1. What is an absolute promise?
    promise without condition

    "I will give you my phone"
  2. What is a conditional promise?
    promise with condition

    "I will give you my phone when you're done with your homework"
  3. What are the 5 types of discharge of a contract?
    discharge by

    • - condition
    • - performance
    • - breach
    • - agreement of the parties
    • - operation of law
  4. What is a conditional contract?
    contract is based on a condition

    conditions precedent -- event must occur before performance is due (perform once sth happens)

    conditions subsequent -- event terminates a duty to perform (perform until sth happens)
  5. What is discharge by condition?
    contractual condition was met/not met
  6. What is discharge by performance?
    all parties perform according to the contract
  7. What is a breach of contract?
    wrongful failure to perform according to contract
  8. What are the 2 types of breach of contract?
    material breach -- essential duty has not been performed

    minor breach -- minor part of the contract has not been performed
  9. What determines whether a breach is material?
    the contract
  10. What are the consequences in case of a breach of contract?
    material breach -- NBP is discharged from any further duty under the contract and can recover damages

    minor breach -- NBP can recover damages, but is not discharged
  11. What is substantial performance?
    incomplete performance that does not defeat purpose of contract
  12. What are the 2 kinds of discharge by agreement of the parties?
    mutual rescission -- both agree to terminate original contract

    substituted contract -- new contract that replaces the original
  13. What are the 2 kinds of a substituted contract?
    accord and satisfaction -- substitute a duty in the contract

    novation -- substitute a party of a contract
  14. What are the 6 kinds of discharge by operation of law?
    impossibility -- performance cannot be done

    commercial impracticability -- performance could be done under unforeseen and unjust hardship

    destruction of subject matter -- contract subject does not longer exist

    subsequent illegality -- contract objective becomes illegal

    bankruptcy -- discharge by court order

    statute of limitations -- too much time has passed
  15. What are the 2 kinds of impossibility to perform according to a contract and their effects on the contract?
    • subjective impossibility
    • -- promisor cannot perform
    • => no discharge

    • objective impossibility
    • -- no one could perform duty
    • => discharge
Card Set
Review questions for Business Law and the Regulation of Business, 10th edition, Mann&Roberts, chapter 17