Contract Formation and Enforcement Flashcards

An employer promises a retiring employee a monthly pension. The employee retires in reliance on this promise. The promise is later revoked. Under promissory estoppel, the employee can recover:

Answer: An amount necessary to prevent injustice, which may be limited to reliance damages

Promissory estoppel may limit recovery to the extent necessary to avoid injustice, which courts often measure as reliance damages rather than full expectation damages.

In which situation would the doctrine of impossibility most clearly excuse a party's performance?

Answer: The subject matter of the contract is destroyed without fault of either party

Impossibility excuses performance when an unforeseen event destroys the subject matter or makes performance objectively impossible, not merely more difficult or unprofitable.

A party who seeks to enforce a contract under the theory of quasi-contract (implied-in-law) must show:

Answer: The other party received a benefit and allowing retention without payment would be unjust enrichment

Quasi-contract is an equitable remedy that requires proof that one party was unjustly enriched at the other's expense, regardless of any actual agreement between them.

Which of the following most accurately describes the 'adequacy of consideration' standard under contract law?

Answer: Courts generally do not inquire into the adequacy of consideration as long as something of legal value is exchanged

Courts uphold the freedom of contract by not requiring equal value; as long as something of legal value (a legal detriment or benefit) is bargained for, consideration is sufficient.

A professional services contract is silent on duration. A court will most likely:

Answer: Imply a reasonable time for performance based on the circumstances

Where a contract is silent on duration, courts supply a reasonable time term based on the nature of the services, industry custom, and surrounding circumstances.

A contract provision that would require a consumer to waive all future tort claims arising from a company's negligence is most likely:

Answer: Unenforceable as unconscionable or against public policy

Provisions that attempt to exculpate a party from liability for its own negligence are frequently held void as against public policy, especially in consumer adhesion contracts.

Under common law, the Statute of Frauds requires a writing for contracts that cannot be fully performed within one year. When does this one-year period begin?

Answer: From the date the contract is made

The one-year period under the Statute of Frauds is measured from the date the contract is formed, not from when performance commences.