question

most common way rights and duties are extinguished:

answer

by performance

question

doing what you said you would do:

answer

performance

question

failure to perform duties under the agreement:

answer

breach of contract

question

sometimes the duty to perform is dependent upon what?

answer

the happening or not happening of an event (a condition)

question

terms allude to the existence of what?: if, when subject to, on the condition that

answer

terms that allude to a condition

question

what are the 3 types of conditions that excuse performance of a contract?

answer

1. condition precedent 2. Condition subsequent 3. Concurrent condtion

question

a condition that must occur before duty to perform arises:

answer

condition precedent

question

condition precedent:

answer

condition precedes the performance

question

"I will pay you when I get paid:"...what type of condition?

answer

condition precedent

question

a condition that extinguishes the duty to perform --condition arises, contract ends

answer

condition subsequent

question

someone is hired and their contract is in full-force and effect until or unless they fail to pass a drug test: example of what type of condition?

answer

condition subsequent

question

conditions that happen simultaneously

answer

concurrent condition

question

concurrent condition happen when/how? occurs in what type of contracts?

answer

happen concurrently, at the same time ---bilateral contracts

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you get the title to the car when you pay the money, you will receive deed to land when you pay for it. what type of condition?

answer

concurrent condition

question

It is unusual for one party to have the power to unilaterally discharge his duties under a contract. What is the one instance that we discussed where the consumer has this power?

answer

consumer protection; when buying a house the buyer has 3 day right to rescind

question

mutual agreement by the parties to cancel the contract

answer

agreement of the parties

question

What are the 3 ways that we discussed that contractual duties and obligations can be discharged by agreement?

answer

1. by the terms of the contract 2. by mutual cancellation (agree to stop, here & now) 3. by rescission

question

just rescind the duties:

answer

rescission

question

rescission also involves what?

answer

restitution; must put parties back to the position they were prior to the contract

question

things out of the hands of the parties cause the contract to be cancelled:

answer

external forces

question

discharge by external causes is defined at what?

answer

common law

question

what is the 1st common law rule of discharge by external causes?

answer

impossibility (it is absolutely impossible)

question

impossible to perform the contract if the subject matter is destroyed

answer

impossibility

question

what are the 3 conditions in which impossibility arises?

answer

1. occurrence has to be unexpected and unenforceable 2. risk is not addressed in the contract 3. the condition (occurrence) makes performance impossible

question

What are the ways we discussed that impossibility arises?

answer

1. destruction of the subject matter 2. an unexpected change of law 3. death or disability of one of the parties

question

what are the 2 exceptions to the impossibility rules?

answer

1. if the contract is not personal in nature (it doesn't matter who performs the contract) 2. the impossibility is one that is addressed in the contract (Heirs and Assigns)

question

ex: subject matter of a contract:

answer

lease - building is destroyed

question

what "only applies to personal services contracts" when no one else can perform the contract?

answer

death or disability

question

what are extinguished by operation of law?

answer

contracts

question

What are the two emerging doctrines founded in the Uniform Commercial Code that discharge performance?

answer

1. commercial impracticability 2. frustration of purpose

question

when rising costs cause benefit that was to be received has now been reduced (unforeseeable)

answer

commercial impracticality

question

when a change in circumstances causes the contract to have no value to the party receiving performance

answer

frustration of purpose

question

a contractual defense that may excuse a duty under the contract if that duty becomes impracticable to perform due to forces neither party could control or contemplate.

answer

commercial impracticality

question

a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, or an event described by the legal term act of God (such as hurricane, flooding, earthquake, volcanic eruption, etc.), prevents one or both parties from fulfilling their obligations under the contract.

answer

force majure clause

question

What are the two ways contractual duties can be discharged by operation of law?

answer

1. bankruptcy 2. statute of limitations

question

what type of contracts do not have as severe a statute of limitations?

answer

contracts covered in courts of equity

question

how do we determine statute of limitations in courts of equity?

answer

look at a reasonable period ( can not wait forever, because claims become stale)

question

A wrong. There are three categories of torts; (1) intentional torts, (2) unintentional torts (negligence), and (3) strict liability.

answer

Tort

question

A category of torts that requires that the defendant possessed the intent to do the act that caused the plaintiff's injuries.

answer

Intentional Tort

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(1) The threat of immediate harm or offensive contact or (2) any action that arouses reasonable apprehension of imminent harm. Actual physical contact is not necessary.

answer

Assault

question

Unauthorized and harmful or offensive direct or indirect physical contact with another person that causes injury.

answer

Battery

question

Under this doctrine, the law transfers the perpetrator's intent from the target to the actual victim of the act.

answer

Transferred Intent Doctrine

question

Intentional confinement or restraint of another person without authority or justification and without that person's consent.

answer

False Imprisonment

question

An attempt by another person to appropriate a living person's name or identity for commercial purposes.

answer

Misappropriation of the right to publicity

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The unwarranted and undesired publicity of a private fact about a person. The fact does not have to be untrue.

answer

Invasion of the right to privacy

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False statements made by one person about another. In court, the plaintiff must prove that (1) a defendant made an untrue statement of fact about the plaintiff and (2) the statement was intentionally or accidentally published to a third party.

answer

Defamation of Character

question

A false statement that appears in a letter, newspaper, magazine, book, photograph, movie, video, and so on.

answer

Libel

question

Oral defamation of character.

answer

slander

question

False statements about a competitor's products, services, property, or business reputation.

answer

Disparagement(trade libel, product disparagement, and slander of title)

question

The intentional defrauding of a person out of money, property, or something else of value. 4 Elements 1. The Wrongdoer made a false representation of material fact. 2. The wrongdoer had knowledge that the representation was false and intended to deceive the innocent party. 3. The innocent party justifiably relied on the misrepresentation. 4. The innocent party was injured.

answer

Intentional Misrepresentation (Fraud or Deceit)

question

A lawsuit in which the original defendant sues the original plaintiff. In the second lawsuit, the defendant becomes the plaintiff and vice versa.

answer

Malicious Prosecution

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A doctrine that says a person is liable for harm that is foreseeable consequence of his or her actions.

answer

Unintentional tort (negligence)

question

The obligation people owe each other not to cause any unreasonable harm or risk of harm.

answer

Duty of Care

question

A test used to determine whether a defendant owes a duty of care. This measures the defendant's conduct against how an objective, careful, and conscientious person would have acted in the same circumstances.

answer

Reasonable Person Standard

question

A failure to exercise or to act as a reasonable person would act.

answer

Breach of the Duty of Care

question

A plaintiff's personal injury or damage to his or her property that enables him or her to recover monetary damages for the defendants negligence.

answer

Injury

question

The actual cause of the negligence. A person who commits a negligent act is not liable unless actual cause can be proven.

answer

Actual cause

question

A point along a chain of events caused by a negligent party which this party is no longer legally responsible for the conwequences of his or her actions.

answer

Proximate Clause

question

The liability of a professional who breaches his or her duty of ordinary care.

answer

Professional Malpractice

question

A tort that permits a person to recover for emotional distress caused by the defendants negligent conduct.

answer

Negligent Infliction of emotional distress

question

A tort in which the violation of a statute or ordinance constitutes a breach of the duty of care.

answer

Negligence per se

question

A tort in which the preseumption of negligence arises because (1) the defendant was in exclusive control of the situation and (2) the plaintiff would not have suffered injury but for someones negligence. The burden switches to the defendant to prove that he or she was not negligent.

answer

Res ipsa loquitur

question

The settlement of a contract dispute. The accord is the agreement whereby parties agree to settle a contract dispute by accepting something different than provided in the original contract. Satisfaction is the performance of an accord.

answer

accord and satisfaction

question

A clause that prohibits the assignment of rights under the contract.

answer

anti—assignment clause

question

A clause that prohibits the assignment of rights under the contract.

answer

anti—assignment clause

question

A clause that permits the assignment of the contract only upon receipt of an obligor's approval.

answer

approval clause

question

The party to whom the right has been transferred.

answer

Assignee

question

Transfer of both rights and duties under the contract.

answer

assignment and delegation

question

The transfer of contractual rights by the obligee to another party.

answer

Assignment

question

The party who transfers the right.

answer

Assignor

question

When a delegation of duties contains the term assumption or I assume the duties or other similar language; the delegatee is legally liable to the obligee for nonperformance.

answer

assumption of duties

question

Nonperformance that is excused if an extreme or unexpected development or expense makes it impractical for the promisor to perform.

answer

commercial impracticability

question

A condition that exists when the parties to a contract must render performance simultaneously; each party's absolute duty to perform is conditioned on the other party's absolute duty to perform.

answer

concurrent condition

question

Clause in a contract that reserves the right to a party to pay for the item or services contracted for only if they meet his or her satisfaction.

answer

Condition precedent based on satisfaction

question

A condition that requires the occurrence of an event before a party is obligated to perform a duty under a contract.

answer

condition precedent

question

A condition, if it occurs, that automatically excuses the performance of an existing contractual duty to perform.

answer

condition subsequent

question

A qualified promise that becomes a covenant if it is met. There are three types of conditions: conditions precedent, conditions subsequent, and concurrent conditions.

answer

conditional promise

question

An unconditional promise to perform.

answer

Covenant

question

A contract that arises in the following situation: (1) a debtor borrows money, (2) the debtor signs an agreement to pay back the money plus interest, (3) the debtor sells the item to a third party before the loan is paid off, and (4) the third party promises the debtor that he or she will pay the remainder of the loan to the creditor.

answer

creditor beneficiary contract

question

Original creditor who becomes a beneficiary under the debtor's new contract with another party.

answer

creditor beneficiary

question

If the delegatee has not assumed the duties under a contract; the delegatee is not legally liable to the obligee for nonperformance.

answer

declaration of duties

question

The party to whom the duty has been transferred.

answer

Delegate

question

A transfer of contractual duties by the obligor to another party for performance.

answer

delegation of duties

question

The obligor who transferred his or her duty.

answer

Delegator

question

A contract entered into with the intent to confer a benefit or gift on an intended third party.

answer

donee beneficiary contract

question

The third party on whom the benefit is to be conferred.

answer

donee beneficiary

question

A doctrine which excuses the performance of contractual obligations if (1) the object or benefit of a contract is made worthless to a promisor, (2) both parties knew what the purpose was, and (3) the act that frustrated the purpose was unforeseeable.

answer

frustration of purpose

question

A condition that can be implied from the circumstances surrounding a contract and the parties' conduct.

answer

implied-in-fact condition

question

Nonperformance that is excused if the contract becomes impossible to perform; must be objective impossibility, not subjective.

answer

impossibility of performance

question

A party who is unintentionally benefited by other people's contract.

answer

incidental beneficiary

question

A third party who is not in privity of contract but who has rights under the contract and can enforce the contract against the obligor.

answer

intended beneficiary

question

An agreement that substitutes a new party for one of the original contracting parties and relieves the exiting party of liability on the contract.

answer

Novation

question

Subjective test that applies to contracts involving personal taste and comfort.

answer

personal satisfaction test

question

The state of two specified parties being in a contract.

answer

privity of contract

question

Objective test that applies to commercial contracts and contracts involving mechanical fitness.

answer

reasonable person test

question

Statute that establishes the time period during which a lawsuit must be brought; if the lawsuit is not brought within this period, the injured party loses the right to sue.

answer

statute of limitations

question

TRUE

answer

1) Statute of Frauds is a state statute that requires certain types of contracts to be in writing

question

FALSE

answer

2) In most states, contracts for the sale of goods for $900 do not require to be in writing

question

TRUE

answer

3) In most states, contracts for the lease of goods with payments of $2000 require to be in writing

question

FALSE

answer

4) If an oral contract that should have been in writing under the Statute of Frauds is already executed, neither party can seek to rescind the contract on the grounds of noncompliance with the Statute of Frauds.

question

FALSE

answer

5) Trees, crops, minerals, and timber are barred from being included in contracts involving interests in real property.

question

TRUE

answer

6) Built-in cabinets in a house would be considered as permanent parts of the real property

question

TRUE

answer

7) Under the Statute of Frauds, any contract that transfers an ownership interest in real property must be in writing to be enforceable.

question

FALSE

answer

8) A lease is an interest in real property given to a lender as security for the repayment of a loan.

question

TRUE

answer

9) A life estate will be transferred to another party in the event of the holder's death.

question

TRUE

answer

10) The transfer of the right to use real property for a specified period of time is known as a lease.

question

FALSE

answer

11) An easement is a form of real property security given by a borrower to a lender.

question

TRUE

answer

12) According to the Statute of Frauds, an executory contract that cannot be performed by its own terms within one year of its formation must be in writing.

question

FALSE

answer

13) An easement contract occurs when one person agrees to answer for the debts or duties of another person.

question

FALSE

answer

14) In a guaranty situation, there is only one contract among three parties.

question

TRUE

answer

15) The primary contract in a guarantee situation is between the debtor and the creditor.

question

TRUE

answer

16) In a guarantee situation, the guarantor's liability is secondary.

question

FALSE

answer

17) A guaranty contract between people with no bad credit history can be oral.

question

TRUE

answer

18) The main purpose exception to the Statute of Frauds allows oral collateral contracts to be enforced if there is a monetary benefit to the guarantor.

question

TRUE

answer

19) Equal dignity rule says that agents' contracts to sell property covered by the Statute of Frauds must be in writing to be enforceable.

question

FALSE

answer

20) Section 2-201(1) of the Uniform Commercial Code states that a unilateral promise to pay money or property in consideration for a promise to marry must be in writing.

question

FALSE

answer

21) If Johnny made an oral contract with Peter to sell Peter his truck for $15,000, Johnny's eventual refusal to sell the truck is considered breach of contract.

question

TRUE

answer

22) Section 2A-201(1) of the Uniform Commercial Code states that lease contracts involving payments of $1,000 or more must be in writing.

question

TRUE

answer

23) If a modification of the lease contract increases the lease payment to $1,000 or more, the modification has to be in writing to be enforceable.

question

TRUE

answer

24) The doctrine of part performance allows the court to order an oral contract for the sale of land or transfer of another interest in real property to be specifically performed if performance is necessary to avoid injustice.

question

TRUE

answer

25) Any writing—including letters, telegrams, invoices, sales receipts, checks, and handwritten agreements written on scraps of paper—can be an enforceable contract.

question

FALSE

answer

26) The signature of the person who is enforcing the contract is necessary

question

FALSE

answer

27) A person's nickname or initials that indicate his or her intent are not considered binding signatures.

question

FALSE

answer

28) The UCC does not permit several writings to be integrated to form a single written contract.

question

TRUE

answer

29) Incorporation by reference is an integration made by express reference in one document that refers to and incorporates another document within it.

question

TRUE

answer

30) Placing several documents in the same envelope indicates implied integration.

question

TRUE

answer

31) While interpreting contract words and terms, specific terms are presumed to qualify general terms

question

FALSE

answer

32) If there is an ambiguity in a contract, the ambiguity will be resolved in favor of the party who drafted the contract.

question

TRUE

answer

33) Any oral or written words outside the four corners of the written contract are called parol evidence.

question

FALSE

answer

34) Parol evidence rule stipulates that the contract is a complete integration and the exclusive expression of the parties' agreement.

question

TRUE

answer

35) Promissory estoppel is an equitable doctrine that permits enforcement of oral contracts that should have been in writing.

question

D) Statute of Frauds

answer

36) The ________ requires certain contracts to be in writing. A) part performance exception B) common law of contracts C) equal dignity rule D) Statute of Frauds

question

A) contracts under promissory estoppel

answer

37) Which of the following is an exception to the Statute of Frauds? A) contracts under promissory estoppel B) agents' contracts C) merger clause D) prenuptial agreement

question

C) promises to write a will

answer

38) Which of the following contracts is required to be in writing in most states? A) contracts for the sale of goods for $100 B) contracts for the lease of goods with payments of $500 C) promises to write a will D) contracts falling under the promissory estoppel

question

D) Promises made in consideration of marriage must be in writing.

answer

39) Which of the following statements is true of the writing requirement of contracts, according to the Statute of Frauds? A) Contracts for the sale of goods for $500 need not be in writing. B) Contracts for the lease of goods with payments of $101 must be in writing. C) Finder's fee contracts need not be in writing. D) Promises made in consideration of marriage must be in writing.

question

D) Most states require contracts to pay compensation for services rendered in negotiating the purchase of a business to be in writing.

answer

40) Which of the following statements is true of the Statute of Frauds? A) An executory contract that is not in writing even though the Statute of Frauds requires it to be is enforceable by either party. B) Executed oral contracts that should have been in writing under the Statute of Frauds can be rescinded. C) If an oral contract that should have been in writing under the Statute of Frauds is already executed, either party may seek to rescind the contract. D) Most states require contracts to pay compensation for services rendered in negotiating the purchase of a business to be in writing.

question

B) The contract cannot be rescinded by either party as it has already been executed.

answer

41) Jonas enters into an oral contract with Chelsea to lease his house to her for $100,000. Chelsea pays him $100,000 and moves in. A month later, Jonas learns that his state requires contracts for the lease of goods with payments of $1,000 or more to be writing. Which of the following options does either party have? A) Jonas can evict Chelsea as the contract does not comply with the Statute of Frauds and is hence void. B) The contract cannot be rescinded by either party as it has already been executed. C) Chelsea can rescind the contract on the grounds of noncompliance with the Statute of Frauds. D) Jonas can rescind the contract on the grounds of noncompliance with the Statute of Frauds.

question

A) a fixture permanently affixed to a building

answer

42) Which of the following is considered "real property?" A) a fixture permanently affixed to a building B) fifty-one percent partnership in a firm C) a club membership D) diamond jewelry

question

B) mortgage

answer

43) Which of the following is an interest in real property given to a lender as security for the repayment of a loan? A) lease B) mortgage C) life estate D) easement

question

C) the transfer of the right to use real property for a specified period of time

answer

44) Which of the following phrases explains the term lease? A) an interest in real property given to a lender as security for the repayment of a loan B) an interest in real property for a person's lifetime C) the transfer of the right to use real property for a specified period of time D) a right to use someone else's land without owning or hiring it

question

A) lease

answer

45) Ida moves to New York from Poland and wants to live in an apartment. However, she does not have sufficient money to buy one. Her colleague Henry allows Ida to live in his old apartment for a year, if she pays him $25,000. This contract would be considered a(n) ________. A) lease B) mortgage C) installment D) easement

question

D) life estate

answer

46) Which of the following interests in real property transfers to another person after the present holder's death? A) easement B) mortgage C) EMI D) life estate

question

B) easement

answer

47) A right to use someone else's land without owning or leasing it is called ________. A) mortgage B) easement C) life estate D) leasehold

question

C) Richard gives his country estate as collateral to a bank from where he has borrowed money to buy an apartment

answer

48) Which of the following is an instance of a mortgage? A) Richard pays Ellen $1000 a month to live in her apartment. B) Richard pays Ellen $12,000 a year to live in her apartment. C) Richard gives his country estate as collateral to a bank from where he has borrowed money to buy an apartment. D) Richard lives in an apartment for thirty years and upon his death, the apartment is transferred to somebody else.

question

A) lease

answer

49) Which of the following grants a person the right to use real property for a specified period of time? A) lease B) mortgage C) sale D) barter

question

D) one-year rule

answer

50) The ________ states that an executory contract which cannot be performed by its own terms within one year of its formation must be in writing. A) parol evidence rule B) common law of contracts C) merger clause D) one-year rule

question

C) A contract that cannot be performed on its own terms within a year should be in writing.

answer

51) Which of the following does the one-year rule state? A) Every contract in writing is subject to yearly renewal. B) The terms of a written contract can be modified within a year of its formation. C) A contract that cannot be performed on its own terms within a year should be in writing. D) Valid contracts cannot be rescinded by either party until a year after their formation.

question

A) The modification to the duration of the contract should be in writing.

answer

52) Good Faith Consultants partnered with QuickFind IT Solutions for a period of six months. After three months, they wanted to extend the contract by two years. According to the Statute of Frauds, which of the following holds true for the contract? A) The modification to the duration of the contract should be in writing. B) A new contract must be formed. C) The contract can be oral both before and after modification. D) Only the original contract should be in writing.

question

C) guaranty contract

answer

53) A(n) ________ occurs when one person agrees to answer for the debts or duties of another person. A) main purpose exception B) mortgage C) guaranty contract D) implied integration

question

D) guarantor

answer

54) A ________ is a person who agrees to pay a debt if the primary debtor does not. A) secondary contractor B) third-party contractor C) lessee D) guarantor

question

B) debtor and the creditor

answer

55) In a guaranty situation, the original contract is between the ________. A) creditor and the guarantor B) debtor and the creditor C) debtor and the guarantor D) creditor and the lessee

question

C) The guarantor's liability is secondary.

answer

56) Which of the following statements is true of a guaranty contract? A) The guaranty contract is between the guarantor and the debtor. B) A guaranty contract need not be in writing. C) The guarantor's liability is secondary. D) The original contract is between the creditor and the guarantor.

question

C) guarantor

answer

57) Nina wants to borrow money from Tina but Tina refuses to lend the money unless another person promises to pay the money in case Nina cannot clear the debt. James agrees to pay the debt if Nina does not. James is the ________ in this transaction. A) creditor B) debtor C) guarantor D) facilitator

question

B) leading object exception

answer

58) The ________ states that if the main purpose of a transaction and an oral collateral contract is to provide pecuniary benefit to the guarantor, the collateral contract does not have to be in writing to be enforced. A) merger clause B) leading object exception C) collateral contract rule D) parol evidence rule

question

D) equal dignity rule

answer

59) The ________ says that agents' contracts to sell property covered by the Statute of Frauds must be in writing to be enforceable. A) merger clause B) common law of contracts C) doctrine of equity D) equal dignity rule

question

A) sales contracts

answer

60) Section 2-201(1) of the Uniform Commercial Code is the basic Statute of Frauds provision for ________. A) sales contracts B) lease contracts C) all contracts involving interests in real property D) mortgage contracts

question

B) Lease contracts involving payments of $1,000 or more must be in writing.

answer

61) Section 2A-201(1) of the Uniform Commercial Code states which of the following? A) All lease contracts must be in writing. B) Lease contracts involving payments of $1,000 or more must be in writing. C) All sales contracts must be in writing. D) Sales contracts involving payments of $500 or more must be in writing.

question

D) Sales contracts involving payments of $1,000 or more must be in writing.

answer

62) Section 2-201(1) of the Uniform Commercial Code states which of the following? A) All lease contracts must be in writing. B) Lease contracts involving payments of $1,000 or more must be in writing. C) All sales contracts must be in writing. D) Sales contracts involving payments of $1,000 or more must be in writing.

question

C) The oral contract to trade a car for $5,000 is not binding, according to the UCC.

answer

63) Santos told his friend Ernesto that he would sell Ernesto his car for $5,000. However, on the day of the sale, Santos refused to sell the car for the agreed-upon price and demanded more money. Which of the following statements is true in this context? A) Ernesto can sue Santos as their oral sales contract was binding. B) Santos has violated Section 2-201(1) of the UCC. C) The oral contract to trade a car for $5,000 is not binding, according to the UCC. D) Santos has violated Section 2A-201(1) of the UCC.

question

B) Section 2A-201(1)

answer

64) Jim's landlord insists on a written agreement to lease his apartment for $25,000 in order to comply with ________ of the UCC. A) Section 2-201(1) B) Section 2A-201(1) C) the merger clause D) the equal dignity rule

question

A) part performance

answer

65) The doctrine of ________ allows the court to order an oral contract for the sale of land or transfer of another interest in real property to be specifically performed if it has been partially performed and performance is necessary to avoid injustice. A) part performance B) undue performance C) equitable performance D) promissory estoppel

question

B) The signature of the person who is enforcing the contract is not necessary.

answer

66) Which of the following statements is true of signature on a written contract? A) The contract should be signed by the party who seeks enforcement. B) The signature of the person who is enforcing the contract is not necessary. C) The signature must appear at the end of the writing. D) A person's nickname or initials are not binding legal signatures.

question

B) Incorporation by reference

answer

67) ________ refers to the integration made by express reference in one document that refers to and incorporates another document within it. A) Implied integration B) Incorporation by reference C) Executory contract D) Merger clause

question

C) Specific terms are presumed to qualify general terms.

answer

68) Which of the following statements is true of interpreting contract words and terms? A) Where a preprinted form contract is used, preprinted words prevail over typed words. B) Preprinted words prevail over handwritten words. C) Specific terms are presumed to qualify general terms. D) If there is an ambiguity in a contract, the ambiguity will be resolved in favor of the party who drafted the contract.

question

D) Australian dollars

answer

69) If a provision in a contract refers to the subject matter as "dollars," which of the following specific terms would qualify the general term? A) currency B) pounds C) bills D) Australian dollars

question

A) parol evidence

answer

70) Any oral or written words outside the four corners of a written contract are termed as ________. A) parol evidence B) exclusive integration C) leading object exception D) main purpose exception

question

C) Parol evidence rule

answer

71) ________ says that if a written contract is a complete and final statement of the parties' agreement, any prior or contemporaneous oral or written statements that alter, contradict, or are in addition to the terms of the written contract are inadmissible in court regarding a dispute over the contract. A) Main purpose exception B) Leading object exception C) Parol evidence rule D) Promissory estoppel

question

B) Merger clause

answer

72) ________ stipulates that the contract is a complete integration and the exclusive expression of the parties' agreement. A) Promissory estoppel B) Merger clause C) Main purpose exception D) Leading object exception

question

B) when the evidence explains ambiguous language

answer

73) In which of the following cases is parol evidence admitted by a court? A) when the plaintiff reduces the value of damages he expects B) when the evidence explains ambiguous language C) when the defendant does not wish to appeal D) when the defendant takes the case to the appellate court

question

A) Promissory estoppel

answer

74) ________ is an equitable doctrine that permits enforcement of oral contracts that should have been in writing. A) Promissory estoppel B) Merger clause C) Main purpose exception D) Leading object exception

question

A) when the promise induces action or forbearance of action by another

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75) Under which of the following conditions does a promissory estoppel provide for the enforceability of an oral contract? A) when the promise induces action or forbearance of action by another B) when the reliance on the oral promise was unforeseeable C) when enforcing the oral promise provides for faster resolution of the case D) when the oral promise provides for reduced damages to the defendant

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Answer: A guaranty contract occurs when one person agrees to answer for the debts or duties of another person. Guaranty contracts are required to be in writing under the Statute of Frauds. In a guaranty situation, there are at least three parties and two contracts. The first contract, which is known as the original contract, or primary contract, is between the debtor and the creditor. It does not have to be in writing (unless another provision of the Statute of Frauds requires it to be). The second contract, called the guaranty contract, is between the person who agrees to pay the debt if the primary debtor does not (i.e., the guarantor) and the original creditor. The guarantor's liability is secondary because it does not arise unless the party primarily liable fails to perform.

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76) Explain the creation and working of guaranty contracts.

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Suggest an alternative and explain how it is beneficial to an oral contract. Answer: It is a bad idea for Edward and his landlord to make an oral lease contract for $30,000 as such a contract is vulnerable to fraud. Instead, they must create a written contract in accordance to Section 2A-201(1) of the Uniform Commercial Code, which is the Statute of Frauds provision that applies to the lease of goods. It states that lease contracts involving payments of $1,000 or more must be in writing. If a lease payment of an original lease contract is less than $1,000, it does not have to be in writing under the UCC Statute of Frauds. However, if a modification of the lease contract increases the lease payment to $1,000 or more, the modification has to be in writing to be enforceable. The most recent revision to UCC 2A-201 requires that lease contracts involving payments of $20,000 or more must be in writing to be enforceable.

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77) Why is it a bad idea for Edward and his landlord to make an oral lease contract for $30,000?

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Answer: If the parties have not defined the words and terms of a contract, the courts apply the following standards of interpretation: 1) Ordinary words are given their usual meaning according to the dictionary. 2) Technical words are given their technical meaning, unless a different meaning is clearly intended. 3) Specific terms are presumed to qualify general terms. For example, if a provision in a contract refers to the subject matter as "corn," but a later provision refers to the subject matter as "feed corn" for cattle, this specific term qualifies the general term. 4) If both parties are members of the same trade or profession, words will be given their meaning as used in the trade (i.e., usage of trade). If the parties do not want trade usage to apply, the contract must indicate that. 5) Where a preprinted form contract is used, typed words in a contract prevail over preprinted words. Handwritten words prevail over both preprinted and typed words. 6) If there is an ambiguity in a contract, the ambiguity will be resolved against the party who drafted the contract.

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78) How are contract words and terms interpreted?

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Answer: Parol evidence may be admitted in court if it: 1) shows that a contract is void or voidable (e.g., evidence that the contract was induced by fraud, misrepresentation, duress, undue influence, or mistake). 2) explains ambiguous language. 3) concerns a prior course of dealing or course of performance between the parties or a usage of trade. 4) fills in the gaps in a contract (e.g., if a price term or time of performance term is omitted from a written contract, the court can hear parol evidence to imply the reasonable price or time of performance under the contract). 5) corrects an obvious clerical or typographical error. The court can reform the contract to reflect the correction.

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79) When is parol evidence admitted in court?

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Answer: The doctrine of promissory estoppel, or equitable estoppel, is an equitable exception to the strict application of the Statute of Frauds. The version of promissory estoppel in the Restatement (Second) of Contracts provides that if parties enter into an oral contract that should be in writing under the Statute of Frauds, the oral promise is enforceable against the promisor if three conditions are met: (1) The promise induces action or forbearance of action by another, (2) the reliance on the oral promise was foreseeable, and (3) injustice can be avoided only by enforcing the oral promise. Where this doctrine applies, the promisor is estopped (prevented) from raising the Statute of Frauds as a defense to the enforcement of the oral contract.

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80) Explain the doctrine of equitable estoppel.

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The requirement that a party's assent to a contract be genuine.

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Genuineness of Assent

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A mistake in which only one party is mistaken about a material fact regarding the subject matter of a contract.

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Unilateral Mistake

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...

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Mutual Mistake

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...

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Mistake in Fact

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exists if both parties know the object of the contract but are mistaken as to its value

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Mistake in Value

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Intentional misrepresentation (fraudulent misrepresentation)

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Fraud

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...

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Proving Fraud

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occurs if a person is deceived as to the nature of his or her act and does not know what he or she is signing

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Fraud in the Inception

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The innocent party knows what he or she is signing or doing but has been fraudulently induced to enter into the contract

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Fraud in the Inducement

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Occurs when one party takes specific action to conceal a material fact from another party

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Fraud by Concealment

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...

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Fraud as Misrepresentation

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Misrepresentation

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innocent party cannot generally rescind the contract because each party to a contract is assumed to know the law that applies to the transaction, either themselves or through a lawyer

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Misrepresentation of Law

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Fraud that occurs when a person makes a statement of fact that he or she honestly and reasonable believes to be true even though it is not.

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Innocent Misrepresentation

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A situation in which one person takes advantage of another person's mental, emotional, or physical weakness and unduly persuades that person to enter into a contract; the persuasion by the wrongdoer must overcome the free will of the innocent party

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Undue Influence

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