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Questions and Answers
Which of the following contracts must be in writing to be enforceable?
Which element is NOT required to prove fraudulent misrepresentation?
What defines a liquidated debt?
What is the primary consequence of a material breach of contract?
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In the context of debts, what is a common requirement to satisfy a partial payment on an unliquidated debt?
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What must occur for an offer to be effectively revoked?
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Under the Mirror Image Rule, what happens if the offeree changes the terms of the offer?
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What is true regarding option contracts?
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What is a defining characteristic of a firm offer under the UCC?
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Which situation results in the termination of an offer?
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Which statement accurately describes consideration in a contract?
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What is the effect of the Mailbox Rule regarding acceptance?
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What occurs if an offeree rejects an offer?
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Study Notes
Offer and Acceptance
- An offer is a clear proposal to enter a contract under specific terms.
- Acceptance must mirror the offer's terms exactly to form a contract.
- Mailbox Rule: Acceptance is effective when sent, not received.
- Revocation, the withdrawal of an offer, must be communicated before acceptance.
- A counteroffer changes the offer, rejecting the original proposal.
Mirror Image Rule
- Acceptance must match the offer's terms precisely.
- Changing terms creates a counteroffer, rejecting the original offer.
Termination of Offers
- Offers can terminate due to death, incapacity, lapse of time, or rejection.
- Offers expire after a specified time or a reasonable time if unspecified.
- Rejection ends the offer unless renewed by the offeror.
Option Contracts
- Option contracts require consideration to keep an offer open for a specified period.
- They prevent the offeror from revoking the offer during this time.
Firm Offer (Under the UCC)
- Firm offers, made in writing by merchants, remain open for a specified time (up to 3 months).
- They cannot be revoked during this period, even without consideration.
Consideration
- Consideration is something of legal value (money, services, or promises) exchanged by parties.
- Both parties must provide consideration for a contract to be enforceable.
- Pre-existing Duty Rule: A promise to do what is already legally obligated is not valid consideration.
- Past Consideration: Promises for actions already completed are not enforceable.
- Accord and Satisfaction: Agreement to accept different performance than originally agreed upon to settle a disputed debt.
Statute of Frauds
- Certain contracts must be in writing to be enforceable:
- Sales of goods $500 or more
- Real estate contracts (except leases under a year)
- Contracts not performed within one year
- Oral agreements under the Statute of Frauds are usually unenforceable unless exceptions apply (e.g., partial performance in real estate contracts).
Liquidated and Unliquidated Debts
- Liquidated Debt: Certain and undisputed amount. Partial payment doesn't satisfy the debt without new consideration or creditor's written agreement.
- Unliquidated Debt: Disputed amount. Settlement can occur through accord and satisfaction (debtor offers payment marked “in full satisfaction” and creditor accepts).
Fraudulent Misrepresentation
- To prove fraud, these elements must be shown:
- Misrepresentation of a material fact
- Intent to deceive
- Justifiable reliance on the false statement
- Resulting damages
Breach of Contract
- Material Breach: Significantly failing to perform, allows the non-breaching party to terminate and seek damages.
- Minor Breach: Slight deviation not affecting overall performance. Non-breaching party must perform but can seek damages.
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Description
Test your understanding of the principles of offer and acceptance in contract law. This quiz covers key concepts such as the Mailbox Rule, the Mirror Image Rule, and the termination of offers. Enhance your legal knowledge by exploring various types of contracts and scenarios.
