Contracts Exam Review

Front 1

The standard used for the objective standard is

Back 1

reasonable person standard

Front 2

the standard used for the subjective standard is

Back 2

good faith standard

Front 3

T/F an offer lapses after the end of the option period

Back 3

T

Front 4

If offeror has not indicated when the offer lapses, when does it laps

Back 4

end of a reasonable time

Front 5

an offer for an oral offer lapses?

Back 5

at the end of the conversation

Front 6

with respect to consideration, which type of consideration refers to lack of any legally valid consideration

Back 6

want of consideration

Front 7

______________ of consideration refers to the agreed upon consideration never being paid

Back 7

failure

Front 8

_____________ of consideration refers to the relative values of the quid versus the quo

Back 8

adequacy

Front 9

Four ways charitable subscriptions are eforced

Back 9

interlocking promises or subscriptions
Traditional quid pro quo consideration
promissory estoppel under RII, 90 (1); estoppel under R II 90 (2)

Front 10

To use material benefit rule one must show

Back 10

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.

Front 11

If part performance is within the control of the non- breacher, these expenses are best categorized as ___________

Back 11

reliance damages

Front 12

If part performance is within the control of the breacher, these expenses are best categorized as

Back 12

restitution damages

Front 13

Recovery for emotional disturbance is limited to situations where __________________ was particularly likely to occur

Back 13

serious emotional disturbance

Front 14

A promise which can't be performed within _____ year from the ___________________ are not enforceable under the statute of frauds.

Back 14

one; date, making

Front 15

If a determination is made on an ad hoc basis, what does this mean

Back 15

an ad hoc determination is one made on a case by case basis.

Front 16

What is the difference between an offer of a unilateral contract and an offer for a bilateral contract

Back 16

offer for unilateral exchanges a promise for a performance. An offer for a bilateral contract exchanges a promise in return for a promise.

Front 17

UCC 2-207 (1) talks about additional terms and different terms. What is the difference?

Back 17

additional term is one that was not in the offer, a different term changes a term in the offer.

Front 18

Why is so-called "past consideration" not consideration?

Back 18

It can't be bargained for because the act/promise has already occured

Front 19

To what extent may one recover lost profits when a promise is enforced under promissorry estoppel

Back 19

under majority decision, lost profits aren't recoverable

Front 20

How does one calculate damages in a "losing contract" situation?

Back 20

calculate reliance damages then deduct amount of money lost on the contract.

Front 21

To what extent is specific performance used in contracts of a personal nature

Back 21

generally specific performance isn't used in personal K's, only in equitable relief courts.

Front 22

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?

Back 22

because of the UCC Gap Fillers, they fill in the indefiniteness.

Front 23

An express contract may be formed either verbally or by conduct

Back 23

True

Front 24

t/f If mail is an authorized means of commuication, a rejection is effective when mailed

Back 24

False- mailbox rule only applies to acceptances

Front 25

Unless otherwise agreed, the delivery place for goods is the buyer's place of business T/F

Back 25

False; UCC 2-308 indicates the place of delivery, unless otherwise agreed is the seller's place of business

Front 26

Modifications of contracts need no consideration if done in good faith and for a legitimate commercial reason.

Back 26

F: this only applies to the sale of goods under UCC, 202-9 (1)

Front 27

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

Back 27

True

Front 28

The expectation interest involves putting the non-breaching party (via damages) in the condition she was in before the contract was entered into.

Back 28

F: this is reliance interest

Front 29

With regard to restitution, quantum meruit means the value of services rendered by one party to another

Back 29

True

Front 30

the remedy of restitution is available to breachers as well as non-breachers

Back 30

true

Front 31

A $600 contract to paint a person's house in seven days does not have to be in writing

Back 31

True

Front 32

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.

Back 32

offeree; reject; payment

Front 33

There are two kinds of auctions --------------

Back 33

auction with reserve and auction without reserve

Front 34

regardless of the type of auction, the bidder may always withdraw her/his ----------- prior to the auctioneer concluding the sale

Back 34

bid

Front 35

forbearance of an invalid claim has--------

Back 35

value

Front 36

person forbearing the invalid claim must have an ______________ belief in the validity of the claim and that belief must be ________________

Back 36

honest; reasonable

Front 37

In order to form an offer for a requirements contract, the offer must contain a word of obligation/commitment (for example, _______________

Back 37

All I need, use, require; need, use, require
Good faith

Front 38

Under moral obligation, a subsequent promise to pay a debt barred by the statute of limitations, by ----------------, or by ------------ is enforceable without ----------------

Back 38

Infancy; bankruptcy; consideration

Front 39

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

Back 39

damages; breacher; breach

Front 40

Under the UCC, if a seller fails to deliver goods under a contract, the buyer is to ______________

Back 40

cover

Front 41

Under UCC if the buyer fails to accept the goods from the seller, the seller is to ________________ the goods

Back 41

resell

Front 42

The buyer covering and seller reselling items are acts of ________________

Back 42

mitigation

Front 43

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 must be made to the ---------------- , and you must get by the so-called "main purpose rule."

Back 43

principal debt; to pay the debt of another; creditor

Front 44

An offeree may accept an offer in two ways: What are they?

Back 44

act or promise

Front 45

Explain the difference between a direct revocation and an indirect revocation

Back 45

direct- revocation is communicated by offeror himself
indirect- offeree hears it from a reliable 3rd party that the offer has been revoked

Front 46

What is the difference between "want of consideration" and "failure of consideration"

Back 46

want of consideration means there never was any consideration; failure of consideration means that the original agreed upon consideration was never paid.

Front 47

What is an executory accord

Back 47

an accord without the satisfaction

Front 48

Why cannot so-called "past consideration" be consideration

Back 48

It has not been bargained for

Front 49

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 calculation.

Back 49

K price (24k) - 15k (part performance) - 6k (amount necessary to complete) = $3000 (profit)

Front 50

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?

Back 50

Lost secondary profits

Front 51

What is the significance of a party having "unclean hands" if the party is seeking specific relief?

Back 51

Because specific relief is granted at the court's discretion, a court may deny such relief if a party has unclean hands.

Front 52

In an offer for a unilateral contract, the Offeree is looking for an acceptance by an act.

Back 52

F

Front 53

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

Back 53

F

Front 54

An agreement to agree is normally not thought to be a contract

Back 54

T

Front 55

If a promise reserves a choice of alternative performances, the promise may not be consideration unless both alternatives would be consideration

Back 55

T

Front 56

Moral obligation is very limited in scope: It only applies to debts barred by bankruptcy, statute of frauds, and infancy

Back 56

F; statute of frauds has nothing to do with moral obligation; in addition, promises under the material benefit rule are enforceable under moral obligation.

Front 57

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

Back 57

T

Front 58

In determining whether damages are foreseeable, one asks whether the breach producing the damages was foreseeable.

Back 58

F, whether the damages were foreseeable

Front 59

Another name for restitution is quantum meruit

Back 59

T

Front 60

The three types of formal contracts are

Back 60

Contracts under seal, the recognizance, negotiable instrument

Front 61

Tender is an offer to ______________with a ________________ ability to ___________________

Back 61

peform; demonstrated; perform

Front 62

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

Back 62

contract; option; consideration

Front 63

There are two ways around the pre existing duty rule what are they

Back 63

1) promise something new on both sides and (2) rescind the old contract and enter into a substitute contract

Front 64

Under section 90, restatement II of contracts, a __________ subscription is enforceable under ____________ estoppel even if the charity does not ___________ on the subscription

Back 64

charitable; promissory; rely

Front 65

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 breach was _________________ to the main purpose of the contract

Back 65

dimunition; waste; secondary/incidental

Front 66

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________________

Back 66

$500; quantity; party to be charged

Front 67

What is a course of dealing

Back 67

How the parties acted under prior contracts

Front 68

to what extent does the so-called Mail Box Rule apply to acceptances of option contracts?

Back 68

It doesn't apply to option K's. Under option K's acceptances are effective only when they're communicated to the offeror.

Front 69

Why is the adjective "sufficient" in the phrase "sufficient consideration" unnecessary

Back 69

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."

Front 70

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?

Back 70

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.

Front 71

Why cannot so-called "past consideration" be used as consideration to enforce a promise?

Back 71

It can't be bargained for

Front 72

If a contract is a losing contract, what must be deducted from reliance damages?

Back 72

amount lost on contract

Front 73

Under the UCC, what does "cover" mean?

Back 73

This is where the seller has breached and the buyer purchases "a good faith substitute."

Front 74

Under what circumstances should a court consider granting specific performance rather than damages?

Back 74

Specific performance is appropriate when damages would be inadequte, for example, where the subject matter of the contract is unique.

Front 75

T/F In determining whether an offer has been made an objective standard is used; that is, a standard of good faith

Back 75

F

Front 76

In most jurisdictions, a person accepting a governmental reward does not have to know of the reward prior to supplying the information requested

Back 76

T

Front 77

The so-called mailbox rule (or posting rule) does not apply to acceptance of option contracts

Back 77

T

Front 78

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

Back 78

F; requiring a verb of commitment and standard of good faith apply to offers for requirement contracts not offers for an exclusive dealing contract

Front 79

Promissory estoppel "fills the gap" of consideration, because it applies to a detriment to the Promisee which was bargained for.

Back 79

F promissory estoppel applies to a non-bargained for benefit to teh Promisee.

Front 80

expectation damages are calculated by adding expectation damages, reliance damages, and restitution damages.

Back 80

F one does not add all reliance and restitution damages; in addition, losses avoided must be deducted when calculating expectation damages.

Front 81

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

Back 81

true

Front 82

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 party at the time of contracting.

Back 82

False- damages must only be within the contemplation of the breaching party

Front 83

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

Back 83

F; take away benefit from the breacher

Front 84

Notice of acceptance may either be verbal or?

Back 84

by conduct

Front 85

_________________consideration means teh consideration has value (and thus is redundant); ________________ consideration relates to the relative values of the ______________ versus the ___________

Back 85

sufficient; adequacy of; quid; quo

Front 86

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.

Back 86

illusory; each; consideration

Front 87

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

Back 87

consideration; good faith; legitimate

Front 88

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

Back 88

remedy; damages; specific

Front 89

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 contract is a _________________contract.

Back 89

liquidated damages; penalty; construction

Front 90

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

Back 90

quantity; contract; signed

Front 91

With regard to auctions of goods, what does "by bidding" mean?

Back 91

the auctioneer has planted someone in the crowd to raise up the bid

Front 92

What does want of consideration?

Back 92

lack of any consideration, that is, it never existed

Front 93

Explain to what extent the doctrine of moral obligation applies to a subsequent promise to pay a debt barred by the statute of frauds

Back 93

It doesn't apply at all. It does apply to subsequent promises to pay debts barred by the statute of limitations.

Front 94

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?

Back 94

Not at all; because of public policy, unemployment compensation does not have to be deducted as a mitigating factor.

Front 95

If a contract required by the statute of frauds is not in writing, recovery is generally limited to what type of damages?

Back 95

restitution

Front 96

In an auction without reserve, the auctioneer is the Offeror.

Back 96

true

Front 97

T/F The preferred remedy under promissory estoppel is recovery of lost profits.

Back 97

F reliance damages.

Front 98

diminution of value is appropriate only when the failure of performance by the breacher is material t/f

Back 98

f; it is appropriate when the breach is incidental or secondary, not material.

Front 99

with regard to consequential damages, an inquiry must be made whether the breach was foreseeable t/f

Back 99

f; whether the damages were foreseeable to the breacher

Front 100

to determine damages in a losing contract situation, one must deduct the amount of the losing contract from restitution damages

Back 100

f- reliance

Front 101

tender is an ________________to perform with __________________ability to ________________

Back 101

offer; demonstrated; perform

Front 102

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

Back 102

rejection; offeree; offeror

Front 103

An exclusive dealing contract for the sale of goods is not illusory, because the law imposes on buyer an obligation to __________

Back 103

use best efforts to sale or promote the goods (see UCC, 2-306) (2)

Front 104

A promise may only be consideration if ________________ of the promise would be _________________

Back 104

performance; consideration

Front 105

At equity the remedy of _________________is appropriate if the subject matter of the contract is _________________and__________________

Back 105

specific performance; unique; damages

Front 106

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.

Back 106

It's not a contract because a contract must be enforceable by the law.

Front 107

To what extent must the Offeree know of an offer before accepting the offer?

Back 107

he must know of each offer unless it's an offer for government reward

Front 108

To what extent is consideration required to support a modification of acontract for the sale of goods

Back 108

It's not required, provided the modification was made in good faith and for a legitimate commercial reason.

Front 109

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 nothing

Back 109

$1000 because under moral obligation what is being enforced is the subsequent promise to pay, not the original debt.

Front 110

To what extent may recovery for emotional distrubance be recovered for breach of contract?

Back 110

Only where the breach causes bodily harm or the breach is of such a kind that serious emotional disturbance was particularly likely to result

Front 111

To what extent is one who officiously confers ("forces upon another") a benefit entitled to restitution?

Back 111

not at all

Front 112

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.

Back 112

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.