Contract Law Overview

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Questions and Answers

What is a contract?

A contract is a legally enforceable promise, or an exchange of promises, to do or not to do something.

Which of the following types of contracts are there?

Unilateral

Bilateral

Express

All of the above (correct)

A unilateral contract is formed as soon as a promise is made.

False

What is an express contract?

An express contract arises where the parties actually discuss the terms of their agreement. Signup and view all the answers

What is the primary condition for a bilateral contract?

A bilateral contract involves mutual promises between two parties. Signup and view all the answers

What does an implied-in-law contract address?

Unjust enrichment of one party at the expense of another Signup and view all the answers

A contract formed by conduct is referred to as an ______ contract.

implied-in-fact Signup and view all the answers

An implied-in-law contract can arise if there is no intent to charge for benefits conferred.

True Signup and view all the answers

What is the definition of a good under the UCC?

Tangible, movable item of personal property Signup and view all the answers

What is the primary purpose of contract law?

To provide certainty for people to rely on promises Signup and view all the answers

Which of the following is NOT a characteristic of contracts?

Contracts must always be express Signup and view all the answers

Under what law do most contract rules originate?

Both common law and the UCC Signup and view all the answers

Which statement about the UCC is true?

The UCC applies only to the sale of goods Signup and view all the answers

What key aspect is necessary for the existence of a contract?

Mutual agreement evidenced by manifestation of assent Signup and view all the answers

What occurs when an offer is revoked?

It must be communicated to the offeree. Signup and view all the answers

Which of the following is NOT a component required to form a contract?

Intention Signup and view all the answers

What distinguishes an offer from an advertisement?

An offer creates an understanding that a contract will form upon acceptance. Signup and view all the answers

Under what circumstance would Marcy be required to pay for the roof repair?

If she was physically present and chose not to engage them. Signup and view all the answers

Which situation is true concerning the termination of an offer?

Counteroffers automatically terminate the original offer. Signup and view all the answers

Study Notes

Contract Definition

A legally enforceable promise or exchange of promises to do or not to do something.
The key element is the manifestation of assent.

Contract Types

Contracts can be written or oral.
Contracts can be express or implied.
Express contracts arise from discussions between the parties.
Implied-in-fact contracts arise from the conduct of the parties.
Implied-in-law contracts arise when one party is unjustly enriched at the expense of the other.

Contract Law

Contract law provides certainty and confidence in business transactions.
Contract law allows for flexibility and precision in expectations.
Contract law rules are derived from common law and the UCC.
Common law governs contract formation, performance, breach, and remedies.
The UCC governs the sale of goods, which are tangible, movable items of personal property.

Bilateral Contracts

A bilateral contract involves mutual promises.
All promises are outstanding at the time of contract formation, making it an executory contract.

Unilateral Contracts

A unilateral contract involves only one promise.
Contract formation occurs only when the offerree performs.

Implied Contracts

Implied-in-fact contracts arise from the conduct of the parties where the circumstances, viewed reasonably, suggest an intent to enter into a contractual relationship.
Common examples include visiting a mechanic or doctor.

Unjust Enrichment

Implied-in-law (quasi-contract) arises when one party is unjustly enriched at the expense of the other.
This doctrine does not apply if the other party was a volunteer or an officious meddler.

Contract Formation

Three elements are necessary for contract formation.

Contract Formation Overview

A contract is a legally enforceable promise, or exchange of promises, to do or not do something.
The key to understanding contracts is the concept of “manifestation of assent."
Contracts can be written or oral, express or implied.
Contract law ensures people can rely on promises and provides needed flexibility and precision in expectations.
Contract rules are derived from common law and the Uniform Commercial Code (UCC).

Key Elements of a Contract

There are three essential elements needed to form a contract: offer, acceptance, and consideration.

Offer

An offer must be communicated, directed at a specific person(s), indicate a desire to contract, and create an understanding that a contract will form upon acceptance.
The offer must have definite and specific terms.
Offers can terminate when the offerree rejects the offer, makes a counteroffer, the offeror revokes the offer, or upon the offeror’s death or mental incompetence.
Revocation must be communicated to the offerree.

Acceptance

Acceptance is the offerree’s manifestation of assent.
Acceptance in a bilateral contract occurs when the offerree makes the required promise.
Acceptance in a unilateral contract occurs when the offerree performs the requested act.
If the offer specifies an exclusive mode of acceptance, the offerree must strictly comply.
If the specified mode of acceptance is not clearly exclusive, any reasonable method is effective.
An offer cannot make failure to act a form of acceptance.

Consideration

Consideration is the receipt of a legal benefit or the suffering of a legal detriment.
Examples of consideration include: promising to do something one has no obligation to do, promising to refrain from doing something one has the right to do, or performing when there is no obligation to do so.
Consideration must be bargained for; prior consideration does not count.

Unilateral Mistake

If only one party is mistaken, the contract is still valid. Mistakes in judgment are not grounds for rescission.
Mistakes in calculation may possibly be grounds for rescission.

Statute of Frauds

The statute of frauds requires a writing for the following contracts to be enforceable: sales of interests in land, performance that cannot be completed in one year, sales of goods for $500 or more, and collateral promises to pay another's debt.
The purpose of the statute of frauds is to prevent potential deception or fraud from oral contracts.
The contract must be evidenced in writing and signed by the "party against whom enforcement is sought."
The statute of frauds makes a contract unenforceable.
Contracts with performance terms of longer than one year fall under the statute of frauds.
Contracts with performance terms for life do not fall under the statute of frauds because the person could die within a year.
Contracts for sale of goods for $500 or more fall under the statute of frauds.

Exceptions to the Statute of Frauds

Partial performance for real estate contracts - Improvement must be made or payment must be made towards the purchase price.
Rules involving goods (UCC) - Example, specialty manufactured goods.
Judicial admission: Defendant admits that a contract exists.

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Description

This quiz covers the fundamental concepts of contract law, including definitions, types of contracts, and the legal frameworks governing them. It explores the distinctions between bilateral and unilateral contracts and the implications of express and implied agreements. Test your knowledge of legal terminology and principles within contract law.