Chapter 11 Questions & Solutions

Chapter 11 Questions & Solutions Contract law is based on the notion that you are the best judge of your own welfare A contract is a promise that the law will enforce true For a contract to be __________, seven requirements _________ present enforceable must be capacity the parties must be adults of sound mind legality the contact must be for a lawful purpose consideration there has to be bargaining that leads to an exchange between the parties writing while verbal agreements are often contracts, some types of contracts must be in writing to be enforceable acceptance once a party receives an offer, he must respond to it in a certain way offer all contracts begin when a person or a company proposes a deal, but only proposals made in certain ways amount to a legally recognized offer consent certain kinds of trickery and force can prevent the formation of a contract If Ella and Declan have a contract that falls apart, can Tyrone sue to enforce the agreement? third-party interests If a party fully accomplishes what the contract requires, his duties are discharged. But what if his obligations are performed poorly, or not at all? performance and discharge Relief a court will award to a party injured by a breach of contract. remedies Contract law varies from state to state. true In the surrogacy suit between Mary Beth Whitehead and William and Elizabeth Stern, the court awarded the baby to the Sterns because it was in the baby's best interest What are the three basic questions that are important when analyzing contracts? 1. is it certain that the defendant promised to do something? 2. if she did not promise, are there unusual reasons to hold her liable anyway? 3. if the defendant did promise, is it fair to make her honor her word? In the twelfth and thirteenth centuries, courts did not consider promises binding unless they were in writing and sealed By the fifteenth century, courts would permit suits based on a broken promise if one party had paid some amount of money Which of the following are factors cited by the court in Davis v. Mason as the basis for its ruling on the noncompetition agreement? 1. the terms were not necessarily unreasonable 2. the parties exchanged fair consideration 3. the public was unlikely to be injured by the agreement Davis v. Mason was typical of disputes at that time. The court took a _______ approach, declaring that parties had ________ and would have to live with the consequences. The law had gone from ________ most promises to _______ nearly all. laissez-faire freedom to contract ignoring enforcing In the early twentieth century, courts increasingly began to analyze the basic fairness of a contract. What change lead to this shift in the common law? farms and small businesses were being replaced by corporations Today, courts enforce the majority of contracts. true Courts will not enforce a sales agreement ________. when the agreement is not socially responsible The vast majority of contracts are unilateral contracts. false A bilateral agreement can be for goods, services, and almost any other purpose executory contract a contract that has been made, but one or more parties has not fulfilled its obligations example: lazy joe won't go walk his dog even though he AGREED!!!!!!! executed contract a contract in which all parties have fulfilled their obligations example: done the DAMN THANG unilateral contract a contract in which one party makes a promise that the other party can accept only by actually doing something example: "I will pay you $1,000 if you bring my car from Cleveland to San Francisco." bilateral contract a contract in which each party has made a promise to do something example: a person offers their home for sale, and a buyer agrees to pay $150,000 to purchase the home A medical insurance contract is a(n)________ contract, because the insurance company agrees to pay for treatment if the policyholder goes to the doctor. If the policyholder does not go to the doctor, the insurance company does not pay. unilateral Coworkers Mindy and Jerome agree that Mindy will drive them to work every weekday for one month, and then Jerome will drive them both to work every weekday the following month. This arrangement is a(n) _________ , ________ agreement. executory bilateral valid contract satsfies all of the law's requirements, a court will enforce it void agreement cannot be enforced by either party unenforceable agreement the parties intend to form a valid bargain but a court declares that some rule of law prevents enforcing it voidable contract the law permits one party to terminate the agreement party in a voidable contract may retain the benefits of the agreement while repudiating its obligations. false In Mr. W Fireworks v. Ozuna the court decided in favor of Ozuna, declaring the contract _______. void Isaac puts together a plan to rob First National Bank, and hires Cynthia to assist him when he does it. He and Cynthia agree that Cynthia will be paid $3,000 for her help in the heist. The day before they are set to rob the bank, Cynthia backs out of the deal, saying she does not want to commit a crime. Isaac sues to enforce the agreement. What result? the contract is void because the purpose of the deal is illegal An injured plaintiff can never recover without a contract. false In a(n) ________ the two parties explicitly state all the important terms of their agreement. express contract In a(n) ______ the words and conduct of the parties indicate that they intend an agreement. implied contract Today, the most hotly contested disputes about implied contracts arise . in am employment setting If a plaintiff can show that he has been injured, but does not have a contract, he can sometimes still recover under certain theories. In _________ cases, the defendant received a benefit from the plaintiff. In _________ cases, the defendant made a promise that the plaintiff relied on. quasi-contract promissory estoppel Which of the following must a plaintiff show in order to prevail in a promissory estoppel claim? 1. the plaintiff did rely on the promise 2. the only way to avoid injustice is to enforce the promise 3. the defendant made a promise to the plaintiff 4. the defendant knew the plaintiff would likely rely on the promise A _______ makes a promise to a ________. promisor promisee Promissory estoppel allows a party to recover without a contract in certain circumstances, but these types of claims rarely succeed in court When a court relies on the theory of ________ , the damages awarded to the plaintiff are called _________, which means that the plaintiff gets "as much as he deserves." This is a form of __________. quasi-contracts quantum meruit judicial activism Which of the following must a plaintiff prove to win a quasi-contract claim? 1. the defendant knew the plaintiff reasonably expected to be paid for the benefit 2. the plaintiff gave some benefit to the defendant 3. the defendant would be unjustly enriched if he did not pay Which of the following would be considered "goods" under UCC Article 2? 1. 500 turtles 2. sweatshirts 3. bananas When ruling on common law contract claims, state judges are under no obligation to follow the precedent of other states. true When analyzing any contract problem, it is important to determine whether the UCC governs the dispute. It probably does if the contract concerns the sale of goods The UCC was drafted in order to facilitate the easy formation and enforcement of contracts In a mixed contract, UCC Article 2 governs only if ________ was _______. the primary purpose the sale of goods Every state has adopted at least part of the UCC In Fallsview Glatt Kosher Caterers, Inc. v. Rosenfeld the court found that the UCC did not govern the contract because the contract did not specify any quantity of goods One of the factors leading courts away from a laissez-faire approach to contract law was a change in relative bargaining power between parties to contracts. Paid surrogacy contracts are viewed by the legislative majority in all states as immoral and illegal. false All oral contracts are quasi-contracts until they are completely executed. false On January 16, Deb offers to sell her waterbed to Colleen for $600. Colleen accepts and agrees to pay Deb $600 on January 27. Which of the following is correct? until January 16, the contract was executory. One purpose of contract law is to determine which agreements are worthy of legal enforcement. true Mary goes into Honest Harry's Electronics and purchases a TV. Mary agrees to pay for the TV in 30 days on the store's "30 days same as cash" plan. This is an executory contract. true Which of the following is NOT required to establish promissory estoppel? a promise made by the plaintiff in response to the defendant's promise Miles purchased a lawnmower with an attached warning that said, "The manufacturer is not responsible in the case of an injury caused by the lawnmower." If Miles is injured because of a defect in the mower and sues the lawnmower manufacturer, he will most likely win, as this warning would be unenforceable. Robert offers to buy a car from Jane for $400. Jane must accept this offer in order to form an enforceable contract. true A valid contract can legally be voided by either party. false Courts may award damages called quantum meruit, which means "as much as he deserves." Noncompetition agreements are more common today than they were in the past, although policy issues they raised in the 1700s have never gone away. The element of a contract that states the parties must be adults of sound mind is consent. false it is capacity Robert, a minor, buys a stereo from Jane for $200. State law allows a minor to disaffirm contracts within a reasonable time after turning 18. Robert disaffirms the contract the day after turning 18 and returns the stereo. this contract was a voidable contract, Robert can disaffirm