Bar - Contracts - Set 1

Front 1

Overall Attack for Contracts Question

Back 1

Applicable Law
Formation
Terms
Performance/Breach
Remedies
Excuse
Third Parties

Front 2

What is Contract?

Back 2

A promise or set of promise for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.

Front 3

What is a unilateral contract?

Back 3

One that expressly requires acceptance only by performance (example: reward)

Front 4

Applicable Law

Back 4

If a contract is for the sale of goods (tangible/moveable objects) then it is governed by the UCC. Otherwise apply common law.

For mixed contracts - look to see which part is predominant and apply corresponding law, unless K divides payment. When in doubt, apply both laws.

If UCC governs, consider whether each party is a merchant.

Front 5

What is a merchant?

Back 5

By profession holds himself out as having special knowledge/skill as to the pracgtices or goods involved.

Front 6

Offer

Back 6

One person through words or conduct has created a reasonable expectation in the offeree that the offeror is willing to enter into a K.

Three questions
1) Was there an expression of a promise, undertaking, or commitment to enter into a contract?
2) Were there certainty and definiteness in the essential terms?
3) Was there communication to the offeree?

Look at languge, prior practice & relationship.

Front 7

Formation Issues

Back 7

Offer, Revocation, Rejection, Acceptance, Consideration, Promissory Estoppel, Defenses

Front 8

Missing terms in an offer

Back 8

Under CL - material terms must be definite and certain. Vague & ambiguous material terms are not an offer.

Real estate must have PRICE and descritption.

UCC, no price requirement, quantity is required. Price is reasonable price at time of delivery.

Front 9

Revocation

Back 9

Direct or Indirect. Idirect requires information, from a reliable source of acts that indicate to a rsnbl person that the offeror no longer wishes to make the offer.

Revocation is effective when received.

Front 10

Revocation Limitations

Back 10

1) Option Contracts
2) Merchant's Firm Offer (merchant, signed writing, assurances it will be held open, rsbl time not more than 3 mos.)
3) Detrimental Reliance - can create a type of option contract if offeror should expect offeree to rely.
4) Part Performance - Unilateral Contract Offers - irrovocable once performance has begun. But offeree is not bound to compete. Mere preparations aren't enough.
5) Part Performance - Bilateral formend upon the start of performance. Notification may be necessary.

Front 11

Rejection

Back 11

Express, Counteroffer vs. Mere Inquiry, effective when received, Lapse of rsnbl time, Termination by law (death, insanity, destruction, illegality)

Front 12

Rejection after Option Contract

Back 12

doesn't close contract unless offeror detrimentally relies on rejection.

Front 13

Acceptance

Back 13

Manifestation of assent to the terms of the offer. Only the person who it is directed to, must know of the offer.

Front 14

Acceptance of Unilateral Contract

Back 14

Offeree must know of offer. Maybe be required to give ntoice that he has begun. Not required if offeror waived notice or the offeree's performance would normally come to offeror's attention.

Front 15

Methods of Acceptance, Bilateral Contracts

Back 15

UCC - offer to buy goods invites acceptance by a promise to ship or by actual shipment.

Front 16

Unequivocal Acceptance

Back 16

CL - any different terms make the response a rejection and counter offer

UCC - Additional terms are still an acceptance unless acceptance is expressly conditional on assent to the additional terms. The additional terms are mere proposals that do not become part of the contract unless the other party expressly agrees.

If both parties are merchants, additional terms in the acceptance will be included in the contract unless 1) they materially alter the terms of the offer 2) the offer expressly limits acceptance to its terms or 3) the offeror has already objected or objects within a reasonable time.

UCC conflicting terms -use general approach, or minority knockout rule - conflicting terms are knocked out and replaced by gap fillers.

Front 17

The fucking mailbox rule

Back 17

Acceptance at dispatch unless (otherwise contracted, option contract, rejection sent first, detrimental reliance on rejection recieved first)

Rejection - on receipt.

Front 18

Consideration

Back 18

a Bargained for legal detriment, act or forbearance

Front 19

Past or moral consideration

Back 19

Generally not enforceable unless

- when past obligation isn't enforceable (SoL) and new promise is made in writing or is partially performed.
- act at the request of a promisor
- response to an emergency.

Front 20

Pre-existing Legal Duty exceptions

Back 20

1) New or different consideration
2) ratify a "voidable" obligation
3) owed to a third person
4) honest dispute as to the duty
5) unforseen circumsances sufficient to discharge a party.

NO CONSIDERATON REQURIED for good faith modification under UCC.

Front 21

Promissory Estoppel

Back 21

Substitute for Consideration, promisor should reasonably expect to induce action or forbearance; of a definite and substantial character; and such action or forbearance is in fact induced. May be limited as justice requires.

Front 22

Defenses to Contract Formation

Back 22

Capacity, Statute of Frauds, Illegality, Unconscionability, Mistake of Fact, Misrepresentation, Ambiguity, Duress

Front 23

Mistake of Fact

Back 23

Mutual Mistake - can be voidable if: basic assumption, material effect, party seeking avoidance did not assume the risk of the mistake. (mistake in value, when one party is in a better position to know)

Unilateral mistake - only if the nonmistaken party knew or had reaqson to know of the mistake.

Front 24

Ambiguous Contract Language

Back 24

1) Neither party aware of ambiguity - no K unless both intended same meeting
2) both parties aware - no K unless both parties intended the same meaning.
3) One party aware - bidning contract based on what the ignorant party reasonably believed.

Front 25

Misrepresentation

Back 25

1) Fraudulent - voidable if the innocent party justifiably relied on the misrepresentation

2) nonfraudulent - voidable if the innocent party justifiably relied and the misrepresenation was material.

Front 26

Illegality

Back 26

If consideration or subject matter is illegal, the K is void.

If purpose behind K is illegal, K is voidable by party that was unaware of purpose or was aware but didn't facilitate & no moral turpitude.

Front 27

Capacity

Back 27

1) Minors - can disaffirm or affirm. Infants are bound to pay for necessities
2) Mental incapacity - voidable.
3) Intoxicated - don't understand nature and significance, voidable promise if the other party had reason to know of intoxication.

Front 28

Duress

Back 28

Coercion. Voidable.

Economic Duress - threaten's property or finainces and no adequate means to prevent loss

Front 29

Statute of Frauds

Back 29

Writing w/in statute signed by party to be charged.

MYLEGS
Marriage, Year, Land, Executorship, Goods, Surety

Also modifications & Equal Dignity

Exception: part performance on a K takes it out of the SoF.

Front 30

Executorship (SoF)

Back 30

A promise by an executor to pay the estqate's debts out of his own funds.

Front 31

Suretyship (SoF)

Back 31

A promise to answer for the debt of another, if they don't pay. NOT A PRIMARY PROMISE TO PAY SOMEONE'S DEBT.

Front 32

Marriage (SoF)

Back 32

Promises that induce marriage other than a return promise to marry

Front 33

Interest in land (SoF)

Back 33

Includes leases and easmenents for more than one year, Fixtures, minerals, mortgages.

Doesn't include construction contracts.

Front 34

Year (SoF)

Back 34

A promise by it's terms cannot be performed within a year. Runs from the date ofteh agreement. Lifetime Ks are capable of being performed in a year.

Front 35

Goods (SoF)

Back 35

$500 or more.

SWAP - no writing required when:
1) specially manufactured goods.
2) written confirmation by merchant (see below)
3) admissions or pleadings in court
4) payment or delivery of goods

Merchants - Confirmatory Memo - Between merchants - written confiramtion w/ in rsbl time of oral agreement, satisfies SoF. Binds receipient if 1) had reason to know 2) doesn't object in 10 days of receipt.

Front 36

Unconscionability

Back 36

Court can refuse to enforce a provision or an entire contract or limit the application of a clause.

1) Inconspicuous risk shifting
2) Adhesion contracts
3) Excupatory clause for negligent acts

Timing - at the time the K was formed.

Front 37

"Terms" - Items to consider under this heading

Back 37

Parol Evidence, UCC Provisions, Modifications

Front 38

Contracts are construed

Back 38

As a whole

Front 39

Courts give words in a contract

Back 39

their ordinary meaning unless it is clear words were meant in a technical sense.

Front 40

Written or typed provisions

Back 40

prevail over printed privosions

Front 41

Ambiguties in a K

Back 41

are construed against the party preparing the K.

Front 42

Parol Evidence Rule

Back 42

When parties put their agreement in writing with the intent that it embody the full and final expression of their writing, any expressions made prior to or contemporaneous with the writing are inadmissible to vary the terms of the writing.

Front 43

Parol Evidence Attack

Back 43

1) Is the writing an integration? Look for completeness, merger clause.

Corbin test - specific circumstances of the transaction involved. Would these parties normally include the extrinsic matter in their writing? If so, it will be excluded.

Decision made by judge.

Front 44

Exceptions to Parol Evidence

Back 44

1) Formation defects
2) Conditions precedent to contract effectiveness
3) Uncertainty or ambiguity in the meaning of the words.
4) Evidence of true consideration
5) Reformation arguments (mistake)
6) Subsequent modifications

Front 45

Parol Evidence Under the UCC

Back 45

A party cannot contradict a written contract but may add additional consistent terms unless 1) there is a merger clause or 2) the court finds it was a complete agreement. Terms may be explained or suppliemented by course of performance, course of dealing and usage of trade.

Front 46

Gap Filler Terms

Back 46

Price - by a third party or a reasonable price at the time for delivery

Place of deliver - seller's place of business

Time for shipment or delivery - reasonable time

Time for payemnt - due when the buyer recieves the goods.

Assortment of goods - at buyer's option.

Front 47

Delivery Terms and Risk of Loss in a Non Carrier Case

Back 47

If seller is a merchant, risk of loss only passes to buyer when she takes posession of the goods. If seller is not a merchant, risk of loss passes to the buyer upon tender.

Front 48

Delivery Terms and Risk of Loss in a Carrier Case

Back 48

Shipment Contract - If the contract authroizes seller to ship by common carrier but does not require him to deliver them at a destination, it is a shipment contract and risk of loss passes to the buyer when goods are delivered to the carrier.

Destination contract - If the K requires seler to deliver the goods at a particular destinattion, risk of loss passes to the buyer when the goods are tendered to the buyer at the destination.

Front 49

F.A.S.

Back 49

Free along side - shipment by boat - Shipment Contract

Front 50

CIF and C&F

Back 50

Always shipment Ks - Cost insurance freight

Front 51

FOB

Back 51

Free on Board

If FOB followed by buyer's location, then this is a destination contract. Risk of loss doesn't pass until they reach that named location.

Front 52

UCC Provisions governing "Terms"

Back 52

1) Battle of the Forms
2) Gap Fillers
3) Delivery Terms/Risk of Loss
4) Breach & Risk of Loss
5) Risk & Sale/Return Contracts
6) Warranties

Front 53

Breach & Risk of Loss

Back 53

Defective goods - buyer can reject them. Risk of loss doesn't pass to the buyer until defects are cured or the buyer accepts them in spite of their defects.

Revocation of acceptance - (sleeping bag hypo) - risk of loss rested on the seller from the beginning.

Front 54

Sale or Return K & Risk of Loss

Back 54

If goods are returned to the seller, the risk remains on the buyer while the goods are in transit.

Front 55

Sale on Approval Contracts

Back 55

(Where buyer takes goods to try and sell, but can return), risk of loss doesn't pass to the buyer until the buyer accepts.

Front 56

Warranties in sales of goods cases.

Back 56

1) Warranty of title
2) Warranty against infringment
3) Implied warranty of merchantability
4) Implied warranty of fitness for a particular purpose
5) Express Warranties

Front 57

Warranty of Title

Back 57

Any seller warrants that the title is good and their are no liens or encumberances (implied warranty)

Front 58

Warranty against infringment

Back 58

MERCHANT SELLER - who regularly deals in goods of the kind - warrants that goods are free of any patent, trandemark or copyright claims. Unless the buyer somehow has made specifications that breach...

Front 59

Implied Warranty of Merchantability

Back 59

Sale by a merchant who deals in goods of the kind - fit for the ordinary purposes for which such goods are used.

Front 60

Implied Warranty of Fitness for a Particular Purpose

Back 60

Any seller that has reason to know the particular purpose for which the goods are to be used and the know's the buyer will rely on his skill and judgment and the buyer in fact relies on the seller's skill and judgment.

Front 61

Express warranties

Back 61

Can be made by a fact, promise, descritption or model. It is an express warranty if is the basis of the bargain. Comes at a time that the buyer could have relied on it. Buyer doesn't have to show he actually relied.

Front 62

Disclaimer of Warranties

Back 62

Titl of warranty can be disclaimed by specific language that the seller doesn't claim title.

Implied warranties, must be disclaimed conspicuously. Can use langugage such as "as is" or "with all faults"

Warranties can be disclaimed by course of dealing, course of performance or usage of trade.

Express warranties are difficult to disclaim.

Limitations on damages will be upheld unless unconscionable.

Some courts will look to whether disclaimers are unconcionable.

Front 63

Damages for Breach of Warranty under UCC

Back 63

Deifference between goods as tenedered and goods as warranted. For Warranty of Title, buyer can rescind the contract.

Can be appreciated or depreciated.

Front 64

Modification of Contract Terms

Back 64

Under CL, modification must be supported by new consideration. Written contracts can be modified orally, unless, the contract as modified falls within the SoF. Parties can orally modify a contract even if the K says you can't

UCC - New consideration is not required. "No modification" clauses are given full effect. If the K is between a merchant and nonmerchant, the nonmerchant must sign. However, look for reliance on an oral modificaiton (waiver).