question

What is a contract?

answer

1) Judicially enforceable agreement 2) An agreement that can be enforced by a court 3) An agreement that creates duties and obligations

question

What is mutuality of obligation?

answer

1) Each party has a duty or obligation to perform

question

What source of law deals with contracts?

answer

1) Common law

question

What subject matters do contracts cover?

answer

1) Real estate 2) Insurance 3) Services 4) Employment

question

What do contracts do?

answer

1) Provide stability and predictability

question

What are the two parties of a contract?

answer

1) Promisor 2) Promisee

question

What are the elements of a contract?

answer

1) Agreement 2) Consideration 3) Contractual capacity 4) Legal purpose

question

What is the most important element of a contract?

answer

1) The agreement

question

How is an agreement created?

answer

1) Created by an offer and an acceptance

question

What are the two legal defenses to a contact?

answer

1) Mutual ascent 2) Proper form

question

What is mutual ascent?

answer

1) A meeting of the minds

question

Contracts can be __(1)__ or __(2)__.

answer

1) Unilateral 2) Bilateral

question

What is a bilateral contract?

answer

1) Created by an exchange of promises

question

What is a unilateral contract?

answer

1) Accepted by performance Ex. Someone cuts your grass. You don't own them anything until the grass has been cut

question

What is an expressed contract?

answer

1) Agreement is fully stated

question

What is an implied in fact contract?

answer

1) Created by actions of the parties

question

What are the 4 requirements for an implied in fact contract?

answer

1) One party offers services 2) Other party accepts those services under conditions knowing payment is expected 3) It would be unjust not to require payment 4) Services could have been rejected

question

How are contracts classified?

answer

1) Formation 2) Performance 3) Enforceability

question

Is an executed contract completed?

answer

1) Yes

question

Is an executory contact completed?

answer

1) No

question

What makes a valid contract?

answer

1) All elements are present

question

Does a void contract have legal force?

answer

1) No

question

What makes a contract voidable?

answer

1) One of the parties has the power to avoid their obligations

question

What do we look at to determine if a contract is voidable?

answer

1) The facts and circumstances at the time of the contract

question

What is a quasi contract?

answer

1) Implied in law contract 2) It's as of there's a contract when there's no contract at all

question

What is the purpose of a quasi contract?

answer

1) Avoid unjust enrichment

question

What is quantum meruit?

answer

1) Amount that is deserved

question

What are the requirements for payment?

answer

1) One party receives benefit 2) Knowing of the benefit 3) Only fair that payment is made

question

What is privity?

answer

1) Direct relationship between the contracting parties 2) Only the parties in privity have rights in the contract and the right to force the agreement

question

What is the implied covenant of good faith and fair dealing?

answer

1) Applies to relationship between parties 2) Neither party will hinder the other

question

What is the heart of a contract?

answer

1) Agreement

question

What is an agreement?

answer

1) The reflection of the parties assent to the terms of the agreement

question

What is an offer?

answer

1) The offerors commitment to voluntarily act or remain from acting

question

What are the three requirements in a valid offer?

answer

1) Intent 2) Definite and certain 3) Communicated

question

What essential terms must an offer have?

answer

1) Names of parties 2) Subject matter 3) Time of performance 4) Consideration

question

What ways can an offer be terminated by the action of the parties?

answer

1) Rejection 2) Revocation 3) Counter offer

question

What ways can an offer be terminated by operations of law?

answer

1) By death or disability of either party 2) Death or destruction of the subject matter 3) Statute of limitation 4) Lapse of time

question

When can revocation be made?

answer

1) Anytime before the offer is accepted

question

What is acceptance?

answer

1) Voluntary assent of the offeree to the terms of the offer

question

Acceptance must be __(1)__.

answer

1) Unequivocal

question

__(1)__ is not a way to accept an offer.

answer

1) Silence

question

What is consideration?

answer

1) What each party gives up in order to reach the agreement

question

What are the two requirements for a valid consideration?

answer

1) Legally sufficient value 2) Bargained for exchange

question

What are three kinds of legal value?

answer

1) Return promise (consideration for bilateral) 2) Voluntary performance of an act (consideration for unilateral) 3) Forbearance

question

What is forbearance?

answer

1) Giving something up you have the legal right to do

question

What case established forbearance?

answer

1) Case of Hamer Vs. Sidway

question

What is bargained for exchange?

answer

1) Something was voluntarily exchanged

question

What three instances lack consideration?

answer

1) A gift 2) A preexisting legal obligation 3) A past consideration: Act is already done before payment was made

question

What are three exceptions to consideration?

answer

1) Statute of limitation 2) Charitable subscriptions 3) Doctrine of promissory estoppel

question

What are the two kinds of charitable subscriptions?

answer

1) Operating funds 2) Building funds

question

What is the problem with mutual ascent?

answer

1) If there is a mistake

question

Does a mistake of value effect a contract?

answer

1) No

question

What is unconscionability?

answer

1) Parties must be in an unequal bargaining position

question

What are two kinds of unconscionability?

answer

1) Procedural 2) Substantive

question

What is procedural unconscionability?

answer

1) Form of the agreement 2) Generally agreements prepared by the stronger party Ex. "Here are the terms. Take it or leave it"

question

What is substantive unconscionability?

answer

1) Affect/result of the agreement 2) So unfair they "shock the court"

question

What is a unilateral mistake?

answer

1) Mistake by one party 2) Does not effect the contract, unless the other party knew or should have known there was a mistake

question

What is a bilateral (mutual) mistake?

answer

1) Mistake by both parties 2) Complete miscommunication between parties

question

What does fraud do?

answer

1) Negates to voluntarily entering agreement

question

What are the elements to fraud?

answer

1) False statement of material fact 2) Made knowing the statment is false 3) Promisor knows the promisee relies on the promise 4) Damage

question

What is undue influence?

answer

1) A strong party and a weak party 2) One party is being taken advantage of

question

What is a fiduciary relationship?

answer

1) Relationship of utmost confidence, legality, and trust

question

Undue influence is presumed in __(1)__ if the stronger party benefits.

answer

1) Fiduciary relationships

question

What does duress involve?

answer

1) Threats

question

What is extreme duress?

answer

1) Physical threats/threats of physical harm

question

What is ordinary/economic duress?

answer

1) Threat of economic harm

question

What is capacity?

answer

1) Legal ability to enter a contract

question

Who are the protected classes to contracts?

answer

1) Minors 2) Intoxicated people 3) Mentally incompetent/ill

question

When can minors disaffirm a contract?

answer

1) During minority 2) For a reasonable time after reaching majority

question

How can minors void an agreement?

answer

1) Not paying

question

What is the effect of disaffirming an agreement?

answer

1) We return parties to their original agreement

question

Does misrepresentation of age affect a minors ability to disaffirm an agreement?

answer

1) No

question

Minors and intoxicated persons can disaffirms necessaries, but must pay __(1)__.

answer

1) For the services used

question

What must intoxicated (drugs/alcohol) persons do to void an agreement?

answer

1) Prove that they were intoxicated at the time of the agreement

question

What makes the agreement valid with mentally incompetent persons?

answer

1) Diagnosis doesn't render the agreement anything but valid

question

What makes the agreement void with mentally incompetent persons?

answer

1) If there is a guardian appointed to them

question

Can mentally incompetent persons, that have a guardian, enter an agreement without that guardian present?

answer

1) No

question

If the contract deals with something illegal it is __(1)__.

answer

1) Void

question

How do revenue generating licenses affect agreements?

answer

1) Failure to have a license doesn't effect the agreement

question

What does a regulatory license do?

answer

1) Assures competence 2) Voidable by either party

question

What are covenants not to compete?

answer

1) Agreements that limit and restrict trade

question

What are the terms to covenants not to compete?

answer

1) Must be a reasonable distance 2) Time 3) Unconscionability

question

When was the act to prevent frauds and perjuries under written requirments passed?

answer

1) 1635

question

What contracts must be in writing?

answer

1) Any contract dealing with land 2) A Contract that cant be completed within 12 months of the date of the agreement 3) Secondary or collateral promise to pay someone elses debt 4) Promise where marriage is the consideration; "If you marry me I'll buy you a house"

question

What is a primary promise?

answer

1) I borrowed money from you, and I'll pay you back

question

What is a secondary promise?

answer

1) My son borrowed money from you, he can't pay, so I pay his debt for him

question

Contracts in writing can be __(1)__ or very __(2)__.

answer

1) Informal; like on a napkin 2) Formal

question

What must be in the writing of a contract?

answer

1) The essential terms (name parties, subject matter, consideration, and time of performance) 2) Signature by both parties

question

What is the parol evidence rule?

answer

1) Brings finality to written agreements 2) It says that oral testimony wont be heard to change the terms of a written agreement

question

What are the exceptions to the parol evidence rule?

answer

1) Duress 2) Unconscionability 3) Undue influence 4) Mistake 5) Fraud

question

Contracts create absolute __(1)__.

answer

1) Promises to perform

question

What is condition precedent?

answer

1) Condition happens first, and then the obligation to perform happens Ex. "When you graduate college, I'll buy you a new car"

question

What is condition subsequent?

answer

1) Condition ends obligation to perform Ex. "Here is a company car, but you must under go random drug and alcohol screenings. If you fail, you're fired"

question

What is concurrent condition?

answer

1) Simultaneous performance Ex. " You can have the car, when you pay me"

question

What are the two ways to look at discharging contractual obligations?

answer

1) By agreement 2) Operation of law

question

Contracts in writing fall under what statute?

answer

1) The statute of frauds

question

What are the three ways operations of law discharges contractual obligations?

answer

1) Statute of limitations 2) Bankruptcy 3) Impossibility (harshest): Means it's impossible for anyone anywhere to perform

question

What are the exceptions to impossibility?

answer

1) Death or incapacity of one of the parties if it's a personal service contract 2) Destruction of the subject matter

question

What is a breach of contract?

answer

1) Failure to perform contractual duties according to the term of the agreement

question

What are the types of monetary damages are available if someone breaches a contract?

answer

1) Compensatory damages 2) Consequential damages

question

What are compensatory damages?

answer

1) "Actual Damages" 2) Damages we can put a money value on

question

What are consequential damages?

answer

1) Damages that happen as a consequence of a breech of contract

question

Consequential damages must be __(1)__ and __(2)__.

answer

1) Foreseeable 2) Known by the breeching party

question

What are the four equitable remedies?

answer

1) Specific performance 2) Reformation 3) Rescission 4) Injunction

question

When is specific performance available?

answer

1) Available when subject matter is unique 2) Applies to anything rare

question

Land always falls under __(1)__.

answer

1) Special performance

question

What is reformation?

answer

1) Asking court to reform of rewrite the agreement

question

When is reformation appropriate?

answer

1) Noncompete agreements 2) Violation of usury laws

question

What is rescission?

answer

1) Asking the court to cancel or resend the agreement

question

What does restitution mean?

answer

1) Return of consideration

question

What is litigation of damages?

answer

1) Lessen the damages

question

Whos duty is litigation of damages?

answer

1) Duty of the breeching party

question

What are liquidated damages?

answer

1) Damages that are contained within the terms of the agreement

question

What contracts are liquidated damages almost always found in?

answer

1) Construction contracts

question

What must happen for liquidated damages to be enforceable?

answer

1) Actual damages must be difficult to determine 2) Amount must be reasonable

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