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Contracts Flashcards

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1
Q

In order to qualify as an Offer to buy or sell real estate, a communication must include:

  1. __________
  2. _________
A

In order to qualify as an Offer to buy or sell real estate, a communication must include:

  1. Price
  2. Land description
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2
Q

Under the UCC, Article 2, party A and party B agree to purchase 200 widgets. The parties do not include a price in their agreement.

Is there a valid offer and acceptance without a price agreement in the UCC?

A

Yes, per Article 2 of the UCC, a communication may be an offer, even without a price term, if the parties so intend.

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3
Q

S tells B that S will sell B a car for a fair price.

Under the UCC, is this an offer?

A

No, under the UCC, a vague or ambiguous material term is not an offer.

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4
Q

Buyer and Seller form a Requirements contract. B is to buy 1000 widgets from S every month.

Buyer is authorized to increase the requirements amount to an amount higher than 1000 widgets, if B’s increase is ____________________.

A

A Buyer can increase requirements so long as the increase is in line with prior demands.

An unreasonably disproportionate increase however, would not be permitted.

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5
Q

If a potential Buyer dies before accepting an offer, that offer is:

A. Acceptable by the Buyer’s heirs
B. Terminated

A

B. Terminated.

Death or incapacity of either party after the offer, and before acceptance, terminates the offer.

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6
Q

S tells B that S will sell B a house for a reasonable price.

At Common Law, is this an offer?

A

No, under Common Law, a vague or ambiguous material term is not an offer.

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7
Q

An offer is revoked by either:

  1. A later ___________ statement by offeror to offeree of unwillingness/inability to contract; OR
  2. Later ___________ conduct by offeror indicating unwillingness/inability to contract, that ______________________.
A

An offer is revoked by either:

  1. A later unambiguous statement by offeror to offeree of unwillingness/inability to contract; OR
  2. Later unambiguous conduct by offeror indicating unwillingness/inability to contract, that offeree is aware of.
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8
Q

Four kinds of Irrevocable Contract are:

  1. __________________
  2. __________________
  3. __________________
  4. __________________
A
  1. Option
  2. Firm Offer Rule
  3. Reliance
  4. Unilateral Contract (Start of Performance)
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9
Q

An offer may be considered an irrevocable Option offer if the offeror has made an offer and:

  1. __________________
  2. __________________
A

An offer may be considered an irrevocable Option offer if the offeror has made an offer and:

  1. The offeror promises not to revoke (or keep the offer ‘open’)
  2. This promise is supported by payment/consideration from the offeree.
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10
Q

The UCC ‘Firm Offer Rule’ provides than an offer cannot be revoked for up to three months if there is:

  1. __________________
  2. __________________
  3. __________________
A

The UCC ‘Firm Offer Rule’ provides than an offer cannot be revoked for up to three months if there is:

  1. An offer to buy or sell goods
  2. Signed, written promise to keep the offer open
  3. The offeror is a merchant
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11
Q

Does the ‘Firm Offer’ rule apply to Common Law exchanges as well as UCC exchanges?

A

No.

The Firm Offer Rule applies only to the UCC and does not apply to Common Law exchanges.

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12
Q

Per the principle of Reliance, an offer cannot be revoked if there has been:

  1. __________________
  2. __________________
  3. __________________
A

Per the principle of Reliance, an offer cannot be revoked if there has been:

  1. Reliance that is
  2. Reasonably foreseeable and
  3. Detrimental
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13
Q

Generally, a counteroffer terminates an offer, and creates a new offer.

What is the effect if a potential Buyer sends a counteroffer in response to an Option Offer?

A

If a counteroffer does not terminate an Option.

A Buyer may send a counteroffer in response to an Option, and then the Buyer may subsequently accept the Option.

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14
Q

At Common Law, a ‘Conditional Acceptance’ is treated as a Rejection and a Counteroffer that may be accepted by conduct.

Per UCC, Conditional Acceptance is treated as only a ________________.

A

Rejection.

The UCC treats conditional acceptances as only Rejections.

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15
Q

The Mirror Image Rule provides that a response to an offer that adds new terms will be treated as a _________, rather than an acceptance.

A

Counteroffer.

The Mirror Image Rule provides that a response to an offer that adds new terms will be treated as a Counteroffer, rather than an acceptance.

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16
Q

The Mirror Image Rule applies to:

A. Common Law Only
B. UCC
C. Both Common Law and UCC
D. Only in Equity

A

A. Common Law Only

The Mirror Image Rule is only applicable to Common Law.

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17
Q

If the offeree starts to perform in response to an offer, the general rule is the contract has been accepted.

As a general rule, this is because beginning to perform is treated as ______________.

A

As a general rule, this is because beginning to perform is treated as an implied promise to perform.

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18
Q

The exception to Acceptance by Starting Performance is when the offeror would not know that the offeree has begun performance.

In such instances, acceptance is not Starting Performance, but _______________.

A

Notice of Performance.

The Offeree must provide the offeror Notice that the Offeree has started performance, in order for Offeree’s performance to be considered Acceptance.

19
Q

The “Mailbox Rule” provides that:

Offers are effective when they are ___________.
Acceptances are effective when they are ___________.
Communications other than offers or acceptances are effective when they are ___________. .

A

Per the “Mailbox Rule”:

Offers are effective when they are RECEIVED.
Acceptances are effective when they are SENT (placed in the mailbox).
All other communications are effective when RECEIVED.

20
Q

Consideration is defined as _________ __ _____ ____________.

A

Consideration is defined as Bargained For Legal Detriment.

21
Q

May forbearance from a legally allowable activity be consideration?

A

Yes, forbearance from activity may be consideration, if that forbearance is bargained for.

22
Q

At Common Law, which of the following is consideration?

A. A promise to perform later.
B. An agreement to perform an activity already required by an existing contract.
C. A service that was previously performed.

A

A. A promise to perform

Promises to perform are valid consideration for other promises, at Common Law.

However, agreements to perform that are already legally obligated is not new consideration. Generally, any new contract modification will require additional consideration.

Further, if a service was already performed, it may not be consideration in a later contract.

23
Q

Per the UCC, what is required to modify or make changes to a sale of goods contract?

A. New consideration alone
B. Good faith alone
C. Good faith and new consideration

A

B. Good Faith alone

Under the UCC, there is no requirement for new consideration in order to modify a sale of goods.

The only requirement is good faith.

24
Q

What are the elements of Promissory Estoppel?

  1. _________
  2. _________
  3. _________
A

The elements of Promissory Estoppel are:

  1. Promise
  2. Reliance that is reasonable, detrimental, and foreseeable
  3. Enforcement of the promissory is necessary to avoid injustice
25
Q

What 3 categories of person does the law characterize as ‘lacking capacity to contract?’

  1. _________
  2. _________
  3. _________
A

The three categories of individuals who lack capacity to contract are:

  1. Infants (under 18)
  2. Mental incompetents (must lack ability to understand agreement)
  3. Intoxicated persons (only if other party has reason to know that person is intoxicated)
26
Q

Under ___________, a person who lacks capacity is nonetheless obligated to pay for things that are __________.

A

Under quasi-contract, a person who does not have capacity is legally obligated to pay for things that are necessary.

This includes food, clothing, medical care, shelter, etc.

27
Q

A contract will not be enforced by a Court if the court finds a party was under Duress.

Duress may be physical or economic.

Economic duress has two elements.

  1. _________
  2. _________
A

Two elements of Economic Duress:

  1. Improper Threat (often threat to breach an existing contract)
  2. No Reasonable Alternative (the party under duress is vulnerable and lacks a reasonable alternative)
28
Q

A contract will not be enforced by a Court if the court finds a presence of Undue Influence.

Undue Influence has two elements:

  1. _________
  2. _________
A

Undue Influence has two elements:

  1. Special Relationship between the parties
  2. Improper Persuasion of the weaker party by the stronger party
29
Q

Courts will void a contract for Unconscionability if the Court finds:

  1. ___________ unconscionability; and
  2. ___________ unconscionability
  3. ___________
A

Courts will void a contract for Unconscionability if the Court finds:

  1. Procedural unconscionability; and
  2. Substantive unconscionability
  3. At the time the agreement was made
30
Q

Relief for a Mutual Mistake will be granted only when:

  1. Both parties _______________ (not just _____)
  2. About _______________
  3. The party seeking relief __________
A

Relief for a Mutual Mistake will be granted only when:

  1. Both parties are mistaken (not just uncertain)
  2. About existing facts
  3. The party seeking relief did not bear the risk of mistake in forming the contract
31
Q

Courts will grant relief on the basis of a Unilateral Mistake (only one party is mistaken) only if __________________________________. (also known as __________________)

A

Courts will grant relief on the basis of a Unilateral Mistake (only one party is mistaken) only if the other party had reason to know of the mistake. (known as Palpable mistake)

32
Q

To examine whether Misrepresentation has occurred, Courts will examine if there has been:

  1. Statement of “fact” ______ the contract
  2. By _______________________ or _____
  3. That is ________
  4. That is _________ or ______
  5. _____________ the ________
A

To examine whether Misrepresentation has occurred, Courts will examine if there has been:

  1. Statement of “fact” before the contract
  2. By one of the contracting parties or her agent
  3. That is false
  4. That is fraudulent or material
  5. Induces the contract
33
Q

When considering if a Contract is void on the basis of Misrepresentation, what weight does the Court give to the below factors:

  1. Party seeking relief’s Reliance on the misrepresentation
  2. The Party that made the misrepresentation’s Honest belief that the misrepresentation was correct
A
  1. Reliance is a crucial component in whether a Court will find a contract void for Misrepresentation.
  2. Courts do not require that misrepresentation be intentional. Honest Misrepresentations are still considered Misrepresentations by the Court.
34
Q

What Four kinds of contracts are within the Statute of Frauds?

  1. _________
  2. _________
  3. _________
  4. _________

*** Statute of Frauds

A

The below four kinds of contracts fall within the statute of frauds:

  1. Promises to Answer for the Debts of Another (Suretyship)
  2. Service Contracts not capable of being performed in under a year (from the time of the contract)
  3. Transfers of Interests in Real Estate
    (Exception: lease of 1 year or less)
  4. Sales of Goods for over $500
35
Q

Very generally, how may the Statute of Frauds be satisfied?

  1. __________
  2. __________
  3. __________ (UCC Specific)
  4. __________ (UCC Specific)
  5. _________ (UCC Specific)

*** Statute of Frauds

A

The Statute of Frauds may be satisfied by:

  1. Part Performance
  2. Writing
  3. Delay in Responding by Merchant (UCC Specific)
  4. Judicial Admission (UCC Specific)

*** Statute of Frauds

36
Q

What is the Common Law test to examine whether a writing satisfies the Statute of Frauds?

__________________

*** Statute of Frauds

A

The Material Terms Test: All material terms must be included in the writing, and the writing must have been signed by the party asserting the Statute of Frauds defense.

*** Statute of Frauds

37
Q

What is the basic premise of the Parol Evidence Rule?

A

Under the Parole Evidence Rule, the final written version of a deal replaces earlier agreements, negotiations, and conversations.

38
Q

The Implied Warranty of Merchantability applies to any goods that are __________________, and warrants that the goods ________________________________.

A

The Implied Warranty of Merchantability applies to any goods that are bought from a merchant, and warrants that the goods are fit for the ordinary purpose for which such goods are used.

39
Q

An Implied Warranty of Fitness for a Particular Purpose is triggered when:

  1. ___________
  2. ___________
  3. ___________
A

An Implied Warranty of Fitness for a Particular Purpose is triggered when:

  1. Buyer has a particular purpose
  2. Buyer is relying on seller to select suitable goods
  3. Seller has reason to know of the buyer’s purpose and reliance on seller
40
Q

The term for statute of limitations on Warranties is __________.

The statute begins to run when ___________.

A

The term for statute of limitations on Warranties is four years.

The statute begins to run when the tender of delivery is made.

41
Q

_________ warranties generally cannot be disclaimed.

A

Express warranties generally cannot be disclaimed.

42
Q

Implied warranties of merchantability/fitness may be disclaimed in either of the below two ways:

  1. ___________; OR
  2. ___________
A

Implied warranties may be disclaimed in either of the below two ways:

  1. Conspicuous language of disclaimer, mentioning merchantability; OR
  2. “As is” or “with all faults”
    (these terms function as ‘magic words’)
43
Q

Although express warranties may not be disclaimed, a seller may limit the possible ___________.

A

Although express warranties may not be disclaimed, a seller may limit the possible remedies.

Bar Exam (8 decks)

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