

Under common law, modification of an existing contracts needs ______ to be legally binding

A

New Consideration by both parties

66
Q

T/F

Under UCC, modication of an existing contract needs new consideration by both parties to be enforceable

A

FALSE

Under UCC, a contract for the sale of goods can be modified orally or in writing without new consideration if done in good faith.

67
Q

T/F

If a buyer accepts an offer containing an immaterial unilateral mistake, the resulting contract will be void as a matter of law

A

FALSE

Immaterial Unilateral Mistakes are valid as to both parties

68
Q

T/F

If a buyer accepts an offer containing an immaterial unilateral mistake, the resulting contract will be void at the election of the buyer

A

FALSE

Immaterial Unilateral Mistakes are valid as to both parties

69
Q

T/F

A guarantor is only liable if they themselves agreed to the guarantee in writing

A

TRUE

70
Q

T/F

Under the Statute of Frauds, all contracts involving consideration of more than $500 must be in writing

A

FALSE

It must be contracts relating to sales of goods for this statement to be correct. Contracts under common law are not included in this requirement

71
Q

T/F

Under the Statute of Frauds, the written contract must be signed by all parties

A

FALSE

Only the party to be charged must sign, not all parties

72
Q

T/F

The Statute of Frauds applies to contracts that can be fully performed within one year from the date they are made

A

FALSE

The Statute of Frauds applies to contracts that CANNOT be fully performed within one year from the date they are made

73
Q

T/F

Under the Statute of Frauds, the contract terms may be stated in more than one document

A

TRUE

74
Q

This entails canceling a contract and placing the parties in the position they were in before the contract was formed

A

Rescission

75
Q

This is an agreement between three parties whereby a previous agreement is discharged by the creation of a new agreement

A

Novation

76
Q

This is a means of discharging (abandoning) a contract but it does not place the parties in the same position as before the contract

A

Release

77
Q

This is used by an offeror to terminate an offer

A

Revocation

78
Q

How does the Statute of Frauds relate to Common Law & UCC?

A

The Statute of Frauds requires that certain contracts be in writing. Some of these contracts may be under Common Law while others may fall under the UCC

79
Q

Contracts involving the sale or transfer of land are covered under _____

A

The Statute of Frauds

80
Q

Contracts to answer for the debt or duty of another are covered under _____

A

The Statute of Frauds

81
Q

Contracts cannot be completed within one year are covered under ______

A

The Statute of Frauds

82
Q

Certain contracts (those over $500) for the sale of goods are covered under the UCC and under ____

A

The Statute of Frauds

REG Law (12 decks)

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