Exam 2 Flashcards
Which of the following can serve as consideration in a contract?
- a promise
- the doing of the act
- property and/or money
- forbearance
- all of these
all of these
This means whereby one party conveys/transfers his/her rights in a contract to another who is not a party to the original contract is called:
assignment
The party making the assignment is known as the
assignor
One to whom no legal obligation exists, but to whom performance is a gift, is known a a/an
donee beneficiary
The party to whom the assignment is made is known as the
assignee
The person who receives the proceeds from an insurance policy is called the
beneficiary
Which form of contract termination deals with a period of time in which you may sue to recover damages?
statute of limitations
If a party fails to perform the duties of the contract, they are termed
breaching the contract
Which type of damages would be contained in a clause in the original contract?
liquidated
Real property is:
- land
- buildings
- fences
- furniture
land, building, fences
Charging a higher interest rate than the maximum set by law is called
usury
A token award, as used to symbolize that a wrong was done to the plaintiff, is known as
nominal damages
The law which governs the type of contracts which must be in writing in order to be enforceable by the courts is the
statute of frauds
A rejection of the original offer and making a new offer back to the offeror is a/an
counteroffer
The substitution of a new party for the original contracting party who is to perform, with the mutual consent of both the original parties to the contract is called
novation
When one of the parties has failed to fulfill his/her contractual obligations on time, which of these remedies is BEST to use when the contractual goods are of a rare or unique nature?
- sue for liquidated damages
- sue for compensatory damages
- sue for specific performance
- sue for nominal charges
sue for specific performance
Monetary awards given by courts in excess of actual damages suffered following a breach of contract are called ________ and monetary awards given by courts for exact amount of damages suffered following a breach of contract are called________.
punitive damages, compensatory damages
Which of the following contracts does NOT have to be in written form to be enforceable?
- transfer of ownership of all or part of 5 acres of land
- a promise to transfer ownership of a lake house upon marriage
- sale of a computer for $450
- an agreement to pay off a debt over the next 8 years
sale of a computer for $450
A legal order forbidding a specific act is known as a/an
injunction
All physical items that are NOT real property are classified as ________ property.
personal
The violation of the terms of a contract is called
breach of contract
A contract in which ownership of goods passes immediately from a seller to a buyer in consideration of a price is called
sales contract
When a seller agrees to transfer title of goods to a buyer in consideration of a price at some time yet to come, this is called a/an
contract to sell
A document used as evidence of a sales contract and as proof of the ownership of goods is called a
bill of sale
If the most important part of the contract deals with personal services to be rendered, even though there is some purchasing of goods involved also, this would be considered a/an
contract of services
Which of the following contracts would NOT have to be in writing before the agreement would be enforceable by the courts?
- an agreement to sell real property
- an agreement to become responsible for the debts of another
- an agreement to buy or sell goods valued at over $500
- an agreement which can be performed within a 12 month period of time
an agreement which can be performed within a 12 month period of time
When one party in a contract is completely released and replaced by another party with the formation of a new contract, this is called a/an
novation
The law that governs the time period during which one must file suit for breach of contract is called the
statute of limitations
A contract that may be set aside by at least one of the parties is called
voidable
A means of destroying another’s free will by obtaining consent to a contract by means of threat to do them harm is the definition of
duress
A mutual mistake as to the existence of the subject matter makes a contract
voidable
The election to avoid a contract by a minor is called
disaffirmance
A contract made by a legally declared insane person is
void
Whatever the promisor demands and receives as the price for his promise is called
consideration
One who induces another to enter into a contract as a result of an intentional or reckless false statement of material fact is guilty of
fraud
When one promises to refrain from doing something that he/she is legally able to do, his/her behavior is known as:
forbearance
If a minor makes a contract during the age of minority and then elects to proceed with the contract after reaching the age of majority, the minor has chosen to _____ the contract.
ratify
Which of the following would NOT be considered to be a necessary item for a minor?
- food
- clothing
- housing
- laptop
laptop
Generally, a mistake made by one of the parties to a contract and that is unknown to the other party has what affect on the contract?
has no effect on the validity of the contract
If one person acts in justifiable reliance upon the promise made by another, the promissory cannot later claim lack of consideration because of the principle of
promissory estoppel
