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155 Cards in this Set
- Front
- Back
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Invitation v. Offer
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Tells 3 people he has 2 tickets and asks who wants them and for how much
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Termination of Face-to-Face Offers
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When conversation is over
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Termination of Offers (5)
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- death
- revocation - rejection - counteroffer - lapse of time |
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Powers of Offeree (4)
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- accept
- reject - counteroffer - inquiry |
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Effect of shipping non-conforming tendor
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- acceptance of contract and
- breach of contract |
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Unilater Offer (in general)
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Offeror makes offer that calls for performance
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Bilateral Offer (in general)
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Exchange of promises
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Firm Offer Rule (2)
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- signed writing by a merchant promising to hold open offer (< 3mo)
- offeree can pay $ to keep offer open |
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Option Contract (Bids)
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When a general contractor receives a bid from a sub. and uses that bin in bidding for work, that creates a binding option contract
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Requirements to Modify a Contract (CL)
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new consideration
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Modify Contract (UCC)
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Good Faith
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Mutual Mistake
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no contract, put parties back as they were
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Unilateral Mistake
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enforce against the mistaken party - unless the non-mistaken party knows or should have known of the mistake
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Are Personal Services Contracts Assignable?
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No
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Can Specific Performance be Ordered in Personal Services Contracts?
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No
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Parol Evidence Rule
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Once parties have reduced agreement to writing, evidence of prior oral or written work is inadmissible to alter the terms of the contract
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Exceptions to Parol Evidence Rule (6)
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- fraud
- mistake - illegality - duress - partial integration - conditions precedent |
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Statute of Frauds requires writing...
M-Y-L-E-G-S |
Marriage > 1yr
Lane Executor Guaranty (suretyship) Sale of Goods ( > $500) |
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Main Purpose Extension to SoF
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the oral promise to answer for the debt of another is OK if the promissor's purpose was to further his own economic advancement
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Rules of Anticipatory Repudiation
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- party may demand assurances
- need response within 30 days |
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What can be awarded for contract breach under law?
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Money Damages Only
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What can be awarded for contract breach under equity? (6)
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- injunction
- specific performance - recission - reformation - quiet title - partition |
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Will subjective impossibility excuse performance?
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No
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Will objective impossibilty excuse performance?
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Yes
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Issues when examing 3PB (3)
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- identity
- intent to benefit (incidental has no rights) - vested |
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According to the Mailbox Rule when does acceptance occur?
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On dispatch
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According to the Mailbox Rule when does rejection occur?
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On receipt
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According to the Mailbox Rule what happens when a person sends a rejection and then later sends an acceptance?
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First to arrive controls
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Ways of Acceptance under UCC (3)
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- promise to ship
- shipment of conforming goods - prompt shipment of non-conforming goods |
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Under Perfect Tender Rule what may the recipient do when non-conforming goods are recieved? (3)
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- accept and pay agreed upon price
- timely reject and sue for damages - accept in part / reject in part |
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What is required to keep option contract open under CL?
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Consideration
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What is required to keep option contract open under Firm Offer Rule? (3)
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- signed writing by offeror
- by its terms gives assurance to keep open - if no time is given, then 90 days is assumed |
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Elements of Detrimental Reliance (4)
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- promise
- reasonable reliance - actual reliance - interest of justice requires enforcement |
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What can happen if a buyer changes terms of contract? (4)
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- material alteration (contract under terms of original offer)
- makes acceptance conditional on new term (no contract) - makes non-material change (incorporated unless seller rejects within reasonable time) - material change |
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3PB of Intended Contract (3)
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- 3P learns and assents
- 3P relies on contract - 3P may sue on contract |
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May an act of God excuse performance?
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Yes
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Lost Volume Doctrine applied to Resale of Goods Under Deposit (3)
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- only to volume sellers
- unlimited stock - remedy is contract price less resale price |
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Goods (general definition)
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things moveable at time of sale
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Goods include (5)
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- unborn animals
- timber to be cut - growing crops - builds (if seller severs) - minerals (if seller severs) |
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Predominant Thrust Test (NC)
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to determine whether a contract with goods and services is covered under the UCC or CL, look at is predominant thrust
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Component Test
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brake up goods/services contract into two contracts
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Article 2A covers leases of goods. Definition of lease (3)
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- transfer of right to possess and use good
- for a term - for consideration |
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Interaction between CL and UCC
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The common law supplements Article 2, unless otherwise displaced
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Formation of contract (4)
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- offer
- acceptance (mutual assent) - consideration - capacity |
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Terms of an offer must be certain and definite - apply to CL (3)
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- subject matter of K
- price - quantity |
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Terms of an offer must be certain and definite - apply to UCC (2)
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- intent
- enough information to fashion a remedy for a breach |
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Magic language for contracts (3)
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- promise
- undertaking - commitment |
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Are advertisements offers? (3)
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No
- no certainty or definiteness of terms - language has no words of promise - number of potential acceptors is huge |
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Offer and Acceptance at Auctions with and without reserve (4)
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- offer is made by bidder
- acceptance is when the hammer falls - with reserve allows seller to withdraw (presumption) - without reserve is final |
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Bilateral Contract
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OR seeks return promise
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Unilateral Contract
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OR seeks performance
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Bilateral Contract - when formed
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with return promise
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Unilateral Contract - when formed
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when performance occurs
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Unilateral Contract - Rest 2nd
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the beginning of performance acts as an acceptance an implied promise to complete performance
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Unilateral Contract - UCC
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if beginning performance is a reasonable method of acceptance, OE must notify the OR of its acceptance within a reasonable period of time
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Termination of offer (by OR) (2)
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- direct revocation
- indirect revocation |
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Indirect revocation occurs when the OE indirectly receives (4)
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- correct info
- from a reliable source - about acts of OR - indicating he intends to revoke |
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Option contracts consist of 2 contracts
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- the sale of the goods
- the option to keep offer open |
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Firm Offers (UCC) - instead of consideration to keep offer open must have (5)
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- offer
- merchant - signed writing - assurance to keep open - no longer 90 days |
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Part Performance in Unilateral Contract - become irrevocable when
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performance has begun
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Two theories of part performance eliminating revocation
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- (R1) contract is formed once performance has begun and if OE quits, he breaches
- (R2) an option contract is formed upon the beginning of performance, making offer irrevocable for a reasonable time - contract is not formed until performance is complete |
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Promissory Estoppel (GR)
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if the OE has relied on an offer to its detriment prior to the time it could accept the offer, the OR may be precluded by the OE's detrimental reliance from revoking the offer for a reasonable time (Not in NC)
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Ways OE may terminate offers (2)
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- rejection
- counter offer |
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Death or incapacity of parties
R1, R2, NC |
- (R1) contract formed
- (R2) irrevocable offer - (NC) restitution |
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Termination of Offers (4 general ways)
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- lapse
- death / incapacity - destruction of subject matter - supervening illegality |
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Can OE assign power to accept?
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No - must know of offer and accept
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Mailbox Rule
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- acceptance is effective on dispatch
- acceptance for an option contract is effective on receipt - if both acceptance and rejection are sent, first arriving controls |
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Benefit - Detriment Test for Gift Promise
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the exchange must be of something of legal value that is benefit to one and detriment to the other
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Bargained For Exchange Test for Gift Promise
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- Exchange is a return promise or performance
- Bargain - PR sought the exchange in return for his promise and PE gave the exchange for PR's promise |
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Incidental Condition Test
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if an incidental condition (such as coming to a home to pick up a TV) is required to get a gift - it is still a gift-promise
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Test for Adequacy of Consideration
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Don't care
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Forebearance to sue or prosecute a claim against B (invalid but believed to be valid)
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consideration and legally enforceable
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Forebearance to sue or prosecute a claim against B (invalid)
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no detriment
no consideration not enforceable |
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Past Consideration
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is no consideration
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A new promise to perform a past obligation that would be enforceable but for a technical bar (bankruptcy) will be enforced according to its terms if the new promise (2)
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- in writing OR
- partially performed |
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Exceptions to Pre-existing Duty Rule (3)
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- new or different consideration promised
- unforeseen circumstances - modification is fair and reasonable |
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UCC 2-209 (NON) Pre-existing Duty Rule (2)
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- good faith
- assent |
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Accord and Satisfaction Issues (2)
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- is there an acceptance of offer to settle
- is there consideration to support a promise to take less |
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Liquidated Claim
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sum certain and cashing "paid in full" check has no force
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Unliquidated Claim
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legitimated doubt as to sum and cashing "paid in full" is enforceable
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Illusory Promises
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discretionary choice of OR which lacks mutuality of obligation - thus consideration fails
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Best Effort Doctrine
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Best Efforts are Implied if a seller is granted to sell all of merchant's dresses in exchange for 40% reduction
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Conditional promises are enforceable no matter how remote the contingency so long as ...
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the condition is not wholly in the control of PR
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Elements of Promissory Estoppel (4)
(Not in NC) |
- promise that might reasonably induce action or forebearance
- person to whom promise is was made reasonably relied on promise to his detriment - injustice can only be avoided by enforcement - remedy may be limited as justice requires |
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Effect of Sealed Instrument (2)
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- provides consideration
- 10 year SoL |
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Age for minors to contract
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18
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May minors affirm after reaching age of capacity
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yes
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Misrepresentation of age still allows the minor to...
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avoid or disaffirm contract
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Actions adult may have against a minor for misrepresenting age (not in NC)
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fraud, misrepresentation, deceit
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What may the person who entered into a contract with a minor seek?
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restitution
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Statutory exceptions to minor contracts (2)
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- student loans
- insurance |
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Coogan's Law (2)
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- minor may disaffirm any artistic contract unless employer obtained prior approval of court
- employer required to set aside 15% of minor's gross pay in a trust fund to benefit minor |
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What may a person who lacks capacity (insanity) be liable for contracting?
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necessities
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When may an intoxicated person disavow a contract? (2)
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- not able to understand
- other party knew of intoxication and took advantage of it |
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SoF for land (3)
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- mortgage
- leases > 1 yr (CL) > 3 yrs (NC) - easements > 1 yr |
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Is a contract to BUILD upon land subject to SoF?
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No
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Past Performance Exception to SoF (not in NC)
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oral contract may be enforceable if part of the contract has already been partially performed
- payment - moved in - improvements |
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SoF for Goods
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$500 or more
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Exceptions to $500 goods rule of SoF (3)
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- specially manufactured goods
- admission of party in open court or proceeding - part performance |
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Long Term Contract Rule (not in NC)
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if a contract is POSSIBLE to be performed in less than 1 year, no writing necessary
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Are contracts in consideration of marriage subject to SoF?
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yes
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Is a promise by an executor to pay debts of decedent's estate out of his own funds subject to SoF?
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yes
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Is a convenant to compete subject to SoF?
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yes
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Rules on Covenant not to Compete (4)
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- if already employed - need new consideration
- reasonable time - reasonable territory - reasonable type |
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Ways to deal with Covenant not to Compete (3)
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- throw out everything
- blue line (re-write) - cross out (NC) |
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CL requirements of writing for SoF (5)
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- id of party to be charged
- id subject matter - other terms and conditions - consideration - signature of party to be bound |
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UCC requirements of writing for SoF - only between merchants (3)
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- indication of sale
- quantity term (or output K) - signature of party to be charged |
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Can several writings be pieced together to meet SoF?
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yes
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Promissory Estoppel to avoid SoF writing requirement (4)
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- (Maj) yes
- (Min) no - (NC) yes - (UCC) yes |
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If the writing is a complete integration, may parol evidence be introduced?
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No
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Complete Integration
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final writing is a complete and exclusive statement of terms of the agreeement
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How can parol evidence be used in a partial integration?
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may supplement, but not contradict
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Exceptions to Parol Evidence Rule (4)
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- clear up ambiguity
- show fraud, mistake or failure of consideration - show collateral agreements - show conditions precedent |
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Effect of Unilateral Mistake
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relief not allowed unless other party knew of the mistake and took advantage of it
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Mutual Mistake (3)
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- mistake by both parties as to a basic assumption upon which the contract is made
- mistake has a material effect - party seeking to avoid mistake did not bare risk of mistake |
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Is recission allowed for mistakes of value or opinion?
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no
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Latent ambiguities (define)
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at the time the contract is formed, the agreement appears to be clear, but subsequently discovered facts make it obvious the agreement can be interpreted in more than one way
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Aware and Unaware of Latent Ambiquities
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Both unaware - no contract
Both aware - no contract unless they both have chosen the same outcome One aware - enforced according to the intentions of the innocent party |
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Two types of unconscionability
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- procedural
- substantive |
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Procedural unconscionability
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corecion
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Substantive Unconscionability
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Unfair terms
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Difference between Intended and Incidental 3PB
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- intended 3PB have a right to sue
- incidental 3PB do not |
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Factors in determining if an 3PB is an Intended 3PB (4)
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- expressly named in contract
- performance to be made directly to him - given rights under the contract - such a relationship exists that one could infer |
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Two types of Intended 3PB
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- donee
- creditor |
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Creditor 3PB
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beneficiary of of a debt owed to him by promisee
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Donor 3PB
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object of promise is to confer a benefit to 3PB
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When do the rights of 3PB vest, cutting off the ability of the promisor and promisee to modify or rescind the contract? (4)
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- manifest assent
- sues to enforce promise - 3PB changes a material position - older authority says it immediately vests |
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Two types of Assignments
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- gratuitous
- for consideration |
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Gratuitous Assignment
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no consideration from AE to AR in return for assignment - it is revocable by AR
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Assignment for Consideration
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Rights of AE are vested and irrevocable
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Can rights of a future (non existent) contract be assigned?
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No
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Contractual Prohibitions of Assignment under CL (2)
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- language of "assignment is void" bars an assignment
- if AE has notice of non-assignment clause, then the assignment is ineffective |
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Contractual Prohibition of Assignment under UCC
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if contract "bars assignment of the contract" this interpreted to bar only a delegation of duties, not an assignment
- may still assign but BREACH |
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How may a delegator of duties excuse himself from performance?
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novation of contract
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You lease space in a shopping center to open a video store, the shopping center breaches. What damages may be recovered (3)
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- lost profits if mitigated
- lost profits if proved with certainty - reliance expenses |
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Consequential Damagages
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must be reasonably foreseeable at the time of contracting
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Punitive Damages
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generally NOT awarded on contract
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Rule of Mitigation
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victim of a breach cannot recover for damages he could have reasonably mitigated or avoided
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Quasi-Contract (implied in law)
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legal fiction designed to prevent injustice by not allowing unjust enrichment
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Elements of Quasi-Contract (5)
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- one party has conferred benefit to another
- the person has a reasonable expectation of being compensated - person conferring the benefit was not a volunteer - if the D is allowed to retain the benefit without compensating the P, he would be unjustly enriched |
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Divisibility
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where one party has not substantially performed under the contract, it is still possible that the party may be able to recover something under divisibility (3 parts = 3 payments = 3 contracts)
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Liquidated Damages v. Penalty
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If viewed as a penalty, courts will not recognize liquidated damages
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When money damages are inadequate, specific performance may be allowed when (4)
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- land sale
- unique goods - output/requirements contract involving a particular or unique source or market - never for service contracts |
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Conditions (def)
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an event (other than the passage of time) the occurrence or non-occurrence of which will create, limit, or extinguish an absolute duty to perform in the other party
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Condition Precedent
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one that must occur before an absolute duty of immediate performance arises in the other party
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Condition Subsequent
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one whose occurrence cuts off an already existing duty to perform
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Waiver (def)
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express conditions in a contract may be waived by the party in whose favor they operate
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Estoppel Waiver
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waiver occurs before the condition has failed to be fulfilled
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Election Waiver
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waiver occurs after the condition has failed
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Substantial Performance
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if the essential purpose of a contract is met, then contract price is paid and a counterclaim for damages may be sought
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Must anticipatory repudiation be unequivocal?
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yes
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Under anticipatory repudiation, a nonbreacher may (3)
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- be excused from further performance
- sue immediately for damages - or ignore repudiation an urge performance |
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Prospective inability to perform (2)
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- may ask for adequate assurances of performance
- if not assured within reasonable time, then may consider contract repudiated |
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Impossibility
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excuse for performing obligations if it becomes impossible to perform
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Frustration of Purpose
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excuse for performing obligations under contract if there is no point in doing so
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