Contracts Final Exam

Question 1

What is a Contract?

Answer 1

Promise or set of promises for the breach of which the law gives a remedy. Needs to be definite and ascertainable

Question 2

Express Warranty

Answer 2

affirmation of fact or promise made by the seller to the buyer when relates to the goods and becomes part of the basis of the bargain creates on express warranty that the goods shall conform to the affirmation or promise

Question 3

Implied Warranty

Answer 3

If you buy something from a merchant and soon after it stops working, then you can use implied warranty

Question 4

Reliance Damages

Answer 4

Based on a promise’s reliance interests, which are subverted when he has changed his position to his detriment when relying on a promise

Question 5

Restitution Damages

Answer 5

an amount corresponding to any benefit conferred by the plaintiff upon the defendant in the performance of the contract disrupted by the defendant’s breach

Question 6

Compensatory (Expectation) Damages

Answer 6

An amount intended to put the plaintiff in the position he or she would have been if the contract had been actually performed

Question 7

Offer

Answer 7

manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it

Question 8

Advertisements

Answer 8

not an offer, rather an invitation by the seller to the buyer to make an offer to purchase

Question 9

Knowledge of Mistake

Answer 9

If an offeree knows or has reason to know of the offerors’ material mistake at the time of acceptance, the offeror is not bound

Question 10

Acceptance

Answer 10

Mutual assent to terms in manner required by the offer, making the offer binding. Must be absolute, unequivocal, and unconditional and not introduce new terms

Question 11

Offer can be terminated by:

Answer 11

Lapse after reasonable time, revocation before acceptance, death/incapacitation, or rejection

Question 12

Counter Offers

Answer 12

(1) A counter-offer is an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer.

(2) An offeree’s power of acceptance is terminated by his making of a counter-offer, unless the offeror has manifested a contrary intention or unless the counter-offer manifests a contrary intention of the offeree.

Question 13

UCC 2-207 (1)

Answer 13

A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon unless acceptance is expressly made conditional on assent to the additional or different terms.

Contract based on explicit acceptance

No assent to additional terms= not contract

Question 14

UCC 2-207(2)

Answer 14

(2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract
unless
(a) the offer expressly limits acceptance to the terms of the offer;
(b) they materially alterity (Huge discrepancy) ; or
(c) notification of objection to them has already been given or is given
within a reasonable time after notice of them is received.
- Gap-filler
- Only Care about paragraph 2 if there is a contract under paragraph 1
Terms do not matter when there is no contract
- Additional terms prevail unless offeror states that no additional terms are available, then there is no issue
- Only Involving Merchant-to-Merchant

Question 15

UCC 2-207(3)

Answer 15

(3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act (UCC): i.e., On those terms that conflict, courts eliminate such terms and resort to the UCC gap-filling provisions to flesh out the agreement.

Question 16

Order becomes a contract when:

Answer 16

signed and delivered by buyer to seller and accepted in writing by seller
- - or- when buyer has received and retained this order for ten day without objection
- - or - when buyer has accepted delivery of any party of the merchandise or when buyer has otherwise indicated acceptance of the terms hereof.

Question 17

Consideration

Answer 17

i) a benefit to the promisee or a detriment to the promisor (x harm)
ii) that has been bargained for between the parties
iii) Consideration can be either a promise or an act (act in response to
a reward notice)

Question 18

Consideration for a promise is:

Answer 18

An act other than a promise -or-
A forbearance -or-
The creation, modification, or destruction of a legal relation, -or
A return promise

Question 19

Restatement 75

Answer 19

Unilateral: Promise exchange for performance
Bilateral: Promise exchanged for a promise

Question 20

Good Faith Clause

Answer 20

A good faith clause in an agreement states that the parties will uphold the agreement, and if they can’t for one reason or another, they will act in good faith to come to a mutual agreement. If you need help with a good faith clause, you can post your legal need on.

Question 21

Substitutes for Consideration: UCC 2-209

Answer 21

A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party.

Question 22

Promise Reasonably Inducing Definite and Substantial Action

Answer 22

• A promise which the promisor should reasonably expect to induce
  action or forbearance of a definite and substantial character on
  the part of the promisee and which does induce such action or
  forbearance is binding if injustice can be avoided only by
  enforcement of the promise.

Question 23

Promise Reasonably Inducing Action or Forbearance

Answer 23

A promise which the promisor should reasonable expect to induce action or forbearance on the part of the promisee or a third person and which does induce such such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires

Question 24

Restitution as an Alternative Basis for Recovery

Answer 24

Liability in restitution derives from the receipt of a benefit, whose retention without payment would result in the unjust enrichment of the defendant at the expense of the claimant
Unjust enrichment may occur even when there has been no promise
Gains produced through another’s loss are unjust and should be restored
Limiting Principle: One who acts officiously in conferring a benefit cannot get restitution from the recipient, volunteers do not get restitution
Term: Quasi-contract: a ground for recovering money in an action at common law, when the claim is not based on true contract but instead seeks redress for unjust enrichment
Quantum Meruit: as much as is deserved
Quantum Valebant: As much as they are worth

Question 25

Statute of Frauds

Answer 25

Statute of frauds requires that a contact be in writing to be enforceable, not to exist in the first place. Oral contract, even one that falls under a statute of frauds, is still a contract
Next step is to decide whether the contract falls under any statute of frauds.
Next step is to ask whether the contract is set forth in a writing or writings that meet the statutory requirements of form and content

Question 26

Statute of Frauds Requires

Answer 26

Contract to be memorialized in writing
Be signed by, or on behalf of, the party against whom enforcement is sought.
Indicate that a contract has been made between the parties
State with reasonable certainty the essential terms of the unperformed promises in the case of non-goods contracts
Specify the quantity in the case of a contract for the sale of goods

Question 27

UCC 2-201

Answer 27

UCC 2-201
A record is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable beyond the quantity of goods shown in the record
When one party has signed a writing and the other has not, but the contract is enforceable against the party that has satisfied the statute
Can be used for purpose other than enforcement of the contract, such as trespass and restitution