BLAW 301 EXAM 2 (CASTLE - KU) QUESTIONS
What is the statute of frauds? - Answer -A law requiring contracts involving real
property to be in writing and to contain essential elements
What contracts must have statute of frauds? - Answer -- sale of a certain interest in
land
- guaranty of debt
- contracts that cannot be performed within one year
- contracts for the sale of goods over $500
Do email transactions satisfy the statute of frauds? - Answer -Yes.
How are contracts interpreted? - Answer -Words are given their common meaning
What happens if there are ambiguous terms in the contract? - Answer -Courts interpret
these terms according to common trade usage and business practices.
What is the purpose of the judge in contract interpretation? - Answer -To try and
determine what the parties meant and what they intended when they drafted the
language
What controls the contract -- handwritten or typed terms? - Answer -Handwritten terms
control typed terms meaning that if presented with a contract that had stuff crossed out
and replaced with writing in the margins, the writing would be the terms of the contract
not what was crossed out
How are ambiguous terms interpreted? - Answer -Ambiguous terms are interpreted
against the drafter
What is the Parol Evidence Rule? - Answer -Parties may not introduce evidence of
*prior* oral agreement that would change the written agreement
What is an example of the Parol Evidence Rule. - Answer -Buying a washer from
Lowe's. The salesman says that they can deliver the washer on Monday or Tuesday.
The contract that you sign says it won't be delivered until Thursday. After you contest,
the court would find that that is ok, because that date wasn't in the contract but rather
the conversation you had with the salesman.
What is performance? - Answer -The act of doing what is in the contract
Why do parties enter in to contracts? - Answer -To ensure the performance of a
promise that is made
, When is a party discharged from a contract? - Answer -When that party has fulfilled all
obligations under the contract and is relieved of further performance
What is substantial performance? - Answer -When a party honestly attempts to perform
but has fallen short
What is an example of substantial performance? - Answer -You want to build a custom
house. You and the builder walk through every aspect of the house -- # of bedrooms,
type of carpet, landscaping, etc. However, when the builder finishes the house, they
didn't put in the sprinkler system for the landscaping, despite you wanting it. Everything
else you wanted is there.
The court would find that the builder did substantial performance. They would get the
benefits of the contract less any damages of the breach. So if your grass died because
the sprinklers weren't there, they would have to pay for that.
What is a breach of contract? - Answer -A breach occurs when a party fails to perform
an agreed-upon act.
What are compensatory damages? - Answer -Damages that put the person in the
same place as if the contract had been performed
What are consequential damages? - Answer -Damages incurred as a consequence of
the other side's breach
What is an example of a consequential breach? - Answer -You want to open up a
restaurant and you order your appliances from Sears (RIP), like a dishwasher, stove,
refridgerator, etc. However, on opening day, you still don't have a refridgerator so you
cannot open. Sears is in breach of our agreement. I cannot open the store, so I've lost
profits, had to pay my staff for no work, etc. The lost profits and what I had to pay the
staff are considered consequential damages.
What are liquidated damages? - Answer -Damages that parties agree from the
beginning of what a breach is going to cost
Why are liquidated damages used? - Answer -So people can make business decisions
based on how much it would cost them to breach the contract
What is specific performance? - Answer -Plaintiff asks the court to force the defendant
to specifically perform the promise they made
When is specific performance used? - Answer -When a contract involves something
really unique (land!) or when money damages cannot compensate (land!).
Do courts like to use specific performance? - Answer -No, they don't like to tell people
what they can and cannot do.
What is the statute of frauds? - Answer -A law requiring contracts involving real
property to be in writing and to contain essential elements
What contracts must have statute of frauds? - Answer -- sale of a certain interest in
land
- guaranty of debt
- contracts that cannot be performed within one year
- contracts for the sale of goods over $500
Do email transactions satisfy the statute of frauds? - Answer -Yes.
How are contracts interpreted? - Answer -Words are given their common meaning
What happens if there are ambiguous terms in the contract? - Answer -Courts interpret
these terms according to common trade usage and business practices.
What is the purpose of the judge in contract interpretation? - Answer -To try and
determine what the parties meant and what they intended when they drafted the
language
What controls the contract -- handwritten or typed terms? - Answer -Handwritten terms
control typed terms meaning that if presented with a contract that had stuff crossed out
and replaced with writing in the margins, the writing would be the terms of the contract
not what was crossed out
How are ambiguous terms interpreted? - Answer -Ambiguous terms are interpreted
against the drafter
What is the Parol Evidence Rule? - Answer -Parties may not introduce evidence of
*prior* oral agreement that would change the written agreement
What is an example of the Parol Evidence Rule. - Answer -Buying a washer from
Lowe's. The salesman says that they can deliver the washer on Monday or Tuesday.
The contract that you sign says it won't be delivered until Thursday. After you contest,
the court would find that that is ok, because that date wasn't in the contract but rather
the conversation you had with the salesman.
What is performance? - Answer -The act of doing what is in the contract
Why do parties enter in to contracts? - Answer -To ensure the performance of a
promise that is made
, When is a party discharged from a contract? - Answer -When that party has fulfilled all
obligations under the contract and is relieved of further performance
What is substantial performance? - Answer -When a party honestly attempts to perform
but has fallen short
What is an example of substantial performance? - Answer -You want to build a custom
house. You and the builder walk through every aspect of the house -- # of bedrooms,
type of carpet, landscaping, etc. However, when the builder finishes the house, they
didn't put in the sprinkler system for the landscaping, despite you wanting it. Everything
else you wanted is there.
The court would find that the builder did substantial performance. They would get the
benefits of the contract less any damages of the breach. So if your grass died because
the sprinklers weren't there, they would have to pay for that.
What is a breach of contract? - Answer -A breach occurs when a party fails to perform
an agreed-upon act.
What are compensatory damages? - Answer -Damages that put the person in the
same place as if the contract had been performed
What are consequential damages? - Answer -Damages incurred as a consequence of
the other side's breach
What is an example of a consequential breach? - Answer -You want to open up a
restaurant and you order your appliances from Sears (RIP), like a dishwasher, stove,
refridgerator, etc. However, on opening day, you still don't have a refridgerator so you
cannot open. Sears is in breach of our agreement. I cannot open the store, so I've lost
profits, had to pay my staff for no work, etc. The lost profits and what I had to pay the
staff are considered consequential damages.
What are liquidated damages? - Answer -Damages that parties agree from the
beginning of what a breach is going to cost
Why are liquidated damages used? - Answer -So people can make business decisions
based on how much it would cost them to breach the contract
What is specific performance? - Answer -Plaintiff asks the court to force the defendant
to specifically perform the promise they made
When is specific performance used? - Answer -When a contract involves something
really unique (land!) or when money damages cannot compensate (land!).
Do courts like to use specific performance? - Answer -No, they don't like to tell people
what they can and cannot do.
