Dass Review- Contracts/sales

Front 1

contract

Back 1

legally enforeceable argeement or promise

Front 2

quasi contract

Back 2

Equitable remedy
- p has conferred a benefit on D and
- P reasonably expected to be paid and
- D realized unjust enrciment if P not compensated
for measure of recovery focuse on value of benefit conferred. Contract price is the ceiling

Front 3

unilateral contract

Back 3

offter that expressly requires performance as method of acceptance
(reward, prize, contest or offer expressly requires performance for acceptance)

Front 4

Bilateral Contract

Back 4

Most contracts unless unilateral

Front 5

Sale of goods

Back 5

UCC Article 2 applies
- tangible, personal proeprty

Front 6

Mixed deal that divides payment for goods and services

Back 6

apply UCC to sale of goods part and common law to the rest

Front 7

common law applies to

Back 7

real estate and service contracts

Front 8

offer

Back 8

manifestation of an intent to contract- words of commitment
- vague or ambiguous terms are not enough (appropriate, fair, reasonable)

Front 9

Common law offer

Back 9

must have price term

Front 10

Goods offer

Back 10

does not need price term but do need quantity

Front 11

Requirements/output contracts

Back 11

sale of goods can state in terms of buyer's requirements or seller's output
- all, only, exclusively, solely

Front 12

advertisement

Back 12

not an offer unless in nature of award or indicates who can accept

Front 13

termination of offer

Back 13

1. lapse of time
2. death of party prior to acceptance
3. words or conduct of offeror
4. rejection

Front 14

lapse of time

Back 14

offer only stays open for reasonable period of time
(if more than one month assume lapse)

Front 15

Death of party prior to acceptance

Back 15

terminates the offer

Front 16

Words or conduct by offeror

Back 16

-unabiguous statement by offeror to offeree
- unabiguous conduct by offeror that offeree is aware of

Front 17

revocation sent through mail

Back 17

not effective until it is received

Front 18

common law option

Back 18

1. promise not to revoke and 2. promise support by payment

Front 19

UCC Firm Offer

Back 19

keeps offer open for stated time or reasonable time (not more than 3 months):
1. offer to buy or sell goods
2. signed written promise to keep the offeren open,
3. party is a merchant

Front 20

Bid offer

Back 20

ex. Contractor/sub cannot be revoked if:
1. relied on offer
2. reliance was reasonable
3. detrimental

Front 21

start of performance of unilateral contract

Back 21

it makes the offer irrevocable for a reaosnable time to complete performance

Front 22

counteroffer

Back 22

teriminates the offer and becomes a new offer

Front 23

words or conduct of offeree that can reject offer:

Back 23

1. counteroffer
2. conditional accpetance
3. additional terms

Front 24

conditional acceptance

Back 24

accept "if, only if, provided, so long as, but, on condition that"

- creates new offer

Front 25

mirror image rule

Back 25

common law
- a response to an offer that adds new terms is treated like a counteroffer rather than an acceptance

Front 26

UCC counteroffer

Back 26

a response to an offer that adds new terms but does not make them a condition of the acceptance creates a contract

Front 27

UCC counteroffer terms

Back 27

- either party not merchant not term just proposal
- both parties are merchants- additional term is part of the contract UNLESS:
1) materially changes the offer
2) offeror objects to the change

Front 28

acceptance: verbal response to an offer then later conduct indicating a contract

Back 28

CL conditional accepatnce is treated as counter offer and the later conduct is treated as acceptance of the count offer. Thus, the terms of the coinditional accpeance are part of the contract
- Under UCC contract based SOLELY on the conduct. THe conditional acceptance is NOT treated as a counter offer, is not a part of the contract. Thus the terms appearing only in the conditional acceptance are not part of the contract.

Front 29

Offeree fully performs

Back 29

This is acceptance.
1) verbal offer but
2) no words in response but full performance

Front 30

offeree promises to perform

Back 30

Only words- this is acceptance unless offer states it must be accepted in different way

Front 31

Mailbox Rule

Back 31

1. all communications OTHER THAN ACCEPTANCE are effective only when received
2. acceptances is GENERALLY effective when mailed
3. if a rejection is mailed before an acceptance then neither is effective until received
4. you cannot use the mailbox rule to meet an option deadline

Front 32

Seller of goods sends wrong goods

Back 32

this is an acceptance + breach

Front 33

Accomidation

Back 33

sends wrong goods with letter saying they hope this will work= counteroffer and no breach

Front 34

who can accept an offer

Back 34

1. someone who knows about it
2. the person to whom offer was made
Note: offers= not assignable
options= assignable

Front 35

Legal Reasons for not enforcing agreement

Back 35

1. Lack of consideration
2. lack of capacity
3. statute of frauds
4. exisiting laws that prohibit performance
5. public policy
6. misrepresentation
7. nondisclosure
8. durress
9. unconscionability
10. ambiguity
11. mistake

Front 36

consideration or consideration subsitute

Back 36

1. identify the promise breaker
2. ask whether that person asked for something in return
3. whether person looking to enforce suffered a legal deteriment

Front 37

Illusory promise

Back 37

not consideration
ex. "I promise to buy unless I change by mind"

Front 38

Adequacy of considration

Back 38

not relevant in contract law
"a peppercorn will do"

Front 39

past consideration

Back 39

not consideration
UNLESS expressly requested by promisor and expectation of payment by promisee

Front 40

preexisting contractual or statutory duty rule

Back 40

Common law- requiers new consideration
UNLESS: addition or change in performance
UNLESS: unforeseen difficulty so severe as to excuse performance
UNLESS third party promises to pay

Front 41

Changing contract terms for sale of goods

Back 41

Art. 2
no pre-exisiting duty rule. New consideration not needed but requires good faith

Front 42

payment as consideration for release

Back 42

turns on whether the debt is due and undisputed.
- if due and undisputed it is not consideration for release
- if not yet due or disputed it is consideration for release

Front 43

Consideration substitutes

Back 43

1. seal is not consideration substitute
2. written promise to satisfy obligation for which there is a legal defense is enforceable w/o consideration (ex statute of limitations defense but D writes C and says she'll pay part of it)
3. promissory estoppel (promise, reliance that is reasonable, detrimental, and foreseeable, enforcement to avoid injustice)

Front 44

lacks capacity to contract

Back 44

- infant (under 18)
- mental incompetants- lacks ability to understand agreement
- intoxicated person - only if other party has reason to know

Front 45

contract with incapicitated person

Back 45

-right to disaffirm by person w/o capacity
- implied affirmation by retaining benefits after gaining capacity
- creates quasi contract for necessities (food, cothing, medical care or shelter)

Front 46

Statute of Frauds

Back 46

intended to prevent fraudulent claims of the exisitence of a contract
-requires either:
1) performance or
2) a writing signed by the person who is asserting that there was no such agreement

Front 47

Promises to answer for Guarantee

Back 47

falls within the statutes of frauds unless:
MAIN PURPOSE EXCEPTION: the main purpose of the guarantee was to benefit the guarantor

Front 48

Promies by executor to answer personally the debts of decedent

Back 48

within statute of frauds

Front 49

Promise in consideration of marriage

Back 49

falls under statute of frauds
ex. prenup and post nup

Front 50

Service contract not capable of being performed within a year

Back 50

falls under statute of frauds.
either the specific time period is more than a year or the date it the contract is done is more than a year
- note if no time period stated ask whether the contract could be performed within a year with unlimited resources (if just task SF does not apply)

Front 51

service contract for life

Back 51

Statute of frauds does not apply cause person could die 6 months from now

Front 52

Transfers of interest in Real Estate

Back 52

Statute of frauds does not apply
-exception: leases for a year or less

Front 53

Sale of goods for $500 or more

Back 53

falls w/i statute of frauds

Front 54

Leases of goods for $1,000 or more

Back 54

falls w/i statute of frauds

Front 55

Satisfying statute of performance

Back 55

1. performance
2. writing

Front 56

Satisfying statute of frauds by performance- common law

Back 56

1. full performance satisfies SOF
2. part performance of services DOES NOT satisfy SOF

Front 57

Satisfying SOF - Sale of goods

Back 57

1. Sale of goods part performance satisfies as to the part performed
2. goods- specially manufactured- SOF satisifed by substantial beginning not just preparation (enough to show that it is custom made)

Front 58

Satisfying SOF for Real Estate transfers

Back 58

part performance needs two of three:
1. payment
2. improvements
3. possession

Front 59

Satisfying SOF by writing (common law)

Back 59

Common law- all material terms signed by person claiming there is no agreement

Front 60

Satisfying SOF by writing- UCC

Back 60

UCC- must indicate there is a contract and contain quantity term
- generally must be signed by person arguing no contract unless merchant fails to respond to a signed writing and:
1. both parties are merchants
2. person who recieves signed writing with quantity tmer claims there is a conract
3. fails to respond w/i ten days of receipt

Front 61

Satisfying SOF by judicial admission

Back 61

party admists in a pleading or testimony that he had entered into an agreement w/p

Front 62

Authorization to enter into a contract for someone else

Back 62

requires writing only if contract to be signed is within the SOF (equal dignity)

Front 63

agreement to modify

Back 63

required to be in writing if the agreement with the alleged change would be under the SOF

Front 64

agreement requires all modifications be in writing (common law)

Back 64

not effecive- ignore contract language

Front 65

agreement requires all modifications be in writing (UCC)

Back 65

efffective unless there is a waiver

Front 66

illegal subject matter

Back 66

agreement is not enforceable

Front 67

illegal purpose

Back 67

agreement is enforceable only by the person who did not know of the illegal purpose

Front 68

exculpatory agreement

Back 68

based on public policy cannot exempt from intentional or reckless conduct

Front 69

covenant not to compete

Back 69

not enforceable w/o reasonable need or reasonable time and place limits

Front 70

non disclosure

Back 70

must be wrongful to be reason for not enforceing the agreement

Front 71

duress

Back 71

- bad guy- improper threat
- vulnerable guy- no reasonable alternative

Front 72

Unconscionability

Back 72

1. unfair surprise (procedural) and oppressive terms (substantive)
- tested at the time the agreement was made
- by the court

Front 73

ambiguity

Back 73

no contract if:
1. parties use material term that is open to at least 2 reasonable interpretations
2. each part attaches different meaning to the term and,
3. neither party knows or has reason to know the term is open to at least two reasonable interpretations

Front 74

mistake of fact

Back 74

more likley to grant relief from mutual mistake than unilateral mistake

Front 75

integration

Back 75

written agreement that court finds is the final agreement, tiggers the parol evidence rule

Front 76

partial integration

Back 76

written and final, but not complete (strong chance it is wrong answer)

Front 77

merger clause

Back 77

clause that says this is complete and final agreement
-persuasive but not determiniateive

Front 78

parol evidence

Back 78

- words of party(s)
- before integration (written form)
- oral or written

Front 79

reformation

Back 79

equitable action to modify the written contract to refect the actual agreement

Front 80

integrated agreement, person tries to introduce contradicting evidence

Back 80

under parol evidence, inadmissible for contradicting temrs unless court uses it to determine whether there was a mistake in integration

Front 81

getting out of written deal

Back 81

parol evidence doesn't prevent party from introducing evidence of defense to contract such as fraud, misrepresentation or duress

Front 82

Explaining the deal

Back 82

parol evidence does not permit evidence from explaining the terms of a written deal

Front 83

adding to the deal

Back 83

parol evidence prevents evidence adding to deal unless:
1) only partially integrated agreement or
2) additional term would normally be in a different document

Front 84

Intepretting the agreement- hierchy

Back 84

1) Course of performance
2) course of dealing
3) trade usage

Front 85

Course of performance

Back 85

same people, same contract

Front 86

courst of dealing

Back 86

same parties, different but similar contract

Front 87

custom and trade usage

Back 87

different but similar people, different but similar contract

Front 88

shipment contract

Back 88

seller completes deliever obligation when:
1) gets the goods to a common carrier
2) makes reasonable arrangements for delivery; and
3) notifies the buyer

Front 89

destitnation contract

Back 89

delivery not complete until goods reach the buyer

Front 90

FOB

Back 90

Seller's location= shipment contract
any other locaion= destination contract

Front 91

risk of loss passes

Back 91

1. agreement between parties
2. breaching party
3. delivery by common carrier- passes when seller meets all delivery obligations
4. seller-merchant- passes to buyer on receipt of goods
seller-non-merchant- passes when goods are tendered

Front 92

express warranty

Back 92

promise - describe or state facts for use of, sample model

Front 93

Implied Warranty of merchantability

Back 93

sold by merchant- goods are fit for the ordinary purpose for which goods are used

Front 94

implied warranty of fitness for a particular purpose

Back 94

1. buyer has particulare purpose
2. buyer relies on seller
3. seller knows or has reason to know

Front 95

waiver of express warranties

Back 95

generally cannot be waived

Front 96

Waiver of implied warranties

Back 96

(merchantability and fitness)
Either:
1) CONSPICIOUS disclaimer mentioning the word merchantability; or
2) "as is" or "with all faults"

Front 97

Limiting remedies

Back 97

does not remove warranty, just limits what can be recovered.
- look at unconscionability
- prima facie if limit on personal injury

Front 98

Perfect tender rule

Back 98

1. only sale of goods
2. seller's performance must be perfect; and
3. less than perfect tender by seller generally gives buyer right to reject

Front 99

rejection of goods

Back 99

if seller does not meet perfect tender rule b can:
- retain good and sue for damages or
- reject all or any commercial unit (does have limitations)

Front 100

Limitiations to buyer's right to reject

Back 100

1. cure- whether seller has reasonable grounds for beleive that the improper tender would be acceptable, perhaps with a money allowance (look for past)
2. time for performance has not yet expired

Front 101

Buyer's right to reject and installment contracts

Back 101

(seperate lots, seperately accepted)
- can only reject if impairment of that shipment cannot be cured

Front 102

Acceptance of the goods

Back 102

- if buyer accepts the goods, cannot later reject
- note payment without opportunity for inspecting is not acceptance
- keeping the goods without object= implied acceptance (look for 1 month)

Front 103

Revocation of acceptance of the goods

Back 103

1) nonconformity substantially impairs the vlaue of the goods and
2) excusable ignorance of grounds for revocation or reasonable reliance on seller's assurance; and
3) revocations withing a reasonable time after discovery of nonconformity

Front 104

open price term=

Back 104

reasonable price at the time of delivery

Front 105

price to be fixed by buyer or seller

Back 105

requires good faith

Front 106

price payable in goods

Back 106

means each party is a seller of goods it provides

Front 107

specific perfomance

Back 107

must not be adequate remedy at law
1. land contracts
2. unique goods
3. service contracts- no s/p but possible injunction

Front 108

Reclamation

Back 108

right of unpaid seller to get goods back.
1. buyer must have been insolvent at the time that it received the goods
2. seller demand w/i 10 days
- runs from when buyer receives goods
3. buyer still has goods

Front 109

Money damages policy

Back 109

compensate P, not to punish D

Front 110

Expectation damages

Back 110

it protects the nonbreaching party's expectation
1. determine $ value of performance w/o breach
2. determine $ value w/ breach
3. subtract 2 from 1

Front 111

damages: seller breaches, buyer keeps the goods

Back 111

fair market value if perfect- fair market as delievered

Front 112

Damages: seller breaches, seller keeps goods

Back 112

market price - contract price or
replacement price - contract price

Front 113

Damages: buyer breaches, buyer keeps the goods

Back 113

Contract price

Front 114

Damges: buyer breaches, seller has the goods

Back 114

contract price- market prce at time and place of delivery or
contract price - resale price

Front 115

damages: volume seller

Back 115

can recover lost profits if they show that they have reg. inventory

Front 116

incidental damages

Back 116

always recoverable
- costs incurred in finding replacement performance

Front 117

Consequential (special) damages

Back 117

-loss that is special to P
- limited to cases where D had reason to know of special circimstances at time of contract

Front 118

Avoidable damages

Back 118

subtract from any recovery
- no recovery for damages that could have been avoided w/o undue burden
- burdens of pleading and proof on D

Front 119

Certainty for damages

Back 119

must be reasonably certain
- look for new business, consider reliance recovery instead

Front 120

liquidated damages

Back 120

1. damages were difficult to forecast at tiem contract was made and
2. provision was a reasonable forecast
- anytime it just says a number it is presumptively invalid

Front 121

material breach rule

Back 121

Common law
1. damages can be recovered for any breach
2. only a material breach by one guy excuses the breach by the other guy
3. material breach is fact question
4. there is no material breach if there is substantial performance

Front 122

Divisible contract

Back 122

recovery for substantial performance of a divisible part even though there has been a material breach of entire contract
ex. Contract to paint 10 apartments and will be paid $100 dollar for each apt. D quits after 3, D can recover for 3 he has painted by P can recover for breach

Front 123

Express condition

Back 123

- watch for: if, only if, provided that, so long as, subject to, in the event that, unless, when, until, on condition that
- does not create new obligation but limits the obligations created in another
- requires strict compliance of satisfaction

Front 124

eliminating an express condition

Back 124

1. waiver/estoppel by party being protected by express condition
2. prevention- party being protected by condition hinders or prevents the occurance of the condition
3. avoidance of forfeiture- to avoid excessive harm to party not protected.

Front 125

anticipatory repudiation

Back 125

unabiguous statement or conduct:
1. indicating party will not perform and
2. made prior to time performance was due
- excuses other party's duty to perform and gives rise to immediate damages for breach unless party has fully performed (fully painted house must wait till payment is due)

Front 126

reverse or retraction of anticipatory repudication

Back 126

can be done as long as there had been no material change in position by the other party. Duty to perform is reimposed but performance can be delayed until adequate assurance is provided

Front 127

Insecurity

Back 127

1. reasonable grounds for insecurity
2. written demand for dequate assurance
3. commericially reasonable to stop performance

Front 128

Recission

Back 128

Key is that both parties must have part remaining on contract, if not recission not valid

Front 129

Accord and satisfaction

Back 129

agreement by parties to an already exising obligationto accept a different performance in satisifaction

Front 130

effect of accord and satisfaction

Back 130

if new agreement is performed then performance of original obligation is excused
- if accord not performed, other party can sue on either the original obligation or the accord

Front 131

Modification

Back 131

agreement by parties to an exisiting obligation to accept a different agreement in satisifaction of the exisiting obligation
- cannot sue under original agreement, mere making of agreement excuses

Front 132

novation

Back 132

substituted person- agreement by both parties of a substitution of a new party
(same performance, different party)
- removes liability from person replaced

Front 133

Delegation

Back 133

- one party finds subsitute
- does not require agreement of both parties
- does excuse other party

Front 134

impossibility, impracticability, frustration of purpose

Back 134

1. something happens a/f contract before performance completed
2. unforeseen
3. makes performance impossible or commercially impracticable or frustrates the purpose of the performance

Front 135

Death after contract

Back 135

doesn't not excuse unless services contract

Front 136

later law makes performance of contract illegal

Back 136

excuse by impossibility

Front 137

later law makes mutually understood purpose of contract illegal

Back 137

excuse by frustration of purpose

Front 138

Intended Beneficiaries

Back 138

have contract rights, based on the intent of parties

Front 139

When can third party prevent cancellation of contract

Back 139

when he knows of and has relied on or assented as requested unless agreement otherwise provides.

Front 140

Who can sue to enforce 3rd party contract

Back 140

1. beneficary can recover from promisor
2. promisee can recover from promisor
3. bene. cannot recover from promisee (unless creditor bene)
4. Credtor Benefiricaly can recover from promisee BUT ONLY on pre-exisiting debt

Front 141

debts available when being sued by 3rd party bene

Back 141

any defense that would be used againsed the promisee

Front 142

assignment

Back 142

transfer of rights under a contract
1. contract between only two parties
2. on of the parties later transfers rights under the contract to a third party

Front 143

assignor

Back 143

party to the contract who later transfers rts

Front 144

assignee

Back 144

not party to contract. able to enforce the contract becasue of assignment

Front 145

obligor

Back 145

other party to contract

Front 146

limitiations on assignment

Back 146

(court favors assignability of contracts)
1. contract prohibits it but if assignee doesn't know about prohibition can still enforce the assignment
2. language of invalidation "if assigned contract is invalid" = no rts in unknowing assignee

Front 147

assignments that materially change the contract

Back 147

- not valid under common law
- assignemnt of right to payment (never substantial change)
- assignment of right to contract performance other than right to payment usually material change (ex. assignment of security services to another city)

Front 148

gratuitious assignments

Back 148

no considerations and can be revoked

Front 149

right of assignee

Back 149

1. can recover from obligor
2. assignor for consideration cannot recover from obligor
3. obligor has same defenses against assignee as it would have against assignor
4. pyament by obligor to assignmor is effective until obligor knows of assignment

Front 150

implied warranties for assignment for value

Back 150

1. right assigned actually exiss
2. right assigned is not subject to any defense by obligor
3. assignor will do nothing to impari the value of the assignment
(he does not warrant what obligor will do)

Front 151

Contests between Gratuitious assignments

Back 151

ALL are gratuitious- last asignee generally wins, last in time rule
UNLESS an assignee has receved some indicia of ownership or relied on it that made it irrevocable

Front 152

Contests between Assignments for Consideration

Back 152

First assignee for consderation wins
UNLESS:
1. did not know of earlier assignment and
2. obtained either: payment, judgment, novation or indicia of ownerwhip

Front 153

Delegation

Back 153

-party to a contract transferring work under the contract to a third party

Front 154

when delegation permitted

Back 154

permitted unless:
1. contract prohibits delegations or prohibits assignments or
2. contract calls for VERY SPECIAL skills or
3. person to perform contract has VERY SPECIAL reputation

Front 155

Results of non performance by Delegatee

Back 155

1. Delegating party always remains liable
2. Delegatee liable only if she receives consideration from delegating party
- delegation for consideration creates a third party bene- non delegating part to original contract

Front 156

MT Contract Statute of Limitations

Back 156

Written contract- 8 years
Oral Contract- 5 years

Front 157

MT Parole Evidence

Back 157

evidence other than writing only admissible (M/V/S.T.)
- Mistake or Imperfection in writing
- Validity of the agreement is in dispute
- Explaining or supplementing terms by evidence of CONSISTENT TERMS
*MT is more restrictive than common law

Front 158

MT Exculpatory Clause for Willful and Negligent Torts

Back 158

illegal and Void

Front 159

MT Law Remedy for Actual Fraud

Back 159

(D knew of the Misrepresentation)- Recission and Damages

Front 160

MT Law Remedy for Constructive Fraud

Back 160

(D did not know of the Misrepresentation) - Recission