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MIE 305 Final Exam Questions with Verified Answers
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MIE 305 Final Exam Questionswith Verified Answers
Contract - -a promise or set of promises supported by the exchange of
bargained-for consideration for the breach of which the law gives a remedy,
or the performance of which the law recognizes as an enforceable duty. "a
promise or set of promises that are enforceable in court." primarily state
based common law
-contract elements - --Agreement: the parties agree to the exchange of
legal detriment as to each other
-Bargained-for consideration: exchange of value, including their detriment,
for purpose of K
-Freely entered: the parties' volitionally (knowingly, with capacity) enter the
K
-Legal purpose: the subject of the contract is legal, and doesn't violate public
policy.
-uniform commercial code (UCC) - --standardize commercial transactions in
goods across all states. limited in scope, but does change some important CL
contract rules. Falls back on CL when there isn't an answer to a problem.
deals with all phases which may ordinarily arise in the handling of a
commercial transaction from start to finish. rejects the mirror-image rule
-changes tend to reflect a preference toward less formal good faith dealings
rather than formality.
-purpose: to harmonize the law of contracts in sales of goods between states
so that the interstate market for goods is stable and predictable. all 50 states
have adopted at least part of the UCC. only applies in transactions for goods
(not services, not realty), and only where one or both parties to a K are
merchants.
-Bilateral contract - -two promises; each party is both a promisor and a
promisee, enforceable at the moment of exchange. ex) "My company will
buy 10,000 widgets from your firm at $6 each, deliverable within 30 days"
"Agreed"
-Unilateral contract - -a promise for an act; a promisor makes an
enforceable promise in exchange for an act, but the promise is not legally
enforceable until/unless the act is performed. it may be directed at any party
of the promisor's choice, or generally to any actor. ex) "I will give you $1000,
Bob, if you'll paint my house within the next 30 days." alternatively. "My
kingdom for a horse!" (Richard III was making a unilateral offer to anyone
with a horse to spare)
, -Express - -the agreement is "spelled out" specifically, either in writing or
orally
-implied in fact - -1- P furnished good/service
2- P expected payment, D knew or should have known this
3- D had an opportunity to pay and did not (doctor/dentist appt.)
-implied in Law (Quasi-K) - -not true K! uses quantum meruit to avoid
injustice at equity. a term used to describe a factual situation involving a
duty that does not arise out of an actual contract and, in essence, is
associated with a remedy designed to promote justice and fairness.
-enforceability - -Valid agreements: partially or completely enforceable
agreement
Void agreements: not valid from the start; misnomer, because it is never a
contract. subjects are typically involve illegal acts or other acts statutorily
declared "void as to public policy"
Voidable agreements: valid from the start, but a party may declare an intent
not to perform and it is not a breach; may be honored by the parties at their
discretion, but one party may renounce the obligations. (ex. minors; K's
involving fraud (incapacitated party may void, other party must honor until
so declared))
-mental incapacity and intoxication - -not automatic outs. second
restatement of contracts requires an understanding of the degree of
incapacity of the promisor. with intoxication, party must be so intoxicated as
to not understand the nature of the transactions and promisee must know or
have reason to know of promisor's condition.
-executed contract - -the term used to mean that the performances of a
contract have been completed
-executory contract - -until the performance required in a contract is
completed, it is said to be executory as to that part not performed.
-objective theory of contracts - -modern standard analytical tool for US
courts.
a contract and its precise terms will be determined objectively by the words,
acts, behavior of the parties in case of dispute-no "meeting of the minds"
stuff, because you can also have a misunderstanding over whether minds
actually met, and on what terms.
-conditional promise - -by a promisor (offeror) to a promisee (offeree). An
offer! it has no effect unless the duty to perform to receive the benefit of the
promise is ACCEPTED
, -offer - -must manifest a present intent to be bound by the offeror in
exchange for the consideration of the offeree (action, forbearance, money,
item) the terms must be reasonably definite at least as the subject of the K,
consideration and a quantity term (UCC). must be communicated to the
offeree, who must in turn have been an intended or proper offeree. must not
have expired or been revoked. may also terminate by operation of law
(death, insanity, bankruptcy, destruction of subject, supervening illegality,
"open offer" not accepted for extended time)
-not generally offers - -advertisements, flyers, inquiries, quotes. ads can be
binding K if the language is such that it is clearly more than a solicitation to
bargain. "Fred's furniture going out of business! ten sofas left to the first ten
buyers at ten percent off original price at monday opening only!"
-mirror image rule (matching acceptance) - -offeror is "master of the offer"
offeree must therefore provide a mirror-image acceptance of the terms of
the original offer. any variation immediately extinguishes the original offer
and becomes a counteroffer back to the original offeror (now the
counterofferee) acceptance is usally a simple matter of communicating
consent, valid from the moment it is tendered. if the offeree imposes
conditions or terms on acceptance, however, they must be followed. offeree
may also reject outright without a counteroffer. Silence cannot be treated as
acceptance even if in terms of offer, although may be a rejection if the offer
is limited as to duration (or by operation of law if too much time goes by).
the offeror has the power to revoke the offer, but only prior to acceptance by
the offeree.
-mailbox (deposited acceptance) rule - -acceptances are valid upon
dispatch (sending); revocations are valid upon receipt (as are rejections and
counteroffers by offeree) the application of this rule can be avoided by the
offeror simply stating in the offer that the acceptance is not effective until it
is actually received
-no mutuality - --illusory promises: gratuitous, don't really reflect an
obligation. (ex. if i buy an ipod, i promise to buy yours"
-promises to fulfill a pre-existing duty: the detriment already exists (ex. I
know i owe you $1000. if you will agree to give me an extension on the loan,
i promise i'll pay you back.
-Promises based on past consideration given: lawyer provides friend with
free legal services; friend later says "I should give you something for that. i'll
pay $1000." friend doesn't pay. lawyer knows better than to sue.
-The Peppercorn theory - -of consideration holds that it is not generally the
courts' job to look into the adequacy of consideration if the parties are
satisfied with the exchange. Nominal consideration is acceptable; sham
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