BUL 4421 FAU GENDLER UPDATED
COMPREHENSIVE QUESTIONS AND ANSWERS
SURE A+
✔✔Adequacy of consideration - ✔✔The court doesn't help you if you made a bad deal
(paid $500 for a $100 TV).
✔✔Exception to Adequacy of consideration - ✔✔if the court believes fraud or undue
influence occurred, the court may look at adequacy of consideration.
✔✔Illusory Promise - ✔✔i. Is not a promise at all
ii. This promise is not consideration
Ex: Shawn offers to sell Molly his skis for $300, and Molly responds "I'll look at them in
the morning, and if I like them, I'll pay you."
✔✔Enforcement of Promise - ✔✔For a court to *enforce* a promise, both parties must
provide valid consideration, consideration by one party only is insufficient to support
this:
✔✔Preexisting Duty Rule - ✔✔i. Performance of a duty you are *obligated* to do under
the law is not consideration.
ii. Performance of an *existing contractual duty* is not good consideration.
,✔✔Types of Partial Payment of a Debt (2): - ✔✔i. Liquidated debt
ii. Unliquidated debt
✔✔Liquidated debt - ✔✔*No dispute that money is owed or how much* - debtor must
pay the full amount even if agree to lesser sum.
✔✔Unliquidated debt - ✔✔The parties either *disagree about whether money is owed or
dispute the amount* - the parties can settle for less than the full amount if they *enter
into an accord and satisfaction.*
✔✔Accord & Satisfaction (used for Unliquidated debt) - ✔✔Settling to pay an
unliquidated debt for less than the full amount (requires 3 things).
✔✔3 Requirements for Accord & Satisfaction: - ✔✔1. The debt is unliquidated
2. The creditor agrees to accept less than it is owed as full payment.
3. The debtor pays the amount they have agreed on
✔✔"accord" = - ✔✔new agreement to pay less than creditor claims is owed
✔✔"satisfaction" = - ✔✔debtor's payment of a reduced amount
✔✔under accord and satisfaction, the debt is - ✔✔fully discharged
✔✔failure to pay under accord and satisfaction - ✔✔creditor can sue for full amount of
original debt
✔✔IV. CHAPTER 16: Capacity and Legality - ✔✔IV. CHAPTER 16: Capacity and
Legality
✔✔The third required element of a legally binding contract - ✔✔Capacity
✔✔Capacity - ✔✔the mental ability to understand his or her rights and obligations under
a contract and therefore presumable to comply with the terms
✔✔incapacity or incompetence - ✔✔mental or physical defect that prevents natural
person from being able to enter into a legally binding contract
✔✔two types of incapacity - ✔✔no capacity and limited capacity
✔✔no capacity - ✔✔complete inability to enter into contracts
✔✔limited capacity - ✔✔ability to form only voidable contracts (minors, insane persons,
convicts, etc.)
, ✔✔minors - ✔✔persons under 18 unless emancipated
✔✔(t or f) emancipated minors have full legal capacity to enter into contracts - ✔✔true
✔✔Emancipation - ✔✔This occurs when a minor's parents or legal guardians give up
their right to exercise legal control over the minor, typically when the minor moves out of
the parents' house and begins supporting himself or herself.
✔✔(t or f) a married minor is not considered emancipated - ✔✔false; married minor =
emancipated
✔✔any contract entered into by a minor is voidable by the minor until - ✔✔he or she
reaches the age or majority, or a reasonable time thereafter
✔✔Because their contacts are voidable, minors have the right - ✔✔to disaffirm or avoid
their contract., until a reasonable time after reaching the age of majority
✔✔(t or f) Adults can disaffirm contracts made with minors - ✔✔False; only minors can
disaffirm
✔✔in order for a minor to disaffirm a contract - ✔✔only need to show intent to rescind,
either by words or acts. No formalities required.
✔✔(t or f) A minor can disaffirm parts of a contract - ✔✔false, the entire contract must
be voided
✔✔Obligations of disaffirmance by a minor - ✔✔vary state to state
✔✔Ratification by a Minor - ✔✔Once a person reaches the age of majority, he or she
may ratify, legally affirm, contracts made as a minor
✔✔Two types of ratification by a minor - ✔✔express ratification and implied ratification
✔✔Express ratification - ✔✔after reaching the age of majority the person states orally or
in writing that he or she intends to be bound by the contract entered into as a minor
✔✔implied ratification - ✔✔occurs when the former minor takes some action after
reaching the age of majority consistent with the intent to ratify the contract
✔✔Contracts of a person with limited mental capacity can be - ✔✔valid, voidable, or
void, depending on the extent of the mental incapacity.
COMPREHENSIVE QUESTIONS AND ANSWERS
SURE A+
✔✔Adequacy of consideration - ✔✔The court doesn't help you if you made a bad deal
(paid $500 for a $100 TV).
✔✔Exception to Adequacy of consideration - ✔✔if the court believes fraud or undue
influence occurred, the court may look at adequacy of consideration.
✔✔Illusory Promise - ✔✔i. Is not a promise at all
ii. This promise is not consideration
Ex: Shawn offers to sell Molly his skis for $300, and Molly responds "I'll look at them in
the morning, and if I like them, I'll pay you."
✔✔Enforcement of Promise - ✔✔For a court to *enforce* a promise, both parties must
provide valid consideration, consideration by one party only is insufficient to support
this:
✔✔Preexisting Duty Rule - ✔✔i. Performance of a duty you are *obligated* to do under
the law is not consideration.
ii. Performance of an *existing contractual duty* is not good consideration.
,✔✔Types of Partial Payment of a Debt (2): - ✔✔i. Liquidated debt
ii. Unliquidated debt
✔✔Liquidated debt - ✔✔*No dispute that money is owed or how much* - debtor must
pay the full amount even if agree to lesser sum.
✔✔Unliquidated debt - ✔✔The parties either *disagree about whether money is owed or
dispute the amount* - the parties can settle for less than the full amount if they *enter
into an accord and satisfaction.*
✔✔Accord & Satisfaction (used for Unliquidated debt) - ✔✔Settling to pay an
unliquidated debt for less than the full amount (requires 3 things).
✔✔3 Requirements for Accord & Satisfaction: - ✔✔1. The debt is unliquidated
2. The creditor agrees to accept less than it is owed as full payment.
3. The debtor pays the amount they have agreed on
✔✔"accord" = - ✔✔new agreement to pay less than creditor claims is owed
✔✔"satisfaction" = - ✔✔debtor's payment of a reduced amount
✔✔under accord and satisfaction, the debt is - ✔✔fully discharged
✔✔failure to pay under accord and satisfaction - ✔✔creditor can sue for full amount of
original debt
✔✔IV. CHAPTER 16: Capacity and Legality - ✔✔IV. CHAPTER 16: Capacity and
Legality
✔✔The third required element of a legally binding contract - ✔✔Capacity
✔✔Capacity - ✔✔the mental ability to understand his or her rights and obligations under
a contract and therefore presumable to comply with the terms
✔✔incapacity or incompetence - ✔✔mental or physical defect that prevents natural
person from being able to enter into a legally binding contract
✔✔two types of incapacity - ✔✔no capacity and limited capacity
✔✔no capacity - ✔✔complete inability to enter into contracts
✔✔limited capacity - ✔✔ability to form only voidable contracts (minors, insane persons,
convicts, etc.)
, ✔✔minors - ✔✔persons under 18 unless emancipated
✔✔(t or f) emancipated minors have full legal capacity to enter into contracts - ✔✔true
✔✔Emancipation - ✔✔This occurs when a minor's parents or legal guardians give up
their right to exercise legal control over the minor, typically when the minor moves out of
the parents' house and begins supporting himself or herself.
✔✔(t or f) a married minor is not considered emancipated - ✔✔false; married minor =
emancipated
✔✔any contract entered into by a minor is voidable by the minor until - ✔✔he or she
reaches the age or majority, or a reasonable time thereafter
✔✔Because their contacts are voidable, minors have the right - ✔✔to disaffirm or avoid
their contract., until a reasonable time after reaching the age of majority
✔✔(t or f) Adults can disaffirm contracts made with minors - ✔✔False; only minors can
disaffirm
✔✔in order for a minor to disaffirm a contract - ✔✔only need to show intent to rescind,
either by words or acts. No formalities required.
✔✔(t or f) A minor can disaffirm parts of a contract - ✔✔false, the entire contract must
be voided
✔✔Obligations of disaffirmance by a minor - ✔✔vary state to state
✔✔Ratification by a Minor - ✔✔Once a person reaches the age of majority, he or she
may ratify, legally affirm, contracts made as a minor
✔✔Two types of ratification by a minor - ✔✔express ratification and implied ratification
✔✔Express ratification - ✔✔after reaching the age of majority the person states orally or
in writing that he or she intends to be bound by the contract entered into as a minor
✔✔implied ratification - ✔✔occurs when the former minor takes some action after
reaching the age of majority consistent with the intent to ratify the contract
✔✔Contracts of a person with limited mental capacity can be - ✔✔valid, voidable, or
void, depending on the extent of the mental incapacity.
