Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
89 Cards in this Set
- Front
- Back
|
Quasi-Contract
|
Equitable Remedy
- P conferred benefit on D - P reasonably expected to be paid AND - D w/realize unjust enrichment if P is not compensated Recovery = value of benefit conferred |
|
|
Unilateral vs. Bilateral Contracts
|
Unilateral c/b accepted only by performance
Bilateral = all others except reward, prize, contest |
|
|
Common Law vs. UCC Article 2
|
CL = RP and services
UCC 2 = sale of goods (tangible, movable personal property) |
|
|
Mixed Deal Rule
|
All or nothing on applicable law - what makes up most important part of the K?
Note division when K divides payment between different categories. |
|
|
Offer
|
Words or conduct showing commitment (regardless of intent)
Test = whether RP in offeree's position w/believe her assent creates K. |
|
|
Content of Offers
|
Reasonably Certain Test - c/n have vague and ambiguous terms but d/n/h to include all material terms
- Except Sale of RP = price + description to be an offer - UCC has no price requirement |
|
|
Requirement/Output Contracts
|
Can state quantity of goods to be delivered in terms of B's requirements, S's output or in terms of exclusivity.
Increases = M/b in line w/ prior demands and not unreasonably disproportionate |
|
|
Advertisements
|
NOT offers Except:
- if it is in the nature of award - M/b specific as to quantity AND expressly indicates who can accept |
|
|
Methods of Terminating Offers
|
Lapse of time - stated or reasonable time
Death of a party pre-acceptance - or incapacity of either party after offer - Exception for options, or part performance of unilateral K Revocation = words or conduct of offeror Rejection = words or conduct of offeree |
|
|
Revocation of an Offer
|
Unambiguous statement by offeror to offeree of unwillingness or inability to contract
Unambiguous conduct by offeror indicating unwillingness or inability to K that offeree is AWARE of |
|
|
Revocation - When is it Effective?
|
Mail = when received
Multiple offers are not revocation C/n revoke accepted offers |
|
|
Irrevocable Offers - UCC Article 2
|
Irrevocable for up to 3m when:
- offer to buy/sell goods - signed, written promise to keep open AND - party is a merchant |
|
|
Irrevocable Offers - Common Law
|
Irrevocable when offeror has promised not to revoke/keep open AND supported by payment or other consideration.
If promised conditions pass, offer c/b revoked. |
|
|
Irrevocable Offers - Reliance
|
Offer c/n/b revoked if reliance was foreseeable and detrimental
|
|
|
Irrevocable Offers - Unilateral Contracts
|
Start of performance makes it irrevocable for reasonable time to complete the performance
- if mere preparation made for performance, offeror can revoke |
|
|
Rejection of Offers
|
Counteroffer (not mere bargaining)
Conditional Acceptance Additional Terms at CL |
|
|
Mirror Image Rule
|
Response to offer adding new terms is treated like a counteroffer, not an acceptance
|
|
|
Battle of the Forms
|
Additional terms is still acceptance, regardless of whether parties are merchants.
If material, M/b separately accepted (or only one of the parties is a merchant) - Offeror can object to the change |
|
|
Improper Acceptance and Later Conduct
|
If parties thereafter act as though there is a K, the CL will treat conduct as acceptance of counteroffer.
UCC will treat it as a new K based solely on conduct |
|
|
Acceptance - Full Perofrmance
|
As whether notice is required = look to offer OR whether offeree has reason to believe offeror w/n learn of the acceptance
|
|
|
Acceptance - Performance Started
|
Acceptance to enter into Bilateral K, but NOT Unilateral (requires full performance)
|
|
|
Mailbox Rule
|
Acceptance effective when mailed u/l rejection mailed first - then it's whichever first received.
All other communications effective on receipt. |
|
|
Seller Sends Non-Conforming Goods
|
Acceptance and Breach
If accommodation/explanation = counteroffer and no breach; buyer can accept or reject w/ no damage options |
|
|
Legal Reasons for Not Enforcing Contracts
|
Lack of consideration
Lack of capacity of promisor SOF Existing laws prohibit performance Public policy Misrepresentation Nondisclosure Duress Unconscionability Ambiguity MIstake at time of agreement w/r/t material fact |
|
|
Forms of Consideration
|
Bargained for Legal Detriment
- performance = doing something not legally obligated to do - forbearance - not doing something legally entitled to do - promise to perform - promise to forbear |
|
|
Illusory Promise Exception
|
Promising to do something u/l you change your mind is not consideration
Rarely a right answer choice! |
|
|
Past Consideration
|
Generally does not count.
Exception = expressly requested AND expectation of payment |
|
|
Consideration - Pre-Existing Contractual or Statutory Duty at Common Law
|
M/h new consideration for K modification
- Doing something already legally obligated to do does NOT = new consideration for a new promise to pay you more to complete that. Exceptions = addition/change in performance, unforeseen difficulty so severe as to excuse performance, 3P promise to pay |
|
|
Consideration - Pre-Existing Contractual or Statutory Duty under UCC Article 2
|
No pre-existing Legal duty rule = no new performance/consideration needed to modify K
Changes M/b made in GF |
|
|
Part-Payment as Consideration for Release
|
Debt due and undisputed = part payment is NOT consideration for release
Debt not due or disputed = new consideration and agreement is enforceable |
|
|
Consideration Substitutes
|
Seals (not majority)
Written promise to satisfy obligation to which there is a legal defense Promissory Estoppel |
|
|
Promissory Estoppel
|
Promise AND
Reliance that is foreseeable, reasonable, and detrimental. Enforcement necessary to avoid injury |
|
|
Lack of Capacity to Contract
|
Infants
Mental Incompetents (c/n understand agreement) Intoxicated persons = IF other party has reason to know |
|
|
Incapacity - Consequences
|
Right to disaffirm by person lacking capacity
Implied affirmation after gaining capacity Quasi-K liability for necessaries |
|
|
Statute of Frauds Defense
|
Goal is to prevent fraudulent claims/make it harder to present them by requiring the claimant to have "special proof" that K exists
- Proof of Performance OR - Proof a writing signed by person asserting that no agreement exists Analysis = does K fall into one of the SOF categories and if so, is the SOF satisfied? Is there a SOF defense? |
|
|
Statute of Frauds - Historical Bases
|
MY LEGS
- Marriage = more than mere promise to marry - Year is not enough to perform service K = not including life terms, tasks that are not time-specific. Specified dates take more than one year when the time period is more than 1y from K date. - Land/real estate transfers - Executor to answer personally for decedent's debts - Goods sale for $500+ - Suretyship - guaranteeing the debts of another UNLESS Main Purpose Exception = for benefit of guarantor |
|
|
Statute of Frauds - Satisfaction
|
If SOF applies, M/meet requirements to enforce the agreement. If requirements not met = SOF defense, which results in no K liability.
- FULL PERFORMANCE by either party for service Ks of more than 1y - Part Performance - generally no satisfaction - Seller w/r/t Ordinary goods = satisfied if delivered, not if undelivered - Seller w/r/t Specially-Made goods = satisfied upon "substantial beginning" - Buyer w/r/t Multiple items = satisfied as to items performed - Buyer w/r/t Single item = satisfy - WRITING - CL = Material Terms Test - and M/b signed by person asserting SOF defense - UCC = Writing M/indicate K for sale of goods, quantity term, exception to signature when both parties are merchants - JUDICIAL ADMISSION |
|
|
Statute of Frauds - Equal Dignity Doctrine
|
Authorization to enter into K for someone else M/b in writing only if K M/b in writing (i.e. SOF)
|
|
|
Statute of Frauds - Contract Modification
|
If deal w/ change w/b under SOF, modification M/b in writing.
If M/b in writing: - CL = K provisions requiring written modification is NOT effective, language ignored - UCC = requiring written modifications is effective u/l waived |
|
|
Duress, Illegality, Misrepresentation, Non-Disclosure, Public Policy
|
DURESS = Physical and economic (improper threat, no reasonable alternative)
ILLEGALITY = if subject matter is illegal, not enforceable. If purpose is illegal, it's enforceable by the unknowing party MISREPRESENTATION = false assertions of fact inducing the K - no wrongdoing required - K c/b rescinded NON-DISCLOSURE = wrongful failure to disclose PUBLIC POLICE = ct can refuse to enforce K under reasonableness considerations - exculpatory agreements for intentional, reckless, grossly negligent liability OR - covenants not to compete w/o reasonable need, time, place limits |
|
|
Parol Evidence Rule
|
E of prior or contemporaneous negotiations and agreements that contradict, modify or vary K terms is INADMISSIBLE if the written K is intended as a complete and final expression of the parties (presumption strengthened by "merger clause"
|
|
|
Parol Evidence Rule Exceptions
|
E w/b Admissible of:
- Formation defects (fraud, duress, illegality) - Existence of condition precedent to K - Parties' intent regarding ambiguous terms - Prior valid agreement that is incorrectly reflected in the writing (mistake) - Collateral agreement that d/n contradict or vary the main K and is not closely connected enough to be part of main K AND - Subsequent modifications |
|
|
Terms of Contracts - Conduct Evidence
|
Conduct c/b source of K terms when:
- Course of performance = same K, same people - Course of Dealing = same people, different K - Custom and Usage = different but similar people and K (less persuasive than the first two types) |
|
|
UCC Default Terms - Delivery Obligations
|
Delivery by Common Carrier
- Shipment K = S completes obligation when it gets goods to common carrier, makes reasonable arrangements for delivery AND notifies B - When S gets goods to FOB city = obligation complete - Destination Ks = S completes obligation when delivery to where B is |
|
|
UCC Default Terms - Risk of Loss
|
When neither S nor B is to blame
- if risk on S = B has no obligation and S m/h liability for non-delivery - If risk on B = he M/pay full K price RULES - Start w/ agreement = it controls - Breach = breaching party liable - Delivery by common carrier other than S = risk shifts from S to B at time S completes delivery obligations - Catch-All - if S is merchant, risk shifts to B upon physical possession or receipt of goods - If S is non-merchant, when goods are "tendered" or made available to B |
|
|
Express Warranties
|
Words promising, describing or stating facts, or use of sample/model (more than puffing)
Generally c/n/b disclaimed |
|
|
Implied Warranty of Merchantability
|
Arises automatically by operation of law when S is a merchant, and it c/b waived.
Goods are fit for the ordinary purpose for which such goods are used. |
|
|
Implied Warranty of Fitness for Particular Purpose
|
B has a particular purpose
B relies on S to select suitable goods AND S has reason to know of purpose and reliance Waivable. |
|
|
Warranty Disclaimer
|
M/b conspicuous and mention merchantability OR "as is" / "with all faults" language
NOTE: Mere limitation on remedies d/n eliminate warranty, but sets recovery - can be done for EWs too! - Key = unconscionability (i.e. PF unconscionable for br/warranty causing personal injury) |
|
|
Warranties - Privity
|
No privity issue for Tort Actions
Horizontal = customer, spouse, bystander Vertical = manufacturer, wholesaler, etc. |
|
|
Perfect Tender
|
UCC Sale of Goods Performance
- S's performance M/b perfect - B has option to reject non-perfect delivered goods and sue for damages OR retain and sue for damages - Limited by Cure, Installment K, or Acceptance |
|
|
Curing Less-than-Perfect Tender
|
B c/n compel S to cure.
S has reasonable grounds to believe it can cure when: - Prior deals b/t B and S allowing cure - Time for performance not yet expired |
|
|
Installment Contracts
|
Require or authorize delivery of goods in separate lots to be separately accepted.
Requires substantial impairment that c/n/b cured to allow B to reject installment |
|
|
Acceptance of Goods
|
B accepts = c/n later reject
Payment w/o opportunity to inspect is not acceptance B keeping goods w/o objection = implied acceptance |
|
|
Revocation of Goods' Acceptance
|
B can cancel when:
- non-conformity substantially impairs goods' value - excusable ignorance of grounds for revocation or reasonable reliance on S's assurance of satisfaction AND - Revocation w/in reasonable time after discovery of non-conformity |
|
|
Payment for Goods
|
Open price term = reasonable price at delivery
Price to be fixed by B or S = M/b fixed in GF Payable in goods = each party is S of goods it provides |
|
|
Common Law Performance
|
Substantially performs = other party M/pay or otherwise perform
|
|
|
Specific Performance/Injunctions
|
Look for adequacy of legal remedy, unclean hands or other party's equities = almost never available.
RP key situation for SP. NEVER for service Ks. UCC = unique goods or other such circumstances m/b SP situation. |
|
|
Reclamation
|
UCC Remedy = right of S to get goods back.
- B M/h/b insolvent at time it receivd goods - S m/demand return w/in 10d of receipt (reasonable time if B expressly represented solvency before delivery) AND - B still has goods at time of demand |
|
|
Entrustment & Buyers in Ordinary Course
|
Owner leaving goods w/ a person who sells goods of that kind bears risk that S will wrongfully sell to 3P GF purchaser - O will lose her rights to her goods.
|
|
|
Legal Damages - Generally
|
Compensate P, not punish D = protection of Expectancy!
Expectation Reliance Restitution Incidental Consequential Avoidable Liquidated |
|
|
Expectation Interest
|
Put P in same economic position as if K h/b performed.
Compare value of D's performance w/o breach to value w/ breach |
|
|
Reliance Interest
|
Put P in same economic position as if K h/n happened.
|
|
|
Restitution Interest
|
Put D in same economic position as if K h/n happened (unjust enrichment idea)
|
|
|
UCC Damages Rules
|
S Breaches
- B keeps goods = FMV if perfect less FMV as delivered - S has goods = market price at time of discovery of br/K less K price OR replacement price less K price B breaches: - B keeps goods = K price - S has goods = K price less MV at time and place of delivery OR K price less resale price - Sometimes provable lost profits where volume seller/inventory goods (w/h made two sales and profits absent br/K) |
|
|
Excuse for Non-Performance
|
Common Law and Material Breach
- factual question as to breach - but if substantial performance, then no material breach and vice versa. - Divisible K Exception = K law recovery for substantial performance of a divisible part even if no MB of entire K. UCC = less-than-perfect tender Note: excuse excuses performance but m/h QK remedy |
|
|
Excuse for Non-Occurrence of Conditions
|
Strict compliance required to satisfy a condition
Non-Occurrence = excuse of all remaining K obligations u/l the Occurrence of the condition is excused. |
|
|
Waiver & Estoppel w/r/t Conditions
|
Estoppel = based on a statement by the person protected by the condition BEFORE the conditioning event was to occur and requires a change of position.
Waiver = based on statement by the person protected by the condition AFTER the conditioning event was to occur and does not require a change of position The only person who can excuse condition (sue on the contract) is the person who was protected by the condition |
|
|
Incidental Damages
|
Cost incurred in finding replacement performance
Always recoverable - foreseeability irrelevant |
|
|
Consequential/Special Damages
|
Losses special to P / arising from her special circumstances
M/b foreseeable = limited to situations in which D had reason to know of P's special circumstances at time of K |
|
|
Reasonable Certainty Limitation on Damages
|
Facts involving new business entities or business activities - K is one of a kind, or P's first venture... indicates you c/n determine w/ sufficient certainty what w/h happened if the K was performed.
|
|
|
Avoidable Damages
|
No recovery for damages that c/h/b avoided - subtract!
BOP is on D. |
|
|
Prevention of Condition
|
Party protected by condition hinders or prevents its occurrence = condition excused and K M/b performed.
|
|
|
Conditions Subsequent
|
Excuse future performance
|
|
|
Anticipatory Repudiation
|
Unambiguous statement or conduct indicating that repudiating party will not perform AND made prior to time performance was due.
Excuses other party's performance and immediate claim for damages UNLESS claimant already finished performance. AR c/b reversed or retracted - but no material change in position by other party, and if timely will reimpose duty to perform (c/b delayed until adequate assurance is provided) |
|
|
Insecurity
|
When a party's words or conduct give "reasonable grounds for insecurity" the other party can demand adequate assurance in writing AND suspend performance until that is received - if commercially reasonable.
|
|
|
Excuse by Reason of Later K
|
Recission (Cancellation!) = if performance still remaining from is K party
Accord & Satisfaction Novation |
|
|
Accord and Satisfaction
|
New agreement to accept different performance to satisfy existing obligation & Performance of new agreement
If accord is satisfied, performance of original obligation is excused. If accord is not satisfied/performed, other party can sue on either the original obligation or the accord. Tip = look for "if" and "then" |
|
|
Novation
|
Agreement b/t parties to existing K to substitute a new party = excuses peformance for party replaced
Distinguish Delegation = d/n require both parties' agreement and does not excuse the delegating party. |
|
|
Impossibility, Impracticality and Frustration of Purpose
|
Something happens after K formation but before complete performance that was unforeseen AND makes performance impossible, commercially impracticable or frustrates the purpose of performance.
Impossibility is objective - impracticality is subjective (c/b done only w/ extreme and unreasonable difficulty and expense) Frustration of Purpose = later law makes mutually understood purpose of K illegal = excuse by FOP! |
|
|
Third Party Beneficiaries
|
Does 3P know of and rely, or assent upon request? Yes = vested right.
Recovery - 3P can recover from Promisor, not Promisee - Promisee can recover from Promisor Defenses = promisor can assert any defense she w/h if sued by promisee |
|
|
Assignment of Rights
|
K b/t two parties AND one party transfers right under K to 3P
Consideration not required. Only gratuitous assignments c/b revoked. Rights of Assignee - can recover against obligor u/l assignment for consideration |
|
|
Limitations on Assignment
|
Provisions prohibiting assignment = d/n take away power to assign and results in Assignor being liable for br/K, and innocent assignee being able to enforce.
Provisions invalidating assignments altogether = results in breach by assignor and no rights in assignee Note: At CL, assignment that substantially changes the duties of the obligor is BARRED. - ex: right to K performance, but not right to payment |
|
|
Implied Warranties of Assignor
|
Assignments for VALUE.
- Right assigned actually exists - Right assigned is not subject to obligor's defenses AND - Assignor will do nothing to impair value of assignment - NO warranty on what obligor will do |
|
|
Assignment - Obligor's Rights
|
Same defenses against assignee as against assignor
Payment to assignor effective so long as obligor d/n/h notice of assignment Modification agreements b/t obligor and assignor effective until obligor knows of assignment |
|
|
Gratuitous Assignments
|
C/b freely revoked - last in time rules (u/l one is for consideration)
EXCEPTIONS = Irrevocable when: - it is the subject matter of a writing delivered to assignee - assignee received some sort of indicia of ownership OR - assignee has relied on assignment in a reasonable, foreseeable and detrimental way Irrevocable gift assignments take priority over later ones - first in time! |
|
|
Assignments for Consideration
|
First assignee for Consideration wins.
Exception where subsequent assignee takes: - D/n/k of earlier assignment AND - is the first to obtain payment, judgment, novation OR indicia of ownership |
|
|
Assignment vs. Delegation
|
Assignment = transfer of rights
Delegation = transfer of duties |
|
|
Delegation
|
K duties delegable unless K prohibits, calls for special skills OR person to perform has special reputation
Non-Performance by Delegatee = delegating party ALWAYS remains liable and delagatee is only liable if she received consideration from delegating party |
