Contract Formation and Enforcement Flashcards

Which doctrine allows a court to enforce a promise even without consideration when one party has reasonably relied on the promise to their detriment?

Answer: Promissory estoppel

Promissory estoppel (detrimental reliance) allows enforcement of a promise when the promisor should have expected reliance and injustice can only be avoided by enforcement.

A contractor submits a bid for a construction project. Before the owner accepts, the contractor realizes there was a clerical error that understated costs by 40%. Which defense is most likely to allow rescission?

Answer: Unilateral mistake known to the other party

A unilateral mistake may permit rescission when the non-mistaken party knew or should have known of the error, making enforcement unconscionable.

What is the legal effect of a counteroffer under common law?

Answer: It terminates the original offer and creates a new offer

Under the mirror image rule, a counteroffer simultaneously rejects the original offer and creates a new offer that the original offeror may accept or reject.

Seller and Buyer sign a written contract for the sale of equipment. Buyer later claims the parties had an oral agreement to include maintenance services. The parol evidence rule would most likely:

Answer: Exclude the oral agreement if the written contract is fully integrated

The parol evidence rule bars extrinsic evidence of prior or contemporaneous agreements that would contradict or vary the terms of a fully integrated written contract.

Under the UCC, a contract for the sale of goods worth $500 or more is unenforceable unless:

Answer: There is a sufficient writing signed by the party to be charged

UCC § 2-201 requires a writing signed by the party against whom enforcement is sought for contracts involving goods priced at $500 or more.

An agreement where both parties have obligations yet to be performed is called:

Answer: Executory contract

An executory contract is one in which performance remains due from one or both parties, as opposed to an executed contract where performance is complete.

Which of the following is NOT a required element for a valid contract?

Answer: Written documentation

Most contracts do not need to be in writing to be enforceable; offer, acceptance, and consideration are the core requirements, with writing required only by the Statute of Frauds.