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69 Cards in this Set

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in KS, are farmers considered merchants for the purposes of the statute of frauds?
no, KS courts have held that farmers are not merchants for purposes of the statute of frauds.
what are "goods" under the U.C.C.?
"goods" are defined as all things moveable at the time they are identified as goods to be sold under the contract.
are sales of crops considered goods?
sales of growing crops, made separate from a sale of land on which the crops are growing, are considered sales of goods associated w/real estate.
what is promissory estoppel?
promissory estoppel may be used to render enforceable any promise upon which the promisor reasonably intended to induce action or forbearance, of a definite and substantial character, and such action/forbearance is in fact induced. it is also available where application of the statute of frauds to such a promise would work a fraud or gross injustice on the promissee.
is consideration necessary in KS?
consideration is NOT necessary in KS ONLY IF there has been detrimental reliance or if promissory estoppel applies.
what is the general rule regarding an "as is" clause in a contract?
despite the existence of an "as is" clause, the seller is nevertheless obligated to disclose any known material defects in the condition of the house, provided the defects are not apparent or readily discoverable through the exercise of ordinary diligence.
what is an "as is" clause in a contract?
an "as is" clause means the buyer is purchasing property in its present state or condition. it implies the property is taken w/whatever faults it may possess and the seller is released of any obligation to reimburse the purchaser for losses/damages b/c of that condition.
does an "as is" clause bar a buyer's claim based on fraud or intentional misrepresentation?
what is needed to establish a claim for fraudulent concealment/nondisclosure?
a plaintiff must show (1) the defendant had knowledge of a material existing fact or condition, and (2) the defendant had a duty to disclose the fact/condition.
what does it mean to be "material?"
a fact or condition is "material" if it is one of controlling importance in determining the desirability and value of the residence.
what is the theory of unilateral mistake?
where only one party is mistaken about the facts relating to the agreement, the mistake generally will not prevent the formation of the contract.
what is the exception to the general unilateral mistake theory?
if the nonmistaken party knew or had reason to know of the mistake made by the other party, he will not be permitted to "snap up" the offer, and the contract will be voidable.
what may a SELLER recover when a BUYER breaches by repudiating her offer?
when a BUYER breaches a K by repudiating her offer, the SELLER is entitled to recover incidental damages plus either the difference between the K price and the market price or the difference between the K price and the resale price.
what is anticipatory repudiation?
anticipatory repudiation occurs where a promisor, prior to the time set for performance of her promise, indicates that she will not perform when the time comes.

there must be (1) an executory bilateral K w/executory duties on both sides; and (2) words/conduct of promisor must unequivocally indicate she cannot or will not perform when the time comes.

the nonrepudiating party has the option of treating the K as breached and sue immediately.
what discharges a minor's liability under a K?
disaffirmance. (i.e. minor refuses to make any more payments.)
does a minor have capacity to enter into a K?
minors generally lack capacity to enter into a K binding on themselves.
what is the mailbox rule?
under the mailbox rule, an acceptance generally is effective upon dispatch.
does the mailbox rule apply even if an offer states, "acceptance not effective until received?"
if an offer states a period of acceptance, what must an offeree do to create a K?
if a period of acceptance is stated in an offer, the offeree must accept w/n that period to create a K.
may a party recover both liquidated and actual damages?
what is the purpose of contract damages?
the purpose of contract damages is to put the nonbreaching party into as good a position as it would have been had the breaching party fully performed.
what is the general rule regarding a condition precedent to payment in a contract?
a party does not have a duty to perform if a condition precedent to that performance has not been met.
when is specific performance available?
specific performance is available only where the legal remedy is inadequate.
will courts force someone to work using specific performance?
courts generally will not grant a decree of specific performance in personal services contracts to force someone to work.

(they may enjoin someone from working for anyone else in violation of contract.)
are advertisements offers?
advertisements are generally construed to be mere invitations to make offers, although some advertisements may be construed as offers, especially if they are very definite as to terms.
what is an offer?
a certain and definite promise, undertaking, or commitment to enter into a K communicated to the offeree.
what is the effect of a counteroffer?
a counteroffer serves as both a rejection terminating the original offer and a new offer from the original offeree, thus reversing the former roles of the parties and giving the original offeror the right to accept/reject the new offer.
is a gratuitous assignment revocable?
a gratuitous assignment generally is revocable unless the obligor has already performed or the assignee has relied on the promise to his detriment.
must an intended beneficiary be designated in the K?
what is an assignment?
an assignment is a K that does not contemplate performance to a 3rd party when the K is made, but later, one of the parties transfers his right to another.
what is the doctrine of detrimental reliance?
a promise will be enforced to the extent necessary to prevent injustice if it was made w/a reasonable expectation that it would induce reliance, and such reliance was in fact induced.
what is a gratuitous assignee?
one that gives no consideration.
what is the doctrine of promissory estoppel?
a promise that the promisor should reasonably expect to induce action/forbearance on part of the promisee, and which does induce such action/forbearance, is binding if injustice can be avoided only by enforcement of the promise.
what is "acceptance?"
a manifestation of assent to an offer.
what must happen for a communication to be an offer?
it must create a reasonable expectation in the offeree that the offeror is willing to enter into a K on the basis of the offered terms. there must be a promise, undertaking, or commitment ot enter into a K w/certain and definite terms.
under the U.C.C., is a promise to modify an existing K enforceable w/o consideration?
yes. the only requirement is that the proposal to modify be made in good faith.

(note: if a new shipping date is included, that counts as consideration.)
does the common law pre-existing duty rule apply to modifications under the U.C.C.?

the common law enforces promises only if they are supported by consideration, and a promise to perform a pre-existing duty is not valid consideration.
what may a buyer do if nonconforming goods are delivered?
the buyer may (1) reject them and cancel the K or sue for damages; or (2) accept any commerical units, reject the rest, and sue for damages.
what are buyer's rights if he accepts nonconforming goods?
once goods are accepted, the buyer is generally bound on the K and it's too late to cancel; however, the buyer retains the right to sue for damages for nonconformity.
when does acceptance occur?
acceptance occurs when the buyer: (1) indicates that he will accept the goods after a reasonable opportunity to inspect them; (2) fails to reject w/n a proper time; or (3) does any act inconsistent w/seller's ownership.
when is a K formed under the U.C.C.? (for sale of goods)
a K is formed whenever it appears from the parties'communications that they intended to enter into a K.
under the U.C.C., what happens when the acceptance contains terms additional to the offer terms?
if the K is between merchants, the additional terms in the acceptance are included in the K unless, (1) the additional terms materially alter the K, (2) the offer expressly limits acceptance to the terms of the offer, or (3) the offeror objects w/n a reasonable time.
is a mere inquiry about additional terms or matters a counteroffer?
what is the test for determining whether a communication is a counteroffer or an inquiry?
the test of whether a reply is a counteroffer or inquiry is whether a reasonable person would believe that the offer was being rejected.
when are revocations effective?
upon receipt.

note: does not require knowledge of revocation, just possession.
must impossibility be objective, subjective, or can it be either?
must be objective.

(i.e. no one could have performed. defendant could not perform is insufficient.)
what does a K term prohibiting the assignment of "the contract" do?
it bars only the delegation of the assignor's duty, not the assignment of the assignor's right to payment.
under the U.C.C., when can an offer to buy goods be accepted by a seller?
either a promise to ship or by prompt shipment of conforming or nonconforming goods. shipment of nonconforming goods will constitute an acceptance and a breach unless seller notifies buyer that the goods are offered only as an accomodation.
when does the offeror have the power to revoke an offer?
any time before an acceptance has occurred, even if the offeror has promised to keep the offer open, unless (1) consideration has been paid to keep the offer open (option K), (2) the offeree reasonably relies on the offer to his detriment, or (3) the offer is a merchant's firm offer.
under the U.C.C., what is the consequence of paying for goods in advance?
paying for goods in advance neither impairs the buyer's right to inspect nor his right to assert his remedies for breach.
if a buyer receives nonconforming goods, what are his damages?
he is entitled to damages based on the difference between the K price and the price to buy conforming goods, plus any incidental and consequential damages.
must a contract in consideration of marriage be evidenced by a writing to be enforceable?
is a duty that calls for personal service delegable?
when a duty is delegated, can the obligee force the delegate to perform?
ordinarily, no. the obligee cannot force the delegate to perform b/c the delegate has made no promise to the obligee.
until when is a unilateral K revocable?
until performance has begun.
does a payment constitue acceptance if the K calls for "payment on delivery?"
what may a buyer accept if he receives nonconforming goods?
he may accept all, reject all, or accept any commercial unit and reject the rest.
if a buyer rejects goods as nonconforming, is he entitled to a refund or resale profits?
a buyer who has rejected goods as nonconforming is entitled to any prepayment, OR , if the seller refuses to refund, to resell the goods and apply the proceeds to what is owed him from the seller. the buyer is not entitled to both.
does cashing a check offered as payment in full establish accord and satisfaction?
cashing a check offered as payment in full, where there is a bona fide dispute as to the amount owed, will establish an accord and satisfaction.
may a buyer cancel an installment K if there is a defect in one installment?
the U.C.C. provides that a buyer cannot cancel the entire K b/c of a defect in one installment if the defect can be cured.
when may a buyer of goods obtain specific performance?
the buyer of goods may obtain specific performance where the seller refuses to deliver goods if the goods are unique or circumstances are otherwise proper.
when does an express warranty arise?
an express warranty will arise from any affirmation of fact or promise or from any model or description if the statement, promise, model, or description is part of the basis of the bargain.
what is the warranty of merchantability and when does it arise?
it is a warranty that the goods shall be merchantable, which means that the goods shall be fit for ordinary purposes. it arises in every sale of goods, unless expressly disclaimed.
what damages may a buyer of defective goods recover?
a buyer of defective goods may recover as damages "loss resulting in the normal course of events from the breach, which includes damages to the goods themselves plus all foreseeable incidental and consequential damages, including injuries to person or property.
is an offer to buy goods for shipment inviting acceptance either by a promise to ship or by shipment?
what happens if only one party is aware of a latent ambiguity in a K?
the K will be enforced in favor of the UNAWARE party.
are minors bound for the reasonable value of necessities for which they contract?
what is the general rule regarding assigning contractual rights?
the general rule is that all contractual rights can be assigned.
when enforcing his rights against an obligor, is an assignee subject to defenses the obligor had against the assignor?
yes, as long as the defense is inherent in the K, such as failure of a condition, it is always available against an assigneee b/c it was in existence when the K was made.