CPA REG: Contract Law
2 remedies for breach of contract - ✔✔1. Rescind (cancel) contract & sue for restitution
2. Affirm contract & sue for [actual] damages
3 parts of a valid contract - ✔✔1. Offer
2. Acceptance
3. Consideration
Assignment of rights/duties: who's liable? - ✔✔the assignor - unless novation & assignee substitutes
assignor
Bilateral vs unilateral contract - ✔✔bilateral: promise for a promise - can accept
unilateral: promise for an act (one sided) - can only accept when perform
can an intended 3rd party beneficiary enforce a contract? - ✔✔yes if specifically designed to benefit the
outside party
Can you assign option contract rights? - ✔✔Yes
Can you rescind a contract if innocent misrepresentation? - ✔✔Yes, must prove MILE (intent reliance,
error b/c misrep)
Can you revoke an option contract? - ✔✔No. Consideration was paid to keep the offer open.
Can you sue for anticipatory breach of contract? (ex. nah I won't do that in 1 month) - ✔✔yes. can
cancel the contract, sue for compensatory damages
Can you sue for punitive damages for breach of contract? - ✔✔no
, Can you sue for specific performance? - ✔✔no unless involving unique property (artwork, patent, land)
Compensatory vs consequential damages - ✔✔compensatory: direct losses/profits
consequential: indirect costs & anticipated losses
Conditional acceptance? Ex. If agree to buy house only if the bank approves their loan application, is it
valid? - ✔✔Yes! Must make a good faith attempt to ensure condition is satisfied (valid loan application
and sincerely attempt)
discharge by agreement (rescind, accord&satisfaction, novation) - ✔✔rescission: restore to original
position
accord & satisfaction: discharge original duty & make new
novation: one party accepts performance of 3rd party in place of original party (whole new contract)
Does the statute of frauds apply to services? - ✔✔(written req'd) No, unless > 1 year
Donee vs creditor beneficiary - ✔✔Donnee: receiving as a gift - can enforce against party owing benefit,
not arranging it (giver)
Creditor: receiving to benefit them/settle debt owed - can sue either party
Exceptions for sale of goods written requirement (SOF) - ✔✔Specifically manufactured
Partially performed (to extent of performance)
Admits in court to making contract
Merchant doesn't object within 10 days of confirmation
Express vs Implied-in-fact contract - ✔✔Express: oral/written with explicit terms of who, what, when,
where, how much
Implied-in-fact: behavior makes it clear of terms (don't need to expressly write it out.
2 remedies for breach of contract - ✔✔1. Rescind (cancel) contract & sue for restitution
2. Affirm contract & sue for [actual] damages
3 parts of a valid contract - ✔✔1. Offer
2. Acceptance
3. Consideration
Assignment of rights/duties: who's liable? - ✔✔the assignor - unless novation & assignee substitutes
assignor
Bilateral vs unilateral contract - ✔✔bilateral: promise for a promise - can accept
unilateral: promise for an act (one sided) - can only accept when perform
can an intended 3rd party beneficiary enforce a contract? - ✔✔yes if specifically designed to benefit the
outside party
Can you assign option contract rights? - ✔✔Yes
Can you rescind a contract if innocent misrepresentation? - ✔✔Yes, must prove MILE (intent reliance,
error b/c misrep)
Can you revoke an option contract? - ✔✔No. Consideration was paid to keep the offer open.
Can you sue for anticipatory breach of contract? (ex. nah I won't do that in 1 month) - ✔✔yes. can
cancel the contract, sue for compensatory damages
Can you sue for punitive damages for breach of contract? - ✔✔no
, Can you sue for specific performance? - ✔✔no unless involving unique property (artwork, patent, land)
Compensatory vs consequential damages - ✔✔compensatory: direct losses/profits
consequential: indirect costs & anticipated losses
Conditional acceptance? Ex. If agree to buy house only if the bank approves their loan application, is it
valid? - ✔✔Yes! Must make a good faith attempt to ensure condition is satisfied (valid loan application
and sincerely attempt)
discharge by agreement (rescind, accord&satisfaction, novation) - ✔✔rescission: restore to original
position
accord & satisfaction: discharge original duty & make new
novation: one party accepts performance of 3rd party in place of original party (whole new contract)
Does the statute of frauds apply to services? - ✔✔(written req'd) No, unless > 1 year
Donee vs creditor beneficiary - ✔✔Donnee: receiving as a gift - can enforce against party owing benefit,
not arranging it (giver)
Creditor: receiving to benefit them/settle debt owed - can sue either party
Exceptions for sale of goods written requirement (SOF) - ✔✔Specifically manufactured
Partially performed (to extent of performance)
Admits in court to making contract
Merchant doesn't object within 10 days of confirmation
Express vs Implied-in-fact contract - ✔✔Express: oral/written with explicit terms of who, what, when,
where, how much
Implied-in-fact: behavior makes it clear of terms (don't need to expressly write it out.
