Contracts

What is a unilateral contract?

A way to make an irrevocable offer if offeree has started performance Arises from a promise that requests acceptance by an action of the promisee

What happens if there is ambiguity about whether the offer is unilateral or bilateral?

under the modern approach, if there is an ambiguity about whether the offer is unilateral or bilateral, acceptance can be by either performance or a return promise**

I send you an offer. You mail back your acceptance. The letter gets lost and never shows up. Is there a contract?

yes

What is fraud in the execution?

you trick someone into signing something that they do not even know is a contract

What is undue influence?

arises when a party puts very intense sales pressure on another party, who often seems weak-minded or susceptible to high-pressure sales tactics

What is economic duress?

arises when one party makes threats to induce another party to contract (or modify a contract)

Can you sue on an illegal contract?

Typically, the law will just leave the parties where they stand. There is a modern trend toward allowing less-guilty parties to recover restitution (i.e., get their money back)

What does UCC §2-207(3) say?

Under UCC §2-207(3), only the terms that both parties/writing agree on become part of the contract, with all other terms supplied by the UCC default rules

For a communication to be an offer, the communication must do which of the following?

manifest the offeror's willingness to enter into a contract

What is duress?

An improper threat that deprives a party from making a meaningful choice to contract

Under the mailbox rule, which of the following is generally effective upon being sent? A. Offer B. Acceptance C. Rejection D. revocation

B. Acceptance - CORRECT

What happens to the original promisor in a novation?

If there is a valid novation, then the original promisor will be excused from performance

What is a satisfaction condition? What kind of standard is used to see if it's met? What about for contracts involving aesthetic taste?

It depends on the nature of the performance Preferred approach -- use an objective standard of satisfaction --> If most reasonable people would be satisfied, then the condition is met. Contracts involving aesthetic taste -- such as art or tutoring services -- use a subjective standard (to see if YOU are satisfied) --> The party can still breach if they claim dissatisfaction in bad faith

What is the typical remedy in contract law?

Money damages

Does the UCC follow the preexisting duty rule?

No

In CL, can a breaching party who fails to satisfy the CCE due to a material breach get paid anything?

Not on the contract (will not be able to get paid if doesn't satisfy CCE) -- maybe quasi-contract

What if the seller tries to accept an offer by shipping the wrong goods?

The UCC treats this as acceptance plus breach.

What is the default method of delivery under the UCC?

The default method of delivery under the UCC is one delivery of the goods. If you don't state delivery, assumption is goods will be delivered all at once

What is the parol evidence rule?

The parol evidence rule generally prevents a party to a written contract from presenting extrinsic evidence of a prior or contemporaneous agreement that contradicts the terms of the contract as written

If goods are to be tendered at seller's place of business, what is the seller's obligation?

Then the seller just needs to give the goods to the buyer

Do you have to make a clear commitment to a deal for there to be consideration?

Yes

To which of the following situations does the parol evidence rule most likely apply? A. A party seeks to introduce evidence about a subsequent agreement. B. A party seeks to introduce the other party's oral assertion made during the negotiations of the agreement as evidence of mistake. C. A party seeks to introduce evidence of a written statement made before the written contract was entered into that directly contradicts a provision in that contract. D. A party seeks to introduce evidence of a second, separate deal.

C. A party seeks to introduce evidence of a written statement made before the written contract was entered into that directly contradicts a provision in that contract. - CORRECT

Regarding consideration, which of the following statements is FALSE? A. An agreement for which there is consideration may be legally enforceable. B. Not doing something you are legally entitled to do is a legal detriment. C. A promise to make a gift is bargained-for consideration. D. The exchange of promises must be bargained for to constitute consideration.

C. A promise to make a gift is bargained-for consideration. - CORRECT

Which of the following agreements is NOT subject to the Statute of Frauds? A. A prenuptial agreement. B. An agreement by a parent to guarantee a child's loan to purchase a car. C. An agreement to rent a house for six months. D. A sale of goods for a price of $500.

C. An agreement to rent a house for six months. - CORRECT

Regarding an express condition in a contract, which of the following statements is TRUE? A. Under the preferred approach, the satisfaction of an express condition is judged by a subjective standard. B. An express condition in a contract involving aesthetic taste is judged by an objective standard. C. An express condition must be strictly satisfied. D. An express condition in a contract involving aesthetic taste cannot be breached.

C. An express condition must be strictly satisfied. - CORRECT

FILL IN THE BLANKS. For a third party to qualify as an intended beneficiary, ____________________ must have intended to convey enforcement rights to the third party in the event of ___________________. A. Only the promisor, a breach B. Both the promisor and the promisee, the death of the promisor C. Both the promisor and the promisee, a breach D. Only the promisor, the death of the promisor

C. Both the promisor and the promisee, a breach - CORRECT

FILL IN THE BLANK. A liquidated damages clause will be enforced by a court if the amount of liquidated damages was reasonable at the time of ___________________________. A. Breach B. Discovery of breach C. Contracting D. Filing suit

C. Contracting - CORRECT

When the builder breaches a building contract, which of the following is FALSE? A. Expectation damages generally take into account the cost to complete the building in accordance with the contract. B. Expectation damages may be limited to the diminution in market value when economic waste would result. C. Damages based on the diminution in market value of the building may be awarded to the nonbreaching party whenever the breaching party acted willfully. D. Damages based on the diminution in market value may be awarded if the cost-to-complete damages will dramatically overcompensate the nonbreaching party.

C. Damages based on the diminution in market value of the building may be awarded to the nonbreaching party whenever the breaching party acted willfully. - CORRECT

With regard to an accord and satisfaction, if the accord is not performed, on what basis may the other party sue? A. The promised performance in the original agreement B. The new promise C. Either the promised performance in the original agreement or the new promise D. The other party may only sue to recover the benefit conferred on the nonperforming party.

C. Either the promised performance in the original agreement or the new promise - CORRECT

Regarding services contracts, which of the following is the minimum that must be done for the contract to satisfy the Statute of Frauds? A. Partial performance of the contract by one party B. Partial performance of the contract by both parties C. Full performance of the contract by one party D. Full performance of the contract by both parties

C. Full performance of the contract by one party - CORRECT

1. Which of the following types of damages is designed to restore to the plaintiff whatever benefit was conferred upon the defendant? A. Expectation damages B. Reliance damages C. Restitution damages D. Liquidated damages

C. Restitution damages - CORRECT

Regarding the assignment of contractual rights, which of the following is FALSE? A. A party to a contract who assigns rights despite a prohibition in the contract against assignment of rights has breached the contract. B. The assignee of rights under a contract that invalidates assignments cannot enforce the contract. C. The assignee of rights under a contract that prohibits assignments cannot enforce the contract. D. A party to a contract who assigns rights despite a provision in the contract that invalidates an assignment of rights has breached the contract.

C. The assignee of rights under a contract that prohibits assignments cannot enforce the contract. - CORRECT

Under which of the following circumstances is an agreement promising to guarantee the debt of another NOT subject to the Statute of Frauds? A. The debt is for $400. B. The debt must be repaid within one year. C. The main purpose of the promise is for the promisor's economic advantage. D. The debt to be incurred stems from the leasing of real property for six months.

C. The main purpose of the promise is for the promisor's economic advantage. - CORRECT

When an offeree begins performance of a unilateral contract, which of the following statements is TRUE? A. The offeror can revoke the offer. B. The offeror need not give the offeree a reasonable time to complete performance of the contract. C. The offeror cannot require the offeree to complete performance of the contract. D. A contract has been formed.

C. The offeror cannot require the offeree to complete performance of the contract. - CORRECT

Which of the following is TRUE with regard to the risk of loss in a sale of goods contract? A. The breaching party does not bear the risk of loss when the breach is totally unrelated to the delivery of the goods. B. When neither party has breached a destination contract, the risk of loss during delivery rests with the buyer, absent a contrary contract provision. C. The parties may allocate the risk of loss by agreement. D. If there is no breach of contract for the sale of goods, and the goods are being shipped under a shipment contract, the risk of loss during delivery rests with the seller, absent a contrary contract provision.

C. The parties may allocate the risk of loss by agreement. - CORRECT

For impracticability to be a defense, which of the following conditions need NOT be satisfied? A. An unforeseen event must occur. B. The nonoccurrence of the event must have been a basic assumption of the contract. C. The party against whom impracticability is being asserted must have been at fault. D. The party asserting this defense must not have been at fault.

C. The party against whom impracticability is being asserted must have been at fault. - CORRECT

To establish the defense of mutual mistake, which of the following is NOT required? A. Both parties are mistaken about a fact at the time the deal is made. B. The mistake relates to a basic assumption of the contract. C. The party who is not seeking to assert the defense assumed the risk of mistake. D. The mistake has a material impact on the contract.

C. The party who is not seeking to assert the defense assumed the risk of mistake. - CORRECT

To satisfy the Statute of Frauds, which of the following is FALSE with respect to a sale of goods? A. The writing need not be the contract itself. B. The writing need only be signed by the party against whom enforcement is sought. C. The writing must contain the price of the goods. D. The writing must contain a quantity of goods sold.

C. The writing must contain the price of the goods. - CORRECT

In which of the following circumstances may a party's silence be actionable as nondisclosure? A. Only when the party engages in active concealment. B. Only when the party owes a fiduciary duty to the other party. C. When the party engages in active concealment or when the party owes a fiduciary duty to the other party. D. A party's silence cannot give rise to a misrepresentation.

C. When the party engages in active concealment or when the party owes a fiduciary duty to the other party. - CORRECT

FILL IN THE BLANKS. In a sale of goods, when a party has failed to respond to the other party's proper demand for assurance of performance within _________________________, the party making the demand may treat this failure as a _____________________ of the contract. A. 45 days, repudiation B. 45 days, rescission C. a reasonable time, repudiation D. a reasonable time, rescission

C. a reasonable time, repudiation - CORRECT

For a communication to be an offer, the communication must do which of the following? A. induce a willingness by the offeree to accept the offer B. create the power of acceptance in the offeror - C. manifest the offeror's willingness to enter into a contract D. reveal the offeror's subjective intent

C. manifest the offeror's willingness to enter into a contract - CORRECT

What is promissory estoppel (or reliance?)

Can arise when one party makes a promise, and the other party relies on that promise to take some action Three key elements for a claim under reliance: 1. A promise is made that would be reasonably expected to induce reliance; 2. The promisee does indeed take detrimental action in reliance on the promise; and 3. Injustice can only be avoided by enforcement of the promise. Remember, we said that reliance could be a theory to make an offer irrevocable, especially in the general contractor-subcontractor context

What is the mirror image rule? Which universe uses it?

Common law universe uses mirror image rule The terms in the acceptance must match the terms of the offer exactly -- or it is not an acceptance, but a counteroffer --> A counteroffer destroys the caterpillar, the offer

How specific must your offer be?

Common law: all essential terms must be covered in the agreement --> This typically means the parties, subject, price, and quantity UCC: only essential term is the quantity (price doesn't need to be stated) --> UCC more willing to fill gaps and and find a contract, even if agreement leaves out some key terms

How can you satisfy the Statute of Frauds on a writing? (main way)

Contracts that fall within the Statute of Frauds are unenforceable unless evidenced by a writing. The writing must: 1. Be signed by the party against whom enforcement is sought; and --> So NOT both signatures 2. Contain the essential elements of the deal It must cover the fundamental facts: 1) Show that a contract has been made; 2) Identify the parties; and 3) Contain the essential elements of the deal. *The writing does NOT have to be a formal, executed contract

When do courts award liquidated damages?

Courts are wary about awarding liquidated damages and will do so only if: 1) The amount of liquidated damages was reasonable at the time of contracting; and 2) Actual damages from breach would be uncertain in amount and difficult to prove. (these two are in slight tension)

Which of the following will NOT prevent the application of the preexisting duty rule under common law? A. A change in performance B. A third party's promise to pay C. Unforeseen difficulties that would excuse performance D. A modification made in good faith

D. A modification made in good faith - CORRECT

Which of the following is NOT a requirement of a quasi-contract? A. A measurable benefit is conferred by one party on another. B. The benefit is conferred with the expectation of payment. C. Retention of the benefit without compensation would be unfair. D. Absence of mistake by the party conferring the benefit.

D. Absence of mistake by the party conferring the benefit. - CORRECT

5. With regard to the retraction of an anticipatory repudiation, which of the following is TRUE? A. An anticipatory repudiation may not be retracted. B. An anticipatory repudiation may be retracted only if the other party has not commenced a lawsuit for breach of contract. C. An anticipatory repudiation may be retracted only if the other party has not acted in reliance on the repudiation by materially changing its position. D. An anticipatory repudiation may be retracted unless the other party has commenced a lawsuit for breach of contract or has acted in reliance on the repudiation by materially changing its position

D. An anticipatory repudiation may be retracted unless the other party has commenced a lawsuit for breach of contract or has acted in reliance on the repudiation by materially changing its position. - CORRECT

Regarding termination of an offer, which of the following is TRUE? A. An offer may not be terminated unless the offeror communicates a revocation to the offeree. B. An offer to sell a unique item is automatically terminated by the sale of the item to a party other than the offeree, even if the offeree is unaware of the sale C. An offeree who has made a counteroffer may withdraw the counteroffer before the offeror has relied on it and thereby reinstate the offer. D. An inquiry by an offeree as to the terms of the offer does not terminate the offer

D. An inquiry by an offeree as to the terms of the offer does not terminate the offer

In applying the parol evidence rule to a sale of goods, which of the following is TRUE? A. There is a presumption that a written contract is a complete integration of the parties' agreement. B. The parol evidence rule does not apply to a sale of goods. C. The parol evidence rule applies only to an oral statement made before the written contract was entered into. D. Evidence of an additional promise made before the written contract was entered into that does not contradict the contract may be considered unless the parties would certainly have included the term in the contract.

D. Evidence of an additional promise made before the written contract was entered into that does not contradict the contract may be considered unless the parties would certainly have included the term in the contract. - CORRECT

3. Regarding silence as acceptance, which of the following is FALSE? A. Silence qualifies as acceptance when the offeree has reason to believe that silence can constitute acceptance and remains silent with the intent to accept the offer. B. Silence qualifies as acceptance when previous dealings between the parties make it reasonable to believe so. C. An implied-in-fact contract can be accepted by the offeree's actions without the offeree verbalizing an acceptance. D. Generally, silence constitutes acceptance of an offer.

D. Generally, silence constitutes acceptance of an offer. - CORRECT

Regarding consequential damages, which of the following is FALSE? A. Consequential damages are damages that are unique or special to the plaintiff. B. Consequential damages may be recovered in addition to general damages. C. Unforeseeable consequential damages are not recoverable unless the breaching party had some reason to know about the possibility of these damages. D. Incidental damages are a subset of consequential damages.

D. Incidental damages are a subset of consequential damages. - CORRECT

Regarding the "perfect tender" rule, which of the following is FALSE? A. A seller who has not made a perfect tender of the goods has a chance to cure the tender if there is time left on the contract. B. The perfect tender rule does not apply to an installment contract. C. If the seller tendered nonconforming goods under a reasonable understanding that the buyer would accept the replacement goods, the buyer must allow for cure of the defective tender. D. Once a buyer has accepted the goods, the buyer cannot revoke his acceptance and return the goods.

D. Once a buyer has accepted the goods, the buyer cannot revoke his acceptance and return the goods. - CORRECT

To establish the defense of misunderstanding, which of the following is NOT required? A. The parties use a material term that is open to two or more reasonable interpretations. B. Each party attaches a different meaning to the term. C. Neither party knows or has reason to know of the confusion. D. One of the parties has detrimentally relied on its interpretation of the term.

D. One of the parties has detrimentally relied on its interpretation of the term. - CORRECT

In a sale of goods for which there was a written offer and a written purported acceptance, if there is not a contract but the parties act as if there is, which of the following is TRUE? A. The terms contained in the offer govern. B. The terms contained in the purported acceptance become part of the contract. C. All terms are supplied by the UCC default rules. D. Terms on which both writings agree become part of the contract.

D. Terms on which both writings agree become part of the contract. - CORRECT

When the paying party breaches a building contract at a time that the building is only partially complete, which of the following is TRUE? A. The builder may usually complete the building. B. The builder is entitled to the full contract price. C. The builder's recovery need not take into account any amount already paid to the builder. D. The builder's recovery must take into account the cost of completing the building.

D. The builder's recovery must take into account the cost of completing the building. - CORRECT

Which of the following is NOT an element of the defense of misrepresentation? A. A misrepresentation of a present fact. B. The misrepresentation was material or fraudulent. C. The party was justified in relying on the misrepresentation. D. The misrepresentation constituted a threat that deprived the party from making a meaningful choice to contract.

D. The misrepresentation constituted a threat that deprived the party from making a meaningful choice to contract. - CORRECT

or an offer to sell a good to be irrevocable under the UCC without the offeree purchasing an option, which of the following is NOT a requirement? A. The offer must be in writing. B. The offeror must be a merchant. C. The offer must contain an explicit promise not to revoke. D. The offer must be signed by both the offeror and the offeree.

D. The offer must be signed by both the offeror and the offeree. - CORRECT, ONLY THE OFFEROR NEEDS TO SIGN

1. Impracticability does NOT provide a defense for nonperformance in which of the following circumstances? A. Performance of the contract has become illegal. B. The subject of the contract has been destroyed. C. The party required to render services in a personal services contract dies. D. The purpose of the contract is frustrated.

D. The purpose of the contract is frustrated. - CORRECT

Regarding the implied warranty of fitness for a particular purpose, which of the following is FALSE? A. The buyer must intend to use the goods for a special purpose. B. The buyer must rely on the seller's expertise in selecting the goods. C. This warranty can be disclaimed. D. The seller must be a merchant.

D. The seller must be a merchant. - CORRECT

Which of the following is NOT a requirement for a seller to exercise the right of reclamation? A. The buyer was insolvent at the time of receipt. B. The seller must demand the return of the goods. C. The buyer still has the goods. D. The seller's demand for return of the goods must be made within 30 days of receipt of the goods by the buyer unless the buyer misrepresented his solvency.

D. The seller's demand for return of the goods must be made within 30 days of receipt of the goods by the buyer unless the buyer misrepresented his solvency. - CORRECT

Which of the following statements about the defense of illegality is FALSE? A. Under the modern trend, the less guilty party to an illegal contract may be able to recover restitution. B. An illegal contract is unenforceable. C. A contract entered into in furtherance of an illegal act that is not itself illegal can be enforced. D. Traditionally, an illegal contract was enforceable unless unconscionable.

D. Traditionally, an illegal contract was enforceable unless unconscionable. - CORRECT

In determining whether a contract is subject to the Statute of Frauds under the one-year rule, which of the following is taken into consideration? A. Whether the contract was actually completed within one year from the date on which performance of the contract began B. Whether the contract is likely to be completed within one year from the date on which performance of the contract is to begin C. Whether the terms of the contract make it impossible for performance to be completed within one year from the date on which performance of the contract is to begin D. Whether the terms of the contract make it impossible for performance to be completed within one year from its making

D. Whether the terms of the contract make it impossible for performance to be completed within one year from its making - CORRECT

FILL IN THE BLANK. A promise not to sue will act as consideration as long as there is a(n) __________ that the claim may be determined to be valid. A. substantial certainty B. reasonable basis C. substantial likelihood D. good-faith belief

D. good-faith belief - CORRECT

FILL IN THE BLANKS: An advertisement is generally an _____, but may be treated otherwise if it is _____. A. offer, in writing B. offer, a reward C. invitation to deal, in writing D. invitation to deal, a reward

D. invitation to deal, a reward - CORRECT

FILL IN THE BLANKS. In a sale of goods, when a party has _____________________ grounds for insecurity about the other party's ability or willingness to perform, the party may demand _____________________ assurance of performance. A. any, perfect B. any, adequate C. reasonable, perfect D. reasonable, adequate -

D. reasonable, adequate - CORRECT

FILL IN THE BLANKS. A contract for the transfer of a real property interest can satisfy the Statute of Frauds if any _________ of the following have occurred: payment, _________, or improvements of the property. A. one, reliance B. one, possession C. two, reliance D. two, possession

D. two, possession - CORRECT

If you owe me money, and you promise partial payment to get released from this debt obligation, is my promise to release you from this debt binding in exchange for your partial payment?

Depends on whether the debt is currently due and undisputed If the debt is CURRENTLY due and undisputed, --> NO, the modification is NOT binding. --> Therefore, I can sue, even though I promised to release you if you paid some of it If the debt is NOT CURRENTLY due (like it's due next year), then --> YES, the modification IS binding --> Therefore, I can NOT sue you for the extra money you didn't pay me

What happens if after a contract is made, there is death? Will the contract performance always make sense?

Dying does not normally excuse liability on a contract that has been made. --> The estate will normally be on the hook for any contractual obligations. -----> Death of an offeror is one way an offer can be extinguished, it kills all of their offers -----> Death after a contract is different → doesn't excuse normally Ask whether there is something special about the person performing on the contract, such that it makes no sense to continue if they die.

What is an express condition?

Express conditions are created by language in the contract --> Look for magic words like "only if," "provided that," "on the condition that," "only in the event that," etc. Express conditions must be strictly satisfied unless the condition is somehow excused --> If express condition is not strictly satisfied, other party doesn't have to do their obligation

What is the seller's responsibility under a destination contract? What is the F.O.B.?

F.O.B. Buyer's place of business If the contract is a destination contract, then the seller must get the goods to the buyer's business and notify the buyer. Risk of loss is with seller

What is the seller's responsibility under a shipment contract? What is the F.O.B.?

F.O.B. Seller's place of business If the contract is a shipment contract, then the seller must take (all) three actions to satisfy perfect delivery: a) Get the goods to a common carrier (like UPS) b) Make arrangements for delivery; and c) Notify the buyer. Risk of loss is with buyer

How can you satisfy the Statute of Frauds on a services contract that cannot be performed within one year? Is part performance enough?

Full performance of a services contract by either side satisfies the Statute of Frauds. (so just one side perform) Part performance of a services contract does NOT satisfy the Statute of Frauds.

What are reliance damages?

Goal - to put a party in the same economic position that it would be in if the contract had never been created in the first place Ask what loss has the plaintiff incurred that would never have taken place but for the breached contract?

What happens when courts ask whether, under the circumstances, an extrinsic term of the agreement would "naturally be omitted" from the writing (in order to figure out whether a contract is fully integrated or partially integrated)?

If it would naturally be omitted, it may not violate the parol-evidence rule and can be introduced as evidence if it does not contradict the writing.

What's the difference between accord and satisfaction, and modification?

If the party to perform has an option to satisfy a contract obligation by doing something else, then it is an accord and satisfaction --> Think of accords as being flexible In a modification, it is clearer that the parties have changed the performance obligation --> Modification is more absolute

What are lost volume profits?

If the paying party breaches, then normally the selling party needs to mitigate by reselling the goods or services to another person But if the seller is a retailer who sells this type of product all the time, the seller might try to argue for LVP.

What is an integrated writing?

Integrated writing = a comprehensive agreement that seems to be the final expression of the parties' agreement → so the other stuff is maybe preliminary, here's an integrated writing that's maybe final expression of the agreement

Do gift promises and conditional gifts count as bargained for consideration?

No

Do charities have to prove all three elements for a claim under promissory estoppel (or reliance)?

No Charities do not need to prove detrimental reliance (the second element) when pursuing a reliance theory to collect on a charitable gift promise. Charities don't need to show a specific detrimental action they took, it's hard for them to link specific actions they may have taken on reliance to a gift

Does the UCC universe require contract acceptances to match the terms of the offer exactly?

No The UCC replaces the mirror-image rule with §2-207 In some cases, a purported acceptance that does not match the terms of the offer exactly can still count as a legal acceptance But, do not assume that all terms in the purported acceptance will govern the contract --> Ex. Let's say we've got an offer with main terms on front and other stuff on back, and an acceptance with main terms on front and other stuff on back that's different from buyers --> In common law, that acceptance wouldn't count --> 2-207 says that can still count as a legal acceptance, and be a legal contract, but that doesn't mean that all the terms in the seller's back form is gonna come in in the contractual relationship --> You can have a contract without all those terms becoming part of the deal It does not matter whether the parties are merchants for this part of §2-207

Do custom-made or specially manufactured goods have to have a signed writing to satisfy the Statute of Frauds?

No, these are exempted from the Statute of Frauds The maker can satisfy the SOF as soon as it makes a substantial beginning toward the manufacturing of the goods --> Logic - why would they make these goods specialized for this person unless there's a contract? (like a monogrammed shirt)

If the paying party breaches in a partially completed building contract, can the builder continue to work on the job?

No, this runs counter to mitigation -- it would be "running up the damages." Common in construction No because if someone tells you they can't pay you and you're not done yet, you can't keep building and try to sue for the full price You've got to mitigate as soon as you learn they're breaching and stop the work

I offer to sell you my Jeep for $500,000, saying "you may accept this offer by remaining silent for five seconds." You stare at me but don't say a word. After five seconds pass, do we have a contract?

No, unless you intend to accept. He's master of offer, so he can define the terms of when to accept the offer, but he can't trick you by forcing you to disclaim a contracting situation like he tried to do here. But if you do want to accept this, you can accept the offer and play by his rules since he's master of the offer, and stay silent, but you have to intend to accept

Who is the master of the offer?

Offeror

What is the constructive condition of exchange (CCE)?

One party's performance is conditioned on the other side's performance. Most important implied condition is the constructive condition of exchange

What is frustration of purpose? Can performance still happen? How often does it happen?

Performance can still occur, but something has happened to undermine the entire reason for the creation of the contract This is very rare -- the event must be extreme and not previously allocated to one of the parties.

Who is a promisor, promisee, and third-party beneficiary? Ex. Abe agrees to pay Beth $50 if Beth mows Cam's lawn. Beth never shows up, and Cam files a lawsuit against Beth. Who is the promisor? Who is the promisee? Who is the third-party beneficiary?

Promisor - the person making the promise that the outsider is trying to enforce Promisee - a contractual counterparty to that promise; this person could presumably enforce the contract, but is not doing so Third-party beneficiary - the outsider suing the promisor for the breach Beth - promisor - she's made the promise that's being sued for Abe - promisee - Beth initially promised Abe that she would do the work. Cam - third-party beneficiary - outsider who wasn't a part of the initial contract, but now he's suing to try to get it enforced

What are punitive damages? How often are they given? When should we look out for them?

Punitive damages are almost never allowed in contract law --> Not the goal of contract to punish the breaching party Don't worry about these unless you see a breach that also seems like a tort (e.g. fraud or some other very extreme situation)

In UCC, what happens if you have reasonable grounds for insecurity about the other side's performance?

Reasonable grounds for insecurity about the other side's performance allows you to demand an adequate assurance of performance --> If the party fails to respond within a reasonable time, you can treat this as repudiation. -----> If unsure, send them the adequate performance. If they don't respond within reasonable time, you'll know it's a repudiation

Do both types of unconscionability need to be present for a deal to be struck down?

Some jurisdictions require both varieties to be present before a deal is stuck down; others may act if only one variety is present

What is a quasi-contract?

Sometimes called a "contract implied-in-law" Trick to remember: "quasi" is like "queasy," which makes you ill, which is implied in law Arises when 1. You would have made a contract if you could have, but you could not, or --> Maybe didn't have time, or was sick 2. When one party conferred a benefit on another party, and it would be fair to pay for that benefit Quasi-contract elements: 1. The plaintiff confers a measurable benefit on the defendant; 2. The plaintiff reasonably expected to get paid; and 3. It would be unfair to let the defendant keep the benefit without paying Look for an opportunity to decline, because we don't like to force people into situations when they have to pay for benefits. If there isn't an opportunity to decline, you want to see why that's the case

For the UCC, when is specific performance available?

Specific performance is available only for unique goods like art or custom-made items. --> Question is whether money damages is inadequate - usually not, you just cover, you find another similar vendor and buy the goods from them and recover the difference --> But for unique stuff you may need an order for specific performance

What is specific performance available for, and not available for?

Specific performance is presumptively available for real estate transactions --> Easy for real estate - every parcel of land is unique, nothing like it, if someone promised you that land, you want it under equitable relief because money damages may not be adequate, you can't get something that's exactly the same Specific performance is presumptively available for real estate transactions --> Easy for real estate - every parcel of land is unique, nothing like it, if someone promised you that land, you want it under equitable relief because money damages may not be adequate, you can't get something that's exactly the same

What are liquidated damages?

Stated in the contract as an explicitly negotiated amount due upon breach You'll know if you have a liquidated damages question because the contract will have liquidated damages, are set out in contract as an explicitly and negotiated amount

What is the Statute of Frauds? What is its goal? How does one use it as a defense?

The Statute of Frauds (SOF) is a barrier that some contracts must meet in order to become legally binding --> Contracts in SOF world require a higher and special form of proof -- typically a writing signed by the defendant or some performance on the purported deal. --> Two main ways to satisfy the SOF -- by performance or by writing. The exact requirements differ between our parallel universes. Goal -- to prevent false assertions about a contract that was never really created Usually, one party might try asserting a Statute of Frauds defense by claiming that a contract is within the Statute of Frauds world, and it does not satisfy the higher requirements that are needed in the statute of frauds world

What can the buyer do if they get goods that seem okay when delivered but a defect is discovered within a reasonable time?

The buyer may revoke an acceptance of the goods

What does §2-207(2) say?

The new term in the acceptance may control under §2-207(2), but only if all of the following are true: 1. Both parties are merchants 2. The new term does not materially alter the deal; 3. The initial offer did not expressly limit acceptance to its terms; and 4. The offeror does not reject within a reasonable time to the new term It is very difficult for the new terms in the acceptance to govern the contract --> Ex. a new indemnification provision is probably material

In UCC, when can a new term in a contract acceptance control? The new term in the acceptance may control under §2-20

The new term in the acceptance may control under §2-207(2), but only if all of the following are true: 1. Both parties are merchants 2. The new term does not materially alter the deal; 3. The initial offer did not expressly limit acceptance to its terms; and 4. The offeror does not reject within a reasonable time to the new term It is very difficult for the new terms in the acceptance to govern the contract Ex. a new indemnification provision is probably material

How can an "irrevocable offer" occur?

The offer is normally free to revoke at any time prior to acceptance 1. Option 2. Firm offer 3. Unilateral contract - cannot be revoked by offeror if offeree has started performance 4. Detrimental reliance

What is an accord and satisfaction? What part is accord and what part is satisfaction?

The parties to an earlier contract agree that performance will be satisfied instead by the completion of a different performance --> The new performance is called the accord --> The excusal of the initial performance obligation is called the satisfaction

What is a waiver?

The party receiving the protection of the condition may waive the condition by words or by conduct How is an express condition excused? The party who receives the protection of the condition can waive the condition either by words or by conduct A condition will also be waived if the other party wrongfully interferes with or hinders the occurrence of the condition --> This will be judged by a good-faith standard

What are the 4 topics we look at that influence or impact whether or not successful contract performance has occurred?

These are arising after a successful contract has been created to excuse someone from their obligations 1) Parol-evidence rule 2) Warranties 3) Conditions 4) Excuse of performance obligations (impracticability, frustration of purpose, etc.) Note 18: Remember "Pizza With Crawling Escargot"

What are expectation damages?

This is the normal way to calculate damages in contracts. Goal - to put a party in the same economic position it would be in if the contract had been performed as promised. --> What's the situation the breached against party is in now, and what is the situation they would have been in if that other party had done what they were supposed to do? Measured by comparing the value of the performance without the breach to the value of the performance with the breach.

What is unconscionability? What are the two types of it?

This is the ultimate contract defense. Everything seems fine, but a court simply looks at the deal and says, "No, this shocks my conscience. It's unconscionable." 1) Procedural unconscionability - a defect in the bargaining process itself, usually: --> A hidden term (surprise) or Ex. a hidden term in a really long contract that's a surprise --> An absence of meaningful choice (no other contracting option) 2) Substantive unconscionability - a rip-off in some term of the contract

What is an implied warranty or merchantability?

This warranty is triggered only when the seller is a merchant dealing in the goods at issue --> Be careful, in order to make an implied warranty of merchantability, you have to be a merchant selling the type of product that you NORMALLY sell --> Selling a one-off good will NOT trigger the implied theory, which the exam can test Warrants that the goods are fit for ordinary commercial purposes Can a merchant disclaim this warranty? Yes, if it is very clearly done. --> Look for VERY CONSPICUOUS language; and --> Look for the term "merchantability."

What is an implied warranty of fitness for a particular purpose?

Triggered when a buyer relies on a seller's expertise to select a special type of good that will be used for a special purpose Can a nonmerchant extend this warranty by implication? Yes, as long as the buyer relies on any seller's expertise. --> Anyone can send it, not just merchant, as long as one is relying on the seller's expertise Can this warranty be disclaimed? Yes. --> Must use CONSPICUOUS language, such as "as is" --> Disclaimer must be in writing

What is §2-207 and §2-207(1)

UCC replaces mirror-image rule with this In some cases, a purported acceptance that does not match the terms of the offer exactly can still count as a legal acceptance Text of § 2-207(1): "A definite and seasonable expression of acceptance [or a written confirmation] which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional upon assent to the additional or different terms."

In UCC, for a CCE, what is the rule? What happens if obligations are not strictly performed

UCC rule is perfect tender Seller must strictly perform all obligations or be in breach The doctrine of material breach applies to installment sales --> Normal rule is perfect tender

In CL, can a breaching party who fails to satisfy an express condition get paid in quasi-contract?

Usually not, express conditions must be strictly satisfied

What is an advertisement?

Usually understood as an invitation to deal There are some exceptions: --> Reward advertisements (see Example 12, above) --> Advertisements that are very specific and leave nothing open to negotiation, including how acceptance can occur

What is the right of reclamation? When can you assert this remedy?

When an unpaid seller tries to reclaim goods that were sold on credit when the buyer is insolvent To assert this remedy, the following facts must be present: 1) The buyer is insolvent at the time of receipt of the goods 2) The seller must demand the return of goods within 10 days of receipt (or within a reasonable time if the buyer misrepresented his solvency to the seller in a writing within three months before delivery); and 3) The buyer still has the goods.

How can a sale of goods contract over $500 satisfy the Statute of Frauds?

When the price of goods is at least $500, the UCC requires a memorandum of the sale that must i. Indicate that a contract has been made; ii. Identify the parties; iii. Contain a quantity term; and iv. Be signed by the party to be charged. --> A signature includes any authentication that identifies the party to be charged, such as a letterhead on the memorandum. *Does not have to be contained on one piece of paper - a series of correspondence between the parties may suffice A signed writing will satisfy the SOF, but the requirements differ a little: - There is no need to mention the price; - The writing must mention the quantity of goods sold. --> What if you make a mistake and write the wrong quantity of goods? Then, the SOF will be partially satisfied, but --> The contract is only enforceable under the SOF for the quantity mentioned in the writing

Under the common law, if you modify a contract, do you need new consideration for the modification to be valid?

Yes CL follows the preexisting duty rule -- a promise to do something that you are already legally obligated to do is not consideration. --> If you already promised to do it, you're not giving up anything by promising to do it again

I send you an offer. You mail back your acceptance. I call you before I receive your letter and revoke. Is there a contract?

Yes Classic mailbox rule situation If the rule was different and acceptance was when he received it, then he would be able to revoke, but that's not the rule

Do you have to know about an open-to-all offer in order to accept it?

Yes Even with an open-to-all offer, you must know about that offer in order to accept it

In a CCE, if payment must be made (because there is only a minor problem) can the nonbreaching party recover damages for the deficiency?

Yes Typically measured as the cost to complete the performance --> You can offset the price, or recover back from them --> Usually its amount of what it would cost to get what you wanted in the contract Sometimes limited to the diminution in market value

Can a party retract its anticipatory repudiation?

Yes, as long as the other side has not: --> Commenced a lawsuit; or --> Acted in reliance on the repudiation (by materially changing its position)

Can both parties agree to just walk away from a contract?

Yes, as long as there is some performance remaining from each side. Otherwise, there is no consideration for this modification --> So otherwise, we would have a modification for which there's no consideration → would give rise to a consideration problem perhaps

On a sale of goods contract over $500, does part performance satisfy the SOF?

Yes, part performance satisfies the SOF, but only for the quantity delivered and accepted.

What is an implied-in-fact contract?

You can communicate an acceptance without writing or speaking --> Accepting by your gestures Like by someone getting a haircut without saying a word - they still have to pay bc they understand what's going on by virtue of the acts and circumstances of him going there, sitting down, and letting them cut his hair

How do you distinguish assignment from a third-party beneficiary contract?

You can distinguish assignment from a third-party beneficiary contract because you will typically see two steps in an assignment: 1) The formation of a contract; and 2) The transfer of the benefits of the contract from an original counterparty to some third party.

What is acceptance?

a manifestation of a willingness to enter into the agreement by the offeree

What is a warranty?

a promise about a term of the contract that explicitly shifts risk to the party making the promise.

What is the pre-existing duty rule?

a promise to do something that you are already legally obligated to do is not consideration. --> If you already promised to do it, you're not giving up anything by promising to do it again

FILL IN THE BLANKS: With regard to the offeree, an offer must generally be directed to _____, and must _____.

a specific person, create a power of acceptance in the offeree

In CL, what happens in a CCE if one side fails to substantially perform?

failure to substantially perform means the other side may withhold their own performance Cannot withhold payment if the other side has substantially performed, but may be entitled to recover for the breach

What is divisibility?

if a contract is clearly divisible, then it will be broken into mini-contracts for the purposes of determining if there has been substantial performance

When can a buyer reject a specific delivery that is not perfect?

only when there is substantial impairments in the installment that cannot be cured the UCC allows for installment contracts (agreement for delivery in separate lots) UC recognizes with installment contracts, it might not be exactly perfect every time, so they might limit buyer's ability to reject every time it's not perfect ***

If the seller fails to tender perfect goods and time is left on the contract or the seller had reasonable grounds to to believe that the buyer would accept a replacement, what must the buyer do?

the buyer must give the seller a chance to cure the deficiency UCC wants things to be prefect, so they give chance to try again and correct your mistake

What happens if an accord is not performed?

the other side can sue on either the original obligation or the new promise

What is anticipatory repudiation?

when the other side says they are not going to perform on the contract (repudiation) before performance is due Book - the anticipatory repudiation must be clear and unequivocal (as opposed to MERE INSECURITY) and may be by conduct or words (SO HAVE TO BE SURE THEY WON'T)

What is a donee beneficiary?

when there is no preexisting obligation, but the promisee clearly intends to confer a gift of enforcement on a third party.

How do mixed contracts work? (Both services and goods)

1. All-or-nothing rule You cannot be in two universes at the same time, do mixed contracts must fall into one universe or the other Exception is divisible contracts, which are divided into two mini-contracts 2. Predominant purpose rule Does a good or service play a bigger role?

What are the defenses to contract formation?

1. Misunderstanding 2. Incapacity 3. Mistake 4. Fraud/Misrepresentation/Nondisclosure 5. Duress 6. Illegality 7. Unconscionability

When reading a question in which bargained-for-consideration is missing, what do you ask yourself?

1. Who is making the promise that needs to be supported by law? (That person is the promisor; the other party is the promisee). 2. Is there a benefit to the promisor OR a detriment to the promisee? (You just need one, not both.) 3. Was this bargained for? (In other words, did the parties think that they were making a deal when they exchanged promises?)

What is a mistake?

A mistake is a belief that is not in accord with a present fact (be careful bc there's lots of mistakes, only some will count in contract context)

How can a party without capacity ratify/approve the deal?

A party without capacity can ratify the deal by keeping the benefits of the contract after capacity is obtained

What is detrimental reliance?

A way to make an irrevocable offer Arises when an offeree reasonably and detrimentally relies on the offer in some foreseeable manner Like contractor/subcontractor

FILL IN THE BLANK. When both parties agree that another party will assume the contractual obligations of one of the parties, a __________ has occurred. A. novation B. delegation C. rescission D. cancellation

A. novation - CORRECT

When can contract benefits be assigned?

Almost all contract benefits can be assigned, in whole or in part, unless the contract explicitly prohibits or invalidates assignments. If the contract states that rights are not assignable, you must determine whether the contract prohibits assignments or invalidates assignments.

What is a condition?

Another way to shift risk by stating that one party's contractual obligation will only kick in if some future event takes place.

What is novation?

Arises when BOTH parties agree that a substitute person will take over the contractual obligations --> Can one side decide to create a novation by asking someone else to do the work? No, this is called a "delegation," (discussed later)

What is a misunderstanding?

Arises when each party attaches a different meaning to the same words For this defense, you must show that: 1. The parties use a material term that is open to two or more reasonable interpretations (the objective test cannot apply); 2. Each side attaches a different meaning to the term; and 3. Neither party knows, or should know, of the confusion

FILL IN THE BLANK. For a contract subject to the common law, the doctrine of substantial performance does NOT apply to ________________ conditions. A. Implied B. Express C. Implied or express D. Constructive

B. Express - CORRECT

FILL IN THE BLANK. Under the common law, a conditional acceptance functions as a(n) __________________________. A. acceptance B. counteroffer C. revocation D. invitation to deal

B. counteroffer - CORRECT

FILL IN THE BLANKS. An acceptance is a(n) ________________ manifestation of a willingness to enter into the agreement by the offeree. The offeree _______________ accept a unilateral offer with a promise to perform. A. objective, may B. objective, may not C. subjective, may D. subjective, may not

B. objective, may not - CORRECT

A shipment contract does NOT require the seller to do which of the following? A. Get the goods to a common carrier. B. Make arrangement for delivery of the goods. C. Purchase insurance for the goods. D. Notify the buyer of the shipment.

C. Purchase insurance for the goods. - CORRECT

Which of the following types of damages is least likely to be awarded in a contract action? A. Incidental damages B. Restitution damages C. Consequential damages D. Punitive damages

D. Punitive damages - CORRECT

FILL IN THE BLANK. Delegation is not permitted when ________________________________. A. the delegatee is not compensated B. the delegatee is not liable for a breach C. the delegatee lacks a special interest in performing the duty D. an original party to the contract has a special interest in having the other party perform the duty to be delegated

D. an original party to the contract has a special interest in having the other party perform the duty to be delegated - CORRECT

When is specific performance awarded?

Equitable relief is the exception, not the norm in contract law Awarded only when monetary damages are considered inadequate for some reason Specific performance is presumptively available for real estate transactions

What is the normal way to calculate damages in contracts?

Expectation damages

How do you evaluate whether the parol evidence rule applies?

First, determine what the agreement entails (basically, the first step in determining whether or not a party has performed is asking what the agreement entails) --> If the parties have reduced their contract to a comprehensive writing, then earlier statements or writings related to this agreement are not part of the deal under the PER. --> ** These earlier writings are presumed to have been dropped out of final agreement. Does the PER apply to later written or verbal statements about the deal? No, that's a modification. Does the PER apply to earlier written documents? Yes. So not just verbal, but also written agreements

What are restitution damages?

Goal - to give the plaintiff an amount equal to the economic benefit that the plaintiff conferred on the defendant --> Value of benefit that you've conferred on the breaching party This can sometimes equal reliance damages, but it need not. (restitution not always the same as reliance)

What are the nonbreaching party's options in anticipatory repudiation if a party clearly and unequivocally repudiates?

If a party clearly and unequivocally repudiates, the nonbreaching party has two options 1) Treat the repudiation as a breach and sue immediately for damages --> BUT, if you have completed the entire performance and are only waiting for payment, you cannot sue early. -----> So if they tell you they're not going to pay you, you can't move up your payments to collect early 2) Ignore the repudiation, demand performance, and see what happens:

Does a seal on a document act as a consideration substitute?

In most jurisdictions, no Historically, a seal might transfer any document into a legally binding thing Today, it does not in most jurisdictions

What happens if someone assigns the same rights twice?

It depends on whether the assignee has paid consideration for the rights: If the rights are assigned without consideration, the assignment is generally revocable and the last assignment controls. If the rights are assigned for consideration, then the first assignment for consideration is typically irrevocable and will hold.

I send you an offer. You mail back a rejection. You change your mind and mail back an acceptance a few hours later. Both letters arrive at my house on the same day. Is there a contract?

Maybe. It depends on which letter I open first If you send a rejection or counteroffer first, that eliminates you being able to use the mailbox rule You can't create a contract right now, you lost the mailbox rule If he opens the acceptance first, he has a contract If on other hand he opens the rejection first, then he doesn't have a contract It's gonna depend on which of the letters he actually opens first

What is a merger clause? What kind of integration does it evidence?

Merger clause = statement that tells everyone this is a full and complete memorial of our understanding, this memorializes our deal, there's nothing else going on --> If there's a merger clause, many courts would deem the writing integrated --> Evidence of complete integration

What is a mutual mistake?

Mutual mistake occurs when BOTH parties are mistaken as to an essential element of the contract. In such a situation, the contract may be voidable by the adversely affected party upon proof of the following - There is a mistake of fact, existing at the time that the deal is made; - The mistake relates to a basic assumption of the contract - The mistake has a material impact on the deal; and - The impacted party did not bear the risk of mistake.

Can a party get both expectation and reliance damages?

No, a party can NOT recover both expectation and reliance damages; typically, the plaintiff must elect one or the other. Usually they pick whichever they can get more from

Are illegal contracts enforceable?

No, illegal contracts are unenforceable --> Basically, subject matter of contract itself has to be illegal, if it helps someone to do illegal activity that's okay But, a contract entered in furtherance of an illegal act (that is not itself illegal) will still be enforced

For implied conditions, what does the UCC require? What are its obligations?

Perfect tender Exceptions -- contract explicitly changes the default rule; installment contracts Perfect tender has two main obligations: 1) Perfect goods 2) Perfect delivery

What are quasi-contract damages like?

Quasi-contract damages are often limited, as justice requires, to the fair value of the benefit conferred Note 15: When you see a situation that does not satisfy the normal requirements for a contract but still strikes you as unfair, ask whether quasi-contract might apply. --> If it's a situation where you feel like they should have been paid or paid back, that's a quasi-contract

Is promising not to sue sufficient consideration?

Settling a legal claim can be sufficient consideration, but only if: 1. The plaintiff has a good faith belief in the validity of the claim; or 2. There is reason to doubt the validity of the claim due to uncertain law Otherwise, that would count as blackmail

How is the CCE satisfied in the common law?

The doctrine of substantial performance states that a party will satisfy the CCE if there is not a material breach Substantial performance only works to satisfy the CCE if the failure is not willful (ex. Different color building)

What is an implied condition?

The most important implied condition is the "constructive condition of exchange."

What is an excuse?

There is a contract, but something has happened to prevent one side from having to perform

What are contracts against public policy? Are they enforced?

They are not enforced These are contracting situations that are not formally illegal but present some other policy concern (e.g., a broad exculpatory agreement) --> Tough for bar examiners to ask about usually -----> Example might be very broad exculpatory agreement - contracting away right to sue someone, or a contract to pay someone $1 million for them to divorce their spouse -----> These would likely not be enforceable -----> Usually relates to evolving social norms, so usually not the best for the bar

If you say a statement during a pleading or testimony indicating there was a contract, does that alone in and of itself satisfy the Statute of Frauds?

Yes, this satisfies the Statute of Frauds under the UCC. you've waived the SOF because you admitted under oath there's a contract, you wouldn't say that if it isn't true

I send you an offer. You mail back your acceptance. You change your mind and call me up before I receive your letter to reject the offer. Is there a contract?

Yes, unless I detrimentally relied on the rejection. When you call me and say no, it's too late, you've already created this contract when you mailed this acceptance He doesn't know anything about this acceptance, so it's reasonable for him to take what he's selling and offer it to someone else, he would be relying on your rejection, which he heard about earlier without relying on your rejection

How can you authorize an agent to form a contract that is in the Statute of Frauds world?

You need a signed writing This is known as the "equal dignity rule."

What is consideration?

a deal in which the parties exchange promises involving a legal detriment or benefit

FILL IN THE BLANKS: An advertisement is generally an _____, but may be treated otherwise if it is _____.

invitation to deal, a reward

What is a creditor beneficiary?

when the promisee strikes a deal with the promisor in order to repay some earlier debt to the third party.

What is a requirements contract?

"I don't know how many I need over the next year, but I promise to buy all of them from you." The buyer is offering to buy 100% of whatever amount is needed from this individual seller.

What is an output contract?

"I don't know how many I will make over the next year, but I promise to sell all of them The seller is offering to sell 100% of whatever amount is produced to this individual buyer

What is the knock-out rule?

- Arises when the acceptance has a different term from the initial offer (as opposed to just an additional term) - Minority -- (not knock out) When the different term does not govern under §2-207(2) the initial offer controls the terms. - Majority -- "Knock out" both of the different terms; neither term will govern and the general gap-filling provisions of the UCC will apply --> When the other terms wont come in under the acceptance of 2-207(2), the initial offer is gonna be able to set the terms that control the relationship, so courts that subscribe to knock-out-rule say why should the first offer control when you just have two different terms? Instead we're gonna knock out both of those different terms and we're not gonna allow either of those to govern --> They're just gonna do the gap-filling provision --> Some courts use it, some don't --> Each term will knock the other out, so the initial offeror's term is not gonna control

What is a conditional acceptance? What universe uses it?

- Common law - Conditional acceptance is another form of counteroffer - Look for: "if," "only if," "on the condition that," "but," etc. --> Example 56: I offer to mow your lawn on Saturday for $50. You say "OK, if you come over on Sunday." Do we have a contract? No --> You said something that looks like an acceptance because you said "okay" but the "if" is a tip-off that it's not really an acceptance, you gave a conditional acceptance, which is really a counteroffer --> Let's say I say "I'll sell my car to you for 4k" and you say "okay if you put 5k in glove compartment," you can't get away with that

How does a modification of a contract satisfy the Statute of Frauds?

- If you have a deal that meets requirements of the SOF world, now the parties want to modify that deal. Must the modification also satisfy the Statute of Frauds requirements? Not automatically --> Look at what the modification would be --> Ask whether the deal, with the alleged modification, would be in Statute of Frauds world -----> If so, the Statute of Frauds requirements must be met for the modification; -----> If not, there is no Statute of Frauds requirement, even though the initial deal was in Statute of Frauds world. -It looks like, if a deal doesn't meet Statute of Frauds, but after modification, it does meet Statute of Frauds, then it does officially meet Statute of Frauds

What is acceptance based on conduct?

- Parties might fail to make a contract but still act as though there is an agreement (e.g., exchange goods for money) --> What happens if there's not a real contract? Like in example 58-60 --> The parties might not realize they're not in a real contract, and exchange goods for money --> Later, there might be a problem that arises and you have to figure out which terms are part of the deal, and so, when they're acting like there's a contract even though there's no contract created, go to last part of 2-207 → 2-207(3)

What happens if you make a contract with a person who lacks capacity?

- The contract is going to be voidable -- the incapacitated party can disaffirm - Contract for necessities - the party without capacity must still pay fair value (not necessarily the contract price) (food, clothing, or shelter) --> We have this because we understand minors have to buy food, and don't want people to be nervous and not contract with them to buy food, but also want them to get fair prices - A party without capacity can ratify the deal by keeping the benefits of the contract after capacity is obtained

What is a unilateral mistake?

- When only one of the parties was mistaken as to an essential element of the contract at the time the contract was formed --> Then, either party can generally enforce the contract on its terms - However, (only) the adversely affected party can rescind if: --> She can prove all of the elements of mutual mistake; AND --> Either: 1. The mistake would make the contract unconscionable; or 2. The other side knew of, had reason to know of, or caused the mistake ------> Book: the non-mistaken party caused the mistake, had a duty to disclose or failed to disclose the mistake, or knew or should have known that the other party was mistaken

What is nondisclosure? Is it normally a problem? When is it definitely a problem?

- the other party does not learn the truth about something, but now you just remain quiet --> Normally, you do not need to tell the other side about all material facts related to the deal --> Law is still evolving here - still have a tradition of buyer beware, or seller beware in most circumstances, and you're not obligated without more to give all info you know about car you're selling -- look for special relationship --> Except: A special (fiduciary) relationship or active concealment

What is nominal consideration / adequacy of consideration? Does difference in economic value between items exchanged count?

-A pretense of consideration is insufficient -Like paying $1 for a jeep -A difference in economic value between the items exchanged is not grounds for finding inadequate consideration -As long as there is enough value, even subjective value to the person receiving it, consideration will be adequate --> A difference between item exchanged and what it might be worth on the market isn't going to be inadequate consideration --> As long as there's enough value (at least $20 or so on exam), and person might pay high subjective value on something and what they'll pay for it, it's fine, that's enough

How can a real estate transaction satisfy the statute of frauds? Is part performance enough?

-A signed writing will satisfy the Statute of Frauds -Part performance of a real estate contract can satisfy the Statute of Frauds if any two of the following three elements are met: 1) Possession; 2) Payment; 3) Improvements to the land --> The logic is - why would these things be happening if there wasn't a real contract that had been performed? --> Need to prove at least two of the real estate elements to satisfy SOF

Professor Geis promises to pay you $1,000 if you do not watch the next season of The Bachelor. You do not watch the show, but I refuse to pay you the money. Who is the promisor? Who is the promisee? Did Professor Geis benefit from the exchange of promises? Did you incur a legal detriment, even though not watching the show is good for you? Is there bargained-for consideration?

-Promisor - Professor Geis -Promisee - You -Did Professor Geis benefit from the exchange of promises? Not in a legal sense -Did you incur a legal detriment? Yes because you gave up something you had the legal right to do -Is there bargained-for consideration? Yes. Even though he didn't get a benefit, you incurred a legal detriment, and that's enough. **Remember you only need benefit to the promisor OR detriment to the promisee. --> The key is not doing something that you are legally entitled to do can count as a legal detriment --> Here, I incurred a legal detriment → therefore there is consideration --> Not doing something legally entitled to → legal detriment → consideration

What is an illusory promise?

-When one side is not really committing to the deal under the objective test --> you promise to buy my Jeep for $5,000 on December 1 "if you feel like it." Is there bargained-for consideration? No --> "I would like to buy your car when I have more money." --> "When the economy gets better, I will pay $5,000 for your car." -A promisor must clearly commit to the deal or there is no consideration (i.e., there must be a way for the promisor to breach)

If both parties are merchants, and one party fails to object to a confirming memo within 10 days, is the Statute of Frauds satisfied for the contract?

-Yes, but only if both parties are merchants --> Then, the contract is enforceable against the receiving party even though he has not signed it -If you're a merchant, you're expected to read and respond to all your business correspondence in connection with your business activity. Consumers may not be held to those expectations.

What do you do when there is a goods contract followed by damage or destruction of the goods before the buyer receives them. Who will bear the loss, the seller or the buyer? (4 steps)

1) Check whether the parties have already dealt with the risk problem in the contract. If so, their agreement will control. 2) If not, ask whether either party has breached (typically another part of the contract) --> If so, the breaching party bears the risk of loss --> Is this true even if the breach is totally unrelated to the delivery damage? Yes 3) If there is no breach, and the goods are being shipped, then ask what type of delivery contract it was: --> If it was a shipment contract, then the risk of loss during delivery rests with the buyer. With shipment contract, the seller will have satisfied their requirement, and risk of loss is going to shift over to me --> If it was a destination contract, then the risk of loss during delivery rests with the seller And with a destination contract like in example 143, FOB my house, but something happens, the risk of loss is under the seller, they've got to get it to me 4) In all other cases, ask whether the seller is a merchant. --> If so, the risk of loss stays with the seller until the buyer receives the goods. --> If not, the risk of loss moves to the buyer when the seller tenders the goods.

What are general damages and consequential damages?

1) General damages - the type of loss that almost anyone would incur from a breach --> Includes incidental damages - the cost of storing rejected goods, or finding a new buyer, or finding a replacement vendor 2) Consequential damages - losses that are unique or special to this plaintiff

What are the exceptions to needing new consideration for a contract modification under the CL to be valid?

1. A change in performance --> Like for a lease, if you both agree to modify the rent to $1,500, and you commit to re-rent the apartment for another year, that commitment is new consideration, now you're doing something else that you didn't initially commit to, which is extending the contract 2. A third party promising to pay; or --> Like if your rent changes and someone agrees to cover $500 of your rent 3. Unforeseen difficulties that would excuse performance

What happens if the initial counterparties try to revoke or modify the third-party's right to enforce the contract? When would the third-party lose enforcement rights?

1. Ask whether the third party knows about the promise and has changed position in reasonable reliance on the promise. --> If so, the third party may be able to make out a claim under promissory estoppel BASICALLY, A third party will not lose enforcement rights if any of the following facts is true, as these facts cause the right to vest: --> The beneficiary detrimentally relies on the rights (similar to promissory estoppel) --> The beneficiary manifests assent to the contract; or --> The beneficiary files a lawsuit to enforce the contract

What are the two questions you ask when you see Statute of Frauds?

1. Does the Statute of Frauds apply to this transaction? Are we in SOF world? --> The statute of frauds does not cover every type of contract, so that's the initial question. If the answer is yes, that it does cover, next we go to question #2 2. If so, has the Statute of Frauds been satisfied?

Three main questions for contracts

1. Has an enforceable contract been formed? (If no, no legal rights; if yes, go to Question 2) 2. Has the contract been performed (or, has the performance been excused)? (If yes, cool; if no, go to Question 3) 3. What are the remedies for breach?

Elements of offer

1. Key question - whether an offeror displays an objectively serious intent to be bound 2. Watch out for situations involving humor or anger - the offeror may not be displaying a serious intent to be bound under the objective test 3. Expressions of opinions are NOT offers 4. An offer must usually be directed to a specific offeree. So you cannot accept an offer unless it is directed at you 5. Offer must be specific, depending on the universe (different flash card)

What type of contracts does the Statute of frauds apply to?

1. Marriage - a contract made in consideration of marriage (like a prenup) 2. Suretyship - a contract promising to guarantee the debt of another (The main-purpose exception - if the main purpose in agreeing to pay the debt of another is for the surety's own economic advantage, then we are not gonna be in SOF world.) 3. One year - a contract that by its terms cannot be performed within one year from its making (the question is whether there is no possible way for the contract to be performed within one year.) 4. UCC - applies to goods contracts for a price of $500 or more 5. Real property - a contract for the sale of an interest in real property

Who lacks the capacity (thus has incapacity) to make a contract?

1. Minors or youths (under the age of 18) 2. People who are mentally ill -- two standards: --> The person cannot understand the nature and consequences of his actions; or --> The person cannot act in a reasonable manner in relation to the transaction (if the other side knows or has reason to know this) 3. Very intoxicated persons (if the other side knows or has reason to know this)

What are the three major limits on the calculation of expectation damages?

1. Must be proven with reasonable certainty 2. Not recoverable unless the breaching party had some reason to know about the possibility of these special damages at the time of contracting (the Hadley rule) --> Can recover general damages, but not consequential damages 3. A breached-against party must take reasonable steps to reduce damages from breach

When is the defense of impracticability available?

1. Performance becomes illegal after the contract is made; 2. The specific subject matter of the contract (e.g., the goods) is destroyed; 3. In a personal services contract, the performing party to the contract dies or becomes incapcitated; or 4. Performance becomes impracticable. ***Unforeseen natural disasters, wars, trade and military embargoes, strikes, and local crop failures have all been found sufficient to excuse performance. However, non-extraordinary increases in the cost of performance are not sufficient. For the defense of impracticability to be available, the following conditions must also be met: 1. An unforeseeable event has occurred; 2. Nonocurrence of the event was a basic assumption on which the contract was made; and 3. The party seeking discharge is not at fault. NOTE for assumption of the risk --> If a party assumes the risk of an event happening that makes performance impracticable, then the defense of impracticability will not apply --> NOTE that impracticability is not available merely when a party has made a bad deal and will have to pay more, even a lot more, than originally contemplated. It requires some totally unexpected occurrence that completely upsets the parties' expectations. Generally, the cost increase must be extreme.

What is the difference with prohibiting or invalidating assignments?

1. The contract prohibits assignments - the assigning party has breached when he makes the assignment, but the third party can still recover from the guarantor The power to assign persists, even if the right to assign does not. Breached, but can sue Example 202: I agree to pay you $1,000 to paint my house, but the contract states that the rights under this contract are not assignable. You nevertheless assign the $1,000 payment to Mickey. Have you breached? Yes. Can Mickey sue me if I don't pay her the money? Yes 2. The contract invalidates assignments - the third party cannot recover because there is no power or right to assign. --> Contract void, cannot sue Example 203: I agree to pay you $1,000 to paint my house, but the contract states that all purported assignments of rights under this contract are void. You nevertheless assign the $1,000 payment to Mickey. Can Mickey sue me if I don't pay her the money? No

How can an offer be terminated?

1. The offeror revokes the offer by express communication to the offeree. 2. The offeree learns that the offeror has taken an action that is absolutely inconsistent with a continuing ability to contract. This is called a constructive revocation. (ex. Like someone else bought my house) 3. The offeree rejects the offer. 4. The offeree makes a counteroffer (Operates as a rejection plus a new offer) 5. The offeror dies 6. A reasonable amount of time passes (time differs based on subject matter and contract in situation; on bar, look for delay of several weeks, months, or more - see if offer has expired on its own)

What are the exceptions to the requirement that you must communicate an acceptance to the offeror?

1. Unilateral reward offers or contests (e.g., my lost cat Monster) 2. Unilateral offer in which the parties are geographically close (such that the offer will see that performance has occurred) --> If you can SEE like by painting a house that one has accepted an offer 3. A past history of silence serving as acceptance (such that the offeree should reasonably notify the offeror if she does not accept) Like a regular business relationship when things are shipped every certain amount of time, in fact it would be reasonable for them to notify if they DON'T want something shipped 4. The offer says that acceptance must come by silence, and the offeree intends to accept the offer by silence

When will the Parol Evidence Rule not bar earlier evidence?

1. Will not bar evidence relevant to a defense against contract formation (duress, mistake, fraud, etc.) --> If we're trying to assert that a contract is not valid because I was defrauded, the other party can't say well you can't bring in that evidence of fraud under the PER 2. Even if a writing is completely integrated, a party can introduce evidence of a second separate deal. --> Example 123: Same facts as Example 120, except Hugh now argues that Disney verbally offered, prior to signing, to sell him a season pass to Disneyland for $1,000. Can he introduce this evidence? Yes Totally different contract 3. Even if a writing is completely integrated, a party might be able to introduce evidence of a prior communication that is designed to interpret an ambiguous term in the final agreement. --> Example 124: Same facts as Example 120, except the parties disagree over what "movie" means in the contract. Disney believes that Hugh will make "Mrs. Doubtfire 2." Hugh claims that they had verbally agreed that he would make "Driving Miss Daisy 2." Can Hugh introduce this evidence? Yes, as long as the term "movie" is sufficiently ambiguous. If contract only say that he's making a movie, they need to figure out what movie means

Example 162: I hire you to build the Geis Towers, a 150-story building in Charlottesville, Virginia, for $100 billion. You never start the project and tell me that you are breaching the contract. What are my expectation damages if I hire a replacement builder for $110 billion?

110 - 100 = 10 He has a contractual right to get tower built for $100 billion 110 (had to pay) - 100 (should have had to pay) = 10 So he's entitled to $10 billion

What is mitigation? What if a party refuses to mitigate? Who bears the burden of proving a mitigation failure? How similar to mitigation efforts have to be?

A breached-against party must take reasonable steps to reduce damages from breach --> Basically have to do stuff to keep damages down as low as possible If a party refuses to mitigate, the law will calculate damages as if the party did mitigate The defendant bears the burden of proving a mitigation failure Mitigation efforts must be reasonably similar to the original contract

What is an impossible and impracticable contract?

A contract that's impossible can no longer be performed An impracticable contract can only be performed with very very great difficulty → either of which may give rise to an excuse to not perform

What is the difference between partial and complete integration?

A court can find an agreement not integrated at all, partially integrated, or completely integrated Complete integration -- the contract -expresses all terms of the agreement --> Clear, comprehensive document Partial integration -- there is a final writing, but some terms are not included --> Written and final writing, but some terms might not be included in that final writing

Is a delegatee liable for breach? If so, when?

A delegatee is generally not liable for breach unless she receives consideration from the delegating party. Example 209: agree to pay you $1,000 to paint my house. You delegate your painting obligation to your best friend and promise to pay her $800 to do the job. She does a lousy job. We know already that I can sue you. Can I sue your friend? Yes, the friend has been paid consideration to do the job.

What is a delegation? When is it okay?

A delegation occurs when a party to a contract "outsources" her duties under the contract This is generally acceptable, 1. as long as the contract does not prohibit delegation and 2. as long as the other party does not have some special interest in having a specific individual perform. --> Specific individual perform - like a personal services contract involving a high level of skill or taste

Is moral obligation plus a subsequent promise to pay binding?

A few jurisdictions have some case law suggesting that a moral obligation plus a subsequent promise to pay can be binding Normally, this would be past consideration and thus not binding Ex. you're swimming racing to Alcatraz, get picked up in boat, promise to pay for rescue, no bargained-for consideration but you might argue moral obligation plus subsequent promise Don't worry about this unless the test says the jurisdiction follows this rule and wants you to talk about it as another possible theory of promissory liability

What is invitation to deal?

A preliminary communication that reserves a final right of approval with the speaker. It does not convey a power of acceptance to the other side

What is an express warranty?

A promise that affirms or describes the goods and is part of the basis of the bargain, unless it is merely the seller's opinion The use of a sample or model creates an express warranty that the goods sold will be like the sample.

What is misrepresentation? How do you assert misrepresentation as a defense?

A statement at the time of contracting that is not true --> Can be intentional (fraudulent) or accidental To assert this defense, the party must show: 1. A misrepresentation of a present fact (not opinion); 2. That is material OR fraudulent (intentional); and 3. That is made under circumstances in which it is justifiable to rely on the misrepresentation

What is a firm offer?

A way to make an irrevocable offer A merchant in the UCC universe can make a firm offer to buy or sell goods (i.e., a binding, free option) (do offer for free) A firm offer must be 1. Written 2. Signed by the offeror 3. Contain an explicit promise not to revoke Time period: either as long as stated in the offer, or for a reasonable time period not to exceed 90 days

What is an option?

A way to make an irrevocable offer Book: an independent promise to keep an offer open for a specified period of time Offeror can't revoke until period has expired If you buy an option, that will give you an irrevocable offer

Which of the following promises is NOT sufficient to constitute consideration? A. "I promise to buy your puppy if I feel like it." B. "I promise to pay you for designing the logo for my business if I am satisfied with it." C. "I promise to buy from you all of the sugar that I need." D. "I promise to sell you all of the toys that I make."

A. "I promise to buy your puppy if I feel like it." - CORRECT

1. To what type of contract does the mirror-image rule NOT apply? A. A contract governed by the UCC B. A contract governed by the common law C. A bilateral contract D. A unilateral contract

A. A contract governed by the UCC - CORRECT

Regarding a mentally ill person who has not been adjudicated incompetent, which of the following statements is FALSE? A. A mentally ill person's ability to disaffirm a contract is the same as that of a minor regardless of the mentally ill person's understanding of the transaction B. A mentally ill person who understands the nature and consequences of the transaction but is unable to act in a reasonable manner may disaffirm the contract if the other party to the contract has reason to know of the mentally ill person's inability to act in a reasonable manner. C. A mentally ill person who does not understand the nature and consequences of the transaction may disaffirm the contract, regardless of whether the other party to the contract has reason to know of the mentally ill person's lack of understanding. D. A mentally ill person can be required to pay for necessities.

A. A mentally ill person's ability to disaffirm a contract is the same as that of a minor regardless of the mentally ill person's understanding of the transaction - CORRECT

Which of the following contracts is subject to the Statute of Frauds? A. An employment contract for a ten-month period that starts in three months B. A contract to provide lifetime services to a 50-year-old person with a life expectancy of another 30 years. C. A contract to construct a dam across a major river that has no fixed completion date but will likely take five years. D. A contract to build a replica of a palace that has no fixed completion date but will likely take five years.

A. An employment contract for a ten-month period that starts in three months. - CORRECT

Regarding the waiver of an express condition, which of the following statements is FALSE? A. An express condition can be waived only by express language. - CORRECT B. A party may waive an express condition by hindering its occurrence. C. A party may waive an express condition by wrongfully interfering with its occurrence. D. When the occurrence of an express condition depends on the actions of a party, the actions undertaken by the party are judged by a good-faith standard.

A. An express condition can be waived only by express language. - CORRECT (it's by language or by conduct!)

3. For a new term in an acceptance to be part of the contract in a sale of goods, which of the following is NOT a requirement? A. Both parties cannot be merchants. B. The new term does not materially alter the deal. C. The offer did not expressly limit acceptance to its terms. D. The offeror does not object within a reasonable time to the new term.

A. Both parties cannot be merchants. - CORRECT

Regarding the application of the Statute of Frauds to a sale of goods, which of the following is TRUE? A. Custom made goods are exempt from the Statute of Frauds once the maker makes a substantial beginning towards the manufacture of the goods. B. A written sale of goods contract that contains the wrong quantity cannot be enforced. C. A party's failure to object to a confirming memo within 10 days will satisfy the Statute of Frauds if at least one of the parties to the contract is a merchant. D. Part performance of the contract makes the contract enforceable for the quantity of goods stated in the contract.

A. Custom made goods are exempt from the Statute of Frauds once the maker makes a substantial beginning towards the manufacture of the goods. - CORRECT

Regarding termination of an offer, which of the following statements is FALSE? A. If the offer does not specify a termination date, the offeree retains the power of acceptance indefinitely. B. Rejection of the offer by the offeree terminates the offer. C. An offeror can revive a terminated offer. D. The death of the offeror can terminate the offer.

A. If the offer does not specify a termination date, the offeree retains the power of acceptance indefinitely. - CORRECT

FILL IN THE BLANKS. A ________________________ clause in a written contract is evidence of a ______________________ integration. A. Merger, complete B. Merger, partial C. Warranty, complete D. Warranty, partial

A. Merger, complete - CORRECT

FILL IN THE BLANKS. ________________ unconscionability is a defect in the bargaining process; ____________________ unconscionability is an exploitive contractual term. A. Procedural, substantive B. Substantive, procedural C. Material, fraudulent D. Fraudulent, material

A. Procedural, substantive - CORRECT

What standard is applied to the proof of expectation damages? A. Reasonable certainty B. More likely than not C. Preponderance of the evidence D. Beyond the shadow of a doubt

A. Reasonable certainty - CORRECT

Regarding the granting of specific performance as a remedy for breach of contract, which of the following statements is FALSE? A. The contract must be for the sale of goods. B. Monetary damages must be an inadequate remedy. C. This remedy is a form of equitable relief. D. This remedy is the exception rather than the norm

A. The contract must be for the sale of goods. - CORRECT

Which of the following is NOT a promissory estoppel requirement? A. The promisor and the promisee have a special relationship. B. A promise was made that would be reasonably expected to induce reliance. C. The promisee takes detrimental action in reliance on the promise. D. Injustice can only be avoided by enforcement of the promise.

A. The promisor and the promisee have a special relationship. - CORRECT

The occurrence of which of the following events will NOT cause an intended beneficiary's right to vest? A. The third party is identified in the contract as an intended beneficiary. B. The intended beneficiary assents to the contract. C. The intended beneficiary detrimentally relies on the contract. D. The intended beneficiary files suit to enforce the contract.

A. The third party is identified in the contract as an intended beneficiary. - CORRECT

With regard to the satisfaction of the Statute of Frauds through a writing, which of the following statements is TRUE? A. The writing must contain the essential elements of the deal. B. Only a formal written contract is sufficient to satisfy the writing requirement. C. A writing that is signed by either party is sufficient to satisfy the writing requirement. D. A signed writing will not satisfy the Statute of Frauds unless the contract has also been at least partially performed.

A. The writing must contain the essential elements of the deal. - CORRECT

5. FILL IN THE BLANK. If a seller of goods ships the wrong goods, generally the seller has _______________________________________. A. You Selected: accepted the offer, and breached the contract B. accepted the offer, but has not breached the contract C. rejected the offer, and made a counteroffer D. terminated the offer, and made a new offer

A. You Selected: accepted the offer, and breached the contract - CORRECT

3. FILL IN THE BLANKS. Generally, if a contract is silent as to assignment and delegation, a party to the contract _________________ her contractual rights, ________________________________ her contractual duties. A. may assign, and may also delegate B. may assign, but may not delegate C. may not assign, but may delegate D. may not assign, nor delegate

A. may assign, and may also delegate - CORRECT

FILL IN THE BLANKS. When a party clearly and unequivocally anticipatorily repudiates its contractual obligations, the other party _______ ignore the repudiation and demand that the repudiating party perform _______________________. A. may, as called for in the contract B. may, immediately C. must, as called for in the contract D. must, immediately

A. may, as called for in the contract - CORRECT

FILL IN THE BLANKS. The delegating party ___________________ to the obligee unless ______________________________. A. remains liable, there has been a novation B. remains liable, the delegatee receives consideration C. escapes liability, there has been a novation D. escapes liability, the delegatee receives consideration

A. remains liable, there has been a novation - CORRECT

What is the mailbox rule?

An acceptance sent by mail is effective when the letter is sent. General rationale - to determine when an acceptance has been legally communicated when there is some delay between sending and receiving Does not apply: 1. If the offeree sends something else back first (e.g., rejection, counteroffer); 2. To other types of communications (e.g., revocations, rejections) 3. To option contracts; or --> These already designate when it should be received 4. It is unclear whether this applies to other media (e.g., fax, e-mail)

What is an offer?

An offer is a manifestation of a willingness to enter into an agreement (by the offeror) that creates a power of acceptance (in the offeree)

What is a risk of loss problem?

Arises when there is a goods contract followed by damage or destruction of the goods before the buyer receives them. Who will bear the loss, the seller or the buyer?

In UCC, what happens if a contract modification is made?

Ask whether the modification is made in good faith. If so, it is binding even without new consideration

What is an assignment and a delegation?

Assignment - the transfer of rights under a contract Delegation - the transfer of duties under a contract

Which of the following contracts is subject to the Statute of Frauds as a real estate contract? A. A contract to build a skyscraper for $1 billion B. A contract to buy a tiny sliver of land for $450 C. A contract entered into between a couple who plan to marry and a builder to construct their residence for $300,000 D. A contract to serve as a caretaker of a farm - I PICKED, WRONG

B. A contract to buy a tiny sliver of land for $450 - CORRECT

In which of the following circumstances is a court unlikely to grant specific performance? A. A contract to sell a house B. A contract to provide fitness training services C. A contract to buy a rare stamp D. A contract to purchase custom-made boots

B. A contract to provide fitness training services - CORRECT

With regard to the doctrine of mitigation, which of the following is FALSE? A. The nonbreaching party must take reasonable steps to reduce the damages from the breach. B. A failure to mitigate damages prevents the nonbreaching party from recovering any damages. C. The burden of proving a failure to mitigate damages rests on the breaching party. D. The mitigation efforts required to prevent loss are subject to a reasonableness standard applied in light of the original contractual duties.

B. A failure to mitigate damages prevents the nonbreaching party from recovering any damages. - CORRECT

Regarding consideration substitutes, which of the following statements is FALSE? A. A promise to contribute to a charity is enforceable even though the charity has not relied on the promise. B. A promise that is not supported by consideration cannot be enforced. C. A promise to pay for benefits that is motivated by a moral obligation generally does not constitute bargained-for consideration. D. A finding by a court of a contract-implied in law may result in an award of damages based on the fair market value of the benefit conferred by the plaintiff.

B. A promise that is not supported by consideration cannot be enforced. - CORRECT

Which of the following does NOT make an offer irrevocable? A. Payment of consideration to keep the offer open B. A writing signed by the offeror containing a promise not to revoke an offer to sell land C. Commencement of performance by an offeree in response to a unilateral offer D. Reasonable detrimental reliance by an offeree on the offer

B. A writing signed by the offeror containing a promise not to revoke an offer to sell land - CORRECT

An express warranty may be based on all but which of the following? A. A description of the goods by the seller B. An opinion about the goods offered by the seller C. A model of the goods provided by the seller D. A sample of the goods supplied by the seller

B. An opinion about the goods offered by the seller - CORRECT

FILL IN THE BLANK. An improper threat that deprives a party from making a meaningful choice to contract is _____________________. A. Misrepresentation B. Duress C. Undue influence D. Unconscionability

B. Duress - CORRECT

Which of the following third party beneficiaries can NOT enforce a contract entered into by other parties? A. Intended B. Incidental C. Creditor D. Donee

B. Incidental - CORRECT

Regarding modification of a contract for the sale of goods, which of the following statements is FALSE? A. The pre-existing duty rule does not apply. B. Past consideration constitutes consideration. C. A contract modification requires only good faith. D. A contract modification is binding without new consideration.

B. Past consideration constitutes consideration. - CORRECT

Which of the following types of damages is designed to put a party in the position it would have been in if a contract had never existed? A. Expectation damages B. Reliance damages C. Restitution damages D. Liquidated damages

B. Reliance damages - CORRECT

Regarding damages in a contract action, which of the following is FALSE? A. The typical remedy in a contract action is money damages. B. Reliance damages are the normal way in which to calculate damages. C. The goal of expectation damages is to put a party in the same economic position that it would have been in had the contract been performed as promised. D. Expectation damages are measured by comparing the value of the performance without the breach to the value of the performance with the breach.

B. Reliance damages are the normal way in which to calculate damages. - CORRECT (expectation damages are the normal way)

Regarding the implied warranty of merchantability, which of the following is TRUE? A. This warranty applies to any seller of goods. B. The goods are warranted to be fit for ordinary commercial purposes. C. This warranty cannot be disclaimed. D. This warranty shifts the risk to the buyer of the goods if the buyer is a merchant.

B. The goods are warranted to be fit for ordinary commercial purposes. - CORRECT

The mailbox rule applies in which of the following situations? A. The offeree sends an acceptance to an offer that is subject to an option contract. B. The offeree sends an acceptance and the acceptance never arrives. C. The offeree sends a counteroffer and then an acceptance; the offeror receives the acceptance first. D. The offeree sends a rejection and then an acceptance; the offeror receives the acceptance first.

B. The offeree sends an acceptance and the acceptance never arrives. - CORRECT

FILL IN THE BLANKS. When a buyer refuses to purchase an item despite being contractually obligated to do so, a volume seller (i.e., a seller who regularly sells the contracted-for item) is entitled to recover ___________________________ even though the seller mitigated damages by selling the item at the contract price to another buyer. A. Its cost for the item B. The profit that the seller would have made on the sale to the contract buyer C. The full contract price of the item D. The fair market value of the item

B. The profit that the seller would have made on the sale to the contract buyer - CORRECT

FILL IN THE BLANKS. For frustration of purpose to serve as an excuse for performance, an event must occur that ____________________ the reason for the contract. The event ____________________ performance of the contract impossible. A. Modifies, does not make B. Undermines, does not make C. Modifies, makes D. Undermines, makes

B. Undermines, does not make - CORRECT

When must a contract that is modified satisfy the Statute of Frauds? A. Whenever the original contract was also subject to the Statute of Frauds B. Whenever the contract as modified is subject to the Statute of Frauds C. Only when the original contract was subject to the Statute of Frauds and the contract as modified is subject to the Statute of Frauds D. Whenever either the original contract was subject to the Statute of Fraud or the contract as modified is subject to the Statute of Frauds

B. Whenever the contract as modified is subject to the Statute of Frauds - CORRECT

FILL IN THE BLANKS. For the parol evidence rule to apply, there must be a(n) __________________ agreement and a(n) ________________ written or oral statement about the agreement. A. Written, subsequent B. Written, earlier C. Oral or written, subsequent D. Oral or written, earlier

B. Written, earlier - CORRECT

FILL IN THE BLANKS: With regard to the offeree, an offer must generally be directed to _____, and must _____. A. a specific person, induce the offeree to accept it B. a specific person, create a power of acceptance in the offeree C. the public at large, induce the offeree to accept it D. the public at large, create a power of acceptance in the offeree

B. a specific person, create a power of acceptance in the offeree - ANSWER

FILL IN THE BLANKS. When a party clearly and unequivocally anticipatorily repudiates its contractual obligations, the other party ________ treat the repudiation as a breach of contract and sue ____________________ for damages. A. may, after making a demand for performance B. may, immediately C. must, after making a demand for performance D. must, immediately

B. may, immediately - CORRECT

FILL IN THE BLANKS. A contract between a minor and an adult may be voided by the _________. If the contract involves necessities furnished to the minor, the minor is required to pay for them at their ________________. A. minor, contract price B. minor, fair value C. minor or adult, contract price D. minor or adult, fair value

B. minor, fair value - CORRECT

4. FILL IN THE BLANKS. Generally, if multiple assignments of the same rights are made ___________________ consideration, the _________________ assignee enjoys the assigned rights. A. without, first B. without, last C. with or without, first D. with or without, last

B. without, last - CORRECT