Exam 7: Contracts

Which of the following is true regarding a mistake of judgment?

Courts enforce liquidated damages as a form of a penalty.

Consideration can be either a promise to do a certain act or the performance of the act itself.

Mutuality of obligation applies only to bilateral contracts.

Only an attorney can hold a power of attorney.

What are the four basic elements necessary for a valid contract?

Fact Pattern 7-1 Prudence offered to sell her car to Danny for $3,000. Danny was not sure what to do, so he asked Prudence if she would hold the offer open for him for one week for $50. Prudence said sure, and the parties signed a contract to the effect that Prudence would hold the car. A few hours, Bobby unexpectedly offered Prudence $3,500 for the car, and Prudence sold it to him on the spot. Danny decided to buy the car, but when he came by to pick it up the next day, it was gone. Prudence gave Danny his $50 back telling him that was her only obligation and that if he had any complaints, he could take it up with Bobby. Danny found a similar car the next week for $3,500 and purchased it. -Refer to fact pattern 7-1. What damages,if any,could Danny likely collect against Prudence in litigation over the car?

Liquidated damages are damages that

A contract entered into by a minor is

Generally,prior to upholding a contract,a court will carefully scrutinize the value of consideration to be sure that the contract is a fair one.

Fraud in the ________ occurs when a party is persuaded to sign one document thinking that it is another.

Reliance damages are awarded in addition to expectation damages.

An agreement between two parties that provides that the buyer will buy all of a particular product from a particular seller is called a[n] ______.

Identify and discuss the two elements focused on in relation to procedural unconscionability.

Fact Pattern 7-2 Hester offers to sell her house to Frank for $250,000. Frank says that he would like to think about it, and Hester says that is fine. The next day, Martha, Hester's friend, says that she will give Hester $240,000 for the house. Hester really likes Martha more than Frank and signs a contract to sell the house to Martha. Later that day Hester sees Frank walking up her driveway. She immediately opens the window and yells "I revoke the offer on the house" before Frank says anything. Frank replies that he accepts the offer and expects to purchase the home. Frank tells Hester that while he has not yet taken steps to sell his own home or get a loan, he feels confident that there will be no problem with those matters and he is a ready, willing, and able buyer. -Refer to fact pattern 7-2. Which of the following is true regarding the offer to Frank assuming Hester's revocation was ineffective?

Fact Pattern 7-1 Prudence offered to sell her car to Danny for $3,000. Danny was not sure what to do, so he asked Prudence if she would hold the offer open for him for one week for $50. Prudence said sure, and the parties signed a contract to the effect that Prudence would hold the car. A few hours, Bobby unexpectedly offered Prudence $3,500 for the car, and Prudence sold it to him on the spot. Danny decided to buy the car, but when he came by to pick it up the next day, it was gone. Prudence gave Danny his $50 back telling him that was her only obligation and that if he had any complaints, he could take it up with Bobby. Danny found a similar car the next week for $3,500 and purchased it. -Refer to fact pattern 7-1. Did Danny have any type of contract with Prudence,and if so what type?

Which of the following are damages that give the plaintiff the benefit of its bargain,putting the plaintiff in the case position it would have been in if the contract had been fulfilled?

A third party beneficiary is someone who is not

Which of the following is a technique by which a new party is substituted for one of the old parties,and a new contract is written (with the consent of all old and new parties)to effect the desired change?

A merger agreement is an agreement between two companies to combine into a single entity.