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commercial law > exam 1 > Flashcards

exam 1 Flashcards

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1
Q

liquidated debt

A

no dispute

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2
Q

unliquidated debt

A

a dispute - once the debtor pays the amount agreed on by both the parties, the debt is fully discharged. can enter into a - “Accord and Satisfaction”

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3
Q

The term ________ refers to the fact that the agreement in question is so unfair that it is void of conscience

A

unconscionable

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4
Q

express ratification

A

An express ratification occurs when, after reaching the age of majority, a person states orally or in writing that he or she intends to be bound by the contract entered into as a minor.

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5
Q

An agreement presented on a take-it-or-leave it basis is referred to as a(n) ________blank contract.

A

adhesion

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6
Q

Consideration

A

what a person will receive in return for performing a contract obligation.

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7
Q

preexisting duty rule

A

performance of a duty you are obligated to do under the law is not good consideration.

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8
Q

Promissory estoppel

A

Promissory estoppel occurs when three conditions are met: one party makes a promise knowing the other party will rely on it, the other party does rely on the promise, and the only way to avoid injustice is to enforce the promise. (also an exception to the rule requiring concideration)

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9
Q

Belinda mails Harold an offer on March 2nd. Harold receives the offer on March 4th and immediately mails a rejection. On March 5th, Harold changes his mind and mails Belinda an acceptance. Belinda receives the acceptance on March 6th and the rejection on March 7th. Is there a contract?

A

Yes, the acceptance is effective when mailed on March 5th.

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10
Q

“mirror-image” rule

A

According to the “mirror-image” rule, if the terms of the acceptance do not mirror the terms of the offer, the attempted acceptance is a counteroffer.

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11
Q

What’s considered material terms in an offer?

A

The subject matter, price, quantity, quality, and parties

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12
Q

unilateral contract

A

promise for an act

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13
Q

bilateral contract

A

promise for a promise

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14
Q

Things that are not consideration

A

Illusory promise, Past consideration, and Preexisting duty rule

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15
Q

-misunderstanding bc you didn’t know any better (as the buyer)
- Contracting party made a false statement of Material fact & believed the false statement to be true

A

Innocent misrepresentation

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16
Q

Negligent misrepresentation

A
  • Contracting party made false statement of material fact & did not know the false statement was false but should have known considering their knowledge/experience surrounding the matter.
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17
Q

Fraudulent Misrepresentation

A
  • Contracting party made false statement of material fact
  • Contracting party knew the false statement was false (Fraud)
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18
Q

Persuasive efforts of dominant party using a special relationship of trust to interfere with non-dominant party’s free choice of entering the contract (voidable)

A

Undue Influence

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19
Q

when parties have a meeting of the minds, enter contracts voluntarily and contracts are not “unreasonably” unfair

A

Legal Assent

(w out asset, contract is voidable)

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20
Q

When one party is forced, either physically or economically, into an agreement by a wrongful act of another

A

duress

(not legal assent)

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21
Q

A false statement about a material fact that was based on an innocent belief that the false statement was true is a(n)

A

innocent misrepresentation

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21
Q

When a contract is unreasonable unfair to one of the parties through either its formation or operation

A

Unconscionability

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22
Q

Josh contracted with a railroad company to have his order of lumber delivered by the train the company called Westward. Actually, there were two trains that were named Westward. They were identical trains, but had different delivery times. Josh thought his goods were being delivered by Westward I which delivered goods at the end of October. Westward II had a delivery date of February. Josh thought he was contracting for Westward I and the railroad company thought he wanted Westward II. Will the court void or rescind the contract due to mutual mistake?

A

yes

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23
Q

A court was asked to void a contract based on mutual mistake. The parties had entered into an agreement where the seller of goods believed that he was to deliver the goods on the truck which was designated as Route 1. However, the buyer thought he was contracting for the truck designated as Route 2. The only difference between the two trucks was the delivery date – the Route 1 shipment would be delivered one day sooner than goods shipped on Route 2. The later delivery did not really affect the buyer in any negative way. The buyer was so furious about the late delivery that he wished to teach the trucking company a lesson and requested the court to void the contract. The court will: Blank______.

A

not void the contract, since at least one of the elements of mutual mistake is missing

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24
Q

Brenda went shopping for a new computer at a nearby computer store. Her salesperson, Alan, had been told by another sales associate that a free printer was to be given to any customer who purchased a new laptop. This was not the case, but Alan believed the sales associate since he had been working at the store for two years. Alan told Brenda about the free printer, and Brenda purchased the laptop. Unfortunately Brenda was charged for the printer. Brenda was very angry and went to court. The judge found that there was innocent misrepresentation, and therefore, Brenda can receive: Blank______.

A

rescission of the contract, but no damages

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25
Q

Scienter is present when the party making the fraudulent assertion:

A

believed it was false or didn’t care to make sure it was true or false

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26
Q

A special relationship in which one person takes advantage of a dominant position in a relationship to unfairly persuade the other and interfere with that person’s ability to make his or her own decision to enter into a contract is known as: Blank

A

undue influence

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27
Q

Mistakes in contract law:

A

do not result from untrue statements.

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28
Q

In contract law, a ________ is an erroneous belief about the facts of the contract ________.

A

mistake of fact; at the time the contract is concluded

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29
Q

Concealment

A

a type of fraudulent misrepresentation, is the active hiding of the truth about a material fact

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30
Q

Nondisclosure

A

the failure to provide pertinent information about the projected contract. - form of fraudulent misrepresentation

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31
Q

Rule of state law requiring certain types of contracts to be in writing in order to be enforceable

A

Statue of Frauds

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32
Q

What Contracts are required to be in writing to be enforceable?

A

– Contracts made in consideration of marriage (prenuptial agreements)
- Contracts that cannot be performed within one year from the date of their making
– Land/Real Estate Contracts
– Executorship
- Goods valued at $500 or more
– Suretyship

33
Q

What are the exceptions to the writing requirement?

A
  • Admission
  • Partial performance
  • Promissory estoppel
  • UCC items discussed later
  • Courts finding the above will enforce a contract to the extent the above facts are found
34
Q

Parole Evidence Rule

A

Oral evidence of agreement made (1) before or (2) at the same time as a writing that the parties intend to be the complete and final version of their agreement is inadmissible

35
Q

What is an Integrated Contract?

A

A contract by its terms states this is the complete and final representation of parties’ agreement

36
Q

What are there Exceptions to the Parole Evidence rule?

A
  • Contracts that are subsequently modified
  • Contracts conditioned on orally agreed-upon terms
  • Contracts that are not final, as they are part written and part oral
  • Contracts with ambiguous terms
  • Incomplete contracts
  • Contracts with obvious typographical errors
  • Void or voidable contracts
  • Prior dealings or usage of trade
37
Q

The partial performance exception to the statute of frauds covers contracts involving

A

a property interest/ land (includes all things attached to the land)

38
Q

Parol evidence is admitted to determine whether a contract is: ___ or ____

A

void or viodable

39
Q

According to the ______, parol evidence is admissible for the sake of clarification if it addresses prior dealings between the parties or usages of trade in the business they are in.

A

UCC (uniform commercial code

40
Q

In which of the following cases is parol evidence inadmissible

A

When a contract is deemed integrated by the courts

41
Q

_____damages are intended to reimburse a plaintiff for his or her loss of the benefit of the bargain

A

Compensatory

42
Q

_____ contracts contain conditions affecting performance obligations of the parties.

A

conditional

43
Q

Which is the most frequently awarded damages?

A

Compensatory

44
Q

A condition ______ is a particular event that must occur in order for a party’s duty to arise

A

precedent

45
Q

A condition subsequent is a ______ event that terminates the obligations of the parties when it occurs

A

future

46
Q

Discharge by ______ refers to parties discharging their obligations by doing what they respectively agreed to do under the terms of the contract.

A

performace

47
Q

Concurrent conditions exist when the parties are to perform their obligations for each other:

A

simultaneously

48
Q

Complete performance occurs when all aspects of the parties’ duties under the contract are carried out:

A

perfectly

49
Q

No willful departure from the terms of the agreement

An honest effort to complete all of the contract terms

Completion of nearly all of the terms of the agreement

A

Conditions that need to be satisfied for substantial performance

50
Q

What type of breach occurs when a party unjustifiably fails to substantially perform his or her obligations under the contract, thereby discharging the non-breaching party from his or her obligations under the contract?

A

material

51
Q

Discharge by performance refers to parties discharging their obligations by:

A

doing what they agreed to

52
Q

a situation when, before the actual time for performance, a contracting party decides not to complete the contract?

A

Anticipatory repudiation

53
Q

Regarding discharge by mutual agreement, discharge by novation refers to a situation in which:

A

the original parties and a third party all agree that the third party will replace one of the original parties and that the original party will then be discharged

54
Q

What occurs whenever a party fails to perform his or her obligations under the contract

A

a breach

55
Q

Which of the following terms indicates mutual consent by contracting parties to replace an old agreement with a new one?

A

Substituted contract

56
Q

A(n) ______ discharges the nonbreaching party from his or her obligations under the contract

A

material breach

57
Q

Which of the following terms refers to a situation where contracting parties replace one of the parties with a third party?

A

Novation

58
Q

When a party files for bankruptcy, the court allocates the assets of the bankrupt debtor to creditors and then issues the debtor a ______ in bankruptcy

A

discharge

59
Q

Whenever possible, courts award ______ damages rather than some form of ______ relief.

A

monetary; equitable

60
Q

Consequential damages are also referred to as ______ damages.

A

special

61
Q

____damages are rarely awarded in breach of contract cases.

A

Punitive

62
Q

In a case where no actual damages resulted from a breach of contract, the court may award the plaintiff which of the following?

A

nominal damges

63
Q

_______ damages are foreseeable damages that result from special facts and circumstances arising out of the contract itself. These damages must be within the contemplation of the parties at the time the breach occurs.

A

Consequential

64
Q

____ damages represent a trivial amount of money (typically, $1 or $5), but serve to signify that the plaintiff has been wronged by the defendant

A

nominal

65
Q

What constitutes the termination of a contract?

A

rescission

66
Q

To recover damages in a breach-of-contract case, the plaintiff must demonstrate that he or she used reasonable efforts to minimize damages resulting from the breach. This obligation is referred to as the: ______.

A

duty to mitigate one’s damages

67
Q

The most common ______ remedies include rescission and restitution, orders for specific performance, and injunctions

A

equitable

68
Q

Rescission is the ______ of a contract.

A

termination

69
Q

Specific performance is sometimes called specific:

A

enforcement

70
Q

legal ability to enter into a binding agreement

A

contractural capacity

71
Q

Which type of damages are foreseeable damages that result from special facts and circumstances arising outside a contract itself?

A

Consequential damages

71
Q

Which of the following is a future event that terminates the obligations of the parties to a contract when it occurs?

A

Condition subsequent

72
Q

Sonya, an event planner, had agreed to use the rare Juliet rose for Juliet’s engagement party. However, due to an embargo against the country from where the flowers were to be imported, Sonya could not fulfill her promise. In this scenario, the contract between Sonia and Juliet may be discharged on the basis of

A

commercial impracticability

73
Q

(1) the plaintiff conferred a benefit on the defendant; (2) the plaintiff had reasonably expected to be compensated for the benefit conferred on the defendant
(3) the defendant would be unjustly enriched from receiving the benefit without compensating the plaintiff for it.

A

Recovery in quasi-contract

74
Q

________occurs when a party to a contract unjustifiably fails to substantially perform his obligations under the contract.

A

Material breach

75
Q

qualities of an offer

A

Definite and certain terms (matieral terms): Price, parties, quality, quantity, subject matter
communication

76
Q

Things that are not consideration

A

-Illusory promise:**
- Past consideration:**
- Preexisting duty rule:**

77
Q

Acceptance of offer by mail effective when…

A

mailed by offeree

78
Q

Revocation of offer (no agreement) by mail effective only when…

A

received by offeree

commercial law (1 decks)

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