Contracts

Front 1

What is a contract?

Back 1

legally enforceable agreement

* not every agreement is a contract

Front 2

What is a quasi-contract?

Back 2

An equitable remedy.

* whether we have relief under quasi-contract does not depend on contract law principles

* Any time that application of contract law rule produces an unfair result, look for opportunity to write a few sentences on quasi contract (MA day)

Front 3

1) Define Bilateral contract

2) DefineUnilateral

Back 3

1) Bilateral results form an offer that is open as to method of acceptance

2) Unilateral results from an offer that expressly requires performance as the only possible method of acceptance

Front 4

**Assume that all contracts are bilateral UNLESS

Back 4

- reward, prize, or contest
- offer expressly requires performance for acceptance.

Front 5

Bi or unilateral contract:

NBC offers A 25000 to sing on show.

Back 5

Yes contract.
Bilateral contract because
1) not reward, prize or contest
2) contemplates that she will sing song to perform contract BUT contract doesn't say that the only way she can accept offer is to sing song.

Why important? She breaches contract if she lip-sings. There can only be a breach because we already decided there is a contract. If it was a unilateral contract, there would be no contract and thus no breach.

Front 6

What is first question to ask when any kind of agreement or dealing?

Back 6

What is the applicable law?
--common law
--Article 2 of the UCC

Front 7

When does Article 2 of the UCC apply?

Back 7

When transaction is primarily a sale of goods

* goods are something tangible and movable

* applies to everyone, whether business deal or deal between individuals

* applies regardless of price of contract (except one section applies when over 500)

Front 8

Goods defined and why relevant?

Back 8

1. Relevant because sales of goods covered by ucc art. 2

2. goods are something tangible and movable

Front 9

UCC or common law

1. A contracts to lecture for Barbri.

2. A agrees to buy clubhouse.

3. A contracts to buy used cadillac for 400.

4. A buys used car and two driving lessons for 400.

5. A buys yo-yo and 10 lessons from yo yo ma.

Back 9

1. apply common law to services contract

2. apply common law to real estate

3. UCC

4. Mixed deal bc part goods and part services. UCC applies to the whole deal because the goods part is the more important part of the deal

5. Apply common law bc lessons are more important part of deal.

Front 10

How to handle mixed deals involving sales of goods and services?

Back 10

Ask whether goods or services is most important part of deal and apply that law to the entire deal.

--either use UCC in full or not at all. Apply even to disputes over services in contract.

Front 11

Common law or ucc:

A buys yoyo for 10 and lessons for 40,000

Back 11

Apply common law to lessons disputes and UCC to yoyo disputes.

This is a mixed deal question where contract divides payment

Front 12

What law applies when a contract divides payment between goods and services?

Back 12

Apply ucc to goods part and common law to sales part.

Front 13

Article 2A of the UCC

Back 13

Applies to leases of goods, not sales.

--mostly acts like Article 2, except in few exceptions

--NOT ms, maybe ma

Front 14

What if not sale of goods, what law applies?

Back 14

Common law applies to anything other than the sale of goods

Front 15

Overview of contract formation

Back 15

1. Look for agreement
2. Ask whether legally enforceable
3. Level one: initial communication/offer
4. Level two: what happens after initial communication/termination of offer
5. level three: who responds and how responds/acceptance

Front 16

Test for offer

Back 16

Would a reasonable person in the position of the offeree believe that his or her assent creates a contract?

--Manifestation of an intention to contract--words or conduct showing commitment

Front 17

Can an offer to contract be given without containing all material terms?

Back 17

Yes

Front 18

Valid offer?

1. S offers to sell Blackacere to B, doesn't say anything about price

2. S offers to sell car to B and says nothing about price

Back 18

1. No offer bc offer must give price and description

2. Yes offer if parties so intent

Front 19

When is price and desription required to make valid contract offer?

Back 19

1. Price and description required in sales of real estate under common law

2. Sales of goods under Article 2 have no price requirement. Only needs intent from parties.

Front 20

Use of reasonable, appropriate, fair in first contracts communication

Back 20

Not a valid offer bc vague or ambiguous material terms

Front 21

Requirements contracts

Back 21

A contract for the sale of goods can state the quantity of goods to be delivered under hte contract in terms of buyer's requirements or seller's output or in terms of exclusivity

Front 22

Offer?

1. B offers to buy widgets from S for five years. No specific quantity term in the offer. Says that B will purchase all widgets from S.

Back 22

1. Yes, it is an offer to enter into a requirements contract.

Front 23

Use of words all, only, solely in offer contracts questions...

Back 23

Valid offer to enter into a requirements contract.

Front 24

Can buyer in requirements contract increase requirements?

Back 24

Yes, so long as the increase is in line with prior demands

Front 25

Permissible?

B buys 1000 pounds of widgets in first three years.

1) B orders 1050 in 4th year

2) B orders 2000 in 4th year

Back 25

1. valid increase in requirements contract

2. invalid increase in requirements contract because buyer can increase requirements only so long as the increase is in line with prior demands

Front 26

Is an advertisement an offer?

Back 26

No, it is an invitation to make an offer UNLESS

1. reward, prize, or contest can be an offer

2. An advertisement can be an offer if it is specific as to quantity and expressly indicates who can accept.

Front 27

Offer?

1. A promises 100$ reward to anyone who catches the flue after using A's product as directed.

2. A advertises coat for 10$, first come first served.

Back 27

1. Yes, offer even though advertisement. Reward, prize, contest exception applies.

2. Yes because an advertisement can be an offer if it is specific as to quantity and expressly indicates who can accept.

Front 28

Things to look for in offers questions

Back 28

1. Common law real estate sales require price and description

2. Vague or ambiguous material terms are not an offer under common law or ucc

3. Requirements contracts / increase in requirements

4. Advertisments are not offers

Front 29

Termination of offers

Back 29

An offer cannot be accepted if it is terminated. It is DEAD.

Front 30

I tell you I will sell you car for 4000 but not how long offer is kept open. Can you accept 5 years later?

Back 30

No, terminated by lapse of time

Front 31

Reasonable time until offer terminated by lapse

Back 31

1. by time stated

OR

2. one month (says Epstein)

Front 32

How can an offer be revoked?

Back 32

1. unambiguous statement by offeror to oferee of unwillingness or inability to contract OR

2. unambiguous conduct by offerer indicating an unwillingness or inability to contract that offeree is aware of

Front 33

A offers to sell cadillac for 400. Who can revoke offer?

Back 33

Only A. Offer can only be revoked by guy who made it.

Front 34

Why is offer revocation a two-player game?

Back 34

Because it involves conduct by offeror that

offeree is aware of

Front 35

1. On jan 15, A offers to sell cadillac to B for 1500. I say to myself next day that I don't want to sell car.

Back 35

1. Offer is still valid. Nothing has been communicated to B. NO revocation of offer.

Same result if A has sold car to someone else without B's awareness.

Front 36

On jan 15, A offers to sell cadillac to B for 1500. B sees C driving cadillac next day and learns that C has bought it. Can B accept offer?

Back 36

1. No because conduct by A and B is aware.

**remember offer revocation is a two-player game involving offeror and offeree

Front 37

On jan 15, A offers to sell cadillac to B for 1500. B learns that A offered car to C but C hasn't accepted it. Can B accept offer?

Back 37

Yes, Making offer to another person is NOT revocation.

Front 38

Is making multiple offers revocation?

Back 38

No, not words or conduct unambiguously indicating an unwillingness or inability to contract.

Front 39

When does a revocation become effective?

Back 39

1. If sent through mail, revocation effective when received.

2. Offer cannot be revoked after accepted.

Front 40

1. S offers to sell car to B for 400. B accepts. Can S still revoke?

Back 40

No, bc offer can't be revoked until accepted.

Front 41

Offers that CANNOT be revoked

Back 41

1. Option (involves promise to hold offer open and some payment for it)

2. firm offer rule

Front 42

Option

Back 42

1. promise to hold offer open
AND
2. some payment for option

Front 43

S offers to sell B car for 400. B pays S 10 for S's promise to keep offer open for week.

(1) Can S revoke?

(2) If no 10 payment?

Back 43

1) No, bc option.

2) Yes, not option bc no payment.

Front 44

Firm offer rule
(special article 2 rule)

Back 44

An offer can't be revoked for up to 3 months if:

1) offer to buy/sell goods
2) signed,written promise to keep teh offer open
3) party is a merchant

Front 45

What is a merchant?

Back 45

Anyone connected with business.

Front 46

S, used car dealer, offers to sell B car for 400. S signs written offer and promises it will be kept open for week. Can S revoke?

Back 46

No, under firm offer rule.

Front 47

Differentiate between option and firm offer rule

-why relevant

Back 47

1. Option has paid for promise

2. Meet requiremetns of firm offer rule

3. relevant bc both prevent revocation of offer

Front 48

Can offer be revoked?

1. Merchant S promises by signed writing to keep offer open for 6 months.

2. Merchant S by signed writing promises to keep offer open and doesn't state time period.

Back 48

1. Can't be revoked for 3 months under the firm offer rule

2. Can't be revoked for time fixed by court for up to three months (limit under firm offer rule)

Front 49

S Used Cars makes offer by signed writing to B to sell car for 400. Can S revoke?

Back 49

Yes because no promise to keep the offer open

Front 50

S offers to sell B house for 100,000 and the written offer promises that will be accepted for next 4 months. Can S revoke?

Back 50

Yes, common law applies to real estate.

Firm offer rule only applies under Article 2.

Front 51

When detrimental reliance by offeree that is reasonably foreseeable,

Back 51

Offer cannot be revoked

Front 52

Four times when can't revoke

Back 52

1. option
2. firm offer rule (applies to signed writings by merchants)
3. when detrimental reliance by offeree that is reasonably foreseeable
4. offers to enter into unilateral contracts.

Front 53

Offer states that can be accepted only by performance

Relevance?

Back 53

Unilateral contract

Front 54

O offers P 1000 to paint O's house. O's offer states that can be accpeted only by performance. P starts painting. Can O revoke?

Back 54

No, offer irrevocable because start of performance pursuant to offer to enter into a unilateral contract makes that offer irrevocable for a reasonable time to complete performance.

Front 55

Revocability of unilateral contracts

Back 55

Start of performance pursuant to offer to enter into a unilateral contract makes that offer irrevocable for a reasonable time to complete performance.

Front 56

Is mere preparation enough to accept unilateral contract?

Back 56

No, it must be actual performance.

--Yet mere preparation might be enough to trigger detrimental reliance rule adn make offer irrevocable.

Front 57

Effect of rejection of offer by offeree

Back 57

Offer is terminated

Front 58

How can offeree reject offer?

Back 58

1. counteroffer
2. conditional acceptance
3. additional terms (common law only)

Front 59

Effect of counteroffer

Back 59

Terminates offer and becomes the new offer

**counteroffers kill

**distinguish from bargaining, which doesn't terminate offer

Front 60

1) S offers to sell blackacre to B for 10,000. B responds, I will only pay 9000. Can B later accept S's offer for 10,000?

2) S offers to sell blackacre to B for 10,000. B responds, Will you take 9000? Can B later accept S's offer for 10,000?

Back 60

1. No, By's counteroffer terminated S's offer.

2. Yes, this is bargaining

Front 61

Distinguish between bargaining and counteroffer

--relevance

Back 61

* Relevant bc counteroffers terminate offers and bargaining does not.

1. Statement is counteroffer
2. Question is bargaining, "Will you take X"

Front 62

Conditional acceptance defined and why relevant

Back 62

1. relevant because terminates offer and becomes new offer

2. Response to offer uses words if, provided, so long as, but, on condition that

Front 63

Firm offers job. A answers I accept provided that I don't get assigned to tax team.
1) contract formed?
2) is offer terminated?

Back 63

1. No contract formed
2. Yes, conditional acceptances terminate offer

Front 64

B sends S purchase order. Purchase order makes no mention of disputes. B returns with statement "Acceptance is expressly conditioned on this arbitration term as part of contract"

Is there a contract?

Back 64

No, conditional acceptance. This terminates offer and creates new offer.

Front 65

Additional terms to a common law contract: Mirror image rule

-relevance

Back 65

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

--Relevant because any added terms (not mirror image) terminates offer and creates new one.

--If sale of goods, apply UCC 2-207, not mirror image rules

Front 66

L offers to lease building to T by sending T a signed lease that is silent about arbitration of disputes. T adds paragraph about disputes and signs. Did T accept L's offer creating a contract?

Back 66

No, violates common law mirror image rule. Adding terms to a common law contract terminates the offer and creates a new one.

--If sale of goods, apply UCC 2-207.

Front 67

When response to offer adds new terms, but does not make new terms a condition of acceptance

Acceptance?

Back 67

Generally treated as acceptance.

Front 68

Additional terms still acceptance under UCC article 2 (2-207)

Back 68

Applies to fact patterns when
(1) offer to buy or sell goods and
(2) a response with additional terms raises two separate questions

Front 69

Analysis under UCC 2-207

Back 69

1. Is there a contract?
--yes if response adds something in sale of goods, without insisting on it.
--no if says that "acceptance is expressly conditioned" on additional term

2. Is the additional term a part of the contract?
- if both merchants, the additional term is part of contract UNLESS (1) material change or (2) offeror objects
-if one or both parties aren't merchants, adddition treated as proposal to be separately accepted or rejected. Contract still formed without additional terms.

Front 70

4 ways that an offer can be terminated

Back 70

1. Lapse of time (either by time stated or reasonable time)
2. Revocation of an offer
3. Words or conduct of the offeree (Rejection by offeree)
4. Death of a party prior to acceptance

Front 71

Can buyer in requirements contract increase requirements?

Back 71

Yes, so long as the increase is in line with prior demands

Front 72

Permissible?

B buys 1000 pounds of widgets in first three years.

1) B orders 1050 in 4th year

2) B orders 2000 in 4th year

Back 72

1. valid increase in requirements contract

2. invalid increase in requirements contract because buyer can increase requirements only so long as the increase is in line with prior demands

Front 73

Is an advertisement an offer?

Back 73

No, it is an invitation to make an offer UNLESS

1. reward, prize, or contest can be an offer

2. An advertisement can be an offer if it is specific as to quantity and expressly indicates who can accept.

Front 74

Offer?

1. A promises 100$ reward to anyone who catches the flue after using A's product as directed.

2. A advertises coat for 10$, first come first served.

Back 74

1. Yes, offer even though advertisement. Reward, prize, contest exception applies.

2. Yes because an advertisement can be an offer if it is specific as to quantity and expressly indicates who can accept.

Front 75

Things to look for in offers questions

Back 75

1. Common law real estate sales require price and description

2. Vague or ambiguous material terms are not an offer under common law or ucc

3. Requirements contracts / increase in requirements

4. Advertisments are not offers

Front 76

O offers P 1000 to paint O's house. O's offer states that it can be accepted only by performance. P orders paint. Can O revoke?

Back 76

1. this is a unilateral contract and start of performance makes the offer irrevocable for a reasonable time to complete performance. But P has only prepared for performance. This is not enough. The offer can be revoked until P actually begins performance, not mere preparation.

2. The offer is not revocable under the rule of detrimental reliance by the offeree

Front 77

A offers to sell car to B for 400. B responds "I accept. Deliver it on Saturday."
1. is there a contract?
2. is sat. delivery a contract term?

Back 77

1. Yes contract formed because new terms not ecxplicitly made a condition of acceptance.

2. Sat. delivery not a contract term because A and B are not both merchants.

Front 78

A offers to sell car to B for 400. B responds "I accept if the car is delivered on saturday"

1. is there a contract?
2. is sat. delivery a contract term?

Back 78

1. No, conditional acceptance terminates offer and makes new offer.

Front 79

What is the effect of death or incapacity of a party on an offer to enter into a contract?

Back 79

Terminates offer

UNLESS

1. option
2. there has been part performance of an offer to enter into unilateral contract

Front 80

Who can accept an offer?

Back 80

1. person who knows about the offer

2. the person to whom the offer was made

Front 81

Can offers or options be assigned?

Back 81

1. offers cannot be assigned. Only available to the person to whom the offer was made.

2. Options can be assigned unless the option provides otherwise.

Front 82

A finds and returns dog, not knowing about reward offered by owner. Is this acceptance of offer--can A later claim reward?

Back 82

No, an offer can only be accepted by a person who knows about the offer at the time of acceptance.

Front 83

Five fact patterns that arise in acceptance of offer questions

Back 83

1. offeree fully performs
2. offeree starts to perform
3. offeree promises to perform
4. offeror and offeree are at different places and there are conflicting communications

5. seller of goods sends the wrong goods

Front 84

When is notice of performance required to accept an offer?

Back 84

1. when offer requires it
OR
2. offeree has reason to believe that offeror will not learn of the acceptance (e.g. lives in different place)

Front 85

O lives in CA. O offers P 1000 to paint house in TX. P paints house but doesn't notify O. O pays X to paint house. Did P accept?

Back 85

No. P had reason to believe that offeror would not learn of acceptance and therefore notice of performance was required.

Front 86

Does an offeree accept an offer by starting to perform?

Back 86

1. Yes if offer to enter into bilateral contract.

2. No if offer to enter into unilateral contract. This requires complete performance for acceptance.

Front 87

O offers P 1000 to paint his house. Offer silent as to method of acceptance. P starts painting. Has P accepted O's offer?

Back 87

Yes, preseumed bilateral contract. P obligated to finish painting.

Front 88

O offers P 1000 to paint his house. Offer states that it can only be accepted by perofrmance. P starts painting. Has P accepted O's offer?

Back 88

No, unilateral contract. This requires complete performance to accept.

Front 89

Can an offeree accept an offer by promising to perform?

Back 89

1. Yes, in most offers to contract.

2. Not unilateral offers, those that expressly require perofrmance for acceptance, such as rewards.

Front 90

B faxes order for grits to S, requesting immediate shipment.

1. Can S accept by sending fax promising to ship grits?

2. What if offer stated that could only be accepted by shipment.

Back 90

1. yes. Then S is obligated to immediately ship grits

2. Promise to ship doesn't constitute acceptance of offer and failure to ship is not breach.

Front 91

Can an offeree accept an offer by promising to perform?

Back 91

1. Yes, in most offers to contract.

2. Not unilateral offers, those that expressly require perofrmance for acceptance, such as rewards.

Front 92

B faxes order for grits to S, requesting immediate shipment.

1. Can S accept by sending fax promising to ship grits?

2. What if offer stated that could only be accepted by shipment.

Back 92

1. yes. Then S is obligated to immediately ship grits

2. Promise to ship doesn't constitute acceptance of offer and failure to ship is not breach.

Front 93

When are mailed communications effective under contract law?

Back 93

1. Acceptance effective when sent if (a) made in a manner and by means invited, and (b) the offeree has not already sent a rejection

2. other mailed communications are effecitve when received

Front 94

A offers to sell car for 400 to B. On 1-10, B mails letter of acceptance. On 1-11, B receives letter revoking offer. Is there a contract?

Back 94

Yes, revocation effective when received.

Acceptance effective when mailed.

Front 95

A offers B to join band. A mails rejection of offer on 1-8. On 1-9, A mails acceptance. B receives rejection first. Is there a contract?

Back 95

1. if rejection letter sent first and received first, no contract

2. if acceptance mailed first OR received first, valid contract.

Front 96

B orders a case of vaseline from S. S ships case of jelly. Did S accept offer creating contract? Did S breach contract?

Back 96

1. Yes S accepted offer by performance, sending jelly.

2. Yes S breached by sending the wrong goods.

Front 97

B orders 100 red widgets. S sends 100 blue widgets with explanation, out of red, can you use blue? Is there a contract? IS there a breach by S?

Back 97

1. No contract bc conditional acceptance.

2. No breach because no contract formed.

Front 98

Legal reasons for not enforcing an agreement

Back 98

1. lack of consideration or consideration substitute for promise at issue

2. lack of capacity of person who made promise

3. statute of frauds

4. existing laws that prohibit performance of the agreement

5. misrepresentations

6. duress

7. unconscionability

8. ambituity in words of agremeent

9. mistakes at time of agreement as to teh material facts affecting the agreement

Front 99

What is consideration on MS?

On MA?

Back 99

1. MS: bargained for legal detriment

2. MA: bargained-for legal detriment or benefit

Front 100

Consideration analysis

Back 100

1. What did defendant ask for?

2. What detriment did plaintiff incur?

Front 101

types of consideration

Back 101

1. performance/forbearance
2. promise to perform/forbear

Front 102

Landlord promises T to renew lease at same rental rate. T paints apt. L increases rent. T sues. Who wins?

Back 102

1. T incurred detriement of painting

2. BUT L didnt' ask for/bargain for anything.

NO CONSIDERATION.

Front 103

A promises to pay B 100 if B stops listening to music for month. B complies and A doesn't pay? who wins.

Back 103

1. B suffered detriment
2. A bargained for something.

Yes consideration adn A must pay.

Front 104

Can a promise be consideration?

Back 104

yes

Front 105

A and B enter into agreement. A promises to buy house. B promises to sell. Valid contract?

Back 105

Yes, A's promise serves as B's consideration and vice versa.

Front 106

A promises to sell house unless changes mind. B promises to buy. Valid contract?

Back 106

No, because A's promise is illusory.

Front 107

What consideration is adequate?

Back 107

Any consideratoin

Front 108

How is past consideration treated?

Back 108

Not consideration. Consideration can't be based on things that already happened.

Exception:
expressly requested and expectation of payment

Front 109

A saves B's life. B's mom promises to pay A 1000. Is this promise legally enforceable?

Back 109

No bc no consideration. A's detriment was in the past and past consideration not valid.

Front 110

When is past consideratoin valid?

Back 110

When act was expressly requested and actor expected payment for act.

Front 111

A's mom sees A in danger and asks B to save A. A's mom knows that B would expect to be paid. B saves A. A's mom promises to pay B 1000. Is this promise legally enforceable?

Back 111

Yes as the expressly requested adn expectation of payment exception to the general rule against past consideration.

Front 112

How is past consideration treated?

Back 112

Not consideration. Consideration can't be based on things that already happened.

Exception:
expressly requested and expectation of payment

Front 113

A saves B's life. B's mom promises to pay A 1000. Is this promise legally enforceable?

Back 113

No bc no consideration. A's detriment was in the past and past consideration not valid.

Front 114

When is past consideratoin valid?

Back 114

When act was expressly requested and actor expected payment for act.

Front 115

A's mom sees A in danger and asks B to save A. A's mom knows that B would expect to be paid. B saves A. A's mom promises to pay B 1000. Is this promise legally enforceable?

Back 115

Yes as the expressly requested adn expectation of payment exception to the general rule against past consideration.

Front 116

Preexisting contractual or statutory duty rule for consideration

Back 116

1. common law
Doing what you are already legally obligated to do is not consideration for a promise to pay you more to do merely that. New consideraiton is necessary

UNLESS (1) addition to or change in performance; (2) unforeseen difficulty so severe as to excuse performance; or (3) third party promise to pay

2. Article 2
Changes to existing sale of goods contract valid if in good faith. No need for new consideration.

Front 117

A hires B to sing at concert for 15K. B agrees. Later B demands 20K to sing. A agrees to pay B 20K. B sings. A only pays 15K. Is the agreement to pay 20K legally enforceable?

Back 117

No, not under the preexisting contractual or statutory duty rule.

B gave no consideratoin for A's promise to pay 20K. No contract formed bc no consideration.

Front 118

Exceptoins to preexisting contractual or statutory duty rule for consideration

Back 118

No new consideration required when:

(1) addition to or change in performance; (2) unforeseen difficulty so severe as to excuse performance; or (3) third party promise to pay

Front 119

A and B contract for A to sing for 15K. Later B promises 20K if A sings certain song first. 20K contract legally enforceable?

Back 119

Yes, because consideration from both parties.

Preexisting contractual or statutory duty rule doesn't apply

Front 120

A and B contract for A to perform for 15K. At performance, sound system doesn't work. B agrees to pay 20K if A still performs. A performs. Is contract for 20K legally enforceable?

Back 120

Yes, because of unforeseen difficulty so severe as to excuse performance exception to preexisting contratual or statutory duty rule.

Front 121

A and B contract for A to sing for 15K. A later demands 20K to sing. C promises to pay additional 5K. Is C's promise legally enforceable?

Back 121

Yes, because of third party promise to pay exception to preexisting contractual or statutory duty rule.

Front 122

S contracts to sell widgets to B for 1000. Later S demands 1300 for widgets. B agrees. Is agreement for 1300 legally enforceable?

Back 122

Yes, so long as S demanded more money for widgets in good faith.

Preexisting contractual or statutory duty rule doesn't exist under Article 2

Front 123

Is agreement to pay part of debt in exchange for release of debt legally enforceable?

Back 123

Not legally enforceable if
(1) debt is due
AND
(2) undisputed

Front 124

Is agreement between A and creditor legally enforceable

when A and B agree that A pay 1000 early to satify 1500 debt completely.

Back 124

Yes, early payment is new consideration for release of debt.

Front 125

when is a promise enforceable without consideration?

Back 125

When there is a consideration substitute

1. written promise to satisfy an obligation for which there is a legal defense

2. Seal is not consideration substitute on MS, but is sometimes in MA.

3. Promissary estoppel (detrimental reliance)

Front 126

Elements of promissary estoppel and relevancde

Back 126

1. Three elements
a. promise
b. reliance that is reasonable, detrimental, adn foreseeable
c. enforcement is necessary to avoid injustice

**Legally enforceable without consideration

Front 127

D owes C 1000. C can't collect this debt because sof has run. D promises to pay 600. Is the 1000 or 600 promises legally enforceable?:

Back 127

1. 1000 not legally enforceable because sof ran.

2. 600 is legally enforceable even though there is not new consideration. Promise to pay a debt barred by a techical defense is a consideration substitute.

Front 128

Who lacks capacity to contract?

Back 128

1. kids under 18
2. mental incompetents who don't have ability to understand agreement
3. intoxicated persons if other party has reason to know is intoxicated at time of contract formation.

Front 129

Consequences of incapacity of defendant making a contract

Back 129

1. D (without capacity) can disaffirm contract

2. If D retains benefits after gains capacity, D impliedly affirms the contract

3. D's who lack capacity are not liable for necessities under contract law. Liable only under quasi-contract law to pay value of necessities

Front 130

A hires child B to lecture. B lectures and A doesn't pay.

1. Can child A sue B for payment?

2. Can B sue child for breach if child doesn't perform lectures?

Back 130

1. Yes

2. No, as defendant, B has incapacity defense since under 18.

Front 131

A sells 17 year old B car. B doesn't pay. B turns 18 and keeps car w/out complaint or objection. Can A enforce agreement against B?

Back 131

Yes, because B retained car after turned 18 and gained capacity.

Implied affirmation of contract.

Front 132

A is mentally incompetent and leases apt from B for 400. Does A have to pay?

Back 132

Because A is incompetent, he is not liable for contracts for necessities under contract law. A will have to pay under quasi-contract law the value of the lease.

Front 133

What is the purpose of the statute of frauds defense?

Back 133

to prevent false claims of a contract

to require special proof that a contract exists

Front 134

Statute of frauds analysis

Back 134

1. Is the contract within the statute of frauds?

2. Is the statute of frauds satisfied?

3. Is there a statute of frauds defense?

Front 135

Define "within the statute of frauds"

Back 135

statute of frauds applies

Front 136

How is the statute of frauds satisfied?

Back 136

Generally by a writing or performance

Front 137

What types of contracts are within the statute of frauds?

Back 137

1. Promise in consideration of marriage

2. promise by executor or administrator to answer for debt of decedent

3. other promises to creditors to guarantee the debts of another

4. Service contracts not capable of being performed within a eyar from the time of the contract

5. Transfers of interest in real estate of a term of more than a year

Front 138

Promise in consideration of marraige

1. define
2. relevance

Back 138

1. A promise to do something or refrain from doing something if we marry.
--Not merely a promise to marry.

2. Relevant bc within statute of frauds

Front 139

H claims that W agreed to renounce any claim to property that he owned prior to marriage if he would marry her. Within sof?

Back 139

Yes, as promise in consideration of marriage.

Front 140

H claims that W agreed to marry him. Within sof?

Back 140

No, not promise in consideration of marriage

Only promise to marry, not within sof.

Front 141

T or F: When executor or administrator promises to answer for debt of decedent, contract is within the sof

Back 141

True--this means that executor or administrator promises to pay IF original debtor doesn't pay.

Front 142

C is creditor of dead D. C claims that E personally guaranteed payment of D's debts in a contract. Is E's personal guarantee promise within the sof?

Back 142

Yes, a promise by an executor or administrator to answer for debt of decedent (guarantee his debts) is within the sof

Front 143

H promises S that she will pay for paint that S delivered to P. Is H's promise within the statute of fraud?

Back 143

No, sof covers promises to creditors to answer for (guarantee) the debts of another. This means to pay if the debtor can't pay.

--This case is a promise to pay, not a promise to guarantee and is NOT w/in the sof.

Front 144

D commits tort against P. G guarantees P full payment of all damages. Is G's promise w/in sof?

Back 144

Yes, because G promised to answer for the debts of D

Front 145

Main purpose exception to the rule that

a promise to a creditor to answer for the debts of another is within the sof.

Back 145

Agreement to guarantee debts of another NOT within sof when:

the main purpose of the guarantee is to benefit the guarantor

Front 146

P is painting H's house, using paint that P buys from S. P fails to pay S and S refuses to deliver. H promises S that if she contineus to provide paint to P, H will pay S if P fails to P.

Is H's promise within the sof?

Back 146

No, because the main purpose exception to the

rule that a promise to a creditor to answer for teh debts of another is w/in the sof.

Front 147

What is the relevance of a service contract not capable of being performed within a year from the time of the contract?

Back 147

It is within the statute of frauds if it COULD NOT be performed within one year of making of contract.

Front 148

P claims that D agreed to employ her for three years. W/in sof?

Back 148

Yes because services contract not capable of being performed within a year from teh time of contract.

Front 149

P claims that O agreed to employ her for 3 years and that P could terminate contract on 30 days notice. W/in statute of frauds?

Back 149

Yes, early termination option is irrelevant. Contract is not capable of being performed in one year.

Front 150

A claims that B hired him on 1-15-06 to perform on 12-24-07. Is this contract within sof?

Back 150

Yes, because service could not be performed within one year from time of contract.

Front 151

P claims that O agreed to employ her for a year, starting next month. SOF?

Back 151

Yes, within statute of frauds bc can't be completed w/in one year.

Front 152

When does statute of frauds apply to contracts to complete tasks?

Back 152

Never

Front 153

P claims that D hired him on 1-15-06 to cut all trees on land? Is this contract within sof?

Back 153

No, contracts to complete tasks never within the sof.

Front 154

How are lifetime contracts treated under sof?

Back 154

Not covered by sof.

Front 155

P claims that D hired her to work for her for rest of P's life? Is this contract w/in sof?

Back 155

No. Contracts for life never within sof

Front 156

What real estate transactions are within the sof?

Back 156

TRANSFERS OF INTEREST in real estate

for a term of more than a year

Front 157

P claims that D agreed to build a home on blackacre. Is this contract within sof?

Back 157

No, bc no transfer of interest in real estate.

Front 158

P claims that D agreed to sell Redacre for 400. SOF?

Back 158

Yes, within sof bc transfer of interest in real estate for term of more than one year.

Front 159

P claims that D agreed to sell an easement on Greenacre for 2 yrs. Within sof?

Back 159

Yes, because transfer of interest in real estate for more than one year.

Front 160

P claims that D agreed to lease blackacre for one year. W/in sof?

Back 160

No, It is a transfer in an interest of property. BUT it is not for MORE THAN 1 year.

Front 161

When is a sale of goods within sof?

Back 161

When it costs 500 or more.

Includes 500

Front 162

A claims B agreed to sell him car for 500. W/in sof?

Back 162

Yes, because sale of good for 500 or more.

Front 163

When are leases of goods within the sof?

Back 163

When payments total 1000 or more.

Front 164

Categories of contracts w/in the statute of frauds

Back 164

1. Transfers of interest in real estate for term of more than one year

2. Service contracts not capable of being performed w/in a year from tie of contract

3. promise in consideration of marriage

4. promise by executor/adminiatrator to guarantee debt of decedent

5. Promises to creditors to answer for debts of another

6. Sale of goods for 500 or more

7. lease of goods with payments totally 1000 or more

NOT

a. service contracts for life

b. tasks

Front 165

How is the statute of frauds satisfied?

Back 165

By special proof of agreement

1. performance
2. writing
3. judicial admission of sale of goods contract

Front 166

define

"Has the statute of fraud been satisfied?

Back 166

This asks whether there has been special proof of agreement.

If so, then satisfied.

Front 167

define

Is there a statute of frauds defense?

Back 167

This asks whether there is special proof satisfying the statute of frauds.

If not, there is a sof defense.

Front 168

What kind of performance will satisfy the statute of frauds

1. in a service contract?

2. in a sale of goods contract?

3. In a transfer of interest in real estate contract?

Back 168

1.
--full performance by either party satisfies sof
--Not part performance

2.
--part performance but only to extent of part performance
--substantial beginning of specially manufactured goods

3. 2/3:
full or party payment
possession
improvement
--Not fully payment alone

Front 169

A and B agree that A will write book and B will advertise for 5 years. A writes book and B doesn't advertise. A sues B for breach. Statute of frauds?

Back 169

1) applies because service contract for more than one year.

2. satisfied because full performance by either party satisfies sof in service contract.

Front 170

P agrees to work for D for 3 yrs. P works for 13 months and D fires her without cause. P sues. SOF?

Back 170

1. Applies because service contract for more than 1 yr.

2. Not satisfied by performance because must be FULL performance by either party to satisfy sof in service contract

Front 171

S orally agrees to sell 2000 widgets to B for 10,000. S delivers 600. S sues for payment. Does B have sof defense?

Back 171

1. sof applies because sale of goods for price of 500 or more.

2. No sof defense for 600 goods delivered. Part performance satisfies sof to extent of part performance.

Front 172

S orally agrees to sell 2000 widgets to B for 10,000. B sues for 2000 undelievered goods. Does S have sof defense?

Back 172

yes, bc sof applies because goods contract for $500 or over.

No special proof to satisfy (part performance, writing, judicial admisison of sale of goods)

Front 173

How can statute of frauds be satisfied for sale of specially manufactured goods?

Back 173

1. writing
2. judicial admission of sale of goods
3. substantial beginning by seller

Front 174

A orally orders custom made boots from B for 500. A changes mind and cancels order. Can B enforce?

Back 174

SOF applies because sale of goods contract for 500 or over.

SOF satisfied if seller made substantial beginning on custom made goods.

Front 175

How can sof be satisfied in contract for transfer of interest in real estate?

Back 175

1. writing
2. 2/3:
possession
improvements
any payment

Front 176

B orally agrees to buy blackacre from S for 10,000. B takes posession and pays 8000. SOF?

Back 176

Applies bc transfer of interst in real estate for term of more than one year.

Satisfied because part performance (2/3 of possession, some payment, improvements)

Front 177

Statute of frauds analysis

Back 177

1. Does it apply?
2. Is it satisfied?

Front 178

Full payment of oral agreement to purchase house. Valid?

Back 178

No, doesn't satisfy sof unless also either improvements of possesssion--then satisfies sof as part performance

Front 179

What must writing contain to satisfy the statute of frauds

1. under common law?

2. under ucc?

Back 179

1.
--material terms (who, what)
--signed by person asserting sof defense

2.
--quantity term
--signature by person asserting sof defense OR "answer damn letter rule" when merchant sends merchant signed writing with quantity term and merchant fails to respond w/in 10 days

Front 180

Agreement says

"Your offer of 1-15 is hereby accepted." signed by dana scully

valid contract?

Back 180

No, writing doesn't satisfy sof because no material terms (who, what)

Front 181

Contract states

"ABC agrees to employ Harriet Miers as attorney for three years at 200,000 a year" Signed by firm manager

valid contract

Back 181

SOF applies bc service contract for more than one year

--contains material terms (who, what)
--Contains signature of firm, so firm can assert sof defense
--Doesn't contain signature of Miers so she can't assert sof defense.

Front 182

Contract states

"I agree to buy 17 dolls" signed by buyer
price 500

valid?

Back 182

1. sof applies bc sale of goods for 500 or more

2. Does writing satisfy sof?
--contains quantity term
--Satisfies so buyer can assert as defense bc buyer signed.
--seller didn't sign so can't assert sof defense

Front 183

Answer the damn letter exception

Back 183

Statute of fraud satisfied in sale of goods (UCC) when:

MERCHANT asserting sof defense

sent signed writing with quantity term to other MERCHANTand

other merchant didnt' respond w/in 10 days of receipt

Front 184

Merchant S receives fax from B "as we agreed during our telephone call, you will be sending me 200 sacks of grits adn billing me 600" S never sends. B sues for breach. What result?

Back 184

1. W/in sof because sale of goods for 500 or more

2. Is sof satisfied?
Yes under answer the damn letter rule bc

Statute of fraud satisfied in sale of goods (UCC) when:

MERCHANT asserting sof defense

sent signed writing with quantity term to other MERCHANTand

other merchant didnt' respond w/in 10 days of receipt

Front 185

When do writings of leases of personal property satisfy the statute of frauds?

Back 185

When writing

1. indicates its a lease

2. describes whats being leased

3. states duration of lease

Front 186

Judicial admission of sale of goods agreement

defined?
relevance?

Back 186

Relevant bc satisfies sof.

When an individual asserting the sof defense admits that there was an agreement in pleadings, testimony, or discovery

Front 187

Judicial admission of sale of goods agreement

defined?
relevance?

Back 187

Relevant bc satisfies sof.

When an individual asserting the sof defense admits that there was an agreement in pleadings, testimony, or discovery

Front 188

Must an authorization to execute a contract for someone else be in writing?

Back 188

Yes, when the contract to be signed is within the statute of frauds.

Concept of "equal dignity". If contract to be executed by authorized 3rd party is w/in the sof and requires writing, then the authorization to execute the contract for someone else must also be in writing.

Front 189

Equal dignity rule in contracts

Back 189

If contract to be executed by authorized 3rd party is w/in the sof and requires writing, then the authorization to execute the contract for someone else must also be in writing.

Front 190

A authorizes B to sign 2 mth lease on apt for her. Must authorization be in writing?

Back 190

No, because contract to be signed need not be in writing (not within sof).

This is equal dignity rule.

Front 191

When is written evidence of a modification of a written contract necessary?

Back 191

Written evidence of modification is necessary when:

contract with alleged modification is within the statute of frauds

Front 192

T leases building from L for 1 yr. L claims they later agreed to increase term to 3 years. Must this modification be in writing to be enforceable?

Back 192

Yes, bc contract with alleged change is w/in sof.

Front 193

T leases building from L for three years. T later claims they agreed to reduce duration of lease from three to one year. Is writing of modificaiton required for it to be enforceable?

Back 193

No, bc contract w/ alleged change is not w/in sof.

Front 194

A agrees to buy 600 bottles of wine from B for 600. A later claims they agreed to increase number of bottles to 600. Does modification need to be in writing to be enforceable?

Back 194

Yes, contract for sale of goods for 600 is w/in sof. Therefore any modification must also be in writing.

Front 195

How are contract provisions requiring that all contract modifications be in writing treated

by common law?

by Ucc?

Back 195

1. common law
Not effective

2. ucc
Effective unless waived

Front 196

R employs E for 11 months. They sign contract which provides that all modifications should be in writing. Can R and E orally reduce term to 2 mths?

Back 196

Yes bc provisions providing that all modifications must be in writing is NOT effective under COMMON LAW

Front 197

E contracts to sell car to C for 400. They sign contract saying all modifications must be in writing. Can they orally increase price from 400 to 499?

Back 197

No, provision is effective unless waives. Provision requires that all modifications must be in writing

Front 198

When is contract void bc illegal subject matter or purpose?

Back 198

1. Illegal subject matter voids agreement
--e.g. if agreement is to do something illegal

2. Illegal purpose is enforceable by womeone who didn't know of illegal purpose.

Front 199

A agrees to pay 7000 to B to hurt C. A pays and B does nothing.

Can A recover for breach?

Back 199

No, bc illegal subject matter.

Front 200

A agrees to pay 7000 to B to hurt C in california.

B contracts w/ Delta to buy plane ticket to CA. B doesn't pay. Can Delta recover for breach?

Back 200

Yes, bc Delta didn't know about illegal purpose of B's trip.

Front 201

Misrepresentation in contracting

1. defined

2. effect

Back 201

1.
False assertion of fact or
Concealment of facts
that induces contract

2. Contract can be rescinded by induced party

Even if no fraud involved. Even if party innocently told falsehood.

Front 202

S tells B that house had no termites. B agrees to buy in reliance on S's representation. S thinks there are no termites. Can B rescind?

Back 202

Yes, bc S made misrepresentation--false assertion of fact

--doesn't matter that S did so innocently

Front 203

When can contract be rescinded based on physical or economic duress?

Back 203

Economic duress requires

1. bad buy with improper threat

2. vulnerable guy with no reasonable alternative

Front 204

D has contract to supply 1000 widgets to P for Xmas. D refuses to perform unless P also agrees to buy 5000 rugs. P needs widgets so agrees. Can P later rescined rugs agreement?

Back 204

Yes, on grounds of economic duress.

Front 205

When can an otherwise valid contract be rescinded?

Back 205

1. illegality
2. misreprentation
3. economic/physical duress
4. unconscionability
5. misunderstanding
6. mistake of fact existing at time of contract

Front 206

Unconscionability

Back 206

Court can refuse to enforce all or part of agreement when

unfair surprise or oppressive terms

existed at time agreement made

(court can grant relief from consumer lease when unconscionable conduct in inducing or enforcing a lease, even when no provision unconscionable)

Front 207

When can contract be rescinded based on physical or economic duress?

Back 207

Economic duress requires

1. bad buy with improper threat

2. vulnerable guy with no reasonable alternative

Front 208

D has contract to supply 1000 widgets to P for Xmas. D refuses to perform unless P also agrees to buy 5000 rugs. P needs widgets so agrees. Can P later rescined rugs agreement?

Back 208

Yes, on grounds of economic duress.

Front 209

When can an otherwise valid contract be rescinded?

Back 209

1. illegality
2. misreprentation
3. economic/physical duress
4. unconscionability
5. misunderstanding
6. mistake of fact existing at time of contract

Front 210

Unconscionability

Back 210

Court can refuse to enforce all or part of agreement when

unfair surprise or oppressive terms

existed at time agreement made

(court can grant relief from consumer lease when unconscionable conduct in inducing or enforcing a lease, even when no provision unconscionable)

Front 211

When does misunderstanding void a contract?

Back 211

1. parties use a MATERIAL term that is open to at least two reasonable interpretations

2. each party attaches different meanings to the term

3. neither party knows or has reason to know the term is open to at least two reasonable interpretations.

Front 212

What is the effect of misunderstanding on a contract? (think peerless)

Back 212

Voided

Front 213

B and S contract for cotton to be delivered on teh Peerless. Be intends the october peerless. S intends the december peerless. Neither B or S knows that 2 ships called peerless. What result?

Back 213

No contract bc misunderstanding.

Front 214

B and S contract for cotton to be delivered on teh Peerless. Be intends the october peerless. S intends the december peerless. S knows there are two peerlesses. What result?

Back 214

Contract valid under terms as understood by B.

Front 215

What is the difference between misunderstanding and misrepresentation?

Back 215

1. misrepresentation happens before contract made

2. misunderstanding is based on words in contract.

Front 216

Types of mistake of fact existing at time of contract

Back 216

1. mutual mistake of material fact
(no contract if both parties mistaken on basic assumption of fact and the mistake materially affects the agreed exchange and neither party bears the risk)
---eg. barren cow case

2. unilateral mistake of material fact
(no contract if palpable mistake (obvious) or mistake is discvoered before significant reliance by other party)

Front 217

S contracts to sell B a painting for 50,000. Both parties believe it is a genuine warhol. Its not. What result?

Back 217

Contract not legally enforceable bc mutual mistake of material fact.

**Existence of agreed upon subject is material

Front 218

S contracts to sell B a painting for 50,000. Both parties believe it is a genuine warhol. It is but only worth 20,000. What result?

Back 218

Contract enforceable. No mutual mistake defense because mistake is not material.

Front 219

Is a mistake over the value of a good material?

Why relevant?

Back 219

No, not material.

Relevant because mutual mistake over material fact when neither party bears risk is grounds for voiding contract.

Front 220

Types of mistake of fact existing at time of contract

Back 220

1. mutual mistake of material fact
(no contract if both parties mistaken on basic assumption of fact and the mistake materially affects the agreed exchange and neither party bears the risk)
---eg. barren cow case

2. unilateral mistake of material fact
(no contract if palpable mistake (obvious) or mistake is discvoered before significant reliance by other party)

Front 221

S contracts to sell B a painting for 50,000. Both parties believe it is a genuine warhol. Its not. What result?

Back 221

Contract not legally enforceable bc mutual mistake of material fact.

**Existence of agreed upon subject is material

Front 222

S contracts to sell B a painting for 50,000. Both parties believe it is a genuine warhol. It is but only worth 20,000. What result?

Back 222

Contract enforceable. No mutual mistake defense because mistake is not material.

Front 223

Is a mistake over the value of a good material?

Why relevant?

Back 223

No, not material.

Relevant because mutual mistake over material fact when neither party bears risk is grounds for voiding contract.

Front 224

What are parol evidence questions asking?

Back 224

Whether the evidence is admissible

Front 225

Rationale of parol evidence rule

Back 225

final written version of deal is more reliable than anything said or written earlier

Front 226

Integration

Back 226

Written agreement that the court finds is the final agreement. This triggers teh parol evidence rule

Front 227

Partial and complete integration

Why relevant?

Back 227

Only relevant when determining whether parol evidence is admissible to show additions to a written deal.

Parol evidence admissible only when written agreement was a partial integration or that additional terms would ordinarily be in a separate agreement.

Partial integration means a written and final agreement that is NOT complete

Front 228

Merger clause

Back 228

Contract clause such as "This is the complete and final agreement"

--highly persuasive that is an integrated agreement, but not conclusive

Front 229

Parol evidence defined

Back 229

Words of party

before integration (before agreement put in written form)

can be oral or written

Front 230

Reformation

Back 230

Equitable action to modify a written contract to reflect an actual agreement.

This is a legal action to change a written contract to make it reflect what was actually agreed upon.

Front 231

When does the parol evidence rule apply?

Back 231

1. When written contract that court finds is final agreement (integrated) AND

2. there was on oral statement made at time contract signed

OR

earlier oral or written statements by the parties to teh contract.

Front 232

Is parol evidence that is inconsistent with the integrated contract admissible to show that the written deal should be changed?

Back 232

No, parol evidence is not admissible as a source of terms that are inconsistent with terms in written contract.

--doesn't matter whether writing is a complete or partial integration

EXCEPT admissible for limited purpose of determining whether there was a mistake in integration. A mistake that occurred when agreement reduced to writing.

Front 233

S contracts in writing to sell B 1000 chickens/month for 12 months.

B sues for reformation of written contract, claiming that S told him just as they were signing the contract that he would deliver as many chickens as B needed. B offers evidence of pre-contract telefacxes from S supporting claim.

Can court consider any of this evidence?

Back 233

No, this is parol evidence offered to show that integration was inconsistent with earlier conversations. Parol evidence is never admissible to show this

(unless to determine whether a mistake when agreement reduced to writing--clerical)

**Integrated writing is considered much more reliable than this parol evidence.

Front 234

S contracts in writing to sell B 1000 chickens/month for 12 months.

B sues for reformation of written contract, showing evidence that intent was to contract for 1200 chickens for 10 months.

Can court consider any of this evidence?

Back 234

Yes under the mistake in integration exception allowing parol evidence to be admitted to correct clerical type errors.

Front 235

Is parol evidence admissible to establish a defense to the enforcement of a written deal?

Back 235

Yes, for limited purpose of determining whether defense to enforcement of agreement such as misrepresentation, fraud or duress.

**Not admissible for purpose of changing deal
**regardless whether writing is partial or complete integration

Front 236

Is parole evidence admissible for purpose of changing a deal?

Back 236

No.

Admissible for purposes of establishing a defense to a contract

or

to explain term in written deal

or to correct mistake in integration (clerical error)

or

to add consistent additional terms to partial integration

Front 237

Can parol evidence be admitted to resolve ambiguities in the written contract?

Back 237

Yes.

E.g. to determine whether "chickens" meant fryiing or boiling birds

Front 238

Is parol evidence admissible to add consistent additional terms to an integration?

Back 238

Only if the written agreement was only a partial integration
OR
the additional terms would ordinarily be in a separate agreement

**only time it matters whether partial or complete integration

Front 239

S contracts in writing to sell B chickens. The 102 page written contract does not specify how chickens are to be packaged and wratpped. Can court consider evidence of earlier agreements between B and S to show how chickens are to be packaged and wrapped?

Back 239

Only if court finds the agreement to be a partial integration.

Under these facts, parol evidence probably not admitted because complete integration.

Front 240

What fact required to trigger parol evidence rule question?

Back 240

Written agreemetn

Front 241

What fact will most often trigger statute of frauds question?

Back 241

oral agreement

Front 242

Is parol evidence admissible to add consistent additional terms to an integration?

Back 242

Only if the written agreement was only a partial integration
OR
the additional terms would ordinarily be in a separate agreement

**only time it matters whether partial or complete integration

Front 243

S contracts in writing to sell B chickens. The 102 page written contract does not specify how chickens are to be packaged and wratpped. Can court consider evidence of earlier agreements between B and S to show how chickens are to be packaged and wrapped?

Back 243

Only if court finds the agreement to be a partial integration.

Under these facts, parol evidence probably not admitted because complete integration.

Front 244

What fact required to trigger parol evidence rule question?

Back 244

Written agreemetn

Front 245

What fact will most often trigger statute of frauds question?

Back 245

oral agreement

Front 246

How do courts interpret contract terms?

Back 246

1. parol evidence
2. course of performance
3. course of dealing
4. custom and usage

Front 247

course of performance

Back 247

Courts interpret contract terms based the same content between the same people

(basically prior installments under same contract)

Front 248

Course of dealing

Back 248

Courts interpret contract terms based on contracts between same people's different but similar contracts

Front 249

Custom and usage

Back 249

Courts interpret contract terms based on similar people's similar contracts.

Front 250

S contracts to sell 1000 chickens/month to B for 12 months. It is customary in chicken industry to use word chicken when deal covers.....

Back 250

Court interpreting contract terms based on custom and usage

Front 251

S contracts to sell 1000 chickens a month to B fo r12 months. Court looks at first three shipments

Back 251

Courrts use course of performance to interpret contract terms

Front 252

S contracts to sell 1000 chickens a month to B for 12 months. Under prior contracts, S sent B....

Back 252

Courts use course of dealing to intepret contract terms

Front 253

S contracts to sell 1000 chickens a month to B fo r12 months. Court looks at first three shipments

Back 253

Courrts use course of performance to interpret contract terms

Front 254

S contracts to sell 1000 chickens a month to B for 12 months. Under prior contracts, S sent B....

Back 254

Courts use course of dealing to intepret contract terms

Front 255

What is delivery obligation of seller of goods when no place of delivery has been agreed upon?

Back 255

Place of delivery is seller's place of business UNLESS

Both parties know that goods are someplace else AND that is teh place of delivery

Front 256

What is delivery obligatio nof seller when delivery is by common carrier (3rd party transport co.)?

Back 256

1. Under shipment contract
Seller completes delivery obligation when (1) gets goods to common carrier; (2) makes reasonable arrangements for delivery; and (3) notifies the buyer

2. Destination contracts
Seller completes delivery obligation when goods arrive where the buyer is

Front 257

S, Texas store
contracts to deliver bugs to
B, buffalo store

What are S's delivery obligations if this is a shipmetn contract?

Back 257

1. get goods to common carrier
2. make reasonable arrangements for delivery
3. notify buyer

Front 258

How to determine whether contract is shipment or destination?

Why relevant?

Back 258

Relevant bc affects seller's shipping obligations.

FOB--city where seller or goods are = shipment contract

FOB--other city
= destination contract

Front 259

Are seller's obligations greater under shipmetn or destination contract?

Back 259

Shipment contract means that seller's obligations are complete before delivery as longs as got goods to common carrier, make reasonable arrangements for delivery, and notifies buyer.

In destination contracts, obligations not complete until goods arrive where buyer is

Front 260

Contract provides for shipment of armadillos to Chicago, F.O.B., Chicago

(seller in tx, buyer in ny)

Relevance?

Back 260

Destination contract meaning seller has delivery obligation until armadillos arrive at place where buyer is.

Front 261

When do risk of loss issues arise?

Back 261

1) after contract formed
2) but before buyer receives goods and
(3) goods are damaged or destroyed and
(4) neither the buyer nor seller is to blame

Front 262

Risk of loss rule

Back 262

1. If agreement between parties, this controls

2. If one party breaches in any way, that party is liable for any uninsured loss. This is true whether or not breach is related to problem.

3. If delivery by common carrier, then buyer assumes risk after seller completes delivery obligation

4. When no agreement, no breach, no delivery by carrier, THEN:

1. if seller is merchant, risk of loss shifts to buyer when buyer recieves goods

2. If seller is non-merchant, risk of loss shifts to buyer when seller tenders goods

**tender means made goods available to buyer and doesn't require that buyer get physical possession

Front 263

A contracts to sell to B. During delivery products ruined by no fault of either. A sends goods 2 weeks late. Who takes loss of destroyed goods?

Back 263

1. first ask whether agreement controls. If not:

2. A takes loss bc breached, even though breach irrlevant to damage to goods.

Front 264

B buys fridge from S appliances. S appliances tells B he can pick up fridge at loading dock. Before B can drive truck to dock, lightening hits fridge. Does B have to pay for fridge?

Back 264

This is risk of loss question.

1. ask whether agreement controls
2. ask whether one party breached
3. Ask whether shipped by common carrier
4. Ask whether seller is merchant

Here seller is merchant, so buyer takes risk of loss when buyer gets actual physical possession. Here seller takes loss.

Front 265

Analysis to see who bears risk of loss, buyer or seller?

Back 265

ABCM
agreement
breach
common carrier
merchant

Front 266

B, used car dealer, buys used van from friend S. S tells B to pick up the van at his convenience, that keys are behind teh front bumper. VAndals damage van before B gets it. Does B have to pay for van?

Back 266

This is risk of loss question.

1. ask whether agreement controls
2. ask whether one party breached
3. Ask whether shipped by common carrier
4. Ask whether seller is merchant

Here seller is non-merchant, so buyer takes risk of loss when seller tenders (makes available) goods. So here buyer has risk of loss.

Front 267

Who bears risk of loss in leases of personal property?

Back 267

lessor

Front 268

What are the types of warranties of property?

Back 268

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

Front 269

How to spot an express warranty?

Back 269

Uses words that promise, describe or state facts
OR
use a sample model
("all steel" "guaranteed to operate for 2 years")

**distinguish from sales talk such as "top quality"

Front 270

Implied warranty of merchantability

1. when applicable
2. effect

Back 270

1. applicable whenever goods bought from merchant (person in business of selling that good regularly)

2. adds term to contract--that the goods are fit for the ordinary purpose for which such goods are used

Front 271

How to spot an implied warranty of merchantability question

Back 271

When seller is a merchant that deals in goods of a specific kind

Front 272

C buys gold chian from jewelry store. C wears it and hair turns green. Does C have relief?

Back 272

Yes under breach of implied warranty of merchantability theory bc chain not fit for ordinary purposes for which such goods are used

Front 273

Implied warranty of fitness for a particular purpose

Back 273

1. When buyer has particular purpose

2. buyer relies on seller to select suitable goods

3. and seller has reason to know of purpose and reliance

**adds term that the good sold is fit for a particular purpose
(general warranty of merchantability adds term that good sold is fit for ordinary purposes)

Front 274

B tells clerk at shoe store that he needs shoes to wear to interview with wall street firm. Clerk sells him pink leather shoes. Relief?

Back 274

Not general warranty of merchantability bc shoes are firt for ordinary purposes.

Yes implied warranty of fitness for a particular purpose bc

1. When buyer has particular purpose

2. buyer relies on seller to select suitable goods

3. and seller has reason to know of purpose and reliance

Front 275

What warranties are implied on lease?

Back 275

1. Same warranties as seller including express, merchantability, fitness for a particular purpose.

2. In finance lease (where pay third party to lease good), warranties made by supplier to lessor are enforceable by lessor

Front 276

X selects car from ford dealership. Bank buys and leases car to X.

1) what is this called

If car is defective, does X have breach of warranty claims?

3) Can X stop making payments to Bank?

Back 276

1. finance lease

2. Yes against Ford, but not against bank.

3. NO

Front 277

How can warranties be limited?

Back 277

1. Disclaimer

a. implied warranties of merchantability and fitness can be disclaimed by (1) as is or with all faults language; or (2) conspicuous language of disclaimer mentioning merchantability

b. express warranties can't be disclaimed

c. disclaimer eliminates other implied warranties

**In MA, can't disclaim implied warranties on consumer goods in consumer transactions.

2. Limitation of remedies

a. can limit all warranties unless unconscionable
--prima facie unconscionable if breach of warranty on consumer goods causes personal injury

Front 278

Can warranties be limited in MA?

Back 278

MA has greater consumer protection than most states. In most states, one can disclaim implied warranties with "as is" or "with no faults." In MA, can't disclaim implied warranties on consumer goods in consumer transactions.

Front 279

B buys oven from S stove store. Contract provides that "all operating parts are guaranteed for two years" and "warranty liability shall be limited to replacement parts".

A defective heating element causes fire which causes 100 of property damages.

If B sues Stove store for breach of contract, what can b recover?

Back 279

Replacement parts only unless that would be unconscionable.

Limitation of express warranty effective unless unconscionable.

Front 280

B buys oven from S stove store. Contract provides that "all operating parts are guaranteed for two years" and "warranty liability shall be limited to replacement parts".

A defective heating element causes fire which injures B and causes 100 in medical bills

If B sues Stove store for breach of contract, what can b recover?

Back 280

REplacement part and for personal injury.

There is a limitation on warranty in the contract but this is not effective when unconscionable.

Limitations on warranty when consumer goods cause personal injury is prima facie unconscionable.

Front 281

Perfect tender rule

Back 281

Seller is obligated to deliver perfect goods.

If not perfect, buyer can reject all or part.

UNLESS cure or installment contract or acceptance

Front 282

Performance concepts in contracts law

Back 282

1. perfect tender rule
2. rejection of goods rules
3. cure rules
4. installment contracts
5. Acceptance of goods rules
6. Revocation of acceptance of goods

Front 283

B and S enter into contract for 100 green widgets for 200. S delivers 99 green and 1 yellow. What can B do?

Back 283

B can reject all or one widget bc not perfect tender.

(unless cure or installment contract or acceptance)

Front 284

If buyer rejects goods (e.g. not perfect tender), when must buyer reject?

Back 284

Before acceptance of the goods

Front 285

When does seller who fails to make perfect tender have an oppportunity to cure?

Back 285

1. When reasonable grounds for believing that improper tender would be acceptable

E.g. when prior deals with such an allowance.

2. When time for performance has not yet expired

Front 286

B ordered green widgets form S to be delivered by 6-6. S delivers yellow widgets on 5-5. B notifies S that rejecting widgets. Does S have remedy?

Back 286

S can cure up until time for performance expires.

Front 287

When does buyer have right to reject installment sales contract?

Back 287

Only when substantial impairment in installment that can't be cured.

Perfect tender rule doesn't appply to installment contracts requireing or authorizing delivery in separate lots.

Front 288

S and B enter into an installment sales contract for teh delivery of 10 kegs at 6 pm each night of week. One night S delivers 9 kegs at 630 pm. Does B have remedy?

Back 288

No, perfect tender rule doesn't apply to installment sales contracts.

Only can reject when substantial impairment, not in this case.

Front 289

What is the effect of a buyer accepting goods?

Back 289

Can't later reject

But can revoke acceptance when
1) nonconformity substantially impairs value of goods and

2) excusable ignorance of grounds for revocation or reasonable reliance on seller's assurance of satisfaction and

3) revocation within a reasonable time after discovery of nonconformity

Front 290

Does a buyer accept goods when paying for them?

Back 290

NO, payment without opportunity for inspection is not acceptance.

Front 291

What is implied acceptance of goods?

Back 291

When buyer keeps goods without objection. If keeps for one month of more, conclude implied acceptance.

Front 292

In july, B buys sleeping bag from S insulated for temps as low as 10 degrees. B uses bag in summer months. When B goes camping in oct she realizes that bag not insulated for temps as low as 10.
1. can b reject goods?
2. can b revoke acceptance of goods?

Back 292

1. no, bc implied acceptance of goods

2. Yes bc (1) nonconformity; (2) excusable ignorance of groudns for revocation; and (3) revocation w/in reasonable time after discovery of nonconformity

Front 293

Can seller demand cash?

Back 293

Yes, but then buyer gets additional reasonable time

Front 294

What are the remedies for an unexcused nonperformance?

Back 294

1. specific performance/injunction

2. reclamation

3. money damages

Front 295

When is specific performance available as a remedy for unexcused performance?

Back 295

Almost never.

1. In contracts for sale of real estate (bc land unique)

2. Contract for sale of unique goods (art, antiques, custom-made)

3. NEVER for contracts for services

Front 296

S contracts to sell Blackacre to B. S breaches. Can B get specific performance?

Back 296

Yes because contract for sale of real estate

Front 297

S contracts to sell antique desk to B. S breaches. Can B get specific performance?

Back 297

Yes, because unique good.

Front 298

What remedies are available for unexcused performance of contract for services?

Back 298

1. money damages
2. injunction is within discretion of court
3. NEVER specific performance

Front 299

A contracts to lecture for Barbri. A breaches. What remedies for barbri?

Back 299

1. injunctive relief w/in discretion of court

2. never specific performance

3. money damages

Front 300

Reclamation

Back 300

Right of unpaid seller to get goods back.

1. buyer must have been insolvent at time got goods

2. seller must demand return of good W/IN 10 DAYS of buyer's reciept of goods

3. buyer still has goods at time of demand by seller

Front 301

S sells B grits on credit on 1-15. Grits delivered to B on 1-22. B is insolvent on 1-22. S learns of insolvency and demands return of grits on 1-27. Can S get grits by reclamation?

Back 301

Yes, if B still has grits on 1-27

Front 302

O takes watch to Jewler to be reparied. Jeweler repairs and sells watches. Jeweler wrongfully sells O's watch to B, a bonafide purchaser for value. Can O recover watch from B?

Back 302

No, because good faith purchase from dealer cuts off rights of original owner to get property back.

Front 303

Rights of good faith purchaser in entrustment

Back 303

1) owner leaves good with person who sells goods of that kind (e.g. for repair)

2) person wrongfully sells goods to third party

3) good faith purchaser cuts off rights of original owner to get property.

Front 304

How to calculate expectation damages

Back 304

Put P in same dollar position as if the contract had been performed

Front 305

When to calculate expectation damages

Back 305

1. on any ma essay question involving money damages

2. on any ms question, unless specifies otherwise

Front 306

P contracts O to paint house for 1000. O pays but P doesn't paint. O hires another painter for 1400. O's damages?

Back 306

1400--expectation damages

Put p in same dollar position as if contract had been performed

Front 307

What to write about expectation damages on ma essays.

Back 307

Courts in MA consistently look to protection of the expectation interest. This means we compensate teh plaintiff by putting her in the same position as if the contract had not been breached.

Front 308

P contracts to paint O's house for 1000, payable when work completed. P anticipates 200 profit. O breaches after P started work and used 100 of paint an dlabor. What is measure of P's damages?

Back 308

300

Front 309

How to calculate reliance damages

Back 309

Put PLAINTIFF in same economic poition as if contract had never happened

(what did plaintiff lose by relying?)

Front 310

P contracts to paint O's house for 1000, payable when P completes work. P anticipates 200 profit. O breaches after P started work adn used 100 in paint and labor. What is reliance measure of damages?

Back 310

P gets 100 in reliance damages

Front 311

How to calculate restitution interest

Back 311

Put DEFENDANT in same economic position as if contract never happened

(punish defendant for bad behavior)

Front 312

P contracts to paint O's house for 1000, payable when P completes work. O pays P 1000. P doesn't paint house. O hires another painter who charges 1400. What is restitution measure of O's damages?

Back 312

1000

Front 313

P contracts to paint O's house for 1000, payable when P completes work. P anticipates 200 profit. O breaches after P starts work and used 100 o fpaint and labor. What is restitution measure of P's damages?

Back 313

O must pay value of paint work done.

Front 314

What damages for breach of contract for sale of goods?

Back 314

Expectation damages

Front 315

Seller breaches, buyer keeps the goods

What damages?

Back 315

Fair market value if delivered as promised - fair market value as delivered

Front 316

Seller breaches, seller keeps the goods

What damages?

Back 316

Fair market value of goods at time of discovery of breach - contract price

OR

replacement price - contract price

Front 317

Buyer breaches, buyer has goods

Back 317

contract price

Front 318

Buyer breaches, seller has goods

Back 318

If inventory: provable profit of sale

If one of kind good: contract price - resale price
OR
contract price - market price at time and place of delivery

Front 319

Leather co contracts to sell leather clothes from regular inventory to C for 1000. C breaches. Leather co sells same items to J for 1000. Leather sues C.

Back 319

Leather gets provable lost profits for damages

bc inventory item

Front 320

Incidental damages defined

When recoverable?

Back 320

Costs incurred in dealing with breach are always recoverable

Front 321

P contracts to paint O's house for 1000. P breaches. O spends 20 finding another painter who agrees to paint for 1000. What result?

Back 321

P pays 20 in incidental damages.

Front 322

Consequential damages defiend

When recoverable?

Back 322

Damages connected to unique situation of P

Recoverable only if D had reason to know at time of contract

Front 323

M mill owner contracts with C carrier to transport broken shaft to another village for repair of 100. C breaches. M has to pay 150 to transport.

What result

Back 323

C pays 50 in expectation damages.

Front 324

M mill owner contracts with C carrier to transport broken shaft to another village for repair of 100. C breaches. Breach results in 5 day delay and M loses 1000 in profits from mill closure. What result?

What result

Back 324

C pays 50 in expectation damages.

No consequential damages because D had no reason to know of these consequential damages at time of contract.

Front 325

M mill owner contracts with C carrier to transport broken shaft to another village for repair of 100 and tells that mill closed until part back. C breaches. Breach results in 5 day delay and M loses 1000 in profits from mill closure. What result?

Back 325

1050

1000-consequential
50- expectation

Front 326

How are avoidable damages treated?

Back 326

No recovery for damages that could have been avoided without UNDUE BURDEN on plaintiff.

Burdens of pleading and proof on defendant.

Front 327

Duke hires P to teach for 200f for 100,000. Duke breaches. Duke shows that similar university later offered P teaching job for 2005 school year for 80,000. what result?

Back 327

Duke owes P 20,000 in expectation damages.

Not extra 80,000 because avoidable damages.

Front 328

To what extent must contract damages be proven?

Back 328

Contract damages must be proven with reasonable certainty

Front 329

Effect of liquidated damages in question

Back 329

Not valid UNLESS

1. damages were difficult to forecast at time contract made AND

2. provision is a reasonable forecast

* flexible payments usually reasonable
* one time inflexible payments less reasonable

Front 330

Define liquidated damages

Back 330

Contract provision fixing amoutn of damages

Front 331

B contracts to build store for O. Contract provides damages of 1000 a day for each day completeion delayed. What result.

Back 331

Valid liquidated damages because (1) difficult to forecast at time of contractin and (2) provision is reasonable forecast

Front 332

B contracts to build store for O. Contract provides damages of 10000 if delayed. What result.

Back 332

Liquidated damages probably invalid bc not reasonable forecast

(bc same payment if one day or one year delayed)

Front 333

Effect of liquidated damages in question

Back 333

Not valid UNLESS

1. damages were difficult to forecast at time contract made AND

2. provision is a reasonable forecast

* flexible payments usually reasonable
* one time inflexible payments less reasonable

Front 334

Define liquidated damages

Back 334

Contract provision fixing amoutn of damages

Front 335

B contracts to build store for O. Contract provides damages of 1000 a day for each day completeion delayed. What result.

Back 335

Valid liquidated damages because (1) difficult to forecast at time of contractin and (2) provision is reasonable forecast

Front 336

B contracts to build store for O. Contract provides damages of 10000 if delayed. What result.

Back 336

Liquidated damages probably invalid bc not reasonable forecast

(bc same payment if one day or one year delayed)

Front 337

When does a party have the excuse of nonperformance of a contract because of something that happened after contract was made?

Back 337

1. Excuse bc other guy's improper performance

2. Excluse bc failure of a performance condition

3. Excuse of performance by reason of the other party's anticipatory repudiation or inability to perform

4. Excuse by reason of a later contract

5. Excuse by reason of a later, unforeseen event

**not perfect tender under UCC

Front 338

When is nonperformance of a contract because of the other party's improper performance excusable?

Back 338

When material breach

Front 339

O hires P to paint house white for 1000. P paints house white but fails to paint closet. Is O excused from contract duties?

Back 339

No, only excused for other party's MATERIAL BREACH

Front 340

P contracts to paint 10 apts for 10,000. P breaches after painting 3 apts. O doesn't pay. What result?

Back 340

O need not pay because P's breach was material.

**When less than half of multiple jobs completed, material breach.
UNLESS divisible contract, then evaluate each part separately for material breach.

--P can't recover under contract, but may under quasi-contract

Front 341

P contracts to paint 10 apts for 10,000 per apt. P breaches after painting 3 apts. O doesn't pay. What result?

Back 341

P can recover for 3 apts under divisible contract exception to material breach rule.

When divisible contracts, evaluate each one separately for breach. Here no material breach on apts 1-3.

Front 342

When does a party have the excuse of nonperformance of a contract because of something that happened after contract was made?

Back 342

1. Excuse bc other guy's improper performance

2. Excluse bc failure of a performance condition

3. Excuse of performance by reason of the other party's anticipatory repudiation or inability to perform

4. Excuse by reason of a later contract

5. Excuse by reason of a later, unforeseen event

Front 343

When is nonperformance of a contract because of the other party's improper performance excusable?

Back 343

Under common law, when material breach

Under UCC, when not perfect tender

Front 344

O hires P to paint house white for 1000. P paints house white but fails to paint closet. Is O excused from contract duties?

Back 344

No, only excused for other party's MATERIAL BREACH

Front 345

P contracts to paint 10 apts for 10,000. P breaches after painting 3 apts. O doesn't pay. What result?

Back 345

O need not pay because P's breach was material.

**When less than half of multiple jobs completed, material breach.
UNLESS divisible contract, then evaluate each part separately for material breach.

--P can't recover under contract, but may under quasi-contract

Front 346

P contracts to paint 10 apts for 10,000 per apt. P breaches after painting 3 apts. O doesn't pay. What result?

Back 346

P can recover for 3 apts under divisible contract exception to material breach rule.

When divisible contracts, evaluate each one separately for breach. Here no material breach on apts 1-3.

Front 347

When is nonperformance of contract because of a failure of a performance condition excusable?

Back 347

When performance condition fails

LOOK FOR:

if
provided
so long as
subject to
in the event that
unless
when
until
on condition that

Front 348

Conditional acceptance

v.

performance condition

Back 348

1. in conditional acceptance, "if" appears in response to offer

2. in performance condition, "if-word" appears in agreement itself

Front 349

S offers to sell B house for 100,000. B responds that will buy house if appraised at 100,000. Contract?

Back 349

No, bc conditional acceptance

(if appears in response to offer)

Front 350

S and B enter into agreement that provides that B will buy S's house for 100000 if appraised at 100,000. Does B have to buy house if appraised at 75000?

Back 350

1. Contract was formed with performance condition

2. B doesn't have to buy because excused by failure of performance contract.

**S owes B no breach damages

Front 351

Can one get breach damages if performance condition fails?

Back 351

No

Front 352

C contracts with S for shipment of cargo. Contract provides for payment of additional 200 pounds provided that it sails the next day. If S delays sailing beyond next day, what result?

Back 352

C doesn't have to pay extra 200 pounds bc

failure of performance condition (signalled by provided that) excuses nonperformance by C.

Front 353

What is the standard for satisfying an express performance condition?

Back 353

strict compliance

Front 354

B contracts to buy S's house. Contract provides "this sale is conditioned on teh house being appraised at 77000." If house is appraised at 76000, what result?

Back 354

Express condition.


Buyer excused from buying house bc condition not met.

Front 355

B contracts to build O's house. Contract provides "O's payment for B's work is expressly conditioned on B's using Reading pipe throughout." B uses Cahoe pipe. What result?

Back 355

O excused from contract law obligation to pay. Strict compliance required for express conditions.

--May have quasi-contract remedy.

Front 356

C contracts with S for shipment of cargo. Contract provides for payment of additional 200 pounds provided that it sails the next day. If S delays sailing beyond next day, what result?

Back 356

C doesn't have to pay extra 200 pounds bc

failure of performance condition (signalled by provided that) excuses nonperformance by C.

Front 357

What is the standard for satisfying an express performance condition?

Back 357

strict compliance

Front 358

B contracts to buy S's house. Contract provides "this sale is conditioned on teh house being appraised at 77000." If house is appraised at 76000, what result?

Back 358

Express condition.


Buyer excused from buying house bc condition not met.

Front 359

B contracts to build O's house. Contract provides "O's payment for B's work is expressly conditioned on B's using Reading pipe throughout." B uses Cahoe pipe. What result?

Back 359

O excused from contract law obligation to pay. Strict compliance required for express conditions.

--May have quasi-contract remedy.

Front 360

When can an express condition be waived?

Back 360

When person benefiting from condition

gives up benefits/protection of condition

Front 361

B contracts to buy S's house. Contract provided that sale conditioned on house being appraised at 100,000 or more. HOuse appraised at 75,000.

Can S refuse to sell?

Can B refuse to buy?

Back 361

B can refuse to buy because condition protects B.

S cannot refuse to sell because only the person who is protected by the condition can waive the condition.

Front 362

When does other party's anticipatory repudiation
excuse nonperformance?

Effect?

Back 362

1. unambiguous statement that repudiating party won't perform
2. made prior to time performance due

Excuses the other party's duty to reform and generally gives rise to immediate claim for breach damages
EXCEPT in MA, must wait until due date for performance of repudiator before claiming breach damages

Front 363

When does other party's inability to perform
excuse nonperformance?

Back 363

When Plaintiff agrees to contract for reason X
AND
Reason X no longer exists.

Front 364

P contracts to paint O's house for 1000 with payment to be made on 4-5. On 3-13, before P has finished painting house, O tells P that P is painting well but O won't pay. P stops painting. What result?

Back 364

1. P is excused from contract because of O's anticipatory repudiation.

2. On MS, P can recover damages for breach of contract immediately.

3. In MA, P must wait until 4-5 (due date for O's performance) before claiming damages.

Front 365

When can an express condition be waived?

Back 365

When person benefiting from condition

gives up benefits/protection of condition

Front 366

B contracts to buy S's house. Contract provided that sale conditioned on house being appraised at 100,000 or more. HOuse appraised at 75,000.

Can S refuse to sell?

Can B refuse to buy?

Back 366

B can refuse to buy because condition protects B.

S cannot refuse to sell because only the person who is protected by the condition can waive the condition.

Front 367

When does other party's anticipatory repudiation
excuse nonperformance?

Effect?

Back 367

1. unambiguous statement that repudiating party won't perform
2. made prior to time performance due

Excuses the other party's duty to reform and generally gives rise to immediate claim for breach damages
EXCEPT in MA, must wait until due date for performance of repudiator before claiming breach damages

Front 368

When does other party's inability to perform
excuse nonperformance?

Back 368

When Plaintiff agrees to contract for reason X
AND
Reason X no longer exists.

Front 369

P contracts to paint O's house for 1000 with payment to be made on 4-5. On 3-13, before P has finished painting house, O tells P that P is painting well but O won't pay. P stops painting. What result?

Back 369

1. P is excused from contract because of O's anticipatory repudiation.

2. On MS, P can recover damages for breach of contract immediately.

3. In MA, P must wait until 4-5 (due date for O's performance) before claiming damages.

Front 370

Can an anticipatory repudiation be retracted?

Back 370

Yes when

1. not a material change in position by non-retracting party

2. adequate assurance by repudiating party that will fulfill obligation (e.g. putting money in escrow account)

Front 371

P contracts with O to paint house. O gives anticipatory repudiation. Then O changes mind and puts money to pay P in escrow account. Is P obligated to perform?

Back 371

Yes, because anticipatory repudiation can be retracted and duty to perform reimposed when:

1. no material change in position by P
And
2. adequate assurance like escrow account

Front 372

P contracts to paint O's house in exchange for unique autographed photo of Janet Reno that O owns. Before P finishes painting, O sells reno photo to C. Is p excused from continuing to perform?

Back 372

Yes bc of O's inability to perform.

Front 373

When is nonperformance because of a later contract excused?

Back 373

1. Rescission legally effective when neither party has completed performance

2. Accord and satisfaction--agreement by parties to already existing obligation

to accept a different performance

in satisfaction of existing obligation

3. Modification (substituted agreement)

4. Novation
(substituted person agreed upon by both parties)

Front 374

When is rescission of contract legally effective?

Back 374

When neither party has completed performance.

Front 375

P contracts to paint O's house for 1000 with payment to be made when work completed. After P completes work, P and O agree to rescind contract. Can P later recover for work under contract law?

Back 375

Yes. Rescission was not legally effective because one party, P, had finished performance.

Front 376

When should accord and satisfaction answer be selected?

Back 376

When later agreement that agrees

that old agreement will disappear

IF parties do something different instead

Front 377

D borrows 1000 from C and agrees to pay loan with interest. Later
D and C agree that if D delivers 20 widgets by end of month, then debt will be excused.

If D delivers 20 widgets, can C collect on debt?

Back 377

No, This is valid accord and satisfaction. It invalidates the previous agreement.

Front 378

D borrows 1000 from C and agrees to pay loan with interest. Later D and C agree that if D pays 700, the rest of debt will be excused. D pays 700. Can C collect on other 300?

Back 378

Yes, This is not an accord and satisfaction because the parties did not agree to something different instead of original deal.

Rather they just agreed to do less of the same thing.

Front 379

accord and satisfaction
v.
modification

Back 379

accord and satisfaction agrees to eliminate old deal IF something different is done

Modification agrees definitively to new deal in lieu of old

Front 380

D borrows 1000 from C and agrees to pay the loan with interst. Later D and C agree that if D delivers 20 widgets by the end of the month, then the debt will be excused. D doesn't deliver widgets. What can C do?

Back 380

Sue to recover either widgets or loan

but not both.

Front 381

Modification defined

Back 381

Agreement by parties to an existing obligation

to accept a different agreement in satisfaction of the existing loan

**Here the parties accept a new agreement. Not conditional like accord and satisfaction

Front 382

D borrows 1000 from C and agrees to repay loan with interest. Later D and C agree that D will deliver 20 widgets instead of paying 1000 with interest. D doesn't deliver widgets. What can C recover?

Back 382

Only the widgets.

Not the 1000 with interest

bc this was a modification and parties agreed on new agreement in lieu of old one.

Front 383

Novation defined

Back 383

Agreement between both parties to an existing contract to the substitution of a new party.

**both parties must agree

Front 384

P contracts to paint o's house. P, O, and X agree that X will do work instead of P. What is this called?

Can O enforce agreement against P?

Back 384

Novation

O can't enforce against P bc P is excused from agreement by novation.

Novation is Agreement between both parties to an existing contract to the substitution of a new party.

Front 385

What is the effect of novation

Back 385

Excuses the contracted for performance

of party who is replaced

Front 386

novation
v
delegation

Back 386

novation requires agreement of both parties and excuses person replaced

delegation doesn't require agreement of both parties and doesn't excuse

Front 387

P contracts to paint O's house. Then P asks X to do work and X agrees. If X doesn't paint house, can O recover damages from P for breach?

Back 387

Yes, This is delegation, which doesn't excuse delegating party.

Novation would excuse P, but that would have required that P AND O agreed to substitution of X for P.

Front 388

When is nonperformance by reason of a later event excused?

Back 388

1. when something happens between formation and performance

2. that was unforeseen

3. that makes performance commercially impracticable
impossible
or
frustrates purpose of performance

Front 389

Situations where nonperformance by reason of later unforeseen event is excused

Back 389

1. sometimes damage or destruction of subject matter of contract

2. sometimes death or party

3. sometimes subsequent law or regulation

Front 390

P contracts to paint O's house for 1000. After P begins painting, the house burns down. Is P excused from performing on this contract so that P is now free to take another painting job?

Back 390

Yes, excuse of performance by reason of later unforeseen event making performance impossible.

Front 391

B contracts to build house for O for 100,000. After B begins work, the house burns down. Is B excused from performing on this contract?

Back 391

No, yes unforeseen event but performance still possible

Front 392

A contracts to sell C 100 sacks of grits for 300. Grits destroyed by flood. Must A complete contract?

Back 392

Yes, not impossibility bc grits widely available.

Front 393

A contracts to sell car to B for 700. Car and risk pass to buyer. Car destroyed by unforeseen event. Must B pay?

Back 393

Yes, no defense of impossibility bc risk passed to buyer. Buyer can always perform.

Front 394

How does death of a party affect parties' obligations?

Back 394

No effect UNLESS

the party who died was a special person

e.g. famous artist hired to paint portrait, then nonperformanc eof this special person is excused by death

Front 395

What happens to contract when later law makes performance of contract illegal?

Back 395

Parties excused from performing due to impossibility.

Front 396

What happens to contract when purpose of contract made illegal?

Back 396

Parties excused from performing due to frustration of purpose.

Front 397

C tells surgeon that he needs plastic surgury so can nude dance and look good. Contract formed. Nude dancing then outlawed. Must C perform?

Back 397

No, excused due to frustration of purpose because purpose of surgery is now illegal.

Front 398

What happens to contract when later law makes performance of contract illegal?

Back 398

Parties excused from performing due to impossibility.

Front 399

What happens to contract when purpose of contract made illegal?

Back 399

Parties excused from performing due to frustration of purpose.

Front 400

C tells surgeon that he needs plastic surgury so can nude dance and look good. Contract formed. Nude dancing then outlawed. Must C perform?

Back 400

No, excused due to frustration of purpose because purpose of surgery is now illegal.

Front 401

Types of third party contract questions

Back 401

1. Third party beneficiaries

2. Assignment

3. Delegation

Front 402

When does a third-party beneficiary arise?

Back 402

When two parties contract with then intent of benefiting a third party.

**then 3rd party can enforce
**e.g. life insurance policy

Front 403

C has insurance with A. Contract provides that C will make premium payments and A will pay H 250000 when C dies.

C dies and A refuses to pay H.

Can H enforce against A?

Back 403

Yes. H is third party beneficiary and can enforce and recover from A.

Front 404

Define terms for 3rd party beneficiary

1. promisor
2. promisee

Back 404

1. promisor is person making promise that benefits 3rd perty

2. promisee is person who obtains promise that benefits third party

Front 405

Relevance of intended beneficiaries

Back 405

Only intended beneficiaries have contract law rights.

Incidental beneficiaries do not.

Front 406

When can contract benefiting third party be cancelled or modified?

Back 406

1. if 3rd party beneficiary knows of contract and relies on it
--can't be modified or canceled without 3rd party's consent UNLESS contract so provides

2. If 3rd party doesn't know of contract, can be cancelled or modified

Front 407

Who can recover from promisor in 3rd party contract?

Back 407

Either 3rd party beneficiary or promisee

but not both

Front 408

Who can recover from promisee in 3rd party contract?

Back 408

Promisor

and

3rd party beneficiary who is also a creditor ot promisee to extent of promisee's pre-existing debt

NOT donee beneficiary (who gets benefit of contract as gift)

Front 409

Who can a creditor-beneficiary sue to recover?

Back 409

Both promisor and

Promisee to extent of promisee's pre-existing debt to creditor-beneficiary

Front 410

What defenses can promisor assert when sued by 3rd party beneficiary?

Back 410

Same defenses that could assert against promisee.

Front 411

Assignment defined

Back 411

Transfer of rights under contract to a third party after the contract has been formed


1. contract between two parties
2. one of the parties later transfers rights under that contract to a third party

Front 412

Assignment
v.
Third party beneficiary

Back 412

In assignment transfer of rights occurs after contract formed

In third party beneficiary situation, third party rights are contemplated IN the CONTRACT.

Front 413

B contracts with G to provide security for a year. Contract provides that G will pay R 300,000 for batman's services.

What kind of contract?

Back 413

This is third party beneficiary contract because third party rights are contempleted IN contract.

NOT assignmetn because that involves transfer of rights to third party AFTER contract formed

Front 414

Define
1. assignor
2. assignee
3. obligor

Back 414

1. party to contract who later transfers rights under contract to another

2. assignee is not party to contract, but can enforce contract bc of assignment

3. obligor is other party to contract

Front 415

When can't an assignment be made?

Back 415

1. when language of prohibition in contract
--not assignable, can't assign, don't assign
--effect is that assignor is liable for breach BUT assignee who doesn't know of prohibition can enforce

2. when language of invalidation in contract
--gives consequences of violating prhobition, e.g. void
--effect is breach by assignor and NO rights in assignee

3. Under common law, when assignment substantially changes duties of obligor (then can't be assigned)

Front 416

Language of invalidation

defined

relevance

effect

Back 416

Relevant when in contract bc takes away right and power to assign.

--Effect is breach by assignor and no rights in assignee

--identifiable bc gives consequences of violating the prohibition, e.g. voided

Front 417

Language of prohibition

defined, relevance, effect

Back 417

When in contract, takes away right to assign, but not power to assign

--Effect is breach by assignor BUT assignee who doesn't know of prohibition has power to enforce

--identifiable bc says contract not assignable, can't be assigned, don't assign

Front 418

Contract between A and B provides "rights hereunder are not assignable." A assigns right to payment to C anyway. Can C collect from B.

Back 418

Yes, this is language of prohibition when takes away right to assign (so A is in breach) but not power to enforce by assignee who didn't know of phibition (so
C can enforce)

Front 419

Contract between A and B provides "all assignments of rights under this contract are void." A assigns right of payment to C. Can C collect from B.

Back 419

No, this is language of invalidation bc mentions consequence of assignment (voided). This takes away
A's right and power to assign.

A is in breach and C can't enforce.

Front 420

When is assignment permissible under common law?

Back 420

When

1. no words of prohibition
2. no language of invalidation
3. assignment does NOT substantially change duties of obligor (assignment of rt to payment is ok. assignment of right to contract performance invalid)

Front 421

Batman assigns rights to payment under service contract with Gotham to Robin. Valid?

Back 421

Yes, because assignmetn of right to payment does not substantially change the duties of the obligor and is therefore valid.

Front 422

In contract between Gotham and Batman:

Gotham assigns rights to security services of Batman to Metro. This means Batman is to defend Metro.

Valid?

Back 422

No, bc assignment substantially changes the duties of the obligor, batman and is therefore invalid under comomn law.

Front 423

What is required for a valid assignment

(when not invalidated by language of prohibition or invalidation or common law rule against assignments that substantially change the duties of the obligor)?

Back 423

1. consideration NOT required for valid assignment. Can be gift.

2. Promise to collect and pay AND promise to assign ARE NOT assignments

3. Must be assignmetn of existing rights, even if conditional. Future rights cannot be assigned.

Front 424

Contract between B and G.

B promises to collect money from G and pay to R. What are r's rights?

Back 424

R has no rights against G because this is only promise to collect and pay.

It is not an assignment.

Front 425

B and G have contract.

B promises R that he will assign right to payment form G to R. What are R's rights?

Back 425

No rights against G. Not an assignment--only a promise to assign.

Front 426

E assigns right to royalties from just published book. Valid?

Back 426

Yes, bc assignment of existing right.

Front 427

E assigns right to royalties from book not yet written or osld. valid?

Back 427

No bc can't assign a future right. Can only assign an existing right.

Front 428

Can assignee sue obligor?

Back 428

Yes

Obligor has same defenses against assignee as would have against assignor

Front 429

Can assignee collect from obligor if assignor didn't fulfill contractual obligations?

Back 429

No, obligor has same defenses against assignee as would against assignor.

Front 430

A rents from Acme. In March, Acme assigns your rental contract to Baker. You don't know of assignment and make next payment to Acme. Baker sues for payment. Result?

Back 430

Baker loses. Payment by obligor to Acme is effective until obligor is notified of assignment.

Front 431

Difference between assignment for consideration and
gratuitous assignment

Back 431

Assignment for consideration gives rise to warrant that assignor won't mess up to prevent assignee from collecting under contract.

**obligor not under warranty here

Front 432

E assigns royalties to S for 1000. E writes publisher and releases it from obligation to pay royalties. Does S have remedy?

Back 432

Yes. ASsignment for consideration includes warranty that assignor will do nothing to impair value of assignment.

S has breach of warranty of assignment claim against E

Front 433

E assigns royalties to S for 1000. Publisher goes insolvent Does S have remedy based on warranty?

Back 433

No, assignment for consideration carries warranty that ASSIGNOR won't impair value of assignment.

No warranty covering obligor.

Front 434

When assignor makes multiple gratuitous assignments of same good, who gets it?

Back 434

Last assignee wins.

All prior assignments revoked.

Front 435

Can gift assignments be revoked?

Back 435

Yes, at any time directly or by making new assignemtn.

EXCEPT can't revoke when
1) relied on assignment in way that was reasonable, foreseeable, and detrimental
OR
2) assignee has recieved some sort of indicia of ownership
OR
3) assignmetn is subject matter of a writing delivered to assignee

Front 436

B gives right to 300 payment fro A to C on 1-15. On 2-1, B gives same payment right to D. Sho has rt to assignmetn?

Back 436

D because all gratuitous assignments and D is last in time.

Front 437

When multiple assignees for consideration of same rright?

Back 437

First assignee for consideration wins

EXCEPT
subsequent assignee take priority over earlier assignee when:
(1) doesn't know of earlier assignment
AND
(2) first to obtain judgmetn, payment, novation, or indicia of ownership

Front 438

On 2-2, B assigns contract rights to R for 1. ON 2-5, B assigns rights udner same contract to C for 250,000. Who owns rights?

Back 438

R bc first assignee for consideration wins

Front 439

On 2-2, B assigns contract rights to R for 1. ON 2-5, B assigns rights udner same contract to C for 250,000. C obtains payment under contract. Who owns assignmetn

Back 439

C under exception to "first assignee for consideration wins" rule.

subsequent assignee takes priority over earlier assignee for value when
(1) didn't know of earlier assignemtn AND
(2) is first to recieve payment, judgment, novaiton, or indicia of ownership

Front 440

Delegation defined

Back 440

When one party to contract transfers her work under that contract to a third party

e.g. P contracts to paint O's house for 1000. P (delegatin gparty) and X (delegatee) agree that X will paint O's (obligee's) house

Front 441

Delegation
v.
assignmetn

Back 441

Delegation transfers obligation

Assignment transfers rights

**often occur in tandem in real world but separately on bar exam

Front 442

Meaning of term "assignment" on bar exam

Back 442

Sometimes means delegation

Front 443

E contracts with C to deliver lectures for 20/hour. E and S agree that S will do lectures and collect 20/hour from C. What is this called?

Back 443

Both dlegation (bc transfer duty) and assignment (bc transfer benefit/rights)

Front 444

What duties are delegable?

Back 444

All duties unless

(1) contract prohibits delegations OR prohibits assignments

OR

2) contract calls for very special skills

OR

3) person to perform contract has a very special reputation

Front 445

Motel contracts with C to clean rooms for 10/room. C delgates duty to E. Motel refuses to pay E. Can E recover payment from Motel?

Can C recover payment from Motel?

Back 445

C can recover. E cannot.

REason: this is a delegation which does not transfer rights under contract. Only assignment transfers rights under contract and this was not given in fact pattern.

Front 446

Motel contracts with C to clean rooms for 10/room. Contract says "no delegations." C delgates duty to E. Motel refuses to pay E. What result?

Back 446

Delegation so E can't recover. C can't recover because prhobitied in contract.

Front 447

Motel contracts with C to clean rooms for 10/room. Contract says "no assignments." C delgates duty to E. Motel refuses to pay E. What result?

Back 447

Delegation so E can't recover. C can't recover because assignments prhobitied in contract. When assignments are prohibited, so are delegations

Front 448

Chipper jones has contract with Braves. Can he delegate performance to Alex Rodriguez?

Back 448

No, bc obligations requiring very specila skills are not delegable

Front 449

What happens if A delegates obligations under contract to C and C doesn't perform?

Back 449

1. A remains liable

2. B is liable only if she recieved consideration from delegating Party A

Front 450

Delegation
v.
Novation

Back 450

Delegation only requires one party to delegate

Novation requires both original contracting parties to agree to substitute

Front 451

P contracts to paint O's house for 1000. X then agrees with P that X will do painting for P. X doesn't do work.
1) can o sue p?
2. Can p sue x?
3) can o sue x?

Back 451

1. Yes, delegating party always remains liable

2. No, bc X didn't recieve consideration from delegating party

3. No bc X got no consideration from p

Front 452

P contracts to paint O's house for 1000. P an dX then agree that X will do work and P will pay 900. X doesn't do work.

1) Can O sue P?
2) Can P sue X?
3) Can O sue X?

Back 452

1. Yes delegating party always liable.

2. Yes bc X got consideration from P.

3. Yes, bc X got consideration from P.

Front 453

What does a delegation for consideration create?

Back 453

A third party beneficiary.

Front 454

Armadillos from Texas play rap, eating tacos

Back 454

Applicable law
Formation of contracts
Terms of contract
Performance
Remedies for unexcused nonperformance
Excuse of nonperformance
Third-party problems