Wrong Answer Rules

Question 1

What is consideration?

Answer 1

To constitute consideration, a performance or a return promise must be bargained-for.

Consideration can consist of forbearing from doing something, or doing something one is not already required to do.

Question 2

A performance or return promise is bargained-for if

Answer 2

1. it is sought by the promisor in exchange for his promise
   AND
2. and is given by the promisee in exchange for that promise.

Question 3

With respect to the requirement for consideration, the performance may consist of:

Answer 3

1. an act other than the promise;
2. a forbearance; or
3. the creation, modification, or destruction of a legal relation.

Question 4

What is a delegation?

Answer 4

A delegation occurs when a third party agrees to satisfy a performance obligation owed by one of the parties to the contract.

Question 5

True or False: A delegation does not relieve the delegator from their obligations under the contract.

Answer 5

True. Despite the delegator’s delegation to the delegatee of the performance obligation owed to the obligee, the delegator remains liable for the performance, UNLESS there is a novation.

Question 6

Liability of the Delegatee

When is a delegatee liable to a delegator?

Answer 6

When the delegatee has agreed to perform the delegator’s contract obligations and does not fulfill those obligations.

Question 7

Liability of the Delegatee

When is a delegatee liable to a obligee?

Answer 7

Under the third-party beneficiary theory, the delegate is also liable to the obligee, because the obligee is an intended beneficiary of the promise made to the delegator.

Question 8

Can a Delegatee recover from obligor?

Answer 8

Yes. for unjust enrichment if they fail to pay delegatee.

Question 9

If the obligor pays the assignor, this defense can be raised against the assignee, provided that payment was made ___________

Answer 9

before notice of the assignment was given to the obligor.

Once notice of the assignment is given, payment to the assignor is no defense.

Question 10

What is UCC 2-207

Answer 10

a definite and seasonable expression of acceptance operates an an acceptance ven though it states terms additional to or different from those offered..unless acceptable is made expressly conditional on assent to the additional or different terms.

Question 11

Between merchants, additional terms are to be construed as proposals for addition to the contract. They become part of the contract UNLESS:

Answer 11

1. The offer expressly limits acceptance to the terms of the offer;
2. they materially alter it; or
3. notification of objection to them has already been given or is given within a reasonable time after notice of them is received.

Question 12

True or False: Modification or recission of a third-party contract is possible up to the time the third-party’s rights vest.

Answer 12

True.

Question 13

A third-party beneficiary’s rights vest when he learns of the contract and:

Answer 13

(1) manifests assents to it at the request of one of the parties;

(2) materially changes position in reliance on the contract; or

(3) files suit to enforce rights under the contract.

Question 14

What is the pre-existing duty rule?

Answer 14

a duty already obligated to be performed on the basis of the original contract CANNOT serve as consideration for a new promise, as it lacks the novelty required for valid consideration.

Question 15

under the pre-existing duty rule, if parties to an existing contract agree to modify the contract for the sole benefit of one of them, the modification will usually be

Answer 15

unenforceable at common law for lack of consideration.

Question 16

True or False: Employment contracts are regarded as divisible for the purpose of permitting the employee to recover the agreed price for the number of months of service he has put in.

Answer 16

True.

Question 17

If a buyer repudiates a contract for unfinished goods, the seller may in the exercise of reasonable commercial judgment proceed in any reasonable manner, including finishing the goods for resale.

The seller’s damages in this situation are:

Answer 17

the difference between the contract price and the resale price RATHER THAN seeking costs and anticipated profit.

Question 18

True or False: An intended beneficiary can enforce a contract to which it is not a party because the parties intended the contract to benefit that beneficiary.

Answer 18

True.

Question 19

Divisible Contract

When performance under a contract can be divided into multiple tasks, each with a corresponding price that the other party must pay when the task is completed, one party’s performance of a task triggers:

Answer 19

the other party’s duty to pay for it, even if the performing party breaches another part of the contract.

Question 20

When a seller’s demand for a modification is a repudiation, and the buyer refuses the modification and purchases goods elsewhere, the remedy for the seller’s breach is:

Answer 20

the difference between the cost of cover and the contract price.

Question 21

What is the principle of reasonable expectations?

Answer 21

This applies to insurance law. It posits that parties should not be bound by term that they would not expect to find a contract unless those terms were called to their attention and that ambiguities are to be resolved in favor of the insured.

Question 22

True or False: A party may avoid a contract if their asent was induced by either a FRAUDULENT or MATERIAL misrepresentation.

Answer 22

True.

Question 23

Under UCC 2-501, Goods are identified to the contract when the seller:

Answer 23

ships, marks, or otherwise designates them as goods to which the contract refers.

Question 24

What is a constructive condition precedent?

Answer 24

Where the contract contains no provision relating to the order of the respective performance, and performance on one side will necessarily take time, while the other can be performed in an instant, the former is a constructive condition precedent to the latter.

In other words, the performance that takes time must be substantially completed bore the other party needs to render his performance.

Question 25

True or False: Damages are not recoverable for loss that the party in breach did not have reason to forsee as a probable result of the breach when the contract was made.

Answer 25

True.

Question 26

What is the doctrine of promissory estoppel?

Answer 26

a promise which the promisor should reasonably expect to induce action OR forbearance on the part of the promissee or a third person, and which does induce such action or forbearance, is binding if injustice can be avoided only by enforcing the promise.

Question 27

True or False: even if a surety arrangement existed between a promisor, creditor, and third party, it would be voidable due to lack of consideration to support the promisor’s promise.

Answer 27

True.

Question 28

True or False: when an event occurs that dramatically reduces the value of the transaction to a party, frustration of purpose allows the party to be excused from performance.

Answer 28

True.

Question 29

Unjust enrichment

Answer 29

occurs when a party to an agreement receives a benefit without incurring any detriment.

Question 30

What is a self-limiting reward?

Answer 30

Rewards that can only be awarded for a single task.

Question 31

What is an open-field award?

Answer 31

claimed by multiple people for a given task.

Question 32

The doctrine of impossibility excuses both parties from their obligations under a contract if the performance has been rendered impossible by events occurring AFTER the contract was formed.

It requires:

Answer 32

1. objectively impossible performance; and
2. that the occurrence of the contingency was not known to the parties at the time of contracting.

Question 33

The doctrine of impossibility does not apply if:

Answer 33

the parties have allocated the risk of the contingency.

Question 34

True or false: In the absence of language as to risk sharing, the builder assumed the risk because it was new construction.

Answer 34

True.

Question 35

Under the UCC, a modification to a contract for the sale of goods needs no additional consideration to be binding if:

Answer 35

the modification was made in good faith.