Contracts

Question 1

Is a merchant’s firm offer revocable or irrevocable?

Answer 1

No, even if there was no consideration was given up.

Question 2

What is an implied in-fact contract?

Answer 2

Where the conduct of a party creates a contract.

Ex. Patient/doctor situation

Question 3

Is an express contract written or oral?

Answer 3

Both

Question 4

Who can enforce/create a quasi-contract?

Answer 4

The courts

Question 5

What is the mailbox rule?

Answer 5

When the offeree MAILS the acceptance, the acceptance is considered to be received.

Question 6

List some elements to contract formation.

Answer 6

1. Offer
2. Acceptance
3. Consideration
4. Capacity
5. Mutual agreement
6. Proper form (some must be written)

Question 7

List some defenses to formation of a contract

Answer 7

Fraud or misrepresentation
illegality
incapacity
undue influence
duress
unconscionability
mistake
indefiniteness

Question 8

If a party terminates an offer before the offeree accepts it, is a contract formed?

Answer 8

No

Unless contract is unilateral, an option contract, or a merchant firm offer.

Question 9

Name the ways an offeree can reject an offer

Answer 9

1. Expressly
2. Time lapse
3. Counteroffer

Question 10

Offers can be terminated by operation of law. List some examples.

Answer 10

Destruction or sale of subject matter
Illegal subject matter
Death of one of the parties
Insanity of one of the parties

Question 11

What is consideration?

Answer 11

A promise for a promise (simply put)

Question 12

List 3 forms of a bargain

Answer 12

Payment of cash
Payment of some other property
Time commitment
Action

Question 13

Difference between void and voidable contract?

Answer 13

VOID
Unenforceable by either party
Essentially, when contract is illegal or impossible. Cannot be ratified by either party.

VOIDABLE
A legal contract, but one party has the right to cancel

Question 14

I. Order for there to be a contract, both parties have to do something or give up something- T or F?

Answer 14

True

Question 15

List 3 ways an offeror can revoke an offer

Answer 15

1. Direct communication
2. Indirect communication (must involve a reliable source to revoke. Offeree needs to clearly understand and accept revocation).
3. Effective publication

Question 16

One remedy for a breach of contract is discharge of a contract - T or F?

Answer 16

True

Question 17

List 3 types of contract breach

Answer 17

Material breach
Anticipatory breach
Minor breach

Question 18

What is a material breach?

Answer 18

One party’s failure to perform its contractual duties.

The non-breaching party can sue for damages, compel performance or discharge the contract.

Question 19

What is an anticipatory breach?

Answer 19

When a party has a clear indication the the other party won’t perform its duties under the contract.

Resolution options include discharging the contract, suing for damages, or waiting to see what happens.

Question 20

What is a minor breach?

Answer 20

Breach is immaterial.

Party who was breached can sue, but cannot discharge contract.

Other options include rescission, and reformation.

Question 21

Name 3 types of damages that a contract breacher could be responsible for.

Answer 21

Compensatory
Specific performance
Punitive

Question 22

List 3 elements of an offer

Answer 22

Seriously intended
Communicated to offeree
Definite in terms

Question 23

List 3 elements of acceptance

Answer 23

Must be unconditional (under common law -Adding a condition creates a counter offer).

Must be communicated by words or actions

Must be accepted by offeree

Question 24

Can offers be open-ended?

Answer 24

No

Question 25

List the 3 ways an offer can end.

Answer 25

Counter offer (common law) Rejection Revocation

Question 26

Under common law, can an offerer revoke an offer before acceptance?

Answer 26

Yes

Question 27

When do offers end?

Answer 27

After stated time If no stated time, after a reasonable amount of time

Question 28

What is a bilateral contract? What is a unilateral contract?

Answer 28

Promise for a promise | Promise for an act Promise has to induce the act

Question 29

What are the 6 types of contracts that must be in writing according to the Statute of Frauds?

Answer 29

``` Goods $500 or more Real Estate Marriage Contracts > 1 year A promise to answer a debt of another Executer's promise to be liable for the debt of an estate ```

Question 30

What types of people does "capacity" acknowledge?

Answer 30

Minors Insane Inebriated

Question 31

Under the eyes of the law, are minors considered competent to create a contract?

Answer 31

No They can disaffirm a contract anytime while a minor, and a reasonable amount of time afterwards, once an adult.

Question 32

How drunk does an inebriated person have to be to disaffirm a contract?

Answer 32

Very. If they understood the contract while inebriated, they cannot disaffirm.

Question 33

What are the 4 elements of a fraud charge.

Answer 33

Misrepresentation of material fact Reasonable reliance by the injured party Intent to mislead -scienter Results in injury or damage

Question 34

What are the 4 elements of a gross negligence charge?

Answer 34

Material misstatement Reasonable reliance by injured party Reckless disregard for the truth Results in injury or damages

Question 35

Fraud in the inducement creates what kind of contract?

Answer 35

Voidable contract

Question 36

Fraud in the execution creates what kind of contract?

Answer 36

Void contract

Question 37

List 2 defenses to breach of contract (that would void the contract)

Answer 37

Undue influence | Duress

Question 38

List contracts that can't be assigned or delegated

Answer 38

Insurance contracts Personal Services contracts that requires a special skill If assignment materially increases risk or duties for other party If the contract prohibits assignment Most contracts are assignable-example is a mortgage contract that gets reassigned to different banks

Question 39

What is parol evidence

Answer 39

Facts outside a contractual agreement that may be used to interpret the agreement.