Contracts Basics

Question 1

Contract Definition

Answer 1

A legally enforceable agreement or promise. The law recognizes a duty to perfrom and provide a remedy in the event of breach.

Question 2

Unilateral Contract

Answer 2

Offer expressly requires perfromance as the only manner of acceptance

Question 3

Bilateral Contract

Answer 3

Anything other than a unilateral contract

Question 4

Quasi Contract

Answer 4

Not a contract, more like an equitable remedy.

• Usually arises when there is an unenforceable agreement, but one side has realized a benefit.

Question 5

Quasi-Contract

Look for:

Answer 5

1. P has conferred a benefit to D
2. P reasonably expects to be paid
3. D knowingly accepted the benefit
4. D will be unjustly enriched if O is not compensated

Question 6

Void, Voidable, & Unenforceable Ks

Answer 6

• Void: K never had any legal effect
• Voidable: one or both parties may elect to void the contract
• Unenforceable: otherwise valid contract that is unenforceable bc a defense applies
  
  • Incapacity
  • SOF

Question 7

Applicable Law: Common Law

Answer 7

Applies to most contracts, except sale of goods.

• Any contract not involving the sale of goods should be treated under common contract principles

Question 8

Applicable Law: UCC Article 2

Answer 8

Article 2 governs the sale of goods. If both parties are merchants, the UCC has additional special rules.

Question 9

Applicable Law: Mixed Contracts

Answer 9

For contracts involving both goods are services, the predominant purpose of the contract dicitates the applicable law.

Question 10

Applicable Law: Mixed Contracts

Exception

Answer 10

If contract terms divide payment between the goods and the services, apply the UCC to the sale of goods portion of the contract and the common law to the remainder.

Question 11

Acceptance under the common law

Answer 11

Acceptance must mirror the offer

Question 12

Acceptance under the UCC

Answer 12

If both parties are merchants, additonal terms become part of the contract unless they materially change the offer or the offeror objects.

Question 13

Options under the common law

Answer 13

Requires consideration or reliance

Question 14

Options under the UCC

Answer 14

No consideration required for a merchant’s firm offer.

• Firm offer is irrevocable for time stated, or up to three months if no time stated (permanently irrevocable if consideration provided).

Question 15

Contract Modification under the common law

Answer 15

ineffective unless consideration is provided

Question 16

Contract modification under the UCC

Answer 16

No consideration required, but modification must be in writing and mae in good faith.

Question 17

Substantial performance vs. perfect tender under the common law

Answer 17

If there is substantial perfromance by one party to a contract, the other party must perfrom

Question 18

Substantial performance vs. perfect tender under the UCC

Answer 18

The buyer is not required to pay unless seller makes a perfect tender of goods.