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65 Cards in this Set
- Front
- Back
- 3rd side (hint)
Battle of Forms |
"... where there is a battle of the forms, there is a contract as soon as the last of the forms is sent and received without taking objection to it. In some cases, the battle is won by the person who fires the last shot. He is the person who puts forward the latest term and conditions; and, if they are not objected to by the other party, he may be taken to have agreed with them." |
Firing the last shot |
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Agreements entered under duress |
Illegal an invalid |
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Essentials of a contract |
1. Capacity of the parties 2. Mutual Agreement 3. Consideration 4. Legality |
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Intent of Parties |
Intent of the parties to a contract may be determined from the totality of the words and actions of the parties, in contrast to the parties' isolated words or actions. ex. Bold face print is more important than fine or obscurely-placed print, |
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Five principal ways the UCC changes sales contracts for merchants are |
1. Higher standards of conduct must exist, namely good faith an reasonable commercial standards 2. Written confirmation of an oral agreement may satisfy the statute of frauds. 3. A firm offer to purchase or to sell goods is irrevocable for up to three months. 4. Even if an acceptance alters the terms of an offer, this does not necessarily constitute a rejection. 5. The UCC provides for implied warranties for merchantability and ownership. |
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UCC |
Uniform Commercial Code |
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Types of Contracts |
1.Express contracts 2.Implied-in-fact 3. Implied-in-law 4. Bilateral contract 5. Unilateral contract
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Express contracts |
all elements (offer, acceptance, consideration) are specifically stated, whether in words, written or oral, or partly written and partly oral |
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Implied-in-fact Contracts |
The existence and terms are agreed to non-verbally, that is by conduct. |
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Implied-in-law |
created to avoid unjust enrichment of one party at the expense of another, wherein the wronged party is entitled to receive restitution |
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Bilateral contracts |
an exchange of promises between the parties |
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Unilateral contracts |
A promise of one part and an act by the other party |
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Requirements for an offer |
1. Must indicate a clear intent to enter into a contract 2. Must be expressed with sufficient specificity so that a court can ascertain the actual intent of the parties. 3. Must be communicated to the party to whom the offer is made |
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Requirements for acceptance of an offer |
1. clear and unconditional |
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Consideration |
Anything of commonly agreed upon worth that is promised to another when making a contract. |
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stExamples when consideration is absent |
1. illusory promises 2. Moral Obligation 3. Doing what one is already bound to do 4. Promissory Estoppel |
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Promissory Estoppel |
If a party changes his or her position substantially either by acting or forbearing from acting in reliance upon a gratuitous promise, then that party can enforce the promise although the essential elements of a contract are not present. |
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Sales Contract concepts addressed by the UCC |
1. Statute of Frauds: covers >$500 2.Greater Flexibility: parties can agree on a reasonable compensation 3.interpretation of the agreement: criteria addresses considerations such as performance, past conduct, and custom as opposed to technical considerations |
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CISG |
-Only applies to contracts between companies in different countries. -address firm offer rule -addresses mirror image rule |
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Mirror Image Rule |
1. should the offeror of the goods receive a contrary response from the receiver and failing to recognize the sinifigance of the receiver's alteration, proceed as if the contract had been formed, the offeror may be considered to have accepted the receiver's alteration to the contract. (exception-materially additions or limitations) |
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Obtaining a better title than the seller |
1. A party with a voidable title can transfer a valid title to a bona fide purchaser (one who is unaware o f the voidable title) 2. A purchaser who purchases goods in good faith from a retailer will get a good title, even though the retailer in the ordinary course of his business has transferred to another party a prior interest in those goods. 3. A purchaser in good faith buys goods that have been entrusted to a retailer by a third party for some special purpose, the purchaser obtains good title to the goods he has purchased. |
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FOB Desitination |
Free on Board- Shipper pays the shipping costs to the specified destination. Upon arrival the buyer takes responsibility |
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Ex-ship |
A seller is required to deliver good to a buyer at an agreed port of arrival. seller remains responsible for the goods until they are delivered. The buys payer for unloading and subsequent charges |
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No Arrival, no sale |
If goods do not arrive there is no contract unless the seller is responsible for the non arrival. |
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Shipping Contract Types |
1. FOB-Free on board 2. FAS- Free alongside ship 3. CIF- Cost, insurance and freight 4. C&F- cost and freight |
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FOB |
Free on Board- Seller's price includes all the charges incurred up to the point of placing the goods on board a ship at departure point |
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FAS |
Free Alongside ship- Seller's price includes the charges incurred only up to the ship at the specified point of departure |
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CIF |
Cost, insurance, freight- Seller's price includes insurance and all other charges up to the specified destination point |
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C&F |
Cost and freight-Does not include insurance but all other cost up to the destination point |
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Risk of loss Breach |
1.if goods are non conforming and unaccepted (seller), 2. If conforming (buyer for all uninsured) |
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Risk of loss (difficult to tell whether shipment or destination contract) |
if seller is a merchant-Risk of loss up to point when the goods are delivered to buyer --if seller not a merchant-buyer bears all risk of loss when goods become available to him. |
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Risk of Loss (Delivery by third person) |
Buyer assumes risk upon receiving documents of title
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Perfect Tender Rule |
If the seller's performance fails in any respect to conform to terms of the contract buyer has three options: 1. Reject all goods 2. Accept all goods 3. Accept all conforming goods, reject rest |
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Conditions |
1. Express 2, Implied 3. Time of performance 4. Satisfactory performancE |
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Express Conditions |
deliberately created, agreed upon conditions of a contract |
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Implied Conditions |
contained within most contracts, whether implied by law or by the language of the contract |
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Time of performance |
typically a type of express condition identifying performance of a contractual obligation at an expected time |
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Satisfactory performance |
Can be subjective or objective |
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Discharge of contracts |
termination or completion of a contract 1. performance 2. Breach 3. Mutual agreement |
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Discharge by law |
1. Subsequent illegality (illegal after the fact) 2. Impossibility (death or destruction) 3. Bankruptcy 4. Statute of limitations 3-6 years |
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BFP for value |
an innocent party who in good faith attains from another party apparent legal title to the other party's property, in the absence of knowledge of any third party's claim to te title |
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negligent entrurustment |
a situation in which one party (the entrustor) is held liable for negligence because he provided another party (the entrustee) with the means to cause injury to a third party. (i.e. cars and weapons). key element is the enstrustee is known through reputation or documentation to have the proclivity to use the specified instrument in a manner that is likely to cause harm. |
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Express Warranty |
spoken or written assureance by the seller concerning the nature, performance or quality of the goods he is selling |
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Kinds of express warranties |
1. affirmation of the fact of conformance (good will accomplish a specific purpose) 2. A description of the goods (match description) 3. Refernece to a sample or model (visual representation. |
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Implied Warranty |
1. warranty of merchantability (fit for ordinary purposes) 2. Warranty of fitness (seller possess knowledge and expertise on which buyer may rely) |
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Disclaimers |
seller seeks to eliminate or modify legal warranty obligations. ex. "as is", "without warranty" *must make every effort to call attention to disclaimer |
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Magnuson-Moss warranty act |
-1975 requires manufacturers and sellers of consumer products to provide consumers with detailed information about warranty coverage. |
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three tenets of magnuson moss warranty act |
1. A warrantor must specify "full" or "limited" 2. warranty must be part of an easy to read document 3. Warranty must be readily available for buyers to read |
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Privity |
requirement that a party bringing a lawsuit on a contract be a party on the contract. |
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negligent harmful action |
when generally accepted standards of care are not followed and in which harm must have been reasonably foreseeable. |
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Principle of res ipsa loquitor |
-"the things speaks for itself 1. a plantiff's injury would not ordinarily occur unless someone has been negligent 2. plantiff's injury must result from a condition within the exclusive control of the defendant 3. the plaintiff must not have done anything that significantly contributed to the accident that caused the injury. |
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Strict liability |
imposes liability on manufacturers and sellers even if they were not at fault or negligent, so long as 1. the product was defective at time of sale 2. the seller's business concerns the selling of the product in question. 3. The procut when purchased differed in no substantive way from the product as produced |
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Parties held liable for defective products |
1. Manufacturers (even through a distributor 2. Component part manufacturers (only if defect is their component not overall design) 3. Wholesalers (exception is if defects are not ordinarily detectable. 4. Retailers (limited liability |
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Defenses for sellers in product liability lawsuit |
1. product misuse (plaintiff used product in a blatantly improper manner or failed to maintain) 2. Assumption of Risk (Plaintiff's product has known risks or well publicized side effects 3. sophisticated purchases ( plainitiff extraordinarily knowledgeable) 4. Preemption (federal statues override state courts jurisdiction to decide claims in the case in question 5. State of the art (defendent used best available technology or high standard of care and could not have forseen the danger inherent in the product at the time of manufacture. |
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Breach of Contract |
Plaintiff's case 1. contract must be proven to exist 2. Proof must exist that the defendant breached the contract 3. Proof must exist that the breach by the defendant resulted in injury or damage to the plaintiff. |
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De Minimus |
intended to discourage plaintiffs from bringing cases to avenge some perceived embarrassment or hurt feeling. |
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Ability to be legally compensated for damages in a breach of contract lawsuit |
1. Certainty- Damages cannot be merely speculative, but must be proved to a reasonable certainty. 2. Forseeability (at the time contract was created or at time of breach 3.Mitigation-Compensatory damages are limited by the palaintiffs requirement to make reasonable efforts to complte inability to be compensated for a breach. |
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Types of damages awarded |
1. Consequential 2. Liquidated 3. Punitive |
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Consequential damages |
damages resulting not as a result of an act but rather from a consequence of an act. requires full forseeability and certainty |
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Liquidated damages |
dollar amounts. Reasonable efforts to calculated damages will be awarded by the court. |
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Punitive damages |
A.k.a exemplary damages a punishment and example to deter others from malicious, evil or fraudulent act |
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Make whole prinicple |
liberally administered to the en that the aggrieved party shall be put in a s good a position as if the other party had fully performed. four year statute of limitations |
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Buyer in breach of contract |
1. Seller proffers the goods but the buyer refuses to accept them. 2. After received the goods, the buyer improperly returns them 3. After having received the goods, the buyer fails to pay for them. 4. At any point during the proper execution of the contract, the buyer exhibits an unwillingness to go forward |
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Remedies for sellers in buyer breach
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1. seller may cancel the contract and delay delivery of the goods 2. The seller may resell the goods to another buyer and recover damages for the difference in price received 3. the seller may seek to recover damages from the buyer |
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Types of breach |
1. minor/immaterial/partial (can collect actual damages only) 2. Material (failure to perform that permits non-breaching party to compel performance or collect 3. fundamental 4. anticipatory |
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