Business 18/Paralegal 18 Spring 2011

Preparation hints for Exam #4

General Hints: Exam 4 will cover chapters 14, 16, 17 plus the associated lectures.
1. You must bring a Scantron answer form, and a number 2 pencil to the exam. Please make
sure your Scantron answer form is not three-hole punched, folded, or wrinkled, because I
won't accept it if it is.
2. Closed book, closed notes. NO ELECTRONICS. If you are concerned you may need to
know the definition of a word (one that will not provide the answer to a question), you may
sit in the very first row or at an aisle seat during an exam, and I will define such a word for
you.
3. Specific Hints: Not everything that is listed below will be on the test. And there may be
questions on the test on topics that are not listed below. However, the items below are
among the most important lessons of this portion of the course and have a higher than
average probability of appearing on exam 4.
The following items are from chapter 14:
1) The meaning of the following terms and expressions: the statute of frauds, executor,
estate, mortgage, easement, parol evidence, integrated contract, integration clause,
promissory estoppel.
2) The six types of contracts that fall within the statute of frauds.
3) The basic rule that an oral contract that falls within the statute of frauds is unenforceable,
but not void.
4) The rule that once an oral contract is fully executed, neither party may demand rescission,
even if the contract fell within the statute of frauds.
5) The fact that the doctrine of promissory estoppel is sometimes applied to avoid injustice
where an oral contract falls within the statute of frauds.
6) How the agreements that cannot be performed within a year provision of the statute of
frauds works.
7) The leading object rule exception to the promise to pay the debt of another provision of
the statute of frauds.
8) How the promise made by an executor of an estate provision works. In particular, know
that only promises made by such an executor to pay debts of the estate out of his or her
own money fall within the statute of frauds.
9) The things the writing must contain under the common law:
a) Must be signed by the defendant, and
b) Must state with reasonable certainty the name of each party, the subject matter of the
agreement, and all of the essential terms and promises.

10) The basic rule regarding enforceability of contracts for the sale of goods valued at more
than $500 under the UCC. In particular, know the three things a writing must contain under
the UCC, and how they are different (easier to meet) than the common law requirements:
a) The signature of the defendant
b) The quantity of the goods
c) An indication that the parties reached an agreement.
11) The fact that electronic signatures are generally valid substitutes for paper and pen
signatures. Know what is sufficient as a signature.
12) Know the basic parol evidence rule.
13) Exceptions to the parol evidence rule:
a) both parties admit agreement was part written and part oral.
a) An incomplete or ambiguous contract.
b) Evidence of fraud, misrepresentation or duress.
The following items are from chapter 16:
14) The meaning of the following terms and expressions: discharge, full performance, discharge
by agreement, discharge by other party breaching, condition, condition failure, express
conditions, implied conditions, condition precedent, condition subsequent, concurrent
conditions, strict performance, substantial performance, personal satisfaction contract,
time is of the essence clause, breach, material breach, anticipatory breach.
15) The fact that which party has the burden of proof (to prove that the condition did or did not
occur) depends upon whether the condition is a condition precedent or a condition
subsequent. The plaintiff has the burden to prove a condition precedent and the defendant
has to burden to prove a condition subsequent.
16) The fact that courts dislike strict performance because it enables one party to benefit
without paying.
17) The substantial performance doctrine: the basic rule that, in a contract for services, a party
that substantially performs its obligations will receive the full contract price, minus the
value of any defects.
18) The 3 substantial performance guidelines: Can the thing constructed be used for its intended
purpose? Can the promisee be compensated with money damages for any defects? Did the
promisor act in good faith?
19) The basic rule that a party that fails to perform substantially receives nothing on the
contract itself and will only recover the value of the work that they can prove, if any.
20) The two requirements for a court to be willing to apply a subjective standard to
performance. (See page 358.)
21) The general rule that a court will apply an objective standard to determine if the plaintiff
has substantially performed unless both of the requirements referred to above are met.

22) The fact that a time is of the essence clause will generally make contract dates strictly
enforceable; but that in the absence of such a clause, the court will expect the parties to
accommodate reasonable delays.
The following items are from chapter 17:
23) The meaning of the following terms and expressions: breach, expectation damages
(interest), compensatory damages, consequential damages, incidental damages, reliance
damages (interest), restitution damages (interest), specific performance, injunction,
preliminary injunction, reformation, duty to mitigate damages, nominal damages, liquidated
damages, punitive damages.
24) The rule that the injured party may recover consequential damages only if the breaching
party should have foreseen them.
25) The fact that in promissory estoppel cases, a court generally awards reliance damages.
26) The rule that a court may award restitution, even in the absence of a contract, where one
party has conferred a benefit on another and it would be unjust for the other party to retain
the benefit.
27) That in rescission cases, a court generally awards restitution damages.
28) The general rule that a court will award specific performance only in cases involving the sale
of land or some other asset that is unique.
29) The rule that a party injured by a breach of contract may not recover for damages that he or
she could have avoided with reasonable efforts (part of duty to mitigate).
30) The rule that a court will generally enforce a liquidated damages clause if (1) at the time of
creating the contract it was very difficult to estimate actual damages, and (2) the liquidated
amount is reasonable.
31) Calculation of damages for the sale of goods under the UCC. You will find this on page 375
and top of 376.