BLAW EXAM 2

Courts will not rescind contracts for mistakes related to... (READ ENTIRE OTHER SIDE)

1. A Prediction Error - The mistake must be of a fact, not "guessing" about something in the future. A contract involving an incorrect prediction will be enforceable. 2. Mistakes of Value (Quality) - Mistake in judgment as to the fair market value, future value, or quality of an item by one of the parties is not voidable. If the other party did not know the other party was mistaken, the contract is enforceable. For instance, Therese finds paintings in her grandmother's attic and offers to sell them to a thrift shop for $20 each. Therese later reads in the news that Eric, the owner of the thrift shop, sold a rare painting for $100,000 after one of his regular customers told him to have it appraised. Therese sues Eric for $100,000. Therese's mistake as to the value of the painting does not allow her to rescind the contract. 2. Conscious Uncertainty - One of the parties knows he or she is taking on a risk, and realizes there is some uncertainty about the subject matter of the contract. For Example: If Kathleen buys a house sight-unseen without an inspection, Kathleen cannot claim mistake later and seek to rescind the contract. Kathleen knows she is taking a risk buying a house without seeing it and without hiring an expert to inspect the house.

How an offer can be terminated (READ THE OTHER SIDE)

1. By Action of the Parties: Revocation - The offeror can revoke the offer before the offeree accepts. Rejection - The offer is terminated when the offeree rejects the offer. This includes counteroffers. Suppose Lindsay states she will buy Lorenzo's Maserati for $10,000, and Lorenzo responds by saying, "No, you can buy my Maserati for $95,000." Lorenzo has rejected Lindsay's offer, and he has made a new offer to Lindsay. 2. Termination by Law - An offer is terminated by law due to lapse of time, destruction of the subject matter of the contract, death or incompetence of the parties, and illegality of the contract (i.e., if the basis of the contract has become illegal). Example: If Lorenzo offers to sell his Maserati for $95,000 to Lindsay, she cannot return to Lorenzo five years later and try to force Lorenzo to sell his Maserati five years later. It has been too long for that offer to be enforceable. Also, if the car is destroyed in a wreck, the law terminates that offer. Finally, if instead of a car the item for sale is an animal and the law changes to protect that animal from private ownership, the offer is terminated by law.

Laws that provide for alternatives to the general requirements for acceptance

1. Silence As Acceptance - in some cases silence can be considered to be acceptance and the offeree has a duty to speak to reject the offer and to deny acceptance. Silence can be acceptance when: - the offeree takes the benefits of offered goods or services and should have known payment is expected. - the parties have had prior dealings. 2. Unilateral Contracts - With a unilateral contract, one party makes an offer for which the other party must accept by action, not words. As a result, the required action is the method of acceptance. - Example: Barry tells Olivia, his neighbor's daughter, that he will pay her $50 if she pulls weeds and trims the bushes in his yard. When Olivia comes to Barry's house and begins the work, she has accepted his offer with her actions. 3. Clickwrap and Browsewrap Agreements - Clicking on an "I agree" button is the method of acceptance for a clickwrap agreement. The user has accepted the terms and is bound by them, even if he or she has not read the information. - Browsewrap terms exists when a party posts terms on a website or includes a hyperlink in other information without requiring users to click on a button or complete any other action. Courts can choose to enforce these terms when the party gives users reasonable notice and reasonable access to those terms.

The Two Elements of Consideration in A Contract

1. Value - A legal benefit or detriment of sufficient, measurable value promised by each party. - A promise to do something that one has no prior duty to do. - The performance of an action that one is otherwise not obligated to do. - Forbearance is the refraining from an action that one has a legal right to do. If a parent pays his adult child to quit smoking, that is forbearance and is consideration. The adult child has a right to smoke, and giving up that right is valid consideration for the contract. 2. Bargained-For Exchange - Each party negotiates and agrees to give and take something of comparable value.

Which act or statement is a valid offer? A detailed advertisement A price list/quote A typical advertisement

A detailed advertisement

occurs when one party fails to perform his or her contractual obligations in a way that harms the non-breaching party. In this case, the breaching party did not perform to the level of substantial performance, meaning the performance was non-existent or very deficient

A material breach

when one of the parties fails to complete a minor part of the contract. In these cases, the contract is not discharged, or ended. But the other party can sue the breaching party for any damages caused by the breach.

A minor (immaterial) breach

Which statement is true about the ability of minors to enter into contracts? A minor may enter into a contract but must ratify it within one year of the date of the contract. A minor may enter into a contract only if the minor has an adult co-signer. A minor may enter into any contract an adult can, except for contracts that are expressly prohibited for minors. A minor cannot legally enter into contracts.

A minor may enter into any contract an adult can, except for contracts that are expressly prohibited for minors

What conditions must be met for an offer to be legally accepted? Choose 2 answers. A. It may only be accepted by the intended offeree or the offeree's agent. B. Acceptance must be communicated in words, either written or oral. C. The offer must be accepted within 24 hours of communication. D. Acceptance must be unequivocal with no requests for changes in the offer.

A. It may only be accepted by the intended offeree or the offeree's agent. D. Acceptance must be unequivocal with no requests for changes in the offer.

The types of acts or statements that are usually not offers:

An Invitation to Bargain or Negotiate Price Quotes Letter of Intent - This letter states what the parties are considering, and does not create a legal obligation. Advertisements - Ads are generally not offers, but instead are requests for someone to make an offer. A very detailed advertisement is an exception, and could be considered an offer. Auctions - Auctions are considered requests for offers. In some auctions, the bidding must meet or exceed a certain bid price to complete the sale.

a type of material breach. Happens when a party repudiates a contract, he or she communicates through actions or words that he or she will not perform contractual obligations.

Anticipatory repudiation

Owen offers to sell his motorcycle to Julian for $5,000. After he makes the offer, Owen has second thoughts. Owen can revoke the offer to sell his motorcycle to Julian even after Julian has accepted but before Julian has delivered the money to Owen. at no time, because offers to sell merchandise are irrevocable. anytime, whether or not Julian has accepted the offer. as long as Julian has not yet accepted the offer.

As long as Julian has not yet accepted the offer.

Huseyin and Ashish are negotiating the details of a new garage that Ashish plans to build on Huseyin's property. They agree on the building specs, the delivery date, and a price of $25,000. Ashish draws up the contract and sends it to Huseyin to sign. Huseyin reviews the contract and notices the price is listed as $2,500 instead of $25,000. Elated at the unbelievably low price, Huseyin quickly signs the contract and sends it back to Ashish, who signs it as well. If Ashish later tries to rescind the contract due to the mistaken price: Ashish will be successful, because the parties made a mutual mistake. Ashish will not be successful, because a unilateral mistake is not a basis to rescind a contract. Ashish will be successful, because it is a mathematical mistake that Huseyin was aware of.

Ashish will be successful, because the parties made a mutual mistake.

What legal limitations are imposed on parties to assignments and delegations? Choose 3 answers. Contracts that are for a service that depends on a particular skill or talent may not be delegated. The assignee obtains only the rights that the assignor had under the contract. A contract cannot prevent an assignment of the right to receive funds. A valid delegation of duties relieves the delegator from the obligation to perform.

Contracts that are for a service that depends on a particular skill or talent may not be delegated. The assignee obtains only the rights that the assignor had under the contract. A contract cannot prevent an assignment of the right to receive funds.

occurs when the parties to a contract have no more duties. Occurs in three ways: Full performance - Performance can be strict performance or substantial performance. ____________ by agreement - the parties agree to end the contract. The court ___________ one or both of the parties by law.

Discharge

Which of the following is a valid offer? Eric offers to buy Arun's house for $290,000. Arun says, "No, but I will sell it to you for $300,000." Eric seems to be upset, so Arun says he will sell it for $290,000. Eric offers to buy Arun's house for $775,000 with no contingencies because Eric's lease ends in two months. Arun wants to think about it and six days later has not yet responded. Arun tells Eric he will sell one of his houses for $250,000 by the end of the summer. Arun distributes flyers at work stating he wants to sell his house, listing the address and the asking price.

Eric offers to buy Arun's house for $775,000 with no contingencies because Eric's lease ends in two months. Arun wants to think about it and six days later has not yet responded.

Quon decides to sell his antique roadster, so he places an ad on Craigslist. He lists the roadster as a 1957 Mercedes Benz 300SL Roadster, describes it as in good working condition, and states that no reasonable price will be refused. Fern responds to the ad and offers to pay $25,000 to Quon for the car, which Quon agrees to. In this scenario, who is the offeror? Quon is the offeror. Fern is the offeror. Quon was the original offeror, but Fern becomes the offeror when she offers $25,000. Neither party is the offeror because there is no agreement to specific terms.

Fern is the offeror.

Marie and Molly enter into a written contract to sell Marie's home to Molly. At the time the contract is executed, Marie tells Molly that for the last six months she has been sharing the home with a family of extraterrestrial beings. Marie states that she has asked the extraterrestrials to move out, but they won't; therefore, she is selling the family home to get rid of them and is willing to sell the home to Molly for well below market price. After the sale of the home is complete, Marie's children challenge the sales contract on the grounds that Marie did not have the mental capacity necessary to enter into a contract, even though Marie has not been declared incompetent by the courts. The contract between Marie and Molly can be rescinded: under no circumstances, because Marie was not adjudicated insane before she signed the contract. by either Marie or Molly. if Marie's children can prove that Marie lacked the mental capacity to comprehend the nature, purpose, and consequences of the contract. only if Marie's children have Marie committed to a psychiatric care facility

If Marie's children can prove that Marie lacked the mental capacity to comprehend the nature, purpose, and consequences of the contract.

What rights does a third-party beneficiary to a contract hold in regard to that contract? The third party has no rights because the third party does not have privity of contract. If the third party is an intended beneficiary of the contract, the third party has the right to sue the promisor. If the third party is an incidental beneficiary, the third party has the right to become an intended beneficiary. The third party has all the rights of the primary parties to the contract.

If the third party is an intended beneficiary of the contract, the third party has the right to sue the promisor.

Isabel is 17 years old and wants to stop paying for the use of the local gym, but wishes to continue teaching classes. Her contract with the company includes terms regarding her employment and use of the facility. What must she do to properly disaffirm the contract? Isabel must disaffirm both the gym membership obligations and the employment terms in the contract. Isabel can choose to disaffirm the gym membership portion of the contract and retain the employment terms. Isabel must wait until she turns 18 to disaffirm the contract.

Isabel must disaffirm both the gym membership obligations and the employment terms in the contract.

Elvis agrees to provide guitar lessons to Angela's niece for three months for $600. Angela decides her niece really is not interested in guitar lessons, and assigns her rights under the contract to Jose, so Jose can use the lessons for his daughter. When Jose contacts Elvis to set up the first guitar lesson for his daughter: Jose cannot enforce the contract against Elvis because the contract is for personal services. Elvis will be obligated to provide guitar lessons to Jose's daughter because this is a valid assignment. Jose cannot enforce the contract against Elvis, because contracts are not assignable unless they contain a clause making them assignable. Elvis will be obligated to provide guitar lessons to both Jose's daughter and Angela's daughter.

Jose cannot enforce the contract against Elvis because the contract is for personal services.

The main requirements for a valid contract are:

Offer - made by the offeror Acceptance - made by the offeree Consideration - what each party gives up under the contract

What are the types of situations that may qualify as grounds for discharge due to impossibility? Choose 3 answers. The price of the subject matter of the contract more than doubles. The subject matter of the contract becomes illegal. The specific subject matter of the contract is destroyed. A party to a personal contract dies or becomes incapacitated.

The subject matter of the contract becomes illegal. The specific subject matter of the contract is destroyed. A party to a personal contract dies or becomes incapacitated.

What type of acceptance requires an affirmative action for the offeree to accept that offer? Unilateral contracts Offeree's silence in response to an offer The typical type of acceptance to an offer Browsewrap Agreements

Unilateral contracts

Sarah is shopping at Sylvia's thrift store, and notices that the inside of the store needs repainting. Sarah offers to paint the store for $400. Sylvia does not respond to Sarah's offer. Later that day, Sarah returns to the store with painting supplies in hand and begins painting the store. Sylvia watches Sarah painting. When Sarah is finished, she demands payment of $400 from Sylvia. Will Sylvia have to pay Sarah for painting the store? No, Sylvia will not have to pay Sarah for painting the store because Sarah did not verbally agree to the contract. Yes, Sylvia will have to pay Sarah for painting the store, even though she did not verbally agree to the contract. No, Sylvia will not have to pay Sarah for painting the store because silence can never be an acceptance of an offer. Yes, Sylvia will have to pay Sarah for painting the store because silence is always an acceptance of an offer.

Yes, Sylvia will have to pay Sarah for painting the store, even though she did not verbally agree to the contract.

You haven't used your professional camera in a while, so you offer to sell it to your friend who just started photography classes at the local college. Later in the day before your friend responds, you start having second thoughts. You call your friend and tell her that you changed your mind, and the camera is not for sale after all. What do you think would happen if your friend tried to enforce your offer and make you sell her the camera? Your friend cannot force you to sell her the camera because you let her know you changed your mind before she accepted the offer. Your friend can force you to sell her the camera only if your offer to sell was in writing. Your friend can force you to sell her the camera because you made a valid offer to her. Your friend cannot force you to sell the camera whether she had already accepted the offer or not.

Your friend cannot force you to sell her the camera because you let her know you changed your mind before she accepted the offer.

A transfer of contractual rights to a third party

assignment

Jayden is restoring a house for Jane when Hurricane Emma hits and washes out the foundations of the house. The cost for restoration has just increased by 400%. Under what principle may Jayden's obligations be excused? commercial impracticality impossibility statute of limitations insurable interest

commercial impracticality

Transfer of duties (value to be be bargained for exchange. Example: paying a loan) to a third party.

delegation (BTW, the delegatee still owes duty- the value- to the original party in the contract, and is still liable for performance)

Forcing a party to agree to the terms of a contract through the use of threats or blackmail is called adhesion. usury. undue influence. duress.

duress.

In January, Victor contracted with Delrita to cater a Cinco de Mayo (May 5th raised to the th power) party for 500 of his closest friends. Neither of them anticipated that their entire state would be under stay-at-home orders on May 5 due to a global pandemic. Under what principle may Victor cancel his contract with Delrita? frustration of purpose statute of limitations impossibility of performance time is of the essence

frustration of purpose

What is the primary purpose of the Statute of Frauds? defining who may testify in a dispute over a contract preventing fraudulent behavior in the formation of contracts ensuring that all details of a contract are well defined requiring written evidence of agreements concerning important transactions

requiring written evidence of agreements concerning important transactions

What are the elements of consideration? Choose 2 answer choices. something of value from each party past consideration an exchange to which the parties agree a preexisting duty

something of value from each party an exchange to which the parties agree

What is the term for when a party to a contract performs his duties exactly according to the terms of the contract? strict performance specific performance substantial performance perfect performance

strict performance

Capacity

the legal ability to enter into a contract. Society does not want to hold vulnerable parties to obligations they were not actually able to make. When one of the parties has a lack of __________, the contract can be void or voidable. - Minors - a minor can enter into a contract, unless the particular activity or subject matter of the contract is prohibited by law. Contracts with minors are voidable by the minor, but not by the non-minor party. This means the minor has the option to choose to cancel the contract or to continue with it. If the other party is not a minor, that other party is bound by the minor's decision.

If Ramona changes her will at age 88 to leave the bulk of her fortune to her home health care nurse instead of her children, what factor will the courts consider in judging whether or not her will is valid? duress undue influence fraudulent misrepresentation mistake

undue influence

Alvin's Department Store agrees over the telephone to purchase $1,000 worth of blankets from Blanket Emporium. Blanket Emporium sends an invoice for the blankets before shipping them, and Alvin's Department Store refuses to go forward with the deal, saying their deal is not a valid contract. The oral agreement between Blanket Emporium and Alvin's Department Store for the purchase of $1,000 worth of blankets: does not violate the statute of frauds because it is not for the sale of real estate. does not violate the statute of frauds because it can be completed within one year. violates the statute of frauds, and is, therefore, unenforceable. does not violate the statute of frauds, and is, therefore, enforceable.

violates the statute of frauds, and is, therefore, unenforceable.

When are covenants [agreements] not to compete in employment contracts considered to be against public policy? Choose 2 answers. when the business is mostly online when the specified time of restraint is excessive when the business is mostly a service business when the geographical restriction is too broad

when the specified time of restraint is excessive when the geographical restriction is too broad

Components that seem like considerations, but are not

1. Preexisting Duty - In most cases, a promise to do something one must do is not consideration such as requirements imposed by laws or previous contracts - For example, a neighbor could not say to you he will agree to keep his violent dog in the house or otherwise restrained if you give him $1,000 if local ordinances require that anyway. 2. Past Consideration - An offer for something given in the past as the basis for a future contract is not valid consideration. - For Example: Pat is a contractor who sometimes hires Sophie to do excavation work. Pat is having trouble selling some old equipment and decides to give it to Sophie. A few months later, Pat needs some excavation work and asks Sophie to do the work. Sophie asks for money, but Pat says, "I gave you some old equipment so you should do this work for no charge." The equipment Pat had given to Sophie would be past consideration and would not be consideration for the new deal. 3. Adequacy of Consideration - In general, courts do not question the value of the consideration exchanged. In most cases, courts will let the parties decide what the property or services are worth, and will even allow some parties to make an imprudent deal. - For Example: Suppose Anna's father had a Volkswagen Beetle when she was a little girl. Anna happens to see a Beetle that is the same style and color in a parking lot and waits for the owner, Julie, to return to ask Julie if she will sell the car. Julie is not interested in selling the car, but Anna offers double the market price and Julie agrees to the deal. Later, Anna decides she is getting a bad deal and wants to walk away from the contract. Julie sues Anna. The court can rule that the consideration was adequate because of the sentimental aspect. The parties decided what that car was worth and are now bound by their contract.

How may an offer be terminated? Choose 3 answers. A. The offeree may make a counteroffer. B. An offeror may terminate an offer by revocation. C. A reasonable amount of time has passed. D. A competitor to the offeror can issue a better offer for the same product or service.

A. The offeree may make a counteroffer. B. An offeror may terminate an offer by revocation. C. A reasonable amount of time has passed.

How may a revocable offer effectively be revoked? Choose 2 answers. A. The offeror may take an action that contradicts the offer and make that known to the offeree. B. The offeror may withdraw the offer with a clear expression. C. The offeror may convert the offer to an option contract. D. The offeree may reject the offer with a clear expression.

A. The offeror may take an action that contradicts the offer and make that known to the offeree. B. The offeror may withdraw the offer with a clear expression.

What elements are required for an offer to be effective under the common law? A. The offeror must intend to be bound by the offer. B. The offer must be communicated to the offeree. C. The offer must be irrevocable for a set period of time to allow acceptance. D. The terms of the offer must be reasonably definite so that all parties understand them.

A. The offeror must intend to be bound by the offer. B. The offer must be communicated to the offeree. D. The terms of the offer must be reasonably definite so that all parties understand them.

If two parties have an on-going oral agreement that that one will ship and the other will accept 50 pounds of produce each week unless the buyer informs the seller one week before not to ship the next order, then the buyer's failure to speak up and tell the shipper not to send the produce: A. qualifies as acceptance of that week's delivery offer. B. cannot be held against them as acceptance of an offer. C. does not qualify as a valid acceptance of the offer. D. fails as an acceptance for lack of timeliness.

A. qualifies as acceptance of that week's delivery offer.

Which of the following words, if added to an offer, will cause the offer to fail for definiteness? (Select two) A. Friday, as in "I will sell you my boat Friday for $1000" B. In the future, as in "I will sell you my boat sometime in the future for $1000" C. Tomorrow, as in "I will sell you my boat tomorrow for $1000" D. Might, as in "I might want to sell you my boat for $1000"

B. In the future, as in "I will sell you my boat sometime in the future for $1000" D. Might, as in "I might want to sell you my boat for $1000"

Which mistake is likely to be voidable? Unilateral mistake A prediction mistake Bilateral mistake Mistakes of Value

Bilateral mistake

when one party to a contract fails to perform a contractual duty. When this happens, the other party is discharged from contractual obligations and excused from performance. The other party can also sue for damages caused by this action.

Breach of Contract

Which of these contracts would be enforceable, despite the existence of a mistake? Choose 2 answer choices. Christopher agrees to sell his washer and dryer to Ella. He bought them at a yard sale and the sellers told him they were new and unused. The next week Christopher sells the washer and dyer to Ella. He tells Ella the previous sellers told him the washer and dryer were new and unused, and Christopher had never used them either. Ella believes they are new as well and, as a result, pays a higher price. When Ella encounters problems, a friend shows her parts that are worn and have been used. Christopher agrees to sell his washer and dryer to Ella. Ella does not ask Christopher about the washer and dryer. Ella thinks the dryer uses gas instead of electricity, but she is incorrect. Christopher agrees to sell his washer and dryer to Ella. Christopher overhears Ella telling her friend that she is happy she is getting such a great deal on a new unused washer and dryer, although Christopher knows he has used them for a year, but he does not correct her. Christopher agrees to sell his washer and dryer to Ella in "as is" condition. Ella thinks the set is in excellent condition and is willing to take a chance on buying it. Neither works after a few weeks of use.

Christopher agrees to sell his washer and dryer to Ella. Ella does not ask Christopher about the washer and dryer. Ella thinks the dryer uses gas instead of electricity, but she is incorrect. Christopher agrees to sell his washer and dryer to Ella. Christopher overhears Ella telling her friend that she is happy she is getting such a great deal on a new unused washer and dryer, although Christopher knows he has used them for a year, but he does not correct her.

Which of the following statements is an offer? There is no way I could sell my house for less than $400,000. I am thinking about selling my house for $400,000. I will sell you my house for $400,000. House for sale! Asking $400,000.

I will sell you my house for $400,000.

Example For Material Breach and Imperial Breach (READ OTHER SIDE)

For example, if a builder fails to seed the lawn and plant landscaping after a house is built, the builder has still substantially performed the contractual obligations. This would be an immaterial breach of the contract. If the builder failed to include a basement when building the house, however, that would be a material breach. In that case, substantial performance has not occurred. With any breach, the non-breaching party can sue for damages, but with a material breach the contract is discharged (ended). The reason for this distinction is that courts want to encourage contracts with minor issues to proceed, but when the parties are encountering major issues the contract should end.

Midwest Life Insurance sells a life insurance policy to Thiago. Under the terms of the contract between Thiago and Midwest Life, Thiago will pay $75 per month for the policy, and, upon Thiago's death, Midwest Life will pay $100,000 to Laurelei. Four years later, Thiago dies, and Midwest refuses to pay under the terms of the policy. The party entitled to sue Midwest for its failure to honor the terms of the contract is: Laurelei, because she is a donee beneficiary. Laurelei, because she is an incidental beneficiary. Laurelei, because she is a creditor beneficiary. Thiago's executor, because the only party to the contract with Midwest is Thiago, and Thiago is deceased.

Laurelei, because she is a donee beneficiary.

Selma wants to buy Matilda's house. Selma has been admiring the house for a long time and has asked Matilda repeatedly to sell the house to her, but Matilda has always refused. Finally, Selma tells Matilda that if Matilda does not sell Selma the house, Selma will kill Matilda's daughter. Afraid for her daughter's life, Matilda signs the contract to sell the house to Selma. If Matilda later tries to rescind the contract: Matilda may rescind the contract on the grounds that she signed the contract under duress. Matilda may not rescind the contract because it has all the elements of a valid contract. Matilda may rescind the contract on the grounds of undue influence. Matilda may rescind the contract on the grounds of unconscionability.

Matilda may rescind the contract on the grounds that she signed the contract under duress.

You go out drinking and playing cards with your buddies. After you have consumed a huge amount of alcohol, you agree to sell your motorcycle to your buddy. The next morning, after you sober up, your buddy tells you what you did. Do you think your buddy can legally hold you to the deal to sell him your motorcycle? No, he can't, if you were so intoxicated that you could not form the mental capacity to enter into a contract, whether or not your buddy knew that you were intoxicated. No, he can't, if you were so intoxicated that you could not form the mental capacity to enter into a contract, and your buddy knew you were intoxicated. Yes, he can, even though you were so intoxicated that you could not form the mental capacity to enter into a contract, and your buddy knew you were intoxicated. Yes, he can, even though you were so intoxicated that you could not form the mental capacity to enter into a contract, whether or not your buddy knew you were intoxicated.

No, he can't, if you were so intoxicated that you could not form the mental capacity to enter into a contract, and your buddy knew you were intoxicated.

Which situation would be considered sufficient consideration for a contract to exist? Bethany is remodeling a kitchen for Tonya and the two have signed a valid contract. After Bethany begins the work, she tells Tonya she will finish the work within a reasonable time if Tonya pays her a bonus. Pam agrees to pay Derek $500 if he does not sit next to her in class anymore. Alice's grandson quit smoking a month ago, and today Alice promises to give him $5,000 because he quit smoking. Alice promises to give her granddaughter $10,000.

Pam agrees to pay Derek $500 if he does not sit next to her in class anymore.

Korbyn enters into a contract with Peyton to sell Peyton a 1956 roadster (a vehicle). The contract has a condition precedent that the roadster will pass inspection by an independent appraiser, verifying that the roadster contains all original parts and is in good working order. This contract provision means that: if the appraisal is not satisfactory to both parties, the contract price will be adjusted accordingly. Peyton is not required to perform under the contract until the appraisal is complete and the roadster passes inspection. Peyton must have the appraisal completed within thirty days of performing the contract and provide the results to Korbyn. Peyton must pay for the roadster at the time of contracting, and Korbyn will then order the appraisal.

Peyton is not required to perform under the contract until the appraisal is complete and the roadster passes inspection.

What factors are used to judge if consideration is adequate to ensure a fair bargain? Choose 2 answers. Consideration must be a promise to pay money. Items or promises exchanged must be of nearly equal value. Promises must be made with voluntary consent. Promises exchanged may not be a preexisting duty.

Promises must be made with voluntary consent

Ruby, a seventeen-year-old, purchases a car from Smitz Used Auto Sales and agrees to pay for it over a period of twenty-four months. Ruby makes the payments for four months but then decides the car payment is too much for her limited budget. Ruby tells Smitz that she wants to stop making payments and that she wants out of the contract completely. The contract between Ruby and Smitz can be canceled by Smitz, because Ruby is a minor, but Smitz must allow Ruby to keep the car. Smitz or Ruby, because Ruby is a minor, and Ruby may keep the car. Ruby, because she is a minor, but Ruby must return the car. Ruby, because she is a minor, and Ruby may keep the car.

Ruby, because she is a minor, but Ruby must return the car.

requires the parties to perform exactly as agreed to in the contract. Any deviation from this standard is a breach and will discharge the other party's obligation to perform. Courts rarely hold parties to this standard unless the contract expressly requires it and the requirement is reasonable. Some products or components must meet precise standards for health or safety reasons or they cannot be used. For example, certain components for delicate machinery might require precision without any tolerance.

Strict Performance

involves minor breaches and occurs when one party fulfills the contractual requirements at a sufficient level to warrant payment, and is not considered to be a full breach of the contract. In general, if the party performs most, but not all, of the obligation, the other party must pay the amount due according to the contract, less the value of the defects. INVOLVES IMMATERIAL BREACHES. Requirements: The party acted in good faith. Intentional failure to comply with the contract is breach, not substantial performance. The performance did not vary greatly from the performance required in the contract. The other party received sufficient benefit. The imperfect performance can be remedied with monetary compensation. The performance must create substantially the same benefits as those promised in the contract. In other words, the other party can use the item for its intended purpose.

Substantial performance

The weekly Kroger advertisement states that five-pound chubs of ground chuck are available for eighty-nine cents per pound. Arlene sees the advertisement; she realizes that ground chuck has not been priced this low in quite some time, so she hurries to the store to purchase some. Arlene loads seven chubs of ground chuck in her shopping cart. When she goes to the checkout to pay, however, the cashier informs Arlene that the price in the advertisement is a typo and that the correct price is $1.89 per pound. Arlene insists that the store must honor the price listed in the advertisement, because it is an offer that she has just accepted. The cashier calls the store manager for a decision. The store manager will likely explain to Arlene that advertisements are not offers, but merely a request for offers. that the advertisement is a valid offer because it is in writing. that the advertisement is a valid offer, and the store must honor the price in the advertisement. that the advertisement is a valid offer because its terms are definite.

That advertisements are not offers, but merely a request for offers.

What is the test for whether a contract is governed by the Statute of Frauds because of the one-year rule? The contract must be unlikely to be performable in less than one year. The contract must be objectively impossible to perform within one year.

The contract must be objectively impossible to perform within one year.

Disaffirmance (READ MOST OF OTHER SIDE)

To void the contract, the minor must show his or her intent to not be bound through disaffirmance. To disaffirm, the minor must accomplish certain acts: - The minor must express his or her intent by words or actions. - The minor must give notice to the other party. - The minor must disaffirm while a minor or within a reasonable period of time during minority or after reaching majority age. - The minor must disaffirm the entire contract. In some jurisdictions, a minor could be liable to the other party for damages from disaffirmance. Note that only the minor can disaffirm the contract. If the other party is not a minor, that non-minor party is bound to the contract and cannot disaffirm. Public policy will not allow minors to disaffirm all contracts; it is important that minors be bound by some contracts. Exceptions to the rule that contracts with minors are voidable include: - Contracts for Necessities - Minors must pay for the value they receive for necessities, such as housing, food, and medical care. - Misrepresentation of Age - Some jurisdictions hold minors accountable for contracts when they lie about their age. - Marriage contracts - Military enlistment contracts

You agree to paint your neighbor's house for a certain price. You get ninety percent of the painting done and then have to leave town for your real job. Your neighbor is pretty mad because you didn't finish the job, and says she is not going to pay you a penny! What do you think will happen when you try to collect payment from your neighbor for painting her house? You will probably receive the price you agreed on, less the amount it will take for her to have the painting finished. You will probably receive the cost of your materials. You will probably receive the full contract price. You will probably receive nothing because you did not finish the job.

You will probably receive the price you agreed on, less the amount it will take for her to have the painting finished.

Harold offers to sell Emma his farmland in Bryson County. After discussing the sale at length in front of their friends Nicole and Jackson, Harold and Emma orally agree on a price of $120,000 for the land. The next day, Emma goes to the bank and withdraws $120,000 to pay Harold for the land. When Emma presents the $120,000 to Harold, Harold tells Emma he was just joking and does not wish to sell the land. Emma tries to enforce the deal, and Harold continues to refuse by saying that the deal was not in writing, and, therefore, it is unenforceable. The contract between Harold and Emma for the sale of the land: is enforceable because it complies with the statute of frauds. is not enforceable because it violates the statute of frauds. is not enforceable because of the theory of promissory estoppel. is enforceable, because there are witnesses to the deal.

is not enforceable because it violates the statute of frauds.

Mistake Of Fact

must be about a material fact. This means it must be a fact that a reasonable person would consider to be important for making a decision regarding entering into a contract. There are two types: - Unilateral Mistake: - One party is mistaken as to a material fact, and the other party is not mistaken. Usually not voided; the courts usually hold the contract enforceable. (EXTRA - READ: Exceptions in the case of a mistake of fact that could cause the contract to be unenforceable include: a. The other party to the contract knows or should have known that the mistake was made. b. The error was due to a substantial mathematical mistake and was made inadvertently and without extreme negligence. c. Enforcing the contract would be unconscionable, extremely unjust, or harsh). - Bilateral Mistake (Mutual Mistake) - Both parties have a misunderstanding concerning a basic assumption upon which the contract was made.

Ratification

the act of agreeing to being bound by a legal obligation that was not enforceable until the party ratifies or agrees to that obligation. Once minors reach the age of majority, they can ratify a contract by acting expressly or impliedly. - Express Ratification - The minor affirmatively states either verbally or in writing that he or she intends to be bound by the contract. - Implied Ratification - The minor's actions indicate his or her intent to be bound by the contract.

In an auction, the bidder is: the offeror. counter-offeror. the offeree. seller.

the offeror.

Emancipation

the termination of minority status when a parent or legal guardian relinquishes the legal right to exercise control over a minor child, or when a court terminates that right. Once a minor becomes emancipated, he or she is able to enter into legally binding contracts.