Contracts Feb 11

Front 1

how to decide if ucc or common law governs when there is a mixed deal?

Back 1

whatever "the most important part" of contract is governs

Front 2

terms needed for valid offer ucc and cl?

Back 2

ucc: quantity and description of goods
exception: requirements/output k valid if say all, only, exclusively, solely

cl: price and description

cant have vague or ambiguous material terms

Front 3

when is an advertisement an offer?

Back 3

1) it is in the nature of an award

2) if it is specific to quantity and expressly indicates who can accept

Front 4

4 ways to terminate an offer

Back 4

1) lapse of time
*anything over a month deserves discussion on bar
2) death of a party prior to acceptance
3) revocation
unambiguous statement or conduct making offeree aware of revocation
4) rejection

Front 5

offer made by publication. how to revoke?

Back 5

comparable means of publication

Front 6

4 situations where offeror cannot revoke?

Back 6

1) option supported by consideration
2) ucc firm offer rule
3) detrimental reliance
4) start performance on unilateral k

Front 7

ucc firm offer rule elements?

Back 7

an offer cannot be revoked for up to 3 months if there is
1) an offer to buy or sell goods
2) a signed, written promise to keep the offer open
3) offeror is a merchant

Front 8

3 methods of indirect rejection?

Back 8

1) counteroffer
2) conditional acceptance
3) additional terms at common law

Front 9

ucc rules for additional terms

Back 9

acceptance which adds new terms is still acceptance unless offeree expressly conditions his acceptance on additional terms being part of k

Front 10

is the additional term apart of the k?

Back 10

yes if:
1) both merchants

2) the additional terms do not materially change the k
and
3) the offeror does not object in reasonable time frame

Front 11

6 methods of accepting an offer

Back 11

1) later conduct by offeror
(ie: when offeree gives conditional acceptance or adds additional terms)
2) offeree fully performs (may need to show offeror had notice of offerees performance. turns on what the offer requires or whether offeree had reason to believe offeror wont learn of acceptance
3) offeree starts to perform (bilateral k only)
4) offeree promises to perform on bilateral k
5) mailbox rule: acceptance effective when mailed unless i) rejection mailed first, then whatever is received first wins or ii) acceptance mailed, followed by rejection, rejection is received first and detrimentally relied upon
6) seller sends wrong goods is acceptance and breach
exception: seller provides explanation as to why they sent wrong goods, this is treated like a counteroffer

Front 12

does the additional terms or condition become part of k when later conduct by offeree creates acceptance?

Back 12

cl: yes
ucc: no (ucc only applies for conditions set by offeree as adding additional terms still constituted acceptance by offeree)

Front 13

exceptions to pre-existing duty rule

Back 13

1) addition to or change in performance required
2) unforeseen circumstances so severe that it acts to excuse performance
3) 3rd party promise to pay
4)***ucc new consideration not needed to modify existing k. good faith is the test

Front 14

part performance as consideration for release of a debt?

Back 14

1) if due and undisputed, not valid
2) if not due then will be valid if some other change is made

Front 15

consideration substitutes?

Back 15

1) written promise to fulfill obligation in which you would have had a legal defense. will be enforced under new terms
(ie: owe 1k but sol has run out but you write promising youll pay 500)
2) promissary estoppel/detrimental reliance

Front 16

elements of promissory estoppel/detrimental reliance?

Back 16

1) promise
2) reliance on promise which is reasonable, detrimental, and foreseeable
3) promise induced substantial action/forbearance by promisee
4) enforcement is necessary to avoid injustice

Front 17

past consideration, is it valid?

Back 17

no unless
1) expressly request the consideration
2) there is an expectation of payment
(ie: ask A to save your life, then promise to pay 3k after A has done it)

Front 18

consequences of incapacity?

Back 18

1) only the person without capacity has right to disaffirm
2) if after gaining capacity, retained the benefit, k is ratified
3) there is quasi-contract liability for any benefit incapacitated person receives

Front 19

who lacks capacity?

Back 19

1) under 18
2) mentally incompetent person
3) intoxicated person if other party had reason to know of intoxication

Front 20

contracts within SOF?

Back 20

1) promises to answer for anothers debt (must say specifically you wil pay if they dont)
exception: main purpose exception
2) promises by executor to answer PERSONALLY for decedents debt
3) promises made in consideration of marriage
4) service k not capable of being performed within a year
5) transfers of real estate interest
exception: leases of a year or less
6) sales of goods $500 or more

Front 21

how to satisfy SOF if not written and signed k?

Back 21

1) full performance on services k
(part performance, quasi-k theory)
2) part performance of sale of goods (but only as to the part performed)
3) substantial beginning, preparation if specially manufactured goods
4) performance and transfers of interest in real estate (if 2 of following 3 things occur: i) full or partial payment ii) possession iii) improvements
5) judicial admission (in testimony admitted that there was a valid agreement)

Front 22

writing requirement to satisfy SOF?

Back 22

1) cl = all material terms must be present and signed by person asserting SOF defense
2) quantity term must be included and signed by person claiming SOF defense
exception: requirement waived if i) both merchants ii) person who is claiming no k received signed writing with quantity terms based on oral agreements between the 2 and iii) fails to respond within 10 days of receiving it

Front 23

provision saying all modifications must be in writing?

Back 23

cl = invalid

ucc = effective unless waived

Front 24

validity of k if relied on misrepresentation or nondisclosure

Back 24

misrepresentation = can rescind if misrep was unintentional, it is void if it was intentional
nondisclosure = can only rescind if intentional nondisclosure

Front 25

when can courts refuse to enforce an agreement because of public policy?

Back 25

if there is an exculpatory ageement that exempts reckless or intentional conduct from liability

*can exempt negligence but not gross negligence

Front 26

when can a court refuse to enforce k because of unconscionability?

Back 26

1) unfair surprise (hidden strict warranty)
2) oppressive termss

Front 27

duress?

Back 27

forcing extraneous agreement because know that other party has no other options

Front 28

void k based on ambiguity in agreement?

Back 28

1) parties use material terms that have 2 possible meanings
2) each puts separate meaning
3) neither knows there is other possible meanings to the term

*if one knows then there is a k based on understanding of ignorant party

Front 29

mistake of fact analysis

Back 29

1) both parties are mistaken
2) regarding assumption of facts
3) which materially affects agreed exchange
4)it is not a risk the adversely affected party bears

*ct will not void a k if there is unilateral mistake unless the nonmistaken party had reason to know of mistake

Front 30

when can parole evidence be used?

Back 30

1) to prove a mistake in reducing the k to writing
2) for purposes of showing defense to formation of k (ie: misrepresentation, duress, fraud, etc)
3) resolving ambiguities
4) additional terms if ct finds k was only partial integration and the additional terms would ordinarily be in separate agreement

Front 31

conduct and course of opinion used by ct to determine term of k. in order of what is given more weight?

Back 31

1) course of performance (what has already happened under this k)
2) course of dealing (what facts tell us about earlier k between these parties)
3) custom and usage (what is the normal custom in the industry and what have other people done in similar k's)

Front 32

shipment v. destination k under ucc

Back 32

shipment: seller must deliver to common carrier, make reasonable arrangements, and notify the buyer

destination: delivery obligation complete when reaches buyer (fob anything other then sellers city)

Front 33

4 risk of loss rules, in order?

Back 33

1) what does agreement say?
2) if there is a breach, breaching party is liable for any uninsured loss even if breach unrelated to problem
3) if delivery by common carrier, risk of loss shifts depending on if shipment k or destination k
4) if 1-3 dont apply, look to see if seller is merchant. if yes, he carries the risk of loss until buyer physically possesses goods. if not, risk of loss shifts upon tendering delivery (setting up place and method of delivery)

Front 34

warranties of quality?

Back 34

1) express
2) if merchant is seller, implied warranty of merchantability (goods must be fit for the ordinary purpose for which such goods are used) and if facts show, implied warranty of merchantability for a particular purpose (if buyer is counting on sellers skill and knowledge to pick an item and seller knows buyer needs it for a particular use)

Front 35

disclaiming warranties?

Back 35

1) express generally cannot
2) implied warranties may be disclaimed by either
i) CONSPICUOUS language of disclaimer, mentioning merchantability
or
ii) language saying "as is" or "with all faults'

Front 36

can a disclaimer eliminate a warranty?

Back 36

no only limit extent of recovery

*general test is unconscionability. if breach or warranty causes personal injury, is unconscionable

Front 37

6 sale of goods performance concepts?

Back 37

1) perfect tender
i) applies only to sog
ii) sellers goods and delivery method must be perfect
iii) less than perfect tender gives buyer option of rejection
2) rejection of the goods
i) buyer may retain and sue for damages
ii) reject all or any commercial unit and sue for damages (this option is eliminated if seller cures, if the k is an installment k, or buyer accepts
4) cure: seller will have 2nd chance to fix perfect tender requirement if
i) he reasonably believed the nonperfect tender would be accepted (ie: seller has accepted previously what is being deemed ineffective now)
ii) time for performance has not yet expired)
4) installment k: unless there is substantial impairment in the installment that cannot be cured
5) buyer keeping without timely objection implies acceptance (1 month or more)
6) revocation of acceptance of goods
i) nonconformity substantially impairs value of goods
ii) excusable ignorance or reasonable reliance on sellers assurances o satisfaction
iii) revocation occurs within reasonable time after discovery of nonconformity (this is only in situations where nonconformity becomes known after acceptance)

Front 38

common law equivalent to perfect tender rule?

Back 38

substantial performance

Front 39

non monetary remedies?

Back 39

1)specific performance. 2 situations where granted:
i) k for sale of real estate not sold to bona fide purchaser for value
ii) k for the sale of unique goods
2) for sog only: unpaid seller can get goods back if
i) buyer was insolvent at time received goods
ii) seller demands return within 10 days of receipt
iii) buyer still has goods at time of demand

Front 40

when does the rights of a bonafide purchaser for value cut off owners right to get goods back?

Back 40

1) if owner leaves goods with someone who wrongfully sells them to bonafide purchaser, cant get goods back and can only sue seller
2) if goods were stolen, then sold, can recover the goods

Front 41

defenses to equitable remedies? 3

Back 41

1) unclean hands
2) laches
30 sale to a bonafide purchaser for value and in good faith

Front 42

money damages and how computed?

Back 42

1) expectation: put plaintiff in same position would have been had D not breached
2) reliance: put p in same position had there never been a k
3) restitution: put D in position would have been had there never been a k (ie: money still goes to p but focus on what D got in determining p's recovery)

after the first 3, you add incidentals (always recoverable)

Front 43

consequential damages analysis?

Back 43

p only gets if their existance was known to D at time k was made (ie: knew if breach occurs, p would suffer additional loss. ie: p tells d that if the plumbing isnt fixed by tuesday, he will lose a grand a day)

Front 44

subtracting avoidable damages analysis?

Back 44

after adding general, incidental, and where applicable, consequential damages, you subtract avoidable damages (ie: anything p could have avoided without undue burden)
**must be similar ie: teaching job at duke breached but got offer at yale)

Front 45

damage rules for SOG?

Back 45

only expectation
1) seller breach, buyer has goods = fmv at time of delivery - fmv as delivered
2) seller breach, seller has goods = replacement price - k price or fmv - k price
3) buyer breach, buyer has goods = k price
4) buyer breach, seller has goods = k price - fmv at time of breach or k price - resale price

**lost profits available for high volume sales in form of profit percentage

Front 46

liquidated damages clause analysis?

Back 46

1) cant be a penalty (usually lump some)
2) must be reasonable measure of actual damages

Front 47

excuse of nonperformance common law?

Back 47

1) must be material breach
*failing to perform by stated time not material if performed shortly after UNLESS timeliness is essential to k
2) substantial performance renders breach immaterial and performance is not excused
3) less than half the work done is not substantial performance (watch for quasi-k issue)
exception: if its a divisible k, then must pay for part performance

Front 48

condition analysis

Back 48

strict compliance with conditions are required for satisfaction, thus noncompliance is a material breach and performance by other party is excused (ct has discretion to excuse lack of condition if deems minor)

Front 49

excuse of condition by waiver or estoppel?

Back 49

waiver: based on statement by person protected by condition after condition did not occur and doesnt require reliance
estoppel: based on statement made by person protected by condition beofre condition occurs or doesnt and requires reliance

Front 50

anticipatory repudiation analyisis

Back 50

performance is excused if other party makes unambiguous statement or conduct which
1) indicates he will not perform
2) is made prior to the time performance is due
**neither side has completed performance

Front 51

anticipatory repudiation can be retracted so long as?

Back 51

1) there has not been a material change in position by the other party

Front 52

excuse by insecurity analysis?

Back 52

1)if words/ conduct by a party gives the other party reasonable grounds for insecurity and
2) it is commercially reasonable to suspend performance
3) can make demand for adequate assurance that other party will perform.
**if 30 days goes by without answer, excused for non performance

Front 53

cant agree to rescind k if?

Back 53

performance by either party is completed

Front 54

accord and satisfaction analysis

Back 54

agreement by parties to an already existing obligation to accept different performance in satisfaction of the existing obligation
2) key is words like IF you do this, THEN
3) if performs new agreement, no action available
4) if doesnt, can sue for either the original or the new

Front 55

modification vs accord?

Back 55

modification doesnt say if you do this, it will satisfy, it says, lets make a whole new agreement. unlike accord and satisfaction, breach of the modified k only allows liability for the new agreement

Front 56

novation v. delegation?

Back 56

1) novation: both original parties agree to new party replacement and old party no longer liable
2) delegation: original party still liable

Front 57

excuse by later unforeseen event?

Back 57

1) something happens after formation but before completion of k
2) that makes performance impossible, impracticable, or frustrates the purpose of k
3) its unforeseen

Front 58

destruction of subject matter, who bears risk of loss, and when is performance excused?

Back 58

1) look at who bears risk of loss at time of destruction
2) a house burning down can still be built so cant be excused
3) a car being destroyed excuses performance cuz only one of that car
4) whoever bears risk of loss is the one we are concerning ourselves with regarding whether the performance is excused

Front 59

death after k

Back 59

doesnt excuse unless the person was unique (ie: ashton kutcher dies, his estate not liable for him not acting in movie)

Front 60

when subsequent law either makes performance illegal or frustrates purpose of performance

Back 60

performance is excused

Front 61

when does third party beneficiary acquire k rights, ie, when do their rights vest and modification or rescission not allowed anymore?

Back 61

must know of k and i) manifested assent to a promise in a manner requested by the parties
ii) brought a suit to enforce the promise or
iii) changed position on justifiable reliance of the promise

Front 62

donee v creditor third party beneficiary

Back 62

if donee (meaning is not creditor of promisee)
1) has no rights against promisee even after rights have vested so promisee can modify/rescind
2) promisor still liable though (promisor is guy who is supposed to confer benefit on 3rd party
if creditor third party (ie: third party is creditor of promisee, promisee owes him money)
1) third can revover from either promisee (for outstanding debt) or promissor for specific performance
defenses: if 3rd sues promisor, promisor can assert any defenses he would have had against promisee

Front 63

rights of an assignee?

Back 63

1) assignee can sue obligor
2) assignor for consideration cannot recover from obligor (the obligor is the guy paying the assignee, the assignor assigned the money to the assignee)
3) obligor has same defenses against assignee as it would have had against assignor
4) obligor may pay assignor UNTIL assignee knows of assignment

Front 64

implied warranty of assignor when assignment is for value?

Back 64

1) the rights actually exist
2) the right assigned is not subject to any defenses by the obligor
3) assignor will do nothing to impair the value of the assignment

Front 65

if assignment is gratuitous?

Back 65

can be revoked by assignor or the obligor can pay assignor as long as assignee doesnt know about the assignment

Front 66

multiple assignments?

Back 66

if gratuitous: last assignment wins
if for consideration: the first assignee for consideration wins

Front 67

delegation of duties?

Back 67

1) delegating party always remains liable
2) delegatee only liable if receives consideration from delegating party

Front 68

if k is silent, when are contracts not delegable?

Back 68

if they involve artistic performance or professional skill

Front 69

Describe fighting words as an unprotected speech

Back 69

Describe fighting words as an unprotected speech

Restricted speech includes personally abrasive language likely to invite the average person to commit acts of physical violence; however, statutes designed to punish only particular viewpoints are invalid – e.g., fighting words that provoke violence on the basis of race, religion, or gender