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The following items are from chapter 9: (*items tested from this Chapter also come from
other chapters)
1) The meaning of the following terms and expressions: agreement, consideration, legality,
capacity, contract, bilateral contract, unilateral contract, valid contract, unenforceable
contract, option contract, voidable contract, void contract, promissory estoppel, the
common law, the Uniform Commercial Code.
The following items are from Chapter 10 and relevant portions of Chapter 9:
2) The meaning of the following terms and expressions: intent, definiteness of terms, offer,
offeror, offeree, agreement, bilateral contract, unilateral contract, promissory estoppel, the
Uniform Commercial Code, invitation to bargain, price quote, gap-filler provisions (UCC),
revocation, firm offer, rejection, counteroffer.
3) The four essential elements of a contract.
4) Know which types of contracts are governed by the UCC and which types are governed by
the common law.
5) The fact that a revocation of an offer is effective when received, except in California where
it is effective upon dispatch.
6) The fact that an offer and rejection are effective when received, not when dispatched.
7) The fact that an acceptance is effective when dispatched, not when received (mailbox rule).
8) The general rule that an advertisement is not considered an offer, but instead is considered
a request or solicitation for offers.
9) The general rule that putting an item up for auction is not considered an offer, but instead is
considered a request or solicitation for offers.
10) The two requirements contained in the UCC for when the courts will recognize the
existence of a contract even though it has some open terms.
a) The parties have intended to make a contract, and
b) There is a reasonably certain basis for giving an appropriate remedy.
11) The meaning of the expressions implied warranty of merchantability and implied warranty
of fitness for a particular purpose as defined in the UCC.
12) The four ways offers may be terminated and what they mean:
a) By revocation
b) By rejection
c) By expiration
d) By operation of law
13) The general rule that an offeror may revoke an offer any time before it has been accepted.
14) The two ways offers may be terminated by operation of law:
a) Death or mental incapacity of the offeror.
b) Destruction of the subject matter.
15) The common law mirror image rule.
16) The effect of additional or different terms contained in the acceptance of a contract
governed by the common law (mirror image rule applies). The effect of additional or
different terms contained in the acceptance on a contract governed by the UCC.
17) Medium and manner of acceptance (controlled by offer; if offer is silent, reasonable).
18) Promissory estoppel and that it can be a substitute for consideration.
19) The three required elements a plaintiff must prove in order to win a case under the doctrine
of promissory estoppel.
The following items are from chapter 11:
20) The meaning of the following terms and expressions: consideration, forbearance,
detriment, promisor, promisee, adequacy of consideration, illusory promise, good faith,
past consideration, preexisting duty, letter of intent.
21) The types of things that can function as consideration.
22) The general rule that courts do not consider the adequacy of consideration.
23) The general rule that past consideration cannot function as consideration.
24) The general rule regarding preexisting duty: that a promise to do something the promisor is
already obligated to do is not valid consideration.
25) That additional work is an exception to the general rule regarding the common law rule
against modification of contracts (based upon preexisting duty rule).
26) The common laws treatment of rescission and substitution as sometimes a way around the
general rule regarding preexisting duty.
27) The UCCs rules regarding modification of existing contracts and whether those
modifications need to be supported by consideration the way they do under the common
law.
The following items are from chapter 12:
28) The meaning of the following terms and expressions: insurable interest, ancillary, usury,
noncompetition agreement, exculpatory clause, unconscionable contract, and adhesion
contract.
29) The basic rule that a gambling contract is illegal unless it is specifically authorized by state
statute.
30) The basic rule that anyone taking out an insurance policy on the life of another must have
an insurable interest in that person, or else it will be treated as mere wager and therefore
void.
31) The fact that when a licensing requirement is designed to protect the public, any contract
made by an unlicensed worker is unenforceable.
32) The fact that when a licensing requirement is designed merely to raise revenue, a contract
made by an unlicensed person is generally enforceable.
33) The fact that for an agreement not to compete to be valid and enforceable, it must be
ancillary to a legitimate bargain.
34) The fact that the two most common types of contracts in which legitimate non-competition
agreements are found are contracts for the sale of a business and contracts for
employment.
35) The four requirements of a valid non-compete agreement in connection with the sale of a
business:
a) The non-compete agreement must be ancillary to an agreement to sell the business.
b) It must be reasonable in time.
c) It must be reasonable in geographic area.
d) It must be reasonable in scope of activity.
36) What the general parameters are for 35 b), c), and d) above.
37) That exculpatory clauses may be enforceable to waive ordinary negligence but not for
recklessness or intentional torts.
38) That exculpatory clauses are generally not enforceable for essential public services.
The following items are from chapter 13:
39) The meaning of the following terms and expressions: capacity, minor, voidable contract,
disaffirm, rescind, restitution, ratification, necessaries, mental impairment, mental illness,
mental defect, intoxication, misrepresentation, innocent misrepresentation, fraudulent