Contracts and Commercial Law Flashcards

Under Minnesota law, a liquidated damages clause is enforceable if:

Answer: Damages are difficult to estimate and the amount is a reasonable forecast

Minnesota courts uphold liquidated damages clauses when actual damages are difficult to estimate and the stipulated amount represents a reasonable approximation of anticipated harm.

Under Minnesota contract law, the duty to mitigate damages requires the non-breaching party to:

Answer: Take reasonable steps to minimize damages after breach

Minnesota requires the injured party to take reasonable steps to mitigate losses; failure to mitigate bars recovery for damages that could have been avoided.

In Minnesota, which type of contract is voidable at the option of one party due to lack of capacity?

Answer: Contracts with a minor

Contracts with minors are voidable in Minnesota at the minor's election, though minors may be liable for the reasonable value of necessaries.

A Minnesota court would likely find a contract unconscionable and refuse to enforce it if:

Answer: The contract had grossly unfair terms imposed on a party with no meaningful choice

Minnesota courts apply both procedural unconscionability (unfair bargaining) and substantive unconscionability (oppressive terms) to refuse enforcement of unconscionable contracts.

Under Minnesota law, which of the following modifications to an existing contract requires new consideration?

Answer: Modification of a common law services contract

Common law contract modifications require new consideration, while UCC modifications under Minn. Stat. § 336.2-209 do not need new consideration if made in good faith.

Under Minnesota law, a valid assignment of contract rights:

Answer: Requires the obligor's consent unless the contract forbids assignment

In Minnesota, rights can generally be assigned without the obligor's consent unless assignment is prohibited by the contract, statute, or would materially increase the obligor's burden.