How does the objective standard judge a party’s assent?
By how it reasonably appears to a third party.
What three requirements must an offer satisfy?
Communication to the offeree, intent to contract, and sufficiently definite terms.
What may a court do when an offer’s terms are incomplete?
Fill in the missing terms.
What events can terminate an offer?
Lapse, revocation, rejection, counteroffer, death or incompetency, destruction of the subject matter, or subsequent illegality.
What effect does physical compulsion have on assent?
It makes assent void.
What effect does an improper threat have on a contract?
It makes the contract voidable.
What elements must be present for fraud?
A false material representation, knowledge of its falsity, intent to deceive, and justifiable reliance.
What effect does fraud in the execution have on a contract?
It makes the contract void.
What effect does fraud in the inducement have on a contract?
It makes the contract voidable.
What does consideration require in an enforceable exchange?
A legal benefit to the promisor or a legal detriment to the promisee.
Why does an existing legal obligation fail to support a contract modification?
It provides no new consideration.
Which existing obligations cannot provide new consideration for a modification?
Preexisting public or contractual obligations.
Can partial payment of an undisputed, liquidated debt discharge the debt?
No; it is insufficient to discharge the debt.
What effect can partial payment have on a disputed, unliquidated debt?
It is sufficient to discharge the debt.
What can promissory estoppel substitute for to enforce gifts?
Consideration.
What cases will courts refuse to hear under the illegal-bargains rule?
Cases involving violations of statutes or public policy.
Which public-policy grounds make bargains illegal?
Restraint of trade, restrictions on competition, exculpatory clauses, and unconscionable contracts.
Which competition restrictions are public-policy grounds for illegal bargains?
Restrictions on competition in the sale of a business or employment.
Which three groups have special contractual-capacity rules?
Minors, incompetent persons, and intoxicated persons.
When may a minor disaffirm an unratified contract?
While a minor or within a reasonable time after reaching majority.
What ages define minority under the stated rule?
Under 18 or 21, depending on the state.
What is the contractual status of a contract made by a person under guardianship?
It is void.
What does the Statute of Frauds specify about contract writing?
It specifies contracts that must satisfy writing requirements.
Which agreements fall within the Statute of Frauds?
Suretyship promises, personal promises by an executor or administrator for a decedent, agreements in consideration of marriage, transfers of interests in land, and agreements not performable within one year.
Who must sign a writing subject to the Statute of Frauds?
The party to be charged.
What must a writing subject to the Statute of Frauds specify?
The parties, the subject matter, and the essential terms.
Must both parties sign a writing subject to the Statute of Frauds?
No; only the party to be charged must sign.
What does the Parol Evidence Rule exclude from written contracts?
Oral agreements that would change the written contract’s terms.
Which type of contract condition is most common?
Concurrent conditions.
Which type of contract condition is rarest?
Conditions subsequent.
Which events may discharge a contract through performance or breach?
Performance, material breach, prevention of performance, or non-material breach with substantial performance.
What position do compensatory damages aim to restore the injured party to?
The position they would have occupied had there been no breach.
What case illustrates foreseeability as a limit on damages?
Hadley v. Baxendale.
What does mitigation require of someone who has been fired?
Trying to find another job.
Which equitable remedies are listed for contract disputes?
Specific performance, injunctions, and restitution.
How are preliminary negotiations and advertisements generally classified?
As non-offers.
Which contract types are identified as offers?
Output and requirements contracts.
What can an option contract do to an offeror’s power to revoke?
Restrict revocation.
When is acceptance generally effective, and what can alter that rule?
On dispatch, unless the offer changes the rule.
How is an opinion distinguished from a factual representation?
By contrasting an expert with a salesperson.
What effect does a mutual mistake have on a contract?
It makes the contract voidable.
Must consideration be equal in value to the promise received?
No; courts do not require equal value.
Why is past consideration unenforceable?
It is not contemporaneous with the promise.
Which four types of statutes are identified as grounds for illegal bargains?
Licensing, gambling, usury, and Sunday statutes.
What maximum-interest restriction do usury statutes impose?
They limit the maximum interest rate.
What commercial activity do Sunday statutes prohibit?
Commercial business on Sunday.
What may a sale-of-business restraint specify?
Time and area.
Which matters may employment restraints address?
Competition during or after employment, customer lists, or trade secrets.
What must a minor return after disaffirming a contract?
Received property, in whatever condition it is in, for a full refund.
What responsibility does a minor have for damage after misrepresenting age?
The minor is responsible for property damage.
How can a minor ratify a contract through conduct?
By using or selling the property.
When may a minor disaffirm a contract for necessaries?
A minor cannot disaffirm for necessaries actually furnished and used or consumed.
What doctrine provides an exception to the suretyship rule?
The main-purpose doctrine.
How do courts attempt to interpret contracts?
In accordance with the parties’ intent.
What type of performance occurs when a deed and payment are exchanged at closing?
Concurrent performance.
What may an express condition depend on regarding a contracting party?
The party’s satisfaction.
How may a contracting party’s satisfaction be assessed?
Subjectively or objectively.
How may parties discharge a contract by mutual agreement?
By mutual rescission or accord and satisfaction.
Which events discharge a contract by operation of law?
Impossibility, destruction of the subject matter, or subsequent illegality.
What types of losses can monetary damages include?
Loss of value, incidental damages, and consequential damages when applicable.
What do punitive damages punish in contract cases?
Malicious conduct.
How often are punitive damages awarded in contract cases?
Rarely.
When do parties agree to liquidated damages?
In advance, in the contract.
Answer 24 questions on Intermediate Business Contract Law.
1. A party privately intends not to make a deal, but communicates and behaves in a way that would reasonably signal agreement to an outside observer. How does the objective standard assess assent?
2. A proposal is communicated to its recipient and shows intent to contract, but leaves one term unspecified. What additional requirement determines whether it can qualify as an offer?
Go over the full study guide for Intermediate Business Contract Law.
Read the study guide →Upload your class notes and Revizly writes your flashcards in about a minute.
Flashcard maker