Exam 2

Question 1

What is contract

Answer 1

legally enforceable promise or set of promises

Question 2

What are the four required elements of a valid contract

Answer 2

mutual assent- parties to contract must indicate through words or behavior that they are willingly agree to enter into contract
Consideration- both sides must obtain something of value and give something of value
Legality of purpose- contract must justify legal purpose
Capacity- both parties to contract must have legal standing to enter into contracts

Question 3

what is the difference between a unilateral contract and a bilateral contract

Answer 3

unilateral contract- where one party’s legal detriment arises from its action or inaction rather than a promise
bilateral contract- where legal detriment is incurred through the mutual promises the parties to each other

Question 4

in general what type of law governs contracts for services

Answer 4

common law

Question 5

In genral what type of law governs contracts for the sale of goods

Answer 5

Ucc sales contract

Question 6

What is the difference between an offeror and an offeree

Answer 6

offeror makes valid offer
offeree accepts offer

Question 7

At what point after making an offer can an offeror no longer revok the offer

Answer 7

it is effective upon dispatch when sent in a commercially reasonable manner

Question 8

what is consideration

Answer 8

mutual exchange of benefits and detriments

Question 9

what is the rule regarding whether giving up something that is not of legal value constitutes consideration

Answer 9

nominal consideration

Question 10

How did the virginia state supreme court rule in lucy v. zelmer

Answer 10

Unanimous decision in favor of plantiff lucy because contract was valid

Question 11

What is capacity

Answer 11

a legal docrineused by courts to protect parties who may lack ability to understand agreement’s terms

Question 12

In general, what is the age below which a person is considered to lack full capacity to contract

Answer 12

below age of 18

Question 13

In genral, what status do the contracts of a minor have

Answer 13

voidable at their option

Question 14

What is the difference between ratification and disaffirmance

Answer 14

ratification- includes any act that indicates the minor intends to be bound by minor’s promise
disaffrimation- when a minor has performed or partially performed contract, minor must take action to avoid contract’s obligations

Question 15

What is the difference between a bright-line rule and a flexible standard, and what are examples of each

Answer 15

bright-line- rules are clear-cut and fairly easy to apply
Flexable- less clear-cut because they provide grater range of choice of discretion

Question 16

what is legality

Answer 16

whether a contract is in accordance with the law and can be enforced

Question 17

as a general rule, what status do illegal contracts have

Answer 17

automatically void

Question 18

What is public policy

Answer 18

courts have power to declare certain types of contracts void on grounds that they are contrary to public policy

Question 19

How did the ninth virvuit court of appeals rule in C.M.D. v. Facebook

Answer 19

ruled that facebook’s terms of service are generally enforceable against minors, meaning that minors who use facebook are bound by the user agreement unless they actively disaffirm it.

Question 20

What is genuine assent

Answer 20

knowing, voluntary, and mutual approval of terms of contract by each party

Question 21

What are the five consent defects

Answer 21

Misrepresentation
fraud
duress
undue influence
unconscionability

Question 22

In general, what are the three elements that an aggrieved party must prove to avoid a contract on the basis of misrepresentation

Answer 22

misrepresented fact was material
that party justifiably relied on misstatement when forming agreement
misrepresentation was one of fact and not just opinion or mere puffing

Question 23

What is the difference between duress, undue influence, and unconsicionability

Answer 23

duress- use of any form of unfair coercion by one party to induce another party to enter into or modify contract
undue influence- defense that gives legal relief to party in fiduciary relationship who has been induced to enter into contract trough improper pressure
unconsicionability- defense that may allow party to potentially avoid contract on grounds that the party suffered grossly unfair burden that shocks the conscience

Question 24

What is the statute of frauds

Answer 24

law governing which contracts must be in writing in order to be enforceable

Question 25

Under what circumstances must a contract be in writing to satisfy the statute of frauds

Answer 25

sale of land
performed over a year
pay debt
consideration of marriage
executor of a will to pay debts of estate
sale of goods over $500

Question 26

What is the parol evidence rule

Answer 26

rule of contract interpretation stating that any writing intended by parties to be final expression of agreement may not be contradicted b any oral or written agreements made prior to the writting

Question 27

What is contract discharge

Answer 27

How and when contract is legal

Question 28

What are the three general categories of conditions and what is the difference between them

Answer 28

Condition precedent- contract term requires an event to occur before performance under contract is due
Condition concurrent- when each party is required to render performance simultaneously
Condition subsequent- contract term that discharges parties’ obligations if event occurs after performance under contract

Question 29

What are the four methods of discharge by mutual agreement and what is the difference between them

Answer 29

Rescission- when parties agree to cancel contract
Accord and satisfaction- one party agrees to render substitute performance in future,and other party promises to accept that substitute performance to discharge existing performance obligations
Substitute agreement- when contracting parties discharge their obligations by replacing original contract with new agreement
Notation- when parties agree to substitute third party for one of the original parties to contract

Question 30

What are the three doctrines of discharge by operation of law and what is the difference between them

Answer 30

Impossibility- when contemplated performance of obligations becomes objectively impossible and therefore is subject to discharge
Impractibility- discharge arising when performance is not objectively impossible yet performance becomes extremely burdensome due to some unforeseen circumstances occurring between time of agreement and time of performance
Frustration of purpose- when one party’s purpose is completely or almost completely frustrated by supervening events courts may discharge that party from performance

Question 31

What is a force majeure

Answer 31

contemplates uncontrollable acts that will impede performance under contract

Question 32

How did the new york cour of appeals rule in jacobs and youngs v. kent

Answer 32

Ruled the defendent was not entitled to the cost of replacing pipes but instead to the difference in value between the property with the installed pipes and the prperty with the contracted-for pipes

Question 33

What is a breach

Answer 33

a violation in the performance of or a failure to perform an obligation created by a promise, duty, or law without excuse or justification

Question 34

What is anticipatory

Answer 34

When a party repudiates prior to the date that the performance is due

Question 35

What are the three types of money damages and what is the difference between them

Answer 35

COmpensatory- damages meant to make injured party whole again
Consequential- foreseeable indirect losses not covered by compensatory damages
Liquidated damages- damages that parties expressly define in contract and agree will compensate nonbreaching party

Question 36

What are the three types of equitable remedies and what is the difference between them

Answer 36

SPecific performnace- whereby court orders breaching party to render promised performance by ordering party to take specific action
Injunction relief- court ordedr to refrain from performing particular act.
Reformation- contract modification in which court rewrites contract to conform to parties’ actual intentions when parties have imperfectly expressed their agreement and imperfection results in dispute

Question 37

What is restitution

Answer 37

compensating a person for loss or injury

Question 38

What is the duty to mitigate

Answer 38

rule preventing recovery for reasonably avoidable damages