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143 Cards in this Set

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what's Parol Evidence Rule ?
Rule keeps out evidence of what the parties said & wrote BEFORE they reduced the terms of their A to writing
what's the reason for parol evidence rule>
prevent P from getting in evidence (either oral or written) of a prior agreement that contradicts a later written contract
what's the difference between per problem and s/f
• A PER problem requires a writing
• A S/F problem involves an oral agreement
what's the exception to parol evidence rule?
• To indicate a CP to the written contract
• To correct a clerical error
• To establish a defense to the enforceability (formation) of an agreement
• A prior valid agreement incorrectly reflected in the writing
• Collateral agreement
• To explain the written contract
• To supplement a “partially-integrated” writing
wants rescission on the ground that K is unenforceable due to misrepresentation, can this get into evidence?
yes
can you get parol evidence to show what a term means?
always
what's partially-integrated writing?
a final statement of the terms included, but not a complete statement of all terms agreed to
if a lease agreement is missing certain terms and doesn’t seem to be complete on its face, can you supplement it with parol evidence?
yes
if you have a “merger clause” which says “this K is limited to the terms set forth herein, can you use parol evidence rule?
then K is considered complete on its face and therefore can’t be supplemented.
does Changing an agreement after it has been reduced to writing satisfy the parol evidence rule ?
no.
• PER doesn’t apply on oral or written promises that are made after signing the written K! PER looks backwards and has nothing to do with K modification!
what's the course of performance?
what the parties have done under this K
what's the course of dealing?
what the parties have done under their earlier contracts
what's the usage of trade?
what others in the trade do under similar K
what can court use the extrinsic evidence as mentioned in the above order?
o course of performance
o course of dealing
o usage of trade
what's the Seller’s Warranties of Quality in a sale of goods under Art 2?
Express warranties that S makes.on facts, promises, or description BUT NOT opinion
what's the words that s make on warrant?
SELLER DOESN”T HAVE TO SAY “I WARRANT”
this desk is solid mahogany. what's this ?
Statement of fact
“this computer is guaranteed for 2 yrs.” what's this ?
Promise
what's opinion?
phrased in general, subjective or vague language): “all parts are top quality”
what's the effect of the seller’s use of a sample or model?
gives rise to express warranty→ it warrants that what you get will be exactly like the sample!!
what's Implied warranty of merchantability?
when any person buys any goods from any merchant, a term is automatically added to the contract by operation of law – that the goods are fit for the ordinary purpose for which such goods are used.
what's merchant?
SELLER must be a merchant who deals in goods of the kind (
if K is silent on quality of shoes and P buys shoe from shoe store, what's the result?
There is implied warranty of merchantability
if shoe store delivers a van to P, is there implied waranty of merchantability?
no
in Implied warranty of fitness for a particular purpose, does seller need to be a merchant?
no
what 's Implied warranty of fitness for a particular purpose?
the goods are fit for the buyer’s special purpose
what's the key for implied warranty of fitness for a particular purpose?
buyer has special purpose; buyer relies on seller AND seller knows it
what 's the sign for implied warranty of fitness ?
• If the question deals with WHY buyer needs a certain good
what's Seller’s warranties of quality in a lease of goods under Art 2A ?
The same IMPLIED WARRANTIES exist in lease of goods under 2A as in Art 2 sale of goods.
what's the exception for seller's warranties ?
• NO implied warranty of merchantability when it involves a finance lease made by Bank
Roy leases computer from Citibank, who bought the computer from Gigabyte Computer Co. Is there an implied warranty of merchantability?
NO implied warranty made by bank, but implied warranty made by computer co.
how can you limit on warranty liability in sales and leases of goods?
o Disclaimer of warranties
o Limitation of remedies
can you disclaim express warranty?
• Seller can’t disclaim an express warranty. S can’t on the one hand make warranties and disclaim them at the same time.
can K both say “all parts are guaranteed for 2 years” and “all warranties are disclaimed”?
no
how can seller or lessor of goods disclaim all implied warranties?
with “as is” or “with all faults”
if "as is" or "with all faults" aren't used, is the disclaimer good?
the disclaimer must be CONSPICUOUS in nature (large print, bold face), then it would be effective
what are the 3 Factors on whether limitations on remedies will be enforceable?
• you can limit B’s remedies for both express and implied warranties
• test for the validity of any limitation of remedies is “whether it’s unconscionable”?
• unconscionability is measured at the time of K, not at time of mishap.
• Where personal injury results from consumer goods, what's the limitation of remedies presumed?
then limitations of remedies is presumed to be unconscionable.
what's the Seller’s delivery obligation in a sale or lease of goods involving a common carrier ?
seller must get the goods to a common carrier; make reasonable delivery arrangements & notify buyer of where the goods are
what's the seller's obligation for the destination k?
seller must get the goods to where buyer is located
FOB (Free on Board) follow by city name other than seller’s city, what's this ?
a destination K.
o Where goods are damaged before buyer gets the goods & neither the buyer or the seller is to blame, who bears the risk of loss?
• If the seller bears the risk of loss, what does he seller must do?
the seller must provide new goods to buyer for NO ADDITIONAL COST or is liable for breach of K
If the buyer bears the risk, what does the buyer must do?
the buyer must still pay the K price
what hierarchy determines who bears the risk of loss?
1. Agreement of the parties control
2. Breach: the breaching party is liable for any uninsured loss
3. Delivery by common carrier other than seller: shifts risk to buyer when seller has completed its delivery obligation.
4. If no common carrier (e.g. buyer to pick up or seller to deliver), the answer depends on whether the seller is a merchant
5. If a contract gives the buyer the right to return the goods, the key is whether the buyer is buying primarily for resale or for his own use:
Beer Co San Antonio Ks to sell bear to Tex Mex Pub in the Bronx. An electrical shortage caused the beer to spoil while being transported by UPS. K is silent on risk of loss, and neither is to be blamed for the problem. Who bears the risk of loss if the bear was delivered on week after K deadline?
o Beer Co. would bear the risk of loss b/c it breached first by shipping goods late.
o If you find anything breached at all → risk is on the breaching party.
Beer Co San Antonio Ks to sell bear to Tex Mex Pub in the Bronx. An electrical shortage caused the beer to spoil while being transported by UPS. K is silent on risk of loss, and neither is to be blamed for the problem.
but Seller shipped on time. Who bears risk if it is shipment K?
If Seller met its delivery obligations, risk of loss is on Pub.
Beer Co San Antonio Ks to sell bear to Tex Mex Pub in the Bronx. An electrical shortage caused the beer to spoil while being transported by UPS. K is silent on risk of loss, and neither is to be blamed for the problem,same facts but destination K.or fob who bears the risk of lost?
Then risk remains on the Seller until the beer actually gets to the buyer.
if no common carrier, seller is merchant, who bears the risk of lost>
seller bears the risk of loss until the buyer takes physical possession of the goods.
(whether buyer is a merchant is irrelevant
if no common carrier, seller is a non merchant, when does the seller bear the risk of lost?
the seller bears the risk of loss until seller “tenders” the goods (makes goods available – tells buyer where the goods are and where to pick it up).
If a contract gives the buyer the right to return the goods, if it is • Sale or return, what rules apply in the risk of lost?
same rules apply
If a contract gives the buyer the right to return the goods, and the buyer is buying for his own use, who bears the risk of lost?
risk remains on the seller until the buyer has accepted the goods.
what's the risk of loss in leases of goods?
o The lessor bears the risk of loss even when the goods are in the possession of Lessee.
Risk of Loss in leases of goods, what if the lessor is a bank?
the lessee would bear the risk of loss if the lessor is a bank.
what are the points for the Performance of K for the sale of goods (Art 2) ?
• Perfect tender rule:
• Cure:
• Installment sales K:
• Acceptance of goods
• Revocation of acceptance of the goods:
• Buyer’s payment obligation
what's Perfect tender rule?
the standard by which a seller’s performance is measured. Under perfect tender rule, a Seller must deliver perfect goods in the right place at the right time. If not, the buyer has the right to reject the non-conforming goods.
does a seller who fails to make perfect tender have an option to cure?
yes, It usually depends on whether the time for S’s performance has expired or not.
when does s has the option to cure?
o S would have the option to cure by the deadline of delivery.
when is the exception allowing for option to cure after deadline has past?
where there is a history between the parties and the party had previously accepted non-conforming goods
what's Installment sales K?
look for K language that requires or authorizes the S to deliver the goods in separate installments
if the S makes 5 separate deliveries of 4 kegs each is this an installment sales K?
need to look at K language.
does Perfect tender rule apply to an installment sales contract?
no
when can b reject installment contract?
• B has the right to reject an installment only if there is substantial impairment in the installment that cannot be cured
when does b has the right to reject an entire contract?
only if a defect in an installment substantially impairs the value of the entire contract
when there is Acceptance of goods, what does it mean?
we are assuming that K has been formed (this is about performance)
does Mere payment for goods without opportunity for inspection qualify for acceptance?
no
If buyer retains the goods w/o objection after having a reasonable time to inspect them, does buyer accepted the goods? how long?
yes. 2 month.
what's the effect of acceptance?
• once a buyer accepts goods, it is too late for the buyer to reject
• A buyer who accepts non-conforming goods can still get damages
can you revoke an acceptance of goods?
o General rule: once a buyer accepts, the buyer cannot revoke acceptance
when can buyer revoke acceptance?
: a buyer can revoke acceptance within a reasonable time after he discovers a nonconformity only if the non-conformity substantially impairs their value and was difficult to discover.
what's the requirement for revocation of acceptance of the goods?
• Nonconformity substantially impairs the value of the goods;
• Excusable ignorance of grounds for revocation or reasonable reliance on seller’s assurance of satisfaction; and
• Revocation within a reasonable time after discovery of nonconformity
M buys home on July 7 & moves in. On Sept 9, it rains for the first time, and M then discovers hairline cracks in the roof. Can M reject? can m revoke?
• No b/c M had lived in house for 2 mos and M has impliedly accepted it and it is too late for M to reject, but she can revoke.• Yes b/c 1) the hairline cracks were hard to discover 2) they substantially impair the value of home. M can revoke acceptance within reasonable time after discovering the cracks
what's the difference between rejection and revocation of acceptance as to time?
Before acceptance After acceptance
what's the standard for reject and revocation?
Perfect tender
Substantial impairment/difficult to discover
what's the requirement for rejection and revocation?
• Seasonably notify seller
• Hold the goods for seller
• Follow reasonable seller instructions
what's the consequence for reject or revoke?
• Goods back to seller
• No buyer payment obligation
what's the Buyer’s payment obligation?
o Can pay with checks; but S doesn’t have to take the checks, can insist on cash; if S insists on cash, B would have additional reasonable time to get some cash (even if after the deadline).
what's the performance standard for common law ?
Substantial performance is the standard
I contract with Martha Stewart to decorate my house. She finishes the job except for the window treatment in one bedroom. what's the result?
• This is substantial performance (did almost everything that she K to do)
• I can still sue Martha for breach of K and recover damages
• BUT I am NOT excused from paying Martha the K price b/c only a material breach will excuse the non-breaching party from performing his part of the bargain
when there is material breach in common law contract, what's the result?
then I can sue her for damages and I am also excused from paying her the K price. But she can recover in quasi-K for the reasonable value of the work that she has done.
when On the NY portion of the bar, if you can recover under QUASI K for the reasonable value of the work, what do i do?
put it in the answer → they like equitable remedies.
how to determine substantial performance in divisible k?
o Substantial performance is evaluated on a unit-by-unit basis b/c in divisible Ks payment is divided up on a per unit basis.
if I K with Martha to pay her $9000 a painted cabana for 10 cabanas, and she paints only 3 cabanas. Martha has substantially performed on 3 cabanas , what does martha get under the common law?
→ gets $2,700 (on K price).
what 's the excuse for any breach is a breach under article 2?
any breach is a breach ⇒ if S fails to make perfect tender, B can reject ALL of the goods from S (B is excused from performing)
what's the common law material breach rule?
i. Damages can be recovered for any breach;
ii. Only a material breach by one guy excuses the other guy from performing;
iii. Whether a breach is material is a factual question
what are the factors that a court may use to determine if a breach is material?
• Amount of benefits received by the non-breaching party
• Adequacy of compensation for damages to the inured party
• Hardship to the breaching party
• Extent of part performance by the breaching party
• Negligence or willful behavior of the breaching party
• Likelihood that the breaching party will perform the remainder of the contract
what's Excuse based on the other party’s repudiation by words or conduct?
ANTICIPATORY REPUDIATION or INABILITY TO PERFORM
what's Anticipatory repudiation?
i. An unambiguous (positive and unequivocal) statement (i) that the repudiating party will not perform; (ii) made prior to the time that performance was due.
what's the effect of anticipatory repudiation?
Anticipatory repudiation by one party excuses the other party’s duty to perform. It also generally gives rise to an immediate claim for damages for breach unless the claimant has already finished performance.
when can Anticipatory repudiation be reversed or retracted?
so long as there has not been a material change in position by the other party. If the repudiation is timely retracted, the duty to perform is reimposed but performance can be delayed until adequate assurance is provided
if there is anticipated repudiation and executory on both sides, what can the other party do?
the other party can sue immediately, rescission, suspension, or urge
in anticipatory repudiation, if non- breaching party perform, what can the non-breaching party do?
they must wait till after due date of other party’s performance
: If I K with Martha to decorate house for $50,000, after Martha starts the job, I tell her that I am not going to pay her for her work , what can she do?
She is excuse from performing by my oral anticipatory repudiation and can sue me for breach of K. [Anticipatory repudiation operates EXACTLY Like material breach
: If I K with Martha to decorate house for $50,000, after Martha starts the job, I tell her that I am not going to pay her for her work ,I tell Martha 2 days later that I will pay her and that she should resume the work. what's the effect?
I can retract my anticipatory repudiation as long as Martha has NOT relied on it.
: P Ks to paint O’s house with O in exchange for a unique autographed painting. Before P finishes her painting, O sells the painting to Conviser. Is P excused from continuing to perform?
yes
what's the Prospective inability to perform ?
merely raises doubts about performance; thus, it does not meet the unequivocal requirement of anticipatory repudiation.
if there is prospective inability to perform, what can the innocent party do?is other party retraction possible?
iii) The innocent party may suspend her own performance until she receives adequate assurances of performance. If these are not forthcoming, she may treat the failure as a repudiation
what's a Performance condition?
a mutually agreed upon promise modifier. It is language in a K – not merely language in a response to an offer – that does not create a new obligation, but merely limits obligations created by other language in the K.
what's Conditional acceptance?
the key is where the language of condition appears.
what's covenant? does nonperforming of covenant constitutes breach?
duty and promise.yes
what's the standard for satisfying an express condition?
strict compliance with express conditions
The contract provides “O’s payment for B’s work is expressly conditioned on B’s using Reading pipe throughout.” B instead uses comparable Cohoe pipe. Has the condition been satisfied so that O has to perform, i.e., pay for the house?
no
what's the exception for satisfying an express condition?
condition based on approval of one of the contracting parties is treated as satisfied if reasonable person would approve, unless subject is art or other matters that are inherently discretionary.
How can an express condition be excused?
i) Estoppel
ii) Waiver
iii) Failure to cooperate:
what's the estoppel for express condition to be excuse?
(1) Identify the person who benefits from or is protected by the condition. Then look for a statement by that person giving up the benefits and protection of the condition.
(2) Estoppel is based on a statement by the person protected by the condition BEFORE the condition event was to occur and requires a change of position
what's the waiver for express condition be excuse?
based on a statement by the person protected by the condition AFTER the conditioning event was to occur and does not require a change of position. A waiver that is not ancillary or collateral to the main purpose of the K shall be treated as a gift and unenforceable.
what's Failure to cooperate under the excuse of express condition?
a party who wrongfully prevents a condition from occurring will no longer be given the benefit of it.
what are the 4 excuse under the contract?
Excuse based on the other party’s breach
Excuse based on the other party’s repudiation by words or conduct (ANTICIPATORY REPUDIATION or INABILITY TO PERFORM)
Excuse because of failure of a performance condition
4). Excuse based on a later agreement (5 types)
what 's the 5 types of excuse based on a later agreement?
• Modification
• Accord and Satisfaction
• Rescission
• Novation
• Excuse based on a Later Unforeseen Occurrence that makes performance IMPOSSIBLE (common law) or impracticable (Art.2) or frustrates the purpose of the performance
what's modification?
substituted agreement.
J borrowed $1000 from R. Later, J and R agreed that R will discharge the debt. NOW if J promises to paint her apartment within 30 days. If J breaches, what's R’s right?can he sue the $1000 debt?
. If J breaches, R’s only right is to sue J on the painting deal (not the $1000 borrowed) b/c J’s obligation has been DISCHARGED by the modification A (takes effect immediately).
what's substituted performance?
accord and satisfaction.
what's accord?
an agreement in which one party to a contract agrees to accept performance different from that originally promised. An accord does not discharge a contractual duty. It merely suspends the other party’s right to enforce it.
what's satisfaction?
performance of the accord
what's the effect of accord and satisfaction?
 the original obligation is excused by accord and satisfaction when the new obligation is performed;
 if the accord is not performed, then the other party can sue on either the original obligation or the accord.
J borrowed $1000 from R. Later, if J paints her apartment w/in 30, then R will discharge the debt. if j doesn't pait apartment, what can r do?
then R can sue J either on the Accord or the original debt b/c the accord has no long-term effect → will wipe out Joey’s debt only when it is satisfied.
what's rescission?
cancellation
if both parties agree to cancel the K after K is formed, what's the result?
then both parties are excused from performing
in order for a rescission to be effective, what's the requirement?
each party must have some performance remaining → thus if one party has fully performed, the other party can’t rescind
what's novation?
substituted person
what does novation requires?
i. Novation requires the consent of all parties; if the non-substituting party is unaware of the substitution, then no novation, it’s a mere delegation of duties and she can sue the old party for breach.
if there is a novation, does the old party excused?
if there is a novation, there is substitution, then the old party is excused (can’t sue him any longer!)
what's the Excuse based on a Later Unforeseen Occurrence ?
this makes the performance impossible (common law), impracticable(article 2) or frustrates the purpose of the performance.
what's the rule based on a later unforeseen occurrence?
 Something that happens after contract formation but before the completion of contract performance;
 that was unforeseen; and
 that makes performance objectively impossible or commercially impracticable
in excuse based on a later unforeseen occurrence, if risk of loss must have been allocated to the party seeking excuse either by terms of the bargain or custom of the marketplace,can he be excused?
no
how do you assume in mbe on later unforeseen event?
ii. Always START with the assumption that later unforeseen events don’t matter on the MBE (it’s pretty tough to get out based on impossibility)
C K with T to perform in concert hall; hall burns down the day before concert. is c excused ?
yes.destruction of hall makes performance impossible
if builder Ks to build house for O. Before builder is finished, house burns down. O sues B for breach, does b excused?
B is NOT excused, B’s task of building a house is not impossible. (just b/c it costs more doesn’t mean it’s impossible)
under article 2, when seller bears the risk of lost, if goods that have been identified and the goods are special in the k and unexpectedly destoryed. is seller excused?what if they are fungible items?
yes.the destruction of seller’s quantity of that item doesn’t excuse seller’s delivery of that item.
If the buyer has the risk of loss, a later unforeseen event happens, does b need to pay?
yes,it’s never impossible for B to pay
does Death or incapacity of a person essential for performance bar buyer to sue his estate?
yes
what does it mean by Supervening government regulation or order?
if gov’t ordinance frustrates the K, then party is excused from performance
what's Frustration of purpose ?
 need at the time of K both parties understood the purpose of the K AND later on an unforeseen event frustrates that purpose
If both parties know that K is for viewing of Thanksgiving Day Parade on Thanksgiving morning, what's the effect for cancellation of parade ?
frustrate the purpose of K
if unforeseen event merely makes K less profitable, does the contract excused?
no
what's In rem remedies?
(“the thing itself”) (rather than monetary damages
what's Specific performance/injunction?
compelling a party to do what he agreed to do.
what shall be satisfied for the purpose of obtaining specific performance?
(i) legal remedy inadequate (e.g., the performance is unique);
); (ii) mutuality of performance
; (iii) practically enforceable (iv) no defense to the performance, the contract exists, and conditions precedent satisfied.
can real property get sp?
yes, always
can sale of goods get specific performance?
: available only if the goods are unique
(e.g., antique, work of art, custom goods)
can service get specific performance?
never. but courts can grant injunction to prevent work for someone else, impose negative restrictions on the person
what's Reclamation?
unpaid seller's right to reclaim goods under Article 2
does unpaid seller has right to get the goods back from a buyer that has not paid for them?
no
when can seller reclaim goods from original buyer?
if:
• buyer was insolvent on date it received goods; AND
• falls under 10 day rule