contract basics
Megan agrees to sell her car to Jake, but their contract is missing a key element: consideration. What type of contract do they have?
void
Bob and Sarah agree to a business deal, but Sarah insists they put it in writing to comply with the law. She is likely referring to ____.
The Statute of Frauds
Samantha owes Kevin $500. Instead of paying him directly, she transfers her right to receive payment from another person, Alex. What is this transfer called?
Assignment
Sophie and Brad sign a contract. After both completely fulfill their obligations, their contract is ____.
Executed
Jordan hires Alex to paint his house for $1,000, but Alex never shows up. Jordan hires another painter for $1,200 and sues Alex for the extra $200. What type of damages is he seeking?
Compensatory damages
Lisa and Tom sign a contract for a business deal. Later, Tom refuses to follow through, and Lisa sues. The court enforces the contract because it meets all legal requirements. What type of contract is this?
enforceable
Mark agrees to sell his house to Rachel, but they only discuss the deal verbally. Later, Mark backs out. Rachel sues, but the court rules in Mark’s favor. Why?
Land sales must be in writing
Olivia’s grandparents pay for a life insurance policy that will benefit her when they pass away. Even though Olivia didn’t sign the contract, she has the right to enforce it because she is a(n) ____.
Intended beneficiary
Emily agrees to design a website for Jake. However, halfway through, she quits. What type of performance has occurred?
Material breach
Mia’s supplier breaches their contract, causing her to miss a major business opportunity. She sues for lost profits. What type of damages is this?
Consequential damages
Jerry tells Kyle, “If you mow my lawn, I’ll give you $50.” Kyle starts mowing but hasn’t finished. At this point, can Jerry legally revoke the offer?
No, because Kyle has started performance
James and Lisa agree on a five-year service contract. Later, James claims they didn’t need a written agreement. Why is he wrong?
The contract cannot be performed within one year
David overhears that his friend Max is getting a large business contract, which will boost David’s own business. However, when the contract falls through, David sues. Why does he lose?
He was an incidental beneficiary
Lisa orders a custom wedding dress. The designer refuses to make it unless she pays extra. Lisa sues, and the court orders the designer to complete the dress. What is this remedy called?
Specific performance
A contract states that if one party breaches, they must pay $5,000 in damages. What type of damages is this?
Liquidated damages
Dylan is desperate for a job. His new employer gives him a contract and says, “Take it or leave it—no negotiation.” Later, Dylan realizes the contract is extremely unfair. What might a court call this contract?
Unconscionable adhesion contract
An executor of an estate promises to pay the deceased’s debts out of their own pocket. According to the Statute of Frauds, when is this promise enforceable?
Only if in writing
Maria signs a contract to build a house but later decides she doesn't want to do the work. She finds another builder, and all three parties agree to substitute this new builder in her place. What is this called?
Novation agreement
A hurricane destroys a warehouse that was essential for a contract’s completion. Because performance is now impossible, the contract is ____.
Discharged under impossibility
Leo wins a lawsuit, but the court finds that he suffered no actual financial harm. Instead, the court awards him a small amount of money to acknowledge the wrongdoing. What are these damages called?
Nominal damages
After Mike’s company breaches a contract, Lisa sues for damages. However, the court rules that Lisa did not take reasonable steps to reduce her financial losses. What principle applies here?
Duty to mitigate
In Florida, magazine subscriptions require a written contract before a customer is obligated to pay. What letter in "MCDs" represents this rule?
M
Jack agrees to do catering for $10,000, but he assigns the contract to another chef. The client refuses to pay because Jack was a famous chef, and they wanted his work. Why is this assignment invalid?
It involved a personal service
A new law makes a previously legal contract illegal. The contract is now ____.
Void
A judge changes certain terms of a contract to better reflect the original intent of both parties. What is this called?
Reformation