Contracts Formation & Enforcement Flashcards
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Read the first 7 Contracts Formation & Enforcement flashcards as text
A modification of an existing contract requires new consideration under common law. Which of the following situations is an exception to this rule?
Answer: A modification under the UCC for the sale of goods
Under UCC § 2-209, a modification of a contract for the sale of goods needs no consideration to be binding, unlike under common law.
Sue is 17 when she signs a contract to buy a car. Two months after turning 18, she continues driving the car and makes two payments. Sue has most likely:
Answer: Ratified the contract through her conduct after reaching majority.
A minor may disaffirm a contract upon or shortly after reaching majority, but retaining and using the subject matter and making payments constitutes ratification.
Which of the following best illustrates promissory estoppel?
Answer: An employer promises a pension but the employee retires in reliance on the promise, and the employer reneges.
Promissory estoppel enforces a promise when the promisee reasonably relies on it to their detriment, even without traditional consideration.
Under the parol evidence rule, extrinsic evidence of prior or contemporaneous agreements is generally inadmissible to:
Answer: Contradict or vary the terms of a fully integrated written agreement.
The parol evidence rule bars extrinsic evidence offered to contradict or vary the terms of a final, completely integrated written contract.
Kevin contracts to buy Blackacre from Linda for $200,000, contingent on Kevin obtaining financing within 30 days. Kevin makes no effort to secure a loan. Linda sues. Who prevails?
Answer: Linda, because Kevin had an implied duty of good faith to attempt to satisfy the condition.
A party who prevents satisfaction of a condition through bad faith or lack of effort is treated as if the condition occurred, and Linda can enforce the contract.
Ron verbally agrees to sell his house to Ed for $150,000. Ed gives Ron a $1,000 deposit. Ron later backs out. Ed sues for specific performance. The best argument in Ed's favor is:
Answer: Part performance: the deposit plus any other acts of reliance may remove the oral contract from the Statute of Frauds.
Part performance (payment of deposit combined with other acts of reliance such as inspections or moving expenses) can take an oral land contract outside the Statute of Frauds.
An offeree begins performance on a unilateral contract offer. Under the modern view, the offeror:
Answer: May not revoke the offer once the offeree has begun performance.
Under the modern/Restatement view (§ 45), commencement of performance on a unilateral contract creates an option, making the offer irrevocable until the offeree has a reasonable time to complete performance.