Contracts Final

Question 1

contract (RST (2nd))

Answer 1

a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty

Question 2

contracts are governed by

Answer 2

common law because there is no single, unified law of contracts

Question 3

what makes an agreement into a contract

Answer 3

a reciprocal agreement in which each party gives up something to get something else from the other

Question 4

essential elements to a contract

Answer 4

1. a mutual exchange relationship
2. agreement between 2 or mroe parties
3. at least 1 promise
4. either:
   -satisfy the formal requirements of law and not be contrary to equity; or
   -not satisfy the requirements of law by being required by equity

Question 5

theroretical approaches to contract law

Answer 5

classicalism (laissez-faire approach): rigid; limited discretion of judge; little attention to fairness
legal realism (neoclassical): realistic study of law in action; unerlies most contract opinions today

Question 6

all contract are promises,

Answer 6

but not all promises are contracts

Question 7

to have a contract you need

Answer 7

offer, acceptance, and consideration

Question 8

specific performance

Answer 8

court ordering the defendant to perform what they promised

Question 9

expectation damages

Answer 9

give the victim of the breach the benefit of the bargain by compensating them for the economic gain that they lost as a result of the breach of contract

Question 10

article 1 of the UCC

Answer 10

sets out the general provisions that apply to all transactions covered by UCC, including sale of goods

Question 11

article 2 of the UCC

Answer 11

transaction of the sale of goods

Question 12

goods

Answer 12

all things (specially manufcatured goods) which are movable at the time of the contract for sale

Question 13

transaction

Answer 13

act of conducting any business between 2 or more persons

Question 14

real estate or services deal with

Answer 14

common law

Question 15

what happens when a provision is inconsistent with a principle of common law?

Answer 15

Article 2 prevails

Question 16

intangible property

Answer 16

can qualify as goods (example: a movie on a DVD)

Pain Center- even though a website can be copied on a tangible goods (ex. hard drive), what is weighing the transaction is software, which is not considered a good. So, Article 2 does not apply. We use common law

Question 17

hybrid transaction/ mixed contract

Answer 17

contract involving both a sale of goods and service

-predominant test is used to decide whether we apply Article 2 or not

Question 18

predominant test (do not need to satisfy all)

Answer 18

-language of the contract
-nature of the business of supplier
-reason the parties entered contract
-respective amounts charged for goods

example:
buying a painting in an art show- goods or service? (skill=service)
-sold in mass= good
-specific for one= service

Question 19

merchants

Answer 19

a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction

Question 20

2 types of merchants

Answer 20

-general (broad): a person in the business
-particular (narrow): sells goods of that kind

Question 21

for a contract to be formed,

Answer 21

-parties must intend to enter a contract and the terms of the contract are those on which they have mutually agreed

Question 22

when a court seeks to ascertain the intent of the parties

Answer 22

it does NOT focus on what each party may have thought or believe he was agreeing to but on the perception conveyed by words or actions

Question 23

an agreement requires communication

Answer 23

the intent to enter a contract must be signaled by each of the parties through words or actions that are observed and given meaning

Question 24

modern contract law

Answer 24

an agreement made in one form, between parties capable of contracting, for a legal object or purpose, and upon sufficient consideration. It must be an agreement or mutual bargain, voluntary, and without force of fraud; and therefore it includes an assent given bona fide. The notion of assent includes a physical and moral power of assenting, and the deliberate and free use of the power

Question 25

subjective intent

Answer 25

internal state of mind

Question 26

objective intent

Answer 26

what words and actions mean

Question 27

can subjective intent also lead to a “meeting of the minds”?

Answer 27

yes when it helps inform the objective viewpoint

Question 28

objective theory- look to the outward manifestations

Answer 28

-attributes (training, experience, etc.)
-background information the party possessed
-relationship of the parties
-context of the transaction

Question 29

the objective test

Answer 29

holds a party accountable for his/her words or actions by looking at his/her manifestations to determine assent

-it is determined within the entire context of the transaction and takes reasonableness into context

Question 30

promise

Answer 30

a manifestation of intent by the promisor that justifies the promisee in understanding that a commitment has been made

Question 31

agreement

Answer 31

manifestation of mutual assent

Question 32

a contract must be interpreted objectively

Answer 32

based on the parties manifested intent rather than their actual intent

Question 33

duty to read

Answer 33

a persons accountability for knowledge of a contracts terms

Question 34

jokes- reasonable person standard

Answer 34

an objective, reasonable person would find that the offer was serious, there may be a valid offer

-miscommuncation of intent is usually caused by inadvertence, carelessness, or inability to communciate accurately

Question 35

jokes- under the obective test

Answer 35

the court will not be concerned with the party’s subjective understanding but by the person reasonable understanding of the manifestation

Question 36

Lucy v Zehmer

Answer 36

-secret subjective intent of one party is immaterial if the objective assent justifies the other party’s belief that an offer was made
-if his words and acts, judged by a reasonable standard, manifest an intention to agree it is immaterial what may be the real by unexpressed state of his mind

Question 37

Leonard v Pepsico

Answer 37

-an objective, reasonable person would have understood that the commercial did not convey an actual prize of a harrier jet
-in light of the obvious absurdity of the commercial, the court rejects plaintiffs argument that the commercial was not clearly in jest

Question 38

initial proposals may lead to

Answer 38

counterproposals, negotiations, or compromise

Question 39

a contract can be made

Answer 39

in writting, orally, partly written and partly orally, etc.