BLAW TEST TWO

Explain the relationship between commercial impracticability and frustration of purpose.

Both involve parties being excused from their contractual performance because of unforeseeable circumstances. Commercial impracticability involves an event that increases the cost or difficulty of performance, whereas frustration of purpose typically involves an event that decreases the value of what a party receives under the contract.

Describe complete performance and substantial performance of contractual duties.

Complete performance occurs when a party performs exactly as agreed and there is no question whether the contract has been performed. Substantial performance is achieved when a party has performed in good faith, did not vary greatly from what was agreed upon, and created substantially the same benefits as promised.

Describe the contents of a writing that would be sufficient to satisfy the Statute of Frauds under the common law.

Writings can consist of any order confirmation, invoice, sales slip, check, fax, or email—or any combination of such items. The writing needs to evidence oral contract and contain essential terms, the parties' names, the subject matter, and the consideration sufficiently.

Explain the Parol Evidence Rule, and identify the situations to which the rule does not apply.

accommodates for additional communication or testimony outside of the contract. Doesn't apply in contracts that are subsequently modified, void/voidable, contain ambiguous terms, incomplete, subject to an orally agreed-on condition precedent, that have a gross error that doesn't represent what the parties agreed upon, or ones that involve prior dealing/course of performance/usage of trade.

consequential damages

also known as special damages, foreseeable damages that result from a party's breach in contract

incidental damages

expenses that are caused directly by a breach of contract.

What's the difference between innocent misrepresentation and fraudulent misrepresentation?

it differs from fraudulent misrepresentation in the sense that the party believes their statement to be true, but it is actually false; aggrieved party can usually rescind contract but not seek damages.

What is the origin and the purpose of the Statute of Frauds?

it originated because of the multiple problems that arose when disputes involving a contract could only be dealt with through a third-party witness. The primary purpose of the statute was to ensure that, for certain types of contracts, there was a reliable evidence of the contracts and their terms.

foreseeability of damages

measure of the likelihood a party can predict a specific event happening in the future.

punitive damages

rarely gets awarded compensation in contract law

mitigation of damages

requires plaintiff to have done whatever was reasonable to minimize the damages caused by the defendant

nominal damages

small monetary award granted to a plaintiff when no actual damages were suffered or when the plaintiff is unable to show such loss with sufficient certainty

liquidated damages

specifies that a certain dollar amount is to be paid in the event of a future default or breach of contract.

What are the primary differences between undue influence and duress?

undue influence involves influence that is so strong it overcomes the party's free will, whereas duress involves force and threats to force a party into an agreement.

When can a unilateral mistake can lead to a contract being voidable?

when the other party knows/should have known that a mistake of fact was made or the mistake was made because of a substantial mathematical error by accident and without extreme negligence

Explain the difference between material breach and substantial performance.

Material breach occurs when the performance of a party is not at least substantial and results in the non-breaching party being excused from their contractual duties and can also sue the breaching party for damages. In contrast, substantial performance is handled on a case-by-case basis, but can result in the other party's duty to perform remaining absolute. The non-breaching party, however, is entitled to damages for the non-perfect performance.

Distinguish among (a) a mutual rescission, (b) an accord and satisfaction, and (c) a novation.

(a) A mutual rescission is the establishment of a second contract that allows both parties to be relieved of their original contractual duties. (b) An accord and satisfaction involves accepting performance that is different from the performance originally promised. To do so, the parties must draw up a new contract to perform some act to satisfy an existing contractual duty that is not yet discharged. When completed, the original agreement is suspended until the second one is completed. (c) A novation occurs when both parties to a contract agree to substitute a third party for one of the original parties. This requires a previous valid obligation, an agreement by all parties to a new contract, the extinguishing of the old obligation, and a new valid contract.

Identify and distinguish among the various types of conditions.

-Condition Precedent must be fulfilled before a party's promise becomes absolute. -Condition Subsequent operates to terminate a party's absolute promise to perform. -Concurrent Conditions are one that must be performed simultaneously. Each party's absolute duty to perform is conditioned on the other party's absolute duty to perform.

Identify and discuss the five (5) types of general contracts covered by the Statute of Frauds.

-contracts involving interests in land (including all physical objects permanently attached to the soil) -contracts that cannot, by their terms, be performed within one year from the day after the date of formation (begins the day after the contract is made) -collateral or secondary contracts (one's made by a third party to assume the debts or obligations of a primary party) -promises made in consideration of marriage (prenuptial agreements) -contracts for the sale of goods of $500 or more (under the Uniform Commercial Code).

Mutual Mistake

-made by both parties -contract can be rescinded by either party

Unilateral Mistake

-made by only one party -normally contract is enforceable

Identify and discuss the elements that must be shown to establish the existence of fraudulent misrepresentation.

-misrepresentation of material fact (can occur through conduct, expert statements of opinion, or silence) -intent to deceive (scienter) -justifiable reliance by the innocent party (innocent party gets into contract partially bc of misrepresented facts -harm done to the innocent party because of the misrepresentation (if seeking recovery of damages).

Identify and discuss the ways discharge may be brought about by operation of law.

-operation of law by a material alteration of the contract (a party changing parts of a contract without consent of the other party) -statute of limitations (2-3 years for oral contract, 4-5 years for written contract, and 10-20 years to file for recovery of amounts awarded in judgements, 4 years for breaches with contracts involving the sale of goods) -bankruptcy (allocation of debtor's assets to creditors achieves the discharge from the debtor's contracts) -impossibility to perform (when one party dies or becomes incapacitated, specific subject matter of the contract is destroyed, or a change in the law renders performance illegal).

Identify and discuss some of the exceptions to the Statute of Frauds.

-partial performance -admissions (when contract is verified by a party under oath) -promissory estoppel (justifiable reliance) -special UCC exceptions

What are the primary methods of discharging a contract?

The primary methods of discharging a contract are discharge by operation of law, by performance, by failure of a condition, by agreement, and by breach.

Why mistakes of value are not accorded the same relief as mistakes of fact?

because value is variable, it all depends on the time, place, and circumstance. Worth can change drastically depending on those variables.

Explain how compensatory damages are computed.

by taking the difference between the value of the breaching party's promised performance under the contract and the value of his/her actual performance.