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23 Cards in this Set
- Front
- Back
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Modification
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General common law view: contract cannot be modified without additional consideration Modern view: no consideration needed if (i) modification was due to unanticipated circumstances and (ii) fair and equitable (MBE) UCC: can be modified without additional consideration, as long as the modification occurs in good faith |
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Oral modification
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General rule: written contract can be modified orally Exception: if a contract for the sale of goods is less than $500 and out of the SoF, and a modification puts the contract over $500 and in the SoF, a writing is needed to evidence the modification |
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Liquidated damages clause
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enforceable if: (1) damages are difficult to ascertain at the time of the making of the contract, and (2) the damages are a reasonable forecast of compensatory damages |
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Consideration
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- to be enforceable, a contract must be supported by consideration - generally, consideration requires a bargained-for exchange of something of legal value from each party - to be bargained for, the promise must induce the detriment and the detriment must induce the promise |
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Third-party beneficiaries (incidental v. intended)
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- only intended beneficiaries have contractual rights - in determining, look to: (i) party identified in contract (ii) receives performance directly from promisor (iii) has some relationship with promise to indicate intent to benefit |
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When rights of intended TBP vest
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(I) manifests assent to the promise in a manner invited or requested by the parties (ii) brings suit to enforce the promise (iii) materially changes his position in justifiable reliance on the promise - generally, when the rights vest, the original contracting parties may not modify the contract without the assent of the TPB - however, the TPB is subject to all defenses the promisor could have asserted against the original promisee |
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Mutual mistake (rights of adversely affected party) |
contract may be voidable by the adversely affected party if: (i) the mistake concerns a basic assumption on which the contract is made (ii) the mistake has a material effect on the agreed-upon exchange (iii) the party seeking avoidance did not assume the risk of the mistake |
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Doctrine of part performance
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What: exception to the SoF for the sale of land Rule: if two of the following three apply, the doctrine is satisfied and equity will decree specific performance of an oral contract for land: (i) grantee takes possession (ii) grantee pays all or part of the price (iii) grantee makes substantial improvements |
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Implied-in-fact contract
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- generally, an acceptance must be communicated to the offeror - but, an implied-in-fact contract may be formed through a manifestation of assent other than oral or written communications - usually when a person knowingly and silently accepts offered benefits |
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Delegation
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What: occurs when the promisor of a contract delegates her duty to perform to a delegate Rule: generally, all contractual duties may be delegated Exception: but, when the duties involve personal judgment and skill, they cannot be delegated Rights: if delegate does not perform, the delegator may be sued... creates a contract between delegator-delegate with obligee as TPB |
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Offer
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- must contain a promise, undertaking, or commitment to enter into a contract
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Advertisements
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- generally construed as invitations to submit offers
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Buyer's remedies when seller fails to tender goods
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1. right to cover - can buy the goods from another source and recover the difference between the cost of the substitute goods and the contract price 2. specific performance - court compel the seller to perform, but the goods must be rare or unique |
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Condition precedent
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- a condition that must occur before an absolute duty of immediate performance arises in the other party (example: wholesaler will pay for the dolls only if they sold out during Christmas season, they didn't, so he never had absolute duty to perform) |
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Condition precedent and PER
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PER general rule: when the parties to a contract express their agreement in writing with the intent that the writing embody the final expression of their bargain, no other expressions made prior to or contemporaneous with the writing is admissible to vary the terms CP exception: however, if a party asserts that there was an oral agreement that the written contract would not become effective until a condition occurred, then the evidence of the oral agreement is admissible (not going to vary the terms) |
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Implied warranty of merchantability
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- means the goods will be fit for the ordinary purpose which such goods are used - present in every sale of goods, unless expressly disclaimed - disclaimer must be part of the offer and acceptance process, or be agreed upon by the buyer as a modification |
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Express warranty
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arises from: (i) any affirmation of fact or promise made by the seller to the buyer, or (ii) from any description of the goods, or (iii) any sample or model if the sample and model is part of the basis of the bargain |
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Implied warranty of fitness for a particular purpose
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arises when: (i) the seller had reason to know the particular purpose for which the goods are to be used and that the buyer is relying on the seller's skill and judgment to select suitable goods, and (ii) the buyer in fact relies on the seller's skill and judgment |
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Mailbox rule
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In general: acceptance by mail creates a contract at the moment of proper posting (mis-address is not valid posting) Rejection: is only effective when received Exception: MB rule does not apply when the offeree sends a rejection first, followed by an acceptance... here it would be whatever is received first (offeror does not have to actually read it though) |
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Discharge by impossibility, impracticability, or frustration
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Contractual duties may be discharged when: (i) the nonoccurrence of the event was a basic assumption of the contract, or (ii) neither party assumed the risk of the event occuring |
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Impossibility
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- events: death, supervening illegality, destruction - objectivity: must be impossible for anyone to perform, not just that specific promisor - timing: event must happen after contract entered into - effect: both parties excused - part performance before event: party can receive reasonable value of his performance |
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Impracticability
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Test: (a) extreme and unreasonable difficulty or expense, and (b) nonoccurance was basic assumption of contract Events: shortage of raw materials due to war, strike, embargo, unforeseen shutdown of major supplier NOT: mere increases in costs are insufficient for discharge, and never paying money |
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Frustration
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Exists when: the purpose of the contract has become valueless by some supervening event not the fault of the person seeking discharge Elements: (1) supervening act (2) parties did not reasonably foresee it (3) purpose of k has been destroyed (4) purpose of k was realized by both parties at time of making Events: usually paying money to rent a building |
