Contracts

Front 1

What are the elements for quasi contract (implied in law)?

Back 1

a. P has conferred a benefit on D
b. P reasonably expected to be paid
c. D would get unjust enrichment if P isn’t compensated

Front 2

What is a unilateral contract?

Back 2

Unilateral contract = offer that *expressly* required performance as the only method of acceptance

Front 3

How do you know it a contract is bilateral?

Back 3

It’s a bilateral UNLESS it’s (a) a reward, prize, advertisement with explicit terms, or contest OR (b) the offer expressly requires performance for acceptance

Front 4

What law governs a contract of mixed subject matter (goods and non-goods)?

Back 4

General Rule: “most important part” governs whole K (i.e. if service part is most important, CL governs)
--Exception: if the K divides payment, then UCC applies to goods and CL to everything else.

Front 5

What is an offer?

Back 5

General test: it’s an offer if a reasonable person would consider the words/conduct to be a manifestation of intent to contract.

Front 6

Are material terms required for something to be an offer? Exceptions?

Back 6

General rule: material terms are NOT required for it to be an offer
--Exception 1: in land Ks, CL requires price and description
--Exception 2: For UCC sales, an ambiguous material term makes it NOT an offer (e.g. offer to sell a car at “a fair price” is an offer to deal)

Front 7

What is a requirements/outputs contract?

Back 7

Test: Such Ks are okay if quantity is expressed in terms of buyer’s requirements, seller’s output, or exclusivity (watch for: all, only, exclusively, and solely). E.g., offer to sell Buyer all the grits Buyer might want is NOT a proper offer.

Front 8

On a requirements contract, is it okay to increase your requirements?

Back 8

An increase in requirements is okay if it is not unreasonable disproportionate to prior demands

Front 9

When is an advertisement an offer?

Back 9

General rule: Never.
--Exception: (a) reward or reward-like things and (b) advertisement specific as to quantity and expressly indicates who can accept (e.g., fur coat for $10 first come first serve)

Front 10

What are the 4 ways to terminate an offer?

Back 10

i. Method 1: Lapse of Time
ii. Method 2: Death Before Acceptance
iii. Method 3: Revocation by Offeror
iv. Method 4: Rejection by Offeree

Front 11

When does an offer terminate by lapse of time?

Back 11

An offer dies after a time stated or reasonable time

Front 12

How does death of a party affect an offer? Exceptions?

Back 12

Rule: Death/incapacity of EITHER party before acceptance kills offer
--Exceptions: (a) option Ks and (b) part performance of offer to enter into a unilateral K (such an offer is irrevocable after performance begins)

Front 13

How can an offeror revoke an offer?

Back 13

Rule: An offer is revoked upon EITHER
1) Unambiguous statement by offeror to offeree of unwillingness/inability to K
2) Unambiguous conduct by offeror that offeree knows of indicating unwillingness/inability to K

Front 14

When does revocation of an offer become effective: when sent or received?

Back 14

When received

Front 15

What are the four types of irrevocable offers?

Back 15

1) Options
2) Offers subject to UCC Firm Offer Rule
3) An offer subject to (a) reliance that is (b) reasonably foreseeable and (c) detrimental
4) A unilateral K where performance has begun

Front 16

What is an option?

Back 16

Option: requires (1) a promise not to revoke (2) in exchange for consideration

Front 17

What is the UCC Firm Offer Rule?

Back 17

Rule: An offer cannot be revoked for 3 months when (1) K for goods, (2) signed & written promise to keep the offer open, (3) offeror is a merchant

Front 18

What if the firm offer rule applies, but no time period is set in the K?

Back 18

If no period set, the ct will select a reasonable period up to 3 months.

Front 19

When does a unilateral K become irrevocable? Is mere preparation enough?

Back 19

The start of performance on a unilateral K makes the K irrevocable for a reasonable time to complete performance. But “mere preparation” to perform (i.e. buy paint for house painting) not enough.

Front 20

What does an offer become irrevocable for reasons of fairness?

Back 20

An offer cannot be revoked if there has been (1) reliance that is (2) reasonably foreseeable and (3) detrimental

Front 21

What are the ways an offer can be indirectly rejected?

Back 21

1) Counteroffer
2) Conditional Acceptance
3) Additional Terms

Front 22

What is the effect of a counteroffer on the underlying offer?

Back 22

i) Counteroffer becomes new offer and original offer dies
ii) Mere “bargaining” (e.g. “would you take $10 less?”) is NOT a counteroffer

Front 23

What is conditional acceptance and what is it's effect on an offer?

Back 23

i) Same effect as a counteroffer (offer is dead)
ii) Look for acceptance + if/only if/provided that/but/so long as
--The key is that the speaker will ONLY accept on the stated conditions

Front 24

What is the effect of additional terms on an offer?

Back 24

i) CL only: A response that adds new terms is treated as a counteroffer. (Mirror Image Rule)
ii) UCC Art 2-207: if conditions are not *required* for acceptance, then there IS an agreement.

Front 25

Under UCC Art 2, when do additional terms become a part of a K?

Back 25

a) Additional terms are part of the K if the parties are both merchants UNLESS either (1) the additional terms are a material change to the offer OR (2) the offeror objects
b) Whether the change is “material” is always fact-specific (so it’s unlikely to be a bar question)

Front 26

Who can accept an offer?

Back 26

Only a person who (1) knows of the offer and (2) to whom it was made

Front 27

What kinds of offers can be assigned?

Back 27

Offers can generally not be assigned. Exception: options can be assigned (unless it says otherwise)

Front 28

What happens if, in response to an offer: there is an improper response (e.g., additional terms) but parties act like a K exists?

Back 28

1) CL: additional-terms type counteroffer is deemed “accepted” can become part of a K if parties act like the K exists (i.e. they perform)
2) UCC: the conduct creates a K, but the additional terms are rejected (unless the parties are merchants, and the additional terms are not material changes)
3) E.g.: buyer/lessee accepts K “only if” an arbitration clause is added. Offeror says nothing and performs. There is a K, but the arbitration clause only applies if we’re under CL.

Front 29

What happens if, in response to an offer: offeree fully performs? Is notice required to the offeror?

Back 29

1) Where the response to an offer is full performance, performance is definitely acceptance. But the question is whether notice is required.
2) Notice is required if EITHER (a) offer calls for notice OR (b) offeree has reason to believe offeror will not learn of acceptance

Front 30

What happens if, in response to an offer: offeree starts to perform?

Back 30

1) Bilateral K: Start of performance is acceptance (Starting to perform = implied promise to finish performing)
2) Unilateral K: Only full performance is acceptance (But remember that starting to perform makes the offer irrevocable)

Front 31

What happens if, in response to an offer: offeree promises to perform?

Back 31

If the offer doesn’t expressly require performance to accept, then a promise to perform is acceptance.

Front 32

What are the 4 mailbox rules?

Back 32

1) All communications EXCEPT acceptance are effective when received.
2) Acceptance is effective when mailed.
3) If a rejection is mailed before acceptance, then neither is effective until received.
4) The above rules have NO applicability to option Ks.

Front 33

What happens if, in response to an offer: seller sends “wrong” goods?

Back 33

General rule: sending the wrong goods establishes a contract and its breach.
--Exception: accommodation (i.e. explanation): if you send the wrong goods and explain (e.g., “we’re out of red, hope you like blue”), then there is NO contract (and thus no breach)

Front 34

What is consideration?

Back 34

Consideration = “bargained-for legal detriment”

Front 35

If there is no consideration, how can a person still get recovery?

Back 35

Even where there is no consideration for a promise, so there is no contract, there might be promissory estoppel.
[Requires: (1) promise, (2) reliance that is reasonable, detrimental, and foreseeable, and (3) enforceable necessary to avoid injustice]

Front 36

When is past consideration deemed proper consideration?

Back 36

General rule: it is NOT consideration.
Exception: okay if expressly requested AND there was an expectation of payment
(E.g.: you save someone’s life expecting to be paid; victim later promises to pay you $5k. That promise is enforceable.)

Front 37

Can part payment be consideration for release from contract duties/debt?

Back 37

If debt is currently due and is undisputed, then no. However, if debt is NOT due, than early partial payment can be consideration.

Front 38

What is the only special CL rule for consideration?

Back 38

The 'preexisting contractual/statutory duty rule'
(Generally, doing what you are already obligated to do is not new consideration for a promise.)

Front 39

What is the preexisting contractual/statutory duty rule? Exceptions?

Back 39

CL ONLY: Doing what you are already obligated to do is not new consideration for a promise.
a) Exception 1: Unforeseen difficulty so severe as to excuse performance
b) Exception 2: Third party promises to pay

Front 40

If there is an existing K, and one party offers to pay more and this is accepted, is the change valid?

Back 40

CL: Generally not (preexisting contractual/statutory duty rule)
UCC: If there is good faith, a change to an existing [sales] contract is okay.

Front 41

Is a seal a proper substitute for consideration?

Back 41

No.

Front 42

If there is a full defense to performing on the K, and you still promise to perform, is that promise valid?

Back 42

Yes, if it's in writing.
Rule: Written promise to pay an obligation for which there is a legal defense is a enforceable
(I.e., if S/L has passed, but you still offer to pay half, that’s enforceable.)
**Note: must be in writing!**

Front 43

Hypo:
The statute of limitations passes on your debt owed to your butcher. You call and tell him that you will still pay. Is this enforceable?

Back 43

No, because it is not in writing.
(Rule: *Written* promise to pay an obligation for which there is a legal defense is a enforceable.)

Front 44

What is promissory estoppel?

Back 44

Requires: (1) promise, (2) reliance that is reasonable, detrimental, and foreseeable, and (3) enforceable necessary to avoid injustice.
If the elements are met, then even though there is NO consideration (and thus no contract), the promise is enforceable through estoppel.

Front 45

Framework: What are the three questions to ask when the statute of frauds may be at issue?

Back 45

1) Is the K 'within' the S/F?
2) If so, is the S/F 'satisfied'?
3) Is there a S/F defense?

Front 46

What are the 6 contracts that are generally within the statute of frauds?

Back 46

1) Promise to Answer for (Guarantee) the Debts of Another
2) Promise by Executor to Answer Personally for Debts of Decedent
3) Promise in Consideration of Marriage
4) Service Contract Not “Capable” of Performance ≤ 1 Year
5) Transfers of Interest in Real Estate (except leases ≤ 1yr)
6) Sale of Goods for ≥ $500

Front 47

Hypo:
Jack owes $100 to Lowe's. You promise to pay the debt. Is that within the Statute of Frauds?

Back 47

NO. It needs to be not only a promise to pay, but a promise to pay *for another*. (I.e., you need to say, 'If he doesn't pay it, I will.')
ii) Main purpose exception: if the main purpose of the promise to pay for another was to benefit the guarantor, then the S/F does NOT apply.

Front 48

Generally promises to guarantee the debts of another are within the Statute of Frauds. What is the exception to this?

Back 48

Main purpose exception: if the main purpose of the promise to pay for another was to benefit the guarantor, then the S/F does NOT apply.
--E.g.: I offer to pay the debts of my house painter if he fails to pay the hardware store for the paint.

Front 49

An executor promises to pay the decedant's debt out of the estate. Is this promise within the S/F?

Back 49

No. Only a within the S/F if it is a promise by executor to answer *personally* for debts of decedent.

Front 50

Must all contracts related to a marriage be within the Statute of Frauds?

Back 50

No. Only a promise in consideration of marriage (I.e., prenuptial and postnuptial agreements)
--Note: a mere promise to marry is NOT subject to the S/F

Front 51

What sorts of service contracts are within the Statute of Frauds?

Back 51

Service contract not “capable” of performance ≤ 1 year
-- 'Capable' is merely theoretical; assume unlimited resources to complete the job
-- Examples: Could be a time period that lasts longer than a year or an event to take place in more than a year

Front 52

A service contract is to end exactly one year from the day the contract is formed. Does the Statute of Frauds apply?

Back 52

No. Only service contracts not capable of performance ≤ 1 year are within the S/F.

Front 53

Is a service contract that is to last the rest of a person's life within the Statute of Frauds?

Back 53

If contract is for “life” then the S/F does NOT apply. (Theoretically, you could die tomorrow.)

Front 54

If you have a service K with no specified time period, but rather a very complex job, is it within the Statute of Frauds?

Back 54

Never. If no time period is given, but rather a “task,” then the S/F does NOT apply. (“Capable” assumes unlimited resources)

Front 55

What sorts of contracts related to real property are within the Statute of Frauds?

Back 55

Transfers of Interest in Real Estate (except leases ≤ 1yr) are within the S/F.
I.e., selling real property, easements, etc.

Front 56

When is a sale of goods within the statute of frauds?

Back 56

When it is ≥ $500 (UCC Rule)

Front 57

Is a sale for $500 within the statute of frauds?

Back 57

Yes. Rule is that any sale ≥ $500 is within the S/F.

Front 58

What are the ways to satisfy the statute of frauds?

Back 58

1) Performance
2) Writing
3) Judicial Admission

Front 59

On a service contract, how can performance satisfy the statute of frauds?

Back 59

Full performance (not partial) will satisfy any service K

Front 60

On a contract for goods, how can a SELLER's partial performance satisfy the statute of frauds?

Back 60

(1) Ordinary goods: part performance will satisfy the S/F for goods that have already been delivered (nothing more)
(2) Specially manufactured goods: S/F is satisfied when seller makes a “substantial beginning” (enough work that it’s clear the goods are being specially manufactured)

Front 61

On a contract for goods, how can a BUYER's partial performance (i.e., partial payment) satisfy the statute of frauds?

Back 61

(1) K for multiple items: S/F is satisfied as to what has been paid for (just the part)
(2) K for single item: S/F is satisfied for entire K

Front 62

If a contract is within the statute of frauds, does the rule regarding what kind of writing is required depend on whether CL or UCC applies?

Back 62

YES. Two different rules.
CL: “All material terms” test
Article 2: Must contain quantity term

Front 63

If CL applies to the K, when will a writing satisfy the statute of frauds?

Back 63

“All material terms” test: K must contain information about *who* is bound and *what* they are bound to do
--Signature: Must be signed by whoever is asserting the S/F defense

Front 64

Whose signature must appear on the writing for it to satisfy the statute of frauds? Exception?

Back 64

For both UCC and CL, it must be signed by whoever is asserting the S/F defense.
--Exception under UCC: no signature required if (1) both parties are merchants and (2) person who received the writing did not object within 10 days

Front 65

If the UCC applies to the K, when will a writing satisfy the statute of frauds?

Back 65

Must contain quantity term. (Price and parties are not necessary.)
-- Signature: like CL, must be signed by person asserting S/F defense
-- Exception: no signature required if (1) both parties are merchants and (2) person who received the writing did not object within 10 days

Front 66

If Article 2A applies (lease of personal property), when will a writing satisfy the statute of frauds?

Back 66

Writing must indicate (1) that it is a lease, (2) what is being leased, and (3) the duration of the lease

Front 67

What does UCC Article 2A apply to?

Back 67

Leases of personal property

Front 68

What does it mean to say that a judicial admission will satisfy the statute of frauds?

Back 68

You cannot use the S/F as a defense if you admit you entered the agmt in a pleading or in testimony

Front 69

You have been authorized by your friend to enter into contracts on his behalf. Must this authorization agreement be in writing?

Back 69

Maybe. Under the “equal dignity” doctrine, authorization to enter into K for someone else must be in writing only if the K to be signed is within the S/F

Front 70

What is the “equal dignity” doctrine?

Back 70

Under the “equal dignity” doctrine, authorization to enter into K for someone else must be in writing only if the K to be signed is within the S/F

Front 71

What is a contract modification within the statute of frauds?

Back 71

If the new K, with the modification, would be within the S/F, then the modification agmt is within the S/F.

Front 72

What is the effect of a contract clause requiring future modifications to be in writing?

Back 72

Depends on CL or UCC:
--CL: such a clause has no effect (use other rules to decide if writing is required)
--Article 2: such clauses are effective unless waived

Front 73

If the subject matter of a K is illegal, is the K unenforceable?

Back 73

Yes. But note that if a K has a merely improper purpose (e.g., plane ticket to go kill someone) can still be enforced by a party unaware of the illegal purpose (i.e. the airline)

Front 74

If a contract has an illegal purpose (e.g., you buy a plane ticket to go kill someone), is the contract enforceable?

Back 74

Yes, but only by the party unaware of the illegal purpose. (E.g., the airline can collect against you for failure to pay for your airline ticket.)

Front 75

When is a contract unenforceable because of public policy?

Back 75

Court has discretion, but there are 2 common bar exam examples:
i) Exculpatory agmt exempting intentional/reckless/gross negligent conduct
ii) Covenant not to compete without a reas need & reas time/place limits

Front 76

What must a covenant-not-to-complete have in order to be enforceable?

Back 76

Reasonable need & reasonable time/place limits. (Public policy.)

Front 77

When will a misrepresentation render a K unenforceable?

Back 77

Rule: if a (a) false assertion of fact (b) induces the K, then the K is voidable (i.e., it can be rescinded)

Front 78

Must a misrepresentation of fact be wrongful for it to render a K unenforceable?

Back 78

No, wrongdoing is NOT required.

Front 79

When will a nondisclosure render a K unenforceable?

Back 79

A nondisclosure must be wrongful and relied upon to allow the K to be rescinded.

Front 80

Must a nondisclosure of fact be wrongful for it to render a K unenforceable?

Back 80

Yes. Unlike a misrepresentation, a nondisclosure MUST be wrongful.

Front 81

What kinds of duress will render a contract unenforceable?

Back 81

1) Physical duress (obvious)
2) Economic duress
--Elements: (1) “bad guy” – improper threat, and (2) “vulnerable guy” – no reasonable alternative.

Front 82

What is economic duress?

Back 82

Elements: (1) “bad guy” – improper threat, and (2) “vulnerable guy” – no reasonable alternative.

Front 83

What are the two kinds of unconscionability?

Back 83

i) Unfair surprise or unequal bargaining power (procedural)
ii) Oppressive terms (substantive)

Front 84

If a K is unconscionable, can a court selectively enforce parts of the K and not others?

Back 84

Yes. Court can refuse all or part of an agmt

Front 85

When is a contract tested for unconscionability?

Back 85

At time of contract. (Doesn’t matter if things have changed)

Front 86

Is unconscionability a question for a judge or jury?

Back 86

Judge. These issues are always treated as a matter of law.

Front 87

When will ambiguity render a contract unenforceable?

Back 87

No K if (1) a material term open to at least 2 reas meanings; (2) each party attaches a diff meaning t the term, and (3) neither knows/has reason to know there are multiple interpretations

Front 88

[not likely to be tested]
When will a mistake of fact at the time of contract render a K unenforceable?

Back 88

a) Unilateral mistake: no rescission
b) Mutual mistake of fact: no K if ALL (1) both parties are mistaken, (2) basic assumption of fact, (3) material affects the agreed change, and (4) not a risk carried by the person trying to get out of the deal (seller bears the risk)

Front 89

When is a fact material such that mistake on that fact at the time of K will make the K unenforceable?

Back 89

Material = mistake about what it WAS, not what it was WORTH.

Front 90

What triggers the parol evidence rule?

Back 90

When we have a contract in writing and someone wants to introduce other evidence of the contract, such as oral or other written evidence.

Front 91

What is a merger clause, and what is its effect on a contract? Are such clauses conclusive?

Back 91

K clause such as “This is the complete & final agmt.” These are highly persuasive but not conclusive

Front 92

What is an action for reformation?

Back 92

Equitable action to modify written K to reflect actual agmt.

Front 93

How can a court use parole evidence to contradict terms in a written K?

Back 93

A court cannot use parole evidence to contradict terms in a written K.
--Exception: it can be used to determine whether there was a mistake in integration (i.e. clerical error)

Front 94

What is integration, and what are the two kinds of integration?

Back 94

Integration: written agreement that the ct finds to be the final agmt (triggers the PE rule)
a. Partial integration: written and final, but not complete
b. Complete integration: written and final and complete

Front 95

How can parol evidence be used to get out of a contract (i.e., demonstrate a defense to enforcement)?

Back 95

Parties can always use parol evidence to establish a defense to enforcement (i.e., misrepresentation, duress, etc)

Front 96

Can parol evidence be used to explain the terms of a written agreement?

Back 96

Yes. Parties can always use parol evidence to resolve ambiguities in a written K

Front 97

When can parol evidence be used to show additional terms to a contract?

Back 97

Parol evidence cannot be used to show additional terms UNLESS either (1) the written agmt was only a partial integration, OR (2) the additional terms would ordinarily be in a separate agmt

Front 98

STRATEGY:
How do you distinguish between a case involving the Parol Evidence Rule from one involving the Statute of Frauds?

Back 98

S/F: triggered by absence of a writing
P/E rule: triggered by existence of a writing

Front 99

Parol evidence: what kinds of conduct evidence may a court rely upon, and what is their respective weight?

Back 99

These are a hierarchy (one is better than two, which is better than three):
a. Course of performance: same people, same K
b. Court of dealing: same people, diff but similar K
c. Custom and usage: dif but similar people, different but similar K

Front 100

What is the UCC rule regarding a seller's/buyer's obligations for delivery of goods?

Back 100

Context: Delivery obligations of *seller of goods* if delivery by *common carrier* (i.e. a 3rd party in transit business)
Rule: Seller’s obligations depends on whether a shipment or a destination K.

Front 101

How do you distinguish between a shipment K and a destination K?

Back 101

Rule of thumb: every K is usually a shipment K. But watch for “FOB [city]” (“free on board [city]”). If the seller’s city is named as [city], it’s a shipment K. Any other city implies a destination K.

Front 102

What are the delivery obligations of seller of goods if delivery by common carrier, when the contract is a SHIPMENT contract?

Back 102

Shipment K: seller has obligation to (1) get the goods to a common carrier, (2) make reas arrangements for delivery, and (3) notify the buyer.
--Note that the seller thus completes delivery obligations well BEFORE arrival of goods

Front 103

What are the delivery obligations of seller of goods if delivery by common carrier, when the contract is a DESTINATION contract?

Back 103

Destination K: Seller doesn’t complete delivery obligations under buyer receives the goods

Front 104

In every risk of loss question, what are the triggering facts?

Back 104

UCC only. Risk of loss arises where (1) after K is formed but before buyer receives goods (2) the goods are damaged/destroyed (3) through no fault of either buyer or seller.

Front 105

In a risk of loss question, does it matter whether the goods were lost through the fault of one of the parties?

Back 105

Yes, in that both parties must be FAULTLESS to trigger risk of loss rules.

Front 106

True or false: 'risk of loss' is a UCC rule providing default terms in a contract that says nothing about risk of loss.

Back 106

True.

Front 107

What are the rules regarding risk of loss, and what weight is each given?

Back 107

Four rules, apply IN ORDER:
i) Agreement: Agreement of the parties controls
ii) Breach: Breaching party is liable for any uninsured loss even though the breach is unrelated to the problem (any breach at all!)
iii) Delivery by common carrier (not seller): risk of loss shifts to buyer when seller completes delivery obligations
iv) Catch all rule (none of the above applies)

Front 108

What is the catch-all rule for risk of loss?

Back 108

a) If seller is a merchant: risk of loss shifts to the buyer only on the buyer’s “receipt” of goods (receipt=physical possession)
b) If seller is a NOT merchant: risk shifts when seller “tenders” goods (tender = seller has made the goods available to the buyer)

Front 109

Where is the risk of loss by default in leases of goods?

Back 109

Article 2A leases: unallocated risk of loss is on lessor

Front 110

What are the triggering facts for warranty questions?

Back 110

UCC only. Look for goods that have been actually delivered, and the question is the goods’ quality.

Front 111

What constitutes an express warranty?

Back 111

i) Words that promise, describe, or state facts OR use of a model
ii) Not puffery or opinions

Front 112

What is the implied warranty of merchantability? When does it apply?

Back 112

i) Requirement: seller is a merchant that sells goods of that kind (Note that more than the usual merchant status is required here).
ii) Warranty: Goods must be “fit for their ordinary purpose”

Front 113

What are the three kinds of warranties for goods under Article 2?

Back 113

1) Express warranty
2) Implied warranty of merchantability
3) Implied warranty of fitness for a particular purpose

Front 114

What are the requirements for triggering the implied warranty of fitness for a particular purpose?

Back 114

a) Buyer has a particular purpose
b) Buyer is relying on seller to select suitable goods
c) Seller has reason to know of goods and reliance

Front 115

What warranty applies when the following are true in a sale of goods?
a) Buyer has a particular purpose
b) Buyer is relying on seller to select suitable goods
c) Seller has reason to know of goods and reliance

Back 115

Implied warranty of fitness for a particular purpose

Front 116

What is the rule regarding warranties on leased goods?

Back 116

Article 2A: General rule is that the lessor of personal property makes the same warranties as a seller (express, merchantability, and fitness)

Front 117

How does privity affect actions for breach of contract? For torts?

Back 117

For a breach of contract suit, there must be both horizontal and vertical privity.
For a tort suit, privity is not required.

Front 118

Can express warranties be disclaimed?

Back 118

No.

Front 119

How can implied warranties be disclaimed?

Back 119

EITHER
a) Conspicuous (bold) language of disclaimer, mentioning merchantability, OR
b) Special words: “as is” or “with all faults”

Front 120

Can remedies for a breach of warranty be limited through special contract provisions?

Back 120

Generally yes. The following apply:
i) Only limits or sets recovery in breach of warranty
ii) You can limit express warranties (even though you cannot disclaim them)
iii) General test: unconscionability

Front 121

When is a contract provision an unconscionable limitation on the remedies for breach of warranty?

Back 121

Limitations on personal injury recovery: it’s prima facie unconscionable if the breach of warranty on consumer goods causes personal injury

Front 122

Contrast the difference in TIMING between rejection of goods & revocation of acceptance of goods.

Back 122

Rejection: Early, before acceptance
Revocation of Acceptance: Later, after acceptance

Front 123

Contrast the difference in STANDARD (i.e., prerequisites for a buyer to employ) between rejection of goods & revocation of acceptance of goods.

Back 123

Rejection: Generally, buyer can reject if not perfect tender
Revocation of Acceptance: Buyer can revoke if substantial impairment

Front 124

What same three things must a buyer do in cases of both rejection of goods & revocation of acceptance of goods?

Back 124

1. Seasonably notify seller
2. Hold the goods for the seller
3. Follow reasonable seller instructions

Front 125

What are the consequences of both rejection of goods & revocation of acceptance of goods (same for both)?

Back 125

1. Goods go back to seller
2. No buyer payment obligation

Front 126

What is the perfect tender rule?

Back 126

UCC only. Rule: seller’s performance must be “perfect”
Consequences: Less-than-perfect tender gives buyer right to reject ANY OR ALL of delivered goods

Front 127

What can a buyer do if the seller fails to meet the perfect tender rule?

Back 127

If seller fails perfect tender standard, buyer has option to retain or reject goods, and EITHER way, he can sue for breach of K

Front 128

Having failed the perfect tender rule, when can a seller cure?

Back 128

A seller ONLY has the opportunity to cure IF
1) Seller has reas grounds to believe that what was delivered was “okay” (i.e., based on prior deals between the buyer and seller)
2) Time for performance has not yet expired (e.g., if seller delivers early and it’s imperfect, he can cure.)

Front 129

HYPO: A buyer enters in a single contract with a seller to buy goods to be delivered in 10 separate deliveries. If the 3rd delivery is wrong in some way, can the buyer reject?

Back 129

On an installment K, a buyer can ONLY reject if there is a “substantial impairment”.
Installment K = Contract itself requires/authorizes separate deliveries to be separately accepted

Front 130

After accepting goods, can a buyer still reject them?

Back 130

No. But you might still be able to *revoke acceptance* later. Remember: Revocation of acceptance is not the same as rejection.

Front 131

If a buyer pays for goods, does that qualify as acceptance?

Back 131

Payment is NOT acceptance unless there is also inspection

Front 132

If a buyer keeps the goods, does that qualify as acceptance?

Back 132

Yes. Buyer’s keeping goods is implied acceptance.

Front 133

Is revocation of acceptance of goods the same as rejection of goods?

Back 133

No. You cannot reject goods after accepting them; you can only revoke acceptance (and then only under certain circumstances).

Front 134

After accepting the goods, under what circumstances can you revoke that acceptance?

Back 134

Need all 3:
1) Nonconformity that substantially impairs the value of the goods
2) Excusable ignorance of grounds for revocation or reasonable reliance on seller’s assurance of satisfaction
3) Revocation within a reas time after discovery of nonconformity (usually a month)

Front 135

If no price is set in a contract for goods, what happens?

Back 135

Open price term (no agmt about price) --> price is 'reasonable price' at time/place of delivery

Front 136

If a contract for goods says that the “price to be fixed by buyer' (or seller), are there any limitations to that process?

Back 136

Price must be so fixed in good faith.

Front 137

If two parties enter a contract where they trade goods for goods, who is the 'seller'?

Back 137

Each party is seller of goods it provides

Front 138

Does the perfect tender rule apply to CL contracts?

Back 138

NO.

Front 139

Regardless of the type of contract, what are the prerequisites before a person can get a nonmonetary remedy?

Back 139

There must not be adequate remedy at law or unclean hands (or other basic inequities that make the court likely to deny equitable relief).

Front 140

Is specific performance allowed on a contract involving real estate?

Back 140

Yes, if feasible (i.e., if the person still owns the land)

Front 141

When is it possible to request specific performance on a goods K?

Back 141

Specific performance is limited to situations where (a) goods are unique or (b) other appropriate circumstances (fact-specific)

Front 142

When is it possible to request specific performance on a service K?

Back 142

Specific performance is never allowed (but possible negative injunctive relief)
--E.g., you might have a ct enjoin a person from competing with you; you just cannot get an order for them to work for you

Front 143

True or false: no matter what the general rules say, the court still has discretion in deciding whether to award equitable relief.

Back 143

True. Always watch for this.

Front 144

What is the right of reclamation?

Back 144

Right of Reclamation = right of unpaid seller to get the goods back

Front 145

What facts are required before a seller can demand reclamation?

Back 145

1) Buyer was insolvent at time buyer received goods
2) Seller demands return of goods within 10 days (or ‘reas time’ if buyer expressly represented solvency). Clock starts at RECEIPT
3) Buyer still has goods at time of demand

[Right of Reclamation = right of unpaid seller to get the goods back]

Front 146

What is the rule of entrustment?

Back 146

Rule: if an owner leaves her goods with a person who sells goods of that kind, and that person wrongfully sells to another in good faith, then the original owner can’t get specific performance on the innocent third party buyer
--I.e., you made the choice to entrust your stuff to someone, so it’s on you

Front 147

What is the preferred type of monetary damages for breach of contract?

Back 147

Expectation damages: get the pl to where he would have been if the K had been performed

Front 148

What are reliance damages?

Back 148

Get the pl to the same position that would have happened if the K never happened

Front 149

What are expectation damages?

Back 149

Get the pl to where he would have been if the K had been performed

Front 150

What is restitution and how would it be calculated?

Back 150

1) Get the *def* to the same position that would have happened if the K never happened
2) I.e., focus on what def has gained, and give that BACK to pl.

Front 151

How would you calculate expectation damages if:
Seller breaches (goods stink), buyer keeps the goods?

Back 151

Formula: D = [FMV if perfect] – [FMV as delivered]

Front 152

How would you calculate expectation damages if: seller breaches, seller has the goods?

Back 152

i) Formula: D = [mkt price at time breach] – [K price]
ii) Or: D = [replacement price] – [K price] (i.e., cover)

Front 153

How would you calculate expectation damages if: buyer breaches, buyer keeps goods?

Back 153

Formula: D = [contract price]
--Note that even if mkt price has gone up, the seller is still only entitled to K price.

Front 154

How would you calculate expectation damages if: buyer breaches, seller keeps goods?

Back 154

i) Formula: D = [K price] – [mkt price at time/place of delivery]
ii) Or: D = [K price] – [resale price]
iii) Or: D = [provable lost profits] <--IF the goods were from regular inventory

Front 155

What are incidental damages?

Back 155

Incidental Damages: costs incurred in finding replacement performance

Front 156

When are incidental damages recoverable? (Must they be foreseeable?)

Back 156

Always. (Need not have been foreseeable)

Front 157

Are incidental damages recoverable if they were NOT foreseeable?

Back 157

Yes. (They are always recoverable, even if not foreseeable.)

Front 158

What are consequential damages?

Back 158

Consequential Damages: special damages (loss particular to this pl)

Front 159

When are consequential damages recoverable?

Back 159

Only when foreseeable to (i.e. told to) the other party
--Under Art 2: when seller breaches, buyer is entitled to consequential damages if seller has reason to know of them.

Front 160

What are the two damages doctrines that can limit contract damages?

Back 160

1) Avoidable damages: No recovery for damages that could have been avoided without undue burden on the pl
2) “Certainty” rule: Damages must be proven to reasonable certainty

Front 161

What is the 'avoidable damages' rule?

Back 161

No recovery for damages that could have been avoided without undue burden on the pl

Front 162

What is the rule regarding speculative damages?

Back 162

“Certainty” rule: Damages must be proven to reasonable certainty

Front 163

When are liquidated damages clauses allowable?

Back 163

Liquidated damages provisions are valid if BOTH (1) damages were difficult to forecast at time of K and (2) provision is a reasonable forecast
--I.e., they can’t be punitive. When struck down, it’s usually because they’re too high.
--If the damages are flexible/formulaic, they are presumptive valid. If a lump-sum, they are presumptively invalid.

Front 164

Under common law, when does breach of one party excuse the other from its performance obligation?

Back 164

Material Breach Rule: Performance can only be excused by a material breach (of the other party)
i) Whether a breach is material is a FACT question
ii) If there is substantial performance, then the breach is NOT material.

Front 165

What is the divisible contract exception to the CL material breach rule?

Back 165

Divisible contract exception: if there is a “divisible K” (service K with many repeated jobs to be paid per job), there can be K law recovery for substantial performance of a divisible part even though there has been a material breach of the entire K

Front 166

Under the UCC, when does breach of one party excuse the other from its performance obligation?

Back 166

The perfect tender rule applies to those and nonperformance is excused on anything less than perfect tender.

Front 167

What is the difference between conditional acceptance and a contract condition?

Back 167

Contract conditions:
1) Created by language like “if/only if/provided that” etc
--E.g., simply saying that the K for building the house will entail the use of Reading pipe is not enough. You have to say the K “is conditioned” on it.
2) These are conditions that BOTH parties agree to

Front 168

Failure to meet a contract condition generally excused the other side from performance. How *much* compliance must there be on the condition to trigger this rule?

Back 168

Rule: language of condition can only be satisfied by *strict compliance*

Front 169

What are three ways to excuse a contract condition?

Back 169

a. Waiver/estoppel
b. Prevention of the condition by a party protected by it
c. Court's Discretion: court can excuse nonoccurrence of a condition to avoid excessive harm)

Front 170

Who can waive a contract condition? Through what legal doctrine is the waiver enforced?

Back 170

1) Conditions can be waived by the person who was protected by the condition.
2) Once waiver occurs and is relied upon, there is estoppel from enforcement of the condition.

Front 171

Does the court have discretion to excuse contract conditions?

Back 171

A court can excuse nonoccurrence of a condition to avoid excessive harm

Front 172

What is anticipatory repudiation?

Back 172

Anticipatory repudiation = an unambiguous statement/conduct (1) indicating that the repudiating party will not perform (2) made before performance was due
Consequences: Anticipatory repudiation by one party excuses the other party from performance.

Front 173

What are the consequences of anticipatory repudiation?

Back 173

a. Anticipatory repudiation by one party excuses the other party from performance.
b. Generally it gives rise to an immediate breach of K claim UNLESS the claimant has already finished performance (in which case she must wait until the due date to sue).
c. If a party continues to perform after anticipatory repudiation, it can create an avoidable damages issue.

Front 174

Under what circumstances can a party retract his anticipatory repudiation?

Back 174

a. Anticipatory repudiation can only be retracted so long as (1) there is no material change in position by the other (nonrepudiating) party; (2) there is adequate assurance by the repudiating party.
b. If this occurs, the duty to perform is reimposed on the other party.

Front 175

Hypo:
Before performance is due on your contract, the other party announces that he will not complete his obligations. What is this called?

Back 175

Anticipatory repudiation = an unambiguous statement/conduct (1) indicating that the repudiating party will not perform (2) made before performance was due
Consequences: Anticipatory repudiation by one party excuses the other party from performance.

Front 176

Hypo:
You hear that your supplier has failed to meet three of his other goods contracts in the past month, and you are worried he will fail to meet your upcoming delivery needs. What can you do?

Back 176

Excuse by insecurity:
When (1) there are reasonable grounds for insecurity, then (2) the party may make written demand for adequate assurance. If no assurance is given, then (3) the party is excused from performance if it is commercially reasonable.

Front 177

When can parties rescind (cancel) a contract?

Back 177

Rescission is allowed only if the K is executory (some performance remains on BOTH sides)

Front 178

If a contract is rescinded, but one of the parties already completed half of the obligations, can he recovery for breach of contract?

Back 178

If a K is rescinded, NO ONE can get K damages (but they might get quasi-K recovery).

Front 179

What is an accord and satisfaction?

Back 179

1) Accord: An agreement by which the parties to an existing obligation agree to accept different performance in satisfaction of the existing obligation.
2) Satisfaction: performance on an accord

Front 180

Strategy:
On the bar exam, how can you distinguish between an accord and a substituted agreement?

Back 180

We will generally be told on the exam whether it’s an accord or a substituted agreement. But watch for words like “if … then” in the new agreement, that's an accord.

Front 181

Hypo:
Two parties from an earlier contract enter a new agreement under which they agree to accept different performance in satisfaction of the existing obligation. What is this called? Does this excuse performance of the earlier contract?

Back 181

(1) This is an accord. (2) But an accord alone does NOT excuse performance (you need satisfaction).
--That is, if you make an accord, but the accord isn’t satisfied, then you can recover on the ORIGINAL contract. (Actually, you can recover on EITHER the original K or the accord.)

Front 182

What is modification/substituted agreement?

Back 182

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

Front 183

What is the difference in consequences between an accord and a substituted agreement?

Back 183

The mere making of a substituted agreement excuses performance. In accord and satisfaction, you need satisfaction to excuse performance.

Front 184

What is a novation?

Back 184

An agreement between both parties to an existing K to substitute a new party (with no other changes to the K) (It also seems to refer to a change in an obligation)

Front 185

Does a novation excuse the original (replaced) party from performance?

Back 185

Yes. Novation excuses the original party to the agreement from performance.

Front 186

How is a novation different from a delegation?

Back 186

A novation requires the agreement of both parties. Delegation does not, and so it does not excuse the original party. The original K hasn’t changed under delegation.

Front 187

When can an event after K formation excuse performance under a K?

Back 187

When something happens (1) after K formation but before performance that is (2) unforeseen and (3) performance is impossible, commercially impracticable, or the purpose of performance is frustrated.

Front 188

What is the difference between impossibility and impracticability?

Back 188

a. Impossibility: Objective; performance cannot be done at all
b. Impracticability: Subjective; performance can only be done with extreme and unreasonable difficulty.

Front 189

Hypo: a painter is about to start painting a house under a contract when the house burns down. Is the painter excused from painting? Is the owner excused from paying?

Back 189

Yes, the painter is excused. No, the buyer is not automatically excused; it's still *possible* for the owner to fulfill his obligation (i.e., pay), so just the painter is excused.

Front 190

You have a contract with someone who dies after making the contract. Is the deceased excused from performing?

Back 190

Rule: Death does NOT generally destroy a person’s K obligations. You can recover damages for breach from the estate.
--Exception: if the party to contract is a “special” person, performance may be excused.

Front 191

How can a subsequent change in the law/regulation excuse performance of a contract?

Back 191

1) Rule 1: Performance is excused if later law makes K performance illegal (impossibility or impracticability)
2) Rule 2: If later law makes the mutually understood purpose of K illegal, then there is excuse by frustration of purpose.

Front 192

Strategy:
On the bar exam, how can you typically tell whether a third party beneficiary of a contract is 'intended' or 'incidental'? How is this important?

Back 192

If named in the K --> intended. Otherwise he's incidental.
Only intended beneficiaries trigger the rules regarding third party beneficiaries of contracts.

Front 193

What is a creditor beneficiary?

Back 193

A creditor beneficiary is a third party beneficiary of a contract who was already a creditor of the promisee.
E.g., if a person owes you $100k and agrees to make you his life insurance beneficiary, then you are the third party creditor beneficiary. (The insurance company is the promisor, and the policyholder is the promisee.)

Front 194

If a contract has a named third party beneficiary, can the contract be canceled without the input of the third party beneficiary?

Back 194

Rule: if the third party knows of and has relied on or assented, then he K rights have vested and cannot be canceled or modified without his consent (unless the K provides otherwise).

Front 195

If the promisor of a contract involving a third party beneficiary breaches, who can sue whom?

Back 195

(Think of it like the beneficiary being able to step into the promisee's shoes...)
a. Promisee can sue the promisor
b. Beneficiary can sue the promisor
c. Beneficiary cannot recover from the promisee

Front 196

When is the only time that a third party beneficiary of a contract can sue the promisee for a breach?

Back 196

A creditor beneficiary can recover from the promisee but ONLY on the pre-existing debt. Otherwise the beneficiary can only sue the promisor.

Front 197

If a third party beneficiary sues the promisor, what defenses can the promisor assert?

Back 197

a. If a third party sues the promisor, the promisor can assert the same defenses that could be asserted against the promisee.

Front 198

What is an assignment of contract rights?

Back 198

Assignment: transfer of rights under a K occurring in 2 steps: (1) K between two parties; (2) one party transfer K rights to a third party

Front 199

Batman enters a contract with Gotham to provide security services for a monthly fee. Batman then assigns his rights to collect his fees to Robin. What is this transfer called? What is each party called?

Back 199

This is an assignment. Gotham is the obligor, Batmen is the assignor, and Robin is the assignee.

Front 200

With regard to assignment of contract rights, contracts sometimes include language of prohibition and language of invalidation. What is the difference?

Back 200

1) Prohibition: “rights hereunder are not assignable.”
--Takes away right to assign, but an assignee who doesn’t know of the provision can still enforce the assignment. (Assignment is valid.)
2) Invalidation: “any assignments under this K are void.”
--Takes away both the right to assign AND the power to assign.

Front 201

A contract states that “rights hereunder are not assignable.” Regardless, a party assigns his rights to another. That third party then tries to sue after the obligor breaches the contract. Is the suit winnable?

Back 201

Yes. The contract language is merely that of 'prohibition,' not 'invalidation.' The assignment is itself a breach of contract, but it is still valid, so the assignee can sue. If it had been language of invalidfation (i.e., 'assignments hereunder are void') then it assignment would be a breach AND the assignee would be unable to sue.

Front 202

A contract states that “any assignments under this K are void.” Regardless, a party assigns his rights to another. That third party then tries to sue after the obligor breaches the contract. Is the suit winnable?

Back 202

No. This is language of 'invalidation.' Has it been mere language of 'prohibition' (i.e., “rights hereunder are not assignable.”) then the assignment would be valid and the assignee could sue. In either case though, the assignment itself would be a breach.

Front 203

Are there any limitations on the assignment of rights under a contract?

Back 203

CL ONLY: You cannot make an assignment that substantially changes the duties of the obligor.

Front 204

How does public policy feel about the assignment of contract rights?

Back 204

Policy favors free assignment of K rights.

Front 205

What is a gratuitous assignment? Can an assignee from a gratuitous assignment sue to enforce his rights as an assignee of the contract?

Back 205

A gratuitous assignment is one where cnsideration is NOT required. Gratuitous assignments are allowed and enforceable (though revocable). (It creates a 'donee beneficiary.')

Front 206

If an obligor breaches on a contract where the other party assigned his rights to an assignee, who can sue the obligor?

Back 206

1) Assignee can recover from the obligor
2) Assignor for consideration *cannot* recover from the obligor.
Note: the assignee CANNOT sue the assignor.

Front 207

Hypo:
X and Y have a contract. Y assigns his contractual payment rights to Z. Whom does X pay: Y or Z?

Back 207

X pays Y unless he knows that the assignment took place.
1) Payment by the obligor to the assignor is effective until the obligor knows of the assignment.
2) Similarly, modification agreements between obligor and assignor are effective if the obligor did not know of the assignment.

Front 208

When you assign your contract rights to another, what implied warranties are you making to your assignee?

Back 208

In a NON-gratuitous assignment, the assignor warrants ALL the following:
i) That the right to assignment actually exists
ii) The right assigned is not subject to defenses by the obligor, AND
iii) The assignor will do nothing to impair the value of the assignment

Front 209

Hypo:
You have a contract with X. You then assign your rights to J, but you then promptly forget that you did this and assign your rights to K as well. If the assignees go to court, who will win?

Back 209

1) When ALL assignment are gratuitous: the LAST gratuitous assignee wins (Exception: when a gratutious assignment is irrevocable, then it wins over later ones).
2) When at least some assignments are for CONSIDERATION: if ANY assignment is one for consideration, the FIRST such assignee wins

Front 210

When is a gratuitous assignment irrevocable?

Back 210

A gratuitous assignment is irrevocable if [ANY:]
(a) it is in writing and delivered to the assignee, OR
(b) the assignee has received some sort of indicia of ownership, OR
(c) the assignee has relied on the assignment in a way that is reasonable, foreseeable, and detrimental.

Front 211

What is the difference between a delegation and an assignment under a contract?

Back 211

A delegation is a transfer of OBLIGATIONS to a third party.
An assignment is a transfer of RIGHTS to a third party.
Note that in NEITHER case does the original party need to know of the transfer.

Front 212

Strategy:
On the bar exam, if the bar examiners use language like 'assignment' and 'assignor,' would they necessarily be talking about an assignment, as opposed to a delegation?

Back 212

No. The Multistate may use the words assignor/assignee for delegation. They use the words somewhat interchangably.

Front 213

When are contract duties delegable?

Back 213

Rule: contract duties are always delegable UNLESS either: (a) K provisions prohibit delegations or assignments, OR (2) the K calls for performance by a person of special skills or special reputation.

Front 214

If a K calls for performance by a person of special skills or special reputation, such as a professional baseball player, can the person delegate to another party?

Back 214

No. Contract duties are not delegable if the contract calls for performance by a person of special skills or special reputation.

Front 215

When a person delegates their contract obligations to another, and that person fails to perform, who can be liable?

Back 215

a. Delegating party ALWAYS remains liable
b. Delegatee is liable ONLY if the delegation was nongratuitous (i.e. for consideration)
-- I.e., delegatee can be sued by the delegating party OR by the obligee if nongratuitous.

Front 216

Hypo:
A painter enters into a contract to paint the law school for $10,000. The painter then pays his sister $200 to take over the painting job for him. The sister fails to perform. Can the law school sue the painter and/or the painter's sister?

Back 216

The school can sue both. Two rules:
a. Delegating party ALWAYS remains liable
b. Delegatee is liable ONLY if the delegation was nongratuitous (i.e. for consideration)
-- I.e., delegatee can be sued by the delegating party OR by the obligee if nongratuitous.

Front 217

Three basic questions when approaching K's

Back 217

1. Has an enforceable contract been formed?
(if yes...)
2. Has the contract been performed (or, has performance been excused)?
(if not...)
3. What are the remedies for breach?

Front 218

2 universes of Ks:
common law governs ____;
UCC governs ___

Back 218

services and real estate, goods

Front 219

Each contract needs to fall within common law or UCC unless...

Back 219

it contains divisible Ks

Front 220

All Contracts Don't Stink (ACDS)

Back 220

1) Agreement (offer and acceptance)
2) Consideration (and related promisekeeping)
3) Defense to formation (e.g. incapacity)
4) statute of frauds

Front 221

Offers and acceptance are governed by an __ test

Back 221

objective

Front 222

offer:

Back 222

An offer is a manifestation of a willingness to enter into an agreement (by the offeror) that creates a ______________________________ (in the offeree).

Front 223

An offer is a manifestation of a willingness to enter into an agreement (by the offeror) that creates a _____________(in the offeree).

Back 223

power of acceptance

Front 224

Once a contract offer has been squashed -- by refusal, counteroffer etc -- it generally__

Back 224

is not revivable.

Front 225

Person offers to sell car with fingers crossed behind his back. Offer?

Back 225

Yes. Acceptance creates a valid contract.

Front 226

The offeror must display an objectively serious ...

Back 226

intent to be bound. (watch for situations where purported offeror is making a joke or angry)

Front 227

An offer must usually be directed to a ___

Back 227

specific offeree. In other words, you can’t accept an offer unless it is directed at you.

Front 228

Exception to an offer being specifically directed to a person

Back 228

reward, contest, etc. Broadly directed at everyone who learns about.

Front 229

How specific must offer be under common law

Back 229

all essential terms must be covered in the agreement. Parties, subject, price and quantity

Front 230

Under UCC how specific must the offer be?

Back 230

Only the parties, the subject and the quantity -- price does NOT need to be stated

Front 231

Beth offers to pay Seth a “fair price” every week to wash her car for the next year. Is this a valid offer?

Back 231

No -- need a price under common law (services)

Front 232

Bob offers to buy 500 windshield-wiper blades next week from Sue for a fair price. Is this deal a valid offer? __________.

Back 232

Yes -- price not required under UCC

Front 233

Bob offers to buy “all the windshield-wiper blades that I need for the next 10 years” from Sue for a fair price. Is this a valid offer?

Back 233

Yes --a requirements contract. quantity "all I need for 10 years" specific enough for UCC, could be figured out in litigation if necessary

Front 234

Requirements / Output contracts

Back 234

Requirements: I don't know how many I will need but I will buy them all from you.
Output: I don't know how much I'll produce, but I promise to sell it all to you

Front 235

A valid offer gives the power of acceptance to the other side. This means if the other party says ___ there will be a contract. The offeror can't retain ____

Back 235

"I accept." a power to approve the deal. (This is an invitation to deal)

Front 236

invitation to deal are not ___

Back 236

offers

Front 237

invitations to deal

Back 237

preliminary communications that still reserve a final round of approval with the speaker. That is, they don’t confer a power of acceptance to the other side. Invitations to deal are not offers.

Front 238

Exception to invitations to deal

Back 238

rewards, specific advertisements that leave nothing open to negotiation including manner of acceptance (Lefkowitz fur stole case -- 1 mink stole $1, first come first served; house rule, only for women)

Front 239

Lefkowitz v. Great Minneapolis Surplus Store, Inc

Back 239

stands for ads which are specific so as to leave nothing open to negotiation can be seen as offers rather than exceptions to invitations to deal (1 mink stole $1, first come first served; house rule, only for women)

Front 240

Ad in paper: “sell my 1994 Jeep Wrangler for $5,000, first come, first served.” You show up at my house waving a check and say “I accept.” Is this a contract?

Back 240

yes -- ad is specific enough to be an offer

Front 241

Revocable offers -- 6 fact patterns prevalent on MBE:

Back 241

1) express communication to the offeree; 2) constructive revocation (when offeree learns of oferror's action that is absolutely inconsistent with a continuing ability to contract); 3) offeree rejects the offer; 4) counteroffer; 5) death of offeror; 6) "reasonable amount of time" (based on subj of contract) passes and nothing happens

Front 242

I offer to sell you my house for $1 million. A day later, you are talking with Mickey and learn that I offered to sell her my house that morning for $1.1 million. You run to my house waving a check and say “I accept.” Is this a contract?

Back 242

Yes, because the house is still available.

Front 243

An immediate refusal of an offer followed by a correction (e.g. due to mistake) results in a

Back 243

no offer.

Front 244

I offer to sell you my Jeep for $5,000. A split second later, you say “I offer to buy it for $4,500.” I remain silent. Ten seconds later, you say “OK, OK … I’ll buy it for $5,000.” Is there a contract?

Back 244

No -- counteroffer kills the offer.

Front 245

I offer to sell you 1,000 barrels of oil for $100 each. You remain silent, and I never revoke. Five years later, when the price of oil has jumped to $500, you call me up and accept. Is there a contract?

Back 245

No -- too much time has passed since offer.

Front 246

even if an offer is squashed, the offeror can always throw out a new offer with the exact same terms as before. This is called ___

Back 246

revival

Front 247

irrevocable offers are created in 4 ways

Back 247

1) option (mini contract with amount of money securing promise not to revoke); 2) merchant's firm offer (UCC only) ; 3) unilateral offer to contract and offeree has started performance; 4) detrimental reliance

Front 248

T/F A promise to revoke an offer makes an offer irrevocable

Back 248

false

Front 249

IF the option money goes towards the ultimate purchase price, does it still make the offer irrevocable?

Back 249

yes

Front 250

merchant's firm offer

Back 250

UCC only 2-205 -- merchant can make a firm offer to buy or sell goods -- binding free option. The offer must be in writing, contain an explicit promise not to revoke, and be signed by the merchant. Lasts as specified in the offer, or reasonable time period <= 90 days.

Front 251

who is a merchant

Back 251

someone who regularly deals with a specific type of goods at issue.

Front 252

Your law-school bookstore offers to sell you a textbook for $100, and it promises via a signed writing not to revoke this offer for one week. Ten days later, you stop by the bookstore to accept the offer. Can you still accept?

Back 252

Yes, as long as a reasonable amount of time has not passed. Merchant's firm offer had been promised to remain open, but if offer hasn't been revoked (by passage of too much time)...

Front 253

I call Ron Heron up and offer $5000 to paint my house. One day I hear some noise out the window, and look out and see him making the first paint stroke. I lean out and say "I changed my mind." Is there a contract?

Back 253

Yes -- he started performance to a unilateral K

Front 254

I call Ron Heron up and offer $5000 to paint my house. He comes and gets started, but halfway in says he doesn't have time to finish. Can I sue for breach?

Back 254

No -- in unilateral K, performer/ offeree can stop at any time, no obligation to finish performance.

Front 255

deterimental reliance

Back 255

An offer cannot be revoked if the offeree reasonably and detrimentally relies on the offer in a foreseeable manner (e.g., general contractor/subcontractor in construction context).

Front 256

T/F An offeree can terminate an offer.

Back 256

True -- through a counteroffer or rejection (even if he changes his mind imm)

Front 257

T/F An offer to sell a unique good is automatically terminated by the sale of the good to a party other than the offeree.

Back 257

False -- only if offeree is aware of the sale

Front 258

T/F An offeree must be given a reasonable time to complete performance after starting in a unilateral contract.

Back 258

True

Front 259

T/F Only an offeree can terminate an offer.

Back 259

False

Front 260

Acceptance

Back 260

a manifestation of a willingness to enter into the agreement by the offeree.

Front 261

Whether acceptance has happened is judged by a(n) ___ test

Back 261

objective

Front 262

What does this mean: “the offeror is master of the offer”

Back 262

offeror makes the rules, offeree has to accept on her terms.

Front 263

T/F Manner of acceptance is part of the offer

Back 263

True, if specified.

Front 264

“I promise to pay you $1,000 if, and only when, you paint my house.” You say, “I accept.” Is there a contract?

Back 264

No -- performance is acceptance.

Front 265

if it's not clear if offeror wants return promise or performance...

Back 265

offeree can accept by either.

Front 266

What if a seller tries to accept by shipping the wrong goods?

Back 266

UCC: acceptance (act of shipping) + breach (wrong goods). (Logic is to give offeror a contract basis on which to pursue a breach and to collect for resulting damages )

Front 267

John posts a lost cat sign on Monday. On Tuesday he posts more signs offering a reward. Mary sees one of the Monday signs and brings John's cat back. Later she sees the reward offer and sues. Is there a contract?

Back 267

No --offeree must be aware of offer to accept it

Front 268

mailbox rule

Back 268

An acceptance sent by mail is generally valid when the letter is sent

Front 269

The mailbox rule doesn't apply ...

Back 269

1) If the offeree sends something else first (e.g., rejection, counteroffer).
2) To communications other than acceptance (e.g., revocations, rejections).
3) To option contracts.
4) It is unclear whether this applies to other media (fax, e-mail, etc.).

Front 270

I send you an offer. You mail back your acceptance. You change your mind and call me up before I receive your letter to reject the offer. Is there a contract? ______, unless I ___

Back 270

No, detrimentally relied on the rejection. This is a limit on the mailbox rule

Front 271

I send you an offer. You mail back a rejection. You change your mind and mail back an acceptance a few hours later. Both letters arrive at my house on the same day. Is there a contract?

Back 271

it depends on what I open first -- mailbox rule lost when sent something else first.

Front 272

Exceptions to need to communicate acceptance of offer:

Back 272

1) unlateral reward offer (carbolic smoke ball case); 2) Unilateral offers in which the parties are geographically close (such that the offeror will just see that performance has occurred); 3) A past history of silence serving as acceptance (such that the offeree should reasonably notify the offeror if she does not accept); 4) The offeror says that acceptance must come via silence, and the offeree intends to accept the offer by silence

Front 273

Mickey buys her weekly keg of beer by calling up Pabst Blue Ribbon on Monday and leaving a message requesting delivery by Friday. One Monday, she leaves her message as usual, but Pabst does not deliver the keg by Friday. Does she have a contract breach to sue over?

Back 273

Likely Yes -- a history of silence serving as acceptance creates an expectation that the offeree should notify if they are rejecting

Front 274

I offer to sell you my Jeep for $500,000, saying, “you may accept this offer by remaining silent for five seconds.” You stare at me but don’t say a word. After five seconds pass, do you have to pay?

Back 274

NO! unless you intend to accept. Can't force person to listen to everything that I'm say so that I can make silence an acceptance.

Front 275

Implied-in-fact contract

Back 275

communicate an acceptance without writing or speaking, but by communication by gestures (often in regular storefront context)

Front 276

Person walks in to Supercuts where all prices are clearly marked, sits to wait, moves to chair, haircutter asks if he wants just a cut and he nods and never says a word. Is there a contract (must he pay)? If yes, why?

Back 276

Yes. his actions have created an implied-in-fact contract.

Front 277

If an offeree sends a rejection followed by an acceptance, and the offeror receives the acceptance first, is there a contract?

Back 277

Yes. Mailbox rule no longer applies b/c something sent before acceptance. Now receipt is what matters.

Front 278

mirror-image rule

Back 278

under Common Law-- the terms in the acceptance must match the terms of the offer exactly—or it is not an acceptance, but rather a counteroffer

Front 279

Under common law, a conditional acceptance is ___

Back 279

a counteroffer. The offer is dead.

Front 280

I offer to mow your lawn on Saturday for $50. You say, “OK, if you come over on Sunday.” Do we have a contract?

Back 280

No, there is a counteroffer.

Front 281

Under ucc 2-207

Back 281

a purported acceptance that does not match the terms of the offer exactly can still count as a legal acceptance in many circumstances.

Front 282

Does UCC follow the mirror-image rule?

Back 282

No -- under UCC 2-207, a purported acceptance that does not match the terms of the offer exactly can still count as a legal acceptance in many circumstances.

Front 283

Under UCC 2-207, if a purported acceptance introduces new terms to the contract, what are the two questions to ask?

Back 283

1) is there a contract; 2) are the new terms included in the K

Front 284

If there are changes added in a purported acceptance, for a contract to exist under UCC 2-207 does it matter whether both parties are merchants?

Back 284

No, the contract can be found to exist regardless of merchant status. (However, it will affect whether the new terms are included in the K.)

Front 285

UCC 2-207(1) “A definite and seasonable expression of acceptance…which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless ....”

Back 285

"acceptance is expressly made conditional upon assent to the additional or different terms"

Front 286

You send a purchase order requesting acceptance by this Friday. I send back my confirming memo two weeks later. Is there a contract under § 2-207?

Back 286

No because the purported acceptance is not timely.

Front 287

You send a purchase order. I send back a timely confirming memo saying, “OK, on the condition that you agree to indemnify me against a lawsuit for harm arising from the chainsaw.” Do we have a contract?
What about if I send back an acceptance that matches the offer except for an indemnification clause to the back?

Back 287

No in the first case; an express condition was added to the acceptance so no contract. In the second case, there is no express condition, so yes, there is a contract.

Front 288

When does a new/different term in the acceptance control?

Back 288

Only when all of the following are true:
1. Both parties are merchants;
2. The new term does not materially alter the deal;
3. The initial offer did not expressly limit acceptance to its terms; and
4. The offeror does not object within a reasonable time to the new term.

Front 289

T/F it is rare/ difficult for new terms in the acceptance to control

Back 289

true

Front 290

If there is not a real contract, but the parties still act as if there is an agreement (e.g., by exchanging goods for money), only the terms that _________________become part of the contract, with other terms supplied by the UCC acting as default rules.

Back 290

both parties agree on,

Front 291

Under UCC, if there's no real contract, but parties act as if there is (exchange of money and goods) and only the terms agreed on are determined part of the contract, how are other provisions determined?

Back 291

UCC terms are used as defaults

Front 292

If there's a verbal agreement to a contract, and a party sends a confirmation memo with additional terms, what happens to the additional terms under the UCC?

Back 292

UCC provision 2-207(1)makes no sense (as it describes the memo as operating as an acceptance even though a K already accepts), but for the exam, treat additional provisions just as you would as if the confirmation memo was the acceptance with changes under 2-207(2) (4 part inquiry). Changes will usu not come in.

Front 293

consideration is

Back 293

legal detriment to the promisee or legal benefit to the promisor

Front 294

Is 1 penny sufficient consideration?

Back 294

No -- a pretense of consideration is not enough

Front 295

You offer $10 for me to mow your lawn. I say I'll come over and mow your lawn on Saturday, if I feel like it. Is there bargained for consideration?

Back 295

No -- no clear commitment to the deal. "If I feel like it" is not a commitment.

Front 296

Will a court examine a contract as to its fairness?

Back 296

No not generally; but will require SOME adequacy of consideration. (and also unconscionability and/or fraud)

Front 297

I promise to pay Mickey $500 if she paints a portrait of my family that meets my satisfaction. This is called a ___ contract and is not illusory.

Back 297

satisfaction

Front 298

A satisfaction contract is distinguished from an illusory contract in that in the first, ....

Back 298

the promissor can breach

Front 299

If a party to an agreement cannot breach, then there is no

Back 299

consideration or contract.

Front 300

T/F Past benefit/detriment can serve as consideration

Back 300

false

Front 301

can a promise not to sue serve as consideration?

Back 301

Yes, Promising not to sue (settlement of a legal claim) will act as consideration, as long as there is an honest belief in the validity of the claim and a reasonable basis for that belief.

Front 302

Contract modification under common law-- the preexisting duty rule

Back 302

a promise to do something that you are already legally obligated to do (by prior contract or otherwise) is not consideration.

Front 303

Musician agrees to play a concert for $5000, shows up and refuses to play. Organizer offers him an additional 2K as extra incentive, but then refuses to pay. Can the musician sue for the 2K?

Back 303

No -- already legally obligated to perform, no consideration for the additional payment

Front 304

Musician agrees to play a concert for $5000, shows up and refuses to play. Organizer offers him an additional 2K as extra incentive if the musician will play an extra song. Musician does so, but organizer refuses to pay. Can the musician sue for the 2K?

Back 304

Yes, the extra song is consideration.

Front 305

Musician agrees to play a concert for $5000, shows up and refuses to play. Groupy Ann, who has traveled to the venue and desperately wants to hear musician offers him an extra 2K to play. He does so, but she doesn't pay. Can musican sue Ann for 2K?

Back 305

Yes -- no pre-existing duty rule since Ann is a different party. Even though musician is legally obligated to play the concert, the inquiry is party specific.

Front 306

Frank owes Harry $1000. Harry offers to take an immediate payment of $800 and forgive the rest. Frank pays $800. Harry sues for $200. What happens?

Back 306

Harry will prevail. The amount is currently due and undisputed. There has been no consideration for a reduction in the debt terms. Thus the full amount is still due.

Front 307

Frank owes Harry $1000, due next January. Harry offers to take an immediate payment of $800 and forgive the rest. Frank pays $800. Harry sues for $200. What happens?

Back 307

Frank prevails -- early payment was consideration for the remaining $200 debt.

Front 308

A debtor has an obligation to pay an undisputed amount currently due, and the contract terms cannot be changed without ___ under the ___

Back 308

consideration, common law pre-existing duty rule

Front 309

The UCC (does /does not) follow the pre-existing duty rule.

Back 309

does not

Front 310

In lieu of the pre-existing duty rule, the UCC asks ___

Back 310

whether a modification is made in good faith

Front 311

What can prevent application of the preexisting duty rule under the common law?

Back 311

1) a change in performance; 2) a third party's promise to pay; 3) unforeseen difficulties that would excuse performance.

Front 312

Charities do not need to prove the element of ____ when pursuing a reliance theory to collect on a charitable-gift promise.

Back 312

detrimental reliance. (because they don't earmark -- and they generally depend on charitable donations)

Front 313

Grandpa Moneybags promises to pay his granddaughter Katie $100,000 next month so that she doesn’t have to work anymore. Katie quits her job. Is this bargained-for consideration? Does Grandpa have to keep his promise?

Back 313

No bargained for consideration. Yes, Grandpa MAY have to keep his promise under a reliance theory

Front 314

Person passes out, a bystander calls a doctor and saves person's life. Does person have to pay for the doctor fees?

Back 314

Yes under quasi contract / implied in law

Front 315

If I clean your windshield while you're at an intersection then demand payment, quasi contract?

Back 315

No-- forced sale.

Front 316

Quasi-contract damages are sometimes limited, as justice requires, to ___

Back 316

the fair value of the benefit conferred. (no extortion)

Front 317

Moral Obligation Plus Subsequent Promise

Back 317

a few jurisdictions have case law suggesting that a moral obligation + a subsequent promise can be binding, even though it is past consideration

Front 318

You are trying to win a race to Alcatraz, when the sharks start to circle. I swing my boat over to pick you up. Grateful, you promise to pay me $500 for the rescue. Is there bargained-for consideration? What could I argue?

Back 318

No consideration -- past consideration doesn't count. Could argue Moral Obligation Plus Subsequent Promise

Front 319

Does a seal ever act as a consideration?

Back 319

No. Still on the books in some states, but dead letter law.

Front 320

T/F. A promise that is not supported by consideration cannot be enforced.

Back 320

False -- can be promissory estoppel

Front 321

Seven Defenses to formation of contract:

Back 321

1. Misunderstanding
2. Incapacity
3. Mistake
4. Fraud/Misrepresentation/Nondisclosure
5. Duress
6. Illegality
7. Unconscionability

Front 322

Misunderstanding defense to contract formation

Back 322

1) The parties use a term that is open to two or more reasonable interpretations (so the objective test cannot apply);
2) Each side attaches a different meaning to the term; and
3) Neither party knows, or should know, of the confusion.
(Raffles v. Wichelhaus, Peerless ship case -- neither party knew there were two ships named "Peerless" shipping cotton)

Front 323

If party A is aware of the misunderstanding of a key term by party B, does a misunderstanding defense hold?

Back 323

No -- terms are as to party B's understanding

Front 324

Incapacitation defense to contract formation

Back 324

1)Minors (under the age of 18)
2) Persons with a mental illness—two standards:
2a) The person cannot understand the nature and consequences of his actions; or 2b) The person cannot act in a reasonable manner in relation to the transaction (if the other side knows this).
3) very intoxicated people (if the other party to the K knows)

Front 325

If you make a K with an incapacitated person...

Back 325

it is voidable -- i.e. incapacitated party can disaffirm.

Front 326

For necessities, the party without capacity must still pay ____________ (not necessarily the contract price);

Back 326

fair value

Front 327

A person without capacity can still ratify the deal by ___

Back 327

keeping the benefits of the contract after capacity is obtained.

Front 328

George bought a car when he was 17. He's 19 now and still has the car. Can he get his money back?

Back 328

no -- he's ratified the deal after the age of majority

Front 329

Mistake defenses to contract formation. Two types:

Back 329

mutual and unilateral

Front 330

Mutual mistake defense

Back 330

adversely affected party may rescind if:
1. There is a mistake of fact, existing at the time that the deal is made;
2. The mistake relates to a basic assumption of the contract and has a material impact on the deal; and
3. The impacted party must not have assumed risk of mistake.

Front 331

I say “wow look at that shiny rock; I wonder what it is. Well, whatever it is, I’ll sell it to you for $10,000.” Can you get out of the contract for mutual mistake?

Back 331

No, not a mistake but a “compromise of conscious ignorance.”

Front 332

Unilateral mistake

Back 332

adversely affected party can rescind if:
1) She can prove all of the elements of mutual mistake; plus
2a) The mistake would make the contract unconscionable; OR
2b) The other side knew of, had reason to know of, or caused the mistake.

Front 333

T/F either party can argue mistake

Back 333

no -- only the adversely affected party

Front 334

misrepresentation -defense to contract formation

Back 334

misrepresentation is a statement at the time of contracting that is not true. It can be intentional (fraudulent) or sometimes just accidental. To assert this defense, the party must show:
!) A misrepresentation of a present fact (not opinion);
2) That is material OR fraudulent (intentional); and
3) That is made under circumstances in which it is justifiable to rely on the representation.

Front 335

Joe sells a car to Gary with the accolade "it's a great car." Gary soon finds that the car is a bucket of bolts. Can Joe get out based on misrepresentation?

Back 335

Probably not -- "it's a great car" would likely be construed as an opinion/puffery, not representation about the car's performance.

Front 336

what is the difference between misrepresentation and faud?

Back 336

ends of the same spectrum -- misrepresentation is usu innocent misstatement or nondisclosure of material facts (but fraudulent representation is also misrepresentation); fraud consists in representations which are known to be false, or which are made in reckless ignorance of their truth or falsity, or in nondisclosure or concealment of facts under such circumstances that it amounts to a representation that the facts concealed do not exist.

Read more: http://chestofbooks.com/business/law/Handbook-Law-Of-Contracts/Misrepresentation-Distinguished-From-Fraud.html#ixzz1ycC7Tb2E

Front 337

fraud in the execution

Back 337

tricking someone to sign something they don't know is a contract

Front 338

nondisclosure

Back 338

law is evolving-- usu don't have to disclose if buyer doesn't ask, but higher duty if there's a special fiduciary duty; or some sort of act of concealment that rises to the level of fraud

Front 339

duress

Back 339

Duress is an improper threat that deprives a party from making a meaningful choice to contract.

Front 340

economic duress

Back 340

one party makes threats to induce another party to contract (or modify a contract).

Front 341

Pabst threatens to breach a contract with Mickey to sell her beer unless Mickey agrees to extend the contract for another year at double the price. Mickey has exhausted her credit with every other brewer and feels that she has no choice but to accede to this threat. Is Mickey bound for the next year?

Back 341

Maybe not -- she's under economic duress

Front 342

Undue influence

Back 342

arises when a party puts very intense sales pressure on another party—who often seems weak-minded or susceptible to high-pressure sales tactics.

Front 343

Illegal contracts defense to conract formation

Back 343

illegal Ks are unenforceable. But, a contract entered in furtherance of an illegal act (that is not itself illegal) will still be enforced.

Front 344

Typically, where Ks involve illegality the law will leave the parties ___, but there is a modern trend toward allowing less guilty parties to recover money.

Back 344

where they stand. He didn't provide an example for the modern trend, but I would imagine that if a con man takes a payment from a susceptible investor, the law will help the investor get the money back even if the K was illegal.

Front 345

Contracts against public policy (will /will not) not be enforced, though not formally illegal, e.g. a contract to divorce, or to leave your kids alone to bond with their new stepparent.

Back 345

will not

Front 346

procedural unconscionability

Back 346

A defect in the bargaining process itself, such as a hidden term (surprise) or an absence of meaningful choice (inequality in bargaining power)

Front 347

substantive unconscionability

Back 347

A rip-off in some term of the contract

Front 348

250 page K with a hidden term promising 25% of your salary to the other party. Valid K?

Back 348

substantively and procedurally unconscionable

Front 349

Types of unconscionability

Back 349

procedural (hidden term, inequality in bargaining power) or substantive (price disparity, unfair allocation of risk or costs)

Front 350

A large seller of motorcycles creates a standardized contract that contains considerable small print ("boilerplate"), which shifts the risks of all mechanical defects to the buyer. The boilerplate would be incomprehensible to the average person. contract?

Back 350

procedurally unconscionable

Front 351

A skydiving company forces all customers to sign a contract where the terms are fixed and the customer cannot negotiate (this is known as an adhesion contract). The customer finds that every single skydiving company offers the same sort of contract. The K is not valid because...

Back 351

adhesion contracts are substantively unconscionable

Front 352

T/F to establish a defense to a K that there was misrepresentation, the P must show that the misrepresentation was fraudulent

Back 352

false

Front 353

T/F a contract entered into in furtherance of an illegal act is unenforceable

Back 353

false

Front 354

Statute of frauds goal

Back 354

The basic goal of the SOF is to prevent false assertions about a contract that was never really created.

Front 355

I walk up to you one day and say “I’m so glad that you agreed to sell me your house for just $50,000.” You stare at me puzzled and reply, “Who are you? We’ve never met.” I laugh and say, “See you in court.” You do end up in court --what is your defense?

Back 355

statute of frauds

Front 356

Only some types of contracts fall under the statute of frauds, so this is a threshold question. Is our contract one of these types:

Back 356

1) Marriage: A contract made in consideration of marriage
2) Suretyship: A contract promising to guarantee the debt of another
3) One Year: A contract that by its terms cannot be performed within one year from its making
4) UCC: Applies to goods contracts for a price of $500 or more
5) Real Property: A contract for the sale of an interest in real property
You should think about Lemonheads candy and its mascot: Mr. SOUR (or M. SOUR):

Front 357

Mary orders $499 of beer and offers to pay at the end of the month. The beer company only delivers half of her order so she doesn't pay. Can either claim SOF?

Back 357

No -- UCC limit is $500

Front 358

Joey's dad agrees to pay off his debt with a local bank, but doesn't pay.Does SOF apply?

Back 358

Yes -- this is a suretyship.

Front 359

I sign a contract with my employer agreeing to a law degree within a certain time period, but I never enroll. Are we in SOF?

Back 359

Maybe-- performance not possible within a year. (Though there may be a remote possibility that I could have earned a degree in less than a year)

Front 360

Larry asks Susie to sign a prenup, and she does so. When the divorce happens 6 months later, can they claim SOF?

Back 360

Yes, A contract made in consideration of marriage falls under SOF.

Front 361

main purpose exception to surety

Back 361

if the person who has assumed another's debt does so because the main purpose is to his economic advantage, this is not SOF world

Front 362

A local store buys a case of special soymilk for me every month, and I agree to pay the distributor's bill directly, so that I can get a retailer's discount. SOF world?

Back 362

No -- assumption of debt is for my benefit, so falls under the main purpose exception to suretyship.

Front 363

the 1 year limitation for SOF -- how does it work?

Back 363

K that by it's terms can't be completed within 1 year of making

Front 364

rationale for suretyship being SOF

Back 364

same as general SOF goal -- don't want random people showing up and claiming that you owe them money without any proof

Front 365

I hire a contractor in June to renovate my kitchen the following August. SOF?

Back 365

Yes -- the entire thing cannot happen by the terms of the contract within the following year.

Front 366

Old man hires to perform nursing services for the rest of his life. SOF?

Back 366

NO-- possibility -- however remote -- that he will die within the year. (even young healthy person should be out of SOF if hiring a maid for life by this logic)

Front 367

Not all contracts involving real property are within SOF -- only those that involve...

Back 367

a transfer of property interest.

Front 368

John buys a small easement of his neighbor's lot so that he can built a garage, paying $499. SOF?

Back 368

yes -- real property transfer of interest

Front 369

Leases less than __ are not usu within the statute of frauds

Back 369

1 year

Front 370

If you're in the SOF world, the next question is whether SOF has been satisfied, i.e. whether or not there is a presumption of a legitimate K. This may be determined by ...

Back 370

performance OR whether the K in writing (requirements vary as to whether under UCC or common law)

Front 371

Services contract -- service K under SOF is valid through performance if ...

Back 371

full performance by either side has occurred. Written K is not necessary.

Front 372

I agree to babysit for Mary all summer in exchange for weekly dance lessons for the next two years. I finish babysitting all summer, but Mary tells me she doesn't have time to give me dance lessons. Is there a valid K under SOF?

Back 372

Yes -- completion is over one year in the future (SOF world) AND one party has completed performance in a service agreement.

Front 373

to satisfy SOF through the "in writing" requirement...

Back 373

a writing which does not have to be a formal K, but which has to indicate existence of K and contain essential information about parties, terms; signed by the person against whom the contract is being asserted

Front 374

Past performance (does/ does not) satisfy SOF performance requirements.

Back 374

does not

Front 375

special rule for real estate: SOF contract exists is 2 of 3 conditions are met:

Back 375

1) possession
2) payment
3) improvements to land

Lexis summary capsule says that cts differ on requirements, but typical formula involves possession + either (partial payment or improvements) http://www.lexisnexis.com/lawschool/study/outlines/html/prop/prop20.htm

Front 376

Johnny claims Frankie sold him his corner store. There's no contract, but Johnny is now managing the store and lives upstairs. He also installed a new awning in front. Is there a valid K under SOF?

Back 376

Yes, 2 of the 3 real estate conditions have been met: possession and improvement to land

Front 377

For UCC (goods) SOF satisfaction through a writing, how does the writing differ from that required under common law?

Back 377

as with other UCC requirements, price does not have to be in the writing, but the quantity is required. Still watch for the total amount of the contract -- has to be over $500 . (and how does that work if the writing doesn't have the price?)

Front 378

For a UCC writing, if the writing quantity differs from that in the verbal agreement, which quantity controls

Back 378

the written quantity

Front 379

For UCC SOF satisfaction through performance, how does the requirement differ from that under common law?

Back 379

part performance creates a contract, but only for the quantity actually delivered (and accepted he said, but that's not in handout)

Front 380

custom made goods are ______ the SOF

Back 380

exempt from

Front 381

A ____ admission satisfies SOF under the UCC

Back 381

judicial admission, such as a statement in a pleading or during testimony

Front 382

Under the UCC, a failure to____ will satisfy SOF if both parties are ____

Back 382

object to a confirming memo within 10 days (of sending or receiving?) , merchants (under old fashioned notion that merchants carefully read all business correspondence)

Front 383

arguments for / against the statute of frauds

Back 383

against: they are often used by parties who freely entered into fair contracts yet wish to avoid having to fulfill their agreements.
For: the abuses these statutes were designed to prevent are quite real, so it is good public policy to require that parties to certain significant transactions, such as those of long duration or which involve real estate, reduce their agreements to writing. A writing will both reduce the chance of future litigation, and also give the parties the opportunity to take a second look at the terms and conditions of their agremeent before it becomes final.

Front 384

Does failure to satisfy the SOF requirements make a K void?

Back 384

NO -- just voidable

Front 385

The real reason behind SOF is to encourage Ks in writing, at least for more speculatively future or significant in size Ks. The logic for allowing parties to enforce agreements not in writing where there has been (partial) performance:

Back 385

where "partial performance" exists, a party who has accepted partial performance by another party under the contract will typically be barred from asserting the "Statute of Frauds" in order to avoid meeting its own contractual obligations. (The key here seems to be that of acceptance -- if the party accepted performance without denying the existence of a K, they can't squirm (completely) out of it after performance is complete /started ).

Front 386

t/f "Promissory estoppel" is relevant to SOF

Back 386

True -- RST 2nd of Contracts 139-- promise can be taken out of SOF through promissory estoppel

Front 387

Whole Foods orders 1 ton of bananas, and fails to cancel the order after receiving a memo from the supplier. 10 days after (receiving the memo/ the memo) can WFIM claim no K under statute of frauds?

Back 387

Not sure on receipt/ sent issue. No -- they're a merchant, so even though there is no writing with their signature, they were under a responsibility to respond to supplier's memo. K exists under SOF.

Front 388

equal dignity rule

Back 388

a company needs a signed writing to authorize an agent to form a contract to which SOF applies

Front 389

Must a modification to an SOF contract also meet SOF requirements.

Back 389

Ask whether the deal after the (alleged) modification would be in SOF world. If yes then SOF applies to mod; if not, then mod is not SOF even if initial deal was.

Front 390

T/F If a real estate deal involves possession and improvements to the land by the alleged buyer, this is considered part performance.

Back 390

true

Front 391

T/F Part performance is relevant in a service contract qualifying under SOF

Back 391

False

Front 392

Relevant issues in determining if a K has been performed

Back 392

1) Parol evidence rule
2) Warranties
3) Conditions
4) Excuse of performance obligations (impracticability, frustration of purpose, etc.)
Mnemonic:
“Pizza With Crawling Escargot”

Front 393

Parol evidence rule in determining K performance

Back 393

If you see a written contract that the court finds is the final agreement all earlier oral or written statements about the same deal don't count. Later statements do -- they're modifications.

Front 394

Gateway determination in deciding if earlier verbal/written statements matter:

Back 394

is the writing integrated -- is it a comprehensive agreement? partially integrated? complete integration?

Front 395

complete integration

Back 395

K contains all terms

Front 396

partial integration

Back 396

final, written, but some terms not included (can be a difficult inquiry unless K says complete agmt-- merger clause)

Front 397

merger clause

Back 397

express statement that a K consistutes a complete integration

Front 398

“This is the entire agreement between the parties. No representations or promises have been made save for those set out in this memorandum.” is a sample ___

Back 398

merger clause

Front 399

The UCC generally presumes a K is a (partial / complete) integration, unless...

Back 399

partial, unless the parties would have certainly included a disputed term in the writing.

Front 400

to determine if parol evidence should be considered, a court may ask whether the extrinsic term is the type that would ___ ____ ____ from the writing under the circumstances

Back 400

naturally be omitted,

Front 401

Situations in which the parol evidence rule does not apply

Back 401

1) when relevant to a defense against contract formation (duress, fraud etc);
2) Even if a writing is totally integrated, a party can introduce evidence of a second separate deal;
3) Even if a writing is totally integrated, a party might be able to introduce evidence of a prior communication that helps to interpret an ambiguous term in the final agreement.

Front 402

T/F The parol evidence rule does not apply when a party seeks to introduce a conversation during contract negotiation as evidence of mistake

Back 402

True

Front 403

Warranty ("with" of "Pizza with crawling escargot)

Back 403

A warranty is a promise about a term of the contract that explicitly shifts risk to the party making the promise.

Front 404

express warranty

Back 404

A promise that affirms or describes the goods and that itself is part of the basis of the bargain is an express warranty, unless it is merely the seller’s opinion.

Front 405

The use of a sample or model good creates an ____warranty that the goods sold will be like the sample.

Back 405

express

Front 406

Implied warranties: 2 types

Back 406

1) of merchantability -- warrant that product is fit for ordinary purposes; 2) fitness for a particular purpose -- buyer relies on merchant's expertise to recommend product for a specific purpose

Front 407

Can a merchant waive an implied warranty of merchantability?

Back 407

Yes but only if the language is very conspicuous that mentions the warranty of merchantability or uses words like “as is.”

Front 408

Can a non-merchant of a product breach an implied warranty of the product being fit for a particular purpose?

Back 408

yes -- qs are whether the buyer needed item for special purpose and relied on the seller's (apparent) expertise

Front 409

condition

Back 409

A condition is another way to shift risk by stating that one party’s contractual obligation will kick in only if some future event takes place.

Front 410

tyoes of conditions

Back 410

express or implied

Front 411

Express Conditions

Back 411

Express conditions are created by language in the contract. Express conditions must be fulfilled unless the condition is somehow excused.
( Look for magic words like “only if,” “provided that,” “on the condition that,” “only in the event that,” etc.)

Front 412

satisfying an express condition -- when a subjective std?

Back 412

While an objective standard of satisfaction is preferred, Contracts involving aesthetic taste, such as art or tutoring services, require a subj standard. The party can still breach if they claim dissatisfaction in bad faith.

Front 413

The party receiving the protection of the condition may waive the condition by words or ________

Back 413

conduct

Front 414

Who can waive a K condition?

Back 414

The party receiving the protection of the condition

Front 415

A condition will also be waived if a party ____________________
the condition. This will be judged by a good-faith standard.

Back 415

wrongfully interferes with fulfillment of

Front 416

T/F the party a condition protects can waive it by wrongful interference

Back 416

True -- if they changed mind and are just trying to get out of the K -- eg failing credit applications on purpose

Front 417

T/F

An express warranty may be based on an opinion about the goods offered by the seller

Back 417

False

Front 418

T/F Any seller makes an implied warranty that the goods are fit for ordinary commercial purposes.

Back 418

false

Front 419

t/f to have a warranty of fitness for a particular purpose, the buyer must have a special need

Back 419

true

Front 420

what kind warranty may NOT be disclaimed?

Back 420

None of them--they all can be

Front 421

t/f Regarding a satisfaction condition in a contract, most satisfaction conditions are judged by an objective standard.

Back 421

true

Front 422

t/f A satisfaction condition in a contract involving aesthetic taste is judged by a subjective standard.

Back 422

true

Front 423

t/f In a satisfaction condition in a contract involving aesthetic taste, the court will ignore the aesthetic component and objectively judge performance

Back 423

false

Front 424

T/F Either party may waive an express condition by words or conduct.

Back 424

false -- only the party protected

Front 425

Constructive Condition of Exchange (“CCE”)

Back 425

says that one party’s performance is conditioned on the other side’s performance.

Front 426

most common implied condition

Back 426

Constructive Condition of Exchange (“CCE”)

Front 427

Universe 1: Common-Law Universe: The CCE need not be satisfied perfectly. Instead, the ____ holds that there is a satisfaction of the CCE if there is not a __________________.

Back 427

the doctrine of substantial performance, material breach

Front 428

Does the doctrine of substantial performance apply to both express and implied conditions?

Back 428

no -- only to implied

Front 429

Does the doctrine of substantial performance apply to a goods delivery?

Back 429

Generally no -- exception in installment K

Front 430

substantial performance suffices only if perf failure was not ____

Back 430

willful

Front 431

Under the doctrine of substantial performance an a breaching party who fails to satisfy the CCe due to a material breach or failure to substantially perform get paid anything?

Back 431

Not under the K, but maybe under quasi-contract. (contract implied in law)

Front 432

Can a breaching party who fails to satisfy an express condition get paid in quasi-contract?

Back 432

Usually not

Front 433

substantial performance may be determined by dividing the K into smaller pieces if it is ____

Back 433

clearly divisible

Front 434

substantial performance (does / does not) apply to goods Ks

Back 434

does not

Front 435

substantial performance does not apply under UCC, which requires ____, meaning ___ and ___

Back 435

perfect tender

Front 436

Under the UCC, prompt shipment of nonconforming goods operates as an ____of the order

Back 436

acceptance

Front 437

Under the UCC, prompt shipment of nonconforming goods is a counter-offer and not a breach if ...

Back 437

the seller notifies the buyer within a reasonable time that the shipment is intended as an accommodation (an attempt to help the buyer) [2-206(1)(b)].

Front 438

An attempt to accept by anyone other than the offeree is treated as ____

Back 438

an offer

Front 439

revocation an acceptance

Back 439

return of goods after acceptance if a defect is discovered within a reasonable time -equiv to rejection

Front 440

If the seller fails to tender perfect goods and time is left on the contract or the seller had reasonable grounds to believe that the buyer would accept, then the buyer must give the seller a chance to ________.

Back 440

cure

Front 441

when is substantial prefermance relevant to the ucc?

Back 441

installment Ks

Front 442

In an installment K, buyer can reject a specific delivery that isn’t perfect only when there is a ________________________ in the installment that cannot be cured.

Back 442

substantial impairment

Front 443

3 methods of adequate delivery under ucc

Back 443

1) Seller’s place of business;
2)shipment k /fob seller place of biz;
3) destination k/ F.O.B buyer place of biz.

Front 444

for a destination K, what steps to "perfect" delivery?

Back 444

Get the goods to the location indicated in the K

Front 445

For an FOB K is it enuf to deliver goods to FedEx with an address and send buyer an e-mail saying that goods are coming?

Back 445

No, with fob have to get it to location specified

Front 446

for a delivery K, what steps to "perfect" delivery?

Back 446

1. Get the goods to a common carrier;
2. Make arrangements (K) for shipment; and
3. notify the buyer.

Front 447

If problem involves loss or destruction b4 buyer receives, steps to determine who bears loss

Back 447

1)Check whether the parties have already dealt with this risk in the contract. If so, their agreement will control.
2)ask whether either party has breached (typically another part of the contract). If so, that breaching party bears the risk of loss, even if the breach is totally unrelated to the delivery damages
3)otherwise ask if shipment or delivery K
3a) shipment K - buyer
3b) destination K - seller
4) in all other cases (what would those be? in the seller place of biz?) ask whether seller is a merchant
4a) If so, the risk of loss stays with the seller until the buyer receives the goods.
4b)If not, the risk of loss moves to the buyer when the seller tenders the goods.

Front 448

Excuses: “E” in “Pizza With Crawling Escargot.”

Back 448

There is a clear contract but something has nevertheless happened to prevent one side from having to perform on the contract.

Front 449

difference betw defense and excuses

Back 449

defense means no K; excuses apply after K exists

Front 450

Impossibility/Impracticability

Back 450

Look for these common fact patterns:
-Performance becomes illegal after the contract is formed;
- The subject matter of the contract is destroyed;
- A services contract with a “special person,” and the performing party dies or is incapacitated;
-look for extreme unforeseeable events
- BUT, something that just makes performance more expensive than expected will not normally excuse. Look for something that hinders the ability to perform, not just the cost to perform.

Front 451

Death after Contract.

Back 451

Dying does not normally excuse liability on a contract that has been made; the estate will normally be liable for any contractual obligations. but Ask whether there is something special about the person performing on the contract, such that it makes no sense to continue if they die.

Front 452

Frustration of Purpose

Back 452

Performance can still occur, but something has happened to undermine the entire reason for the creation of the contract. Note that this is very rare; the event must be extreme, unforeseeable and not previously allocated to one of the parties.

Front 453

You are excited for the season opener of your favorite football team’s game, especially after paying $2,000 for season tickets. You sit down 20 rows up on the 50-yard line, when right before kickoff, a tall man in an Abe Lincoln hat sits down in front of you. He refuses to remove the hat, and you can’t see the game. Can you get out of your contract for the football tickets?

Back 453

No -- foreseeable, plus just one game

Front 454

You rent an apartment in Chicago at $5,000 for one day because it has a prime view of Wrigley Field, and the Cubs are scheduled to play in the World Series that afternoon. The game is unexpectedly canceled one day before because of an earthquake. Is performance excused due to impossibility? no. What about being excused for frustration of purpose? Yes, probably.

Back 454

not impossible -- can rent apt. probably for frustration of purpose b/c price reflects special purpose for rental

Front 455

Can both parties agree to just walk away from a contract?

Back 455

yes, as long as there is some performance remaining from each side. Otherwise, there is no consideration for this modification.

Front 456

Accord and Satisfaction

Back 456

The parties to an earlier contract agree that performance will be satisfied instead by the completion of a different performance.
- The new performance is called the “accord”
-The excusing of the initial performance obligation is called the “satisfaction.”

Front 457

What happens if the accord is not performed? Should the other side sue on the original obligation or the new promise?

Back 457

Either is ok

Front 458

Novation

Back 458

arises when BOTH parties agree that a substitute person will take over the contractual obligations. (DIFFERENT than one sided delegation)

Front 459

Mickey contracts with Pabst to buy five kegs of beer for $500. Later, both parties agree that Blatz will take over the deal. If Blatz fails to deliver any beer, can Mickey sue Pabst?

Back 459

No, the novation has excused Pabst.

Front 460

T/F Impracticability provides a defense for nonperformance if purpose of the contract is frustrated

Back 460

false

Front 461

Anticipatory Repudiation

Back 461

other side says he’s not going to perform on the contract (repudiates) before the performance is due. This can excuse performance of other side if repuidiation is clear and unequivocal

Front 462

2 responses for Anticipatory Repudiation

Back 462

1) Treat the repudiation as a breach and sue imm for damages. EXCEPTION: **If you have completed the entire performance and are only waiting for payment, you cannot sue early
2) reject the repudiation, demand performance, and see what happens.

Front 463

A party can retract its repudiation, as long as...

Back 463

the other side has not commenced a lawsuit for breach or acted in reliance on the repudiation (by materially changing its position).

Front 464

UCC universe: Reasonable grounds for insecurity about the other side’s performance allows you to demand ___________of performance.
If the questionable party ____________________ within a reasonable time, then you can treat this as repudiation.

Back 464

adequate assurance

Front 465

Expectation Damages

Back 465

This is the normal way to calculate damages. The goal is to put a party in the same position that it would be in if the contract had been performed as promised.

Front 466

I hire you to build the Geis Towers, a 150-story building in Charlottesville, Virginia, for $100 billion. You never start the project and tell me that you are breaching the contract. What are my expectation damages if I hire a replacement builder for $80 billion?

Back 466

0

Front 467

Buyer refusal to pay. Mickey contracts with Pabst to buy a keg of beer for $100. Mickey gets the keg but breaches the contract by refusing to pay. The current price for a keg of Pabst has risen to $110. What are Pabst’s expectation damages?

Back 467

100

Front 468

Cover (subst ) for K breach must be ___ to original breacher's goods/services

Back 468

similar

Front 469

If supplier sends partial order, what are your options?

Back 469

accept and ask for expectation damages or reject under perfect tender rule

Front 470

T/F Under the common law, a party’s failure to substantially perform on a contract gives the other party an excuse to withhold its own performance.

Back 470

True

Front 471

3 major limits on expectation damages

Back 471

1) those not proven w/ reasonable certainty (common fact pattern of new biz);
2) unforeseeable consequential damages (the Hadley rule) -- ok if notice of unusual expectation of harm (so can be priced in)
3) Requirement to mitigate as to to limit damages

Front 472

Mitigation responsibility

Back 472

If you refuse to minimize damages, the law will calculate damages as if you did mitigate. The defendant bears the burden of proving a mitigation failure.

Front 473

The ___ bears the burden of proving a mitigation failure.

Back 473

defandant

Front 474

mitigation efforts must be reasonably ___ to the original K

Back 474

similar (fact pattern: employment often isn't)

Front 475

Lost volume profits (LVP) expectation damages

Back 475

If the paying party breaches, normally the selling party needs to mitigate by reselling the goods or services to another person. But, if the seller is a retailer who sells this type of product all the time, the seller can try to argue for LVP.

Front 476

If the paying party breaches in a partially completed building contract, can the builder continue to work on the job?

Back 476

No -- can't continue performance that will increase damages

Front 477

Expectation Damages =

Back 477

Contract Price – Amount Already Paid – Amount that Would Be Needed to Finish the Job

Front 478

I hire you to build the Geis Towers, a 150-story building in Charlottesville, Virginia, for $100 billion, with $10 billion due every month. You start the project, and I pay you for the first three months. After that, I tell you that I’m repudiating the contract and won’t pay another dime. You had expected to build the tower for $85 billion (netting a $15 billion profit), but you have spent only $45 billion thus far. What should you get in expectation damages?

Back 478

$100 bil (contract price) - 30 - bil (amt already paid) -40 bil(costs remaining) =30bil

Front 479

To argue for Lost volume profits...

Back 479

seller must have plenty of product to sell -- damages = net profit on repudiated K

Front 480

The normal measure of expectation damages if breach by a srvc provider is ...

Back 480

the cost to complete the job.

Front 481

Economic waste

Back 481

--where cost to complete may over compensate the P, eg if redo work that is expensive but with little or no enhancement to property value

Front 482

diminution in market value --

Back 482

alt method of calculating damages where expectation would overcompensate relative to the increased value of property from actual K terms; dmv= (market value of work in the K) - (work as completed )

Front 483

dmv calculation=

Back 483

(market value of work in the K) - (work as completed )

Front 484

Usually, dmv can be used instead of expectation damages only if ...

Back 484

the breaching party acted in an innocent and unintentional manner

Front 485

What standard is applied to the proof of expectation damages?

Back 485

reasonable certainty

Front 486

T/F Unforeseeable consequential damages are not recoverable unless the breaching party had some reason to know about the possibility of these damages.

Back 486

True (i.e. are actually foreseeable)

Front 487

T/F. A lost volume seller may be able to recover the full contract price even though the seller’s efforts at mitigation are successful.

Back 487

False -- can recover net profit only

Front 488

When the paying party breaches a building contract at a time that the building is only partially complete, can the builder complete the building?

Back 488

No

Front 489

When the paying party breaches a building contract at a time that the building is only partially complete, is the builder entitled to the full contract price?

Back 489

No

Front 490

T/F when the builder breaches a building contract, Expectation damages generally take into account the cost to complete the building in accordance with the contract.

Back 490

True

Front 491

T/F when the builder breaches a building contract, expectation damages may be limited to the diminution in market value when economic waste would result.

Back 491

true

Front 492

T/F When the builder breaches a building contract, diminution in market value may be awarded even when the breaching party acted willfully.

Back 492

False

Front 493

Reliance damages.

Back 493

The goal is to put a party in the same economic position that it would be in if the contract had never been created.

Front 494

T/F reliance damages are related to detrimental reliance

Back 494

False

Front 495

RELIANCE DAMAGES = GROUNDHOG DAY DAMAGES

Back 495

puts you in econ position b4 K (bill murray learned to rely on Andie macdowell)

Front 496

service K reliance damages is mostly (or only)

Back 496

cost of performance

Front 497

Why might P claim reliance vs expectation damages ?

Back 497

Expectation damages too specultive, hard to prove

Front 498

Restitution Damages

Back 498

goal is to give the plaintiff an amount equal to the economic benefit that the plaintiff has conferred on the defendant.

Front 499

Main way to calculate damages is __. Other methods are:

Back 499

expectation, lost volume profits, diminution in market value, reliance, restitution, liquidated

Front 500

restitution damages are sometimes eq to ___

Back 500

reliance damages

Front 501

T/F you can collect both expectation and reliance damages

Back 501

False

Front 502

Owen Wilson pays $50,000 to Dr. Plastic, a famous surgeon who promises to “make Wilson’s nose perfect.” Wilson also incurs $20,000 in hospital costs related to this procedure. Dr. Plastic botches the job, and Wilson sues for restitution damages. What does Dr. Plastic owe Wilson? ________

Back 502

50K, only the benefit that Owen Wilson conferred upon Dr. Plastic.

Front 503

liquidated damages

Back 503

damages set out in the contract as an explicitly negotiated amount due upon breach.

Front 504

Courts are wary about awarding punitive liquidated damages and will do so only if:

Back 504

1)The amount of liquidated damages was reasonable at the time of contracting; and
2) Actual damages from breach would be uncertain in amount and difficult to prove.
(some tension betw)

Front 505

punitive damages

Back 505

probably a red herring -- Punitive Damages
Punitive damages are almost never allowed in contract law. Don’t worry about these unless you see a breach that also seems like a tort (e.g., fraud or some other very extreme situation).

Front 506

____ remedies are the eception in K law. they are generally only considered when monetary damages seem ___

Back 506

equitable, inadequate

Front 507

Specific performance is presumptively available for _____________ transactions.

Back 507

real estate, b/c each piece of property is considered unique. exception if already transfered to someone else

Front 508

Specific performance is presumptively (available / not available) for service transactions.

Back 508

not available

Front 509

Specific performance is presumptively not available for contracts of personal service. Rarely, a court might grant an injunction prohibiting ...

Back 509

a breaching party from performing services for a competitor for a reasonable period of time/place. (LUMLEY DOCTRINE -- in lieu of forcing performance)

Front 510

In UCC, Specific performance available only for ...

Back 510

unique goods like art or custom-made items.

Front 511

right of reclamation

Back 511

is an equitable right of an unpaid seller to reclaim goods when the buyer is insolvent. To assert this remedy, the following facts must be present:
1) The buyer is insolvent at the time of purchase;
2) The seller must demand the return of goods within 10 days of receipt (or within a reasonable time if the buyer misrepresented his solvency to the seller); and
3) The buyer still has the goods.

Front 512

Which type of damages is designed to restore to the plaintiff whatever benefit was conferred upon the defendant?

Back 512

restitution

Front 513

Which type of damages is designed to put a party in the position it would have been in if a contract had never existed?

Back 513

reliance

Front 514

What type of damages is least likely to be awarded in a contract action?

Back 514

punitive

Front 515

t/f The seller must demand the return of the goods within 15 days of receipt, unless the buyer has misrepresented his solvency.

Back 515

false -- 10 days

Front 516

t/f For right of reclamationwhen will the seller have additional time to demand the return of the goods beyond 10 days of receipt?

Back 516

when the buyer misrepresented his solvency to the seller

Front 517

3rd party beficiary Ks. Who are promisor, promisee, 3rd party beneficiary?

Back 517

promisor? person making a promise benefitting the 3rd person.
3rd party benef-- the person who's getting something for nothing;
promisee -- the person who's paying for nothing

Front 518

The critical issue in a third-party beneficiary contract is whether the third party is an intended or an incidental beneficiary.
 ____________ beneficiaries have the right to sue.
 ____________ beneficiaries do not.

Back 518

intended, incidental

Front 519

every intended 3rd party beneficiary is either a __ or a __ beneficiary

Back 519

donor, creditor

Front 520

A creditor beneficiary can sue both the ____ and the ____ but the beneficiary can not recover against both. If the suit is successful against one party to the contract, the other party will be dismissed.

Back 520

promisor, promisee

Front 521

Once the beneficiary's rights have____, the original parties to the contract are both bound to perform the contract. Any effort by the promisor or the promisee to rescind or modify the contract at that point are ___. Indeed, if the promisee changed his mind and offered to pay the promisor money not to perform, the third party could sue the promisee for tortious interference with the third party's contract rights.

Back 521

vested, void

Front 522

There are three tests used to determine whether the third party beneficiary's rights have vested:

Back 522

1. if the beneficiary knows of and has detrimentally relied on the rights created
2. if the beneficiary has expressly assented to the contract at the request of one of the parties
3. if the beneficiary files a lawsuit to enforce the contract

Front 523

The promisor can assert what contract defenses against the third party beneficiary?

Back 523

any that he would be entitled to assert against the promisee.

Front 524

t/f a 3rd party beneficiary stands in the shoes of the promisee

Back 524

false

Front 525

t/f a 3rd party beneficiary can sue the promisee

Back 525

true

Front 526

What third party beneficiary can NOT enforce a contract entered into by other parties?

Back 526

incidental

Front 527

must both the promisor and promisee intend to convey enforcement rights to the beneficiary?

Back 527

I think so, but maybe just the promisee

Front 528

t/f a third party beneficiary's rights vest when a K names him as beneficiary

Back 528

f

Front 529

if party A contract with party B to have a thousand killer bees delivered to the home of Party A's worst enemy, party C, then C is considered to be

Back 529

intended beneficiary of that contract. K doesn't have to benefit C

Front 530

Once an intended beneficiary’s rights have vested, the original parties to the contract can modify, but cannot rescind the contract without the intended beneficiary’s agreement.

Back 530

false - can't do either

Front 531

Assignment

Back 531

An assignment is the transfer of rights under a contract

Front 532

delegation

Back 532

the transfer of duties under a contract.

Front 533

Almost all contractual benefits can be assigned, in whole or in part, unless a contract ...

Back 533

explicitly prohibits or invalidates assignments

Front 534

Can you assign the offer to a third party?

Back 534

no, only of rights under an existing K

Front 535

distinguishing third party beneficiaries from assignees:
assignment usu another step after K exists, while third party beneficiary is usu ...

Back 535

part of original K. I don't know if this is necessarily so

Front 536

If the contract states that rights are not assignable, you must decide whether the contract ___ assignments or ___ assignments.

Back 536

prohibits, invalidates

Front 537

If the contract prohibits assignments, then the assigning party has ____ the deal when he makes the assignment. The third party ...

Back 537

breached, can still recover from the guarantor.

Front 538

If the contract invalidates assignments, then the third party ...

Back 538

cannot recover (because there is no power or right to assign). Look for language like "void if..."

Front 539

I agree to pay you $1,000 to paint my house, but the contract states that the rights under this contract are not assignable. You nevertheless assign the $1,000 payment to Mickey. Have you breached? ____. Can Mickey sue me if I don’t pay her the money? ____.

Back 539

yes, yes

Front 540

What happens if someone assigns the same rights twice?

Back 540

The answer depends on whether the assignee has paid consideration for the rights:
 If the rights are assigned without consideration, then the last assignment controls.
 If the rights are assigned for consideration, then the first assignment for consideration will typically hold.
o Limited exception: A later assignment will take priority if the second assignee does not know of the initial assignment and is first to obtain payment or a judgment.

Front 541

Where assignment is not prohibited, usu by an express provision, the assignor ____ consult the other party to the contract.

Back 541

need not

Front 542

An assignment (may /cannot )have any effect on the duties of the other party to the contract, nor can it reduce the possibility of the other party receiving full performance of the same quality.

Back 542

cannot

Front 543

Certain kinds of performance that create a unique relationship between the parties to the contract, such as a K with an atty for legal rep, (can / cannot be )assigned

Back 543

cannot

Front 544

delegation of duties occurs when

Back 544

a party to a contract “outsources” her duties under a contract to another party.

Front 545

delegation is generally acceptable, as long ...

Back 545

the contract does not prohibit delegation and as long as the other party does not have some special interest in having a specific individual perform.

Front 546

If Bill Clinton were hired to make a speech, can he delegate the task to another person, where the other person will give the same speech, word for word?

Back 546

no, the specific person matters in this case

Front 547

The person with original K duty is the delegating party; the person who now has the duty is the delegatee; who's the other guy?

Back 547

obligee.

Front 548

If the delagatee fails to perform satisfactorily, the obligee may elect to treat this failure as a breach by the delegator or may assert himself as a third party beneficiary of the contract between the delagator and the delegatee and can sue the ____.

Back 548

delegatee/promisor

Front 549

If the delegation is without consideration, the ___remains liable for nonperformance, while the ___ will not be liable to anyone for anything.

Back 549

delagator, delegatee

Front 550

Unlike an assignment, a delegation is virtually always for consideration, because ...

Back 550

few people are going to charitably offer to perform a task contracted to someone else.

Front 551

If you want the delegee to both do the work and get paid by the other party...

Back 551

you shoul delegate the duties AND assign the rights

Front 552

Can the delegee sue the obligee?

Back 552

No -- she has only the duties and not the rights/benefits

Front 553

A delegatee is generally not liable for breach unless she receives ________________ from the delegating party.

Back 553

consideration

Front 554

T/F If the delegee receives consideration the obligee can sue her

Back 554

true! this is where he inserts self as a 3rd party beneficiary

Front 555

what's the difference betw delegation and novation

Back 555

novation is by agmt of both parties, in which parties are completely replaced, eliinating the original party.

Front 556

MBE may use the wd assignment to mean

Back 556

both assignment and delegation. Read context carefully

Front 557

t/f The delegating party remains liable to the obligee unless there has been a novation.

Back 557

true

Front 558

t/f Generally, a party to a contract may assign her contractual rights, but cannot delegate her contractual duties.

Back 558

false

Front 559

TRUE OR FALSE. An assignment of rights is valid only if the assignor receives consideration.

Back 559

false

Front 560

TRUE OR FALSE. The delegating party remains liable to the obligee unless there has been a novation.

Back 560

true

Front 561

A offers X for $1. B says no, then a split second later says ok. K?

Back 561

no, offer killed w/ rejection

Front 562

constructive revocation

Back 562

offeree learns that the offeror has taken an action that is absolutely inconsistent with a continuing ability to contract.

Front 563

I offer to sell you my house for $1 million. A day later, you are talking with Mickey and learn that she bought my house that morning for $1.1 million. You run to my house waving a check and say “I accept.” K?

Back 563

No--constructive revocation