Contracts QSet Flashcards
What is a mistake in the context of contracts?
A belief not in accordance with the facts
The facts must be existing, not a belief about future events.
What are the two types of mistakes that can occur in a contract?
- Mutual mistake
- Unilateral mistake
What are the three requirements for a mutual mistake to be grounds for avoidance?
- Involves a basic assumption
- Has a material effect on performance
- The adversely affected party is not the one on whom the risk was imposed
What constitutes a breach of contract?
Any failure to render full performance when performance is due
What renders a contract illusory?
Contract language that gives a party total discretion over performance
What is the parol-evidence rule?
Extrinsic evidence is inadmissible to contradict the express terms of an integrated agreement
What is an integrated agreement?
A writing intended by the parties as a final expression of their agreement
What is a merger clause?
Indicates that the writing is the final expression of the parties’ agreement
What is extrinsic evidence?
Evidence outside the four corners of the written agreement
What is the difference between a fully integrated and a partially integrated agreement?
- Fully integrated: full and final expression
- Partially integrated: final but incomplete statement
What are expectation damages?
Damages that place the injured party in the position it would have been in had the breach not occurred
What are incidental damages?
Costs or losses that the breaching party should reasonably have foreseen from the breach
What are consequential damages?
Costs and losses arising from special circumstances peculiar to the nonbreaching party
In a contract for the sale of goods, how are a buyer’s expectation damages calculated?
Market price difference, plus incidental and consequential damages, minus expenses saved
What is an implied-in-fact contract?
A contract inferred from the parties’ conduct
What does the doctrine of frustration of purpose entail?
Discharges a party’s performance when circumstances change making the performance virtually worthless
What is a condition in a contract?
An event that triggers a party’s contractual obligation to perform
What happens when a condition is excused?
The performance subject to it becomes due
How may a party waive a condition?
Through words or conduct
How can an offer be accepted?
- Return promise
- Performance
What is a unilateral contract?
A contract accepted by performance
What is an option contract?
Created when offeree begins performance of a unilateral contract, preventing offeror from revoking
What determines if additional terms in an acceptance become part of the contract?
Whether the parties are merchants
What is a merchant?
Someone who deals in goods of that kind or has knowledge or expertise in the goods or transaction
