Contracts

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How can a written contract satisfy the UCC S of F?: Must contain material info and be signed by the alleged breacher (or by Plaintiff where D failed to respond w/in 10 days). MUST CONTAIN THE QUANTITY TERM (though not the price).
When contract contains a mixed deal of goods and services, which law do you apply?: The more important part (either common law or UCC). Exception for when contract divides payment, apply UCC to the sale of goods part and common law to the rest
Which terms must an offer contain?: Not required to contain all material terms.
Sale of real estate -- price must be there.
Goods -- price not required.
Requirements/output contracts can be stated in terms of "all, only, solely" etc.
NO VAGUE TERMS
When is an advertisement an offer?: When it's a reward, or specific as to quantity and promisee.
What are the 4 methods of terminating an offer?: Lapse of time,
revocation,
rejection,
death of a party prior to acceptance.
How do you revoke an offer?: Unambiguous conduct by offeror to offeree
Unambiguous statement by offeror to offeree
Offeree receives correct info of unwillingness/inability to keep the offer open (Sharon Stone sees Conviser driving the car she wanted ex.)
When is revocation effective?: Upon receipt.
When can an offer be revoked at will?: Before acceptance.
Also, offers not supported by consideration or detrimental reliance can be revoked at will,EVEN IF THE OFFEROR PROMISED TO KEEP THEM OPEN FOR A SPECIFIC LENGTH OF TIME
What are the 4 limitations on power to revoke an offer?: 1. Promised to keep it open AND promise is supported by $ or other consideration ("option contract');
2. When situation fits the FIRM OFFER RULE;
3. There has been detrimental reliance by offeree
What are the methods of indirect rejection of an offer?: Counteroffer (new offer, needs to be distinguished from bargaining)
Conditional acceptance (if, only if, provided that). Memphis law firm ex.
Common law only: Mirror image rule
When does the addition of new terms by offeree affect the validity of a contract under the UCC?: Under the UCC, adding new terms generally means there's still a contract UNLESS THE OFFEREE MAKES AGREEMENT TO THESE NEW TERMS A CONDITION OF ACCEPTANCE.
Are new terms added to a contract by the offeree a part of the contract, under the UCC?: If at least one is not a merchant, the new terms are a separate proposal.
If both are merchants, the new term is part of the contract, UNLESS: it materially changes the offer OR the offeror objects to the change.
What are the methods of terminating an offer, other than rejection, revocation, or lapse of time?: Death or insanity (unless the offer was an option supported by consideration or one party made part perf on unilateral contract);
destruction of contract's subject matter;
supervening illegality
What are the 5 methods of acceptance?: 1. offerree fully performs (is notice required or would offeree have reason to believe the offeror knows?)
2. start of performance is acceptance treated as an implied promise (unless contract demands otherwise)
3. promise
What is the mailbox rule?: If acceptance is by mail or similar means and is addressed and stamped properly, it's effective at the moment of dispatch.
What are the exceptions to the mailbox rule?: 1 option contracts (effective upon receipt)
2 1st sent rejection, then acceptance (whichever arrives first rules)
3 acceptance then rejection, mailbox rule applies unless rejection arrived first and the offeror detrimental
Is an acceptance sent by unauthorized means still effective?: yes,if actually received by offeror while offer is still open
What if the seller of goods sends the wrong goods?: Acceptance and breach. EX. PT orders one kind of jelly, store sends another. They accepted his offer, but breached the contract. OTOH, if they sent an explanation saying they ran out or something, there's an ACCOMMODATION EXCEP
What is consideration?: Bargained - for legal detriment
Is economic benefit required for consideration?: No -- think of peace of mind, gratification, etc.
If someone promises to sell "unless they change their mind," is their consideration?: No -- lllusory promise (will be wrong answer on the bar)
Can there be past consideration?: Generally, no, can't bargain for something already done. EXCEPTION 4 WHEN A PAST OBLIGATION IS UNENFORCEABLE B/C OF TECHNICAL DEFENSE, OBLIGATION IS ENFORCEABLE IF NEW PROMISE IS MADE IN WRITING AND PARTIALLY PERFORMED.
4 limitations on power to revoke: option contract (promise plus consideration), firm offer rule, detrimental reliance by other party that was reasonably forseeable, start of performance on unilateral contract (irrevocable for reasonable time)
what are the methods of acceptance?: full performance (notice sometimes required), part performance of a blateral contract, promise, conflicting communications (r then a, etc.), seller who sends the wrong goods (acceptance but breach)
What's the preexisting legal duty rule?: In common law only -- doing what you're already legally obligated to do is not new consideration 4 a new promise to pay you more to do merely that. Need new consideration for contract modification.
What are the exceptions to the common law "preexisting legal duty": addition to or change in performance, severe unforeseen difficulty, third party promise to pay
What is the test for changes to an existing sale of goods contract?: Good faith. New promises (say, you owe me 700 instead of the agreed-upon 500) will be legally enforceable so long as it was a good faith change. Needs no consideration to be binding.
What is the rule regarding a promise to forgive the balance of a debt?: If debt is DUE AND UNDISPUTED, part payment is not consideration. If not yet due or is disputed, there's new consideration.
what are the implied promises that courts use to infer mutual consideration?: output contracts, conditional promises, party has right to cancel (if restricted), unilateral contracts, option contracts, voidable promises, gratuitous suretyship promises made before consideration flows to principal
What are substitutes to consideration?: detrimental reliance, written promise to satisfy an obligation to which there's a legal defense (debt barred by statute of limitations).
What are the consequences of incapacity?: right to disaffirm by person without capacity. implied affirmation by retainig benefits after gaining capacity (ratification), people without capacity are legally obligated to pay for necessaries (quasi-contract)
What is a Statute of Frauds?: law designed to prevent fraudulent claims by making it harder to claim a contract exists. Requires a higher evientiary standard.
What contracts are within the S of F (hint: 5 categories)?: Marriage, executor's promise (to pay decedent debt), suretyship (guaranteeing debts of another if he doesnt pay), service contracts incapable of being performed in a year or less),
How do service and sale of goods contracts satisfy the Statute of Frauds (so that you prove there's an enforceable contract)? .: Full performance of a service contract, part performance of a sale of goods (to the extent they were delivered). Part perf of custom goods satisfies S of F as soon as substantial beginning.
When does performance on a real estate contract satisfy the S of F?: Part performance by buyer of real estate when 2 of 3 is accomplished: Payment, Possession, Improvements.
What does it take for a writing to satisfy the S of F in a common-law contract?: Must contain all material terms and be SIGNED BY THE PERSON ASSERTING THE S OF F DEFENSE.
When are you authorized to enter a contract for someone else?: In order to execute a contract that would be within the S of F, there must be a written authorization for the person to do so. EQUAL DIGNITY RULE.
When do rules of law require written evidence of the modification of a written contract?: Determine whether the deal -- with the alleged change -- would be within the S of F. If so, the change needs to be in writing as a matter of law.
What if a contract is in writing and requires that all modifications be in writing?: Under common law, you can ignore that requirement. Under the UCC, such requirements are effective unless waived.
If the subject matter of a contract is legal, but the purpose behind it was illegal, can you enforce it?: Only if you're a party who didn't know of the illegal purpose.
What are the elements of a successful claim of misrepresentation or fraudulent concealment?: False assertion of fact or concealment of facts (no requirement of fraud).
What are the elements of economic duress?: a bad guy making an improper threat and a vulnerable guy with no reasonable alternative.
What does a court look at in voiding a contract for unconscionability?: unfair suprise and oppressive terms, tested of time contract was made.
if parties disagree as to the meaning of a contractual term and one party knows they ascribe difft meanings, then what?: contract under terms as understood by the dumb guy.
how do you distinguish btw misrep and mistake of fact?: The former focuses on words before the contract and the latter involves the words in the contract.
elements of mutual mistake of fact: both guys mistaken, basic assumption of fact, materially affects the contract, not a risk either bears. fake andy warhol
define the forms of integration under the parol evidence rule:: Integration-- written agreement that court finds is final (triggers the rule); Partial integration -- written and final, but not complete; complete integration -- written, final, and complete.
what's a merger clause?: contract clause such as "this is complete and final agreement". courts like these.
what is parol evidence?: words of party/parties, before integration, that is oral or written
what is a reformation suit?: an equitable action to modify written contract to reflect actual agreement (use in parol evidence essays).
Can you use parol evidence to contradict the written deal?: No way, only to determine if there was a mistake in integration (a typo)
Does the parol evidence rule prevent a court from considering parol evidence for the purpose of getting out of deal because of misrep/fraud, etc.?: No. You can use parol evidence for that purpose.
may a court consider parol evidence as a source of additional terms that should add to the written deal>?: No, not unless the written contract was only a partial integration or the added terms would ordinarily be a separate agreement.
Beyond the words of the parties (parol evidence), what else do courts look to as a source of contract terms?: First, the course of performace; second, course of dealing; third, industry custom and usage
What is the default place of delivery in a sale of goods contract? (UCC): Seller's place of business
If delivery of goods is by common carrier, how does the seller complete its delivery obligations?: A. Shipment contract (seller completes delivery obligation once gets goods to ups, makes reasonable delivery arrangements, and notifies the buyer.); B. Delivery contract (seller obligated until goods arrive).
If the seller is in ABQ, and the contract says F.O.B., ABQ what kind of contract is it?: A shipment contract.
Implied warranty of merchantability.: implied promise that goods are fit for the ordinary purpose for which such goods are used. Only works if seller typically deals in goods of that kind.
Implied warranty of fitness for a particular purpose: buyer has a particular promise and is counting on you to find suitable goods, seller has reason to know. ex of bubba and patent loafers.
Can an expressed warranty be disclaimed?: No
Can an implied warranty of merchantability or fitness be disclaimed?: Yes -- use words like "as is"
Can a party contract to limit remedies on recovery for breach of warranty?: Yes, unless its uncosncionable (like if a breach of warranty on consumer goods causes personal injury).
What is the rule of perfect tender?: In a sale of goods contract, seller is obligated to deliver perfect goods. Buyer has option to retain and sue, reject and sue, etc.
The perogative to reject imperfect goods is limited by what 3 alternatives?: CURE, INSTALLMENT SALES CONTRACTS, ACCEPTANCE OF THE GOODS
When can a seller "cure" his less than perfect tender?: After the contract delivery date -- if he had reasonable grounds to believe it would be ok, based on prior transactions. Or when time for performance hasn't expired.
What's an installment sales contract?: A contract that requires or authorizes delivery in separate lots to be separately accepted. Right to reject only where there's a substantial impairment that can;t be cured.
When have goods been impliedly accepted?: When they've been retained after opportunity for inspection (generally a month or so)
You can't reject goods you've already accepted. What can you do instead?: Revoke acceptance within a reasonable time after discovery of nonconformity (defective sleeping bag e.)
When can you get a nonmonetary remedy, like specific performance?: Where $ wouldn't be adequate, like in a contract for real estate or unique goods like art. No specific performance on services contracts.
What is reclamation and when/how does it happen?: right of an unpaid seller to get his goods back. Buyer must have been insolvent at time of receip, still have the goods, AND seller must demand return within 10 days of recipt.
EXPECTATION: PUT PLAINTIFF IN SAME ECONOMIC POSITION AS IF CONTRACT HAD BEEN PERFORMED.
RELIANCE DAMAGES -- PROTECTION OF RELIANCE INTEREST.: PUT PLAINTIFF IN SAME POSITION AS IF CONTRACT HAD NEVER HAPPENED. use only if bar tells you.
RESTITUTION DAMAGES: PUT DEFENDANT IN SAME POSITION AS IF CONTRACT NEVER HAPPENED.
How do u calculate expectation damages where SELLER breaches, BUYER keeps the goods? (Maybe the good delivered isn't up to par): Fair market value if perfect-fair market value as delivered.
Calculate expectation damages where Seller breaches, seller keeps the goods: market price at time of discovery of breach - contract price
buyer breaches, buyer has the goods: contract price
buyer breaches, seller has the goods: contract price-resale price OR contract price-market price at time of delivery. IN SOME CASES, LOST PROFITS (where there's a regular inventory)
Incidental damages: costs incurred in dealing with breach -- always recoverable
consequential damages or special damages: damages arising from P's special circumstances; recoverable only if D had reason to know these special circumstances existed at the time of contract.
What are avoidable damages?: No recovery for damages that could have been avoided without undue burden on the plaintiff (Duke prof ex.)
When is there a CERTAINTY LIMITATION in granting liquidated damages?: Where provision ranting damges is too high, there's a penalty. Tests are: dam were difficult to forecast and provision is a reasonable forecast.
Under the common law, when does the other guy's conduct excuse you from performing?: Only when he made a material breach
When can u have both part performance by the bad guy and a material breach?: When the performance was less than half done. If u were the performer (say, the painter) and did less than half your job, u can only recover under quasi-contract
Under the UCC, do u need a material breach by one party to excuse other's nonperformance?: No. Perfect tender rule.
When is a conditional promise distinguished from a counteroffer?: When both parties agree to it. Ex. B and S agree that B will buy S's house if it is appraised high.
What is the standard for satisfying an express condition?: Strict compliance (if contract is conditioned on using Reading pipe, don't use comparable other pipe).
Under what conditions can a party sue for the other party's anticipatory repudiation?: Anticipatory repudiation generally gives rise to an immediate claim for damages UNLESS the claimant/wronged party already finised performing (then wait to sue til the completion date).
Can unambiguous anticipatory repudiation be reversed/retracted?: Yes, but only if there hasn't been a material change in position by the other party. Performance can be delayed until screwed-over party receive adequate assurance.
Insecurity (ambiguous words conduct that suggests a party won't perform): Allows the insecure party to suspend performance until it receives adequate assurance
When can parties agree to recind a contract?: any time up til one of them finishes. both sides need to remain unfinished
Meaning of "accord" and "Satisfaction": accord question will have an agreement by the parties to an already existing oligation to accept a different performance in satisfaction of the existing obligation.
modification: substituted agreement - as opposed to accord (which is substituted performance)
Novation: An agreement between BOTH parties to a contract to the substituion of a new party for one of them (same perf, difft party)
Who is liable after a novation?: The replaced party is excused.
What's the difference between delegation and novation?: In delegation there's no agreement required and no excuse for the nonperforming party.
Does death after contract excuse a party's oblgations?: No, unless the party to contract is a "special" person (service contract)
frustration of purpose: later law makes mutually understood purpose of contract illegal--valid excuse for nonperformance
What do you call a person trying to enforce a contract she didn't make?: Third party beneficiary
Who is the person who promises to perform something for the 3rd party's benefit?: promisor
Who is the person who solicits a promise on the beneficiary's behalf?: the promisee
Can an incidental beneficiary recover?: No, just an intended named beneficiary
Intended beneficiaries are either ____ or _____: donees or creditors
When can parties with a contract that would benefit a third party cancel or modify it?: Any time before the 3rd party knows of AND has relied on or assented to it. At that point, contract can't be altered without her consent unless there's a clause providing otherwise.
Who can sue whom, in a 3rd party beneficiary contract?: Beneficiary can recover from promisor (Epstein sues Jumbo's); Promisee can sue promisor (Stone sues Jumbo); donee benef CAN'T recover from promisee but creditor can recover from promisee on preexisting debt
If the 3rd party beneficiary sues the promisor, what can the promisor's defenses include?: any defense the promisor could assert against the promisee.
What's the diff between being a 3rd part beneficiary and an assignee?: Third party beneficaries are part of the orginal contract. Assignment occurs when 1 party transfers a right(s) to the assignee later.
What are the limitations on the power to assign?: prohibition (doesn't knock out assignee's rights if he didn't know), invalidation/voiding (no right to assign and no rights in the assignee). And in common law, assignments are barred where they substantially change the duties o
Is consideration required for assignments?: No. But make sure what you've got is a genuine assignment and not just a promise to pay someone later with money you collected from a contract.
Who can recover under an assigned contract?: The assigneee can recover from the obligor, but the assignor can not!
What if the obligor pays the assignor instead of the assignee?: Payment from obligor to assignor is effective until obligor knows of assignment. Modifications between obligor ans assignor are likewise effective if obligator didn't know rights were being assigned.
In what respects are assignments for consideration treated differently than gratuitous assignments?: in "assignment for consideration" , the assignor warrants the right exists and he won't impair its value.
What happens when you repeat gratuitous assignements?: last assignee wins. exception: gratuitous assignment is not revocable once assignee has it in writing or indicia of ownership or detrimentally relied.
Who gets an assigment for consideration when the assignor offered it more than once? What's the exception known as the FOUR HORSEMEN RULE?: 1st assignee for consideration wins. LIMITED EXCEPTION: SUBSEQUENT ASSIGNEE FOR CONSIDERATION WINS IF HE DOESN;T KNOW OF EARLIER ASSIGNMENT AND IS 1ST TO OBTAIN PAYMENT, JUDGMENT, NOVATION, OR INDICIA OF OWNERSHIP.
What is a delegation?: A party to a contract transferring work under it to a third party.
What are the limits on your ability to delegate?: 1 contract prohibits delegations or assignments; 2 contract calls for very special skills; 3 person to perform contract has a VERY SPECIAL reputation.
What if a delegatee does not perform?: Delegating party always remains liable; the delegatee on the other hand, is only liable if she receives consideration from the delegating party.

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Created By tannisroot