Contracts Mbe 2008

Front 1

pre-existing duty + 3rd parties

Back 1

does not apply if it is a duty owed to a third party

Front 2

moral consideration + statute of limitations

Back 2

there was a debt barred because of SOL, then promise IN WRITING to pay a smaller amount --> moral consideration is sufficient to make an enforceable K

always enforceable for the lesser amount

Front 3

preexisting duty = consideration?

Back 3

generally, no

if a party already owes a duty to perform, traditionally that performance cannot be used as consideration for another promise

Front 4

can executory bilateral contracts be formed without any communication of acceptance?

Back 4

yes.

common example: prior dealings between the parties, or trade practices known to both, create a commercially reasonable expectation by the offeror that silence = acceptance.

offeree = duty to notify the offeror if no intention of acceptance

Front 5

illusory promises + right to cancel

Back 5

reservation of an unqualified right to cancel or withdraw from a contract at any time may amount to an illusory promise

Front 6

UCC's good faith requirement + right to cancel

Back 6

implied requirement of good faith in all sales contracts imposes an additional restriction on the parties' right to cancel

Front 7

promissory estoppel + option contracts

Back 7

offer = binding as an options contract even without consideration IF the offeror should reasonable expect it to induce action or forbearance of a substantial character by the offeree before acceptance, and such action or forbearance is in fact induced

Front 8

general rule re: acceptance + enforceable K

Back 8

acceptance of an offer must be communicated to the offeror

Front 9

UCC + loss of specific goods

Back 9

contract obligations = avoided if

(1) particular goods = identified
(2) risk of loss has not passed to buyer
(3) goods destroyed without fault of either party

Front 10

intended third-party beneficiary

Back 10

(1) expressly designated in the contract
(2) some performance is to be made directly to her, AND
(3) stands in a relationship to the promisee that an intent to benefit can be inferred

Front 11

intended third-party beneficiary + rights

Back 11

can enforce a K against the promisor

however, promisor can assert defenses he would have been able to assert against the promisee

Front 12

intended third-party beneficiary + enforcement of K

Back 12

can enforce the K only after her rights have vested

vesting occurs when the beneficiary
(1) manifests assent to the promise in a manner invited or requested by the parties
(2) brings suit to enforce the promise, OR
(3) materially changes position in justifiable reliance on the promise

Front 13

effect of valid assignment

Back 13

establishes privity of contract between the obligor and the assignee --> assignee becomes real party in interest, and he aline is entitled to performance under the contract

extinguishes privity of contract between the obligor and the assignor

Front 14

delegation

Back 14

transfer of contractual duties to a third party

Front 15

delegation + liability

Back 15

the delegator-obligor still remains liable on the promise even if the delegate expressly assumes her duties.

the nondelegating party becomes a third-party beneficiary of the assumption agreement and can sue either the delegate or the delegator-obligor

the delegate = the principal
the delegator-obligor = the surety, can obtain reimbursement based on the assumption agreement