Exam 2

Front 1

What are three fundamental requirements a plaintiff must prove to establish the existence of a valid contract?

Back 1

1. Offer

2. Acceptance

3. Consideration

Front 2

The requirements of a valid offer are?

Back 2

1. Reasonable

2. Communicated (offer must be verbal; not necessarily published)

3. Terms must be definite and certain

a) exception UCC - fill in the blanks of the missing terms

Front 3

Is an advertisement a valid offer?

Back 3

No - advertisements are invitations to make an offer.

Front 4

Does an auction with reserve result in a contract when the final bid is in?

Back 4

Auction with reserve- No. It is an invitation to make an offer. The seller may refuse to sell the goods if certain price is not met.

Auction without reserve- Yes. The seller must sell the goods to the highest bidder.

Front 5

What is a Quasi-contract?

Back 5

-Implied Law Contract-

A contract implied by law to prevent unjust enrichment and unjust detriment. (e.g. mowing the law/ kick the guy mowing the lawn off property)

Front 6

If Eddie Basha orders a truckload of apples from his apple supplier in Washington state, does the order constitute a valid offer without definite and certain terms? How will the parties determine the price/payment/quantity terms?

Back 6

Yes. UCC exception. Past dealings. Truck load(know the quantity). Industry standards.

Front 7

Name the ways to terminate a valid offer.

Back 7

1. Revoke(revocation) offer at anytime before acceptance (must be documented)

2. Rejection/counter-offer

3. Death/Insanity

4. Destruction of subject matter voids the offer (plane flies into house)

5. Supervening illegality (law changes to make law legal)

6. Lapse of time (closing period) (if no time is stated a reasonable time will be inferred)

Front 8

A valid offer creates a power of ___________ in the person receiving the offer.

Back 8

Acceptance. Power of acceptance- the right of the person receiving the offer to accept it and create a binding contract.

Front 9

What is the common law rule that requires the terms of the acceptance to accurately reflect the terms of the offer?

Back 9

Mirror image rule- terms of acceptance must accurately reflect the terms of the offer. Counteroffer rejects original offer. To create a contract, an offeree must accept the terms as states in the offeror’s offer, without modification. Any attempt to accept the offer on different terms constitutes a counteroffer, which rejects the offeror’s offer.

Front 10

What is the general rule with regard to silence as acceptance?

Back 10

*SILENCE IS NOT ACCEPTANCE* / Acceptance must be communicated/ no acceptance if there is no response.

Exceptions: The offeree has indicated that silence means acceptance. e.g. If you don’t hear from me by Friday, ship the order. Also, Prior dealings between parties. (harry homeowner/ harry mower)

Front 11

What is the MAIL BOX RULE?

Back 11

-Acceptance Upon Dispatch Rule-

a) applies only to acceptance

b) Acceptance is only valid upon receipt or pony express

Acceptance sent by mail becomes effective when mailed, not when received.

Mail, email, fax

Front 12

If someone uses a method slower than the means used to convey the offer can there be a valid acceptance?

Back 12

Yes, when it is received.

Front 13

How would you avoid the possible effect of the mail box rule?

Back 13

Put it in the terms of the offer. "Mail Box Rule does not apply." Mail Box Rule does not apply when stated.

Front 14

Each party must have what and what for consideration?

Back 14

Benefit- something of legal value

Detriment- what is being given up

Front 15

Why can't sheriff accept a reward for the capture of a bank robber?

Back 15

Preexisting duty - something a person/employee is obligated to do

Front 16

Can Rocky Balboa enforce a contract to collect $500 for breaking thumbs debt collecting for a loan shark?

Back 16

No, because it is an illegal act, therefore an illegal contract or illegal consideration, which is void (will not hold up in a court of law).

Front 17

Name the theory nephew may use to collect $5000 from uncle who promised payment if nephew gave up video games and monster drinks for a year.

Back 17

Promissory Estoppel - Equity (fairness/value) doctrine that permit promises that lack consideration to be enforced.

-One party leads another party into believing a contract exists, when in fact a contract does not exist, there is still no acceptance.

Front 18

Can nephew collect $5000 if he stops selling illegal drugs based on his uncle's promise?

Back 18

No. Illegal consideration. Contracts based on illegal consideration are void. Anything illegal is not acceptance.

Front 19

Lack of capacity (Three I's)

Back 19

1. Infancy - 18 years of age/ minority

2. Insanity -

3. Intoxication

Front 20

What is emancipation?

Back 20

Independently living under legal adult age.

Front 21

Can a minor be liable for contracts for food?

Back 21

Yes- Minors must pay the reasonable value of necessities of life for which they contract (food, clothing, shelter)

Front 22

Is a contract with an intoxicated person void or voidable? Insane person?

Back 22

Intoxicated- voidable (void if re-written when sober // at the option of the intoxicated person to become sober

Insanity- voidable (void if judicially determined)

Front 23

Is a noncompete clause an illegal contract in restraint of trade? What are the two factors you need to examine to answer this?

Back 23

Yes - won't work for similar company for a certain time and in a certain area (reasonably limited)

Front 24

What defense might be used if I tell you "you better sign the contract because I know where your children are."

Back 24

Duress - A situation in which one party threatens to do a wrongful act unless the other party enters into a contract.

Front 25

What do you have to prove to support a defense of undue influence?

Back 25

Confidential Relationship - (e.g. marriage, laywer & client, doctor & patient) Must have existed between the parties

Front 26

Is the exculpatory clause you signed when you went bungee jumping enforceable?

Back 26

Waiver - Enforceable if covering pure negligence

Can become strict liability case if products brake while in use.

Front 27

4 areas that require a written contract to be enforceable. What is the name of this particular defense?

Back 27

Statute of Frauds (prove the existence of an oral contract)

1. Real Estate (e.g. lease)

2. One year rule (not capable of performance in one year - if so it could be an oral contract)

3. Co-signer (Promise to pay debt of another)

4. UCC- Sale of goods worth over $500. Also, lease contracts of $1,000 or more must be in writing.

Front 28

What are the exceptions to the statute of frauds?

Back 28

1. Judicial Admissions (admits oral contract was made in court) (confess under oath)

2. Partial or Full Performance (visible evidence)

3. Promissory Estoppel - Equity (fairness/value) doctrine that permit promises that lack consideration to be enforced.

Front 29

If I agree by phone to be your manservant for the rest of your life and care for your children, is that promise enforceable?

Back 29

Yes, verbal agreement that can be carried out in one year (one year rule). If it exceeds one year it needs to be in writing.

Front 30

Is an oral agreement to sell my mountain bike for $1500 enforceable?

Back 30

No - UCC sale of goods over $500 has to be in writing.

Front 31

If I pre-paid for $10,000 worth of dance lessons, then stricken with paralysis what defense might enable me to get my money back?

Back 31

Discharge by impossibility - Nonperformance that is executed if a contract becomes impossible to preform. It must be objective (enforceable), not subjective (unenforceable).

Front 32

Are electronic signatures on digital agreements as valid as written signatures on printed documents?

Back 32

Yes - under E-signing legislation

Front 33

Wentz brothers carrot growers were able to get out of their contract with Cambells soup co. using which defense?

Back 33

Unconscionable Contract - contract was completely unfair. The court could either find the entire contract unenforceable or rewrite the contract so that it has reasonable terms.

Front 34

What are possible remedies for breach(do not perform duties) of contract?

Back 34

Complete Performance- contract if fulfilled // contract is discharged

Minor Breach (Substantial performance)- Contract is partially performed // Recover damages

Material Breach (Inferior performance) - Partially performed with bad materials // recover damages or cancel contract

Anticipatory Breach- Will not perform duties of contract at all

Front 35

What is the difference between compensatory damages and consequential damages?

Back 35

Compensatory Damages - Restoring original amount (back to the status quo)

Consequential Damages - Loss profit / profit margin

Front 36

What type of remedy is specific performance?

Back 36

Equitable Remedy

- court ordered to perform terms of contract.

Injunction - court ordered that prevents a person from doing a certain act.

Front 37

Can Slick Sam the used car man avoid the implied warranty of merchantability by posting a big spin sign on the windshield of his car that reads "AS IS"?

Back 37

YES - "with all faults"

Expressed - written

Implied

a) merchantability (supplier - product is reasonable for job)

b) fitness for a particular purpose (goods are reasonable for the job)

Front 38

Difference between an intended and an incidental third party beneficiary(person who benefits)

Back 38

Intended Donee - Has rights to sue

Incidental Donee - Does not have rights to sue (walmart case)

Front 39

Name some of the different types of monetary damages(an award of money)

Back 39

Compensatory Damages- Restoring original amount (back to status quo)

Consequential Damages- What was lost Profit / profit margin

Punitive Damages- Punished damages / made example out of you / extra $$

Liquidated Damages- Paid in advance

Nominal Damages- Small amount (fees) ($1)

Mitigation Damages- Use best effort