Contract Law Overview

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Questions and Answers

What must be true for a warranty to be effectively disclaimed?

It can be stated verbally.

It should be mentioned in a separate agreement.

It must be conspicuous. (correct)

It must be signed by both parties.

In the case of a conflicting warranty, which takes precedence?

The warranty that is most recent.

The expressed warranty. (correct)

The disclaimed warranty.

The implied warranty.

What is a characteristic of contracts affected by unconscionability?

They often involve significant disparity in bargaining power. (correct)

They are always void.

They are usually created by mutual agreement.

They can be enforced if both parties consent.

Which of the following is NOT a common ground for voiding a contract due to incapacity?

Falling under economic duress. Signup and view all the answers

What defines fraudulent misrepresentation?

A false assertion of fact intended to deceive. Signup and view all the answers

Which of the following factors might establish undue influence in a contract?

Unequal bargaining positions. Signup and view all the answers

Under what circumstance can a contract be voidable due to duress?

If there are threats of physical harm. Signup and view all the answers

When is it possible to rescind a contract based on nondisclosure?

When essential facts are omitted that would affect consent. Signup and view all the answers

What is the purpose of consideration in contract law?

It serves as a bargain for exchange. Signup and view all the answers

In which scenario is a contract most likely to be deemed unconscionable?

When one party presents terms that are overwhelmingly unfair. Signup and view all the answers

Which of the following is a form of misrepresentation in contract law?

One party misstates a fact that induces another to enter into a contract. Signup and view all the answers

What defines implied warranties in contract law?

They are assurances that certain conditions will be met, unless excluded. Signup and view all the answers

What is the main effect of an express warranty in a contract?

It guarantees specific qualities or performance of goods or services. Signup and view all the answers

Which of the following is a valid defense in contracts?

Mutual assent is not achieved. Signup and view all the answers

Under which circumstance could a misrepresentation lead to a contract being voidable?

If the misrepresentation induced the other party to enter the contract. Signup and view all the answers

Which of the following does not typically constitute a valid defense to the enforcement of a contract?

Disagreement on the labeling of terms. Signup and view all the answers

What is procedural unconscionability primarily concerned with?

The manner in which the contract was formed Signup and view all the answers

Under which circumstance would misrepresentation occur?

A party makes a false assertion intended to deceive another party Signup and view all the answers

Which of the following is true about express warranties?

They need to be explicitly stated in the contract Signup and view all the answers

What is a key feature of substantive unconscionability?

It focuses on the terms of the contract being overly harsh Signup and view all the answers

Which scenario best demonstrates the principle of commercial impracticability?

A party experiences unforeseen circumstances that make performance significantly more difficult Signup and view all the answers

What must be present for an option contract to be enforceable?

Adequate consideration must be given Signup and view all the answers

What is the primary difference between a mistake and misrepresentation in contract law?

Mistakes can be mutual or unilateral, while misrepresentation does not classify this way Signup and view all the answers

What typically triggers frustration of purpose in a contract?

A significant change in circumstances that undermines the contract's original purpose Signup and view all the answers

Study Notes

Contract Law Study Notes

Definition of Contract: A contract requires two or more people involved, something to be done in the future (not the past), a way for it to be enforced, and consideration.

Sources of Contract Law

Model Rules: These provide guidance on interpreting contracts.
Judicial Opinions: Court decisions form the basis of contract law.
Written Laws/Statutes: Statutory law outlines contract principles, like the Uniform Commercial Code (UCC) which deals heavily with the sale of goods.
Contract Theories: These perspectives inform legal reasoning about contracts, including formalism, realism, and economic approaches.

Contract Considerations

Question 4: Conduct and understanding can create a contract even with minimal written terms.
Question 7: Consideration involves a bargained-for exchange
Myer v. Uber Technologies: Agreement to terms is implied by conduct (using the service and clicking "I agree"). A reasonable user is on inquiry notice (should know they are agreeing to the terms). Clickwrap and browserwrap are two types of agreements.

Contract Formation - Substantive Issues

September 3rd: Actual knowledge of a joke (invalid contract), offer must be clear, explicit, and unequivocal.
September 17th: Offers made in jest are not valid offers.
September 3rd: How Offers Are Forwarded - "Material terms" of an offer in a contract.
Offers Made in Jest: An offer made in jest is not a valid offer, even if made purposely for entertainment.
Unilateral vs. Bilateral Contract: Difference between exchanging a promise for a promise, or a promise for an action (payment for work).
Offer/Acceptance: A complete offer and complete acceptance creates a legally binding contract.

Contract Formation - Formal Issues

Unilateral contract: Exchanging a promise for a performance (ex: paying someone to paint your house).
Bilateral contract: Exchanging promises for the performance and completion (ex: buying a painting, paying upfront).
UCC 2-204: Liberal formation rules for contracts, the specifics about the contract do not need to be fully formed in order to create a contract.

Contract Formation - Additional Points

Letters of Intent: These documents can be enforceable, but only if the parties intend them to be binding.
Mutual Assent: Agreements must involve parties who are in mutual assent for a contact to be valid.
Consideration: A necessary element for contracts, it is not just paying money. This involves a "quid pro quo" -a bargain - for an action or a promise between parties.

Other Contract Elements

Clickwrap agreements: Agreements that are accepted by clicking on a button, frequently used by websites.
Browserwrap agreements: Agreements accepted by using a website, without explicit consent to use website terms.

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Description

This quiz covers the basics of contract law, including definitions, sources of law, and key considerations. It also discusses significant cases that illustrate legal principles in the context of contracts. Test your understanding of the essential elements that form binding agreements.