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NALA Testing > Contracts > Flashcards

Contracts Flashcards

1
Q

parol evidence

A

governs what kind of evidence parties to a contract dispute can introduce to identify the special terms of a contract

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2
Q

adhesion contract

A

a contract where one side has an unfair bargaining position; a potion so unequal that the other party’s assent is suspect

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3
Q

palimony

A

a term used to enforce promises made between persons who are not legally married at the time of break up

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4
Q

condition precedent

A

an even which must occur before performance under a contract becomes due

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5
Q

voidable contract

A

when one party can choose not to perform their contractual obligation and not face any negative consequences

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6
Q

unenforceable contract

A

a valid contract in which the court cannot offer any legal remedy if one party does NOT fulfill their contractual obligation

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7
Q

mailbox rule and rejection

A
  • states that the acceptance of an offer of a bilateral contract is effective when properly dispatched by an authorized means of communication
  • rejection of a bilateral contract: rejection is only effective when recieved
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8
Q

reverse unilateral contract

A

the performer makes the offer rather than the promiser

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9
Q

supervening illegality

A

the contract was legal at the time of the offer, but prior to acceptance, a statute or court decision makes the subject matter illegal

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10
Q

caveat emptor and caveat venditor

A

“let the buyer beware” & “let the seller beware”

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11
Q

conditional promises not necessarily insufficient simply because they involve an element of ___.

A

DOUBT; the conditional promise is dependent on the happening of some event

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12
Q

promissory estoppel

A

the legal principle that a promise is enforceable by law, even if made without formal consideration, when a promisor has made a promise to a promisee who then relies on that promise to his subsequent detriment

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13
Q

an assignment of a contract occurs when…

A

one party to an existing contract (assignor) hands off the contract’s obligations and benefits to another party (the assignee); ideally, the assignor wants the assignee to step into this shoes and assume all of his contractual obligations and rights

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14
Q

nearly all contractual rights may be ASSIGNED, what are the exceptions:

A
  1. obligor’s duty changed (the assignment would alter the obligor’s duty)
  2. obligor’s risk changed (prohibited without the obligor’s consent)
  3. assignment prohibited by law (ex. wage assignments)
  4. assignment prohibited by contractual provision (ex. lease)
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15
Q

the parol evidence rule prevents the introduction of ___ or ___ …

A

prevents the introduction of PRIOR or CONTEMPORANEOUS AGREEMENTS that contradict, modify or vary the contractual terms of a written contract when the written contract is intended to be a complete and final expression of the parties

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16
Q

anticipatory repudiation

A

aka anticipatory breach; describes a declaration by the promising party tot a contract that he does not intend to live up to his obligations under the contract

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17
Q

compensatory (general) damages in contracts

A

awarded to a plaintiff to put her where she would have been IF THE CONTRACT HAD BEEN PERFORMED by the other party
*** compensatory damages are designed to give the plaintiff the benefit of her bargain

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18
Q

difference between fraud and misrepresentation

A
  • fraud is done w/ an aim of deceiving others, which is not the case with misrepresentation
  • misrepresentation does not entitle the aggrieved party to sue for damages, they can only AVOID the contract
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19
Q

offer creates power of ___ in the ___ and corresponding ___ on the part of the ___

A

creates power of acceptance in the offeree and corresponding liability on the part of the offeror

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20
Q

an offer to purchase real estate is

A

not a contract

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21
Q

express contracts

A

one formed by specific words, either oral or written

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22
Q

implied contract

A

formed by indication of assent other than specific words, such as by conduct “implied in fact”

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23
Q

acceptance in regards to the mailbox rule

A

acceptance by mail creates a contract at the moment posting, properly addressed and stamped UNLESS:

  1. the offer stipulates that acceptance is not effective until received; or
  2. an option contract is involved (acceptance is effective only upon receipt)
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24
Q

statutes of frauds

A

Concerned with the ENFORCEMENT of a contractual agreement; whereby a contact must be in writing:

  1. executor or administrator
  2. debts of another
  3. in consideration f marriage
  4. interest in land
  5. performance within 1 year
  6. good priced at %500 or more
25
Q

3rd party beneficiary contract

A

one who is intended to received benefits of a contract by someone else

26
Q

some assignments must be in writing to be effective, what are they:

A
  1. wages
  2. interest in land
  3. sale of goods of $500 or more
  4. security interest under UCC article 9
27
Q

delegation of duties and what cannot be delegated

A

where duties or obligations are NOT assigned, rather they are delegated to the obligee; the delegator remains liable on the contract

What cannot be delegated:

  1. those requiring judgment or skills
  2. involving a trust relationship
  3. would change the expectancy of the obligee
  4. those covered by a contract provision that restricts or prohibits delegation
28
Q

written terms in a contract may NOT be changed by the parol evidence; what are the exceptions to this rule

A
  1. attack on validity
  2. to clarify ambiguity
  3. to refute consideration
  4. subsequent modification
  5. UCC rule - may add consistent additional term
29
Q

Conservatorship

A

is a court case where a judge appoints a responsible person or organization (called the “conservator”) to care for another adult (called the “conservatee”) who cannot care for himself or herself or manage his or her own finances

30
Q

Discharge by performance

A

When the parties to a contract fulfill their obligations arising out of the contract within the time and in the manner prescribed

31
Q

Discharge by impossibility of performance

A

means one or both the parties have knowledge that a promise to perform is impossible even though they enter into an agreement

32
Q

Discharge by agreement

A

The parties themselves can agree to end the contract, form a new contract or vary the original one.

33
Q

Discharge by frustration

A

4 conditions must be satisfied for frustration to discharge a contract:

  1. an unforeseeable event
  2. that is no fault of either party
  3. that makes performance impossible
  4. or radically different than agreed
34
Q

an agreement whose terms are expressed inside a box in which goods are packed

A

shrink wrapped agreement; these sorts of good are generally shrink wrapped in the boxes along with the agreement

35
Q

click-on agreement

A

the type of electronic agreement that requires the user to “click” on a button as a sign of agreement

36
Q

Browse wrap agreements

A

no longer used and in many states, were illegal; a type of contract is used with software licenses and online transactions in which a user must agree to terms and conditions prior to using the product or service

37
Q

Disaffirmance

A

refers to a declaration that a voidable contract is void; it is an act by which a person who enters into a voidable contract declares that he will not abide by it

38
Q

Quantum meruit

A

a reasonable sum of money to be paid for services rendered or work done when the amount due is not stipulated in a legally enforceable contract (an equitable remedy)

39
Q

title to goods sold under a shipment contract passes when ___.

A

the seller puts the goods in he hands of a carrier

40
Q

fungible goods

A

Something fungible can be exchanged for something else of the same kind
- ex. oil is fungible commodity

41
Q

A “good” under UCC

A

under the UCC, “goods” are defined as “all things (including specially manufactured goods) which are movable at the time of identification of the contract for sale

42
Q

donee beneficiary

A

a type of intended third-party beneficiary. Donee beneficiaries occur when the second party in a contract (the promisee) does not owe a debt to the third party but wants to provide them with the benefit of the performance of the first party (the promisor)

43
Q

the difference between a condition precedent and a condition subsequent

A
  • condition precedent is an event which must take place before a party to a contract must perform or do their part
  • conditions subsequent refers to conditions which occur after the formation of a contract (an event that ends a party’s duty to keep a promise)
44
Q

privity of contract

A

refers to relationship between the parties to a contract which allows them to sue each other but prevents a third party from doing so

45
Q

The UCC adds 2 terms for merchants in regards to performance of a contract…

A

Good faith and commercial reasonableness

46
Q

methods of discharge (7)

A
  1. excuse of conditions
  2. performance
  3. breach of contract
  4. agreement of the parties
  5. impossibility of performance
  6. death or destruction of the subject matter or parties
  7. frustration of purpose
47
Q

excuse of condition (4)

A

the condition either creates or extinguishes a party’s duty to perform; there are 4 circumstances that falls into this category:

  1. performance prevented - during the period of the condition, one side engages in some act that makes it impossible for the promisor to fulfill her obligation
  2. voluntary disablement - one party voluntarily engages in some conduct that makes it virtually impossible for him to fulfill his obligation (a majority of states considers this a full breach of contract)
  3. insolvency - one party becomes judicially insolvent (the law does not require that a person become a creditor of a bankrupt to fulfill a contact)
  4. anticipatory breach - on party, during the time of the condition states that she has decided not to fulfill her obligations
48
Q

mitigation of damages

A

the injured party only need make “reasonable” attempts to mitigate; reasonable is determined on a case by case basis

49
Q

tendered complete performance

A

a party may be ready, willing, and able to perform, and the other side refuses the performance; the promisor in this instance is said to have “tendered complete performance”, which is legally sufficient to discharge him from his obligations

50
Q

insubstantial performance

A

if the performance is insubstantial, the promisor is not relieved of his contractual obligation unless the promisee accepts the performance

51
Q

divisible contract

- in regards to breach

A

a contract that can be divided into several separate, but equal portions - if the contract is deemed divisible, then a breach would only effect that one small divided contract, the rest of the contract would remain intact

52
Q

agreements of the parties - parties to a contract are free to rearrange their contractual agreements by mutual assent, this can happen in 2 ways:

A
  1. the original contract may contain a provision providing for the dissolution of the agreement
  2. the parties can change their mutual obligations by the parties forming a new contract arrangement
53
Q

the 6 types of NEW agreements that have the effect of discharging the parties from their former contractual obligations

A
  1. mutual rescission - both parties agree that they do not want to proceed any further under the agreement; agree to rescind
  2. release - one side relieves the other of any obligation existing
  3. accord and satisfaction - the parties to a disputed contract agree to settle their dispute by changing the obligations of the contract itself with a NEW agreement
  4. substituted agreement - a new contract that incorporates the original contract in the new provisions
  5. novation - a substitution of parties into an existing contractual agreement
  6. modification - sale of goods between merchants, merchants may make good faith modifications to their contract
54
Q

impossibility of performance

A

the law feels it would be unfair and unjust to hold the person responsible to a contract obligation that could not possibly be met
** circumstances that merely make the performance more difficult or expensive, but not impossible to perform, do NOT release the obligations

55
Q

frustration of purpose

A

the least common method of discharge, occurs when the contract, on its face, is both valid and apparently capable of performance, but the underlying reason for the agreement no longer exists

56
Q

contract defenses (reasons why a contract is not valid) (5)

A
  1. lack of capacity
  2. lack of consent
  3. mistake
  4. unconscionably (includes hidden risk shifting provisions and Adhesion contracts)
  5. statutes of fraud
57
Q

situations where a minor may not avoid contract obligaiton

A
  1. misrepresents his/her age

2. contract provides the minor with necessities of life

58
Q

lack of consent due to…(4 categories)

A
  1. duress (requires coercive threat)
  2. undue influence
  3. misrepresentation
  4. fraud
59
Q

rights and duties of nonparties (can they recover)

A
  1. incidental beneficiaries cannot recover

2. intended beneficiaries can recover, they include creditor beneficiary and donee beneficiary

NALA Testing (11 decks)

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