BLAW 3430 Chapter 9 - COPY

Which of the following is NOT an element necessary for recovery in quasi contract?

An implied or express promise.

What is the difference between a valid contract and a void contract?

A valid contract is one that meets all the requirements of a binding contract. It is an enforceable promise or agreement. A void contract is an agreement that does not meet all of the requirements of a binding contract. It is merely a promise or agreement having no legal effect.

Which of the following is NOT always necessary in order for a valid contract to be formed?

A writing.

Brian makes a material misrepresentation of fact regarding his horse to Rosalind while out riding one day. Later that day, Rosalind makes an offer to buy the horse which Brian accepts, without correcting his earlier misrepresentation of fact.

Rosalind may avoid the contract.

What are the essential elements of a contract? List and discuss them.

The essential elements of a contract include: (a) manifestation of mutual assent; (b) consideration; (c) legality of object; and (d) capacity of the parties. In addition, in a limited number of instances, a contract must be in writing to be enforceable. The parties to a contract must manifest by words or conduct that they have agreed to enter into a contract. The usual method of showing mutual assent is by offer and acceptance. Consideration is the intentional exchange of a legal benefit or legal detriment as an inducement to the other party to make a return exchange. The purpose of a contract must not be criminal, tortious, or otherwise against public policy. The parties to a contract must have contractual capacity. Adjudicated incompetents have no legal capacity to contract. Minors, incompetent persons, and intoxicated persons have limited capacity to contract.

Which of the following contracts is covered by Article 2 of the Uniform Commercial Code?

The sale of a new car.

In addition to the four basic requirements of a contract, which of the following must also occur in order to have a valid contract?

There must be an absence of invalidating conduct, such as duress.

Distinguish between: bilateral and unilateral contracts

When a contract is formed by the exchange of promises, each party is under a duty to the other. This is referred to as a bilateral contract. A unilateral contract occurs when only one of the parties has made a promise.

Lance has a contract with Smith to resurface a driveway at the Smith residence. Lance by mistake stops at the Jones residence and resurfaces Jones' driveway. Jones lives next door to Smith and knows that Lance is at the wrong residence. Jones, however, says nothing and watches while Lance resurfaces his driveway. Is Jones under any contractual obligation to pay Lance for resurfacing his driveway? Explain your answer.

Yes. Although there is not an express or an implied in fact contract here, under certain circumstances implied in law contracts or quasi contracts are created. A quasi-contractual obligation is imposed by law to prevent injustice. Jones is obligated because he had knowledge of the benefit he received and did not prevent Lance from conferring this benefit.

Vi offers to pay Allison $150 if Allison will paint her apartment while she is out of town on vacation for two weeks. Allison makes no promise but tells Vi that she will think about it. While Vi is out of town, Allison paints the apartment. This is best described as:

a unilateral contract.

George has been declared incompetent by the court and is under the care of his sister. Unknown to his sister, George rents the 30,000-seat civic center for his birthday party. George's contract to rent the civic center is best described as:

a void contract.

Hal promises not to foreclose on a mortgage that he holds on an office complex that Christopher owns. In reliance on this promise, Christopher spends $200,000 to remodel the complex. Which of the following is correct with regard to Hal's promise?

a. Hal's promise not to foreclose is unsupported by consideration. b. Hal's promise is noncontractual. c. Hal's promise may be enforced against him based upon the doctrine of promissory estoppel. d. All of the above.

Promissory estoppel is a contractual doctrine that includes which of the following considerations?

a. The courts use the doctrine of promissory estoppel to enforce noncontractual promises. b. Under this doctrine, the promisor reasonably expects that the promisee, in reliance on the promise, will be induced by the promise to take action or refrain from taking action and the promisee does so.

Express contracts and implied in fact contracts:

a. are both genuine contracts. b. are equally enforceable. d. a&b

Contracts that are implied in law:

a. are obligations imposed by law on grounds of justice and equity. b. are intended to prevent unjust enrichment. c. do not rest upon the assent of the contracting parties. d. All of the above.

A __________ is an obligation imposed by law to avoid injustice.

a. contract implied in law c. quasi contract

The Uniform Commercial Code does NOT apply to:

a. employment contracts. b. service contracts. c. insurance contracts. d. All of the above.

The doctrine of promissory estoppel:

a. is a doctrine enforcing noncontractual promises. b. includes as a requirement within the doctrine that there has been justifiable reliance on the promise. c. a doctrine relying on justice and not contractual rights. d. All of the above.

Contract law is significant in that it is basic to other fields of law such as:

a. sales of personal property. b. commercial paper. c. secured transactions. d. All of the above.

The concept of consideration in contract law includes:

an inducement to each party to make a return exchange.

A contract in which both parties exchange promises is a:

bilateral contract.

The requirement that each party to a contract must intentionally exchange something of value as an inducement to the other party to make a return exchange is known as:

consideration.

A(n) __________ contract is one in which the terms have been definitely and specifically stated and agreed upon.

express

Anna by mistake delivers to Bob a plain, unaddressed envelope containing $50 intended for Cora. Bob:

has a quasi-contractual obligation to return the money.

Morris interviewed for a job as plant manager at Northland Bearings and was offered a two-year contract if she could relocate and start the new job within three weeks. Morris agreed. Northland promised to follow up the oral agreement with a written contract setting forth all the agreed terms, but the contract had not arrived within several days. Morris wanted to give two-weeks' notice to her present employer, so she called Northland to check on the written contract and was told it was ready to be sent to her and assured her the job was hers. She gave notice of her intention to quit her present job and moved two states away to the Northland location. When Morris arrived for her first day of work, she was told someone else with better qualifications had been found and hired for the position. Morris:

may be entitled to good-faith reliance damages under the doctrine of promissory estoppel to avoid injustice.

__________ is/are any property other than an interest in real property.

Personal property

It is common for transactions to involve multiple contracts. Identify at least four contracts that might be involved in Costello's sale of land to Johnston.

Possible contracts include: (a) Costello's contract with a surveyor to specify the boundaries of the property; (b) Costello's contract with a realtor to handle the sale; (c) the parties' contracts with their lawyers to examine the title and handle any legal questions; (d) Johnston's contract with a lending institution to finance the purchase; (e) the contract of sale itself between Costello and Johnston; (f) Costello's contract with the bank when he deposits the proceeds of the sale; (g) if Johnston rents the property, there would be a contract with the tenant; and (h) when Johnston or Costello leaves a car in a lot or garage to attend to any of the matters related to the sale, a contractual relationship exists with the owner of the lot/garage. Students may also think of other reasonable possibilities.

What is the doctrine of promissory estoppel, and when is it used?

Promissory estoppel is a doctrine used to enforce noncontractual promises where there has been justifiable reliance on the promise and justice requires the enforcement of the promise. It is used to avoid injustice when the promisor reasonably expected that the promisee, in reliance on the promise, would be induced to take definite and substantial action or to forbear, and the promisee does take such action or does forbear.

Remedies for breach of contract include all but which of the following?

Punitive damages.

A person who makes a promise is a(n):

promisor.

An obligation imposed by law where there has been no agreement or expression of assent by word or act on the part of either party involved is a(n):

quasi contract.

According to the UCC, an enforceable agreement involving the transfer of title of goods from a seller to a buyer for a price is called a(n):

sale.

Caroline signs a contract to work as a sales rep for Incellmed Corporation for a period of two years. This contract is governed by:

state common law.

Quasi contracts are used to provide a remedy when the parties enter into a(n):

void contract.

Steven makes a material misrepresentation of fact regarding his motorcycle to Thelma who agrees to buy the motorcycle based upon the misrepresentation. This contract is:

voidable

Able is involved in an automobile accident and is injured. While he is unconscious, the police call an ambulance which takes him to a hospital. Able is treated at the hospital and released a day later. The hospital sends him a bill for $6,500, which Able refuses to pay, claiming it is too high and he never consented to the treatment because he was unconscious. Able:

will have to pay the bill, because this is a quasi-contractual agreement.

Distinguish between: express and implied contracts

A contract in which the parties manifest assent in words is called an express contract; a contract formed by conduct is an implied in fact contract.

Distinguish between: executed and executory contracts

A contract that has been fully carried out by all of the parties is an executed contract. The term executory contract applies to contracts that are still partially or entirely unperformed by one or more of the parties.

Briefly discuss if and how contract law changed over the nineteenth and twentieth centuries.

Contract law has undergone and is undergoing great changes. During the nineteenth century, contract formation involved many technicalities. Courts imposed contractual liability only when the parties strictly complied with the required formalities. However, almost total freedom in forming contracts was the rule.The twentieth century brought limits on the absolute freedom of contract, as well as relaxing many formalities of contract formation. Now it is much easier to get into and out of a contract. Contractual obligations are now usually recognized whenever the parties clearly intend to be bound. In some circumstances, promises are even enforced when they don't comply with basic contractual requirements.

Samuel Tate enters into a contract with Bill Smith under the terms of which Smith is to pay Tate $7,000 and Tate is to build a garage, repair a boat, and build a doghouse. If the doghouse has not yet been built, which term describes the type of contract in existence?

Executory contract.

Which of the following is NOT generally required in order to have a valid contract?

Fairness of the bargain.

Stan sends for a law school catalog from Ivory Towers University. According to the catalog, the law school applications are evaluated on the basis of undergraduate grades, standardized test scores, and references. Stan, who is a straight-A student, has high test scores and excellent references, applies and pays the $100 application fee. His application is rejected. Later he finds out that others with low grades and test scores were accepted based on their family connections and donations made to the University. If Stan followed all of the guidelines in the college catalog and paid the required application fee, then according to the court in Steinberg v. Chicago Medical School:

there is a valid contract; the school bound itself to honor the obligations set forth in the college catalog.