Exam 2

Question 1

Contract

Answer 1

Legally enforceable agreement

Question 2

Bilateral contract

Answer 2

a promise for a promise

Question 3

Unilateral contract

Answer 3

a promise for an act

Question 4

Executory Contract

Answer 4

A contract not yet fulfilled by both parties, in the future

Question 5

Executed Contract

Answer 5

All parties have fulfilled their obligations

Question 6

Promissory estoppel

Answer 6

Acting on a promise

Question 6

Elements of a contract

Answer 6

18 yrs or older

Consent, can’t be tricked into it

Certain contracts have to be in writing

Offer (payment, benefit, etc.)

Acceptance, agreement to the task for benefit

Consideration

Has to be legal

Question 7

Quasi contract

Answer 7

When someone unfairly benefits, the court makes them pay it back, even if there was no contract.

Question 8

Is an advertisement an offer?

Answer 8

No

Question 9

An offer may be terminated in 1 of 4 ways

Answer 9

Revocation-Revoking before acceptance

Rejection-Ex)counter offer

Expiration

Operation of Law- Death or destruction of property included in the contract

Question 10

Mirror Image Rule

Answer 10

Acceptance must match the contract

Question 11

Usury

Answer 11

prohibits charging excessive interest on loans

Question 12

Are contracts that violate public policy illegal

Answer 12

Yes

Question 13

Is any contract made by an unlicensed worker unenforceable

Answer 13

Yes

Question 14

Insurance interest

Answer 14

to take out a life insurance policy on someone

Question 15

Noncompete agreements

Answer 15

if it is in conjunction to sale of business it is enforceable if reasonable in time, geographic area, and scope of activity

Question 16

Bailment

Answer 16

giving possession and control of personal property to someone else

Question 17

Exculpatory clauses

Answer 17

protects someone from being blamed or sued if something goes wrong

Question 18

Remedies for fraud

Answer 18

Cancel contract and sue for damages

Question 19

A seller generally must report latent defects that they know about that the buyer should not be expected to discover. True or False

Answer 19

T

Question 20

unilateral mistake

Answer 20

when one party enters a contract is mistaken about a fundamental term, subject matter, or assumption, while the other party is not

Question 21

Mutual mistake

Answer 21

when both parties share the same mistake if based on factual error contract is voidable by either person

Question 22

Undo Influence

Answer 22

means someone is pressured or manipulated into making a decision, especially in a contract or agreement

Question 23

Transfer of interest in land (2 EXCEPTIONS)

Answer 23

Full performance by the seller

Part performance by the buyer. The buyer of the land is able to enforce a oral contract if they pay partial down payment and enter upon the land and make improvements

Question 24

Contracts that cannot be performed in one yr are unenforceable unless in writing T or F

Answer 24

T

Question 25

Promise to pay the debt of another

Answer 25

collateral promise must be in writing to be enforceable

Question 26

Executors promise

Answer 26

a promise to pay off debt of the deceased must be in writing to be enforceable

Question 27

Parol Evidence Room

Answer 27

Can't contradict what is in the written contract, using things discussed before the contract was signed

Question 28

Personal Satisfaction Contract

Answer 28

In the contract it must be specific about specific taste, otherwise court will use objective standards

Question 29

Time is of the Essence-Dates in a contract must be followed. Merely including a date for performance does not make time of the essence T or F

Answer 29

T

Question 30

Statute of Limitations

Answer 30

How long you have to file lawsuit

Question 31

Impossibility-must be a true impossibility 

Answer 31

Illegality Destruction-vineyard example Death

Question 32

Condition precedent and cond. Subsequent

Answer 32

Precedent- Something that must happen before a contract becomes active. Subsequent-Something that can end or cancel a contract after it has already started.

Question 33

Specific performance

Answer 33

a court will award specific performance on a contract only on a sale of land or some other unique asset

Question 34

Reformation

Answer 34

a court will rewrite the contract in order to correct mistake

Question 35

Mitigation of damages

Answer 35

A party injured by breach of contract will not recover or damages that could be avoided with reasonable effort

Question 36

Nominal damages

Answer 36

is a small, symbolic monetary award (often $1) given to a plaintiff when a legal right has been violated but no actual, measurable financial harm or loss was proven. These damages act as a moral victory and official record of wrongdoing

Question 37

Liquidated damages

Answer 37

amt that you put in your contract

Question 38

Expectation Interest

Answer 38

is the amount of money awarded to put someone in the position they would have been in if the contract had been fully performed

Question 39

Direct, consequential damages

Answer 39

Direct = basic, immediate loss Consequential = extra, indirect loss (must be foreseeable)

Question 40

Willis and Leslie orally agree to the sale of a parcel of land for $50,000: one-half payable now as a down payment; one-half payable in 30 days at the time of closing when the title will be transferred. The buyer, Willis, is to have possession immediately. Willis pays Leslie $25,000, takes possession of the land, and starts building a house. At the time of closing, Willis has made a substantial beginning on the house. However, Leslie refuses to transfer the title, claiming the oral contract is not enforceable. This contract is:

Answer 40

C. enforceable, because Willis has partially performed the oral contract and made improvements on the land.

Question 41

Derek and Abyan were discussing business over lunch when they agreed on the sale of a five-acre parcel of land. Since neither of them had any paper with them, Derek wrote the following on a napkin: “Abyan agrees to purchase from Derek a 5-acre parcel located at the local address of 123 105th Street, St. Joseph, Minnesota, U.S.A. for the price of $4,500 per acre. Transfer of title, payment, and possession to take place on May 1, 2011.” Abyan signed the napkin. On May 1, 2011, Derek was ready to close the deal and transfer title but Abyan refused to pay the purchase price. If Derek sues Abyan for the price of the land, the most likely result will be:

Answer 41

B. Derek will win because the writing is sufficient under the Statute of Frauds.