Contractual Relationships I: Chapter 10

Question 1

What is the purpose of a contract?

Answer 1

Contracts exist to make business matters more predictable

Question 2

judicial restraint

Answer 2

a court taking a passive role and requiring parties to fulfill whatever obligations they agreed to (whether the deal was wise or foolish)

Question 3

judicial activism

Answer 3

where a court will ignore certain provisions of a contra t or an entire agreement if the judge believes that enforcing the deal would be unjust

Question 4

4 elements of a contract

Answer 4

Agreement, consideration, legality, and capacity

Question 5

Agreement

Answer 5

one party must make a valid offer and the other party must accept it

Question 6

Consideration

Answer 6

There has to be a bargaining that leads to an exchange between the parties

Question 7

Legality

Answer 7

The contract myst be for a lawful purpose

Question 8

Capacity

Answer 8

The parties must be adults of sound mind

Question 9

Consent

Answer 9

Neither party may trick or force the other into the agreement

Question 10

Written Contracts

Answer 10

Some contracts must be in writing to be enforceable

Question 11

Third Party interests

Answer 11

Some contracts affect people other than the parties themselves

Question 12

Performance and Discharge

Answer 12

If a party fully accomplishes what the contract requires, his duties are discharged

Question 13

Remedies

Answer 13

A court will award money or other relief to a party injured by a breach of contract

Question 14

Contract

Answer 14

a promise that the law will enforce

Question 15

Noncompetition Agreement

Answer 15

a contract in which one party agrees not to compete with another in a stated type of business

Question 16

Bilateral Contract

Answer 16

a binding agreement in which each party has made a promise to the other

Question 17

Unilateral Contract

Answer 17

a binding agreement in which one party has made an offer that the other can accept only by action, not words

Question 18

Express Contract

Answer 18

a binding agreement in which the parties explicitly state all important terms

Question 19

Implied Contract

Answer 19

a binding agreement created not by explicit language but by the informal words or conduct of the parties

Question 20

Executory Contract

Answer 20

a binding agreement in which one or more of the parties has not fulfilled its obligations

Question 21

Executed Contract

Answer 21

a binding agreement in which all parties have fulfilled all obligations

Question 22

Valid Contract

Answer 22

a contract that satisfies all of the law’s requirements

Question 23

Unforceable Agreement

Answer 23

occurs when the parties intend to form a valid bargain but a court declares that some rule of law prevents enforcing it

Question 24

Voidable Contract

Answer 24

an agreement that, because of some defect, may be terminated by one part, such as a minor, but not by both parties

Question 25

Void Agreement

Answer 25

one that neither party can enforce, usually because the purpose of the deal is illegal or because one of the parties has no legal authority to make a contract

Question 26

Promissory Estoppel

Answer 26

an exception to there being no contract in place; when the defendant made a promise that the plaintiff relied on

Question 27

Quasi-Contract

Answer 27

an exception to there being no contract; the defendant did not make any promise but idd receive a benefit from the plaintiff

Question 28

arguendo

Answer 28

that there was a clear and unambiguous promise

Question 29

quantum meruit

Answer 29

“As much as she deserves” the damages awarded in a quasi-contract case

Question 30

What is the purpose of UCC

Answer 30

Uniform Commercial Code; intended to facilitate the easy formation and enforcement of contracts in a fast-paced world; commerce (sale and leasing of goods, bank deposits, investment securities)

Question 31

Article 2 of the UCC

Answer 31

governs the sale of goods; “goods” means anything movable, except for money, securities, and certain legal rights

Question 32

In a mixed contract for goods and services, does article 2 govern?

Answer 32

Only if the primary purpose was the sale of goods

Question 33

Restatement of Contracts and Restatement (Second) of Contracts

Answer 33

ALI - American Law Institute; 1932 and 1979; attempted to codify what its members regarded as the best rulings of contract law; not the law anywhere

Question 34

When does the common law govern?

Answer 34

When the contract is for services, employment, or real estate

Question 35

What happens when two parties make an oral agreement that the law requires to be in writing?

Answer 35

It is an unenforceable agreement

Question 36

What happens when one party lacks capacity to make the contract ?

Answer 36

A voidable contract - they may escape liability.

Question 37

What happens if the purpose of the deal is illegal?

Answer 37

It’s a void agreement - the law will ignore the deal regardless of what the parties want

Question 38

When using unjust enrichment, do the courts imply a contract where none existed?

Answer 38

Yes