BLAW Exam 4 (Russell) UPDATED ACTUAL QUESTIONS AND CORRECT
ANSWERS
Role of contract law Provides a legal mechanism to deal with other.
Freedom of contract There are responsibilities imposed on parties who commit to binding
relationships.
Lex mercatoria Commercial rules merchants devised over centuries of doing business across
national boundaries that English courts considered disputes on.
Restatement (Second) of Contracts Authoritative document that provides a summary of common law of contracts.
Uniform Commercial Code A state statue that promotes uniformity of the laws relating to commercial sales of
goods. This statue modifies common-law contracts.
Definition of a contract A promise or set of promises, for breach of which, the law provides a remedy, or
the performance of which the law in some way recognizes as a duty. Not all
promises are enforceable contracts as they must meet requirements of a contract.
Binding v. nonbinding promises A binding promise is contractual and is enforceable if it meets the requirements of
a contract. If a nonbinding promise isn't performed, contract law does not provide
a remedy.
Express contract A contract that is oral or written. Key terms expressly agreed upon by the parties.
Implied contracts If it arises from actions rather than the expressions of the parties. I.e given the way
the parties have acted with respect to each other, the court may infer a contract
exists. Ex. You are expected to pay for a haircut if you sit in the chair and get your
haircut.
Key Elements of a Contract (1) offer and acceptance: an agreement
(2) consideration
(3) contractual capacity
(4) legality
(5) genuine consent
(6) * Writing if necessary under Statute of Frauds
Manifestation of intent To make an offer, the offeror must have the intent to be bound to the contract,
and that intent must be clearly expressed or manifested.
Preliminary Negotiations request or invitation to negotiate is not an offer
, Advertisements as offers Most ads are regarded as invitations for others to submit an offer to buy, rather
than offers themselves.
Communication of the offer and acceptance An acceptance requires knowledge of the offer by the offeree. Ex. Returning a
lost dog and later learning there was a reward doesn't constitute a contract.
Terminating an offer An offer can be terminated by:
1) Withdrawing it (Revocation)
2) Rejecting it
3) Through lapse of time
Counteroffer Are created by rejecting the original offer but keeping negotiations open by
presenting new conditions.
Option contract An offer that is included in a formal or informal contract that creates an obligation
to keep an offer open for a specified period. Ex. Paying $100 to have the choice to
buy a house within 10 days.
Termination of an offer by operation of law An offer can be terminated by..
-Intervening illegality
-Destruction of subject matter
-Death or insanity of offer or offeree.
Element #1: Acceptance An acceptance must be unconditional, unequivocal, and properly communicated.
Bilateral contracts A promise for a promise. Ex. Agreeing to sell you car in exchange for $2000
Unilateral contracts One party makes a promise, and the other party accepts by doing the requested
action. Ex. Someone saying they will pay you $100 if you find and return their lost
dog. You only accept by actually finding and returning the dog.
Element #2: Consideration Something of value or something bargained for in exchange for a promise. This
element keeps contract from being a gift.
What does consideration require? It requires either a legal detriment to the promisee or a legal benefit to the
promisor.
Promissory Estoppel Use of this equitable doctrine AVOIDS INJUSTICE due to promisee's
REASONABLE RELIANCE on the promisor's promise. Promisor is prevented from
denying a promise.
Example of promissory estoppel Quitting your job because your aunt says that she will pay for you tuition. If she
refuses to pay your tuition promissory estoppel may apply even though there
wasn't a contract. You suffered a financial loss by reasonably relying on your aunt
and should be compensated to avoid injustice.
ANSWERS
Role of contract law Provides a legal mechanism to deal with other.
Freedom of contract There are responsibilities imposed on parties who commit to binding
relationships.
Lex mercatoria Commercial rules merchants devised over centuries of doing business across
national boundaries that English courts considered disputes on.
Restatement (Second) of Contracts Authoritative document that provides a summary of common law of contracts.
Uniform Commercial Code A state statue that promotes uniformity of the laws relating to commercial sales of
goods. This statue modifies common-law contracts.
Definition of a contract A promise or set of promises, for breach of which, the law provides a remedy, or
the performance of which the law in some way recognizes as a duty. Not all
promises are enforceable contracts as they must meet requirements of a contract.
Binding v. nonbinding promises A binding promise is contractual and is enforceable if it meets the requirements of
a contract. If a nonbinding promise isn't performed, contract law does not provide
a remedy.
Express contract A contract that is oral or written. Key terms expressly agreed upon by the parties.
Implied contracts If it arises from actions rather than the expressions of the parties. I.e given the way
the parties have acted with respect to each other, the court may infer a contract
exists. Ex. You are expected to pay for a haircut if you sit in the chair and get your
haircut.
Key Elements of a Contract (1) offer and acceptance: an agreement
(2) consideration
(3) contractual capacity
(4) legality
(5) genuine consent
(6) * Writing if necessary under Statute of Frauds
Manifestation of intent To make an offer, the offeror must have the intent to be bound to the contract,
and that intent must be clearly expressed or manifested.
Preliminary Negotiations request or invitation to negotiate is not an offer
, Advertisements as offers Most ads are regarded as invitations for others to submit an offer to buy, rather
than offers themselves.
Communication of the offer and acceptance An acceptance requires knowledge of the offer by the offeree. Ex. Returning a
lost dog and later learning there was a reward doesn't constitute a contract.
Terminating an offer An offer can be terminated by:
1) Withdrawing it (Revocation)
2) Rejecting it
3) Through lapse of time
Counteroffer Are created by rejecting the original offer but keeping negotiations open by
presenting new conditions.
Option contract An offer that is included in a formal or informal contract that creates an obligation
to keep an offer open for a specified period. Ex. Paying $100 to have the choice to
buy a house within 10 days.
Termination of an offer by operation of law An offer can be terminated by..
-Intervening illegality
-Destruction of subject matter
-Death or insanity of offer or offeree.
Element #1: Acceptance An acceptance must be unconditional, unequivocal, and properly communicated.
Bilateral contracts A promise for a promise. Ex. Agreeing to sell you car in exchange for $2000
Unilateral contracts One party makes a promise, and the other party accepts by doing the requested
action. Ex. Someone saying they will pay you $100 if you find and return their lost
dog. You only accept by actually finding and returning the dog.
Element #2: Consideration Something of value or something bargained for in exchange for a promise. This
element keeps contract from being a gift.
What does consideration require? It requires either a legal detriment to the promisee or a legal benefit to the
promisor.
Promissory Estoppel Use of this equitable doctrine AVOIDS INJUSTICE due to promisee's
REASONABLE RELIANCE on the promisor's promise. Promisor is prevented from
denying a promise.
Example of promissory estoppel Quitting your job because your aunt says that she will pay for you tuition. If she
refuses to pay your tuition promissory estoppel may apply even though there
wasn't a contract. You suffered a financial loss by reasonably relying on your aunt
and should be compensated to avoid injustice.
