Law 3800
Dr. Edmonds
Contract Law Study Guide, Part I
Chapter 9
I.
What is a “Contract”?
II.
List the essential elements of a valid contract.
III.
Distinguish a bilateral contract from a unilateral contract and explain how an
offeree must accept an offer under each.
IV.
Explain how an executory contract differs from and executed contract.
V.
Define each of the following and give an example:
Valid Contract
Unenforceable Contract
Voidable Contract
Void Contract
VI.
What is an express contract?
VII. What do we mean when we say a contract is implied in fact?
VIII. What do we mean when we say a contract is implied in law?
Is there an intent by the parties to contract?
If there is no intent to contract, how can a court enforce someone’s rights
under a quasi-contract?
Contrast remedies at law with remedies in equity.
Can a quasi-contract be enforced at law? Why?
Can a quasi-contract be enforced in equity?
What three conditions (elements) must exist for enforcement?
Study Guide, Contract Law, page 2
IX.
Explain promissory estoppel
Is it an equity remedy? Why?
What does estoppel mean? Who is “estopped” and from doing what?
What are the elements of promissory estoppel?
X.
What differentiates promissory estoppel from quasi-contract?
XI.
Explain what is meant by “common law”.
XII. What is the UCC? Is it state or federal law?
XXXIII.
What kind of contract does Article 2 of the UCC apply to?
XIV. What are “goods”?
XV. If goods and services are mixed in a contract, how do we determine whether
Article 2 or common law governs the contract?
XVI. Which two elements of a contract must be present for a “meeting of the
minds”? What is a “meeting of the minds”?
XVII. What two characteristics make an offer a valid offer?
XVIII.List three statements that are generally not considered valid offers:
XIX. Can a letter of intent become a valid offer? How?
XX. An advertisement? How?
XXI. What do we mean when we say an offer has been terminated? If an offer is
successfully accepted can it then be terminated?
XXII. List and explain the four ways an offer may be terminated.
XXIII.What is a “counter offer” and what effect does it have on the offer?
XXIV.What is an open ended offer? Do they ever terminate?
XXV. What is meant by termination by operation of law and how does it happen?
Study Guide, Contract Law, page 3
XXVI.Can an offeror assume/create acceptance from silence?
XXVII. Explain the origin and application of the “mirror Image Rule”.
XXVIII. Does the UCC adopt the “Mirror Image Rule”? Why?
XXIX. Read and research UCC section 2 -207. Explain how it applies to the
following situations (assume the parties intended to contract):
Between two non-merchants an offeree proposes additional terms in her
acceptance
Between two merchants an offeree proposes additional terms in her
acceptance
A written offer and acceptance are created and a contract formed, but the
terms of the offer and acceptance differ is some significant way
The offeror has made it clear that acceptance of his offer can only be made
on the exact terms of the offer; no changes or additions.
XXX. What is a “clickwrap” term? A “Shrinkwrap” term? Are they enforceable?
XXXI. What is “Consideration” and why is it essential to the enforcement of a
contract?
XXXII. When is doing or agreeing to do something sufficient as consideration?
XXXIII. What is “forbearance”? Explain the verdict in Hammer vs. Sidway.
Sample Questions:
Izzy comes home from work one afternoon to discover that a paving contractor
who Izzy has never met or had any dealings with, has installed a nice new asphalt
driveway at Izzy’s house. It turns out that the contractor “Happy Driveways Inc.”
has the wrong address. They had a contract to pave a driveway one block east of
Izzy’s place. The contractor has put a lot of work and expense into the new drive at
Izzy’s place, and it is top quality work.
Study Guide, Contract Law, page 4
1. The contractor wants Izzy to pay for the new driveway. Under which of the
following legal theories could the contractor properly attempt to claim a right to
compensation from Izzy?
a. An implied contract in fact.
b. An express contract.
c. Unilateral mistake.
d. A contract implied in law.
e. None of the above.
2. Under these circumstances, the only legal doctrine that would perhaps support
contractor’s claim against Izzy would be:
a. Promissory Estoppel
b. The Mirror Image Rule
c. Quasi-Contract
d. The Statute of Frauds
3. If the contractor were to prevail (win a lawsuit against Izzy) claiming
compensation for his work, the measure of damages to be awarded would be:
a. Called Quantum Meruit.
b. Would be based upon the cost of the work and a fair measure of profit.
c. Would be based upon the actual value if any, of the new drive to Izzy.
d. Both a and b.
e. Both a and c.
Izzy can prove that he had no need for a new drive and no intent to pave his old
one. In fact, he is a staunch opponent of the use of petroleum based products such
as asphalt for paving residential drives.
Study Guide, contract Law, page 5
4. Does Izzy have a valid defense to contractor’s claim that Izzy should pay for the
new driveway and why?
a. No; if Izzy sells his house, the driveway will add value.
b. Yes; there is no unjust enrichment present.
c. No; but Izzy can only be required to pay fair market value for the work.
d. Both a and c.
Chapter 10
Chapter 10 Legality, Consent and the Role of a Writing
I.
What is a “non-compete” agreement?
II.
Is a non-compete agreement legal?
In all 50 States?
What is required for one to be enforceable?
III.
Discuss the enforceability of a non-compete agreement coupled with the
sale of a business.
IV
What is an “exculpatory clause”?
When are they enforceable?
When are they not?
V.
What is an “unconscionable” contract?
Who decides unconscionability?
Does a contract have to be illegal to be unconscionable?
List and explain the two factors which most commonly lead a court to
find a contract unconscionable.
VI.
What is meant by “capacity to contract”?
Study Guide, Contract Law, page 6
VII.
If a party to a contract lacks the capacity to contract, what is the status of
the contract?
VIII. Who by law, lacks the capacity to contract?
IX.
Who is a minor?
X.
Who may cancel a voidable contact? Who may not? Why?
XI.
When may a minor rescind or disaffirm a contract?
XII. What happens when a minor rescinds a contract? What if the minor has lost
or damaged the subject matter of the contract?
XIII. What is “ratification”?
XIV. What happens if a minor lies about his/her age?
XV. List the three recognized arguments a party to a contract might advance in
order to prove their consent to the agreement was invalid:
XVI. List and explain the elements of fraud as a defense to reality of consent:
XVII. Is a contract based upon fraud/misrepresentation void or voidable? Why?
XVIII. Explain the two types of mistake and when they will excuse performance
by a party to a contract.
XIX. What is “duress” and what impact does it have on the enforceability of a
contract?
XX. Under what circumstances does the Statute of Frauds require a contract to be
in writing to be enforceable?
XXI. What must the writing contain?
XXII. When does the Uniform Commercial Code (UCC2 -201(1)) require a
contract for the sale of goods to be in writing? How does the Code’s
approach differ from common law?
Study Guide, Contract Law, page 7
XXIV. Explain the parol evidence rule. What is a merger clause?
Sample Questions:
Ruben is shopping for a new car. He is about to graduate from Whatsa Matta U.
and has a great job offer. He prices a particular make and model at three
dealerships including one here in Kalamazoo. The Kalamazoo salesperson cannot
match the price Ruben can get in Grand Rapids, but Ruben really wants to buy the
car in Kalamazoo for convenience. The salesperson for the Kalamazoo dealership
tells Ruben that if Ruben buys the car from the Kalamazoo dealership, they will
throw in a year of free oil changes. Ruben agrees to buy the car in Kalamazoo
because the free oil changes offset the difference in price. The agreed price for the
car is $21,990.
1. Does this contract have to be in writing to be enforceable and why?
a. No, it will be performed in one year.
b. Yes, the parol evidence rule requires a writing.
c. No, it doesn’t involve an interest in land.
d. Yes, the Statute of Frauds would require a writing.
2. Which section of the UCC would address whether or not this contract needs to
be in writing?
a. 2-207
b. 2-201
c. 2-313
d. 2-314
Study Guide, contract Law, page 8
Ruben signs a contract to purchase the car. The contract makes no mention of the
free oil changes, but does contain the following language:
“Buyer and Seller agree that this written contract constitutes their entire
agreement with regard to the sale and purchase of the specified automobile, and
that any oral agreements or representations by anyone including a salesperson for
this dealership, not contained in this agreement are of no force or effect.”
3. What is this language called?
a. A merger or integration clause.
b. An exclusionary clause.
c. Unconscionable and unenforceable.
d. Both b and c.
4. Which of the following legal doctrines does this clause attempt to invoke?
a. The Statute of Frauds.
b. The doctrine of caveat vendor.
c. The Parol Evidence Rule.
d. The Fundamental Fairness Rule.
5. The dealership refuses to honor the agreement regarding the free oil changes and
Ruben sues in court. Will Ruben win and why?
a. No; his prior or contemporaneous oral agreement was not incorporated
into the final written agreement.
b. Yes; the agent for the dealership had the authority to bind the dealership
and his word was good enough.
Study Guide, Contract Law, page 9
Sally owns a very old painting she inherited from her grandmother. She needs
tuition money for her senior year at Whatsa Matta U. She takes her painting to an
art dealer and offers to sell it to the art dealer. Sally thinks the painting is a good
copy of a Rembrandt and offers it to the dealer for $500. In fact, the painting is a
Rembrandt and worth a fortune. The art dealer immediately realizes that the
painting is a priceless original but does not tell Sally. The art dealer buys the
painting from Sally for her offered price of $500.
When Sally finds out what the painting was actually worth, she seeks to rescind her
sale. The art dealer refuses.
6. What element of a valid and enforceable contract will Sally argue is lacking in
her contract for the sale of the painting?
a. Offer
b. Acceptance
c. A Writing
d. Consent
7. What type of mistake has Sally made in this situation?
a. A stupid one
b. A bilateral mistake
c. A unilateral mistake
d. A confused mistake
8. Do courts usually and routinely excuse a person from a contract for making the
type of mistake you have identified in Question 6?
a. Yes
b. No
Study Guide, Contract Law, page 10
9. What must Sally demonstrate in court in order to claim her mistake entitles her
to release from the contract for the sale of the painting?
a. That she entered the contract because of a basic factual error
b. That enforcing the contract would be unconscionable
c. That the non-mistaken party knew of the mistake
d. Either a and b or a and c.
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