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56 Cards in this Set
- Front
- Back
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How do you determine whether a contract is for goods or services?
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When the value of the goods predominate, the Uniform Commercial Code applies because the transaction is for the sale of goods.
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What is the Maryland Test to determine when a K is for goods or services?
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When goods and services are combined in a K, even if the services predominate, if the gravamen or heart of the complaint involves the goods, the UCC applies.
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When does the Uniform Commercial Code apply?
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The UCC applies to the sale of goods, regardless of whether or not the parties are merchants.
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What is the definition of goods under the Uniform Commercial Code?
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Goods are items that are movable at the time of sale.
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What are the requirements of valid K?
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A K requires mutual assent, offer, acceptance, consideration, two parties with the capacity to contract, and a lawful purpose.
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What is mutual assent?
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Mutual assent is an agreement by both parties to make a K. The parties objective intentions control.
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What is an offer?
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An offer is a statement that gives the offeree the power to bind the offeror.
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When can an offer be revoked?
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An offer may be revoked anytime before acceptance. However, a unilateral offer cannot be revoked once the offeree has begun substantial performance.
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What is the Mail Box Rule?
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The mail box rule provides that acceptance is effective when mailed.
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What is a unilateral contract?
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A unilateral contract occurs when one person promises to act only if the other party actually performs, instead of promising to perform. There is only one promise.
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What is a bilateral contract?
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A bilateral contract occurs when two parties exchange promises.
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How can one accept a bilateral contract?
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An offeree may accept a bilateral contract by promising to perform or starting to perform.
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How can one accept an unilateral contract?
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An offeree must accept an unilateral contract by performing and cannot accept by promising to perform.
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When is revocation effective?
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Revocation of an offer is effective when actually received by the offeree or when he or she learns of the revocation from a reliable source.
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What types of statements are not offers?
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The following statements are not offers: Advertisements, unless on a first come first serve basis, statement of general intent, and form letters unless recipient could not tell its a general letter.
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Is a promise to keep an offer open enforceable?
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NO. An offer may be revoked anytime before acceptance. Exceptions: Option Contract, UCC Firm Offer, Performance started on a Unilateral Contract, Bids by Subcontractors.
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What happens when the offeree responds with different or additional terms to the initial offer?
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Without the offeree accepting the exact terms of the offer, the different or additional terms constitute a counter offer and a rejection of the initial offer.
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When is a rejection effective?
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A rejection is effective when received.
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What is the effect of a mere inquiry on an offer?
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A mere inquiry, "Would you consider, $20", is not a counter offer or a rejection.
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What are examples of unilateral contracts?
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Awards, Broker Real Estate Contracts, Success Contracts.
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Can a reward offered by a government entity be revoked?
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A reward offered by a government entity cannot be revoked and remains effective, aside from contract law. Winner of reward does not need to know about the reward before performing.
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Describe the effect of different or additional terms in response to an offer by a merchant to a merchant?
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Additional or different terms become part of the contract if the terms do not materially alter the original offer UNLESS the offeror objects within 10 days, the offer said no new or different terms, or the offeree predicated his acceptance on offeror's acceptance of the new terms.
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What is an Implied in fact Contract?
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Mutual conduct shows assent (sit silently in barber chair or dropping off clothes to the dry cleaner).
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What is an Implied in Law Contract or Quasi Contract?
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Quasi-Contract occurs when the parties did not agree to form a contract but the court will find a contract to avoid unjust enrichment and will award the fair market value of the service provided (quantum meriut).
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What is Consideration?
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Consideration is the alteration of legal duties: either agreeing to do something one was not obligated to do or agreeing not to do something one had a right to do.
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What is required for a contract modification to be effective?
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A contract Modification is effective when there is an agreement to modify and any of the following: Consideration (pay more for more work) or
Rescission-{physically tear up first K and replace with new one } or Common law –good faith response to unforeseen hardship, or UCC: Good faith (no extortion) |
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What is an illusory promise?
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Illusory promise occurs when one does not promise to do anything at all and there is no consideration. Example: I will paint your house for $20 bucks if I feel like it. (Without a commitment, there is no consideration-only an illusion of a promise).
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When is a promise to give a gift enforceable?
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A promise to give a gift is enforceable when one relies on the promise.
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What is the pre-existing legal duty rule?
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Where one promises to act or not act consistent with a legal obligation that they had prior to contracting, there is no consideration (legal detriment).
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What is the parole evidence rule?
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The rule prevents a party to a written contract from presenting extrinsic evidence (oral evidence or earlier writings) that contradicts or adds to the written terms of the contract that appears to be fully integrated.
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What happens under the parole evidence rule, if an agreement is partially integrated?
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When an agreement is partially integrated a party may present extrinsic evidence that supplements, but not contradicts, the language found in the contract.
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What are the exceptions to the full integration rule under the parole evidence rule?
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Extrinsic evidence can always be presented to prove fraud, duress, mistake, resolve ambiguity, aid in the interpretation of existing terms.
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What is a merger clause?
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A merger clause recites that a contract represents the whole agreement between the parties, making the K fully integrated.
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What is a covenant not to compete?
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A covenant not to compete is an agreement not to compete. It is only valid if it is reasonable in terms, TIME, GEOGRAPHY, AND SCOPE, PURPOSE=TO PREVENT UNFAIR COMPETITION.
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What are liquidated damages?
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Liquidated damages are a reasonable estimate of damages included in a contract, in case of a breach. To be enforceable, LD must be proportionate to the harm.
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When does the UCC not apply?
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The UCC does not apply to the (1) sale of land, (2) Leases (3) Construction Contracts (3) Employment Contracts.
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Describe the "completed performance" exception to the the Statute of Frauds rule pertaining to contracts which cannot, by their terms, be performed within one year.
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Even if a K cannot be performed in one year, if either side has fully performed, the agreement is enforceable. (despite failure to comply with the statute of frauds)
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What is an an installment contract?
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A contract that requires delivery of goods in separate lots to be separately accepted.
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What is waiver?
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A waiver, giving up right to strict enforcement of a K, occurs when a party permits a breach to occur without complaint.
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What is repudiation?
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A declaration, by the promising party to a contract, that he or she does not intend to live up to his or her obligations under the contract.
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When is a contract repudiated?
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A contract can be treated as repudiated when one party seeks adequate assurances are not provided after demand.
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Question: Mnemonic
Until Fall Test Pressure Exhaustion Both Threaten Romance. |
UCC or Common Law
Formation Terms Performance Excuse Breach Third Party Remedies |
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What are compensatory damages?
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Compensates the claimant for loss, injury, or harm suffered as a result of (see requirement of causation) another's breach of duty.
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What is an acceptance?
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An acceptance is the expression of present, unequivocal, unconditional assent by the offeree to each and every term of the offer.
i. Unless the offeror specifies a particular mode of acceptance, it can ordinarily be made in any reasonable manner. |
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What is the actual value of loss exception to the expectation damages rule?
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When a plaintiff’s expectation damages would be “grossly disproportionate” to the harm she actually sustained, the court may limit recovery to only the actual value of her losses.
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When can an offeree’s conduct in a unilateral contract be construed as an implied promise to complete performance?
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When the offeror of the unilateral K, (1) knows that the offeree has started to perform, and (2) relies on the completion, the offeree’s conduct may be construed as an implied promise to complete performance.
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What is the UCC exception to the Pre-Existing Duty Rule?
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The Modification of a contract for the sale of goods does not require new consideration, even when only one party benefits, if the modification was obtained in good faith. 2-209(1).
i. No Good Faith, No enforcement ii. Only applies to the UCC-not common law (sale of goods) |
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What is the “specially manufactured goods” exception to the UCC’s statute of frauds rule?
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When goods are to be specially made for the buyer, and the goods cannot be sold to others in the ordinary course of the seller’s business, and the circumstances reasonably show that the seller made the goods for the buyer, an oral contract will be enforced, despite a lack of compliance with the Statute of Frauds, IF the seller: (1) made a substantial beginning to make the goods or (2) made substantial commitments to begin performance.
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What are requirements contracts?
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I don't know
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What is the Perfect Tender Rule?
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BUYER'S LEGAL RIGHT to insist upon "perfect tender" by the seller. If the goods fail to conform exactly to the description in the contract (whether as to quality, quantity or manner of delivery) the buyer may reject the goods. (UCC 2-601.)
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What is Divisibility ?
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APPLYS K'S WITH UNIT PRICING ..NEED MORE STUFF
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What does a contract require?
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At minimum a contract requires offer and acceptance.
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Are contracts entered into by minors voidable?
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Yes. Contracts entered by minors are voidable, while the person is still a minor or renounced within a reasonable time after becoming an adult.
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What types of contracts cannot be voided by minors?
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Contracts for NECESSARIES cannot be voided by minors.
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How does a minor ratify a contract?
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A minor ratifies a contract by not disaffirming the contract within a reasonable amount of time after becoming an adult.
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What must a minor return after voiding a contract?
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The minor must return what is in his or her possession.
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