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35 Cards in this Set
- Front
- Back
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Lack of capacity to contract due to intoxication
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If a person enters into a K during a period of intoxication that causes him not to understand the nature and significance of his promise, the contract is voidable IF
the other party knew of the intoxication. |
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Failure to agree on an essential term
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Failure to agree on a term that is essential to the contract (e.g. the time or method of payment) would render the contract VOIDABLE because there is no meeting of the minds as to this term,
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Unconscionability
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To find whether it is unconscionable, the court must ask whether, in light oft he general commercial background and needs of the parties, the clauses involved are so ONE-SIDED as to be unconscionable under the circumstances that existed at the TIME the K was FORMED.
Courts are reluctant to apply this, but will do so when a consumer transaction is involved and the buyer is UNAWARE of the actual price he agreed to pay. aka adhesion contracts |
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Effect of a counteroffer
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It revokes the original offer and takes away the offeree's power to accept the original offer.
For an offer to become irrevocable, even for a short amount of time, there must be consideration, UNLESS the offer is made by a merchant, who is required to hold open an irrevocable offer regardless of lack of consideration. (3 month limit) |
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What is the predominate purpose test?
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TN uses a predominate purpose test to determine whether a transaction consisting of mixed goods and services represents a sale of goods (governed by Article 2 of the U.C.C. or a sale of services (governed by the common law of contracts)
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common law formation elements
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Offer and acceptance, consideration, and capacity.
Also, writing may be required under SOF |
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consideration
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1. bargained-for exchange
AND 2. satisfaction of the benefit-detriment test (requiring mutual benefit and detriment in the arrangement between the parties) Generally, when a contract is modified so that one party is required to render additional performance with no change to the other party's promise, the modification will not be enforceable. |
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equitable doctrine of promissory estoppel
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Promissory estoppel is available when:
(i) someone makes a promise to someone else that induces action or forebearance; (ii) the person to whom the promise is made reasonably relies on the promise to his detriment; AND (iii) injustice can be avoided only be enforcing the promise. **It is important to note, however, that promissory estoppel has not been expressly recognized by the Tennessee Supreme Court |
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How can an offer be rejected
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An offer can be rejected by:
1.direct or indirect revocation, 2. express rejection, 3. counteroffer, OR 4. operation of law (lapse of a reasonable time) |
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mutual agreement theory
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Absent direct acceptance there may acceptance where
1. the parties' course of conduct, 2. together with the identical written offers, WOULD CONSTITUTE an offer and acceptance DESPITE a failure of each to respond to the written offer of the other |
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mirror image rule
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Where there has been no direct acceptance of an offer, there still may be an acceptance under Mirror Image Rule
WHERE the terms of an offer and counteroffer constitute an offer and acceptance because they are identical |
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K entered into by minors
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No. A K entered into by a minor is not void, but is VOIDABLE by the minor.
In TN a minor who misrepresents his age may be estopped to disaffirm the K. |
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guaranty K
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SOF applies
must be supported by consideration, which need not flow from the guarantor, but must be in exchange for guarantor's promise -past consideration not valid |
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oral agreement to reduce to writing
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where parties have negotiated and reached an agreement with the understanding that they would execute a written document but have failed to execute that written document, some cases have held that the parties were bound and some have held that they were not.
-depends on whether the trier of fact believes that the parties intended to be bound upon oral agreement to reduce to writing or only when the written agreement had been signed. |
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SOF--when does it apply
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SOF requires that certain agreements must be in writing.
MY LEGS 1. Interest in LAND $ 2. SURETYSHIP Agreement--must be evidenced by a writing. 3. Performance within a YEAR 4. Consideration of MARRIAGE (Pre-Nups) 5. EXECUTOR or Administrator's Promise to pay debts of the estate out of his own funds $ 6. GOODS valued at $500 or more (UCC) BUT an oral K for the sale of goods over $500 is enforceable to the extent of goods received and accepted by the buyer. Modification Rule: look to K as modified. "if new price brings K within SOF, must be in writing" |
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Is an oral contract for the sale of goods over $500 enforceable?
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VCC states that if the goods have been received and accepted, an oral agreement is acceptable.
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Fraudulent misrepresentation.
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When a misrepresentation is fraudulent, the party to whom the misrepresentation was made NEEDS ONLY to rely on the misrepresentation.
This reliance does NOT have to be REASONABLE. If it is ACTUALLY relied on, the contract is VOIDABLE upon the action of the injured party. |
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$ SOF--a contract that by its terms cannot be performed within one year
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may not be enforced against a person UNLESS
there is a writing signed by that person memorializing the contract. However, TN courts have held that PART PERFORMANCE will take the contract out of the SOF. BUT TN does not recognize part performance when it comes to land. THUS, IF a person possessed and improved the land, he would not be able to enforce the promise if it was not written and signed. |
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Can someone orally give her agent authority to sign a document
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Yes. SOF does NOT require that the authority of the agent be in writing.
Consequently, the oral permission given to the agent authorizing her to sign a document (e.g. a lease) makes the document DOCUMENT. |
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doctrine of impracticability
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Under tins doctrine, a K duty may be discharged when
there is EXTREME DIFFICULTY or EXPENSE AND difficulty or expense was NOT ANTICIPATED. |
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Subsequent modifications--must they be in writing
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There is authority that if the original contract is within the Statute of Frauds, no modification is enforceable UNLESS the modification is in writing.
Other authority holds that the modification need not be in writing UNLESS the modification changes the contract so that a contract that was formerly outside the Statute is, after the modification, within the SOF |
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[Condition] Precedent
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[Condition is an event other than the passage of time the occurrence or nonoccurence of which will create, limit, or extinguish the other party's absolute duty to perform.
IF a party's obligation to perform is subject to a CONDITION PRECEDENT THEN the failure of this condition to occur would excuse the party from performing. |
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doctrine of impossibility--destruction of subject matter
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Generally, IF the K's subject matter was destroyed without fault of the promisor,
THEN any duty under the contract will be discharged for impossibility, PROVIDED THAT that the subject matter of the contract is UNIQUE. If the |
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demand adequate assurance
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if he learns that the buyer is having cash flow problems and is behind in payments to his creditors
Seler may demand adequate assurance AND IF COMMERCIALLY REASONABLE, suspend performance UNTIL seller receives assurance or is paid. |
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Anticipatory Repudiation
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can constitute a breach. An anticipatory repudiation arises if, prior to time of performance, a promisor indicates that he will not perform when the time for performance arises.
words or conduct must be unequivocally indicate that he cannot or will not perform as opposed to merely raising doubt. -can be treated as an immediate breach |
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prospective inability to perform
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Available when reasonble grounds for insecuirty arise
May demand adequate assurance of due performance in writing Until assurance is rec'd. may suspend own performance If adequate assurance is not rec'd within a reasonable time(not exceeding 30 days) may consider it a repudiation contract. --∆ to anticipatory repudiaiton |
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Condition Subsequent
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condition that cuts off an existing right
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impossibility
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duties under the K will be excused if after the K is made:
1. an event occurs that makes performance objectively impossible (i.e. no one can perform) -destruction of subject matter AND 2. nonoccurrence of the event was a basic assumption of the parties |
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Temporary impossibility
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If the impossibility is temporary, K duties are not permanently discharged, but are suspended and will spring back into existence once the impossibility is removed
UNLESS burden on either party would be substantially different than originally anticipated. |
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Anticipatory Repudiation--innocent parties remedies
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If there arises some doubt that the other party may be unable to perform, innocent party may suspend performance and seek adequate assurances.
if no adequate assurances, nonrepudiating party has the following remedies: 1. treat as a total repudiation and sue immediately; 2. suspend performance; 3. treat as an offer to rescind and consider the K discharged 4. ignore the repudiation and urge the promisor to perform. |
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When B rejects goods for defect, S may, w/in time for performance, cure (give reasonable notice of intent to do so and make new tender) and B must accept
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when B rejects a tender that S reasonably believed would be acceptable, S has further reasonable time beyond original K time to make a conforming tender
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S will prob be found to have had reasonable cause to believe nonconforming tender would be acceptable when:
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1. trade practices or prior dealings with B
2. S could not have known of defect |
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Incidental Dams
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expenses reasonably incurred in inspection, receipt, transportation, care and custody of goods rightfully rejected
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Consequential Dams
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any loss resulting from B's general or particular rqmts and needs of which S should have known
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SOL for breach of an Article 2 Sales K
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4 years after coa has accrued (accrual = when breach occurs)
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