Bar Exam: Contracts - Questions and Answers, Exams of Law

Download Bar Exam: Contracts - Questions and Answers and more Exams Law in PDF only on Docsity! Bar Exam: Contracts Questions and answers Accord and Satisfaction CORRECT ANSWERS✅ An accord is an agreement under which one party agrees to accept some other, different performance from the other party than he would have received under the existing contract. An accord must be supported by consideration. Satisfaction discharges the accord and the original contract. Insolvent Buyer CORRECT ANSWERS✅ A seller must deliver goods to an insolvent buyer if the buyer tenders’ cash for their payment Promise to pay a legal obligation barred by the law... CORRECT ANSWERS✅ is enforceable. If a past obligation, such as a debt, would be enforceable except for the fact that a technical defense stands in the way (e.g. statute of limitations), the courts will enforce a new promise if it is in WRITING or there has been a part performance. No additional consideration is needed in order for the contract to be enforceable. Unilateral Contract CORRECT ANSWERS✅ one in which the offer requests performance rather than a promise to perform, and under the First and Second Restatements, as well as the UCC, once performance has begun the offer CANNOT be REVOKED as to that performer. The offer can be revoked as to others who have not yet begun to perform. Bar Exam: Contracts Questions and answers Ambiguity CORRECT ANSWERS✅ When there is ambiguous contract language...where one party is aware of the ambiguity and the other party is not at the time of contracting, a contract will be enforced according to the intent of the part who was unaware of the ambiguity. If neither party, or both parties, are aware of the ambiguity, no contract would be formed unless both parties intended the same meaning. Option Contract CORRECT ANSWERS✅ A distinct contract in which an offeree gives consideration for a promise by the offeror not to revoke an outstanding offer. Unequivocal words of rejection by the offer will not extinguish an option, absent detrimental reliance on the part of the offeror. Accommodation CORRECT ANSWERS✅ When a seller ships both conforming and nonconforming goods along with a note explaining that the nonconforming goods are offered as an accommodation to the buyer, this constitutes a COUNTEROFFER. The buyer is free to accept or reject. A shipment of nonconforming goods without the note would be an acceptance and a breach of contract. Merchant's Firm Offer CORRECT ANSWERS✅ Applies only when the merchant signs a written offer giving assurances that he will hold the offer open for a stated Bar Exam: Contracts Questions and answers Perfect Tender Rule CORRECT ANSWERS✅ Allows rejection for any defect, and does not require material breach. However, rules permit the seller to cure the defect by giving reasonable notice of an intention to cure and making a new tender of conforming goods within the time originally provided for performance. Where the buyer rejects a tender that the seller reasonably believed would be acceptable, the seller, upon reasonable notification of the buyer, has a further reasonable time beyond the original contract time within which to make a conforming tender. Parol Evidence Rule CORRECT ANSWERS✅ When the parties to a contact express their agreement in a writing with the intent that it embody the final expression of their bargain (the writing is an integration) any other other expressions --written or oral--made PRIOR to or CONTEMPORANEOUS WITH the writing, are inadmissible to vary the terms of the writing. Evidence of custom in the trade can be offered regardless of the completeness of the written agreement. Merger Clause CORRECT ANSWERS✅ Recites the agreement is the complete agreement between the parties. Usually determinative in large commerce contracts. Bar Exam: Contracts Questions and answers Gap Fillers CORRECT ANSWERS✅ In a contract for the sale of goods, the key to forming a contract is the quantity term .If other terms are missing from the agreement, aRticle 2 has gap filler provisions to fill in the missing terms. Place of delivery: if not specific then usually it's the seller's place of business, if he has one; otherwise, it's the seller's home. Time for shipment/delivery: reasonable time Time for payment: payment is due at the time and place which the buyer is to receive the goods Delivery Terms and risk of Loss-Noncarrier case CORRECT ANSWERS✅ a sale in which it appears that the parties did not intend the goods would be moved by a common carrier. IF the seller is a merchant, risk of loss passes to the buyer ONLY when the BUYER takes physical POSSESSION of the goods. If the seller is NOT a merchant, risk of loss passes to the buyer upon TENDER of delivery. Delivery Terms and risk of Loss-Carrier case CORRECT ANSWERS✅ A sale in which the parties intended the goods to be moved by a carrier. Bar Exam: Contracts Questions and answers Shipment contract: if contract requires seller to ship goods but not to particular destination, it is a shipment contract and the risk of loss passes to the buyer when the goods are DELIVERED to the CARRIER. Destination contract: if the contract requires the seller to deliver the goods to a particular destination, the risk of loss passes to the buyer when the goods are TENDERED to the buyer at the DESTINATION. Common Delivery Terms CORRECT ANSWERS✅ C.I.F: cost, insurance, and freight. The price in the contract includes the price of the goods,t he cost of shipping them to the buyer, and the cost of insurance for the benefit of the buyer. ALWAYS SHIPMENT CONTRACTS. F.A.S. free alongside. The terms is used when goods are shipped by boat. risk of loss passes to the buyer once the goods are DELIVERED to the DOCK. F.O.B. free on board. Always followed by a location and the risk of loss passes to the buyer at the named location. The seller bears the risk and expense of getting the goods to the named location. implied warranty of merchantability CORRECT ANSWERS✅ Implied in every contract for sale by a merchant who DEALS IN GOODS OF THE KINDS SOLD To be merchantable, goods must be fit for the ordinary purposes for which such goods are used. Bar Exam: Contracts Questions and answers Unilateral Mistake CORRECT ANSWERS✅ Where only one of the parties is mistaken about facts relating to the agreement, the mistake usually will to prevent formation of the contract; however, if the non mistake party is aware of the mistake made by the other party, he will not be permitted to snap up the offer. Installment contracts CORRECT ANSWERS✅ A contract that authorizes or requires deliveries in separate lots. A buyer may declare a total breach of an installment contract only if the defect substantially impairs the value of the entire contract. Anticipatory Repudiation CORRECT ANSWERS✅ Occurs when a promisor, prior t the time set for performance of his promise, indicates that he will not perform when the time comes. Prospective Inability to Perform CORRECT ANSWERS✅ prospective failure of condition occurs when a part has REASONABLE grounds to believe that the other party will be unable or unwilling to perform when performance is due. The innocent party can suspend further performance until she receives adequate ASSURANCES that performance will be forthcoming. Novation CORRECT ANSWERS✅ occurs when a new contract substitutes a new party to receive benefits and assume duties that had belonged to one of the original parties under the terms of an existing contract. Bar Exam: Contracts Questions and answers All parties must agree that the contractual duties between the original parties are extinguished. Condition Precedent CORRECT ANSWERS✅ Where the re is an oral condition precedent, evidence of the condition falls outside the parol evidence rule. Statute of Frauds CORRECT ANSWERS✅ Covers promises: 1) by an executor or administrator to pay the estate's debts out of her own funds; 2) to answer for the debt of another; 3) made in consideration of marriage; 4) creating an interest in land; 5) that by its terms cannot be performed within one year; 6) for the sale of goods at a price of $500 or more. Rules of Construction CORRECT ANSWERS✅ Contracts are to be construed as a whole, words are to be construed according to their ordinary meaning, or custom and usage in the particular business and locale should be considered. Donee Beneficiaries CORRECT ANSWERS✅ a 3rd party donee beneficiary has no cause of action against the promisee, because the promisee's act is gratuitous and Bar Exam: Contracts Questions and answers he may not be held to it, unless the promisee tells the beneficiary of the contract and should foresee reliance by the beneficiary, and the beneficiary reasonably relies to his detriment. mailbox rule-option contracts CORRECT ANSWERS✅ Typically an acceptance is effective on dispatch; however, it does not apply to option contracts. Rights of 3rd Party Beneficiaries CORRECT ANSWERS✅ Right do not vest until: 1) it manifests assent in a manner invited or requested by the parties 2) it learns of the contract and detrimentally relies on it, OR 3) it brings a lawsuit to enforce its rights before any modification *until the rights have vested, a modification of the contract can take place without the consent of the third party. Parol Evidence-Condition Precedent CORRECT ANSWERS✅ Admissible to show a condition precedent to the existence of a contract. Generally, parol evidence rule bars oral evidence contradicting a written agreement which was intended to be a final and exclusive embodiment of the parties. Gratuitous Assignments CORRECT ANSWERS✅ Can be revoked.