BLAW test 2
When one party uses unequivocal language to repudiate a contract, the other party may __________.
file suit immediately
According to the mailbox rule, an acceptance if effective
when dispatched by the offeree in a commercially reasonable manner.
condition concurrent
when each party is required to render performance simultaneously.
assignment
when one of the contracting parties transfers their rights under the contract to another party
Substantial Performance
when one party fails to render perfect performance, yet they have acted in good faith and their breach is not material.
frustration of purpose
when one party's purpose is completely frustrated by supervening events, courts may discharge that party from performance
impossibility
when the contemplated performance of the obligations becomes objectively impossible and, therefore, is subject to discharge
substitute agreement
when the contracting parties discharge their obligations by replacing the original contract with a new agreement.
When a party to an agreement owes a duty to perform and fails to fulfill her obligation, she has __________ the contract.
breached
A speed limit of 55 miles per hour is an example of a(n) __________.
bright-line rule
Meghan has some very embarrassing pictures of Kalieh. Meghan tells Kalieh that she will post the pictures all over various social media accounts unless Kalieh agrees to sell Meghan an antique wedding ring for $500.00. Out of fear that Meghan will indeed publish the pictures, Kalieh agrees to sell the ring for $500.00. Kalieh will be able to claim the defense of
duress
The first step in determining whether a valid offer exists is analyzing the offeror's __________.
objective intent
Situational interview questions about what the applicant would do in a hypothetical situation • Behavioral interview questions that focus on the applicant's behavior in past situations
open ended standard
Which rule states that any writing intended by the parties to be the final expression of their agreement may not be contradicted by any oral or written agreements made prior to the writing?
parol evidence rule
A condition __________ requires that an event must occur before performance under a contract is due.
precedent
Which of the following contract sections explains why the parties are entering into the agreement?
recitals
consequential damages
foreseeable losses caused by the breach; may include lost profits
out-of-pocket losses are typically covered by compensatory damages
true
rescission
when the parties agree to cancel the contract.
novation
when the parties agree to substitute a third party for one of the original parties to the contract
Mandy, a minor, disaffirms an agreement to purchase a car from Jamie, an adult, for $1000.00. Must Mandy give back the car?
Yes, in order to disaffirm it, the minor must return whatever consideration received.
To determine if a person is lucid, courts employ
a flexible standard
Chloe and Connor are discussing a contract. Eventually they have mutual assent. Mutual assent is often referred to as which of the following?
a meeting of the minds
As a general rule, an illegal contract is __________.
automatically void
The law imposes an obligation on the parties to a contract to take appropriate steps to avoid incurring damages and losses. This is called which of the following?
duty to mitigate
If the parties have formed a valid contract, the legal analysis then turns to the issue of __________.
enforceability
CASE 11.2 Bunker et al v. Strandhagen
enforceability of liquidated damages. (1) proof of actual damages is not required if a liquidated damages provision is unreasonable on the face of a contract, and (2) the record did not conclusively demonstrate that the liquidated damages provision is a penalty as an unreasonable forecast of just compensation. The court ordered the case to be remanded back to the trial court.
Riots, threats of terrorism, fires, earthquakes, wars, and embargoes are often mentioned in __________ clauses as events that will discharge the duties of the parties.
force majeure
Which of the following is a consent defect to contract enforceability?
misrepresentation
For most contracts, the remedy at law will be __________.
money damages
John offers to sell his cellular phone to Grace for $400. Grace accepts this offer. This transaction shows which of the following?
mutual assent
When parties to a contract have imperfectly expressed their agreement and this imperfection results in a dispute, a court may change the contract by rewriting it to conform to the parties' actual intentions using which of the following remedies?
reformation
When Bavarian Motor Works (BMW), a German company, opened a production facility in Spartanburg, South Carolina in 1994, a number of its existing suppliers (particularly of component parts) opened facilities there as well. Both BMW and its suppliers depend on each other for their business success, and they have developed strong business relationships over many years. The many contracts that BMW and its suppliers enter into each year are known as __________ contracts.
relational
In a contract cancellation known as a __________, each party gives up rights under the contract in exchange for the release by the other party from performing his or her obligations.
rescission
__________ is a model law that most states have adopted to govern service contracts and real estate contracts.
restatement (second) of contracts
Rockefeller buys an original painting by Pablo, a famous painter. Pablo breaches the agreement. Which of the following is Rockefeller's probable remedy?
specific performance
The defense of __________ gives legal relief to a party who has been induced to enter into a contract through the improper pressure of a trusted relationship.
undue influence
In order for a burdensome contract obligation to be discharged due to impracticability, the burden must be both __________ and __________.
unforeseeable; extreme
Parties to a contract must reach mutual assent using a combination of which of these?
offer and acceptance
Toy Tech (TT) has ordered 50,000 aluminum widgets from the Acme Widget Corporation (AWC) with delivery to be made on November 1. These widgets will be used in TT products to create toys for the holiday season. Under which circumstance may TT claim that AWC has made an anticipatory repudiation of the contract?
AWC's sole manufacturing plant burned down on October 1, yet AWC insists that it will rebuild and honor the contract.
Under the doctrine of __________, one party agrees to render a substitute performance in the future, and the other party promises to accept that substitute performance in discharge of the existing performance obligation. Once the substitute performance has been rendered, this acts as a __________ of the obligation.
Accord and satisfaction; satisfaction
Most advertisements appearing in the mass media, in store windows, or in display cases are __________.
An invitation for the consumer to make an offer to the seller to purchase the goods at a specified price
In order to have mutual asset, there must be
An offer and an acceptance that is the precise mirror image of the offer
A substitute agreement __________.
Immediately discharges any obligations under the original contract
Which of the following is not an example of when a contract must be in writing according to the statute of frauds?
Jeff agrees to mow Julie's lawn for $100.00
What are the four basic required elements of a valid contract?
Mutual assent, consideration, legality of purpose, and capacity
Cliff sells a calculator to Lydia. He states he has only used it for his geometry class which was a lie because he never took geometry. He used it in his basic math class. Since Cliff lied to Lydia, most likely would Lydia be successful in asserting the defense of misrepresentation to get out of the contract?
No, unless the court determines his lie about the class in which he used the calculator was a lie about a material fact.
breach of contract
The failure, without legal excuse, of a promisor to perform the obligations of a contract.
Which of the following is a requirement for promissory estoppel?
The promisee actually relied on the promise
Timothy contracts with Howard Construction Company to build him a new house for $350,000. In the contract, there is a provision indicating that Timothy must obtain "suitable financing" (defined by the contract as a 3.75 percent annual percentage rate of interest or lower interest rate, for the entire purchase price of the home) before his obligation to purchase the house arises. The "suitable financing" provision in this contract is known as __________.
a condition precedent
condition subsequent
a contract term that discharges the parties' obligations if an event occurs after performance under the contract
mitigation of damages is a duty of the breaching party.
false
specific performance is one option for collecting damages as a remedy at law.
false
Some promises do not support a bargained-for exchange and will not support contractual consideration. Such promises are called __________.
illusory promises
Tasha contracts with Marquel to mow her lawn. Totally unexplained and unplanned, it snow six inches before Marquel is supposed to mow her lawn. Most likely the contract will be discharged by operation of law under the concept of
impracticability
A court order to refrain from performing a particular act is known as __________.
injunctive relief
Kelli enters into a contract with Beach Builders, Inc. to purchase a condo to use as a rental unit. The contract contains a clause stipulating that for every day past July 1 that the condo is not finished, the contract price would go down by $100 (a reasonable estimate of the rental income that Kelli would lose). The clause allows for which of the following?
liquidated damages
in cases where it is difficult to estimate actual damages in the event of a breach, the parties may agree to:
liquidated damages
Legalese is characterized by __________, __________ sentences written in a __________ voice.
long, complex; passive
In a majority of states, contracts made by an incompetent are __________.
voidable
According to the contract laws of capacity, the age at which a person can contract is:
18 years
Which of the following subjects of a contract breach would most likely result in a court order of specific performance?
A 19th century coin collection
Abel agrees to paint the lobby of Baker's office building by June 1. On April 28, Abel calls and says that he is running behind schedule and may not get to Baker's lobby until September 1. When can Baker sue for damages?
April 28
CASE 10.2 Jacob and Youngs v. Kent
Difference in Value the court focused on practical application to obtain fairness rather than a strict application of performance requirements and pointed out that trivial and innocent omissions may not always be a breach of a condition.
Which of the following are forms of equitable relief? I. Reformation. II. Money damages. III. Liquidated damages. IV. Injunctive relief.
I and IV.
Which of the following is true regarding specific performance?
One of the most common circumstances in which it is rewarded is in real estate contracts
Most business contracts are bilateral because they are enforceable before the other party performs because:
One party does not have to wait to see if the other person will breach the agreement before taking action.
What is the current trend among contract drafters?
To use plain English whenever possible
You have been doing web design and maintenance in-house for three years. The main person who worked on the website was an employee named Ashton. You decide to hire Jiminez Web Design to design and maintain your website. You tell Ashton that because of the work he did on the website for the previous three years, you will pay him $3,000. Which of the following is correct?
You are not obligated to pay Ashton the $3,000 because his consideration was in the past.
restitution
a remedy that restores to the plaintiff the value of the performance that he has already rendered to the breaching party and by which the breaching party has been unjustly enriched.
equitable relief
a type of remedy, including injunctions and retraining orders, that is designed to compensate a party when money alone will not do, but instead forces the other party to do (or not do) something.
Allison offered to sell Aditi her boat. When Allison composed her written offer, she mistakenly offered to sell the boat for $27,800 instead of $28,700 as she intended. Aditi immediately accepted the offer. Which of the following is Aditi's best argument that the contract should be enforced?
a unilateral mistake is not a valid reason to avoid a contract.
If the promises to perform in a contract are not conditional, the duty to perform is __________.
absolute
Anticipatory repudiation is also called __________.
anticipatory breach
which doctrine allows one party to pursue remedies before a breach has occurred?
anticipatory repudiation
The contract called for Ishmael to start on April 1 and finish on September 30. On February 15 he got another offer to work for the same time period at double the pay. Ishmael immediately contacted Export and told them he was not going to honor the contract. Which of the following has occurred?
anticipatory reputation
Which of the following is a legal doctrine used by courts to protect parties who may lack the ability to understand the terms of an agreement?
capacity
The contract called for Ishmael to start on April 1 and finish on September 30. On February 15 he got another offer to work for the same time period at double the pay. Ishmael immediately contacted Export and told them he was not going to honor the contract. Export was able to find another contractor to do the work during the same time period. The other contractor however charged $5,250 per month for the same service. The extra $250 per month is which of the following type of damages?
compensatory
Which remedy covers losses of actual damages suffered by the nonbreaching party?
compensatory
Suppose that Cromartie is involved in an automobile accident with Frazier, and Frazier is clearly at fault for the accident. Cromartie sustains $4,650 in damages to his car. Cromartie's loss is known as __________.
compensatory damages
An event that occurs after the performance under a contract and discharges the parties' contractual obligations is best referred to as a(n)
condition subsequent
reformation
contract modification in which the court rewrites a contract to conform to the parties' actual intentions when the parties have imperfectly expressed their agreement and the imperfection results in a dispute.
compensatory damages
damages that are meant to make the injured party whole again. in contract law, they are an attempt to place the non breaching party in a position he would have been in had the contract been executed as agreed. Also called direct or actual damages
In the Lucy v. Zehmer case, the court held:
even if the seller had no subjective intent to sell his property, a reasonable person would have concluded that the parties had a serious intent to contract.
Big Box Electronics puts an advertisement in the newspaper that incorrectly stated that they were selling computers for $50. Big Box intended to sell the computers for $500. Rosalyn gets excited and immediately drives to Big Box. She finds the computers and noticed that they had a $50 price tag on the box as well. Roslyn brings the computer to the register and states "I accept your offer to sell me the computer for $50." Which of the following is correct?
neither the advertisement nor the price tag constitutes a valid offer.
Suppose that Farmer McDonald offers to sell his John Deere tractor to Luke for $10,000. Farmer McDonald dies, and Luke would like to accept his offer. Can he?
no
Jason Rutigliano is the owner of Holy Donuts, Inc. in Pittsburgh, Pennsylvania. Rutigliano agrees to pay Officer Kelley $100 per month in return for Kelley's promise to focus his daily patrol on downtown Oak Street, where Rutigliano's store is located (Officer Kelley's normal patrol area includes, but is not limited to, downtown Oak Street). Is the agreement between Rutigliano and Kelley legally enforceable?
no, due to the preexisting duty rule
What is the common sense and conscience of the community extended and applied throughout the state to matters of public morals, health, safety, and welfare?
public policy
In a __________ contract, the legal detriment is incurred through the mutual promises the parties make to each other.
bilateral
When one party fails to perform under an agreement, the failing party has __________ the contract.
breached
In terms of contractual capacity, the age of majority is a(n) __________.
bright-line rule
A lack of genuine assent occurs in cases of __________.
duress
In general, a contract with a minor is:
voidable at the election of the minor
remedies
judicial actions, which can be monetary or equitable, taken by courts that are intended to compensate an injured party in a civil lawsuit
The contract provision "This Agreement and the benefits and advantages herein contained are personal to the Member and shall not be sold, assigned or transferred by the Member" is an example of __________.
legalese
Partial Breach
the innocent party may not rescind the contract and must still perform his/her promise-the remedy is to bring an action for damages caused by the partial breach
CASE 11.1 Thomas v. Montelucia Villas
ruled in favor of the Thomases. The court held that although the doctrine of anticipatory breach could be applied in this case, Montelucia was ready, willing, and able to perform its obligations.
Les orders a set of vitamins online. When it arrives the vitamins were packaged in shrink wrap. When he opens the packaging, he is accepting what type of agreement?
shrink wrap
Thomas, an attorney, enters into a contract of representation with Cybil to represent her in a probate matter. Which body of law applies to this contract?
state common law
A condition __________ stipulates an event that occurs after performance under the contract and discharges the parties' obligations.
subsequent
Which of the following provides that the acceptance of an offer is generally effective upon dispatch of the acceptance when sent in a commercially reasonable manner, and not when the acceptance is received by the offeror?
the mailbox rule
in a contract claim, money damages are primarily limited to:
1) compensatory (also called direct or actual) damages, 2) consequential damages, 3) restitution, 4) liquidated damages
The duty to mitigate is imposed on which parties to a contract?
all parties
Jody and Roberto had a written agreement for the sale of a 2017 Porsche Cayenne for $40,000. When the actual purchase date arrived, Jody (the buyer) came to pick up the car from Roberto (the seller) and demanded that Roberto include in the sale an extra set of four expensive wheels worth $6,000. Jody claims that the wheels were part of the $40,000 purchase price, but Roberto disagrees. The written contract says nothing about the extra set of wheels. Jody sues Roberto for breach of contract, and at trial, he seeks to introduce a note handwritten and signed by Roberto to Jody dated one week before the actual date of the contract, indicating "Extra set of four Cayenne wheels to Jody—Value--$6,000—included in contract price." Will the trial court judge likely allow the jury to hear this evidence?
no, since it violates the parol evidence rule
CASE 10.1 Lucente v. IBM
"employee choice doctrine" New York courts will enforce a noncompete without regard to its reasonableness if the employee quit and was afforded the choice between not competing and preserving contract benefits versus competing and accepting the risk of forfeiting those benefits.
The contract called for Ishmael to start on April 1 and finish on September 30. Suppose for this question only that Export decides that they can not afford a consultant. On February 1 they notify Ishmael. Coincidentally on the same day that Export cancelled, he is offered similar contract for the same time period for similar work. The other contract would have paid $4,800 per month. Ishmael declines the offer and then sues Export. Which of the following would be Ishmael's damages?
$200 per month
Mike had an employment contract with Good Works, Ltd., which stated that he would be employed for two years at a salary of $50,000 per year. After one year, Good Works breached the contract. After the breach, Mike was offered a job at Best Co. to work for them in a similar position for the year for $45,000. Mike refused the job and sued Good Works for breach of contract. What would a court likely award Mike?
$5,000
Frustration of purpose may be used to discharge an obligation if, after the parties enter into an agreement:
A party's principal purpose is substantially frustrated without her fault; some event occurs, when the nonoccurrence of the event was a central assumption of both parties when entering into the contract; and the parties have not otherwise agreed on who bears the risk of such an occurrence?
Suppose that on December 15, 2020, Manager Yang enters into an agreement with Consultant Anderson to provide operation-consulting services for a period of six months to commence on January 2, 2021. On December 20, 2020, Manager Yang is instructed by upper management to cut costs, so he contacts Consultant Anderson the same day by the following e-mail: "Dear Consultant Anderson: We don't require your services. Sorry.—Manager Yang." As of December 20, 2020, Manager Yang has __________ the contract with Consultant Anderson.
Anticipatorily repudiated
Renee was getting old and could no longer drive, so she made a promise that she would give Solomon her car as a gift. A few months later, Renee found out she was dying. While she was on her death bed, Renee told her son, Jason, that she wanted him to promise to pay for her granddaughter's college education. Jason made the promise. Which of the following is correct?
Both Renee's promise and Jason's promise are illusory.
In a contract claim, money damages are primarily limited to __________.
Compensatory damages, consequential damages, restitution, and liquidated damages
Which of the following is not an element required for promissory estoppel?
Consideration must be exchanged by all parties.
Sharlee's nephew Greg is eighteen years old (the legal age to smoke cigarettes in his state). Sharlee promises that she will give Greg $10,000 if he does not smoke until his twenty-first birthday. Greg does not smoke and on his twenty-first birthday he asks for the $10,000. Which of the following statements is correct?
Greg not smoking was a forbearance, therefore Sharlee is obligated to pay.
Anticipatory repudiation can occur in which of the following ways? I. A statement by one party of its intent not to perform.II. An action by the promisor that rendered performance impossible.III. Knowledge by the parties that one party may be unable to perform despite both parties' efforts.IV. After a contract has been discharged.
I, II, and III.
CASE 10.3 McMahon Food Corp. v. Burger Dairy Co.
Honest Dispute Required The appellate court affirmed the lower trial court, stating that the trial court did not clearly err in concluding the MFC's first check marked "paid in full" did not create satisfaction, because the accord it was meant to satisfy was obtained due to MFC's bad faith and deception.
Which of the following are events of termination of an offer via operation of law? I. Revocation. II. Rejection. III. Death of the offeror. IV. Lapse of reasonable time.
III and IV
Shelley sends Keats an offer via U.S. mail: "I offer to manage your website at a rate of $100 per hour. You must accept by Friday." Keats signs: "I accept, but I'll only pay you $90" and puts it in the mailbox on Friday. Shelley receives the letter Saturday. Which of the following is true? I. A contract exists on the day Shelley sent the offer to Keats. II. A contract exists as of Friday. III. No contract exists because of the statute of frauds. IV. No contract exists because of the mirror image rule.
IV only
Julie entered into a contract with Scott to build a deck on her house for $3,000. Halfway through the job, Scott's assistant quit, and Scott had to do the entire job himself. Scott told Julie that he could not complete the building of the deck unless if she gave him $5,000 instead of the $3,000. Julie agreed to give him $5,000. Upon completion of the deck, which of the following is correct?
Julie would owe Scott $3,000, because Scott had a preexisting legal duty to build the deck for $3,000.
In which of the following situations would anticipatory repudiation not be allowed?
Manny calls Moe and tells him that the sculpture he's creating for him is coming along slower than anticipated but he's pretty sure he'll be done by the contract deadline.
Gabrielle, a 19 year old college freshman, promises not to drink any alcohol while she is away at college in exchange for her parents' promise to pay for her tuition. Is there consideration?
No because Gabrielle is not giving up something of legal value as she is under 21 years.
Based on a handshake, Tommy has agreed to purchase Jeff's classic 1965 Mustang for $27,000. Is this agreement legally enforceable?
No, because the contract is for the sale of a good for $500 or more
Which of the following are the three ways in which an offer may be terminated by action of the parties?
Revocation, rejection, and a counteroffer
Sally has just purchased a home and wants to have an in-ground pool installed. She calls Cool Pools, the company that put in her neighbors' pools. When the company rep comes to her property, he does some soil tests that are standard for the industry and gets the same results as he got when the other pools were put in, so the company gives her a price quote of $16,000. When Cool Pools begins excavating, it discovers solid rock four feet below ground level. The neighbors had no such rock. Cool Pools stops work and informs Sally that it will have to use explosives to remove the rock and the cost of the pool will now be $32,000
Sally can have the contract discharged based on impracticability.
Which of the following is true regarding the amount and type of consideration?
So long as some bargained-for exchange between the parties is contemplated, the contract will be deemed enforceable.
A novation is a(n) __________ agreement that involves a substitute __________ rather than a substitute __________.
Substitute; third party, promise
The duty to mitigate damages requires the non-breaching party to:
Take reasonable steps to lessen damages
Contractual performance may be accomplished by delivering products to an agreed-upon location. This is known as __________.
Tendering goods
You decide to hire Jiminez Web Design to design and maintain your website. You enter into a contract in which Jiminez will design your web profile and manage it for six months. You agree to pay them $20,000 for that. Which of the following is correct?
The $20,000 is the consideration you put forth.
At an after work networking event, Mike drinks wine while negotiating the terms of an employment contract with Cyndy to start the next day. Cyndy shows up to work the next day and Mike states that he was drunk the night before and therefore lacked capacity. The court will most likely rule
The contract is voidable by Mike if he can prove that at the time he entered into the contract his intoxication prevented him from understanding the consequences of his actions.
You decide you want to engage Jiminez for your web design. You tell them that you would like for them to create a new website design and monitor it for six months for your company for $16,000. Jiminez says they agree, but they will only monitor the website for three months. Which of the following statements is correct?
The offer to Jiminez is terminated and Jiminez has made a counteroffer.
You decide to hire Jiminez Web Design to design and maintain your website. You enter into a contract in which Jiminez will design your web profile and manage it for six months. You agree to pay them $20,000 for that. When completing the job, one of Jiminez's designers says that he would like one of your company's mouse pads. You tell the designer that you will give them one as a gift. Which of the following is correct?
The promise to gift the mouse pad is illusory, so you do not have to gift one to the designer.
On January 1, Julie sent a fax to Miranda's office: "We offer to provide you with cell phone service for $800 per month for six months starting July 1. Please let us know by U.S. Mail." On January 2, Miranda sent a letter via U.S. mail to Julie that read: "I accept your offer of January 1." On January 3, Julie telephoned Miranda and told her: "I revoke my January 1 offer." On January 5 Julie receives Miranda's letter. Which of the following is correct?
There is a valid contract and it was bound on January 2.
You decide that you want to engage Jiminez. On October 1, Jiminez left an offer of engagement at your office. The offer stated that "We offer to provide you with web maintenance services for $2,800 per month for six months starting January 1. Please let us know by U.S. Mail." On October 3, you send Jiminez a letter via U.S. mail accepting the offer. On October 4, you change your mind a call Jiminez and tell them that you reject their offer. On October 6 Jiminez receives your letter. Which of the following is correct?
There is a valid contract and it was bound on October 3.
Suppose that Jiminez tells you that you need to buy one of their computers to do the job. They write up an agreement that states that they will sell you their latest Pear brand computer for $2,000. You agree, because you know the latest Pear brand computer sells for $2,200. When the computer arrives, it is not what you were expecting. In your discussions, you realize that there are two different companies named Pear Computers. When you agreed to buy a computer, you were assuming that it was from the Pear Computer company located in Vietnam. When Jiminez offered to sell you the computer, they were referencing the Pear Computer company located in Mexico. Which of the following is correct?
There is no contract because there was a mutual mistake about what constituted the consideration.
Suppose that Tamara offers to paint Jamal's house next week for $8,000, and Jamal attempts to accept it for $7,500. Under the common law:
There is no contract between tamara and jamal due to a violation of the mirror image rule
When you decide that you are going to use an outside web design firm, you decide to sell some computer equipment that you previously bought to do in-house web design. You put an advertisement in a newspaper that states you will sell the computer equipment for $400. Geraldine contacts you and says, "I accept the offer and will buy the computer equipment for $400." You say that you will only sell the computers for $600. Which of the following is correct?
There is no valid contract, because advertisements are generally not offers of contract.
Which of the following is true of strategically qualified attorneys?
They play an active role in helping a businessperson translate the important terms of a deal into the legal terms in a contract.
Which of the following is generally true regarding courts that support freedom of contract principles?
They will enforce valid contracts against parties absent evidence of fraud, mistake, oppression, and lack of legal purpose
Amaya is a new attorney who is focusing on business matters especially contract negotiations. When she is hired by Holshauser Industries to negotiate all of their product purchase contracts for their car detailing business, as a strategically qualified attorney, she should do all the following except,
Use strong-arm techniques to exploit maximum advantage over opposing interests
Jackson has offered to sell Lucas six ounces of marijuana for a designated price, and Lucas has accepted Jackson's offer. Lucas plans to use it for recreational purposes. Both live in Alabama, which has not legalized marijuana for either medicinal or recreational use. This contract is __________.
Void per se
You decide to hire Jiminez Web Design to design and maintain your website. You enter into a contract in which Jiminez will design your web profile and manage it for six months. You agree to pay them $20,000 for that. Half of the way through, Jiminez tells you that they cannot complete the project unless you pay them $22,000 instead of $20,000. To make sure that Jiminez finishes, you agree. At the end of the project you only pay $20,000. Which of the following is correct?
You do not have to pay the extra $2,000 because Jiminez had a preexisting legal duty to finish the job for $20,000.
Suppose you were to contact Jiminez Web Design. When contacting them, you discuss terms that you would like in a contract with a web designer. They meet all of the criteria that you expect. At the end of the conversation, you say, "your firm would do nicely." Jiminez assumed that it was an offer of contract. You still wanted to interview other firms. In determining whether there was an offer, which of the following statements is correct?
You must have had objective intent when making the offer.
In which of the following scenarios would enforcement of specific performance be appropriate?
You own the pistol used by Hamilton and contract to buy the pistol used by Burr in the Hamilton-Burr duel to complete your set, but despite the contract the Burr pistol owner refuses to sell at the last minute.
condition precedent
a contract term that requires an event to occur before performance under a contract is due
injunctive relief
a court order to refrain from performing a particular act
Ana knowingly and voluntarily promises to sell her laptop, which is worth $5,000, to her friend Paul for $1. Paul pays Ana the $1. Later, Ana changes her mind about selling the laptop. Which of the following is correct?
a court would allow the contract and not question the fairness of the deal.
Mutual assent is typically referred to as __________.
a meeting of the minds
Ishmael started working on the project. In the contract it required Ishmael to create monthly reports using MacroSoft software, because that was what Export used. Instead, Ishmael used MajorWrite, which is compatible with MacroSoft software. Using the incorrect software was which of the following regarding the contract?
a partial breach
When a breach of contract is not material, it is referred to as which of the following?
a partial breach
Mutual assent is also referred to as __________.
agreement
specific performance
an equitable remedy whereby a court orders the breaching party to render the promised performance by ordering the party to take a specific action
Typically, contracting parties reach mutual assent using a combination of __________.
an offer and an acceptance
Beth has just signed a contract to work for a bank. A clause in the contract says that before she begins work, she must pass a drug test and should drug use be discovered, the contract becomes void. This clause would be a:
condition subsequent
What type of damages compensate the nonbreaching party for foreseeable indirect losses not covered by compensatory damages?
consequential
Which remedy covers foreseeable indirect losses suffered by the nonbreaching party?
consequential
which remedy compensates a non breaching party for foreseeable indirect losses?
consequential damages
Which element of a valid contract requires both sides to obtain something of value and to give up something of value?
consideration
liquidated damages
damages that the parties expressly define in the contract and agree will compensate the non breaching party
impracticability
discharge arising when performance is not objectively impossible yet performance becomes extremely burdensome due to some unforeseen circumstance occurring between the time of agreement and the time of performance.
Anticipatory Repudiation
doctrine under which, when one party makes clear that he has no intention to perform as agreed, the non breaching party is entitled to recover damages in anticipation of the breach rather than waiting until performance is due. also called anticipatory breach
Suppose Laura Menendez, a tenant at Ashley Forest Apartments in Durham, North Carolina, moves out of town with nine months remaining on her lease term. Laura is contractually obligated to pay $1,500 per month in rent. Durham has a 98 percent apartment occupancy rate (meaning that 98 percent of all apartments in the city are occupied by tenants). Ashley Forest Apartments will most likely not be able to recover $13,500 in remaining rent from Laura due to its __________.
duty to mitigate damages
CASE 11.3 Fischer v. Heymann
duty to mitigate damages The court held that Fischer had a right to damages for the loss actually suffered as a result of the breach once the Heymanns breached the agreement, but not to be placed in a better position than she would have been in had the contract not been broken.
Suppose that Ciera rear-ends Dianne's car while Dianne is sitting at a stop light. Dianne claims that her injuries resulting from her accident are substantial, and she demands that Ciera pay her $50,000. Ciera initially offers merely to pay Dianne's medical expenses ($9,760), but she eventually offers to pay $25,000 in return for Dianne's execution of a settlement agreement. As part of the settlement agreement, Dianne must promise not to sue Ciera for her injuries. If the parties consent to the settlement agreement, Dianne's promise not to sue is what type of consideration?
forbearance
For a contract to be enforceable, it must be the result of __________.
genuine assent
Every contract is premised on the notion of __________ dealing.
good faith
Suppose that Felix promises to pay Isaac $3,000 to pick up a box in Oregon and transport it to Felix in Alabama, and Isaac agrees to the terms of the deal. Unbeknownst to Isaac, the box contains marijuana, and upon receipt, Felix plans to sell the marijuana in Alabama. Marijuana is legal in Oregon, but it is illegal in Alabama, both for medicinal and recreational use. If Isaac refuses to perform his obligations required by this arrangement:
he is not liable to Felix for breach of contract, since the contract is void
Timothy, age 17, purchased a necklace for his girlfriend, Bouakham. He bought the necklace on a three-year installment credit plan from Heart-Shaped Box Jewelers, Inc. After Timothy turned 18, he continued to make installment payments on the necklace according to the terms of his credit plan. What is the likely legal outcome if Timothy seeks to end his contract with Heart-Shaped Box Jewelers, Inc.?
heart shaped jewelers, inc. will prevail since Timothy ratified the contract
In contracts, __________ refers to the problem of contracts in which one contracting party has more or better information than the other.
information asymmetry
Maddie cannot read. She signs a cell phone agreement without being able to read the document. This is an example of:
information asymmetry
Connie entered into a contract with Michael to sell Michael her car for $12,000. Which of the following statements regarding Connie delivering the car to Michael is correct?
it is the consideration that makes Michael's promise to pay enforceable.
which duty requires the non breaching party to make reasonable efforts to act in such a manner as to decrease the damages caused by the breach?
mitigation
In terms of intoxication as a defense to contract liability, courts use a(n) __________ standard to determine whether __________ that the intoxicated person had sufficient capacity to enter into the agreement.
objective; a reasonable person would have believed
When encountering a situation in which one party is claiming impossibility of performance, the impossibility must be __________ rather than __________ in order for the obligation to be discharged.
objective; subjective
The contract called for Ishmael to start on April 1 and finish on September 30. On February 15 he got another offer to work for the same time period at double the pay. Ishmael immediately contacted Export and told them he was not going to honor the contract. When may Export begin to assert its remedies?
on February 15
accord and satisfaction
one party agrees to render a substitute performance in the future known as an accord, and the other party promises to accept that substitute performance to discharge the existing performance as a satisfaction.
In terms of contractual capacity, deciding whether an adult is intoxicated is a(n) __________.
open-ended standard
In terms of contractual capacity, deciding whether an adult is lucid is a(n) __________.
open-ended standard
If contracting parties perform their obligations completely, this is known as __________.
perfect performance
You decide to hire Jiminez Web Design to design and maintain your website. You enter into a contract in which Jiminez will design your web profile and manage it for six months. When the six months is over, you promise Jackie that you will hire her to do the web maintenance. Jackie does not offer any consideration, but she immediately quits her job with RealTech and moved to your city in reliance of your promise. You change your mind and decide to let Jiminez maintain the website and tell Jackie that you will not hire her. Jackie sues for lost wages and moving expenses. Which of the following is Jackie's best argument to win her lawsuit?
promissory estoppel
Equitable relief comes primarily in the form of __________.
specific performance, injunctive relief, or reformation
Which of the following laws limits government interference with contracts and says that "No State shall...pass any...Law impairing the Obligation of Contracts?"
the United States constitution
From a practical perspective, the main difference between misrepresentation and fraudulent misrepresentation is __________.
the legal remedy available to the innocent party
Suppose that Katrina Yang, owner of IT Home & Office, Inc. (a computer retail store), e-mails computer hardware wholesaler Macro-Hardware, Inc. as follows: "I am interested in purchasing 10 new tablet computers. Please contact me about the price and delivery terms regarding the tablets." Which of the following is true regarding the facts of this case?
this is an invitation to negotiate
Which of the following is recognized as duress?
threats of a violent act
a breach that relates to a fundamental term of the contract is called a _____ breach.
total
Murray hires Ginny as a sales representative and agrees to pay her a 15 percent commission on all her sales. One month later, Murray pays Ginny a 5 percent commission on her sales, explaining that the company was cutting back on overhead. Which of the following types of breaches describes this scenario?
total breach
An actionable claim for anticipatory repudiation includes threats for which of the following types of breach of contract?
total breach, but not partial breach
Cell phone contracts are an example of which type of contract?
transactional
injunctive relief is a court order to refrain from a particular act.
true
when a total breach occurs, the non breaching party may suspend performance or be discharged from its obligations completely.
true
Home Security Experts, Inc., a manufacturer and seller of home security systems, employs Jennifer to be a sales representative for the company. The term of her employment contract will begin on May 1, 2019, and end on April 30, 2022. Must this contract be in writing to be enforceable?
yes, because it cannot be performed in under one year
Donnie Howell, Jr. is a very wealthy individual, having accumulated $30 million dollars in net worth over the course of his career in the transportation industry. Donnie has met a flight attendant, Melanie, while traveling to a conference last month, and theirs has been a "whirlwind" courtship. Donnie would like to make Melanie his fourth wife (his previous three marriages have ended in divorce), but he would also like to protect his assets with a prenuptial agreement. Must such an agreement be in writing to be enforceable?
yes, contracts made in consideration of marriage must be in writing to be enforceable.
