Contracts Flashcards

When interpreting an ambiguous contract, courts apply the rule of 'contra proferentem.' What does this rule provide?

Answer: Ambiguities are resolved against the party who drafted the contract

Contra proferentem resolves ambiguities against the drafter because the drafter had the opportunity to use clear language.

A subcontractor submits a bid that is used by a general contractor in preparing its own winning bid. The subcontractor then attempts to withdraw before a formal subcontract is signed. Under what theory may the general contractor recover?

Answer: Promissory estoppel

Courts apply promissory estoppel (as in Drennan v. Star Paving) to hold that reasonable reliance on a sub-bid before acceptance makes the bid irrevocable.

Under the parol evidence rule, which type of evidence is ADMISSIBLE to explain or supplement a written contract that is only a partial integration?

Answer: Evidence of consistent additional terms not covered by the writing

When a writing is a partial integration, consistent additional terms may be shown by extrinsic evidence, but contradictory terms remain excluded.

Which of the following is a valid exception to the preexisting duty rule that would allow modification of a contract without new consideration?

Answer: Unanticipated circumstances make the original contract significantly more burdensome

Under the Restatement (Second) § 89, a contract modification is enforceable without consideration if it is fair and equitable in light of unanticipated circumstances.

A third-party beneficiary's rights under a contract vest, making the contract irrevocable as to the beneficiary, when the beneficiary does which of the following?

Answer: Materially changes position in justifiable reliance on the contract, assents, or brings suit

Under Restatement (Second) § 311, a third-party beneficiary's rights vest when the beneficiary manifests assent, materially changes position in reliance, or brings suit to enforce the promise.

In Kansas, the general statute of limitations for breach of a written contract is:

Answer: 5 years

Under KSA 60-511(1), an action on a written contract must be brought within five years of the cause of action accruing.

A seller delivers 95 out of 100 promised widgets. The buyer accepts them but later claims breach. What damages may the buyer recover under UCC Article 2?

Answer: The difference between the value of the goods as accepted and their value had they conformed to the contract

UCC § 2-714 allows a buyer who accepts non-conforming goods to recover damages for the difference between value as accepted and value as warranted, plus incidental and consequential damages.