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Questions and Answers
What is required to prove a commercial frustration of a contract?
What is required to prove a commercial frustration of a contract?
Which of the following damages aims to compensate the injured party for the loss of their expected benefits from the contract?
Which of the following damages aims to compensate the injured party for the loss of their expected benefits from the contract?
When can anticipatory repudiation be treated as a breach of contract?
When can anticipatory repudiation be treated as a breach of contract?
Which of the following is a reason why courts are reluctant to discharge a duty under the doctrine of impracticability?
Which of the following is a reason why courts are reluctant to discharge a duty under the doctrine of impracticability?
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In the event of a major breach, which of the following rights does the injured party have?
In the event of a major breach, which of the following rights does the injured party have?
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Which remedy requires the court to order one party to perform their contractual obligations as agreed?
Which remedy requires the court to order one party to perform their contractual obligations as agreed?
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What characterizes a minor breach of contract?
What characterizes a minor breach of contract?
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Under what circumstance would a death not discharge performance of a commercial contract?
Under what circumstance would a death not discharge performance of a commercial contract?
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What must be shown for a third party beneficiary to prevail under a contract?
What must be shown for a third party beneficiary to prevail under a contract?
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Which of the following is a requirement for the assignment of rights under a contract?
Which of the following is a requirement for the assignment of rights under a contract?
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What is a primary characteristic of a delegable duty in a contract?
What is a primary characteristic of a delegable duty in a contract?
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Which type of condition in a contract is certain and must occur for performance to be due?
Which type of condition in a contract is certain and must occur for performance to be due?
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What is anticipatory repudiation in contract performance?
What is anticipatory repudiation in contract performance?
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Which of the following is a requirement for discharge of contract duties due to impossibility?
Which of the following is a requirement for discharge of contract duties due to impossibility?
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Which of the following best describes 'commercial frustration' in contract law?
Which of the following best describes 'commercial frustration' in contract law?
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What is the purpose of the 'four corners rule' in integrated writing?
What is the purpose of the 'four corners rule' in integrated writing?
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What is required for a valid acceptance of a contract?
What is required for a valid acceptance of a contract?
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Which of the following is considered valid consideration in a contract?
Which of the following is considered valid consideration in a contract?
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Which contracts are required to be in writing under the Statute of Frauds?
Which contracts are required to be in writing under the Statute of Frauds?
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Which of the following would NOT be a valid form of consideration?
Which of the following would NOT be a valid form of consideration?
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What does the Parole Evidence Rule state?
What does the Parole Evidence Rule state?
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Under what condition can a counteroffer be made without terminating the original offer?
Under what condition can a counteroffer be made without terminating the original offer?
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Which of these constitutes a breach of contract?
Which of these constitutes a breach of contract?
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What type of duty affects consideration in a contract?
What type of duty affects consideration in a contract?
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In contract law, which of the following can be a valid defense to the formation of a contract?
In contract law, which of the following can be a valid defense to the formation of a contract?
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When does acceptance of a contract become effective under the Mailbox Rule?
When does acceptance of a contract become effective under the Mailbox Rule?
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Study Notes
Contracts Overview
- Contracts are legally binding agreements.
- A contract is often referred to as a "K".
- Contracts can differ from enforceable agreements.
- Contracts can be bilateral (two promises) or unilateral (one promise).
- The fundamental elements of a K are offer, acceptance, consideration, capacity, and legality.
- Analyzing a contract involves three key steps:
- Determining if a valid contract exists.
- Identifying issues regarding performance.
- Determining if there is a breach and possible remedies.
- Contract formation is a vital element. This involves offer, termination (revocation, rejection), acceptance, consideration, and relevant defenses.
Contract Formation
- An offer must show intent to be bound, be definite, and be communicated to the offeree.
- A counteroffer is an implied rejection and creates a new offer.
- A counteroffer made during an option period does not void the option period.
- Acceptance must be communicated; unlike other actions, acceptance is effective upon dispatch.
- Acceptance must be unequivocal from a valid offer.
- Capacity is required for a valid contract; the offeree needs to have the legal ability to enter a contract.
- Consideration is the mutual exchange of value. (Bargained for exchange)
- Past or moral consideration is not appropriate.
- Forbearance to sue on a claim can be consideration as long as the claim is valid.
- Existing promises to pay past debts are considered enforceable; the new promise to pay extends the debt.
- Illusory promises don't establish sufficient consideration.
- Specific pre-existing duties are exceptions, but each case depends on its facts.
- Promissory estoppel can be a substitute for consideration in certain cases.
Defenses to Contract Formation
- The statute of frauds dictates which contracts need to be written.
- Common examples:
- Land sales (and any interest in real property)
- Goods of $500 or more
- Contracts lasting longer than a year.
- If a contract falls under the statute of frauds, the agreement needs a writing with all material terms.
- The writing must be signed by the party to be charged.
- The parole evidence rule prevents outside evidence from modifying integrated contracts.
- An integrated contract is a fully expressed contract.
- If there's no writing, the parole evidence rule doesn't apply.
Third-Party Beneficiaries and Assignments
- Third-party beneficiaries are parties not directly involved in a contract (A-B K).
- For third-party beneficiaries to be enforceable, the contract's parties intended to benefit this third party.
- A valid contract must exist.
- The parties' intent to include a third party must be established when the contract was created.
- Assignments are the transfer of contractual rights; the assignee now assumes the rights of the assignor in the K.
- Assignors must clearly indicate their intention to assign rights to the assignee.
- The rights assigned should be clearly described in writing.
Delegation
- Delegation is the transfer of contractual duties.
- Delegable duties must be appropriate for transfer; some may not be.
- Non-delegable duties might be too personal or prohibited by the contract.
- The delegatee assumes the duties transferred.
- The delegator remains accountable for the original duty if the delegatee does not perform, unless relieved of liability through novation.
Contract Performance
- Conditions impact contractual performance.
- Express conditions are explicitly stated in the contract.
- Implied conditions are those reasonably inferred from the contract.
- Satisfaction (or dissatisfaction) or performance may depend on established standards.
- A breach can cause suspension of performance by the non-defaulting party or ability to sue immediately.
- If a contract has been fully performed by one side, a suit cannot be actioned until the performance time has been reached.
Contract Discharge
- Contract duties can be discharged under changing circumstances.
- Examples: Impossibility, impracticability, or commercial frustration.
- Impossibility: If a contract becomes impossible to fulfill. Cases include an object becoming destroyed, or an artist dies.
- Impracticability: If a contract becomes exceedingly difficult to fulfill (very expensive or risky, etc).
- Commercial Frustration: If the principle purpose of the contract is no longer viable.
- Contracts can have partial, temporary, or full discharges.
Breach of Contract and Remedies
- Breach occurs if a party fails to perform a contract's duties without justification.
- Major breaches allow injured parties to not perform their duties and sue for damages. Also known as a material breach.
- Minor breaches require the injured party to continue their duties, but may recover damages due to the breach. Also known as immaterial.
- Prospective breach is a predicted failure to perform, allowing the impacted party to pursue legal action.
- Damages, including expectation, reliance, liquidated damages, and restitution, are available remedies for breach.
Damages and Remedies
- Compensatory damages attempt to compensate the non-breaching party for financial losses. There are numerous specific methods.
- Expectation damages compensate for losses of expected gains.
- Reliance damages reimburse costs incurred in relying on the contract.
- Liquidated damages are pre-agreed upon damages defined within the contract.
- Restitution damages are used to return the non-breaching party to their pre-contract position.
- Specific Performance orders the breaching party to perform contractual obligations. It's frequently employed where monetary recompense is inadequate.
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Description
Explore the essentials of contracts, including their definitions, types, and crucial elements for validity. This quiz covers topics such as offer, acceptance, consideration, and breach of contract, providing a comprehensive understanding of contractual obligations.
