FC5

Question 1

List the contracts that must be in writing or on record to be enforceable

Answer 1

1. involving real property sales, transfers, listings, and leases longer than one year
2. to pay the debt of another
3. that cannot be performed within one year
4. the sale of goods for $500 or more

Question 2

Statute of Frauds

Answer 2

a contract statute that requires certain kinds of contracts be memorialized in signed writing with sufficient content to evidence the contract

Question 3

list minimum requirements for a valid writing or record of contract

Answer 3

1. identity of parties
2. subject matter
3. signature by party whom you want enforcement

Question 4

situations in which partial performance exception for real property agreements apply

Answer 4

1. buyer has made payment
2. buyer has taken possession
3. buyer has made improvements

Question 5

fully integrated contract

Answer 5

complete, final, and unambiguois

Question 6

exceptions to parol evidence rule

Answer 6

1. defense to formation (misrepresentation, mistake, durress)
2. modification
3. Ambiguities
4. Incomplete contract

Question 7

merchant’s confirmation memorandum

Answer 7

a UCC provision that allows one merchant to bind another based on oral agreements with one signature

Question 8

what is required for modification of a contract under common law?

Answer 8

additional consideration

Question 9

parol evidence rule

Answer 9

a fully-integrated contract clearly written cannot be contradicted, varied or altered by evidence of the parties prior negotiations agreements or contemporaneous oral agreements

Question 10

Against whom are ambiguities construed?

Answer 10

the party who drafted contract

Question 11

Explain requirements for creating a surety relationship

Answer 11

must be in writing

can be gratuitous

Question 12

What is the formula for the right of a co-surety to collect from another (right of contribution)

Answer 12

amount guaranteed by surety/ total agreed to be paid by all sureties X the amount to be paid by creditor - the amount owed by this surety to creditor or to any surety who had to pay full amount

Question 13

Describe right of contribution regarding sureties

Answer 13

Cosureties have right to collect from other sureties their pro rata share of amount paid to creditor

Question 14

Describe concept of reimbursement and indemnity of guarantor

Answer 14

upon payment to creditor the guarantor has the right to seek reimbursement from principal debtor

Question 15

What is creditors’ right in a surety relationship?

Answer 15

Upon default can proceed against collateral or surety - collector’s choice

Question 16

Conditional guaranty

Answer 16

surety or guarantor promises to pay only when certain conditions have been made.

Question 17

absolute guaranty

Answer 17

promise by surety or guarantor to pay no matter what happens or why debtor defaulted

Question 18

Describe a surety (or guarantee relationship)

Answer 18

Principal debtor owes money to creditor and surety or guarantor agrees to back up the debtor if debtor does not pay; promise to pay debt of another in event that the other defaults

Question 19

Under what circumstances are compensated and uncompensated discharged from liability?

Answer 19

Material alterations, uncompensated surety is discharged

compensated surety is discharged only if modification increases risk

Question 20

What defenses are available to a surety through creditor actions?

Answer 20

1. release of debtor. Refusal by creditor to accept payment. Material alteration of agreement with debtor
2. Fraud and collusion with debtor to get guarantor to provide guaranty
3. Release of collateral to debtor (but only released for the amount that is the value of collateral

Question 21

What defenses are not available to a surety?

Answer 21

Capacity of the principal debtor; Bankruptcy of principal debtor; Statute of limitations running on debtor’s obligation

Question 22

What defenses are available to a guarantor?

Answer 22

Contracts defenses of principal debtor such as fraud, duress, failure of consideration, breach

Question 23

List requirements for a valid deed

Answer 23

1. must be in writing
2. must be signed by grantor
3. must include description of land

Question 24

define fee simple estate

Answer 24

A person has complete ownership for an unlimited duration to do with the property as he or she legally chooses

Question 25

define tenancy for years

Answer 25

a lease for specified duration. the lease agreement must name parties, include ID of property, and include any lease term that the parties wish to have

Question 26

Tenancy at will

Answer 26

a tenancy that simply continues with permission of landlord. A tenancy at will can be terminated by either party without notice

Question 27

easement

Answer 27

the right of a person to make limited use of another’s realty usually without taking anything from it

Question 28

warrant deed

Answer 28

this deed provides the highest level of protection. Grantor guarantees title and his right to transfer