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52 Cards in this Set

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If a contract is made for the sale of goods, but it is destroyed before the date of delivery arrives, is the contract avoided?
Yes, under UCC 2-613 if a contract requires for its performance particular goods identified when the contract is made, and, before risk of loss passes to the buyer, the goods are destroyed without the fault of either party, the contract is avoided.
What promise can be implied from an exclusive distributorship?
Where someone is to be the exclusive distributor, the court will imply a promise to use best efforts to sell the product, which is sufficient consideration.
When does novation occur?
Novation occurs where a new K substitues a new party under the terms of the old K.
If in a K for the sale of goods, does the failure to state a price prevent the formation of a valid K?
No, if the parties intended to form a contract without price being settled. In such a case, if the price is left to be agreed to by the parties, and they fail to agree, a reasonable price at the time of delivery will be supplied by the court.
A and B contract for the building of a dresser for $2K, B delivers, but A refused to tender the $2K, because of its low quality. If A instead sends a check for $1K, which B cashes, is A still liable for the remaining $1K?
No, since there is a good faith dispute, Cts. would view the check for $1K as an proposed accord, with B's act of cashing it as satisfaction. A K may be discharged by accord and satisfaction.
If A contracts B to build a house, and right before completion vandals burn the house down, can B recover for the work that he's already done?
No, B's duty to construct the house is not discharged by the fire. While K duties will not be discharged by the destruction of a work in progress, unless A has assumed the risk. The risk of loss, absent contrary K provisions, lies with the builder.
A and B orally agree that B will make & deliver two machines to A, one on May 1 and the other June 1. B delivers the first machine, but on May 2, A refuses to pay B for either machine, what can B recover?
B should be able to recover the full cost of the machine delivered on May 1. Generally a promise for sale of goods over $500 is not enforceable without a writing. But, an oral K for such goods is enforceable to the extent of goods received and accepted by the buyer.
Does the "mailbox" rule apply to the exercise of options?
No, in such cases where an offer is held open to a certain date, giving the offeree the "option" of acceptance, acceptance is effective when recieved by the offeror.
A responds to an ad by B, which offers to sell Blackacre for $40K. A and B enter into a K for the sale of Blackacre, but the K fails to state a purchase price. If B later decides not to sell, can A sue?
No, under the SOF Ks for the sale of land must be in writing and the writing must contain all essential terms, including price. As such SOF will prevent A from recovering. The ad cannot be considered part of the K, because nothing in the K referred to it.
If A sends a fax to B stating "please fax me you best price on silver, for immediate delivery," is this an offer?
No, it is only a request for an offer. For a communication to be an offer, it must create a reasonable expectation in the offeree that the offeror is willing to enter into a K on the basis of the offered terms.
A contracts to sell his car to B. A includes in the K a provision that states that the sale will occur only if B gets an favorable interest rate on the loan. B doesn't and A refuses to sell. If B sues, who will prevail?
B will prevail beacuse the limitation on the interest rate was placed in the K for B's benefit and he was free to waive it. One having the benfit of a condition may by words or coduct waive it.
If M contracts P to fix the pumbing in her house, but half way through the job M's house is destroyed by a flood, what can P recover?
The destuction of M's house discharges P duties due to impossibility, but P has a right to recover for the reasonable value of work he performed.
If B properly accepts through mail, but before the contract reaches D, B calls and tells D he wants to reject, which one is effective?
The mailbox rule applies and B's acceptance is effective as soon as he mails the bitch.
In a contract for the sale of goods, when will a seller have the ability to cure a defect?
The general rule under the UCC is that the buyer is entitled to a perfect tender. But, an exception is where the seller has reason to think that nonconforming goods will be accepteable to the buyer, based on the parties' past dealings. As such, upon notification of its intention to cure, the seller must be given a reasonable time within which to cure, and may extend beyond the original date of performance.
If A contracts with B to clean A's house, B cleans everything but the downstairs bathroom, what can B recover?
Although there has been substantial performance, A can recover damages for the less than complete performance. A will be able to offset his damages from the breach and B will be able to recover the contract price less the damages caused by his breach, i.e., what it cost someone else to clean the bathroom.
If an owner of a home breaches a K with the builder before the home is completed, what is the builder entitled to?
Where an owner breaches a contract after construction has been started, but before it's complete, the builder is entitled to recover any profit he would have derived from the K pluse any costs he has incurred to the date of the breach.
If a contractor breaches a K by failing to complete the job, how may he recover for the expenses and labor he contributed before the breach?
If a contractor breached the contract by ceasing performance before completion of the entire job, it is not entitled to the contract price. But, it may be entitled to quasi-contractual relief if possible where a party has conferred a benefit on the other that will result in unjust enrichment.
When is a contract divisible?
A contract is divisible if (1) the performance of each party is divided into two or more parts under the K, (2) the number of parts due from each party is the same, and (3) the performance of each part by one party is the agreed-upon equivalent of the corresponding part from the other party.
When is anticipatory repudiation avialable?
Only where the repudiating party unequivocally indicates that it will not perform under the contract. Asking for more money to complete a job is not unequivocal repudiation.
What are the requirements for promissory estoppel?
If a person making a promise should reasonably expect to induce action of a definite and substantial character, and such action is in fact induced, the promise is enforceable to the extent necessary to prevent injustice .
When will a unilateral mistake prevent formation of a contract?
Where only one of the parties is mistaken about facts relating to the agreement, such a unilateral mistake will not prevent formation of a K, unless the non-mistaken party knows or had reason to know of the mistake made by the other party, he is not permitted to take advantage of the offer.
When will an offer be held an irrevocable option because of detrimental reliance?
where the offeror could reasonable expect that the offer would induce the offeree to detrimentally change his position in reliance on the offer
A and B enter into an option K, ending May 30, for $15K. On May 10, B sends A a letter, stating "I can only pay $13K. If you won't accept this I can't go through with the deal." If A sells on May 15th, when did B's power to accept terminate?
B's power to accept terminated May 15th. Although the rejection of the offer in an option K does not terminate the power to accept the offer, if the optioner(A) detrimentally relies upon the rejection, the power to accept the offer terminates at the time of reliance, i.e., when A sells.
A agrees to sell 10K widgets to B, with title passing upon shipment. If A learns that B is insolvent, can A stop the delivery in transit and demand cash payment?
Yes, if a buyer is actually insolvent, UCC 2-207 permits the seller to refuse to delivery except for cash, including payment for all goods previously delivered under K. It does not matter if title had already passed.
A agrees to sell 10K widgets to B. Two days after B recieves the shipment, A finds out B's insolvent. Can A seek to reclaim the widgets?
Yes, under UCC 2-207(2) the seller can reclaim goods upon demand within 10 days after the buyer receives them if the seller discovers that the buyer received the goods on credit while insolvent.
A agrees to sell 10K widgets. If A learns that B is insolvent & reclaims the goods, can A now seek money damages from B for lost profits?
No, UCC 2-702(3) provides that the succesful reclamation of goods from an insolent buyer excludes all other remedies with respect to them.
Can an agreement affecting a 3rd party beneficiary be modified without the 3rd-party's consent?
Yes, it can be modified if the 3rd-party's rights have not yet vested.
When will a 3rd-party's rights vest?
His rights become vested when the 3rd-party assents in a manner requested by the parties, detrimentally relies on the K, or brings a lawsuit to enforce it. Once his rights have vested, the K cannot be modified without his consent.
Does a unilateral K require notice of acceptance to the offeror?
Unilateral Ks do not require notice, unless it is specificaly required in the agreement or the offeree has reason to believe that the offeror will not learn of the acceptance. Otherwise, performance is sufficient.
If a K for the sale of goods contains a covenant prohibiting assignment, but says nothing else, what are the parties prohibited from doing?
Under the UCC, unless the circumstances indicate to the contrary, a prohibition of assignment of the K bars only the delegation to the assignee of the assignor's performance, i.e., barring only the delegation of assignor's duty to pay to some other party, not the assignment of the right to receive payment.
If A purchases shoes from a shoe store, but before she takes possession the store is robbed, does she have to pay for another pair?
No, where the seller is a merchant, the risk of loss does not pass to the buyer until the buyer takes physical possession of the goods.
When will an express warranty arise?
It will arise from any statement of fact or promise. It must also be specific enough so as not to be confused with "puffery," i.e., it will last for "years."
If A buys a pair of shoes, takes possession, but notices when she's outside that they are scratched, can she get a refund?
No, once a buyer has accepted goods, her right to reject for nonconformance generally lapses and her only remedy is a suit for damages. Some cases a buyer can revoke acceptance, but the breach must be substantial and the buyer must have a good reason for accepting the goods.
In a contract for a sale of goods, does a modification to the original agreement require new consideration?
No, under UCC 2-609, good faith modifications are enforceable regardless of lack of consideration.
A and B contract for a sale of goods. A properly tenders delivery at the place designated by B, but there is nonacceptance. B notifies A of the nonacceptance, and after two weeks sells the goods. What is A's remedy?
B, having made the proper tender and notified A of nonacceptance, B discharged his duties under the K. Under the UCC, when B's duty of performance is discharged, A is entitled to restitution of any benefits that he has transferred to B in an attempt to peform on his side. Contract Price - Resale Price=Restitution.
Under the UCC, when will a party's duty to perform under the theory of Impracticability?
Impracticability exists where a party encounters extreme and unreasonable difficulty and/or expense, and suc difficulty was not anticipated. Duties will not be discharged where performance is merely more difficult or expensive than anticipated.
When is an implied-in-fact contract formed?
It is formed by manifestations of assent other than oral or written language, i.e., conduct. The manifestation of mutual assent are analyzed objectively under K law. Even if there is no subjective meeting of the monds, the parties will be bound if their conudct objectivley appears to manifest a contractual agreement.
When will the general rule that most rights are assignable and most duties of delegable be trumped?
Assignments and delegations are prohibited where they would substantially alter the obligor's risk, i.e., where obligor extends any degree of trust or confidence to the particular obligee (exoneration clause).
A and B enter into into a K. Later B delegates his duties under the K to C, with A's consent. If C fucks up on the job, will B still be liable?
No, generally when the obligee (A) expressly consented to the transfer of duties, it is construed as presenting an offer of novation. A novation substitues a new party for the original party to the K, requires the assent of all parties, and completely releases the original party.
If A and B sending matching offers through the mail at the exact time, is there a K?
No, even if identical, there is no requisite mutual assent without an acceptance. An offer cannot be accepted if there no knowledge of it. There can be no mutual assent without at least one of the parties manifesting acceptance of the terms of the offer, and communicating that acceptance to the other.
Can a 3rd-party donee beneficiary sue a promisee under K for specific performance?
No, a 3rd party donee beneficiary has no cause of action against the promisee, because the promisee's at is gratuitous and she may not be held to it (unless she has directly created reliance by personally informing the beneficiary), even if there has been detrimental reliance
Can an oral condition precedent be admitted by the court to attack the validity of the agreement?
Yes, certain forms of extrinsic evidence are deemed to fall outside of the PE rule. A party to a written K can attack the validity of an agreement by asserting that there was an oral agreement that the written K would not become effective until the occurence of a condition.
What is the Firm Offer Rule & When does it apply?
Firm Offer Rule: Offer cannot be revoked for up to 3 months if:(1)Offer to buy or sell goods, (2)Signed, written promise to keep the offer open; AND (3)Party is a merchant, i.e., a person in business.
If the subject matter of a contract becomes illegal after an offer is made, but before there is acceptance, is the K enforceable?
No, if the illegality is present at the time of the offer, there is no valid offer. If the illegality arises after the offer is made, but before acceptance, the illegality revokes the offer. If it arise after the formation of the K, it discharges the K, because performance is considered impossible.
If B contracts to paint A's house, but assigns the painting to C, must A accept C's performance?
Yes, since there is no provision in the K against assignments and the nature of the personal service appears routine, A, the obligee, is required to accept performance by C, the delegate.
What is buyers remedy if seller does not deliver or uyer rejects or revokes acceptance of tendered goos for nonconformance?
Buyer's basic remedy is the difference btw the K price and either the market proce or the cost of buying replacement goods (cover)
What is buyer's remedy if accepts goods that breach one of seller's warranties or is nonconforming?
Damages is measured by the differencee btw the value of the goods delivered and the value of the conforming goods.
If the buyer has already paid for nonconforming goods, and the seller has refused the buyer's offer to give back the goods and buyer's demand for repayment, what is the buyer's remedy?
Buyer may resell the goods and credit the proceeds to the amount owed by the seller. Buyer may sell either at public or private sale, but if private, reasonable advance notice must be given to the seller.
B contracts with A to sell him 100 red widgets by May 1. Because his supplier had not delivered enought red paint, B only delivered 95 red widgets. Is B's nonperformance excused by impossibility?
No, disccharge by impossibility occurs only where impossibility is objective. That fact that B had only 95 red widgets created a subjective, rather than objective impossibility of performance.
In an action for private nuisance, does it matter which party occupied their land first?
No, absent a valid defense a D may not cause a substantial, unreasonable interference with a neighbor's use or enjoyment of his property. Whether the neighbor or D was there first does not control the results.
What are the elements for public nuisance and can a private party recover under the theory?
PN is an act that unreasonably interferes with the health, safter, or property rights of the community. Recovery under PN by a private party is available only if the P has suffered some unique damage not suffered by the public at large.
Si negligently caused a fire on B's property. While putting out the fire, a fireman was burned. Can the fireman sue B for his injuries?
No, since B's conduct did not endanger Si, neighbor owed no duty to Si or his rescuer. Also an act of rescue is not an assumption of the risk.