Contract Law

Front 1

Unilateral Contract

Back 1

results from offer that expressly requires performance as the only possible method of acceptance.

Front 2

Bilateral contract

Back 2

all offers that are not unilateral contracts. Bilateral contract unless (i) reward, prize, contest (ii) offer expressly requires performance for acceptance.

Front 3

quasi contract

Back 3

equitable remedy

Front 4

common law

Back 4

general rules only

Front 5

what to do if a sale of goods

Back 5

articles 1 and 2 of the UCC

Front 6

what if real estate

Back 6

common law only

Front 7

What if you have a common law and article 2 hypo?

Back 7

it is all or nothing, so go with the more important provision; unless, the contract divides payment between each item. In that case, common law will apply to one point and ucc to the other.

Front 8

Definition of contract

Back 8

a contract is an agreement that is legally enforceable. First look for an agreement, then second determine whether the agreement is legally enforceable.

Front 9

what are the three time stages of a contract?

Back 9

(i) the initial communication (offer), (ii) what happens after the initial communication (termination of the offer) and (iii) who responds and how she responds (acceptance). Focus on what is understood and not what was intended.

Front 10

Under common law, can you have an offer with no price?

Back 10

No. must have price. If the terms are vague or ambiguous, not yet a commitment. "appropriate, fair, reasonable"

Front 11

Under article 2, can have an offer with no price?

Back 11

yes.

Front 12

Can you increase quantity in contracts where quantity not specified?

Back 12

Yes, so long as not unreasonably disproportionate.

Front 13

Is an advertisement an offer?

Back 13

no, except (i) an advertisement can be a unilateral offer if it is in the nature of a reward, or (ii) it specifies quantity and expressly indicates who can accept.

Front 14

Is a price quotation an offer?

Back 14

no, except if sen tin response to an inquiry.

Front 15

how can offers be terminated?

Back 15

(i) lapse of time, (ii) death of a party prior to acceptance (except irrevocable offers), (iii) revocation, and (iv) rejection.

Front 16

How to terminate offer by death of a party?

Back 16

General rule is death or incapacity of either party after the offer, but before acceptance, terminates otter. Exception are irrevocable offers.

Front 17

How is an offer relocated?

Back 17

Later, unambiguous statement by offeror to offer of unwillingness or inability to contract; or later unambiguous conduct by offeror indicating an unwillingness or inability to contract that offered is aware of. Multiple offers not revocation.

Front 18

Which offers are irrevocable?

Back 18

Option UCC Firm Offer Rule Reliance Unilateral contract: performance, not mere preparation.

Front 19

What is an option?

Back 19

If the offeror has not only made an offer but also (i) promised to not revoke (or promised to keep the offer "open") and (ii) this promise is supported by payment or other consideration.

Front 20

What is the UCC Firm Offer Rule?

Back 20

An offer cannot be revoked for up to three months if (i) offer to buy or sell goods, (ii) signed written promise to keep the offer open, and (iii) party is a merchant. (Merchant is generally a person in business.) There is a 3 month limit, regardless of what the parties agree to. There is no requirement that a time period be stated, so a court will use reasonable judgment but no more than 3 months. But watch that the promise must promise not to revoke.

Front 21

What is the first thing you do when looking at contract questions?

Back 21

Determine whether using common law or article 2.

Front 22

What is reliance when an offer cannot be revoked?

Back 22

An offer cannot be revoked if there has been (i) reliance that is (ii) reasonably forceable and (iii) detrimental.

Front 23

What is a unilateral contract offer law?

Back 23

The start of performance pursuant to an offer to enter into a unilateral contract makes that offer irrevocable for a reasonable time to complete performance. Mere preparation does not start. If doubt go with preparation.

Front 24

What are the ways of indirect rejection?

Back 24

(i) counteroffer, (ii) conditional acceptance, and (iii) additional terms (mirror image rule or seasonable expression of acceptance).

Front 25

What is a counteroffer?

Back 25

Counteroffer generally terminates the offer and creates a new offer. Need to distinguish between bargaining. Bargaining does not terminate offer. Counteroffers do not terminate options.

Front 26

How is bargaining tested?

Back 26

If the response is a question and not a statement, then treat it as bargaining.

Front 27

What is conditional acceptance?

Back 27

A conditional acceptance terminates the offer. Look for a response to a offer with the word accept followed by "if", "only if", "provided", "so long as", "but", or "on condition that." Under common law, it is a rejection and becomes a counter offer. UCC it is a rejection. So under common law all of terms a contract, and under UCC only the conduct of the parties.

Front 28

What is mirror image rule?

Back 28

Under common law, a response to an offer that adds new terms is treated like a counteroffer rather than an acceptance.

Front 29

What is seasonable expression of acceptance?

Back 29

A fact pattern in which there is (i) offer to buy or sell goods and (iii) a response with additional or different terms raises two separate questions (a) is there a contract (doesn't matter if either party is a merchant), and (b) is the additional term a part of the contract (additional term is not added unless both parties are merchants and is not material or is not objected to by original offeror).

Front 30

What are are ways to accept offer where the offer is silent as to the method of acceptance?

Back 30

1Start of performance is acceptance, except it is not acceptance of unilateral contract offers (completion is required). Also treated as an implied promise to finish. 2Acceptance from a distance (Mailbox rule). 3wrong goods

Front 31

What is mailbox rule?

Back 31

The offeror and offer are at different places and there are delays in receipt of communications. Four rules: all communications other than acceptance are effective only when received, acceptance is generally effective when mailed, if a rejection is mailed before an acceptance is males, the neither is effective until received, you cannot use mailbox rule to meet an option deadline.

Front 32

Is there acceptance if sent wrong goods?

Back 32

General rule is there is acceptance but a breach of contract. Exception is whether the good is an accommodation and explanation of such.

Front 33

Who can accept an offer?

Back 33

(i) ta person who knows about the offer at the time she accepts (ii) who is the person to whom it was made. Offers cannot be assigned; options can be assigned unless the option otherwise provides.

Front 34

What are some reasons for not enforcing an agreement?

Back 34

(i) lack of consideration (ii) lack of capacity, (iii) statute o frauds, (iv) existing laws that prohibit the performance of the agreement, (v) public policy, (vi) misrepresentations, (vii) nondisclosure, (viii) duress, (ix) unconscionability, (x) ambiguity, and (xi) mistakes at the time of the agreement as the material facts affecting the agreement.

Front 35

In dealing with consideration, what three steps to ask?

Back 35

identify the promise breaker, ask whether that person asked for something in return for their promise, look at the person who is trying to enforce the promise and ask what requested legal detriment that person sustained.

Front 36

Can one promise be consideration for another?

Back 36

yes, except where there is no commitment made. Almost never see the exception. A mere peppercorn is enough.

Front 37

Is not doing something a detriment?

Back 37

yes, forbearance is a legal detriment.

Front 38

What is the general law for past consideration?

Back 38

Not consideration, except requested by promiser and expectation of payment by promisee.

Front 39

What are three most likely consideration issues?

Back 39

past consideration, pre-existing contractual or statutory duty rule, and part payment as consideration for release.

Front 40

What is pre-existing contractual or statutory duty rule?

Back 40

Common Law: doing what you are already legally obligated to do is not new consideration for a new promise to pay you more to do merely that. New consideration is required for medication. Exceptions are addition to or change in performance, unforeseen difficulty so severe as to excuse performance or third party promise to pay. Article 2: New consideration is not required to modify a sale of goods contract. Good faith test for changes to an existing sale of goods contract.

Front 41

Is part payment payment consideration for release?

Back 41

Key is whether debt is due and undisputed. If debt is due and undisputed, then part payment is not consideration for release.

Front 42

What are consideration substitutes?

Back 42

Almost statute of frauds. A written promise to satisfy an obligation for which there is a legal defense is enforceable without consideration. Promissory estoppel:

Front 43

What are the elements of promissory estoppel?

Back 43

(i) promise, (ii) reliance that is reasonable, detrimental, and foreseeable, and (iii) enforcement necessary to avoid injustice.

Front 44

Who lacks capacity for a contract?

Back 44

(i) infant - under 18, (ii) mental incompetents - lacks ability to understand agreement, or (iii) intoxicated persons if other party has reason to know.

Front 45

What if person that lacks capacity, subsequently gains it?

Back 45

Implied affirmation by retaining benefits after gaining capacity.

Front 46

What is quasi-contract for necessaries?

Back 46

A person who does not have capacity is legally obligated to pay for things that are necessary such as food, closing, medical care or shelter, but that liability is based on quasi-contract law, not contract law. Payment of value conferred.

Front 47

What sorts of proof needed for statute of frauds?

Back 47

performance or a writing signed by the defendant.

Front 48

What are the four types of contracts within the statute of frauds?

Back 48

(i) promises to answer for the debts of another, (ii) service contract not capable of being performed within a year from the time of the contract, (iii) transfers of interest in real estate (with exception for leases of year or less), and (iv) sale of goods for $500 or more.

Front 49

How do judges try to limit suretyship contracts for statute of frauds?

Back 49

Courts have construed answer for in a way that substantially limits its applicability. Answer for is not merely a promise to pay someone else's debts, but rather a promise to pay another person's debts only if that person does not themselves pay. It is limited to guarantees. Look also for main purpose exception. If the main purpose was to benefit guarantor, ten not covered.

Front 50

For SOF contract, if there is an early termination period, is it still in SOF if for more than a year?

Back 50

Yes, early termination provision is irrelevant. Test is performed within a year, not termination.

Front 51

Are tasks and lifetime contracts subject to SOF?

Back 51

No, if no specified time period or time, then no SOF.

Front 52

Is an option to sell real estate within SOF?

Back 52

yes.

Front 53

Are easements covered by SOF?

Back 53

Yes.

Front 54

If a lease for one year on a house, is it covered by SOF?

Back 54

No.

Front 55

For sale of goods, if SOF does not apply the other UCC applies.

Back 55

.

Front 56

How is statute of frauds satisfied if an agreement falls within?

Back 56

Need objective proof there was a contract. (i) Performance: depends on whether a real estate transfer, services contract or sale of goods contract. (ii) Writing, (iii) Judicial admission and (iv) estoppel.

Front 57

How to prove performance for transfer of real estate for SOF?

Back 57

Part performance satisfies. Requires any two of the following: (i) improvements to the land, (ii) payment and (iii) possession.

Front 58

How to prove performance for services contracts for SOF?

Back 58

Full performance by either party satisfies SOF.

Front 59

Does part performance of a service contract satisfy SOF?

Back 59

No. Fact pattern is P agrees to work for D for 3 years. P works for 13 months and then D fires without consent. P sues D for breach of contract. D assets SOF defense. Is SOF satisfied by P's working for 13 months? No - partial performance. P cannot recover for the 13 months under contract law. Can recover under quasi-contract law.

Front 60

How to prove performance for performance and sale of goods contracts for SOF?

Back 60

Ordinary goods general rule is that part performance of a contract for the sale of goods satisfies SOF, but only to the extent of the part performance. Check for delivered (no SOF) or undelivered goods (SOF). Specially manufactured goods: if the contract is for specially manufactured goods, then SOF satisfied as soon as the seller makes a substantial beginning.

Front 61

How to satisfy SOF in writing for non-Article 2?

Back 61

All material terms test (who and what). Look also at who signed the writing. The writing satisfies SOF if the writing is signed only by the defendant.

Front 62

How to satisfy SOF in writing for Article 2?

Back 62

Look at contents and who signed. The writing must simply indicate that there is a contract for the sale of goods and contain the quantity term. Generally must be signed by the defendant, with the exception for transactions between two merchants where there is a delay in responding. The agreement does not have to state for $500 or more, just the P in its claim has to ask for that amount.

Front 63

What is judicial admission for SOF?

Back 63

If the D asserting SOF admits in a pleading or testimony that he had entered into an agreement with the plaintiff, no SOF defense.

Front 64

What is estoppel in SOF?

Back 64

Some cases hold that plaintiff's reliance on the defendant's oral promise can estop the defendant from asserting a SOF defense.

Front 65

When is SOF used, other than when there is a SOF defense to enforcement of an agreement?

Back 65

(i) written proof of authorization to enter into contract for someone else, (ii) written proof of contract modification, and (iii) contract provisions requiring written modification.

Front 66

What is equal dignity doctrine?

Back 66

Whether law requires written proof of authorization. Rules of law require that the authorization must be in writing only if the contract to be signed is within SOF.

Front 67

When does a contract modification need to be in writing?

Back 67

Looking at the deal with the alleged change and determine whether the deal would fall within SOF. If so, then needs to be in writing. You look at the agreement as modified. So 1 year lease to 3 yrs (writing). 3 years to 1 year lease (no writing required).

Front 68

Are contract provisions that require written modification enforceable?

Back 68

Under common law, you ignore contract language (unless the contract modification would put it within SOF). Under UCC, contract provisions requiring written modification are effective unless waived (doesn't matter if less than $500, as long as a sale of goods).

Front 69

What to look out for in illegal contracts?

Back 69

Illegal subject matter: if the subject matter is illegal, the agreement is not enforceable. Illegal purpose: if the subject matter is legal, the agreement is enforceable if the plaintiff did not have reason to know of the defendant's illegal purpose.

Front 70

What to look for not enforcing a misrepresentation contract?

Back 70

Look for (i) statement of fact before the contract, (ii) by one of the contracting parties or their agent, (iii) that is false, and (iv) induces the contract. Even honest and innocent representations matter.

Front 71

What to look for not enforcing a nondisclosure contract?

Back 71

Generally a person making a contract has no duty to disclose what they know. Looking for a fiduciary-like relationship or concealment.

Front 72

What to look for for not enforcing a duress or undue influence contract?

Back 72

Physical duress and economic duress and undue influence.

Front 73

What are elements of economic duress?

Back 73

bad guy - improper threat and vulnerable guy - no reasonable alternative.

Front 74

What to look for undue influence to not enforce a contract?

Back 74

Look for (i) special relationship between the parties and (ii) improper persuasion of the weaker by the stronger.

Front 75

What to look for ambiguous contracts?

Back 75

There will be no contract if (i) parties use a material term that is open to at least two reasonable interpretations, and (ii) each party attaches different meaning to the term and (iii) neither party knows or has reason to know the term is open to at least two reasonable interpretations.

Front 76

What to look for for not enforcing a mistake of fact existing at time of contract?

Back 76

Mutual, material mistake of existing fact: Relief for mutual mistake only if both parties are mistaken (not just uncertain). Even then, no relieve for mistake if the person seeking relief bears the risk of mistake. answer will tell you who bears what. Unilateral mistake of fact: generally, relief only if the other party had reason to know of the mistake.

Front 77

What to look for in parol evidence rule?

Back 77

It will say written contract and will talk about earlier words of one or both of the parties.

Front 78

What does integration mean?

Back 78

written agreement that court finds is the final agreement, triggers the parol evidence rule.

Front 79

What is partial integration?

Back 79

written and final but not complete If shown, probably wrong answer.

Front 80

What is complete integration?

Back 80

written and final and complete. If shown, probably wrong.

Front 81

What is merger clause?

Back 81

contract clause such as this i the complete and final agreement. persuasive but not conclusive.

Front 82

What is parol evidence?

Back 82

words of party, before integration, oral or written.

Front 83

What are five Parol Evidence rules?

Back 83

(i) changing/contradicting terms in the written deal; (ii) mistake in integration, (iii) defenses, (iv) ambiguity, and (v) adding to the written deal.

Front 84

PER: What is rule for changing/contradicting term in the written deal?

Back 84

Evidence of earlier agreements cannot be considered for the purpose of contradicting the terms in the written contract.

Front 85

PER: What is rule for mistake in integration (clerical mistake)?

Back 85

A court may consider evidence of such terms for the limited purpose of deterring whether there was a mistake in integration (mistake in reducing the agreement to writing).

Front 86

PER: What is rule for defenses (getting out of a contract)?

Back 86

A court is not prevented from considering evidence of earlier words of the parties for the limited purpose of deterring whether there is a defense to the enforcement of the agreement, such as misrepresentation, fraud or duress.

Front 87

PER: What is real for ambiguity (explaining term in the written deal)?

Back 87

A court is not prevented from considering evidence of earlier agreements to resolve ambiguities in the written contract.

Front 88

PER: What is rule for adding to written agreement?

Back 88

A court is prevented from considering evidence of earlier agreements as a source of consistent, additional terms unless the court finds (i) that the written agreement was only a partial integration or (ii) that the additional terms would ordinarily be in a separate agreement.

Front 89

What is course of performance?

Back 89

same people, same contract

Front 90

What is course of dealing?

Back 90

same people, different but similar contract

Front 91

What is custom and usage?

Back 91

different but similar people, different but similar contract.

Front 92

UCC: What are the delivery obligations of seller of goods if delivery by common carrier: Shipment contracts?

Back 92

The question is what does the seller have to do to complete its delivery obligation. For shipment the seller completes its delivery obligation when (i) gets the goods to a common carrier, and (ii) makes reasonable arrangements for delivery, and (iii) notifies the buyer.

Front 93

UCC: What are the delivery obligations of seller of goods if delivery by common carrier: destination contracts?

Back 93

The question is what does the seller have to do to complete its delivery obligation. For destination contracts the seller completes its delivery obligation until the goods arrive at destination. Look for FOB followed by city where seller is are for shipment if other, then destination.

Front 94

What are the risk of loss rules?

Back 94

Title does not matter. (i) agreement controls, (ii) breaching party is liable for any uninsured loss even though breach is unrelated to problem, (iii) risk of loss shifts from seller to buyer at the time the seller completes its delivery obligations, and (iv) catch-all (no agreement, no breach no delivery by a carrier), the deterring factor is whether the seller is a merchant. Risk of loss shifts from a merchant seller to buyer on buyer's receipt (possession) of goods, risk of loss shifts from a non merchant seller when they tender (makes available) the goods.

Front 95

What to look for for express warranty of quality?

Back 95

Look for words that promise, describe or state facts.

Front 96

What are two types of implied warranties?

Back 96

Implied warrant of merchantability and implied warrant of fitness for particular purpose.

Front 97

What is implied warranty of merchantability?

Back 97

trigger is seller is a merchant which means it deals in goods of that kind. warranty is good is fit for ordinary purpose.

Front 98

What is implied warranty of fitness for a particular purpose?

Back 98

Trigger is buyer has a particular purpose; buyer is relying on seller to select suitable goods; seller has reason to know of purpose and reliance. warranty is goods fit for particular purpose.

Front 99

What are the limitations on warranty liability?

Back 99

(i) statute of limitations, (ii) privity, (iii) buyer's examination of goods, (iv) disclaimer, and (v) limitation of remedies.

Front 100

What is warranty statute of limitations?

Back 100

4 years and generally starts running on possible warranty actions when the tender of delivery is made, not when buyer learns that the product is defective.

Front 101

What is privity for warranty?

Back 101

plaintiff contracted with defendant. If P did not buy goods, there might be lack of privity issue. not on bar exam.

Front 102

What is buyer examination of goods for warranty?

Back 102

Look for fact pattern that tells you that the buyer has examined the goods. There are no implied warranties as to defects which would be obvious on examination.

Front 103

What is disclaimer on warranties?

Back 103

express: express warranties cannot generally be declaimed. Implied can be disclaimed either by (i) conspicuous language of disclaimer, mentioning merchantability, or "as is" or "with all faults".

Front 104

What are limitation of remedies for warranties?

Back 104

Limits recovery general test is unconscionability, prima facie unconscionable if breach of warranty on consumer goods causes personal injury.

Front 105

What is perfect tender for Article 2 Contracts?

Back 105

(i) perfect tender only applies to sale of goods, (ii) perfect tender does not mean that the seller's performance must be perfect; rather, the goods and the delivery must conform to the contract terms, and (iii) a less than perfect tender by the seller generally gives the buyer the option of rejection of the delivered goods, so long as the buyer acts in good faith.

Front 106

What is required for rejection of goods for article 2 contracts?

Back 106

(i) need to be able to distinguish rejection of an offer from rejection of the goods, (ii) if the seller does not meet the perfect tender standard, the buyer has the option to retain and sue for damages or reject all or any commercial unit and sue for damages, (iii) the buyer must take reasonable care of the rejected goods and should not continue to use rejected goods., and (iv) this rejection alternative is limited by cure, installment contracts and acceptance.

Front 107

When does a seller have a chance to cure under article 2?

Back 107

(i) Seller's reasonable ground to believe would be acceptable, perhaps with a money allowance. Look for information on prior deals between buyer and seller. (ii) Time for performance has not yet expired.

Front 108

What does installment contracts require for buyer to reject under article 2?

Back 108

(i) delivery of the goods in separate lots (ii) to be separately accepted. The buyer has the right to reject only where there is a substantial impairment in that installment that can't be cured.

Front 109

What are 4 principles of acceptance of goods for article 2?

Back 109

(i) if buyer accepts the goods, it cannot later reject them, (ii) payment without opportunity to inspect is not acceptance, (iii) reject must be timely. failure to reject after the buyer had reasonable time to reject is acceptance, and (iv) effect of buyer's keeping goods is implied acceptance. Look for the buyer's keeping the goods without objection.

Front 110

What is revocation of acceptance of goods under article 2?

Back 110

same as rejection of goods. Requirements are: (i) nonconformity substantially impairs the value of the goods, and (ii) excusable ignorance of grounds for revocation or reasonable reliance on seller's assurance of satisfaction, and (iii) revocation within a reasonable time after discovery of nonconformity. goods return to seller.

Front 111

What are the cases when specific performance is available?

Back 111

Real estate - yes (except bona fide purchasers); sale of goods - yes for unique goods, antiques, art, custom made or other appropriate circumstances; contract for service - no, possible injunctive relief.

Front 112

How to reclaim property from an insolvent buyer of goods for article 2 contracts?

Back 112

No general right to reclaim unless, Key facts are (i) buyer must have been insolvent at the time that it received the goods, and (ii) the seller demands return of goods within 10 days of receipt (this 10-day rule becomes a reasonable time if, before delivery, there had been an express representation of solvency by the buyer) and (iii) the buyer still has good at time of demand.

Front 113

What is entrustment remedy for article 2 contracts?

Back 113

If entrust property with a person, then you have to sue that person and not the bona fide purchaser.

Front 114

Punitive damages is always the wrong answer for breaches of contract.

Back 114

.

Front 115

What to remember for monetary damages for breaches of contracts under common law?

Back 115

(i) compensation, (ii) expectation, (iii) incidental, (iv) consequential, (v) avoidable, (vi) certainty, (vii) reliance, (viii) liquidated. when writing essay use words compensation, expectation (includes profit) and same dollar position as if no breach.

Front 116

What is money damages rule for article 2 contracts?

Back 116

4 rules (i) seller breaches, buyer keeps the goods - fair market value if perfect minus fair market value as delivered or cost of repair, (ii) seller breaches and seller has goods minus market price at time of discovery of breach minus contract price or reasonable replacement price contract price, whichever is greater, (iii) buyer breaches, buyer keeps the goods minus contract price, and (iv) buyer breaches, seller has goods - contract price minus resale unless seller cannot resell in which case the seller can recover the contract price and in some situations provable lost profits. But watch lost profits for lost volume seller. they get provable lost profits.

Front 117

What to know for incidental damages?

Back 117

Always recoverable. Costs incurred in dealing with the breach such as costs of storing rejected goods in a sale of goods or finding a replacement in a services contract.

Front 118

What to know for consequential damages?

Back 118

are limited to damages arising from plaintiffs specific circumstances. Need to know something special about the plaintiff. Limited to situations in which defendant had reason to know of these special circumstances at the time of the contract to make consequential damages recoverable.

Front 119

What is rule for avoidable damages?

Back 119

Avoidable damages cannot be recovered.

Front 120

What happens if you continue to perform after the other party's breach?

Back 120

Cannot continue to incure cost after other party has obviously breached.

Front 121

What happens if non-breaching turns down other comparable opportunities?

Back 121

Cannot turn down comparable opportunities. 

Front 122

What if damages cannot be determined?

Back 122

Less damages that cannot be established with reasonable certainty.  Look for fact patterns with new business or new business activity.

Front 123

What to know for liquidated damages?

Back 123

The issue will be validity of liquidated damages.  Tests are (i) damages were difficult to forecast at time contract was made and (ii) provision is a reasonable forecast.

Front 124

What are the three concepts to know for excuse to terminate because of insecurity about whether the other party is going to perform?

Back 124

It is ambiguity due to uncertainty (i) reasonable grounds for insecurity, (ii) written demand for adequate assurance, and (iii) commercially reasonable to stop performance until assurance is given.  This is UCC only.

Front 125

What is the rule for excuse of performance because of the other party's saying it is not going to perform (anticipatory repudiation)?

Back 125

(i) unambiguous (unambiguous statement or conduct (a) that the repudiating party will not perform and (b) made prior to the time that performance was due (ii) excuse (excuses the other party's duty to perform), (iii) time of recovery (generally gives rise to an immediate claim for damages for breach unless the claimant has already finished her performance), and (iv) retraction of anticipatyr repudiation (can be withdrawn so long as there has not been a material change in position by the other party and the duty to perform is reimposed but performance can be delayed until adequate assurance is provided).

Front 126

What is rule for improper performance?

Back 126

Article 2 and perfect tender rule.  

 

Common law and material breach rule: only a material breach by one party excuses the other from performing (if there is a substantial performance then the breach is not material).  Watch for quality vs quantity type questions.  

 

For quanity (if common law contract, only part performed and part performed is less than half of contract, the material breach)  No requirement to pay under contract law but requirement under quasi-contract.

Front 127

What is excuse rule for divisible contracts for improper performance?

Back 127

In a divisible contract, there can be a contract law recovery for substantial performance of a divisible part even though there has been a material breach of the entire contract.  Look for when price is stated as a lump sum or on a per performance basis.  apply material breach test separately for each portion.

Front 128

What is rule for excuse because of nonoccurrence of an express condition?

Back 128

Express condition is language in a contract that limites obligations created by other contract language (if, only if, provided, a financing out condition).   Strict compliance is required for satisfaction of a condition; exception is for personal satisfaction condition - honest and good faith dissatisfaction.

Front 129

What is required to excuse a contract by recission?

Back 129

Performance is still outstanding from each of the parties.

Front 130

What is required to excuse a contract by accord and satisfaction (substituted performance)?

Back 130

You need to know: (i) what an accord is and what a satisfacion is and (ii) the effect of making the accord, and (iii) the effect of getting no satisfaction.  Accord is parties to an already existing obligation accept different performance in satisfaction.  if the new agreement (accord) is performed (satisfaction), then performance of the original obligation is excused.  If the accord is not performed, then the other party can recover on either the original obligation or the accord.  Look for if, then for accord.

Front 131

What is required to excuse a contract by modification?

Back 131

Modification is an agreement by parties to an existing obligation to accept a different agreement in satisfication of the existing obligation.

Front 132

What is required to excuse a contract for novation?

Back 132

You need to know (i) what novation is, (ii) who is liable after a novation, and (iii) what the factual and legal differences between a novation and a delegation are.

 

A novation is an agreement between both parties to an existing contract to the substitution of a new party (i.e. same performance, different party).

Front 133

Who liable after a novation?

Back 133

novation excuses the contracted for performance of the party who is substituted for or replaced.

Front 134

How is delegation different from novation?

Back 134

Novation requires the agreement of both parties to the original contract, and excuses the person replaced from any liability for nonperformance.  Delegation does not require the agreement of both parties and does not excuse.

Front 135

What is rule for excuse of performance for damage or destruction of subject matter of contract under common law?

Back 135

Common Law: Does post contract occurrance affect the ability to perform vs the cost to perform.

Front 136

What is rule for excuse of performance for damage or destruction of subject matter of contract under article 2?

Back 136

Need to do risk of loss first.

Buyers risk of loss and destruction:  Buyer pays.

 

If risk of loss is on the seller, then the buyer does not have to pay.  Whether the buyer can recover damages from the seller depends on facts.

Seller's risk of loss and destruction of identified goods:  No pay and no damages.  no performance excused.

 

Seller's risk of loss and destruction - different answer:  where not contract to sell an identified good, if seller has risk of loss, seller is excused only if it is goods specificly identified instead of a generic item (300 sacks of grits).    

Front 137

What is rule for excuse of contract for death after contract?

Back 137

General effect of death on a contract obligations death des not make a person's contract obligations disappear.

Front 138

What is rule for excuse contract for subsequent law or regulation?

Back 138

Later law makes performance of contract illegal - excuse by impossibility.

 

Later law makes mutually understood purpose of contract illegal excuse by frustration of purpose.

Front 139

What to look for for third party beneficiary problems?

Back 139

Look for two parties contracting with the common intent of benefit to a third party.  The intended beneficiary is always named in the contract.  

 

Creditor/donee: intended beneficiaries are either donees or creditors.  Usually donees.  Look at whether tpb was a creditor of the promisee before the contract.

Front 140

What is the rule for cancelling or modifying a third party beneficiary contract?

Back 140

The test is whether the third party knows of and has relied onr or assented as requested.  If so, her rights have vested and the contract cannot be canceled or modified without her consent unless the contract otherwise provides.

Front 141

Who can sue whom for third party beneficiary contract?

Back 141

(i) beneficiary can recover from promisor, (ii) promisee can recover from promisor, (iii) general rule beneficiary cannot recover from promisee except creditor beneficiary can recover from promisee but on on pre-existing debt.

Front 142

If the third party beneficiary sues the promisor, the promisor can asset an defense that he would have had if sued by the promisee.

Back 142

,

Front 143

Can you assign an offer?

Back 143

No.

Front 144

Can you assign a contract?

Back 144

Yes.

Front 145

What is the difference between a prohibition vs an invalidation assignment provision?

Back 145

Prohibition: "rights hereunder not assignable"  language of prohibition takes away the right to assign but not the power to assign, which means that the assignor is liable for breach of contract, but an assignee who does not know of the prohibition can still enforce the assignment.

 

Invalidation "all assignments are void" language of 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.

Front 146

What is no language about assignment in agreement?

Back 146

Even if a contract does not in any way limit the right to assign, common law bars an assignment that substantially changes the duties of the obligor.  Assignment of right to contract performance other than right of payment (usually substantial change on bar).

Front 147

What is required for assignment?

Back 147

General rule is that consideration is not required, but gratuitous assignments (and only gratuitous assignments) can be revoked.

Front 148

Who can sue whom for assignment?

Back 148

(i) Assignee can recover from obligor, (ii) Assignor for consideration cannot recover from obligor, (iii) obligor has same defenses against assignee as it would have against assignor, (iv) payment by obligoris effective until obligor knows of assignment.  modification agreements between obligor and assignor are effective if the obligor did not know of the assignment, (v) implied warranties of assignor in an assignment for consideration (1) the right assigned actually exists, and 2 the right assigned is not subject to any then existing defenses by the obligor, and 3 the assignor will do nothing after the assignment to impair the value of the assignment.  Assignor, however, does not warrant what the obligor will do after the assignment.

Front 149

What is rule for multiple assignments?

Back 149

all Gratuitous assignments: general rule last assignee generally wins.  

 

For consideration: general ru.e: first assignee for consideration wins; exception if subsequent assignee both (i) does not know of the earlier assignement and (ii) is the first to obtain (1) payment, (2) a judgment, (3) a novation, or (4) indicia of ownership.

Front 150

What is a contract delegation?

Back 150

Party to a contract transferring work under that contract to a third party.

Front 151

Which duties are delegable?

Back 151

Tranfer of rights is assignment, transfer of duties is delegation.

Generally, contractual duties are delegable.  The limitations on delegation are very limited.  Delegations are permitted unless either (1) contract prohibits delegations or prohibits assignments or (2) personal services contracts that call for very special skills.

Front 152

What if, after delegation, the third party delegatee does not perform?

Back 152

Delegating party always remains liable.  Delegatee liable only if they receive consideration from delegating party.  

 

If there is consideration delegator can recover from delegatee and the other party can recover from delegatee due to third party beneficiary obligation.