Bar Prep Contracts

Front 1

What combats unjust enrichment best?

Back 1

Quasi-Contract: equitable remedy; protects against unjust enrichment; it is the remedy of LAST RESORT
Award under Quasi-K: only the reasonable value of the benefit conferred on the other party, not the K price

Front 2

Can a voidable K be enforced?

Back 2

Yes. Only a VOID K (one w/out legal effect from beginning) cannot be enforced.

Front 3

3 elements necessary for a K?

Back 3

1. Mutual Assent (offer and acceptance)
2. Consideration of a subsitute, and
3. No defenses to formation

Front 4

How can a unilateral K be accepted?

Back 4

Unilateral K: offer only accepted by performance
1. E.g. an offer expressly says it can be accepted only by performing; OR
2. A reward, contest, or prize is also unilateral K

Front 5

What is required in a Real Estate K?

Back 5

Price and description/ identificaiton of land

Front 6

Under UCC Art. 2, what term is required in offer?

Back 6

Quantity and even that can be described generally as "all output" or "as required" if facts provide certainty

Front 7

Under an Employment K, what is the essential term?

Back 7

Duration. otherwise no K--just at will employment.

Front 8

How can an offer terminate? (4) ways:

Back 8

a. Lapse
b. Revocation
c. Rejection
d. Death of a party before acceptance

Front 9

When can an offer be revoked?

Back 9

An offer can be revoked at any time before acceptance. BE CAREFUL: mailbox rule applies to acceptance!

Front 10

How can an offer be revoked? (2)

Back 10

i. Direct revocation: the offeror indicates directly to the offeree that he has changed his mind about the deal
ii. Indirect revocation: the offeror has engaged in conduct which conveys he has changed his mind BUT the offeree MUST know about it.

Front 11

When is the offeror's power to revoke limited? (4)

Back 11

1. Option K
2. Firm Offer under UCC
3. offeree relied reasonably
4. Unilateral K--offeree has begun performance; IN NY: offer can be revoked up to time performance is completed—very harsh

Front 12

What are the elements of a firm offer under UCC?

Back 12

1. Signed writing
2. by a merchant
3. promise to hold open
4. for a period of time

Front 13

In NY what is needed and not needed for a valid option K?

Back 13

NY – need signed, written promise to NOT revoke, enforceable w/ NO payment.

Front 14

What is a Firm offer (Art 2)? (2)

Back 14

1. MERCHANT promises in
2. SIGNED WRITING to keep offer open, offer will be IRREVOCABLE, provided offeror states “will not revoke”

Front 15

Can an offer be revoked after acceptance?

Back 15

NO-remember mailbox rule. As soon as acceptance is put into mail, acceptance is complete. No revocation possible.

Front 16

An offer can no longer be revoked when? (4)

Back 16

1. Option K
2. Foreseeable reliance before acceptance (very rare) – think contractor
3. Starting to perform unilateral K; NY – offer to enter unilateral K can be revoked until performance COMPLETED
4. Firm offer (Art 2)

Front 17

What are the 3 examples of rejection?

Back 17

1. Counteroffer – is rejection and offer
2. Conditional Acceptance – is a rejection
3. Acceptance varying the offer

Front 18

Distinguish a counteroffer from bargaining.

Back 18

A counteroffer is a rejection, but mere inquiry/bargaining is NOT a counteroffer/rejection. A question is usually not a counteroffer. Think - would you take $X?

Front 19

Does mirror image apply under UCC Art 2.

Back 19

No. Acceptance need not mirror offer under UCC.

Front 20

What result if Offeree’s Acceptance includes terms not in offer under UCC? Prerequisites? (3)

Back 20

Acceptance, provided that:
1. Both parties are MERCHANTS
2. Term is NOT material change AND
3. Offeror does not object w/in reasonable time

Front 21

What result if, under UCC, offeree accepts with form that includes material changes.

Back 21

Offeree’s terms only become part of K if offerer expressely assents.
Exception: If fact patterns says “additional term” customary in industry, then additional term ok.

Front 22

What if a party dies before acceptance?

Back 22

Death of EITHER party terminates a revocable offer
• Irrevocable offer does not terminate on death

Front 23

Under a bilateral K, what is triggered by beginning performance? What about a Unilateral K?

Back 23

• Acceptance AND implied promise to FINISH
• Unilateral K – STARTING performance NOT acceptance, COMPLETING performance is acceptance
• MBE – once offeree starts to perform offeror CANNOT revoke
• NY – offeror can still revoke UNTIL performance complete

Front 24

What does improper performance signify under CL? UCC?

Back 24

• CL – improper performance is acceptance AND breach
• Sale of Goods (Art 2) – improper performance is acceptance AND breach UNLESS seller is selling goods as accommodation

Front 25

Define an "accomodation" under UCC?

Back 25

S sending wrong goods to accommodate B, no acceptance and no breach, instead, Counteroffer that B can reject.
e.g. B orders X and S ships Y saying “hope Y meets your needs”

Front 26

Can Offeror interpret offeree's silence as acceptance?

Back 26

Silence – generally NOT acceptance.
Offeror cannot single handedly turn offeree’s silence into acceptance

Front 27

What result if offeree, relying on a revocation, takes another job, but sues when he finds out that acceptance sent first?

Back 27

Reliance on revocation prevents the Mailbox Rule from applying. No COA.

Front 28

Who may invoke lack of capacity as a defense? Util when?

Back 28

Minors, metally incomptetent and incapacitated. Until the condtion ends or adulthood.

Front 29

Will the defense of incapacity work against food, clothing, shelter?

Back 29

No but seller only able to collect reasonable consideration under quasi-contract- K price

Front 30

Define economic duress.

Back 30

Offeror threatens to break K unless offeree accepts X, offeree agrees only to get K done, no reasonable alternative--Duress is a valid defense to formation.

Front 31

If one party makes a mistake regarding K, may they rely on defense of mistake?

Back 31

NO. for a valid defense to formation, Mutual mistake about material fact, both parties mistaken
• A mistake as to market value generally NOT considered material
• Unilateral mistake – one party mistaken, generally not a defense against formation

Front 32

What can consideration be? (2)

Back 32

1. performance or
2. forbearance
Consideration is “bargained-for” legal detriment/benefit

Front 33

Is past consideration-valid consideration? NY exception?

Back 33

No, Cannot get bargain for something that already happened
• MBE –promise for past consideration in a writing, doesn’t matter
• NY – past consideration binding if expressly stated in signed writing and can be proven

Front 34

Is new consideration required for a modification? CL? NY? UCC?

Back 34

1. CL – doesn’t matter if modification in a writing, consideration REQUIRED
2. NY – pre-existing duty rule does not apply if modification in signed writing then no consideration is ok
3. Sale of Goods (Art 2) – consideration NOT required to modify BUT must show good faith

Front 35

Is a promise consideration?

Back 35

YES. consideration will be found in a promise to pay, perform, forebear.

Front 36

Is past consideration valid? MBE? NY?

Back 36

MBE: past consideration is NOT valid, you are not giving consderation in THIS exchange.
NY: valid if expressly stated in signed writing and can be proven

Front 37

Is consideration required to effect K modification? CL? MBE? NY?

Back 37

CL – new consideration REQUIRED, performing pre-existing duty not enough
MBE – NO new consideration required if modification is in a writing
NY – NO new consideration required if modification in signed writing

Front 38

What is the Pre-Exisiting duty Rule? Exceptions? (5)

Back 38

promising to do something you are already obligated to do.
Except:
1. New or different consideration is offered
2. promise to reatify a voidable obligation
3. Pre-existing duty is to another
4. honest dispute about the duty
5. unforeseen circumstances make duty dischargeable
available to original parties

Front 39

Does pre-exisitng duty rule prevent modification w/out new consideration under NY or UCC?

Back 39

NO- no new consderation needed.
In NY you need a signed writing.
under UCC you need good faith.

Front 40

Can partial payment of a debt be used as consideration for foregiveness? MBE? NY?

Back 40

MBE-Part payment is consideration for a promise to forgive the rest of a DISPUTED debt
NY – b/c no consideration is needed if promise to forgive balance of a debt is in signed writing, so n/a

Front 41

If a written promise to pay a debt which is already barred by SoL, will promise be inforced?

Back 41

Enforceable even w/o consideration
Debt is owed, you send writing, “I will pay you X,” signed writing serves as substitute consideration (MBE and NY)

Front 42

What is an illusory K?

Back 42

Bi-lateral K with no consideration on one side. Note, ambiguous promise will look like consideration hence the illusion

Front 43

If one party’s promise causes other party to rely, and reliance foreseeable, is there a K? WHY? (3)

Back 43

YES-Promissory estoppel is a substitute for consideration
1. Promisor expects reliance
2. of definate and substantial character
3. Promisee relies
Never 1st choice - always look for consideration

Front 44

Can an Exculpatory clause eliminate liability for negligence?

Back 44

YES-BUT NOT gross negligence OR intentional torts

Front 45

What types of Ks require a writing under the SOF? (7)

Back 45

1. Real Preperty (inc. agent k)
2. Goods over $500 (and modif. that push over $500)
3. Performance cannot be completed w/in 1 yr.
4. Lease of goods over $1000
5. Suretyships
6. Pre and Post Nuptials
7. K's that prohibit oral modif. (except under CL)

Front 46

What additional K's require writing under NY SoF? (3)

Back 46

1. Assignment of insurance policy
2. Promise to pay discharged debt
3. Agreement to pay finder’s fee/broker’s commission, except atty or real estate agent

Front 47

What does a satisfactory writing contain under SOF?

Back 47

Depends on the nature of the K.
1. Sale of goods (Art 2) – writing MUST contain quantity term AND signed by party charged with breach
2. Lease of goods (Art 2A) NY ONLY - writing must state is a lease, include quantity, duration and rental payments AND signed by party to be charged w/ breach
3. Other K’s w/i SoF – all other K’s under SoF, writing MUST contain all material terms AND be signed by party to be charged w/ breach

Front 48

Is a merchant’s confirmatory memo a valid exception to the SOF? Why? (3)

Back 48

YES-under UCC one party can use its own signed writing to satisfy SoF against other party
Need all 3:
1. Both parties MUST be merchants
2. Writing claims prior oral agreement, has quantity AND
3. Recipient does not object w/i 10 days

Front 49

What does the Parole Evidence Rule prevent? What Exceptions MAY be admitted under PER?

Back 49

Use of prior dealings/agreement to govern transaction.
-Always get in parol evidence to show what a term means if term vague/ambiguous (cloudly or open ended)
-To supplement/add to writing bc on its face does not appear complete; Note on MBE – Merger clause – writing is complete on its face AND cannot be supplemented, everything that happened before “merges” into writing

Front 50

What types of conduct can be used to explain terms or fill in gaps? (3 in order of significance)

Back 50

1. Course of performance – what parties did under THIS agreement; best evidence of parties intentions
2. Course of dealing – what parties did under PRIOR agreements w/ each other; evidence is about prior deals
3. Usage of trade – what others in the trade do in SIMILAR agreements; evidence about how others act

Front 51

What types of warranties can a seller give under the UCC? (2)

Back 51

1. Express (distinguish mere puffery)
2. Implied

Front 52

What is the implied warranty of merchantibility? what prconditions are nec. for warranty to attach?

Back 52

The goods are fit for their ordinary use.
Seller must be a dealer (a merchant who deals in goods of the kind)

Front 53

What is the implied warranty of fitness? what prconditions are nec. for warranty to attach?

Back 53

the goods are fit for the buyer's specific purpose.
The buyer must rely on seller to supply goods for purpose and seller must know the indended purpose

Front 54

Can a seller disclaim an implied warranty?

Back 54

YES-can disclaim implied warranties but NOT express; K must provide for goods “as is” or “with all faults” (magic words) – then disclaims ALL implied warranties; otherwise, seller must inc.: “NO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS” – w/o “magic words” disclaimer has to be CONSPICUOUS

Front 55

Can a seller limit the buyer's remedies by K for harm caused by a defective product?

Back 55

NO- seller can ONLY limit remedies for breach of warranty when not unconscionable--SPL is always unconscionable limit

Front 56

If K is silent who bears the risk of loss if no carrier is involved?

Back 56

Non-carrier cases – answer depends on whether seller is merchant
• If seller merchant – seller bears the risk of loss until BUYER takes POSSESSION
• If seller not a merchant – seller bears risk of loss until TENDERS the goods (makes them available to buyer)

Front 57

What is the perfect tender rule, and when does it apply?

Back 57

Under the UCC-Seller MUST deliver perfect goods in the right place at the right time, if tender not perfect buyer has right to reject goods.

Front 58

If tender is not perfect, until when may the seller cure? Any exception?

Back 58

Until time of performance under th K--after that, no cure possible.
Unless, course of perfromance provides for it.

Front 59

Does perfect tender apply to installment Ks?

Back 59

NO.
• Buyer’s right to reject installment ONLY if substantial impairment cannot be cured
• Right to reject entire K only if defect in an installment SUBSTANTIALLY impairs value of the whole K; otherwise cure on next installment

Front 60

If a buyer of goods fails to reject, what recourse?

Back 60

Buyer CAN revoke acceptance of goods IF:
1. non-conformity SUBSTANTIALLY impairs the value of the goods AND
2. non-conformity was latent

Front 61

If buyer accepts goods with a patent defect, what recourse?

Back 61

Damages. revocation only available for latent defects; buyer must inspect AND reject upon receipt

Front 62

What consequences to seller of rejection/revocation of acceptance? (3)

Back 62

1. Return – buyer can return the goods to seller at seller’s expense
2. Refund – buyer can get back money already paid AND
3. Damages – buyer can sue seller for damages for breach

Front 63

Does the perfect tender rule apply to UCC?

Back 63

YES. under UCC performance does NOT have to be perfect; Substantial performance is all that is required (party cannot commit material breach)

Front 64

What can buyer do if seller fails to make perfect tender? (3)

Back 64

1. Accept ALL goods
2. Reject ALL goods, OR
3. Accept any commercial units and reject the rest
NOTE whichever option buyer elects, buyer gets damages

Front 65

Under the Common law, when can a party sue for damages?

Back 65

Injured party CAN recover damages for ANY breach of K, regardless if breach is material or not; BUT ONLY material breach excuses that injured party from having to perform;
NOTE: Divisible K’s – where payment is to be made on per unit basis, breaching party can recover K price for any unit on which there was substantial performance

Front 66

Aside from material breach, what else excuses performance?

Back 66

Anticipatory repudiation provides excuse for non-performance; AR operates exactly like material breach;
Can only retract AR as long as AR not relied on up to time of performance; Can have AR by conduct

Front 67

Can a subsequent K provide an excuse not to perform under a K? under what doctrine(4)

Back 67

Yes, under:
1. Rescission – is an agreement to cancel the K
2. Modification – is an agreement to replace an existing K with new K
3. Accord and satisfaction
Accord – agreement to accept performance in future satisfaction of an existing duty; Satisfaction – is performance of the accord
Novation – an agreement to substitute a new party for an existing one

Front 68

Does a novation let the original party off the hook for performance?

Back 68

YES-b/c it is an agreement between parties to absolve eachother and K with new parties; Distinguish delegation and assignment

Front 69

Will destruction of something necessary for performance relieve a party from performance under CL?

Back 69

CL – destruction provides excuse for non-performance; BUT destruction must be such that NO ONE could perform; not simply that party

Front 70

Is a seller who identified goods excused if performance is impracticable b/c goods destroyed?

Back 70

YES, Seller off the hook if goods destroyed were identified; if goods had NOT been “identified to the K,” seller is not excused; BUT if seller is merchant, ROL does not pass unitl buyer picks up or is depostied with common carrier

Front 71

If buyer's purpose is frustrated, is buyer excused from performing? (3)

Back 71

YES-If buyer’s PRIMARY purpose is frustrated AND:
1. supervening event,
2. not foreseeable,
3. purpose totally destroyed, and
4. purpose understood by both parties.
Think hire contractor to paint house and house blows up

Front 72

If B and S agree to housepainting and K says: payment IF quality job only, what result if B doesn't like it? What type of condition is this? (3)

Back 72

B tries to invoke express condition precedent, but will fail b/c reasonable person std. applied:
1. Precedent – A agrees to let B use her barbri notes for $50/week IF it rains on July 4
2. Concurrent – A agrees to let B use her barbri notes for $50/week AS LONG AS B is a student (condition “runs alongside”)
3. Subsequent – A agrees to let B use her barbri notes for $50/week UNTIL B passes the bar (performance occurs then occurrence of condition cuts off performance)

Front 73

What are 2 examples where specific performance will be imposed by a court?

Back 73

1. Real property – SP generally available bc real property considered unique
2. Sale of goods (Art 2) – SP available ONLY IF goods are unique OR “other proper circumstances”

Front 74

When is specific performance NEVER imposed?

Back 74

Service K's regardles of whether the service is unique.

Front 75

When can a seller of goods reclaim goods for lack of payment? (2)

Back 75

Generally-NEVER except when:
1. buyer was insolvent when received goods AND
2. Seller demands return of goods w/in 10 days after buyer receives
Unpaid seller can RECLAIM goods at any time IF buyer misrepresented solvency to buyer in a writing w/i 3 months before delivery

Front 76

If owner entrusts watch to watch dealer for repair and dealer sell watch, what result?

Back 76

Sue dealer for damages. No COA v. BFP. Owner who entrusts goods to merchant who deals in goods of the kind has NO RIGHTS against a BFP of the goods.

Front 77

When does a party have the right to seek "adequate assurances"?

Back 77

Party with REASONABLE GROUNDS FOR INSECURITY may request in writing, adequate assurance that other party will perform in accord with K

Front 78

When are liquidated damages acceptable?

Back 78

Will be upheld if:
1. damages were difficult to estimate in advance, AND
2. Are a reasonable forecast of probable damages

Front 79

What do expectation damages get you?

Back 79

Put injured party in as good a position as if full performance--give injured party the benefit of the bargain

Front 80

Car dealer contracts to sell car to A, and A breaches. Later sells same car to B. What damages can car dealer get from A?

Back 80

B/c car dealer is a volume dealer, he gets Lost Profits – IF seller is lost volume dealer, entitled to recover lost profits
Bc dealer could have sold 2 cars, one to A and one to B and make 2 profits, dealer can get damages for lost profit on breach by A

Front 81

When is a seller liable for consequential damages?

Back 81

When the damages are:
1. specific to the plaintiff, and
2. were reasonably foreseeable
NOT available under UCC.

Front 82

Generally, what types of damages are incidental? (2)

Back 82

1. Cost of transporting/caring for goods after breach AND
2. cost associated w/ arranging a substitute transaction
Available to BOTH seller and buyer

Front 83

When must a party mitigate their damages?

Back 83

Always, when possible under UCC or CL.

Front 84

Distinguish a 3rd party beneficiary from an assignee.

Back 84

3PB's – two people enter K intending to benefit a 3PB; 3PB must be contemplated in K
Assignees or delegates: Two people K and later one (assignor) transfers rights under the K to a 3d party (assignee). Party who owes duty to perform is the obligor

Front 85

If B contracts S to build a fence and S delegates the duty to X, if X fails, what COA does B have against X? Why?

Back 85

None, unless B has given X some consideration; otherwise, X is only liable to S (privity). contractual duties MAY be delegated w/o consent of person to whom performance is owed (obligee-B). Delegate (X)liable to obligee (B) ONLY if delegate received consideration from B.

Front 86

If B contracts S to build a fence and S delegates the duty to X, if X fails, what COA does B have against S? Why?

Back 86

Breach of K b/c delegating party remains liable to obligee

Front 87

What duty is owed to a 3PB who is unaware of the K?

Back 87

None, a 3PB must know of the obligation for it to vest in them.

Front 88

Does an incidental beneficiary have the same rights as a 3PB?

Back 88

No, an incidental beneficiary has no rights.

Front 89

K states that “rights under K not assignable” but seller assigns, what result.

Back 89

Language which prohibits assignment will trigger liability for breach by seller BUT assignment IS valid. IF K states
“all assignments VOID” then it invalidates assignments

Front 90

A assigns to B the proceeds from a K w/ no consideration (gift). A then assigns C the same proceeds w/ no consideration-what result between B and C? CL? NY?

Back 90

CL: LAST gratuitous assignee in time prevails over earlier gratuitous assignments
NY – gift assignment IRREVOCABLE if in writing signed by assignor

Front 91

A assigns proceeds of a K to B and later to C. C gets the proceeds but C performs under the K w/ expectation of pay-what result?

Back 91

It depends: FIRST assignee for consideration prevails b/c assignment for consideration more difficult to revoke;
Exception – later assignee for consideration prevails IF does not know of earlier assignment AND is the first to receive payment/judgment from obligor