BLAW 3391 Pleasant Final

Which of the following is not an element necessary to show a mutual mistake in a contract?

The mistake was so serious that the contract is unconscionable, that is, so unreasonable that it is outrageous

Preexisting duty

The obligation to perform acts already required is known as..?

Which of the following is not a possible defense to a contract?

The offeree lost his job and can't pay anymore.

Under what circumstance could lack of genuine assent apply to a contract?

The offeror engages in fraud and misrepresentation in concern to the contract

The test for compliance with the one-year rule considers which of the following?

The possibility of completing the contract within one year

Sources of Contract law

1. Article 2 of the UCC 2. Common Law 3. Restatement

Elements of the contract

1. Consideration 2. Contractual capacity 3. the agreement 4. Legal object

Four types of formal contracts

1. Contracts under seal 2. recognizance 3. letters of credit 4. negotiable instruments

Contracts may be created to bind?

1. Sale of merchandise or services 2. Employment 3. The transfer of ownership or land or personal property such as a car.

executory contract

A contract in which not all duties have been performed.

Voidable contract

A contract in which one or both parties has the ability to either withdraw from or enforce the contract

Executed contract

A contract whose terms have been fully performed

Contract

A legally enforceable agreement that is created when two or more competent parties agree to perform or to avoid performing certain acts that they have a legal right to do and that meet certain legal requirements

_______________ seeks to blend other agreements either into the final agreement or into something explicitly identified as being outside the final agreement.

A merger clause

Novation

The significant change made to a contract when all parties to a contract agree to this change

Common law:

The source of contract law regarding the sale of fixed assets services or intangibles

The UCC defines a contract as

The total legal obligation which results from the parties agreement as affected by the uniform commercial code or any other applicants rule

Which of the following is an exception to the preexisting duty rule?

Unforeseen circumstances

Impossibility of performance

Unforeseen circumstances: may make a contract impossible to fulfill. This voids the contract and parties are discharged form obligations. personal service contracts: Death or illness voids personal service contracts that require a special skill or talent.

Legal object

which means that the subject matter does not violate the law or public policy

Undue influence

A person has the power to control the actions of another because of a special or confidential relationship with that person

Gratuitous promise

A person who makes a promise without requiring some benefit in return has made a..?

Bilateral contract

A promise for a promise

Unilateral contract

A promise for a requested action

Barren Promises

A promise to do something that is already required by either law or by contract represents no additional sacrifice and is not valid consideration

Under the common law, which of the following qualifies an acceptance as a valid acceptance?

A valid acceptance requires all three of these elements.

The offer and acceptance together constitute the ___________, which is the first element of a contract.

Agreement

Which of the following types of agreements is not a type of agreement that is generally illegal in many states?

Agreements for the sale of a used product

If no means of communicating the acceptance is specified, what type of means of accepting is generally not acceptable?

All of these are generally acceptable ways to communicate an acceptance. Mail E-mail Fax Telephone

Substantial performance

All terms and conditions are executed with the exception of minor details.

Tender of performance

An offer to perform. evidence of a partys willingness to fulfill the terms of a contract.

Tender of goods

An offer to provide goods.

Implied contract

Arise from the conduct of the parties and not the words.

For a court to enforce a promise, who must offer consideration?

Both sides

Illusory promises

Consists of an indefinite open ended statement purporting to be an agreement

The agreement

Consists of an offer and acceptance by the parties involved.

Which of the following types of contracts does not fall within the statute of frauds?

Contracts for the sale of goods totaling less than $400

Which of the following types of contracts is required to be recorded in a written contract or memorandum?

Contracts for the sale of goods totaling more than $500

consideration

Each party to a contract must promise to give up something the exchange of promises:

One complication with contracts occurs when an assignor assigns two or more parties the same right, and confusion arises as to which party has the right to the contract. To solve this problem, the minority of states has adopted the __________, which states that the first assignee to give notice of assignment to the obligor is the party with rights to the contract.

English rule

In Re Zappos.com Inc., Customer data security Breach Litigation

In 2012 a hacker hacked into the zappos website in an effort to obtain person account information. After releasing news of the breach zappos faced many lawsuits from customers. Zaappos argued that it and its cutomers were in a bilateral agreement stating that arbitration must be used in the vent of a dispute between the parties. The customers argued that the agreement was not bilateral and was in fact unfairly unilateral. Therefore customers argued that they should not have to use arbitration and instead should be able to file their class action lawsuit against zappos. Issues: Is Zappos using a bilateral or unilateral contract, and does that mean that the customers have to use arbitration? Reason:• Due to the terms of service stating that Zappos can change the TOS at anytime it is illusory and unenforceable • The terms of service leave Zappos free to litigate or arbitrate wherever it sees fit, there is no mutuality of obligation. • A part cannot assent to terms of which it has no knowledge or constructive notice, because of this the party (Customer) cannot consent to the contract therefore they cannot be compelled to arbitrate.

negligent misrepresentation

when someone makes a statement they believe to be true

_________ is the possession of a mental or physical defect that prevents a natural person from being able to enter into a legally binding contract.

Incapacity

mistake

Is a belief that is not in accord with the facts mistakes relating to contracts may be concerned with the nature of the subject matter or the quality of the subject matter

Restatement:

Is a legal treatise from the second series of restatements of the law and seek to inform judges and lawyers about general principles of contract common law

Duress

Is the act of applying unlawful or improper pressure or influence to a person in order to gain his r her agreement to a contract

misrepresentation

Is the unintentional misstatement or nondisclosure of a material fact that results in inducing another to enter into an agreement to his or her loss

Suppose Joey and Mikey enter into a contract together. Joey says he will pay Mikey $100,000 to kill one of Joey's enemies. Both parties know this contract involves the undertaking of an illegal act. Under which element of a contract is this contract not enforceable?

Legal Object

Contractual capacity

Legal ability to enter into a contract

Fraud

The intentional misstatement or nondisclosure of a material fact made by one party in an attempt to influence the actions of another party is fraud. Also commonly referred to as fraudulent misrepresentation

The minor's right to disaffirm is designed to protect the minor from competent parties who might otherwise take advantage of him or her. But most states have determined that the minor should not have the right to disaffirm which of the following types of contracts?

Minors should not have the right to disaffirm all of these types of contracts

Which of the following elements is not necessarily required for a legally binding contract?

Money is exchanged

Valid tender

Must be made as specified in the contract. Tender of payment must be for the exact amount. tender of goods must be for the specific goods specified in the contract.

Valerie is an incidental beneficiary to a contract. One of the parties to the contract breaches the contract. Valerie wishes to sue. Whom can she sue to enforce the contract?

Neither of the two parties

Reinsenfeld & Co. v. The Network Group inc.; Builders square inc.; Kmart Corp.

Network was contracted by Builders square to sell or sublease closed Kmart. Network had a commission agreement with Reinsenfeld to sublease Kmart stores. Networks sole shareholder was convicted of fraud and was order to disgorge any commissions received from Builders square. Reinsenfeld sued for commissions not paid. ISsues: Under quasi-contract was Builders Square jointly liable for the commission owed to Reisenfeld? Reason:Under quasi-contract liability does not imply an amount of money promised to Reisnenfeld from Network. Builders Square is liable to pay for the services Reisenfeld provided to them.

Do mutual promises to marry require a writing?

No, because mutual promises to marry do not fall within the statute of frauds

On rare occasions, rescission is permitted for unilateral mistakes. Which of the following scenarios is an example of when rescission might be available for a unilateral mistake?

One party made a mistake about a material fact, and the other party had reason to know about the mis

Article 2 of the UCC:

Only applied to transactions in goods or other tangible personal property

Suppose you are a donee beneficiary, if you have problems with the contract, whom can you sue?

Only the person who was supposed to perform for you

Puffing

Puffing refers to generalities and is directed toward the five senses. Intentional concealment or intentional nondisclosure of material facts is just as fraudulent as making a false statement

Which of the following rights can be assigned?

Real property rights

Orville and Maxine Arnolds v. United companies lending corporation.

Searls came to the residence of Orville and Maxine Arnold, an elderly couple, and offered to arrange a loan for them. The lending company had the Arnolds sign a "acknowledgment and agreement to mediate or arbitrate" which stated that all legal controversies arising from the loan would be resolved through nonappealable , confidential arbitration, and that all damages would be direct damages, with no punitive damages available. issues: was the agreement void due to unconscionability Reason: The agreement was grossly unequal. Due to the relative position of the lender, a large corporation, and an unsophisticated consumer. In addition the terms of the agreement are unreaonably favorable to united lending. United lendings act or commissions could seriously damage the Arnolds. Because of these reasons the arbitration agreement between the Arnolds and United Lending is void for unconscionability.

Gary w. and Venita R. cruse v. Coldwell banker/Graben Real estate, inc

The Cruse family purchased a house from Harris, Coldwell Banker, and graben Real Estate. The Cruse's sued alleging defective workmanship in the construction of the house they have bought and fraudulent misrepresentations about the condition of the house. The cruses signed a contract to purchase the house from the Harrises. When they told the agent they wanted to hire an independent inspector the Harrises told them it was not necessary to do so because the house was well built. The cruses signed an "Acceptance inspection contract" which states that they had inspected the property or waived the right to do so and accepted it in "as-is" condition. issue: Was the contract signed under fraudulent misrepresentation?

In some states, courts consider the purpose of the licensing statute when determining the effect of the agreement. If a licensing statute is intended simply to generate revenue, then the contract of an unlicensed person is _________.

Valid

In which scenario is parol evidence permitted in court?

When contracts have been subsequently modified. When contracts are conditioned on orally agreed-on terms. When contracts are incomplete. When there are voidable or void contracts.

Which of the following exceptions to the parol evidence rule falls under the Uniform Commercial Code?

When it addresses prior dealings between the parties or usages of trade in the business they are in

Mailbox rule

Which provides that an acceptance is valid when the offeree places it in the mailbox.

Which of the following statements is false?

With intended beneficiaries, contracting parties did not intend to benefit the third party with their contract.

After a football game, Tyler and Austin want to enter into a contract together. Tyler is completely sober, but he knows Austin is very intoxicated and is so impaired that he is unable to understand the terms of the contract. If they enter into a contract, the contract would be ________.

voidable

Suppose Susie enters into a contract that she would give Mikhail her trailer on four acres of wooded backcountry if he agrees to supply her with $25,000 of illegal cocaine and heroin. If Mikhail wanted to prove with oral evidence that the contract was void or voidable, could he?

Yes, void or voidable contracts are an exception to the parol evidence rule

Unenforceable contract

a valid contract tat cant be enforced because some law prohibits it.

restraint of trade

agreements to suppress or eliminate competition which are illgal and unenforceable.

Tender of payment

an offer of money in payment of an obligation. Refusal of a tender of payment foes not cancel the debt.

Parol evidence

any supplementary evidence or conditions written or oral that the party wants to add to a written contract. The word "parol" means speech. The rule: any spoken or written words that are in conflict with that the written contract states cannot be introduced as evidence in a court of law. Purpose: lends stability and predictability and integrity to written contracts.

Agreements regarding marriage in which one party is gaining something other than a return on his or her promise to marry ____________________.

are within the statute of frauds and therefore must be in writing

Express contract

clearly set forth in either written or spoken words.

________________ restrict what an employee may do after leaving a company, and they often dictate where, when, and with whom an employee may work.

covenants not to compete

A(n) _____________ is a third party who benefits from a contract in which a promisor agrees to give a gift to the third party.

donee beneficiary

When both parties are mistaken about a current or past material fact, ____________________.

either can choose to rescind the contract

Covenants not to compete in conjunction with the sale of a business are generally __________ if they are for a reasonable length of time and involve a reasonable location.

enforceable

A(n) __________ releases one of the contracting parties from all liability, regardless of who is at fault or what injury is suffered.

exculpatory clause

The ________________ gives the contractual right to the first party granted the assignment.

first-assignment-in-time rule

discharge by material breach

if a party fails to substantially perform his obligations thereby justifying that the non breaching party be discharged From the contract

discharge by performance

if a party performs the terms of the contract or makes a tender or if the party performs to the satisfaction of the contracting party

discharge by operation of the law

if one of the following occurs alteration of the contract bankruptcy tolling of the statute of limitations impossibility commercial impracticality or frustration of purpose.

discharge by conditions

if precedent concurrent implied and express conditions are not met or subsequent conditions occurs

discharge by mutual agreement

if the parties mutually agree to discharge one another substitute a new contract substitute a party or substitute a different performance

Suppose Markus offers to sell Zara his surfboard for $200. Zara responds, "I'll look at it on the weekend, and if I like it, I'll pay you." At this point, Zara has not committed to doing anything. The law considers this a(n) ________________.

illusory promise

When the courts deem a contract integrated, parol evidence is generally _________________.

inadmissible

fraudulent misrepresentation

is a consciously false representation of a material fact intended to mislead the other party. Also referred to as intentional misrepresentation

nondisclosure

is a failure to provide pertinent information about the projected contract.

A person has _________ to enter into a contract if she suffers from a mental illness or deficiency that prevents her from understanding the nature and obligations of the transaction.

limited capacity

In contract law, a(n) _____________ is an erroneous belief about the facts of the contract at the time the contract is concluded.

mistake of fact

Performance by payment of money

not complete until the amount agreed upon has been paid

A promise to do something that you are already obligated to do is ________________.

not valid consideration

express ratification

occurs when or after reaching the age of majority the person state orally or in writing that he or she intends to be bound by the contract entered into as a minor

implied ratification

occurs when the former minor takes some action after reaching the age of majority consistent with intent to ratify the contract

A creditor beneficiary is a third party that benefits from a contract in which the ________ agrees to pay the _________ debt.

promisor; promisee's

If the offer is for a unilateral contract, the offeree can accept only by __________________.

providing the requested performance

unconscionable

refers to the fact that the agreement in question is so unfair that is is void of conscience.

exculpatory clause

releases one of the contracting parties from all liability regardless of who is at fault or what injury is suffered.

Refusal of a tender of performance

relieves party making the offer of obligation to perform. may sue the other party for breach of contract

Under the UCC, a(n) ____________ is an agreement whereby the buyer agrees to purchase all of his or her goods from one seller.

requirement contract

innocent misrepresentation

results fromm a false statement about a fact material to an agreement that the person making it believed to be true

concealment

the active hding of the truth about a material fact

The mirror image rule

the terms of the acceptance must mirror the terms of the offer.

A(n) ___________ is the result of an error by one party about a material fact. If both parties to a contract are mistaken about a material fact, either can opt to rescind it. This is known as a(n) ___________.

unilateral mistake; mutual mistake