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282 Cards in this Set
- Front
- Back
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When does the CL apply?
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Real estate, fixtures, services
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When does article 2 apply
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Sales of goods.
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What if CL and UCC both apply?
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All or nothing/ more important part.
EXCEPTION If the contract divides payment. |
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Pre-existing duty rule
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A promise can be valid consideration. But if a person already has a pre-existing duty with someone then a promise to perform is not. Under the modern rule, the pre-existing duty rule doesn't affect a promise to a 3rd party.
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Offer modification w/out consideration
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Past obligation would be enforceable except w/out a technical defense (SOL), A new promise in writing will be enforceable absence new consideration. The new promise will be enforceable only to its terms not the old terms.
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Silent Acceptance
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A bilateral acceptance may be formed without any further communication. One example is prior dealings with people.
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Memorializing
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Agree that all the terms would be put in writing. The writing is not the agreement, it's a written record of it.
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ILLUSORY PROMISE
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A PROMISE IS NOT ILLUSORY IF THE WRITE TO CANCEL IS RESTRICTED IN ANY WAY. (MUST BE PRECEDED BY REASONABLE NOTICE TO THE PARTY)
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ASSIGNMENT OF CONTRACT RIGHTS
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THE AFFECT OF A VALID ASSIGNMENT OF CONTRACT RIGHTS IS TO ESTABLISH PRIVITY BETWEEN THE OBLIGOR AND THE ASSIGNEE WHILE DISTINGUISHING PRIVITY FROM THE ASSIGNOR. HOW IS THIS DIFFERENT FROM DELIGATION WHERE YOU CAN SUE BOTH OF THEM?
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UCC CONTRACT
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A CONTRACT FOR SALE OF GOODS OVER $500 MUST BE W/IN THE SOF. MODIFICATIONS THAT REMAIN OVER $500 MUST ALSO BE W/IN SOF.
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BUYER REPUDIATING THE OFFER
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SELLER GETS INCIDENTAL DAMAGES + DIFFERENCE BETWEEN CONTRACT PRICE AND MARKET PRICE OR CONTRACT PRICE AND RESALE PRICE
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ANTICIPATORY BREACH
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1) EXECUTORY BILATERAL CONTRACT WITH EXECUTORY DUTIES ON BOTH SIDES.
2) THE WORDS UNEQUIVOCALLY INDICATE NON PERFORMANCE. |
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DISAFFIRMANCE
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DISCHARGES ALL LIABILITY IF DONE IN A REASONABLE TIME AFTER REACHING MAJORITY. NOT 6 MONTHS.
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MAILBOX RULE
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DOES NOT APPLY WHERE THE OFFER STATES THAT ACCEPTANCE WILL NOT BE EFFECTIVE UNTIL RECEIVED.
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DESTRUCTION OF A PROJECT BEING BUILT
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THE BUILDER IS ENTITLED TO RECOVER NOTHING UNDER THE CONTRACT. BUILDING IS A CONDITION PRECEDENT THAT WASN'T FULFILLED.
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BIDDING MISTAKE
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WHERE ONLY ONE OF THE PARTIES IS MISTAKEN ABOUT FACTS OF THE AGREEMENT, THE UNILATERAL MISTAKE WON'T PREVENT FORMATION UNLESS THE NONMISTAKEN PARTY HAD REASON TO BE AWARE OF THE MISTAKE, THEN....VOIDABLE.
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Unilateral Mistake of a Bid
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Where only one party made the mistake they are bound unless the non mistaken party had reason to know.
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U.C.C. Promise to Modify
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A promise to modify an existing contract is enforceable even w/out consideration.
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U.C.C. Non-conforming Goods
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When non-conforming goods are delivered, a buyer may 1) reject them and cancel the contract or sue for damages Or 2) accept some, reject the rest and sue for damages.
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U.C.C. additional terms between merchants
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They are included in the contract UNLESS 1) they materially alter 2) the offer expressly limits acceptance to the terms 3) the offeror objects in reasonable time.
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Mailman delivers a revocation at the same time he collects an acceptance.
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May be a fact question as to which one was delivered first.
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What is a contract?
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A LEGALLY, ENFORCEABLE, AGREEMENT
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What is a quasi-contract
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Not a contract but an equitable remedy where one party is unjustly enriched at the expense of the other party, so the enriched party must pay restitution equal to the unjust enrichment.
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What are the 2 situations where unilateral contracts can be important
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Accept by performing:
1) If it's an award, prize, or contest 2) An offer that expressly requires performance as the only possible method of acceptance. |
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Was there an offer?
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A manifestation of commitment thru words or conduct.
Whether a reasonable person in the position of the offeree would believe that they could accept the offer. *You don't need all of the terms. |
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When there is an offer without a price?
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CL - Price Required.
UCC - It CAN BE an offer. (Where parties have use vague language to talk about price, NOT AN OFFER) |
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When there is an offer with vague or ambiguous terms?
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CL - No offer
UCC - No offer *Watch for APPROPRIATE, FAIR, REASONABLE |
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Output Contract/Requirements Contract
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Trigger words: All, Only, Exclusively, Solely
These are valid. *An increase in requirements is okay as long as it's in line with prior demands. |
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Advertisements
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Are invitations to offer, not offers. When you take it to the cash register YOU are making the offer.
EXCEPTIONS 1) Specific to the QUANTITY and to the people WHO will be able to accept. |
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Terminate and offer thru lapse of time
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It's NOT open forever, it's a reasonable time.
*If it's a delay of a month or more, look out for lapse |
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Terminate the offer thru death
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When you die, your offer dies with you.
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Terminate Offers thru revocation
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It's a two player game. Statement or Conduct plus offeree AWARENESS.
*Sent thru mail - not affective til received. |
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Option (offers that can't be revoked)
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Payment for a promise. Cannot be revoked.
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Firm Offer Rule (UCC) (offers that can't be revoked)
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An offer cannot be revoked if:
1) Offer to buy, sell goods 2) signed 3) Party is a merchant. 1) Special Rule for Merchants. 2) Has to be a written promise 3) Signed saying "i'm not going to revoke." 4) Won't be revoked for up to 3 months. |
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Reliance (offer that can't be revoked)
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Reliance reasonably foreseeable and detrimental
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Part Performance (offer that can't be revoked)
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Unilateral contract only.
*Doesn't include mere preparations. (Multi-state love this). But if it's detrimental reliance. |
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Rejection of offers
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"Counter offers kill"
Bargaining does not kill. (If the response is a question, it's bargaining) Conditional Acceptance (if, only, provided, so long as, but, on condition that) Mirror Image Rule - CL |
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Adding terms to an agreement in response to an offer.
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CL - No. Mirror image rule
UCC - Yes. I'm accepting ONLY IF - Deal Breaker. Indirect rejection Both Parties are Merchants: It's part of the contract UNLESS material change, or one party objects. One Party is NOT a Merchant: The additional term is merely a proposal that can be accepted or rejected. |
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Acceptance
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The maker can control the method.
When the offer doesn't state how it can be accepted: 1) Later conduct of the offeror (T's response became the new offer, L's conduct because the acceptance). 2) Full performance is acceptance (Notice becomes an issue if offeree has reason to believe that offeror doesn't know). 3) Start of performance. Your conduct is treated as acceptance. EXCEPTION Unilateral contract, part performance is NOT acceptance. |
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Acceptance thru later conduct
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Is there a contract:
1) CL - Yes. 2) UCC - Yes. Where there is imperfect verbal response the contract is limited to the terms that appeared in BOTH of the communications. |
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Mailbox rule
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Acceptance: When sent
Exception: If rejection was sent first, then whatever arrives 1st controls. |
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The seller sends the wrong goods
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Sending the wrong stuff is an acceptance and a breach.
EXCEPTION: Accommodation exception - If you send an explanation. |
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Can offers be transferred/assigned?
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No.
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Can options be transferred/assigned?
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Yes
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Consideration
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Consideration has to be asked for.
There is consideration even though there was no actual detriment, there was a legal detriment. One promise can be a promise for consideration. (Can't be illusory "unless she changes her mind") *illusory is ALWAYS the wrong answer The amount of consideration is not important. Past consideration is not consideration Preexisting contractual duty CL - Not legally enforceable without consideration. Change or unforeseen difficulty is new consideration. UCC - You don't need new consideration to modify, it's just a good faith test. |
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Consideration using part payment
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1) if it's due and undisputed, it's NOT consideration.
2) if it's not yet due, it is consideration. |
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Consideration substitute
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1) A WRITTEN promise to satisfy an obligation is enforceable without consideration.
* I owe you 1000, I promise to pay 600. Can collect 600 2) Seals 3) Promissory Estoppel/ Detrimental Reliance - 1) Promise 2) Reliance is Detrimental and Foreseeable. |
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Who lacks capacity to contract?
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Under 18.
Mentally challenged. Intoxicated if the other person has a reason to know. |
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Consequences of incapacity
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The person has the right to disaffirm.
*We only care about the age of the DEFENDANT. |
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Implied Affirmation
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17 Year old buys a car, turns 18 and continues to use the car w/out objection. Contract was enforceable.
1) agreement made before capacity. 2) person has now gained capacity. 3) continues to retain the benefits w/out complaint. |
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Liability for necessaries
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Even though the person does not have capacity, a person is legally obligated to pay for things that are NECESSARY.
*There is never liability on a person that lacks capacity. There is quasi-contract liability based on the BENEFIT received. Can't take advantage of incapacitated. |
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What are the 6 kinds of contracts w/in the statute of frauds
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1) Promise to ANSWER FOR the debts of another if someone else does not. LOOK FOR A GUARANTEE.
2) Promise by an executor to "answer for personally" the debts of the decedent. 3) Promise in consideration of marriage. 4) Service contract not capable of being performed w/in the Statute of Frauds. (John Tesh will only perform for an Hr, but he can't finish performance w/in a year) |
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X offers to sell blackacre to Y w/ nothing said about price. Offer?
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No.
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X offers to sell his car to Y. Nothing said about price. Offer?
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Can be
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X offers to sell his car to Y for a fair price. Offer?
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No. Vague or ambiguous.
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B offers to buy all of S's grits for 5 years. Offer?
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Yes.
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B buys 1000 pounds of grits in each of the first 3 years and then orders 1020 in the 4th year. What result?
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Valid so long as increase in line w/ prior demands.
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What is the rule with advertisements and offers?
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An advertisement is not an offer unless it is an award or it is specific as to quantity
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X offers to sell his car for $400. The offer fails to indicate how long the offer will remain open. Can you accept 5 years from now?
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No if time is not stated, it is a reasonable time.
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X offers to sell his gameboy to Y. X dies before Y accepts.
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Offer dies with you.
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I offer to sell Sharon Stone my car for $400. The next day I exclaim "I change my mind" while standing in the shower. Can she accept?
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Yes. Unless she is in the shower with you.
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How can you terminate an offer?
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1) An unamibuous statement by the offerer to the offeree of unwillingness or inability to contract.
2) Unambiguous conduct by the offeror indicating an unwillingness or inability to contract that the offeree is aware of. |
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When is revocation of an offer effective?
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Revocation of an offer sent through the mail is not effective until received.
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What are the four situations in which an offer cannot be revoked?
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1) Option - promise and payment
2) UCC Firm Offer Rule - 1) Offer to buy or sell goods 2) signed written promise to keep the offer open 3) party is a merchent 3) Reliance -1) reliance that is 2) reasonably foreseeable and 3) detrimental 4) The start of performance pursuant to an offer to enter into a unilateral contract makes irrevocable for a reasonable time. |
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O offers P 1,000 to paint O's house. O's offer that it can only be accepted by performance. P starts painting. Can O revoke?
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No.
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O offers P 1,000 to paint O's house. O's offer that it can only be accepted by performance. Buys paint. Can O revoke?
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Yes. UNLESS the paint cannot be taken back. Mere preparation is not starting performance.
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S offers Blackacre to B for 10,000. B responds, "I will only pay 9,000," can B later accept S's offer to sell for 10,000
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No, Counteroffers kill
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S offers Blackacre to B for 10,000. B responds, "Will you take 9,000"? S refuses. Can B later accept?
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Yes. It's a bargain.
*If the response is a question.... |
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L offers to lease a building to T. T's response reads T "accepts provided that all disputes shall be resolved by arbitration." Acceptance?
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No.
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L offers to lease a building to T. T adds a paragraph that states that all disputes shall be resolved by arbitration. Has T accepted?
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No. CL is the Mirror Image Rule
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B sends S a signed purchase order for grits that is silent about arbitration disputes. S responds by sending back an acknowledgment form that states all disputes shall be resolved by arbitration. Is there a contract? Is the additional term part of the contract?
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Yes. If both parties are merchants then yes as long as it doesn't materially change it OR if the offeror objects. IF one party is not a merchant, then it's a proposal.
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Epstein offers to sell his car for $400. Convisor responds "I accept. Deliver on Sunday" Is there a contract? Is Sunday delivery a term?
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Yes. No.
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Used car dealer offers to sell car to another used car dealer. Dealer responds "I accept. Deliver on Sunday." Is there a contract? Is Sunday delivery a term?
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Yes and Yes if it's not material.
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Used car dealer offers to sell car to another used car dealer. Dealer responds "I accept if the car is delivered on Saturday. Contract?
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No.
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L offers to lease a building to T. T adds a paragraph that states "accepts on condition that all disputes resolved by arbitration." On receiving the signed lease from T, L sends T the keys to the building. Is there a contract? Is arbitration part of it?
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Yes. Yes.
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B sends S a purchase order for polyester pant suits. S sends an acknowledgment that states "accept only if this arbitration is part of the contract. S also sends the pant suits to B. B keeps the pant suits and pays for them. Is there a contract? Is arbitration part of it?
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Yes. No.
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O lives in CA and owns a house in Texas. O offers $ to paint the house. P paints the house. Has P accepted the offer? What if P fails to notify O that she painted the house and O pays X $1,000 to paint the house.
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Yes. O doesn't have to pay.
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O offers P 1000 to paint his house. O's offer states that it can be accepted only by performance, not by promising to perform. P starts painting O's house. Has P accepted O's offer so that he is contractually obligated to continue painting O's house?
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No.
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B faxes an order for grits to S requesting immediate shipment. Can S accept by promising to ship them immediately? What if B's offer stated that it can be accepted ONLY BY shipment and S sent a fax promising to ship immediately but did not?
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Yes. No a breach.
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Convisor receives a letter from Epstein offering to sell his cadallac for $400. Jan 10 Convisor mails the acceptance. Jan 11, Convisor receives a letter from Epstein revoking. Is there a contract?
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Yes. Acceptance when mailed.
If a rejection is sent first, and then an acceptance, it's whichever one arrives first. |
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B orders 100 red widgets from S. S sends 100 blue widgets. Did S accept the offer creating the contract? Did S breach the contract?
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Yes. Yes.
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B orders 100 red widgets from S. S sends 100 blue widgets with an explanation "out of red, hope blue works" Is there a contract? A breach?
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No. No.
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I offer to sell you my 1973 Cadallac for $400. Can you sell the offer to Conviser so that he can accept the offer?
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No
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You pay me $10 for a ten-day option to buy my Cadillac for $400. Can you sell the option to Conviser so that he can now exercise the option and accept the offer?
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Yes.
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L rents from T. One month before the end of the lease L sends T a letter promising to renew at the same rate. T paints the apartment. L increases the rent. T sues. Is T's painting consideration for L's promise?
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No. It has to be asked for.
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I make you a promise. "Stop listening to records by Kinky Friedman for two months and I'll pay you $100. You don't listen to Kinky anyway. Consideration for the promise?
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Yes. Legal detriment.
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On April 15, B and S enter an agreement which B promises to buy S's house and S promises to sell his house to B. Is there consideration to buy? To sell?
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Yes. Yes.
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S promises to sell unless she changes her mind. Is there consideration for B's promise to buy.
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No.
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Apu saves Lisa's life. Homer is so grateful he promises to pay $3,000. Is there consideration?
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No.
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What is the preexisting duty rule?
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Doing what you are already legally obligated to do.
CL - Not new consideration. Unless unforeseen difficulty so severe as to excuse performance OR third party promises to pay. UCC - New consideration is not required to modify sale of goods contract. |
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The sound system at town hall is inoperative. Lil Jon agrees to pay Kinky an addition $5,000 if he will still perform. Is the promise to pay enforceable? What is Convisor and not Lil Jon promises to pay?
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Yes. Yes.
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S contracts to sell grits to B for $1000. S tells B that it can't deliver for less than $1300. B promises to pay the additional $300. S delivers. Is there new consideration? Is it legally enforceable?
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No. Yes, consideration not required.
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D owes C $3,000. The debt is due an undisputed. C and D agree that D will pay $2000. D pays $2000. Did C received new consideration? Is the agreement that C would not collect the remaining $1000 legally enforceable?
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No. No.
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D owes C $3,000. The debt is due in two weeks. C and D agree that D will pay $2000. D pays $2000. Did C received new consideration? Is the agreement that C would not collect the remaining $1000 legally enforceable?
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Yes. Yes.
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D owes C $1000. Legal action to collect is barred by the SOL. D writes C a note offering to pay $600. Is there new consideration? Can C collect the $600?
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No. Yes. A written promise to satisfy an obligation for which there is a legal defense is enforceable w/out consideration.
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L leases to T. L sends T a letter promising to renew w/out a rent increase. T paints the building. L increases the rent. T sues L. Is the painting consideration? Promissory estoppel?
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No. Yes.
1) Promise 2) Reliance is reasonable, detrimental, foreseeable. 3) Enforcement necessary to avoid injustice. |
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Convisor hires Hannah Montana to sing for $100. If she doesn't sing, can he enforce? If she does sing and Convisor doesn't pay, can Hannah enforce?
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No. Yes.
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S sells Hannah a car. Hannah doesn't pay, but keeps the car. She turns 18. Continues to retain the car. Can S enforce the agreement?
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Yes.
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X is mentally incompetent. Leases and apartment from L. $400 dollars a month. The going rate is $300. Can L enforce? For $400?
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Yes. No.
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S store sells P paint on credit for $400. S alleges Convisor promised to pay for the paint. Is the promise w/in SOF?
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No. Not merely a promise to pay, but a promise to pay if someone does not.
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S sells P paint on credit. S alleges Convisor promised to pay for the paint if P did not pay. Is Convisor's promise w/in the SOF
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Yes.
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Promises by executor to "answer for personally" the debts of D
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Fall w/in the SOF
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H claims that W agreed to renounce any claim to property that he owned prior to marriage if he would merry her. Win SOF?
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Yes. Promise in Consideration of Marriage.
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P claims that D agreed to employ her for 3 years. W/in SOF?
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Yes.
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P claims O agreed to employ her for 3 years and P could terminate on 30 days notice. W/in SOF
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Yes. Capable of being PERFORMED w/in a year.
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John Tesh Claims that Club Putz hired him on Jan 15, 2008 to perform on Dec 24, 2009. W/in SOF
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Yes.
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P claimse that O agreed to employ her for a year, starting next month. W/in SOF?
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Yes. More than a year from the Date of the contract.
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P claims that D hired him on Jan 15, 2008 to move all of his mountains to the other side of the river. W/in SOF?
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No, any task could be performed w/in 1 year.
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P claims that D hired her to work for the rest of P's life. P is only 21. W/in SOF?
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No. SOF does not apply to life.
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P claims that D agreed to build a house on Blackacre. Is this w/in SOF?
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No. Build no.
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P claims that D agreed to sell redacre for $400. W/in SOF?
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Yes. Sell yes. Transfers in real estate (w/ exception of leases for a year or less)
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P claims that D agreed to sell a two year easement on Greenacre. W/in SOF?
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Yes.
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P claims that D agreed to lease Blackacre for one year. W/in SOF?
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No. Leases of 1 year or less not w/in SOF
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C claims E agreed to sell him his 1973 Cadillac for $500. Is this w/in SOF?
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Yes.
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C claimse E agreed to sell him his 1973 Cadillac for $400. Is this w/in SOF?
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No.
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C and L agree that L will write new mini review materials and C will advertise the course as L mini review for the next 5 years. L completes the material. C doesn't call the course L mini review. L sues. C asserts SOF. Is SOF satisfied?
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Yes. Full performance satisfies.
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P agrees to work for D for 3 years. P works for 13 months and D fires w/out cause. Is SOF satisfied by P's working for 13 months? Does D have a SOF defense? Can P recover under contract law? What remedy?
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No. Yes. No. Quasi Contract
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S orally agrees to sell 2,000 sacks of grits to B for $10,000. S delivers 600. S sues B for payment of 600 sacks that have been delivered. B asserts SOF defense.
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No. If lawsuit is about delivered goods SOF is satisfied.
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S orally agrees to sell 2,000 sacks of grits to B for $10,000. S delivers 600. B sues S for failure to deliver the remaining 1400 sacks. S asserts SOF defense.
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Yes. undelivered goods SOF is not satisfied.
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B orders a pair of custom made cowboy boots from S for $500. Nothing is put in writing. S starts work on the boots and makes a "substantial beginning." B changes mind and cancels. S sues. B asserts SOF.
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No defense. Specially manufactured goods exception.
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B orally agrees to buy Blackacre from S for $10,000. B takes possession of Blackacre and pays $8,000. S then refuses to sell to B. B sues S for breach of contract. S asserts SOF.
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No. Part performance by buyer of real estate can satisfy statue if 2/3 of 1) full or part payment 2) possession 3) improvements.
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B orally agrees to buy Blackacre from S for $10,000. B pays the $10,000 in cash. S refuses to sell Blackacre to B. When B sues S for breach, S asserts a SOF defense. Is SOF satisfied? Can B recover 10,000
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No. Yes.
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"Your offer of Jan 15th is hereby accepted. I will do it." s/ Dana Scully. Does this writing satisfy the SOF?
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No. Must answer who and what.
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The lawfirm of CPS hereby employ H as an attorney for 3 years at 200,000 a year. s/ Denny C for the firm. CPS wrongfully dismiss H. She sues for breach. CPS assert SOF defense.
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Yes. writing must be signed by the person asserting the SOF defense.
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The lawfirm of CPS hereby employ H as an attorney for 3 years at 200,000 a year. s/ Denny C for the firm. H breaches. CPS sues H. She asserts SOF defense.
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SOF satisfied. signed by person asserting.
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S sues B for breach of contract to buy grits for $500. Writing says "I agree to buy 200 pounds of grits." s/B. When sued B assets SOF defense. Does the writing satisfy SOF?
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Yes. Writing must contain quantity. Generally must be signed by person asserting, but UCC has an exception. If both parties are merhants and the person who receives a signed writing w/ a quantity term that claims there is a contract fails to respond w/ 10 days of receipt.
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S, a grits distributor, receives the following fax from B, a grits store. "As we agreed during our telephone conversation today, you will be sending me 200 pounds of grits and billing me $500 dollars." S/B. S does not response. S never sends the grits. B sues for breach. S asserts SOF. Has it been satisfied even though S did not sign?
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Yes. Generally must be signed by person asserting, but UCC has an exception. If both parties are merhants and the person who receives a signed writing w/ a quantity term that claims there is a contract fails to respond w/ 10 days of receipt.
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S Stone rents an apartment in Dallas. She arranges for Epstein to sign the lease for her. Does Epstein need written authorization if the lease is for 2 months? 2 years?
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No. Yes. Authorization to contract for someone else require authorization in writing only if the contract to be signed is w/in the SOF.
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T leases a building from L for one year. L claims they later agreed to increase it to 3. Is written evidence of the modification required?
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Yes.
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T leases a building from L for 3 years. L claims they later agreed to decrease it to 1. Is written evidence of the modification required?
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No.
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Convisor contracts to buy 600 bottles of thunderbird from Epstein for $600. Convisor later claims they agreed to modify by increasing the number of bottles to 650. Does modification have to be in writing?
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Yes.
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Convisor contracts to buy 600 bottles of thunderbird from Epstein for $600. Convisor later claims they agreed to modify by changing the price to $3. Does modification have to be in writing?
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No.
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R employs E for eleven months. They sign a contract that provides all modifications have to be in writing. E claims they later agreed to reduce the employment to 7 months. Is writing required?
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No.
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R employs E for eleven months. They sign a contract that provides all modifications have to be in writing. E claims they later agreed to reduce the employment to 7 years. Is writing required?
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Yes.
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Epstein contracts to sell his Cadillac to Convisor for $400. They sign a contract that says all modifications in writing. Epstein claims they later agreed to $499. Is writing required?
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Yes. Under UCC contract provisions requiring written modifications are effective unless waived.
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Epstein agrees to pay $7000 to Sarah Silverman to cause physical injury to Convisor. If Silverman does no injure Convisor, can Epstein recover?
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No. Can't recover illegal subject matter.
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Silverman contracts w/ Delta for a non-refundable ticket to fly from CA to Chicago where Convisor is to cause physical injury to him. If Silverman does not pay for the ticket, can Delta recover?
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Yes. It's an illegal purpose and not illegal subject matter.
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S tells B that the house had no termites. B agrees to buy the house in reliance on S's representation. S honestly believes that the house has no termites. but it does. Can B rescind the agreement to buy the house?
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Yes. No requirement of fraud in actions to rescind a contract because of misrepresentation. Non disclosure may require fraud.
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D has a contract to supply 1,000 pounds of kosher grits to P for Chanakah sales in 2008. D refuses to perform until P agrees to buy 4,000 pounds in 2009. P has not other source so agrees. D delivers grits in 2008. Can P get out of agreement to buy 4,000 in 2009.
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Yes.
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B and S contract for cotton to be delivered on the Peerless. B intends Oct. Peerless; S intends Dec. Peerless. Neither B nor S knows two ships named Peerless. Can S enforce an agreement?
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No.
1) Two reasonable interpretations. 2) each party attaches different meaning 3) neither party knows or has reason to know. |
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B and S contract for cotton to be delivered on the Peerless. B intends Oct. Peerless; S intends Dec. Peerless. What if B but not S knows that there are two ships named Peerless?
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There will be a contract as understood by S.
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S contracts to sell B a painting for $50,000. Both believe that it is a genuine Warhol. It is not. Is this a basic material mistake?
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Yes.
1) both parties mistaken 2) basic assumption of fact 3) materially affects the agreed exchange. 4) not a risk that either party bears. |
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S sells Blackacre to B. Both S and B believe Blackacre to be suitable only for farming. Blackacre contains valuable minerals. Can S rescind because of a mutual mistake?
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?
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Parol Evidence Rule
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Regardless of whether the writing is complete or partial integration, the PER prevents a court from admitting evidence of earlier agreements for the purpose of contradicting the terms of a written contract. A court may consider evidence of such terms for the limited purpose of determining a mistake in integration.
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S contracts in writing to sell B 1,000 chickens a month for 12 months. B claims S told him as they were signing that he would deliver as many as he needs during the 12 month period and offers faxes as evidence. Can the court admit it? What if earlier letters state that the deal is that S will deliver 1,200 chickens for 10 months. Can this be admitted?
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No. Yes, for the limited purpose of determining a mistake in the writing.
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S contracts in writing to sell B chickens. B contends that the word "chickens" in the contract means only fryers while S contends that it includes hens. Can the court consider evidence of pre-contract statements?
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Yes.
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Shipment contract
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The sellers delivery obligations can be completed before delivery has even begun.
1) gets the goods to a common carrier 2) makes reasonable arrangements for delivery 3) notifies the buyer. *More likely to get a shipment than a destination contract on the bar. |
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S, a Snook, Texas pet store contracts to deliver armadillos to B, a Buffalo, New York pet store. What are S's delivery obligations if this is a shipment contract?
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Seller completes obligations before delivery begins.
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Destination Contract
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Seller doesn't complete until the goods arrive where the buyer is.
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How is F.O.B. treated with shipment and destination contracts?
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If F.O.B. is the same city as where the seller is or the goods are, it's a shipment contract, if it's anywhere else it's a destination contract.
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Risk of Loss
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After the contract, before the buyer receives the goods, something bad happens and its nobodies fault.
4 Rules: 1) Agreement: Agreement of the parties controls (never happens in the bar exam) 2) The breaching party is liable for any uninsured loss even though the breach is unrelated to the problem. 3) Delivery by common carrier other than seller: Risk of loss shifts from seller to buyer at the time that the seller completes its delivery obligations. 4) No agreement, no breach, no delivery by a carrier. The determining factor is whether the SELLER is a merchant. Risk of loss stays w/ a merchant-seller until "receipt" of the goods; risk of loss shifts from a non-merchant seller when he or she "tenders" the goods. |
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B buys a stove from S Stove store. S tells B that he can pick up the stove at the loading dock. Before B can drive his truck to the loading dock, lighting strikes the stove. Does B have to pay for the damaged stove.
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No, S has risk of loss when seller is a merchant.
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B, a used car dealer, buys a used van from his friend S. S tells B to pick up the van at his convenience, that the keys are behind the front bumper. Later vandals damage. Does B have to pay for the damage?
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Yes. seller is a friend. Seller "tendered" by telling B how to get the goods.
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What is the implied warranty of merchantability?
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When any person buys any goods from any merchant, a term is automatically added by operation of law, - that goods are fit for the ordinary purpose for which such goods are used.
Triggering fact: Seller is a merchant which here means it deals in GOODS OF THAT KIND. |
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Convisor buys a "gold" chain from Golden fleece fine jewelry store. Nothing was written or said about the quality of the chain. Is there an implied warranty of merchantability?
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Yes. He can recover.
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Which of the following is an express warranty?
"all steel" "top quality" "gauranteed to operate for two years" seller shows buyer a sample. |
All but "top quality". It's too general.
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Implied warranty of fitness for a particular purpose.
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Buyer has particular purpose. Buyer relies on seller to select suitable goods. Seller has reason to know of purpose and reliance.
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Bubba tells a clerk at a shoe store that has interviews on wall street. The clerk sells white leather loafers. Wall street terminates the interviews on account of shoes. Has implied warranty of merchantability been breached?
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No. But implied warranty of fitness for a particular purpose has.
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Contractual limitations on warranty liability: disclaimers
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A disclaimer eliminates implied warranties but not express warranties. Can be disclaimed by CONSPICUOUS language of disclaimer OR "as is" or "with all faults."
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B buys a big screen TV "as is" from S TV store. It explodes. Can B sue S for breach of implied warranty of merchantability?
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No. Have to test for unconscionability. Prima facie unconscionable if goods cause personal injury.
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B and S enter into a contract for 120 green widgets. S delivers 119 green widgets and one yellow widget. Is that a perfect tender?
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No. Perfect tender only applies to sale of goods. Sellers performance must be perfect. Less than perfect, buyer has option of rejection of the goods.
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S offers to sell B 120 green widgets for $1000. B responds "hell no" What result?
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No contract. It's a rejection of an offer.
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S offers to sell B 120 green widgets for $1000. B accepts S's offer. S sends 119 green widgets and one yellow. What result?
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Buyer can reject if not a perfect tender. Assuming Seller cannot cure.
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B and S enter into a contract for 120 green widgets. S delivers yellow. Previously B had accepted different colors. After delivery, B notifies S he rejects the widgets. Can S cure?
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Yes. Sellers reasonable belief would be "ok"
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B order green widgets from S to be delivered no later than 6/6. S delivers yellow widgets on 5/5. B notifies S that he is rejecting yellow. Can S cure?
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Yes. Time for performance has not yet expired.
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S and B enter into an installment sales contract for the delivery of 10 kegs of beer at 6 p.m. for each night of the bar review course. One night S delivers 9 kegs at 6:30. Can B reject?
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No. An installment contract Authorizes delivery of the goods in separate lots to be separately accepted. The buy can reject only where there is a substantial impairment.
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Epstein uses a credit card to buy a new toupee on Ebay. The credit card charge clears and the vendor ships the toupee. Has Epstein already accepted the goods?
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No. Payment w/out opportunity for inspection is not acceptance. However, look for buyer keeping goods w/out objection longer than 1 month.
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In july, B buys a sleeping bag from S. The contract says bag is insulated form temperatures as low as 10. B uses bag in warm weather. When B finally goes in Oct, learns the bag in not insulated for 10. Can B reject? Can B REVOKE acceptance?
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No. Yes. Once you accept, you can't reject. In limited circumstances can revoke.
1) nonconformity substantially impairs the value of goods. 2) excusable ignorance of grounds for revocation or reasonable reliance on seller's assurance. 3) revocation w/in reasonable time after discovery of noconformity. |
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Substantial performance
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The counterpart to UCC "perfect tender". If one party substantially performs then the other party must pay or otherwise perform.
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S contracts to sell blackacre to B. S breaches. Can B get specific performance?
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Yes. Usually not available except real estate.
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S contracts to sell Blackacre to B. S breaches and sells to X, a bona fide purchaser. Can B get specific performance?
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No.
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S contracts to sell an antique desk to B. S breaches. Can B get specific performance?
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Yes.
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Epstein contracts w/ Convisor to lecture for BRI. Epstein breaches. Can Convisor obtain a court order requiring Epstein to lecture? Can Convisor obtain a court order barring Epstein from lecturing?
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No. Yes.
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On January 15, S sells B grits on credit. The grits are delivered to B on January 22. B is insolvent on January 22. S learns of B's financial difficulties and demands return of the grits on Jan 27. B still has the grits. Can S get them back? What if B sold the grits to T for $1000 on Jan. 25.
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Yes. 1) buyer must have been insolvent at the time that received. and 2) seller demands return w/in 10 days of receipt. 3) buyer still has goods at time of demand.
No. |
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O takes her watch to J Jewelers to be repaired. J Jewelers both repairs and sells watches. J Jewelers wrongfully sells O's watch to B, a bona fide purchaser for value. Can O recover the watch from B?
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No. If an owner leaves goods w/ a person who sells goods of that kind and that person sells to a third party, then good faith purchaser cuts off rights of owner.
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T steals O's watch and sells it to J Jewelers which sells the watch to B, a bona fide purchaser for value. Can O recover the watch from B?
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Yes. You can't get title from a thief.
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P contracts to paint O's house for $1000 payable in advance. O pays P $1000. P breaches - does not paint. O hires another painter who charges 1400. O sues P for breach. What is the measure of O's damages that O can recover from P?
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$1400.
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P Painting Contractor, Inc contracts to paint O's house for 1000 payable when P completes the work. P anticipates making 200 profit. O breaches after P has started work and used 100 of paint an labor. P sues O for breach what measure of damages.
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$300
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P Painting Contractor, Inc. contracts to paint O's house for $1000, payable when P completes the work. P anticipates making 200 profit form this contract. O breaches after P has started work and used 100 of paint and labor. What is the reliance measure of damages?
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$100, same position as if contract never happened.
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P Painting Contractor, Inc. contracts to paint O's house for $1000, payable when P completes the work. P anticipates making 200 profit form this contract. O breaches after P has started work and used 100 of paint and labor. If P sues and can show that the value of the paint work that she has done is $150, What is the restitution measure of damages?
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$150, focus on D but money goes to P.
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S contracts to sell Blackacre to B for 100,000. S breaches before B pays. B sues for breach. B is able to persuade court that fair market value is 120,000. B can recover?
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$20,000
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S sells B a car for 30,000. B pays and S delivers. Some of the car was not authentic. B keeps the car and sues. The jury finds the worth of the car is 20,000. Jury finds if it would have been as contracted 30,000. How much can B recover? What if jury finds car would have been worth 340000
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10,000. 14,000
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S contracts to sell B carpeting for 5000. S never delivers the carpeting (or S delivers the carpeting and B rejects it because it is not a perfect tender) At the time of the breach, the market price of comparable carpeting is 6600. How much can B recover? What if B pays 7000 for replacement carpeting.
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1600. 2000.
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B contracts to buy carpeting from S. Contract price is 800. B receives the carpeting and does not pay for it. How much does B owe? What if the market price is now 900?
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800. ?
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Epstein contracts to sell his 1973 Cadilac to Conviser for 1000. Convisor breaches. Epstein then sells to Sharon Stone for 800? What if Sharon Stone pays $1000?
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$200. 0
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S&M leather contracts to sell leather to Conviser for 1000. This is part of their regular inventory. Conviser breaches. S&M sell the very same items to John Ashcroft for 1000. Can S&M recover anything from convisor?
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Yes. Provable lost profit. If S&M's profit margin is 20% of the sales price then 20%. Plus incidental damages.
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M mill owner contracts with C carrier to transport a broken shaft to another village for repair for 100. C breaches by nonperformance. M is unable to find anyone for less than 150 and pays T 150. M sues C for breach. What is the measure of M's damages?
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$50.
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M mill owner contracts with C carrier to transport a broken shaft to another village for repair for 100. C breaches by nonperformance. M is unable to find anyone for less than 150 and pays T 150. C's breach resulted in a 5 day delay and M lost 1000 in profits form the mill closure. M sues C for breach. What is the measure of M's damages?
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$50
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M mill owner contracts with C carrier to transport a broken shaft to another village for repair for 100. C breaches by nonperformance. M is unable to find anyone for less than 150 and pays T 150. C's breach resulted in a 5 day delay and M lost 1000 in profits form the mill closure. M sues C for breach. M told C before the contract that the mill was closed because of the broken shaft and would remain closed until repaired. What is the measure of M's damages?
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$1050
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Duke hires P to work as prof. for 2006 for 100,000. Duke breaches. P sues. Duke is able to show that Dupont, similar university, offered P a job for 80,000 and P rejected. P sues Duke. What measure of damages
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20,000. and the burden is on the breaching party.
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B contracts to build store for O. Contract provides damages of 1000 a day for each day completion is delayed beyond a specific dated.
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Probably reasonable because don't fix amount of damages.
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B contracts to build store for O. Contract provides damages of $10,000.
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This is a penalty and not valid.
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O hires P to paint his house white for 1000. P paints purple O refuses to pay P and P sues. Is O excused from paying?
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Yes. Material breach. O can recover money damages. `
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O hires P to paint house white, but fails to paint a closet. O pays another painter $25 to paint the closet. O does not pay P. Is O excused from performing?
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No. O can recover money damages.
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O hires B to build house for 100,000. All pipe will be copper Reading brand. B uses copper Cohoe brand. Court finds the pipe similar and reduces value 1000. O refuses to pay anything. Is O excused?
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No. B can recover money damages.
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B uses Drek brand pipe made of paper mache instead of copper Redding pipe. Is O excused from paying?
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Yes.
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P contracts to paint 10 apts. for O for 10,000. P breaches after painting 3. O does not pay P. P sues O. Is O excused from paying P? What if contract provides that P will be paid 1000 an apartment
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Yes. Watch for where party does less than 1/2. Have to pay for the 3.
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S contracts to sell B 100 green widgets for 1000. S delivers 99 widgets and 1 yellow. In determining whether S's improper performance excuses B from performing, i.e. whether B can reject the widgets and return them w/out paying, is it necessary that S's breach be material?
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No.
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S offers to sell B his house for 100,000. B responds that he will buy the house if he can obtain a mortgage of no more than 6%. Is there a contract?
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No. It is language of condition that is a response to an offer.
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S and B enter into an agreement that states that B will buy S's house for 100,000 if B can obtain a mortgage at no more than 6%. Is there a contract? Notwithstanding B's best efforts, B cannot obtain a mortgage at 6% or less. Does B have to buy the house? Can S recover breach of contract damages from B?
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Yes. No. No. It is language of condition that APPEARS in the contract.
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B contracts to buy S's house. The contract provides "This sale is conditioned on B's obtaining a mortgage at no more than 6%." If the lowest mortgage rate that B can obtain is 6.1%. has the condition been satisfied?
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No, language of condition must be strictly complied with.
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B contracts to build O's house. The contract provides "O's payment for B's work is conditioned on B's using copper Reading pipe throughout." B instead uses comparable copper Cohoe pipe. Has the condition been satisfied so that O has to perform, i.e., pay for the house?
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No. Payment is excused because of non-occurrence of condition.
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B contracts to buy S's house. The contract provided that the sale was conditioned on B's obtaining a rate of 6% or less. B is unable to get less than 6.5%. B still wants to buy the house. S refuses to sell. B sues on the contract. Is the condition excused?
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Yes. B can waive the condition.
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B contracts to build an office building for O. The contract provides for monthly progress payments but conditions payment on B's obtaining certificate from CM construction management firm certifying the work. In May, O tells B that it will not be necessary to obtain any further certificates from CM. Then in June, O refuses to make the next progress payment because B failed to obtain an architect's certificated. What result?
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The condition is excused by estoppel. Obligation for O to pay.
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P contracts to pain O's house for 1,000 w/ payment to be made on July 13. On March 10, before P finished, O tells P that she is doing a great job but O is not going to pay. P stops painting. IF O sues P can O recover damages for breach? If P sues O on March 11, can P recover damages for breach?
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No. Yes. right to be paid immediately.
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P contracts to paint O's house for 1000 w/ payment on July 13. On March 25, after P has finished painting the house, O tells P he has done a great job but O is not going to pay. If P sues O on March 26, can P recover damages for breach? Before P finds another painting job or moves her painting equipment, O tells P that he has changed his mind again and he will pay P for painting the house and that money has been placed in an escrow account. Can O recover damages for breach of contract if P does not paint the house?
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No. Anticipatory repudiation does NOT give rise to an immediate claim if you have already finished the work.
Yes. Anticipatory repudiation can be retracted as long as no material change. Performance can be delayed until adequate assurance is provided. |
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P contracts to paint O's house in exchange for a unique autographed photo of Janet Reno that O owns. Before P finishes her painting, O sells the Janet Reno photo to conviser. Is P excused from continuing to perform any more painting?
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Yes.
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In Jan, B contracts to buy custom made widgets from S. Contract requires B to pay 25% of price March and requires S to deliver widgets no later than April 5. In Feb, B learns that S was late on all Jan. widget deliveries to other customers and that a substantial number of the widgets delivered were defective. Is B excused from making the March payment?
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Yes. "reasonable grounds for insecurity". Can demand adequate assurance and suspend performance.
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P contracts to paint O's house for 1000 w/ payment to be made when the work is done. P begins. Before P completes the work, P and O agree to rescind the contract. Valid? Can P later recover for O for the work she did?
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Yes. No.
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P contracts to paint O's house for 1000 w/ payment made when the work is completed. After P completes, P and O agree to rescind. Valid? Can P later recover ?
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No. Yes.
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D borrows 1000 from C and agrees to pay the loan w/ interest. Later D and C agree that if D delivers 20 widgets by the end of the month, then the debt will be excused. Accord?
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Yes.
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D borrows 1000 from C and agrees to pay the loan w/ interest. Later D and C agree that if D delivers 20 widgets by the end of the month, THEN the debt will be excused. D delivers the 20 widgets before the end of the month. C still sues D on the 1000 debt. What result?
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Can't sue. Performance of the original contract is excused by accord and satisfaction. If the accord is NOT performed, then the other party can sue on either the original obligation or the accord.
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D borrows 1000 dollars from C. Later D and C agree that if D delivers 20 widgets by the end of the month then the debt will be excused. D does not deliver, Can C recover on the original loan agreement? Can C recover on the accord?
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Yes. Yes but not both. Accord and satisfaction includes "if" and "then"
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D borrows 1000 from C and agrees to repay the loan w/ interest. Later D and C agree that D will deliver 20 widgets by the end of the month instead of paying 1000 interest. D does not deliver the widgets. Can C recover on the original loan agreement?
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No. Original agreement was excused by modification. Modification "let's just make this new agreement."
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What is a novation
|
A later agreement between BOTH parties to an existing contract to the substitution of a new party, i.e. same performance, different party.
Novation excuses the substituted party. |
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P contracts to paint O's house. Subsequently, P,O, and X agree that X will do the work instead of P. Is this a novation?
|
Yes.
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P contracts to paint O's house. Subsequently, P, w/out consulting O, asks X to do the work and X agrees. X doesn't paint the house. Can O recover damages for breach?
|
Yes. Delegation does not excuse.
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P contracts to pain O's house for 1000. After P begins painting, the house burns down. Is P excuses from performing on this contract so that P is now free to take another painting job? Is O excused from paying P?
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Yes. Yes. Something that happens after formation but before completion, unforeseen, and makes performance impossible.
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B contracts to build a house for O for 100000. After B begins work, the house burns down. Is B excused from performing on this contract so that B is not free to take another construction job?
|
No. Not impossible.
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Epstein contracts to sell Conviser his 1973 Cadillac for $700. After the contract but before the risk of loss has passed to Conviser, Epsteins Cadillac is destroyed by an unseasonable flood. When Epstein fails to perform the contract, Conviser sues Epstein for breach of contract, is Epstein's nonperformance excused?
|
Yes.
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Epstein contracts to sell Conviser 100 sacks of grits for $300. After the contract but before the risk of loss has passed to Conviser, Epstein's grits are destroyed by an unseasonable flood. When Epstein fails to deliver grits, Conviser sues Epstein for breach. Is Epsteins nonperformance excused? If risk of loss has already shifted is Convisor's nonperformance excused?
|
No, performance is not impossible.
No, not impossible. |
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D borrows 10000 from C and signs a contract promising to repay the 10000. D dies, leaving an estate of 30,000. Under contract law, can C recover the 10000 from D's estate? Is contract performance excused by D's death?
|
Yes. No.
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Conviser contracts w/ P to paint his house for 25,000. After contracting but before Conviser's paying for P's painting, P dies. Conviser hires another painter AP, who charges 30,000 for painting Conviser's house. Conviser sues P's estate for breach of k, seeking expectation damages of 5,000. Is P's contract nonperformance excused by P's death? Can Conviser recover the $5000 from P's estate?
|
No. Yes.
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Ashton Kutcher contracts w/ WB television network to star in the made for TV movie: Law School Legend ---the David Epstein story. Before filming, Kutcher dies. WB television sues Kutcher's estate for breach. Is Kutcher's nonperformance excused?
|
Yes.
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Conviser contracts w/ Gold Club to be the featured dancer in the club's legendary "Bottoms Up Review" After the contract but before Conviser dances, the town passes a new law outlawing nude dancing. Nonetheless, Conviser comes to the club nude and ready to dance. Is Gold Club excused from performing?
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Yes. Impossibility.
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Conviser tells surgeon he needs plastic surgery for nude dancing. If they outlaw nude dancing after the agreement, is Conviser excused from paying the contract?
|
Yes. Frustration of purpose.
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E takes out an insurance policy w/ Allstate. The policy provides 1) Epstein will make the payments 2) Allstate will pay Sharon Stone $250,000 on E's death. When E dies, Allstate refuses to pay. Can Sharon recover from Allstate?
|
Yes.
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P contracts to pain O's house for 1000. After P begins painting, the house burns down. Is P excuses from performing on this contract so that P is now free to take another painting job? Is O excused from paying P?
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Yes. Yes. Something that happens after formation but before completion, unforeseen, and makes performance impossible.
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B contracts to build a house for O for 100000. After B begins work, the house burns down. Is B excused from performing on this contract so that B is not free to take another construction job?
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No. Not impossible.
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Epstein contracts to sell Conviser his 1973 Cadillac for $700. After the contract but before the risk of loss has passed to Conviser, Epsteins Cadillac is destroyed by an unseasonable flood. When Epstein fails to perform the contract, Conviser sues Epstein for breach of contract, is Epstein's nonperformance excused?
|
Yes.
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Epstein contracts to sell Conviser 100 sacks of grits for $300. After the contract but before the risk of loss has passed to Conviser, Epstein's grits are destroyed by an unseasonable flood. When Epstein fails to deliver grits, Conviser sues Epstein for breach. Is Epsteins nonperformance excused? If risk of loss has already shifted is Convisor's nonperformance excused?
|
No, performance is not impossible.
No, not impossible. |
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D borrows 10000 from C and signs a contract promising to repay the 10000. D dies, leaving an estate of 30,000. Under contract law, can C recover the 10000 from D's estate? Is contract performance excused by D's death?
|
Yes. No.
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Conviser contracts w/ P to paint his house for 25,000. After contracting but before Conviser's paying for P's painting, P dies. Conviser hires another painter AP, who charges 30,000 for painting Conviser's house. Conviser sues P's estate for breach of k, seeking expectation damages of 5,000. Is P's contract nonperformance excused by P's death? Can Conviser recover the $5000 from P's estate?
|
No. Yes.
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|
Ashton Kutcher contracts w/ WB television network to star in the made for TV movie: Law School Legend ---the David Epstein story. Before filming, Kutcher dies. WB television sues Kutcher's estate for breach. Is Kutcher's nonperformance excused?
|
Yes.
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Conviser contracts w/ Gold Club to be the featured dancer in the club's legendary "Bottoms Up Review" After the contract but before Conviser dances, the town passes a new law outlawing nude dancing. Nonetheless, Conviser comes to the club nude and ready to dance. Is Gold Club excused from performing?
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Yes. Impossibility.
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Conviser tells surgeon he needs plastic surgery for nude dancing. If they outlaw nude dancing after the agreement, is Conviser excused from paying the contract?
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Yes. Frustration of purpose.
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E takes out an insurance policy w/ Allstate. The policy provides 1) Epstein will make the payments 2) Allstate will pay Sharon Stone $250,000 on E's death. When E dies, Allstate refuses to pay. Can Sharon recover from Allstate?
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Yes.
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Chloe O'brien agrees to pay Yonah Schimmel's Knishes Bakery $100 and Bakery agrees to deliver 12 dozen knishes to Jack Bauer. When Bakery refuses to deliver the knishes, Bauer sues S for breach of contract. Can he recover from Bakery on the knishes contract? Can Chloe and Bakery cancel the knishes contract before Bauer learns of the contract? Can Chloe and Bakery cancel the contract after Bauer learns of the contract and relies on it? Can Bauer recover from Baker for breach of contract if he does not get the knishes? IF Chloe pays $100 for the knishes and Bakery never delivers the knishes to Bauer, can Chloe recover from Bakery for breach of contract? Can Bauer recover from Chloe for breach if he does not get the knishes? Can Bauer recover from Chloe if she owed him $100 before she ordered the knishes to satisfy that debt and the knishes were never delivered? The check Bakery receives from Chloe bounces. Bakery does not deliver knishes to Bauer. Bauer sues Bakery for breach of contract.
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Yes. Yes. No. Yes. Yes. No (only against pomisor). Yes.
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On January 15, Batman contracts with Gotham to provide security services for a year; the contract provides that Batman is to be paid 300000 for the services. Batman later transfers his rights under the contract to Robin. Assignment or 3rd party beneficiary?
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Assignment
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On January 15, Batman contracts w/ Gotham to provide security services for a year; this January 15 contract provides that Gotham will pay Robin 300000 for Batman's services. Assignment or 3rd party beneficiary?
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3rd party.
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Batmand-Gotham contract provides "rights hereunder are not assignable" Nothwithstanding, Batman assigns the right to the 300,000 to Robin who does not know about the provision. Can Robin collect from Gotham? can Gotham recover from Batman for breach?
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Yes. Yes. Language of prohibition takes away right to assign but not the power. The assignor is liable for breach of contract but the assignee who doesn't know can enforce.
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Batman-Gotham contract provides "all assignments of rights under this contract are void. Notwithstanding, Batman assigns the right to the 300,000 payment to Robin who does not know about the contract provision. Can Robin collect from Gotham?
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No. invalidation takes away both the right to assign and the power to assign so that there is a breach by the assignor and no rights in the assignee.
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Batman assigns his rights under the contract w/ Gotham to Robin. Gotham is to pay Robin, not Batman. Does this substantially change the duty of the obligor so the the assignment is not enforceable?
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No.
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Gotham assigns its rights to security services to Metropolis i.e. Batman is to defense Metropolis, not Gotham. Does this substantially change the duty of the obligor so that the assignment is not enforceable?
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Yes. Even if the contract does not limit the right to assign, common law bars substantial changes to the duties of the obligor.
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Batman assigns the right to Robin for no consideration. Is this valid? Before Gotham pays Robin, Batman changes his mind and tells Gotham to pay him instead. Whom should Gotham pay?
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Yes. Batman.
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Batman promises to collect the money from Gotham and pay it to Robin. Batman does not do what he promised. Can Robin collect from Gotham?
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? #233
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Batman contracts to perform security services for Gotham for 300,000. Batman then assigns his rights under the contract to Robin, and Batman performs the contract. When Gotham refuses to pay Robin, Robin sues Gotham. Can Robin collect from Gotham for breach?
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Yes.
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Gothom to Batman then Batman to Robin for $10. Batman does all the work himself, can Batman collect from Gotham? If Batman fails to perform the services, can Robin still collect from Gotham?
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No. No. (Obligor has the same defenses against the assignee as it would have against the assignor)
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X signs a note promising to pay Y 1000. Y assigns the note to Z for 800. X was an infant when he signed the note and refuses to pay Z. Can Z recover from assignor?
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Yes. The right to assign is not subject to any defenses by the obligor.
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Epstein assigns the right to royalties from his splended contracts casebook to Sharon Stone for 1000. Epstein then writes his publisher and releases it from any obligation to pay royalties. Can Ms Stone collect from Epstein for breach of implied warranty of assignment?
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Yes. The assignor will do nothing to impair the value of the assignment.
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Epstein assigns the right to royalties from his splended contracts casebook to Sharon Stone for 1000. Two days later, the publisher files for bankruptcy and refuses to pay royalties. Can Ms. Stone collect from Epstein for breach of implied warranty of assignment?
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No.
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Batman gives the right to 300,000 payment from Gotham to SMU on Jan. 15. On April 5, Batman makes a gift of the same payment right to the UJA Federation of Gotham. Which assignee has the greater rights?
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UJA. Last assignee generally wins.
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On Feb 2, Batman assigns his rights under the contract w/ Gotham to Robin for $1. On March 3, Batman assigns his rights under the same contract to Conviser for 250,000. Whom should Gotham pay?
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Robin. First assignee for consideration wins.
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Batman assigns to Robin for consideration and then assigns to Conviser for consideration. Conviser does not know of the assignment to Robin. Conviser obtains payment from Gotham. Can Robin recover from either Conviser or Gotham?
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No.
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Batman assigns to Robin for consideration and then assigns to Conviser for consideration. Conviser does not know of the assignment to Robin and Conviser is the first to notify Gotham that he is an assignee. Gotham learns of the earlier assignment to Robin before it pays Conviser. To whom should Gotham make the payment?
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Robin. First to notify is irrelevent.
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What is a delegation?
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Party to a contract transferring work under that contract to a third party. P contracts to paint O's house for 1000. P (delegating party) and X (delegatee) agree that X will paint O's (obligee) house.
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P contracts with O to paint O's house for 1000. P and X agree that X will do the painting and collect the 1000 from O. Is this an assignment, a delegation or both?
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Both.
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P contracts with O to paint O's house for 1000. P agrees to pay X the 1000 for painting the house instead of X collecting the 1000 from O. Is this both a delegation and an assignment?
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No, delegation only.
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What is the relationship between a delegation and assignment?
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A contract creates rights and duties. Assignment is the transfer by a party to a contract of his rights under the contract to a third party who was not a party to the contract.
Delegation is the transfer by a party to the contract of his duties or burdens under the contract to a third party who was not a party to the contract. |
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P contracts to paint O's house for 1000. P delegates the work to X who does a great job. Can delegatee X recover the 1000 from O.
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No, it was a delegation but no assignment.
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P contracts to paint O's house for 1000. P delegates the work to X who does a great job. Can P recover the 1000 from O.
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Yes.
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P contracts to paint O's house for 1000. P delegates the work to X who does a great job. What if contract provides NO delegations?
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Can't recover.
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P contracts to paint O's house for 1000. P delegates the work to X who does a great job. What if contract provides no assignments?
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Can recover. This also invalidates delegations.
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Chipper Jones has a contract w/ the Atlanta Braves. No contract provision regarding assignments or delegations. Can he delegate performance to Epstein?
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No.
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Which duties are Delegable?
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Generally contract duties. The limitations are:
1) If the contract prohibits delegations or prohibits assignments 2) contract calls for VERY SPECIAL skills 3) person to perform contract has a VERY SPECIAL REPUTATION. |
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Chipper Jones has a contract w/ the Atlanta Braves. No contract provision regarding assignments or delegations. Can he delegate performance to A-Rod
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No.
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What if the third party does not perform in a delegation?
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Delegating party always remains liable
Delegatee liable only if she receives consideration from delegating party. |
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P contracts to paint O's house for 1000. X then agrees with P that she (X) will do the painting for P because P is a good friend. X does not do the work. Can O recover from P?
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Yes.
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P contracts to paint O's house for 1000. X then agrees with P that she (X) will do the painting for P because P is a good friend. X does not do the work. Can P recover from X?
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No
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P contracts to paint O's house for 1000. P and X then agree that X will do the work and P will pay X 900. X does not do the work. Can O recover from P?
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Yes
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P contracts to paint O's house for 1000. P and X then agree that X will do the work and P will pay X 900. X does not do the work. Can P recover from X?
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Yes
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P contracts to paint O's house for 1000. P and X then agree that X will do the work and P will pay X 900. X does not do the work. Can O recover from X?
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Yes.
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T or F, A contract in consideration of marriage must be evidence by a writing to be enforceable?
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True
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A manufacturer orders 150 printers. He receives 10, all of them are non-conforming. But he sales 2 of them anyway, and returns the 8. Result?
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The manufacturer accepted the two printers that it sold. Upon receiving non-conforming goods, a buyer may accept all, reject all, or accept any commercial unit and reject the rest.
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A seller of non-conforming goods doesn't want them back.
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A buyer is required to resell the goods and apply the proceeds to what is owed him. Buyer can offset expenses.
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If a price term is missing from a contract...
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courts will supply a reasonable price.
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Can a requirements contract be assigned?
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The UCC allows the assignment of requirements contracts if the assignee acts in good faith not to alter the terms of the contract.
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When is a liquidated damage clause enforceable?
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1) damages are difficult to ascertain at the time of the contract
2) the damages are a reasonable forecast of compensatory damages. |
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What are the elements of a mutual mistake
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1) mistake concerns a basic assumption on which the contract was made.
2) the mistake has a material affect. 3) the party seeking to avoid did not ASSUME THE RISK. |
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Three elements required to create a contract
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Mutual assent
Consideration or substitute No defenses to formation |
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Definiteness of subject matter of:
Real estate transactions Sale of goods Employment |
RE: identification of land and price terms
SOG: The quantity must be certain or capable of being made certain (requirements and output are okay) EC: The duration must be specified. |
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Accord
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An accord is an agreement in which one party to a contract agrees to accept performance different from that originally promised. Generally, it requires consideration. Consideration less than that of the original contract will be sufficient if it is of a different type or is to be paid to 3rd party.
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