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27 Cards in this Set
- Front
- Back
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What is the basic overview of a contracts question?
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UFTTPR
1. Does UCC Apply? 2. Formation 3. Terms of Contract 4. Third Party Rights 5. Performance 6. Remedies |
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What are the two key definitions from the UCC?
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Sale of Goods – UCC deals with moveable goods
Merchant – Regularly deal in the similar goods |
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How do you determine a valid contract?
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1. Offer
2. Has it been Terminated 3. Acceptance 4. Consideration 5. Defenses to Formation |
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What constitutes an offer?
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1. Offer - Creates the power of acceptance in the offeree
. .a. A manifestation of a present intent to contract demonstrated by a promise, commitment, or undertaking . .b. Definite and Certain Terms . . . .i. Vague terms defeat – appropriate, fair, reasonable . .c. Communicated to offeree |
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How can an offer terminate?
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2. Termination of Offer
. .a. Revocation - But Be careful of . . . .i. Option . . . .ii. Firm Offer . . . .iii. Detrimental Reliance . . . .iv. Unilateral K . .b. Rejection, Lapse of Time . .c. Termination by law . . . .i. Death . . . .ii. Destruction of Subject Matter . . . .iii. Illegality |
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What is the basic definition of acceptance?
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Manifestation of assent to the terms of an offer in the manner prescribed or authorized by the offeror
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What are the basic rules of acceptance?
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1. Common Law - Mirror
2. UCC . .a. Any acceptance is valid unless conditional on new terms . .b. Non-merchants – proposals . .c. Merchants – Become part unless . . . .i. Materially alter . . . .ii. Expressly limits acceptance . . . .iii. Objects in reasonable amount of time . .d. Performance as if a contract exists 3. Prior Dealings – Silence may be acceptance 4. Unilateral – Starting creates an option |
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What is the mailbox rule?
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Acceptance is valid upon dispatch.
1. Mailbox rule – Exceptions . .a. Offer stipulates not accepted until receipt . .b. Option K . .c. Rejection-Accept – Which ever comes first |
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What is consideration?
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A bargained for exchange between the parties involving legal value.
1. Bargain – exchange something . .a. Gift – no bargain . .b. Past Moral Consideration – promise to pay an unenforceable obligation is made in writing or partially performed. 2. Legal Value . .a. Legal Detriment or Benefit . .b. Preexisting Duty – Is not a detriment, unless: . . . .i. New or different consideration promised . . . .ii. Owed to a third person . .c. Release from debt – If disputed or not due yet 3. Substitues . .a. Promissory Estoppel/ Detrimental Reliance . . . .i. Promise . . . .ii. Reliance that is reasonable, detrimental and foresbl . . . .iii. Enforcement necessary to avoid injustice |
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What are the 4 defenses to formation?
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1. Absence of Mutual Assent
2. Lack of Capacity 3. Statute of Frauds 4. K requires modification in writing - Only followed under UCC |
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What is the defenense of Absence of Mutual Assent?
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1. Absence of Mutual Assent
. .a. Mutual Mistake – Both thought cow could not calf . . . .i. Basic assumptions . . . .ii. Material adverse effect . . . .iii. Did not assume the risk . .b. Latent Ambiguities – Peerless - No K unless both had same meaning . . . .i. One party – binding based on what ignorant party believed . .c. Misrepresentation . . . .i. Fraudulent Misrepresent – that causes reliance . . . .ii. Or unknown false info that is material . .d. Public Policy - Illegality |
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What is the defense for lack of capacity?
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2. Lack of Capacity - Under 18, Mental, Intox, Duress
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What is required for the statute of frauds?
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1. Statute of Frauds – MY LEGS
. .a. Executor out of own pocket . .b. Surety . .c. Marriage . .d. Land . .e. Year . .f. Goods > $500 2. Reqs . .i. UCC – Just quantity . .ii. CL – Who and what 3. Defense . .i. Full performance . .ii. Real Estate (2/3) Payment, Possession, Improvements |
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What are the considerations when discussing the terms of a contract?
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1. Interpretation of Terms
. .a. Course of Contract . .b. Course of parties . .c. Custom in Industry 2. Mistake and ambiguous terms* 3. Parol Evidence Rule 4. Modification . .a. Additional Consid under CL . .b. Good Faith under UCC . .c. May need writing under Statute of Frauds |
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What is the parole evidence rule?
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Evidence of prior or contemporaneous negotiations and agreements that contradict, modify, or vary terms are barred.
Exceptions: 1. Used to show formation defects – fraud, duress, mistake 2. Intent regarding ambiguous terms 3. Collateral agreement that does not contradict and is closely related to main agreement |
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What are the 3 types of third party contracts?
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Third Party Beneficiary
Assignment of Rights Delegation of Duties |
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When does a third party beneficiary arise?
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1. Third Party Beneficiary
. .a. Intended – Named in K . .b. Creditor or Donee . .c. Vested – Can sue for breach or modification . . . .i. Manifest assent in manner requested . . . .ii. Suit to enforce . . . .iii. Materially changes position . .d. Who Can Sue . . . .i. 3rd Party v. Promisor – Promisor can defend sim to promise . . . .ii. 3rd Party vs. Promisee – Only if creditor beneficiary . . . .iii. Promisee v. Promisor |
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When are assignments restricted?
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a. Generally all rights can be assigned except:
. .i. Would substantially change the obligors risk . .ii. An assignment of future rights to arise from future Ks b. Non-Assignment Provisions . .i. Prohibit – does nothing, still allows obligor to sue . .ii. Void – Prevents |
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What are the rights under an assignment?
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c. Irrevocable with consideration
d. Who can Sue whom . .i. Assignee v. Obligor – defense against assignor . .ii. Assignee v. Assignor – Warrants that . . . .1. it exists . . . .2. not subject to defenses . . . .3. will not impair e. Obligor has duty to pay assignee once notice of assignment f. Multiple . .i. Gratuitous – Last in time wins . .ii. Consideration – 1st wins, unless 2nd has no notice and collects 1st |
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What are the considerations when discussing delegation of duties?
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1. Delegation of Duties
. .a. Generally all can be delegated. Except . . . .i. Duties involving personal judgment and skill . . . .ii. Special person or attribute . . . .iii. Prohibited by contract . .b. Delegator is always liable |
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What are the 3 areas to discuss when analyzing performance?
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Condition
Discharge of Duties Breach |
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What are conditions and how must they be satisfied?
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a. Types of Conditions
. .i. Express, implied, or constructive . .ii. Precedent, concurrent, subsequent b. Satisfaction of conditions – Strict Compliance |
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When are conditions excused?
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c. Excuse of Conditions
. .i. Inability or Unwillingness to perform . . . .1. Mere doubts . . . .2. Suspend until adequate assurances of performance . .ii. Anticipatory repudiation . . . .1. Unequivocal . . . .2. Must be unperformed duties on both sides . . . .3. Results: . . . . . .a. Immediate breach, suspend, rescind, ignore . . . .4. Can be retracted until non repudiating party relies . .iii. Waiver . . . .1. May waive condition by saying will not insist on it . . . .2. Detrimental reliance makes estoppel |
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What is required for a discharge of duties?
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RAIN MI
1. Impossibility – Objective – Nobody could perform . .a. Death, Illegality, Destruction 2. Impracticability - Subjective . .a. Extreme and unreasonably difficult, unanticipated 3. Modification of K – Old K is canceled . .a. Similar to Accord and Satisfaction, except it is not conditional. 4. Rescission . .a. Neither party has fully performed, partial in Bilateral is ok . .b. Mutual agreement to quit. . .c. Third party beneficiary consent if present 5. Novation – Similar to delegation, but there is consent on both sides . .a. Agreement to switch parties to contract by ALL parties 6. Accord and Satisfaction . .a. One party agrees to accept performance different than originally promised. . .b. Can recover either new or old duty if there is a breach |
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What is a breach?
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1. Material - No substantial benefit, 1/2,
. .a. Treat contract at an end . .b. Sue for damages 2. Minor . .a. Must still perform . .b. But still damages available |
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What are the remedies available?
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1. Compensatory
. .a. Expectation – Put party in position had breach not occured . .b. Consequential – where a reasonable person would have foreseen at time of entering the contract 2. Liquidated . .a. Actual damages are difficult to ascertain at time contract was formed . .b. Amount agreed upon is a reasonable forecast of compensatory damages 3. Punitive Damages - Generally not available 4. Specific Performance – Generally NO . .a. Land and Unique goods . .b. Injunction preventing from working for competitor may occur 5. Restitution – Quasi Contract – Equity |
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What is the covenant of good faith and fair dealing?
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All contracts implicitly include the covenant of good faith and fair dealing. It says that both parties will attempt to act in a fair and honest manner.
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