Contracts QSet Flashcards

1
Q

What is a mistake in the context of contracts?

A

A belief not in accordance with the facts

The facts must be existing, not a belief about future events.

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2
Q

What are the two types of mistakes that can occur in a contract?

A
  • Mutual mistake
  • Unilateral mistake
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3
Q

What are the three requirements for a mutual mistake to be grounds for avoidance?

A
  • Involves a basic assumption
  • Has a material effect on performance
  • The adversely affected party is not the one on whom the risk was imposed
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4
Q

What constitutes a breach of contract?

A

Any failure to render full performance when performance is due

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5
Q

What renders a contract illusory?

A

Contract language that gives a party total discretion over performance

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6
Q

What is the parol-evidence rule?

A

Extrinsic evidence is inadmissible to contradict the express terms of an integrated agreement

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7
Q

What is an integrated agreement?

A

A writing intended by the parties as a final expression of their agreement

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8
Q

What is a merger clause?

A

Indicates that the writing is the final expression of the parties’ agreement

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9
Q

What is extrinsic evidence?

A

Evidence outside the four corners of the written agreement

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10
Q

What is the difference between a fully integrated and a partially integrated agreement?

A
  • Fully integrated: full and final expression
  • Partially integrated: final but incomplete statement
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11
Q

What are expectation damages?

A

Damages that place the injured party in the position it would have been in had the breach not occurred

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12
Q

What are incidental damages?

A

Costs or losses that the breaching party should reasonably have foreseen from the breach

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13
Q

What are consequential damages?

A

Costs and losses arising from special circumstances peculiar to the nonbreaching party

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14
Q

In a contract for the sale of goods, how are a buyer’s expectation damages calculated?

A

Market price difference, plus incidental and consequential damages, minus expenses saved

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15
Q

What is an implied-in-fact contract?

A

A contract inferred from the parties’ conduct

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16
Q

What does the doctrine of frustration of purpose entail?

A

Discharges a party’s performance when circumstances change making the performance virtually worthless

17
Q

What is a condition in a contract?

A

An event that triggers a party’s contractual obligation to perform

18
Q

What happens when a condition is excused?

A

The performance subject to it becomes due

19
Q

How may a party waive a condition?

A

Through words or conduct

20
Q

How can an offer be accepted?

A
  • Return promise
  • Performance
21
Q

What is a unilateral contract?

A

A contract accepted by performance

22
Q

What is an option contract?

A

Created when offeree begins performance of a unilateral contract, preventing offeror from revoking

23
Q

What determines if additional terms in an acceptance become part of the contract?

A

Whether the parties are merchants

24
Q

What is a merchant?

A

Someone who deals in goods of that kind or has knowledge or expertise in the goods or transaction

25
Q

What happens to additional terms in an acceptance if at least one party is not a merchant?

A

They are treated as proposals for addition to the contract

26
Q

What are the exceptions for additional terms in a contract between merchants?

A
  • Offer expressly limits acceptance to its terms
  • Additional terms materially alter those in the offer
  • Offeror objects within a reasonable time
27
Q

What makes a contract voidable?

A

A party’s incapacity to contract

28
Q

Who are the common categories of parties lacking capacity?

A
  • Infants
  • Mentally incompetent individuals
29
Q

Under what conditions does an intoxicated person incur only voidable contractual obligations?

A

If the other party knows or has reason to know of the intoxicated party’s incapacity