Contracts and Commercial Law Flashcards
7 cards from real ND BAR practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Contracts and Commercial Law flashcards as text
Which of the following contracts is within the Statute of Frauds and must be in writing to be enforceable?
Answer: A contract that cannot be performed within one year from the date of its making
Contracts that by their terms cannot be completed within one year of formation fall within the common law Statute of Frauds and require a signed writing.
When a contract is rescinded by mutual agreement, the legal effect is:
Answer: Both parties are excused from future performance and the contract is treated as if it never existed
Mutual rescission extinguishes all remaining duties under the original contract, effectively returning both parties to their pre-contract positions.
Under the doctrine of substantial performance, a party who substantially but not perfectly performs a contract is entitled to:
Answer: The contract price minus the cost to remedy the deficiencies
Substantial performance entitles the performing party to the contract price less the cost of remedying any defects, preventing forfeiture for minor deviations.
A third-party beneficiary who has vested rights under a contract may:
Answer: Enforce the contract against the promisor
An intended third-party beneficiary whose rights have vested acquires the right to enforce the contract directly against the promisor.
Which of the following best describes a liquidated damages clause?
Answer: A pre-agreed sum payable upon breach when actual damages would be difficult to calculate
A valid liquidated damages clause fixes a reasonable pre-estimated sum for breach and is enforceable when actual damages are uncertain and the amount is not a penalty.
Under North Dakota law (following the Restatement approach), which of the following constitutes adequate consideration?
Answer: A promise to forbear from filing a lawsuit the party genuinely believes to have merit
Forbearance from asserting a claim that the party genuinely and reasonably believes to be valid constitutes adequate consideration, even if the claim ultimately proves unmeritorious.
An assignment of contract rights is generally valid unless:
Answer: The contract is for professional services that depend on the personal skill of the assignor
Personal service contracts involving unique skills or special trust cannot be assigned because the other party bargained specifically for the performance of that individual.