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Running head: CONTRACT LAW
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Contract law
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CONTRACT LAW
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Contract law
Question 1
A guaranty is a legally binding promise made by one party, the guarantor, to pay or
perform the obligations of another entity if the other entity fails to do so. The major purpose rule
is an exception to the general rule. The rule provides that if a person guarantees another person’s
debt for his or her own personal gain, the guarantee is enforceable even if it is not in writing
(Hawkins, 2020). Even though the third party promises merely to be accountable for the debt if
the debtor defaults, an oral promise will be enforceable if the third party’s primary motivation for
making the promise is for his own advantage.
Question 2
The parol evidence rule limits how far parties to a lawsuit can submit evidence of a prior
or contemporaneous agreement into court in order to modify, explain, or supplement the contract
at issue. The regulation prohibits the use of parol evidence. This means that if the parties to a
contract have created and signed a fully integrated written contract, proof of prior conversations
will not be accepted in order to change or contradict what is written in the contract (McKendrick,
2014). Antecedent discussions are admissible as evidence under the parol evidence rule if the
evidence fits three criteria: the agreement must be a collateral one, it must not contradict features
of the original contract, and it must be something new that was not in the first contract.
Question 3
Most modern laws require that certain promises be made in writing before they can be
enforced. Contracts for the Sale of Goods, contracts made in consideration of marriage, contracts
that cannot be performed within one year of the date of the contract must also be in writing, and
CONTRACT LAW
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a promise made by a third party to a creditor that the third party will be responsible for the debt
that the debtor owes the creditor must also be in writing (Hawkins, 2020).
Question 4
Contracts establish rights and responsibilities. An obligee becomes an assignor when he
or she transfers a right to obtain a contract benefit due by the obligor to a third party. It is
ineffective when an assignment has the impact of materially altering the obligor’s
responsibilities. Personal rights, assignment prohibited by statute or public policy, contracts that
prohibit assignment right…
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