Contracts

Question 1

What is a bilateral contract?

Answer 1

an agreement between two parties who both make promises

Question 2

To have a contract, both parties must intend to:

Answer 2

be legally bound by the contract

Question 3

What does consideration require?

Answer 3

the exchange of something of value

Question 4

What are the elements of consideration

Answer 4

promise and act or forbearance

Question 5

What is forbearance?

Answer 5

When a party refrains from an act may constitute consideration

Question 6

Past consideration does not constitute consideration if:

Answer 6

it was offered before the contract was formed

Question 7

What is the pre-existing duty rule?

Answer 7

An existing duty to perform under a prior agreement that is being offered as performance in a subsequent agreement is not consideration

Question 8

Forbearance is not consideration if:

Answer 8

the forbearing party already lacks the legal entitlement to take the action (Teenager agrees not to drink but this is not consideration because he couldn’t legally drink)

Question 9

Modification to an existing contract w/o consideration is unenforceable unless:

Answer 9

It is fair and equitable in light of unforeseen circumstances that were not anticipated
If it alters the parties’ duties under the existing contract

Question 10

The adequacy of consideration is not an issue unless

Answer 10

the amount of consideration is nominal (5¢)

Question 11

What is an illusory promise?

Answer 11

An apparent promise that does not amount to consideration because the promisor reserves a choice for alternative performance

Question 12

Courts determine meaning based on:

Answer 12

terms
intent
purpose
circumstances

Question 13

terms that reopen or uncertain

Answer 13

indefinite terms

Question 14

If the indefinite terms are essential then the contract is

Answer 14

void

Question 15

If the indefinite terms are minor, then the court interprets it to mean what is

Answer 15

customary or reasonable

Question 16

Terms that have multiple meanings or there is a misunderstanding between parties

Answer 16

ambiguous

Question 17

If both parties have the same meaning for ambitious terms, then the court will _____ the contract

Answer 17

enforce

Question 18

extrinsic evidence can’t be used to modify or supplement a written contract

Answer 18

parol evidence rule

Question 19

Parol evidence rule only pertains to

Answer 19

written agreements that are integrated

Question 20

writing that has been adopted by the parties as a final and complete statement of the terms

Answer 20

completely integrated agreement

Question 21

writing that has been adopted by the parties as a final but incomplete statement of the terms

Answer 21

partially integrated agreement

Question 22

Can sue for remedy if:

Answer 22

• There’s a material breach
• Anticipatory repudiation
• Prospective inability to perform (w/o assurance)