Contract Law: Termination of Offers & Statute of Frauds

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Questions and Answers

What is the primary characteristic of a contract rendered void due to illegality?

It cannot be enforced by either party. (correct)

It is enforceable by one party if agreed upon.

It can be rectified through legal amendments.

It only affects the party who committed the crime.

What scenario best exemplifies 'commercial impracticability' in contract law?

A price hike makes the costs unbearable but achievable.

A supplier fails to deliver goods due to a natural disaster. (correct)

A sudden spike in demand causes stock shortages.

A party neglects to read the fine print of a contract.

Which of the following best defines 'force majeure' in contract terms?

A right to seek damages due to minor breaches.

A clause that allows renegotiation of contract terms.

A mutual agreement to suspend contractual obligations.

An exemption from performance due to uncontrollable events. (correct)

In which situation would promissory estoppel apply?

One party reasonably relies on a clear promise to their detriment. Signup and view all the answers

What is an 'unconscionable contract'?

A contract benefiting one party excessively while burdening another. Signup and view all the answers

What distinguishes 'duress' in contract law?

Pressure applied to compel a party to contract. Signup and view all the answers

Which of the following statements about 'covenants not to compete' is true?

They must be reasonable to be enforceable. Signup and view all the answers

Which of the following best describes compensatory damages?

Damages intended to restore the situation to what it would have been without the breach. Signup and view all the answers

What is the primary function of a Letter of Credit in international trade?

To assure the seller of payment upon receiving goods. Signup and view all the answers

Which situation is best described by the term 'quasi contract'?

An arrangement imposed by a court due to one party's unjust enrichment. Signup and view all the answers

What is the main purpose of a Force Majeure clause in international contracts?

To outline consequences of unforeseen events on contract performance. Signup and view all the answers

What does the Parol Evidence Rule establish in relation to contracts?

Prior negotiations cannot contradict the written terms of a contract. Signup and view all the answers

In the context of contract law, what do Conditions Precedent refer to?

Events that must occur before a contract is executed. Signup and view all the answers

Which of the following scenarios exemplifies conditions concurrent?

The buyer receives goods while making a payment simultaneously. Signup and view all the answers

What is the doctrine of substantial performance primarily concerned with?

Allowing minor deviations in construction contracts under certain circumstances. Signup and view all the answers

What does the term 'Accord and Satisfaction' refer to in contract law?

A new agreement that resolves an existing obligation under different terms. Signup and view all the answers

What is the purpose of a bill of lading in international contracts?

It serves as a receipt for shipment issued by the carrier. Signup and view all the answers

Which type of damage refers to profits lost due to a breach of contract?

Consequential damages Signup and view all the answers

What restricts credit card solicitation from individuals under 21?

CARD Act Signup and view all the answers

Which principle allows an individual to claim a right to a contract benefit, despite not being a party to it?

Third-party beneficiary Signup and view all the answers

What type of damages are agreed upon in advance by the parties involved in a contract?

Liquidated damages Signup and view all the answers

Under the CISG, when is acceptance effective?

Upon receipt by the offeror Signup and view all the answers

Which of the following is NOT a characteristic of assignment in contract law?

It terminates the original contract. Signup and view all the answers

What is the key aspect of performance guarantees in international contracts?

They provide assurance for fulfilling contractual obligations. Signup and view all the answers

Study Notes

Termination of an Offer

Revocation occurs when the offeror withdraws the offer.
Acceptance of an offer removes the offeror's right to revoke.
Options cannot be revoked under common law. An option is a contract where the offeree pays for the right to consider an offer for a certain period.
A merchant's firm offer, made in a signed record by a merchant, can't be revoked for a specific time (up to 3 months).
Rejection ends an offer and cannot be accepted again unless the offeror renews it.
A counteroffer (under common law) invalidates the original offer.
Under the UCC, adding non-material terms to an offer doesn't automatically invalidate it.
An offer can terminate by expiration if a deadline is set, or by the death of the offeror.

Statute of Frauds

Some contracts need to be in writing to be enforceable (e.g., sale of real estate, contracts not performed in a year).
Certain UCC contracts ($5000 or more) also require written evidence.
If the parties to an oral contract perform the contract, a court may enforce it even though it should be written.

Defenses to Contract Formation

Capacity: Minors and those with impaired mental capacity can avoid contracts.
Misrepresentation: A contract can be voided if one party was not given complete and accurate information.
Fraud: Intentional misrepresentation or failure to disclose material information.
Duress: Physical force or coercion.
Undue Influence: Exploiting a relationship of trust or dependency to gain an unfair advantage.
Illegality: Agreements violating laws or public policy are void.
Unconscionable contracts: Contracts that are unreasonably unfair to one party.

Performance Excused

Impossibility: Performance of a contract may be excused if it becomes objectively impossible.
Commercial Impracticability: Performance is excused if circumstances are dramatically different than what was anticipated when the contract was made.
Force Majeure: Excuses performance due to extraordinary events (e.g., war, economic crisis).

Remedies for Non-Performance

Compensatory Damages: Damages to return the non-breaching party to the position they would have been in without the breach.
Incidental Damages: Costs directly stemming from the breach (e.g., advertising costs).
Consequential Damages: Lost profits due to the breach.
Liquidated Damages: Pre-agreed damages in the contract.

Third-Party Rights in Contracts

Third-Party Beneficiary: Someone who benefits from a contract, but is not a party to it.
Assignment: Transferring the benefits of a contract to another party.
Delegation: Transferring contractual duties to another party.

Credit Disclosure

Federal laws require disclosure of interest charges and fees for loans.

International Contract Performance

International contracts may have built-in performance guarantees (e.g., bills of lading, letters of credit).

Other Contract Concepts

Implied-in-law contracts (quasi contracts): Contracts implied by law to prevent unjust enrichment.
Parol Evidence Rule: Oral agreements not included in a written contract are inadmissible in court.
Electronic Signatures: Electronic signatures are valid in many circumstances (ESIGN).
Puffing: Opinions about the subject matter of a contract are not binding.
Fair Credit Billing Act: Allows consumers to challenge billing errors.
Bankruptcy Abuse Prevention and Consumer Protection Act: Guidelines for bankruptcy eligibility criteria.
Fair Credit Reporting Act (FCRA): Protects consumers' rights regarding credit information.
Promissory Estoppel: A promise made can be binding even without consideration if the other party relied on it.

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Description

This quiz covers key concepts related to the termination of offers in contract law, including revocation, acceptance, and counteroffers. Additionally, it addresses the Statute of Frauds and the requirements for certain contracts to be in writing. Test your understanding of these essential legal principles.