Contracts Law Quiz: Consideration Concepts

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Questions and Answers

What concept does Cardozo enforce in Wood v. Lucy, Lady Duff-Gordon despite the lack of mutuality?

Fraudulent inducement

Good faith obligation (correct)

Illusory promise

Implied duty of performance

In the context of consideration, when may an agreement be deemed insuffcient?

When there is no designated timeframe

When it is a disguised gift (correct)

When it involves mutual promises

When both parties agree to its terms

Which case illustrates the concept of donative intent in relation to consideration?

Schnell v. Nell

Fischer v. Union Trust Co. (correct)

Alaska Packers v. Domenico

Wood v. Lucy, Lady Duff-Gordon

What is the primary purpose of the Pre-Existing Duty Rule?

To prevent extortion of modifications Signup and view all the answers

Under the Pre-Existing Duty Rule, what must be true for a promise to incur consideration?

It must offer a new detriment Signup and view all the answers

What did the court decide in Schnell v. Nell regarding past consideration?

It cannot constitute valid consideration Signup and view all the answers

What principle is represented by Fuller/Formalism regarding consideration?

Focus on formality and freedom of contract Signup and view all the answers

What is a potential outcome of erroneously classifying a promise as enforceable?

Legal enforcement of non-commercial promises Signup and view all the answers

What type of damages were awarded to Dicker in the case involving ‘dealer franchise’?

Reliance damages Signup and view all the answers

What is one argument in favor of enforcing promises without consideration?

It protects a party's reliance. Signup and view all the answers

Which argument against promissory estoppel (PE) emphasizes the necessity of a bargain for exchange?

The economic argument. Signup and view all the answers

What must be established to determine if enrichment is unjust in terms of unjust enrichment?

There must be no humanitarian intent or implied benefit. Signup and view all the answers

What is a primary objective of enforcing promises even in the absence of consideration?

To prevent unjust enrichment. Signup and view all the answers

In cases of non-promissory restitution, what is a determining factor for the benefit received?

The benefit must have been offered as a gift. Signup and view all the answers

Which case exemplifies a situation where a benefit cannot be recovered due to lack of discussion about payment?

Martin v. Little, Brown & Co Signup and view all the answers

What can be argued in the context of receiving unordered merchandise?

The recipient may keep or return the merchandise under certain statutes. Signup and view all the answers

What happens to the terms if parties do not agree in writing?

The terms are replaced with UCC gap fillers. Signup and view all the answers

In Klocek v. Gateway, what was the key issue regarding the enforceability of the arbitration provision?

The added term was a material term that was never agreed to. Signup and view all the answers

Under § 2-207(1), which of the following indicates definite and seasonable acceptance?

A written confirmation sent after an oral agreement. Signup and view all the answers

If a transaction does not involve merchants, what happens to additional terms proposed?

They become unenforceable without assent. Signup and view all the answers

What defines a merchant under § 2-104 Cmt 2?

Someone with requisite business knowledge. Signup and view all the answers

What must happen for different terms to become proposals when parties are not merchants?

The offeror must agree to the different terms. Signup and view all the answers

Which statement is true regarding the interpretation of additional terms under § 2-207(2)?

Additional terms do not include different terms, according to Cmt 6. Signup and view all the answers

What occurs if an offer expressly limits acceptance?

Acceptance is only valid if the original terms are followed. Signup and view all the answers

What factors determine if a detriment has been bargained for in a promise?

The promisor must seek the promisee's forbearance in exchange for the promise. Signup and view all the answers

In the case of Whitten v. Greeley-Shaw, why was forbearance not considered valid consideration?

There was no evidence the promisor requested the forbearance. Signup and view all the answers

Which characteristic distinguishes a gratuitous promise from a bargained-for exchange?

A lack of benefit to the promisor in the exchange. Signup and view all the answers

In Sharon v. Sharon, what was established regarding forbearance?

Sufficient consideration can arise even if the forbearance is not induced by a promise. Signup and view all the answers

What does R 2D § 81(1) state regarding the inducement of a promise?

A promise does not need to be induced by the bargain. Signup and view all the answers

What was the implication of donative intent in Kirksey v. Kirksey?

Donative intent indicated that there was no exchange for consideration. Signup and view all the answers

What is a key requirement to identify a promise as a bargain versus a gift?

The promisor must receive something of value in return. Signup and view all the answers

What does the term 'forbearance' imply in the context of legal agreements?

The promisee refrains from exercising a legal right. Signup and view all the answers

What is a necessary condition for a contract to be enforceable under the Statute of Frauds?

A written memorandum signed by the party to be charged Signup and view all the answers

Which of the following is NOT listed as a valid defense to the enforcement of a contract?

Mutual agreement Signup and view all the answers

How can the obligation of good faith be demonstrated before treating a contract as breached?

By giving reasonable notification before the contract is considered breached Signup and view all the answers

What is a consequence of a contract being indefinite in duration?

It is valid for a reasonable time and may be terminated at any time by either party Signup and view all the answers

Which of the following best describes the purpose of the Statute of Frauds?

To encourage parties to memorialize certain agreements by putting them in writing Signup and view all the answers

What must options regarding contract performance be based on according to UCC § 2-311?

Good faith and commercial reasonableness Signup and view all the answers

What could the consequence be of the Statute of Frauds being improperly applied?

Facilitation of fraud and perjury regarding true contracts Signup and view all the answers

Which condition would render a contract to answer for a duty of a decedent enforceable under the Statute of Frauds?

Written memorandum signed by the party to be charged Signup and view all the answers

What does the knockout rule refer to in contract terms?

Different terms cancel each other out. Signup and view all the answers

Under what condition is an addition to a contract not considered valid?

If it materially alters the contract. Signup and view all the answers

What is required for additional terms to be added into a contract?

Notification of objection within reasonable time. Signup and view all the answers

What does the term 'clickwrap' imply in the context of agreements?

A contract is enforceable through affirmative actions. Signup and view all the answers

Which statement correctly describes shrink-wrap agreements?

They require opening the product to accept the terms. Signup and view all the answers

What is the legal implication of conspicuous notice in contract formation?

It ensures users cannot claim ignorance. Signup and view all the answers

Under UCC, how is software classified?

As a good. Signup and view all the answers

What distinguishes browsewrap agreements from clickwrap agreements?

Browsewrap does not need to show terms directly. Signup and view all the answers

Study Notes

I. Overview

Contract law creates legally binding promises, with remedies for breach.
Contracts can be written or oral/verbal.
The society determines the rules used to enforce contracts.

II. Enforceability

Promises supported by consideration are enforceable.
- Consideration involves a bargained-for exchange; one party giving something up and the other party doing something in return.
- Pre-existing duty rule: existing legal duty doesn't constitute consideration in a new separate contract.
Promissory estoppel: reliance on a promise, even without consideration, can be enforceable.
- Requirement of reasonable reliance by promisee.
- Detriment suffered by promisee.
Unjust enrichment: party unjustly benefitted at another's expense must make restitution.
- Determining if enrichment is unjust.
- No gratuitous assumption the benefit was given.

III. Mutual Assent

Evidence of intent to be bound by contract from both parties.
Common law:
- Offer must be definite, clear, and communicated.
- Acceptance must mirror the offer exactly.
UCC (Uniform Commercial Code):
- Allows modifications in contract terms.
- Addresses battle of forms. (Fluid Acceptance).

IV. Defenses

Statute of Frauds: Certain contracts require written evidence to be enforceable.
Misconduct: Fraud, duress, or misrepresentation can void a contract.
Mistakes: Mistakes about material facts can make a contract voidable.
Changed circumstances: impossibility or frustration of purpose may discharge a party's duty.
Unconscionability: terms of a contract so unfair they are unenforceable as a matter of law.
Illegality: contract violates public policy or a law and is therefore unenforceable.

V. Performance – Terms of Contract and Interpretation

Parol evidence rule: bars extrinsic evidence (oral or written) that contradicts the final written agreement.
Consistent and additional terms of the contract are usually allowed.
Ambiguity: if contract terms are unclear, extrinsic evidence may be used to clarify.

VI. Remedies

Expectation damages: put non-breaching party in the position they would have been in if contract had been performed.
- Measure the difference in value.
- Include incidental damages.
- Include consequential damages (only if foreseeable).
Reliance damages: compensate for expenses reasonably related to performance in reliance on the contract.
Restitution damages: return any benefit conferred to the breaching party when unjust enrichment.

VII. UCC Requirements

Applies to contracts for the sale of goods.
Provisions for:
- Output requirements
- Delivery times
- Payment schedules
Addresses issues unique to goods contracts, such as the "perfect tender" rule.

VIII. Additional Topics

Clickwrap agreements: assent to terms of use upon clicking "I agree."
Contracts of adhesion: standardized terms offered on a take-it-or-leave-it basis.
Partial agreements (open/indefinite terms): contracts with missing details, but legally enforceable if intent is clear.

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Description

Test your knowledge on key concepts in contracts law, focusing on consideration. This quiz covers essential cases and principles such as mutuality, donative intent, and the Pre-Existing Duty Rule. Boost your understanding of how these elements affect enforceability in legal agreements.