Practice Exam 2 Halpern Flashcards
A bilateral contract is commonly defined as a promise in exchange for a promise.
T or F?
True
Implied contracts are created by written or spoken words.
T or F?
False
A contract that is valid is never unenforceable.
T or F?
FALSE
A contract can be valid (meaning it meets all the basic requirements of a contract) but still be unenforceable under certain circumstances. Examples include:
Statute of Frauds: If a contract is required to be in writing (e.g., real estate contracts) but is only oral, it may be unenforceable.
Statute of Limitations: If too much time has passed, a valid contract may no longer be legally enforceable.
Illegality: A contract that was valid when made could become unenforceable if laws change and make it illegal.
Unconscionability: A court may refuse to enforce a valid contract if it is excessively unfair.
Thus, a valid contract is not always enforceable.
Which of the following means that a contract cannot be illegal or against public policy?
Agreement
Consideration
Contractual capacity
Legal object
Mutual assent
Legal Object
Jacquelyn accepts Monique’s offer to sell her a used car for $2,000. At what point is there a binding contract between the two parties?
When Jacquelyn and Monique make the agreement
When Jacquelyn pays Monique the $2,000
When Monique delivers the car to Jacquelyn
Three business days after Jacquelyn accepts delivery of the car
Three calendar days after Jacquelyn accepts delivery of the car
When Jacquelyn and Monique make the agreement
Which of the following contracts are usually voidable?
Contracts entered into as a result of fraud
Contracts entered into as a result of duress
Contracts entered into as a result of undue influence
Contracts entered into as a result of fraud or duress, but not undue influence
Contracts entered into as a result of fraud, duress, or undue influence
Contracts entered into as a result of fraud, duress, or undue influence
As long as some of the duties under a contract have not yet been performed, the contract is considered ________.
executory
executed
implied-in-law
implied-in-fact
illusory
Executory
Wishing to sell her used business law book, Inez calls Janice and tells her that if she does not hear from her within twenty-four hours, she will assume that Janice wishes to purchase the book for $50. After the expiration of twenty-four hours, which of the following is correct regarding the status of the proposed book sale?
There is no contract because silence, as a general rule, cannot be used to form a contract.
There is no contract because the offer was not made in person.
There is no contract because the offer was not made in writing.
Janice can avoid the legal recognition of a contract, but only if she can prove by a preponderance of the evidence that she did not hear about the offer before the stated expiration time.
Janice can avoid the legal recognition of a contract, but only if she can prove beyond reasonable doubt that she did not hear about the offer before the stated expiration time.
There is no contract because silence, as a general rule, cannot be used to form a contract.
A court will enforce one party’s promise even if the other party did not promise something in exchange.
T or F?
FALSE
In general, a court will not enforce a one-sided promise unless there is consideration—meaning both parties must promise or give something of value in exchange. This is a fundamental principle of contract law.
Exceptions:
There are a few rare circumstances where a court might enforce a promise even without an exchange:
Promissory Estoppel – If one party reasonably relied on a promise to their detriment, a court may enforce the promise to prevent injustice.
Unilateral Contracts – If one party makes a promise that can only be accepted by performance (e.g., a reward for finding a lost dog), the promise may be enforced once the action is completed.
Forbearance is the promise to engage in a particular activity.
T or F?
FALSE
Forbearance = Refraining from doing something that one has a legal right to do
Suppose that Eduardo agrees to purchase Caleah’s car for $10,000. Eduardo’s payment of $10,000 is the ________ Caleah will receive for her car.
consideration
offer
conditional offer
invitation to negotiate
forbearance
consideration
Greg promises Carlos that he will stop smoking for two (2) years, if Carlos promises to pay him $5,000. Greg’s promise is considered ________.
forbearance
past consideration
an illusory promise
a preexisting duty
promissory estoppel
FORBEARANCE
refraining from doing something he has the legal right to do
Most contracts require that both parties give consideration in a contract. Which of the following is an exception to that rule?
Promissory estoppel
Forbearance
A unilateral contract
A bilateral contract
A real estate contract
Promissory Estoppel
Promissory estoppel is an exception to the requirement that both parties must provide consideration in a contract. Under this legal principle, a party can be held to a promise even without consideration if:
A promise was made.
The promisee reasonably relied on the promise.
The reliance caused significant detriment.
Enforcing the promise is necessary to prevent injustice.
This prevents one party from going back on a promise when the other party has relied on it to their detriment.
Caterer and Bride agree that Caterer will cater Bride’s wedding for $20 per plate. On the day of the wedding, Caterer determines that she needs more money and informs Bride that the price is now $25 per plate. Desperate, Bride agrees. Is the $25-per-plate contract modification enforceable?
Yes, since Bride agreed to the new $25-per-plate price
Yes, since Bride could have counteroffered but declined to do so
No, since the modification is based on an illusory promise
No, since promissory estoppel automatically prohibits the modification
No, since Caterer had a preexisting duty to Cater the wedding for $20 per plate
No, since Caterer had a preexisting duty to Cater the wedding for $20 per plate
Courtney, who does not keep up with the price of current technology, agrees to buy a used computer from Jake for $2,500. Later, Courtney’s friend Brice tells Courtney that she made a terrible deal and that she could get a better, new computer for no more than $1,000. Courtney tells Jake that she is not giving him any money because he has not been fair to her in terms of the computer price. What is the most likely result if Jake sues Courtney alleging breach of contract?
Jake will win because the court will not weigh whether a good bargain was made
Contracts made with someone who has been adjudicated insane are void.
T or F?
True
A contract of an intoxicated person for necessaries will be enforced for the reasonable value of the necessaries.
T or F?
True
Which of the following is true regarding the ability of persons suffering from a mental illness to enter into a binding contract?
Persons suffering from a mental illness never have capacity to enter into a binding contract.
Persons suffering from a mental illness have full capacity to enter into a binding contract, so long as they do not present a danger to themselves or others.
Persons suffering from a mental illness have full capacity to enter into a binding contract, so long as they inform the other party that they are either in, or in the process of seeking, professional treatment.
Persons suffering from a mental illness may have full, limited, or no legal capacity to enter into a binding contract, depending on the nature and extent of their mental deficiency.
Persons who suffer from a mental illness always have full capacity to enter into a binding contract.
Persons suffering from a mental illness may have full, limited, or no legal capacity to enter into a binding contract, depending on the nature and extent of their mental deficiency
Which of the following is true regarding an agreement to commit a crime or a tort?
An agreement to commit a crime is enforceable, but an agreement to commit a tort is unenforceable.
An agreement to commit a tort is enforceable, but an agreement to commit a crime is unenforceable.
An agreement to commit a crime is unenforceable, and an agreement to commit a tort is unenforceable unless a business tort is involved, in which case the agreement is enforceable as an implied-in-fact contract.
An agreement to commit a crime is unenforceable except an agreement to commit a white-collar crime, which is enforceable as an implied-in-law contract; and an agreement to commit a tort is unenforceable unless a business tort is involved, in which case the agreement is enforceable as an implied-in-fact contract.
Both an agreement to commit a crime and an agreement to commit a tort are unenforceable.
Both an agreement to commit a crime and an agreement to commit a tort are unenforceable.
Which of the following involves overly harsh or lopsided substance in an agreement?
Substantive unconscionability
Adhesion conscionability
Procedural unconscionability
An exculpatory clause
An in pari delicto agreement
Substantive unconscionability
Substantive unconscionability refers to contract terms that are overly harsh, one-sided, or oppressive to one party. This typically involves terms that are so unfair that they “shock the conscience” of the court, such as extreme penalties, grossly unfair pricing, or provisions that heavily favor one party over another.
When a contract is void, it may be rescinded.
T or F?
FALSE
A void contract is invalid from the start and has no legal effect, meaning there is nothing to rescind. Rescission applies to voidable contracts, where one or both parties have the option to cancel the contract due to issues like fraud, misrepresentation, or undue influence.
Since a void contract was never legally binding, there is no need to rescind it—it simply cannot be enforced.
When both parties to a contract are mistaken about either a current or a past material fact, only the party who was first mistaken can choose to rescind the contract.
T or F?
False
Unilateral or mutual are two ways to classify which of the following in contract law?
Property
Performance
Duress
Mistake
Consideration
Mistake
In contract law, mistakes can be classified as unilateral or mutual:
Unilateral mistake: When only one party is mistaken about a material fact in the contract. Generally, the contract remains enforceable unless the other party knew or should have known about the mistake.
Mutual mistake: When both parties are mistaken about a fundamental fact in the contract. In such cases, the contract may be voidable because there was no true “meeting of the minds.”
George offers to sell Penelope a ring that George found in his yard. He and Penelope look at the ring and decide that they are not sure what it is, probably just a shiny stone. Penelope pays George $10 for the ring. The ring turns out to be a diamond worth much more than $10. George wants the ring back, and Penelope refuses. What is the most likely result?
Penelope must return the ring to George due to mutual mistake.
Penelope must return the ring to George due to unilateral mistake.
Penelope must return the ring to George due to the application of equitable principles.
Penelope may keep the ring unless George can establish that she was negligent in not recognizing the ring’s true value.
Penelope can keep the ring because the parties contracted on the assumption that they did not know the value of the ring.
Penelope can keep the ring because the parties contracted on the assumption that they did not know the value of the ring.
This is a case of a mistake as to value, which generally does not provide grounds to void a contract. Both George and Penelope were aware that they were uncertain about the ring’s value when they made the agreement. Since they willingly entered into the contract under this assumption, George cannot reclaim the ring just because it turned out to be more valuable than he initially thought.
Which of the following is a false statement about a material fact that the person who asserted the statement believed to be true?
Fraud
Negligence
A criminal misrepresentation
A scienter-based misrepresentation
An innocent misrepresentation
An innocent misrepresentation
A failure to provide pertinent information about a projected contract is:
Multiple Choice
Duress
Negligence
Puffery
Concealment
Nondisclosure
Nondisclosure
Nondisclosure occurs when one party fails to provide important or material information about a contract. While it is not always fraudulent, it can lead to legal consequences if there was a duty to disclose the information, especially in cases where failing to disclose would mislead the other party.
Bobby tells Robert that unless he receives $10,000, Bobby will give Robert’s wife all the pictures he took of Robert with a woman not his wife. This is an example of ________.
duress
fraud
gross negligence
unconscionability
negligent misrepresentation
duress
The statute of frauds serves to protect promisors from poorly considered oral contracts.
T or F?
TRUE
add chat answer later
Although a mutual promise to marry does not fall within the statute of frauds, prenuptial agreements do.
T or F?
True
There are three types of contractual conditions: condition precedent, condition substantial, and concurrent conditions.
T or F?
FALSE
Condition SUBSEQUENT, NOT substantial
When one party to a contract wants to substitute a different performance for his original duty under the contract, this is known as an accord and satisfaction.
T or F?
True
Recission is the termination of a contract, and restitution is the return of any property given up under the contract.
T or F?
True
In order for her employment contract with the law firm Kornegay and Rhyne, PLLC to be valid, Heather (a recent law school graduate) must first pass the state bar examination. This is a(n) _______ contract.
equitable
executed
illusory
conditional
adhesion
conditional
Marlie’s contract explicitly states that she must perform her contract obligation by June 1 at 5:00 p.m. This is an example of ________.
a concurrent condition
a condition precedent
an implied condition
an express condition
both a concurrent condition and an express condition
an express condition
An express condition is a condition explicitly stated in a contract that must be met for a party’s obligation to be fulfilled. In this case, Marlie’s contract clearly specifies that she must perform her obligation by June 1 at 5:00 p.m., making it an express condition.
Thomas did not perform his contract obligation on time or to proper specifications. This is considered a(n) ________ contract.
implied
executed
rescinded
breach of
revoked
breach of
What doctrine arose from cases in England in which parties, who had contracted for rooms along a parade route for the king’s coronation, received their money back when the coronation was canceled because the king became ill?
Frustration of purpose
Commercial impracticability
Substantial performance
Anticipatory repudiation
Impossibility of performance
Frustration of purpose
This doctrine arose from the famous “Coronation Cases” in England, where people had rented rooms along a parade route to watch King Edward VII’s coronation. When the coronation was canceled due to the king’s illness, the courts ruled that the contracts were discharged due to frustration of purpose—the event that formed the basis of the contract did not occur, making performance pointless.
This doctrine applies when:
A principal purpose of the contract is frustrated.
The frustration was unforeseeable and beyond the control of the parties.
Both parties understood the purpose when they entered into the contract.
If the plaintiff is seeking legal damages which would punish the responsible party, he is suing for ________ damages.
equitable
compensatory
nominal
exemplary
punitive
punitive
Why did equitable remedies come into being?
To fashion remedies when existing laws did not provide adequate ones
To fashion substitute remedies for established and adequate legal remedies
To provide a means by which to award nominal damages
To provide a means by which to award consequential damages
To provide a means by which to award liquidated damages
To fashion remedies when existing laws did not provide adequate ones
Equitable remedies were developed to address situations where traditional legal remedies (such as monetary damages) were insufficient to provide justice. Courts of equity created these remedies to ensure fairness, offering solutions like specific performance, injunctions, and rescission when monetary compensation alone would not be adequate.
The termination of a contract is known as ________.
rescission
reformation
restitution
injunction
execution
rescission
Under the Uniform Commercial Code (UCC), when may a court order the specific performance of a contract for the sale of goods?
Only when the goods are unique
Only when five hundred (500) or more units of goods are specified in the contract
Only when the goods have been ordered at least six (6) months in advance
When the goods are unique and when five hundred (500) or more units of goods are specified in the contract
When the goods are unique or in other proper circumstances
When the goods are unique or in other proper circumstances
Under the Uniform Commercial Code (UCC) § 2-716, a court may order specific performance for the sale of goods when:
The goods are unique, meaning they cannot easily be replaced in the market (e.g., rare artwork, custom-made items).
Other proper circumstances exist, such as when the buyer cannot obtain substitute goods (cover) despite reasonable efforts.
This ensures that parties receive the benefit of their bargain when monetary damages would not be sufficient.
