Glossary of contracts exam review

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The standard used for the objective standard is
reasonable person standard
the standard used for the subjective standard is
good faith standard
T/F an offer lapses after the end of the option period
If offeror has not indicated when the offer lapses, when does it laps
end of a reasonable time
an offer for an oral offer lapses?
at the end of the conversation
with respect to consideration, which type of consideration refers to lack of any legally valid consideration
want of consideration
______________ of consideration refers to the agreed upon consideration never being paid
_____________ of consideration refers to the relative values of the quid versus the quo
Four ways charitable subscriptions are eforced
interlocking promises or subscriptions
Traditional quid pro quo consideration
promissory estoppel under RII, 90 (1); estoppel under R II 90 (2)
To use material benefit rule one must show
1) promisor received material benefit from promisee
2) material benefit received under circumstances creating a moral obligation
3) subsequent promise by promisor to compensate
4) the nature of the circumstances was such that the Promisee reasonably expected to be compensated.
If part performance is within the control of the non- breacher, these expenses are best categorized as ___________
reliance damages
If part performance is within the control of the breacher, these expenses are best categorized as
restitution damages
Recovery for emotional disturbance is limited to situations where __________________ was particularly likely to occur
serious emotional disturbance
A promise which can't be performed within _____ year from the ___________________ are not enforceable under the statute of frauds.
one; date, making
If a determination is made on an ad hoc basis, what does this mean
an ad hoc determination is one made on a case by case basis.
What is the difference between an offer of a unilateral contract and an offer for a bilateral contract
offer for unilateral exchanges a promise for a performance. An offer for a bilateral contract exchanges a promise in return for a promise.
UCC 2-207 (1) talks about additional terms and different terms. What is the difference?
additional term is one that was not in the offer, a different term changes a term in the offer.
Why is so-called "past consideration" not consideration?
It can't be bargained for because the act/promise has already occured
To what extent may one recover lost profits when a promise is enforced under promissorry estoppel
under majority decision, lost profits aren't recoverable
How does one calculate damages in a "losing contract" situation?
calculate reliance damages then deduct amount of money lost on the contract.
To what extent is specific performance used in contracts of a personal nature
generally specific performance isn't used in personal K's, only in equitable relief courts.
With regard to the Statute of Frauds, why do writings required for contracts other than contracts for a sale of goods have to contain more detail?
because of the UCC Gap Fillers, they fill in the indefiniteness.
An express contract may be formed either verbally or by conduct
t/f If mail is an authorized means of commuication, a rejection is effective when mailed
False- mailbox rule only applies to acceptances
Unless otherwise agreed, the delivery place for goods is the buyer's place of business T/F
False; UCC 2-308 indicates the place of delivery, unless otherwise agreed is the seller's place of business
Modifications of contracts need no consideration if done in good faith and for a legitimate commercial reason.
F: this only applies to the sale of goods under UCC, 202-9 (1)
To enforce a subsequent promise to pay a debt barred by the statute of limitations under moral obligation, most states require the promise to be in writing
The expectation interest involves putting the non-breaching party (via damages) in the condition she was in before the contract was entered into.
F: this is reliance interest
With regard to restitution, quantum meruit means the value of services rendered by one party to another
the remedy of restitution is available to breachers as well as non-breachers
A $600 contract to paint a person's house in seven days does not have to be in writing
Generally, silence does not act as an acceptance; however, where a ------- takes the benefit of offered services with an opportunity to ------- them and has reason to know they were offered with the expectation of ---------, silence can be an acceptance.
offeree; reject; payment
There are two kinds of auctions --------------
auction with reserve and auction without reserve
regardless of the type of auction, the bidder may always withdraw her/his ----------- prior to the auctioneer concluding the sale
forbearance of an invalid claim has--------
person forbearing the invalid claim must have an ______________ belief in the validity of the claim and that belief must be ________________
honest; reasonable
In order to form an offer for a requirements contract, the offer must contain a word of obligation/commitment (for example, _______________
All I need, use, require; need, use, require
Good faith
Under moral obligation, a subsequent promise to pay a debt barred by the statute of limitations, by ----------------, or by ------------ is enforceable without ----------------
Infancy; bankruptcy; consideration
In order for secondary damages to be foreseeable, it is necessary that the -------------- be foreseeable to the -------------- but it's not necessary that the -----------------be foreseeable
damages; breacher; breach
Under the UCC, if a seller fails to deliver goods under a contract, the buyer is to ______________
Under UCC if the buyer fails to accept the goods from the seller, the seller is to ________________ the goods
The buyer covering and seller reselling items are acts of ________________
In order for atransaction to come within the statute of fraud section, "Promises to pay the debt of another," there must be a ----------------- owed to another, the promise must be in the form of a promise ----------------------, the promise mu
principal debt; to pay the debt of another; creditor
An offeree may accept an offer in two ways: What are they?
act or promise
Explain the difference between a direct revocation and an indirect revocation
direct- revocation is communicated by offeror himself
indirect- offeree hears it from a reliable 3rd party that the offer has been revoked
What is the difference between "want of consideration" and "failure of consideration"
want of consideration means there never was any consideration; failure of consideration means that the original agreed upon consideration was never paid.
What is an executory accord
an accord without the satisfaction
Why cannot so-called "past consideration" be consideration
It has not been bargained for
Helen enters into a contract with Troy to build a wooden horse for $24000. She spends $15000 building the horse but must expend another $6000 to complete the horse. Based on these figures, what would Helen's profit be on the conract? Show your calculatio
K price (24k) - 15k (part performance) - 6k (amount necessary to complete) = $3000 (profit)
If the builder of a motel fails to complete building a motel on time and the owner of the motel loses money because people can't stay in the uncompleted motel, what kind of damage is the money lost because people can't stay in the motel?
Lost secondary profits
What is the significance of a party having "unclean hands" if the party is seeking specific relief?
Because specific relief is granted at the court's discretion, a court may deny such relief if a party has unclean hands.
In an offer for a unilateral contract, the Offeree is looking for an acceptance by an act.
In order to have a direct revocation, the Offeree must learn from a reliable source that hte Offeror has done something inconsistent with the offer
An agreement to agree is normally not thought to be a contract
If a promise reserves a choice of alternative performances, the promise may not be consideration unless both alternatives would be consideration
Moral obligation is very limited in scope: It only applies to debts barred by bankruptcy, statute of frauds, and infancy
F; statute of frauds has nothing to do with moral obligation; in addition, promises under the material benefit rule are enforceable under moral obligation.
The object of the expectation interest is to put the non breaching party in as good as a position as she would have been in had the contract been fully performed
In determining whether damages are foreseeable, one asks whether the breach producing the damages was foreseeable.
F, whether the damages were foreseeable
Another name for restitution is quantum meruit
The three types of formal contracts are
Contracts under seal, the recognizance, negotiable instrument
Tender is an offer to ______________with a ________________ ability to ___________________
peform; demonstrated; perform
While you may always show that the consideration was not paid in a(n) ---------------- a(n) ________________ contract remains effective even if the ___________________ was not paid
contract; option; consideration
There are two ways around the pre existing duty rule what are they
1) promise something new on both sides and (2) rescind the old contract and enter into a substitute contract
Under section 90, restatement II of contracts, a __________ subscription is enforceable under ____________ estoppel even if the charity does not ___________ on the subscription
charitable; promissory; rely
An alternative to calculating expectation damages under the cost of performance approach is the _________________ of value approach which requires that application fo the cost of performance approach would result in economic _________________ and the bre
dimunition; waste; secondary/incidental
Uner the UCC, a contract for the price of __________ or more is not enforceable without a wriring which contains a __________, an indication a contract has been made, and signed by________________
$500; quantity; party to be charged
What is a course of dealing
How the parties acted under prior contracts
to what extent does the so-called Mail Box Rule apply to acceptances of option contracts?
It doesn't apply to option K's. Under option K's acceptances are effective only when they're communicated to the offeror.
Why is the adjective "sufficient" in the phrase "sufficient consideration" unnecessary
because to find consideration, the act or promise bargained for must have value, you don't need "sufficient" which in this context means "has value."
If a creditor and debtor enter into a substitute contract rather than an accord and satisfaction to settle a disputed debt, to what extent can the original deb be enforced by the creditor?
It can't be enforced by the creditor. Although the original debt might be able to be pursued with an accord and satisfaction, this is not possible with a substitute contract.
Why cannot so-called "past consideration" be used as consideration to enforce a promise?
It can't be bargained for
If a contract is a losing contract, what must be deducted from reliance damages?
amount lost on contract
Under the UCC, what does "cover" mean?
This is where the seller has breached and the buyer purchases "a good faith substitute."
Under what circumstances should a court consider granting specific performance rather than damages?
Specific performance is appropriate when damages would be inadequte, for example, where the subject matter of the contract is unique.
T/F In determining whether an offer has been made an objective standard is used; that is, a standard of good faith
In most jurisdictions, a person accepting a governmental reward does not have to know of the reward prior to supplying the information requested
The so-called mailbox rule (or posting rule) does not apply to acceptance of option contracts
What keeps an offer for an exclusive dealing contract from being illusory is the offer contains a verb of commitment (need, use, etc.) plus the standard of good faith
F; requiring a verb of commitment and standard of good faith apply to offers for requirement contracts not offers for an exclusive dealing contract
Promissory estoppel "fills the gap" of consideration, because it applies to a detriment to the Promisee which was bargained for.
F promissory estoppel applies to a non-bargained for benefit to teh Promisee.
expectation damages are calculated by adding expectation damages, reliance damages, and restitution damages.
F one does not add all reliance and restitution damages; in addition, losses avoided must be deducted when calculating expectation damages.
In the United States, a plaintiff generally may not recover for reliance damages incurred prior to the time the plaintiff and defendant entered into the contract
In order for secondary (or special) damages to be recoverable, the nonbreaching party must show, among other things, that the damages were foreseeable; that is, the damages were within the contemplation of both the non-breaching party and the breaching p
False- damages must only be within the contemplation of the breaching party
The purpose of restitution is o take away from the non-breaching party any benefit which would be unjust for for the non breaching party to retain
F; take away benefit from the breacher
Notice of acceptance may either be verbal or?
by conduct
_________________consideration means teh consideration has value (and thus is redundant); ________________ consideration relates to the relative values of the ______________ versus the ___________
sufficient; adequacy of; quid; quo
A promise is not made_______________by the fact that the Promisor has an option between two alternatives, if____________alternative would have been ______________ if it alone were bargaind for.
illusory; each; consideration
Modification of a contract for the sale of goods needs no_______________to be enforceable provided the modification is in ________________and is for a(n)_______________commercial reason
consideration; good faith; legitimate
When the Plaintiff files a law suit, her/his complaint must indicate what _______________she is seeking; that is, what _______________are sought or_____________relief is requested
remedy; damages; specific
If parties to a contract decide to agree in their contract what damages would be appropriate, they may include a(n)__________________clause which will be upheld; however, if they include a(n) ___________________ clause, it will not be upheld unless the c
liquidated damages; penalty; construction
The statute of frauds writing required by the UCC must contain three things: a(n) _____________________; an indication that a _________________has been made; and be ________________by the party to be charged
quantity; contract; signed
With regard to auctions of goods, what does "by bidding" mean?
the auctioneer has planted someone in the crowd to raise up the bid
What does want of consideration?
lack of any consideration, that is, it never existed
Explain to what extent the doctrine of moral obligation applies to a subsequent promise to pay a debt barred by the statute of frauds
It doesn't apply at all. It does apply to subsequent promises to pay debts barred by the statute of limitations.
If an employee is wrongfully discharged and receives unemployment compensation, to what extent must these monies be deducted from any damages obtained for the wrongful discharge?
Not at all; because of public policy, unemployment compensation does not have to be deducted as a mitigating factor.
If a contract required by the statute of frauds is not in writing, recovery is generally limited to what type of damages?
In an auction without reserve, the auctioneer is the Offeror.
T/F The preferred remedy under promissory estoppel is recovery of lost profits.
F reliance damages.
diminution of value is appropriate only when the failure of performance by the breacher is material t/f
f; it is appropriate when the breach is incidental or secondary, not material.
with regard to consequential damages, an inquiry must be made whether the breach was foreseeable t/f
f; whether the damages were foreseeable to the breacher
to determine damages in a losing contract situation, one must deduct the amount of the losing contract from restitution damages
f- reliance
tender is an ________________to perform with __________________ability to ________________
offer; demonstrated; perform
In a contract for non-goods, a counter-offer is a ________________of the offer unless the _______________ indicates otherwise or the ______________indicates the offer has survived the counter offer
rejection; offeree; offeror
An exclusive dealing contract for the sale of goods is not illusory, because the law imposes on buyer an obligation to __________
use best efforts to sale or promote the goods (see UCC, 2-306) (2)
A promise may only be consideration if ________________ of the promise would be _________________
performance; consideration
At equity the remedy of _________________is appropriate if the subject matter of the contract is _________________and__________________
specific performance; unique; damages
If promises are reduced to a written agreement which contains a clause stating "This agreement shall not be enforceable in a court of law." Explain whether the agreement is a contract.
It's not a contract because a contract must be enforceable by the law.
To what extent must the Offeree know of an offer before accepting the offer?
he must know of each offer unless it's an offer for government reward
To what extent is consideration required to support a modification of acontract for the sale of goods
It's not required, provided the modification was made in good faith and for a legitimate commercial reason.
If a $5000 debt is barred by the statute of limitations and the debtor makes a subsequent, written promise to the creditor to pay $1000 (because teh debtor feels it is the right thing to do), how much is the debtor obligated to pay: $5000, $10000, or not
$1000 because under moral obligation what is being enforced is the subsequent promise to pay, not the original debt.
To what extent may recovery for emotional distrubance be recovered for breach of contract?
Only where the breach causes bodily harm or the breach is of such a kind that serious emotional disturbance was particularly likely to result
To what extent is one who officiously confers ("forces upon another") a benefit entitled to restitution?
not at all
If Pat promised to marry chris and Chris promised to marry Pat, explain whether these promises would have to be in writing under the statute of frauds to be enforceable.
they would not have to be in writing, because the marriage section of the statute of frauds does not apply to mutual promises to marry.

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