14 Contracts Ny Distinctions Quiz

Front 1

CHAPTER 1: OFFER AND ACCEPTANCE 

 Contract law in New York is generally governed by Article 5 of New York’s 

_________________________________________________________________________. 

Exam Tip 1: For essay exam purposes, New York tests both general common law and New York law with regard to Contracts. 

 

Back 1

General Obligations Law

 

Front 2

 New York Distinction #1: Unsolicited Goods 

 

what does NY consider goods sent to someone who has not ordered those goods?  An offer?

 

What may the recipient of such goods do?
 

Back 2

 

 New York considers any unsolicited and voluntarily sent merchandise an 
unconditional gift, and NOT an offer.

 

use or dispose of the goods as she sees fit.

 

 

 

Front 3

o New York Distinction #2: The Revocation of a Unilateral Contract Offer by the Offeror 

 

If you told me I'd get a reward for swimming to Alcatraz ($5000) and I'm swimming away heading for Alcatraz to collect my reward, can you drive up in a boat and say "never mind" in NY?

Back 3

Yes!  In New York, an offeror can revoke an offer to form a unilateral contract at any time up until the offeree completes performance.

(partial performance does not preclude the offeror from revocking the offer - remember the reward for swimming to Alcatraz - in NY, until the guy gets all the way there, the offeror can still revoke)

 

Front 4

o New York Distinction #3: The Irrevocable Offer 

 

In New York, under what conditions may an offeror NOT revoke an offer during a stated option period (or for a reasonable time if no option period is stated)?

 

In this case, is consideration needed to hold the option open?

 

Does this provision apply to merchants?  or non-merchants?

Back 4

In New York, if an offer to enter into a contract is made in writing, signed by the offeror or his agent, and the writing specifies that the offer is irrevocable, then the offeror may not revoke the offer during the stated option period (or for a reasonable time if no option period is stated).

 

Consideration is not needed to support the offer.

 

This provision does not apply to merchants, as they are already subject to the UCC firm offer rule.  (so this bring in non-merchants in NY, even when an options contract doesn't include consideration) 

This is a kind of firm offer for non-merchants.

 

 

Front 5

o New York Distinction #4: Promise of Reward 

In New York, what constitutes a valid and enforeceable promise to pay a reward for lost or mislaid property?

Back 5

In NY, a promise to pay a reward for the return of lost or mislaid property is ONLY enforceable if the promise is in writing or the promisor otherwise caused it to be published. In NY, therefore, oral offers of a reward are NOT enforceable. 

Front 6

 New York Distinction #5: Consideration for Real Property 

In New York, under what circumstances can an interest in real property be conveyed without consideration.

Back 6

 

When the conveyance is reduced to a writing sufficient to be recorded and when the conveyance was intended to be made without consideration.  

The rule is:  In New York, if a promise or warranty is written into a deed or conveyance of an estate or interest in real property and acknowledged or proved in a manner legally sufficient for that deed or conveyance to be recorded, the promise or warranty contained therein will not be denied legal effect because of lack of consideration if no consideration was intended.  

Front 7

 New York Distinction #6: Past Consideration 

In New York, past consideration is good consideration when three conditions are met (under common law, past consideration is no consideration - you don't have a contract when one party says "thanks for saving my life!  I'll pay you $500 reward."

 

Back 7

i) The consideration is expressed in a writing signed by the promisor or her agent; 
ii) The consideration is proved to have been actually given or performed; and 
iii) The consideration would be valid consideration but for the time when it was given or performed.

Front 8

 New York Distinction #7: Infancy 
In New York, the following five categories of contracts MAY NOT be disaffirmed solely 
on the ground of infancy:  

 

Back 8

 

i) All contracts entered into by a person 18 years or older (as they are NOT infants 
under NY law); 
ii) Contracts that involve the marital home; 
iii) Contracts for the infant to perform artistic or athletic services that have been approved by either the NY Supreme Court or Surrogates Court; 
iv) student loan contracts entered into by a 
person 16 years or older; and 
v) life insurance contracts entered into by those 14½ years or older. 

Front 9

 New York Distinction #8: Usurious Contracts 

 

what rate is usurious?

 

what effect usually?  occasionally?

Back 9

In New York, consumer and personal loans with an interest rate exceeding 
16% are considered usurious. In most instances, loan agreements containing usurious interest rates are considered illegal and void. On occasion, courts will reform the agreement by lowering the interest rate to a rate that is legally permissible while the rest of the agreement remains in full force and effect. 

 

Front 10

 New York Distinction #9: Negligence Clauses Contrary to Public Policy 

In New York, can you get out of gross negligence through exculpatory clauses and limitation of liability clauses?  Can you get out of negligence claims?

 

Exceptions:  (who can't disclaim negligence - 2 situations)

Back 10

In New York, the general rule is that exculpatory clauses and limitation of liability 
clauses are enforceable against simple or mere negligence claims, but are unenforceable against gross negligence.

 

i) Provisions in contracts for construction, repair, alteration or maintenance that 
purport to exempt the owner, builder, contractor, repairer, or their agents from 
liability for negligence are against public policy and are void and unenforceable. 
ii) Additionally, agreements (including language written on admission tickets) purporting to exempt owners or operators of swimming pools, gyms, and places of public amusement or recreation from liability for their negligence or that of their employees or agents are also against public policy and are void and unenforceable, so long as the facility owner received fee or other compensation for use of the facility

Front 11

 New York Distinction #10: Non-compete Provisions in Employment Agreements 
New York upholds restrictive covenants in employment agreements so long as four 
conditions are met: 
i) The covenant must be reasonable in time and geographic scope; 
ii) The covenant must be necessary to protect the employer’s legitimate interests; 
iii) The covenant must not be harmful to the general public; and 
iv) The covenant must not be unreasonably burdensome on the employee. 

 

Back 11

i) The covenant must be reasonable in time and geographic scope; 
ii) The covenant must be necessary to protect the employer’s legitimate interests; 
iii) The covenant must not be harmful to the general public; and 
iv) The covenant must not be unreasonably burdensome on the employee. 

Front 12

 New York Distinction #11: Pay if Paid Provisions 

In New York, can a general contractor withhold pay to a subcontractor until the client pays him?

Back 12

In New York, it is against public policy for a general contractor to insert a provision into a contract with a subcontractor which states that the general contractor does not have to pay the subcontractor unless the general contractor first gets paid by the client. Such provisions are against public policy because they operate as forbidden waivers of the right of a subcontractor to enforce a mechanic’s lien if not paid. 

 

Front 13

o New York Distinction #12: Assignment 

 

In New York, how can I irrevocably assign my rights to a contract to someone without any consideration?

 

Back 13

 

In New York, an irrevocable assignment of rights under a contract will not be denied effect solely for lack of consideration, so long as the assignment is in writing and signed by the assignor or her agent. 

(So, the common law rule that lack of consideration makes it revocable can be overcome in NY by a signed writing.)

 

Front 14

 New York Distinction #13: Signature Requirement 
 

How does a signature satisfy the SOF in NY?  Are initials ok?

Back 14

For a signature to satisfy New York’s Statute of Frauds, the name used (whether written 
or printed) must be inserted or adopted with an intent (actual or apparent) to authenticate the writing in question.

Front 15

 New York Distinction #14: Transfers of Real Property 

In New York, an oral contract for the transfer of an interest in real property is enforceable and does not require a writing so long as the buyer performs two out of the three following subsequent acts: 
 

 

Back 15

i) The buyer makes partial or full payment; 
ii) The buyer makes substantial improvements to the property; or 
iii) The buyer takes possession of the property. 

 

Front 16

 New York Distinction #15: Statute of Frauds 
New York also requires the following four agreements to be in writing: 
 

 

Back 16

i) A subsequent or new promise to pay a debt that was previously discharged in a bankruptcy proceeding; 
ii) The assignment of an insurance policy or a promise to name a beneficiary in an insurance policy; 
iii) A contract to pay compensation for services rendered for negotiating a 
real estate transaction or a finders fee for introducing a party to a transaction; and 
iv) An agreement to change, modify, or discharge a contract or other obligation 
involving real or personal property. 

Front 17

o New York Distinction #16: Time is of the Essence 

In New York, if the contract says the job will be done on a given date and the job isn't done by that date, is this a material breach?

Back 17

 

Not necessarily.  In New York, merely specifying a date for performance does not result in making that date the essence of the contract. Unless the contract explicitly states that time is of the essence, a material breach will not be found solely because a party fails to perform by the specified date. 

Front 18

o New York Distinction #17: Mitigation of Damages 
In New York, a landlord is under no obligation or duty to the tenant to re-let or attempt to 
re-let abandoned premises in order to minimize damages. When a tenant abandons 
premises prior to the expiration of the lease, a landlord has three options: 
1) The landlord can do nothing and collect the full rent due under the lease from the tenant; 
2) The landlord can accept the tenant's surrender, re-enter the premises, and re-let the premises for the landlord's own account, thereby releasing 
the tenant from further liability for rent; or 
3) The landlord can notify the tenant that it is entering and re-letting the premises for the 
tenant's benefit. In this case, the rent collected will be apportioned first to repay the landlord's expenses in re-entering and re-letting the premises, and then to pay the tenant's obligation. The tenant remains on the hook for any shortfall. 

 

Back 18

1) The landlord can do nothing and collect the full rent due under the lease from the tenant; 
2) The landlord can accept the tenant's surrender, re-enter the premises, and re-let the premises for the landlord's own account, thereby releasing 
the tenant from further liability for rent; or 
3) The landlord can notify the tenant that it is entering and re-letting the premises for the 
tenant's benefit. In this case, the rent collected will be apportioned first to repay the landlord's expenses in re-entering and re-letting the premises, and then to pay the tenant's obligation. The tenant remains on the hook for any shortfall.