Contracts - Ca Bar Feb 2009

Front 1

Armadillos From Texas Play Rap Eating Tacos

Back 1

Applicable law
Formation
Terms
Performance
Remedies for unexecused nonperformance
Excuse of nonperformance
Third party problems

Front 2

A contract is bilateral unless:

Back 2

(1) it is a reward, prize, or contest

or

(2) it is an offer which expressly requires performance for acceptance

Front 3

The UCC applies in all contracts concerning:

Back 3

the sale of goods.

Front 4

What law governs a contract that involves both the sale of goods and the rendering of services for a single price?

What if the contract divided payments between the services portion and the sale of goods portion?

Back 4

Either the UCC or common law, but NOT both. The answer depends on whether the "main purpose" of the contract concerns the sale of goods or the rendering of services. If the main purpose concerns the sale of goods, then the UCC applies to the entire contract. If the main purpose concerns the rendering of services, then common law must apply to the entire contract.

However if the contract divides payments, then you can apply the UCC to the sale of goods portion and common law to the services portion.

Front 5

What is the test to determine whether an offer is valid?

Back 5

An offer is a manifestation, by words or conduct, of an intention to contract. The basic test is whether a reasonable person in the position of the offeree would believe that his or her assent creates a contract.

Front 6

What are the requirements for a valid offer for the sale of real estate?

Back 6

(1) Price and (2) description.

Front 7

Must an offer for the sale of goods include a price?

Back 7

No, the UCC does not require the price to be stated in order for there to be a valid offer.

Front 8

S "offers" to sell her car to B for a "fair price." Is there an offer?

Back 8

No. Vague or ambiguous material terms do not create an offer under the common law or UCC.

Note that if mention of the price was simply left out, then this would be a valid offer.

Front 9

B "offers" to buy all of its grits from S for five years.

Is this a valid offer?

Back 9

Yes, a contract for the sale of goods can state the quantity of goods to be delivered under the contract in terms of (1) buyer's requirements or (2) seller's output or (3) in terms of exclusivity, as in this example.

Front 10

May a buyer increase his requirements under a requirements contact with a seller?

Back 10

Yes, if the increase is not unreasonably disproportionate with prior demands.

Front 11

An advertisement is NOT an offer unless:

Back 11

(i) it is in the nature of a reward; or

(ii) if it is specific as to quantity and expressly indicates who can accept.

Front 12

Describe four methods of terminating an offer?

Back 12

RLRD
(1) Rejection
(2) Lapse (of time specified or reasonable time)
(3) Revocation
(4) Death or incapacity (of a party prior to acceptance)

Front 13

An offer will lapse after:

Back 13

(i) the time stated in the offer; or

(ii) a reasonable time.

Front 14

Revocation of an offer occurs when:

Back 14

(1) the offeror makes an unambiguous statement to the offeree of unwillingness or inability to contract; or

(2) the offeror engages in unambiguous conduct indicating an unwillingness or inability to contract that offeree is aware of.

Front 15

A revocation of an offer that is sent through the mail is not effective until:

Back 15

the offeree receives it. However, if the offeree receives the revocation after she has accepted the offer, there is no revocation.

Front 16

What are the four situations in which an offer cannot be revoked?

Back 16

(1) Option contracts
(2) Firm offer rule (UCC)
(3) Detrimental reliance that is reasonably foreseeable
(4) Partial performance pursuant to an offer to enter into a unilateral contract

Front 17

Under the UCC's firm offer rule, an offer cannot be revoked for up to three months if the offer:

Back 17

(i) is for the purchase/sale of goods
(ii) is signed, written promise to keep the offer open; and
(iii) if the offeror is a merchant.

Front 18

What are the three methods of indirect rejection of an offer?

Back 18

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

Front 19

How do the common law and the UCC differ in their treatment of additional terms to an offer.

Back 19

Under common law an offeree's addition of terms as an acceptance is treated as a counteroffer rather than an acceptance.

Under the UCC, the mirror-image rule does not apply. If BOTH parties are merchants, an acceptance that adds additional terms will become part of the contract if the language adding the additional terms uses "words of insistence" ( and unless (1) offeror objects or (2) the additional terms materially change the offer.

If only one party is a merchant, the additional terms are merely treated as a proposal that is to be separately accepted or rejected.

Front 20

A conditional acceptance of an offer ("provided that," "unless," "only if," "so long as," "but," "on the condition that") operates the same way as:

Back 20

a counter offer, which results in the rejection and termination of the original offer.

Front 21

What are the six typical ways with which an offer is accept on the bar exam?

Back 21

(1) Later conduct after improper acceptance
(2) Full performance (is notice required?)
(3) Part performance (only bilateral)
(4) Promise to perform
(5) Mailbox rule
(6) Wrong goods

Front 22

Hypo #1: Bob orders 1000 purple tennis balls from Sal. Sal ships 1000 red tennis balls to Bob. Did Sal accept Bob's offer?

Hypo #2: Same facts, except Sal sends message along with shipment to Bob: "out of purple balls, hope that you can use red ones instead."

Back 22

Hypo #1: Yes, although he also breached the contract.

Hypo #2: No contract, no breach. Under the Accommodation Exception, an accommodation by seller is treated as a counteroffer.

Front 23

Are offers assignable?

Back 23

No. However, options are freely assignable.

Front 24

What are the common forms of consideration?

Back 24

(1) Performance
(2) Forbearance
(3) Promise to perform
(4) Promise to forbear

Front 25

A promise to do something or not to do something is sufficient consideration unless it is:

Back 25

illusory.

Example: B promises to buy and S promises Blackacre, unless S changes her mind.

Front 26

Past consideration is insufficient to form a contract, unless:

Back 26

(1) the past performance/forbearance was expressly requested; and (2) performer/forbearer expected payment

Front 27

Under the common law, a modification of a contract requires new consideration, unless:

What is the rule under the UCC?

Back 27

(1) there is an addition to or a change in the performance; (2) there is an unforeseen difficulty so severe as to excuse performance; or (3) a third party promises to pay.

Under the UCC, new consideration is NOT required to modify sale of goods contract. Modifications made in good faith are allowed. .

Front 28

Partial payment may be consideration for release of a debt only if the debt is:

Back 28

(1) not yet due or (2) disputed. If it is due and undisputed, then part payment is not consideration for release.

Front 29

A promise lacking consideration may be legally enforceable if:

Back 29

(1) it is a written promise to pay a debt that is barred by SOL or other defense; or

(2) promissory estoppel (detrimental reliance), which requires: (i) promise, (ii) reliance that is reasonable, detrimental and foreseeable, (iii) enforcement necessary to avoid injustice.

Front 30

Who lacks capacity to contract and what are the consequences of incapacity?

Back 30

(1) Infants, (2) mental incompetents and (3) intoxicated persons lack the capacity to contract.

A contracting party that lack capacity may (i) disaffirm contract; (ii) retain benefits after gaining competence--implied affirmation; (ii) be liable under quasi-contract for necessaries.

Front 31

What 7 types of contracts are within the Statute of Frauds?

Back 31

(1) Promises to answer for the debts of another (suretyship) unless main purpose was to benefit guarantor;

(2) Promises by executor to "answer for personally" the debts of the decedent;

(3) Promises in consideration of marriage;

(4) Service contract not "capable" of being performed within a year from the time of contract;

(5) Transfers of interest in real estate;

(6) Sale of goods for $500 or more; and

(7) Leases of goods with payments totaling $1,000 or more.

Front 32

If the statute of frauds applies to a particular contract, the requirements of the Statute of Frauds must be met or else:

Back 32

the contract is unenforceable, if the defendant asserts a statute of frauds defense.

Front 33

The Statute of Frauds requires "special proof" as to the existence of contract and may be satisfied by either:

Back 33

(1) proof of performance; or

(2) a writing.

If the Statute of Frauds is satisfied, then Defendant has no such defense.

Front 34

In performance and services contracts, the Statute of Frauds may satisfied by either:

Back 34

(1) a writing; or

(2) by full performance by either party (part performance does NOT).

Front 35

In sales of goods contracts, part performance satisfies the Statute of Frauds, but only:

Back 35

to the extent of the part performance.

If the contract is for the sale of goods that are made-to-order, the Statute is satisfied as soon as seller makes a "substantial beginning."

Front 36

How can the Statute of Frauds be satisfied in a contract for real estate?

Back 36

(1) a writing;

(2) part performance including two of the following: (a) full/part payment, (b) possession, and/or (c) improvements. Full payment alone is not enough.

Front 37

In a non-UCC contract, a writing can only satisfy the Statute of Frauds if:

Back 37

(1) it contains all material terms of the contract (who and what) and (2) is signed by the party asserting the SOF defense.

Front 38

In a sale of goods contract within the Statute of Frauds, a writing will only satisfy the SOF if:

Back 38

(1) it contains the quantity term and (2) is signed by the person asserting the SOF defense (Exception: if both parties are merchants and one party receives a signed writing with a quantity term that claims contract and doesn't respond, SOF is still satisfied--"Answer the Damn Letter Rule."

Front 39

A person must have written permission to execute a contract for someone else if:

Back 39

the contract to be signed is within the Statute of Frauds (Equal Dignity Doctrine).

Front 40

Might a modification to a contract require a writing?

Back 40

Yes, if the modification itself (changes to the original contract) would be within the Statute of Frauds.

Front 41

Under common law, contract provisions that require all modifications to be in writing:

Back 41

are invalid.

Front 42

In addition to lack of consideration Statute of Frauds violations, what are other reasons for not enforcing an agreement?

Back 42

(1) illegal subject matter/purpose
(2) public policy
(3) misrepresentation or non-disclosure
(4) duress (physical or economic)
(5) UNCONSCIONABILITY (tested by either unfair surprise or oppressive terms at the time of contract)
(6) misunderstanding
(7) mistake of fact

Front 43

A contract may be ruled unenforceable because of misunderstanding if:

Back 43

(1) parties use a material term that is open to at least two reasonable interpretations; and
(2) each party attaches different meaning to the term; and
(3) neither party knows or has reason to know the term is open to at least two reasonable interpretations.

Front 44

A contract may be ruled unenforceable due to mistake of fact existing at the time of contract all of the following factors are present:

Back 44

(1) both parties are mistaken; and
(2) basic assumption of fact; and
(3) materially affects the agreed exchange; and
(4) not a risk that either party bears

Front 45

A party who made a unilateral mistake of fact will be held liable unless:

Back 45

the other party knew or had reason to know of the mistake.

Front 46

Sam sells Blackacre to Bob. Both Sam and Bob believe that Blackacre is suitable only for farming. It turns out that Blackacre contains valuable mineral deposits. Can Sam rescind because of mutual mistake?

Back 46

No. Sam bears the risk that Blackacre may be used for purposes other than farming. Thus he cannot rescind on the ground of mutual mistake of fact because he bears the risk.

Front 47

What is parol evidence?

Back 47

Words (oral or written) of party or parties prior to integration (before the agreement was reduced to a writing).

Front 48

The underlying premise of the parol evidence rule is that:

Back 48

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

Front 49

Regardless of whether a writing is a complete or partial integration, the parol evidence rule prevents a court from admitting evidence of earlier agreements for the purpose of:

Back 49

contradicting the terms in the written contract UNLESS used for the limited purpose of determining whether there was a mistake in putting the agreement in writing (e.g., a clerical error).

Front 50

When can parol evidence be used as evidence of SUPPLEMENTAL or CONSISTENT terms of a contract?

Back 50

(1) PARTIAL INTEGRATION--can use for evidence of SUPPLEMENTAL but not contradictory terms.

(2) COLLATERAL AGREEMENT--parties would naturally and normally not include in integrated writing.

Front 51

What situations may parol evidence always be used regardless of whether the writing is a complete or partial integration?

Back 51

(i) determining whether there is a defense to enforcement (e.g., misrepresentation, fraud, or duress); OR

(ii) to resolve ambiguities in the written contract.

Front 52

Besides parties' words (written or oral), what else might a court look to as a source of contract terms?

Back 52

conduct parties and/or of similarly situated people including: PDC
(i) course of performance; (ii) course of dealing; and (iii) custom and usage.

Front 53

Under the UCC, what are the delivery obligations of a seller of goods if delivery is made by common carrier?

Back 53

For shipment contracts, seller completes its delivery obligations when it (i) gets the goods to a common carrier, (ii) makes reasonable arrangements for delivery, and (iii) notifies the buyer.

For destination contracts, the seller does not complete its delivery obligations until the goods arrive where the buyer is.

Front 54

How do you distinguish between a shipment contract and a delivery contract?

Back 54

Generally, a shipment contract will state: "FOB + [city where seller is]". A destination contract will state: "FOB + [any other city]."

Front 55

Risk of loss issues arise when:

Back 55

(i) after the contract has been formed but before the buyer receives the goods, (ii) the goods are damaged or destroyed and (iii) neither the buyer nor the seller is to blame.

Front 56

What are the four rules applicable to risk of loss?

Back 56

(1) Agreement of the party controls

(2) Breaching party is liable for any uninsured loss

(3) When Delivery is by common carrier other than seller, ROL shifts from seller to buyer once seller completes delivery obligations.

(4)(a) Risk of loss shifts from merchant-seller to buyer upon buyer's receipt of goods; (b) risk of loss shifts from NON-merchant seller to buyer when seller tenders (makes available) the goods.

Front 57

Distinguish an express warranty of quality from mere sales talk.

Back 57

Mere sales talk includes general statements of opinion (example: "this refrigerator is of top quality").

An express warranty is more specific and uses words that (i) promise; or (ii) describe or state facts; or (iii) refer to a sample or model. (examples: "the refrigerator is stainless steel," or "the refrigerator is guaranteed to operate for 5 years," or when seller shows buyer a sample: "the refrigerator is exactly like this one.")

Front 58

What is the implied warranty of merchantability and when is it applicable?

Back 58

implied warranty that goods sold are fit for the ORDINARY PURPOSE for which such goods are used. Automatically added to a contract for the sale of goods ONLY where the seller is a MERCHANT that deals in GOODS OF THAT KIND.

Front 59

What is the implied warranty of fitness for a particular purpose and when is it applicable?

Back 59

This is an implied warranty that the goods are fit for a particular purpose.

It is only applicable when (i) the buyer has a particular purpose, (ii) the buyer is relaying on seller to select suitable goods, and (iii) the seller has reason to know of buyer's purpose and reliance.

Front 60

Can a disclaimer eliminate implied warranties of merchantability?

Back 60

YES, implied warranties of merchantability and fitness can be disclaimed in either of the following ways: (1) CONSPICUOUS language of disclaimer mentioning merchantability or (2) language including "as is" or "with all faults".

Front 61

Can a disclaimer eliminate express warranties? Can it limit them?

Back 61

No, it can't eliminate express warranties.

However, disclaimers can limit the remedies available for a breach of express warranties (e.g., "warranty liability shall be limited to replacement parts") UNLESS disclaimer is unconscionable.

Front 62

What is meant by "perfect tender" and when is it applicable?

Back 62

It means that a seller's performance must be perfect (perfect goods and perfect delivery).

It only applies to the sale of goods. If seller's performance is less than "perfect tender", the buyer has the option to reject the delivered goods.

Front 63

When does a buyer have the option to reject a delivery of goods from a seller and what options are available?

Back 63

If the seller does not meet the perfect tender standard, the buyer has the option to (1) retain and sue for damages or (2) reject "all or any commercial unit" and sue for damages (however, this rejection option may be limited buy "cure" or "installment contract").

Front 64

When does a seller have the option of "curing" its tender?

Back 64

(1) if time for delivery has not yet expired; and

(2) if the seller has reasonable grounds for believing that the improper tender would be acceptable (based on past dealings with buyer).

Front 65

What is an installment sales contract? How do these contracts differ with regards to buyer's option to reject goods?

Back 65

It is a contract for the sale of goods which requires or authorizes (i) delivery of goods in separate lots (ii) to be separately accepted.

The buyer has the right to reject an installment ONLY where there is a substantial impairment in that installment that CANNOT be cured.

Front 66

Can a buyer reject goods after it has accepted them?

Back 66

No, if a buyer accepts the goods, it cannot later reject them.

Front 67

If a buyer pays the seller prior to inspecting the goods, has the buyer accepted the goods?

Back 67

No, payment without the opportunity for inspection is not acceptance.

Front 68

When will an acceptance be implied?

Back 68

If the buyer keeps the goods without objection after an opportunity for rejection, the buyer will have accepted the goods by implication.

Front 69

May a buyer of goods revoke his acceptance of the goods?

Back 69

A buyer may revoke his acceptance ONLY if (i) the nonconformity substantially impairs the value of the goods, (ii) buyer was excusably ignorant of grounds for revocation or reasonably relied on seller's assurance of satisfaction, AND (iii) the buyer revoked within a reasonable time after discovering the nonconformity.

Front 70

Under common law, if one party substantially performs, what is the obligation of the other party?

Back 70

The other party must pay or otherwise perform.

Front 71

When will specific performance or injunction under contract law be an available remedy? What are some examples?

Back 71

Only when a remedy at law would be inadequate.

Examples where specific performance will be granted are contracts for the sale of (1) real estate or (2) unique goods. (NEVER for service contracts)

Example where injunction available: service contracts.

Front 72

When does a seller have the right of reclamation?

Back 72

A seller will have the right to reclaim his goods when (i) the buyer is insolvent at the time that it received the goods, (ii) seller demands the return of goods within 10 days of receipt, AND (iii) buyer still has goods at the time of demand.

Front 73

What are the rights of a good faith purchaser who buys goods from a third party who was entrusted by the owner with those goods? What are the rights of an owner whose personal property is wrongfully sold to a good faith purchaser by a person who was entrusted with the property?

Back 73

A good faith purchaser has the right to keep the goods. Owner cannot recover the goods from good faith purchaser. However, the owner can still sue the person he entrusted his goods to for the tort of conversion.

Front 74

What is the general approach to the measure of expectation damages in a breach of contract? What are alternative approaches?

Back 74

The general approach is to protect the expectation of the non-breaching party--to put the plaintiff in the same economic position as if the K had been performed.

Alternative approaches include: (1) reliance--put plaintiff in same economic position as if K never happened. (2) restitution--put defendant in same economic position as if K never happened (look at what breach gained).

Front 75

How are damages measured when the seller breaches and the buyer keeps the goods?

What if seller breaches, and seller keeps the goods?

Back 75

Fair market value if perfect minus fair market value as delivered.

Market price at the time of discovery of the breach minus contract price OR replacement price minus contract price.

Front 76

How are damages measured when the buyer breaches and the buyer has the goods?

What if buyer breaches, and seller keeps the goods?

Back 76

Contract price.

Contract price minus market price at the time/place of delivery OR contract price minus resale price AND (sometimes) provable lost profits.

Front 77

What are incidental damages and when are they recoverable in a breach of contract?

Back 77

Costs incurred in finding replacement performance. They are ALWAYS recoverable.

Front 78

What are consequential damages and when are they recoverable?

What are defenses and limitations to consequential damages?

Back 78

These are damages arising from plaintiff's special circumstances. They are recoverable ONLY if defendant has reason to know of plaintiff's special circumstances at the time of contract.

Defendant must plead and prove that plaintiff could have AVOIDED damages without undue burden to plaintiff (similar to contributory negligence).

Consequential damages must be reasonably certain. If the business is new and consequential damages are unascertainable then not available.

Front 79

A liquidated damages (fixed damages) clause in a contract will be enforceable if:

Back 79

it was a reasonable forecast of damages. Courts will look to whether damages were difficult to forecast at the time of contract in making this determination.

Front 80

Under common law, when is a party excused from performance based on the other party's breach?

Back 80

Only when the breach was material. A minor breach does not excuse the non-breaching party from performing.

A material breach is a question of fact (not likely to be tested on the bar).

Front 81

Can a A be excused from performance under his contract with B if B breached but has already substantially performed?

Back 81

No, if a party has substantially performed under the contract, he can no longer materially breach that contract. Only material breaches excuse a party from performing.

Front 82

If a service contract is divisible, can a breaching party recover from non-breaching party for partial performance (work performed prior to his breach)?

Back 82

Yes. Usually when a contract is breached prior to substantial performance, the breaching party is entitled to nothing, and the non-breaching party is excused from performance. HOWEVER, where a contract is divisible, the breaching party may recover for the parts of the contract where performance was completed.

Front 83

What is the general rule regarding excuse because of the non-occurrence of a condition?

Back 83

Generally, they must be strictly complied with.

However courts dislike the strict compliance rule and will enforce a contract despite the non-occurrence of a stated condition if non-occurrence of condition was made in good faith or if condition was waived (person protected by condition, waives) or estopped (person protected by condition waives, then later sues for non-occurrence.)

Front 84

What is an anticipatory repudiation?

Back 84

UNAMBIGUOUS statement or conduct by a contractually obligated party made PRIOR to the time that performance was due CLEARLY indicating that HE WILL NOT PERFORM.

Front 85

What are the non-breaching party's options when there is an anticipatory repudiation by the breaching party?

Back 85

(1) if performance not complete, may sue immediately for breach
(2) if performance completed, must wait until payment is due to sue for breach

Front 86

What if the words or conduct of one party to a contract make the other party uncertain as to whether performance will be completed?

Back 86

Other party can demand adequate assurance and if it is "commercially reasonable" can suspend performance until adequate assurance is received. If adequate assurance is not received, then such conduct can ripen into an anticipatory repudiation.

Front 87

A rescission (an agreement to cancel a contract) is valid only if:

Back 87

neither party has completed performance (executory).

Front 88

What is an accord and satisfaction and what is its effect on a contract?

Back 88

It is a new agreement to satisfy an existing obligation. If the accord is satisfied, then performance of the original obligation is excused. However, if the accord is not performed, than the other party can sue on either the original contract or the accord.

Front 89

What is a modification and what is its effect on a contract?

Back 89

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

Front 90

What is a novation and what is its effect on a contract? How is it different from a delegation?

Back 90

it is an agreement between both parties to an existing contract to the substitution of a new party.
A novation excuses the party that was substituted for from liability under the contracted.

A novation is an agreement by BOTH parties and excuses performance of the substituted party whereas a delegation does not require an agreement of both parties and does not excuse performance.

Front 91

In what circumstances may performance of a contract be excused by a later, unforeseen event?

Back 91

Performance of contractual duties may be excused under impossibility (including later illegality), impracticability or frustration of purpose only if: (1) something happens after the contract formation but before completion of performance (2) that was unforeseen, and (3) that makes performance impossible OR commercially impracticable OR frustrates the purpose of the performance.

Front 92

Can a party to a contract intended to benefit a third party cancel or modify the contract?

Back 92

Only if the third party does not know of the contract and has not relied on it. If she has learned of it or relied on it, then her rights have vested and the contract cannot be canceled or modified.

Front 93

Under common law, an assignment is barred if it:

Back 93

substantially changes the duties of the obligor. The assignment of the right to payment is NOT a substantial change. Anything else usually is a substantial change.

Front 94

What is the difference between a prohibition of assignments and an invalidation of assignments?

Back 94

Language of prohibition takes away the right to assign, but not the power to assign. Thus, an asignee who does not know of the provision can still enforce the assignment (and assignor still liable).

Language of invalidation takes away both the right and the power to assign. Thus, assignee will have no rights.

Front 95

Is consideration required in order to assign one's rights under contract?

Back 95

Generally, no. However, gratuitous (gift) assignments can be revoked at any time by assignor.

Front 96

What are the implied warranties of an assignor in an assignment for value?

Back 96

the assignor warrants that:

(1) the right assigned actually exists; and
(2) the right assigned is not subject to any defenses by the obligor; and
(3) the assignor will do nothing to impair the value of the assignment.

Assignor DOES NOT warrant what the obligor will do.

Front 97

If an assignor gratuitously assigns the assignment multiple times, which assignee has the valid assignment?

Back 97

The LAST assignee to receive the assignment (last in time).

NOTE: Gratuitous assignments NOT revocable if:
(1)subject of a writing delivered to assignee; or
(2)assignee has received some sort of indicia of ownership; or
(3) assignee has relied on the assignment in a way that is reasonable, foreseeable, and detrimental.

Front 98

If an assignor assigns the same assignment multiple times and each time for consideration, who gets the assignment?

Back 98

The first assignee for consideration UNLESS:

subsequent assignee (i) does not know of earlier assignment and (ii) is the first to obtain (a) payment or (b) a judgment or (c) a novation or (d) indicia of ownership.

Front 99

Delegations of contractual duties are permitted unless:

Back 99

(1) the contract prohibits delegations or prohibits assignments or (2) the contract calls for VERY SPECIAL skills or (3) the person to perform contract has a VERY SPECIAL reputation.

Front 100

In a contract where a party delegates his duties to a third person, and that third person fails to perform, who is liable for breach?

Back 100

(1) The delegating party ALWAYS remains liable and (2) the delagatee will be liable only if she receives consideration from the delegating party (otherwise, there is no new obligation).

Front 101

An offer requires:

Back 101

(1) the intent to contract, (2) essential terms, and (3) communication to the offeree.

Front 102

Is an ad that is held out to the general public considered an offer? Why?

Back 102

No. An offer must consist of (1) intent to contract, (2) essential terms and (3) communication to offeree.

An ad which is communicated to the public is generally held not to be an offer since it is not directed to a specific person.

Front 103

What is the PAROL EVIDENCE rule under the UCC?

Back 103

(1) NO CONTRADICTORY TERMS!

(2) EXPLANATORY AND SUPPLEMENTAL OKAY IF: (i) course of dealing/ usage in the trade OR (ii) course of performance to date

(2) ADDITIONAL TERMS OK if:
(i) merger clause; or
(ii) court finds that writing was intended as complete and exclusive agreement of terms;

Front 104

What type of extrinsic evidence is INAPPLICABLE to (and therefore its admission does not violate) the PAROL EVIDENCE rule?

Back 104

(1) VALIDITY--when the validity of contract is attacked (fraud, duress, mistake, illegality)
(2) CONDITION PRECEDENT--to prove that K only effective after certain condition met.
(3) INTERPRETATION--ambiguous uncertain terms
(4) CONSIDERATION--showing that consideration has been paid/performed
(5) REFORMATION--when a party alleges facts entitling him to reformation, parol evidence rule doesn't apply
(6) SUBSEQUENT MODIFICATIONS--parol evidence rule only applies to prior or contemporaneous negotiations

Front 105

How do you determine whether a writing was intended as a FINAL EXPRESSION? (and thus, a partial or complete integration)

Back 105

The more complete an agreement appears on its face, the more likely it is that it was intended as an integration.

Front 106

What's the difference between a PARTIAL INTEGRATION and a COMPLETE INTEGRATION?

Back 106

This is a question of fact, but is decided by a district JUDGE.

Using the Williston Test, if the parties situated as were these parties would naturally and normally include the extrinsic matter in the writing, then is a COMPLETE INTEGRATION. Otherwise, it's a partial integration.

Front 107

What type of condition exists in the following contract?

"Brother contracts to sell his stereo to Sister."

Back 107

One of two possibilities:
(1) CONSTRUCTIVE (implied in law) or (2) IMPLIED (implied in fact) condition.

Even though there is no express condition that Brother cannot demand payment before he gives stereo to Sister, a court will either construct or infer this condition into the contract.

Front 108

What are the ways in which a party's performance under a contract can be DISCHARGED?

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(1) Performance
(2) Tender of Performance (present ability to perform)
(3) Occurrence of Condition Subsequent
(4) Illegality
(5) Impossibility, Impracticability, or Frustration of Purpose
(6) Rescission (mutual or unilateral)
(7) Modification of Contract
(8) Novation
(9) Cancellation
(10) Release
(11) Substituted Contract
(12) Accord and Satisfaction
(13) Account Stated
(14) Lapse
(15) Operation of Law
(16) Running of Statute of Limitations