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82 Cards in this Set

  • Front
  • Back
Parol Evidence Rule
If an agreement is reduced to an integrated writing parties may not introduce extrinsic evidence of prior or contemporaneous events that contradict or supplement the terms of the writing.
-If partially integrated and supplemental, than it is not barred
Always Barred by Parol Evidence Rule
-Parol Evidence that Contradicts the writing UNLESS attesting to one of the defenses
Never Barred by the Parol Evidence Rule
-Oral and written agreements that come after
-Simultaneous writings
-Evidence to show that the effectiveness of an agreement was subject to an oral condition precedent
-Evidence to show that the agreement was invalid due to one of the defenses...Fraud Exception
Fraud Exception to the Parol Evidence Rule
Some courts limit the eveidence to fraud in the execution...but some courts extend the exception to fraud in the inducement as well
Fully Integrated
Final and Complete

Final=It has everything

Complete=It is the last agreement
Partially Integrated
Final but not deals with some but not all aspects of a transaction between the parties
Traditional Approach Determining Integration
Traditionalis approach-4 corners, looks strictly at the K, if the writindg is final on its face than integrated
EXCEPTION Parol Evidence may still be used to explain a writing only if it is ambiguous on its face
Determination of Integration
Must look at entire course of dealings to determine whether it is fully integrated
-May use parol evidence to explain a writing dependent of integration status
Fully Integrated v Partially Integrated
-Fully Integrated only allows evidence for a defense
-Partially integrated allows for supplementary evidence but not contradictory
Collateral Agreement Exception
An agreement is not completely integrated
A consistent additional term will be admitted if there is separate consideration for it OR it is something that might be naturally
UCC Parol Evidence
Takes everything into account, dealings are number 1
CISG Parol Evidence Rule
There is none....Gotcha Bitch
Implied Terms
Terms that are not expressly agreed to but become part of the K
Implied in Fact
terms implied by the parties themselves through custom and conduct
5 defenses to parol evidence rule
Undue Influence
Implied in Law
Terms made part of the agreement by operation of the rules of law
Default Rules vs. Immutable rules
Default Rules- Rules included unless specified otherwise
Immutable Rules-Rules that cannot be changed
UCC Good Faith
Honesty in fact and observance of reasonably commmercial stanards of fair dealing in the trade
-subjective honesty and objective reasonableness
UCC 2-306
No tender or demand can be disproportionate to any agreed upon estimate unless done in good faith...
-to protect against loss is not sufficient
Rest. 205
Every K imposes upon each party a duty of good faith and fair dealing in performance and enforcement
Good Faith Descriptors
-Fully disclosing material facts
-Substantially performing without knowing deviating from specifications
-Refraining from abuse of bargaining power
-acting cooperatively
-acting diligently
-acting with some reason
-interpreting K language fairly
-accepting adequate assurances anything that will have the effect of destroying the right of the other party to receive the fruits of the K
-Subjective bad faith trumps objective reasonableness
At will Employment
May be terminated for any reason at all except in bad faith demonstrated by:
-Any termination that deprives of earned compensation
-Good faith evaluation
-Additional consideration requires just termination
-Promissory estoppel
UCC 2-313 Express Warranty
Term implied by law
Created by any affirmation of fact by seller that relates to the goods and becomes a part of the bargain
-Any description that is made part of the basis of the bargain
-sample or model that is part of bargain
-not created by opinion of value by seller
-Cannot write out...immutable
UCC 2-314 Implied Warranty of Merchantability
If sold by a merchant than goods shall be merchantable:
-pass without objection in trade under the description
-Are fit for the ordinary purpose for which the goods are used
-adequately packaged and labeled
-does not vary among units
-conform to label
-other implied warranties from trade usage
-Can be disclaimed if mentions merchantibility
UCC 2-315 Implied Warranty of Fitness
-If Seller at the time of K'ing has reason to know any particular purpose for which the goods are required there is an implied warranty that goods shall be fit for such pupose
-usually signaled with buyer affirmation
-can be disclaimed by:"there are no warranties that extend beyond the description of the face here of
If under the age of majority K is voidable up until the age of majority at which point the minor has a reasonable time to either dissafirm or ratify
Common Law Minority
Responsiblie to return to the party what is left of the K at the time of voidance, absent any willful destruction in which they may not be able to dissafirm
Benifit Rule
Recovery will be reduced by benefit received...may take into account depreciation
Necessaries (Minority)
Minors are liable for necessaries
Rest. 13-Guardianship
If under guardianship not considered to have capacity
Rest. 15 Incapacity
A K is VOIDABLE if entered into by a person of mental illness or defect test:
1) Subjective- is unable to understand in reasonable manner the nature and consequences of the transaction (cognitive)
2) Objective-unable to act in a reasonable manner in relation to the K and the other party knows this (volitional)
HOWEVER if entered into fairly and if the other party is without knowledge then avoidance terminates to the extent that the K has been erformed or circumstances have changed so that it will be unjust
Rest. 175 Duress
If a party's manifestation of assent is induced by an improper threat that leaves the victim no reasonable alternative than the K is void
-Look at legal action, and alternative souces
-inducement is subjective to that person...substantial contribution
Rest. 176 Improper Threat
-Threaten with a crime or tort
-Threaten criminal prosecution
-bad faith threat of the use of civil processes
-threaten breach of good faith and fari dealing
-not on fair terms and of no benefit to the breacher
-for illegitimate means
-Economic duress voidable
Rest. 177 Undue Influence
If a party's manifestation of assunt is induced by excessive ressure to overcome the will of someone who is unduly suceptible than the K is voidable.
7 factors of Excessive pressure
1)Inappropriate time
2)Inappropriate place
3)Insistent demand that the deal be done now
4) Extreme emphasis on consequence of delay
5) The use of multivple persuaders
6) No time to consult professionals
7) No third party guidance
Rest. 159
A misrepresentation is an assertion that is not in accord with the facts
Rest. 163 Fraud in the execution
A K is void if there is a 1) misrepresentation as to the character or essential terms of the K 2) induces assent 3) that the victim neither knows nor has reasonable opportunity to know the character of the essential terms
Rest. 164 Fraud in the Inducement
1) a manifestation of assent is induced
2) by a material (likely to induce reasonable person) or Fraudulent (knows or is negligent to the truth)
3) That the other party is justified in relying
-special relationship
-special skill in subject matter
-particular susceptibility
Third party misrepresentation
K is voidable if justified in relying unless the other party in good faith and without reason to know gives value and relies on the transaction
Non-Disclosure Classic View
Non-Disclosure is not a defense
Modern View Non disclosure
Non-disclosure becomes a misrepresentation:
-Where party knows that disclosure of a fact is necessary to prevent some previous assertion from being a misrepresentation
-disclosure would correct a basic assumption of the other party
-disclosure would correct a mistake of the other party as to the contents of the writing
-entitled to know the fact because of a special relationship
-new knowledge
Acknowledge difference between information known as oppose to gained with resources
Court will fink a K unenforceable if there is an absence of meaningful choice on the part of one of the parties together with K termas that are unreasonably favorable to another party
-court may choose to revforce remainder without term or limit term
Procedural Unconscionability
Lack of choice by one party or some defect in the bargaining process
-disparity in power
-awareness of infirmity
-wiff of bad faith
Substantive Unconscionability
A lack of fairness of the terms of the bargain
Public Policy
What is the statute?
Connect to a significant public body.
Balance with the freedom to K
Rest. 151 Mistake
A belief that is not in acccord with the facts
Rest. 152 Bilateral Mistake
1) Where mistake of fact of both parties at the time of K
2) Was made as to a basic assumption on which the K was made
3) Has a mterial effect on the agreed exchange of performances
4) Is voidable unless he bears the risk

-market conditions and financial standing not sufficient
Rest. 153 Unilateral Mistake
1) Where a mistake of one party was made at the time of K
2) To a basic assumption on which he made the K
3) has a mterial effect on the agreed exchanges that is adverse to him
4) K is made voidable as long as he did not bear the risk AND effect of mistake makes enforcement unconscionable OR other party has reason to kno of the mistake or fault Or his fault caused the mistake
-Wiff of Sulfur
Rest. 261 Impracticability
-The occurence of an event that the non-occurence of was a basic asumption of now makes performance unduly burdensome
-must have not boar the risk
-must have not not been at fault
-no duty to render performance
UCC 2-615 Seller delivery impracticability
non delivery is not a breach immade impracticable by a contingenecy that the non occurence of was a basic assumption on whch the K was made...seller may allocat any way he sees reassonable
-Increased cost or market fluctuation is not enough
Deathe or incapacity, failure to come into existence or destruction of a specific thing, or governmental regualation of a person necessary for the performance which the non occurence of was a basic assumption on which the K was made
UCC Impossibilty
If goods destroyed before risk passes to buyer than K is voided, or if partial buyer chooses
Frustration of purpose
Where after a K is made, a party's principal purpose is frustrated without fault of his own, by an event the non-occurence was a basic assumption on which the K was made, remaining duties to render performance are discharged
Rest. 89 Modification
A promise modifying an existing K requires consideration unless
1)Fair and equitable in view of circumstances not anticipated at time of K
2) Statute
3) Exten justice requires enforcement in view of material change of position in reliance on the promise
UCC 2-209 Modification
An agreement modifying K does not need consideration
-Between merchants you can K for a private SOF...NOM
-SOF must be satisfied unless the NOM right has been mutually waved
-can be used in situtations that do not rise to the level of excuse
Any unjustified or unexcused failurre to perform all or any party of what is promised in a K
the denial of compensation that results when the obligee loses its right to the agreed exchange after it has relied on the exchange
express condition
a term or event upon the performance of which the K explicitly makes another term's performance conditional
Constructive Condition
A term or event upon the performance of which the performance of another term is construed to be conditional
Rest. 241 Test for a material breach
-Extent injured party is deprived of teh benefit expected
-Extent to which the injured party can be adequately compensated for the part of the benefit of which he will be deprived
-The extent to which the party failing to perform will suffer forfeiture
-Likelyhood of cure
-Good faith of breaching party
Rest. 242 Test for totality of breach
Rest. 241 Factors
+Delay will prevent sustitute performance/cure
+"Time is of the essence"
Rest. 250 Anticipatory Repudiation
A repudiation is a statement by one party indicating she will commit a total breach giving rise to damages for total breach, discharge duties, or excuse the non-occurence of a condition
-usually clear and unequivocal
-mere doubts are not sufficient
-may be effectively retracted as long as other has not relied on or changed postion relative to the repudiation
Rest. 251 Adequate Assurances
Where reasonable grounds arise to believe that one party will committ a total breach adequate assurance may be demanded and if reasonable suspend performance for which he has not already received the agreed exchange until he receives such assurance
-if assurances are not given in a reasonable time, acts as repudiation
Reasonable grounds for assurances
-financial insecurity
-failure to perform important obligations under the K
-failure to perform under related K's
UCC Assuances
Same except must be in writing...
Cannot be based on past dealings
-after receipt 30 day max for performance
Expectation Damages
Gain that P would have realized if the K had been fully performed as promised by both partis
Expectation Equation
Loss in Value + Other Loss(Consequential/Incidental)-Cost Avoided-Loss Avoided
Loss in Value
Difference between what value should have been received and what if anything was received
Real Estate LIV
Buyer Breach-K Price-FMV
Seller Breach-FMV-K Price
Construction Variation
Net Profit+Unreimbursed Expenses
Consequential Damages
Injury to persons or property caused by breach
-must be foreseeable
-must be reasonably certain
-must be caused by brache
-must take reasonable efforts to mitigate
Incidental Damages
Additional costs incurred after the breach in a reasonable attemet to avoid loss, even if unsuccessfule
Cost Avoided
Additional expenditure saved after the breach in not having to perform
Loss Avoided
Resources Salvaged or reallocated that would have otherwise been devoted to K
Cannot Recover
Lawyers Fees (EXCEPT CISG)
Punitive Damages
-unless insurance, bad faith
Emotional Distress
-common carriers, death stuff
Reliance Damages
Put P in the same position as she was in before the K was made
=Direct/Essential + (Consequential&Incidental- loss avoided
-Done becaue of causation and predictability problems associated with expectation damages
Direct essential
Costs incurred as a part of the performance obligation
Expenses incurred on the reliance on the K and because of the breach
-reasonably foreseeable
Loss avoided
Net loss of breaching party if performed in full
Restitutionary damages
Aime to recreate the status quo...unjusyt enrichment
K price or market value
-in cases of defenses
Market value restitution
Agreed Remedies
-It is within the power of the parties to agree to compromise disputy....agreeing on the remedy
-must act to liquidate damagaes as oose to punish
-Must be a reasonable forecase of compensation for harm and difficult to estimate
Specific Performance
When Damages are inaeequate...
Difficulty in proving with reasonable certainty
Difficult in procuring substitute performance
Difficulty of collecting damges