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81 Cards in this Set

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PER definition
writings intended to be the final agreements betwen parties supercede all others, and thus other evidence is misleading and irrelavent, and should be kept from the fact finder
What does the PE rule apply to?
oral evidence, and contemp written evidence may be allowed in
What is required of the final written agreement?
It must be a writing adopted by both parties
PER collateral rule
if the subject of the controversy does not go to the heart of the K, then it may be considered a seperate agreement
exception to the PER rule
PE is allowed to show fraud, duress, mistake, and other bases for invalidating or avoiding a K
- may show a writing was false
- may show agrmnt was subj to condition
Two Functions of PE
to prove additional terms and to prove meaning
Traditional view
K determined to be integrated by its own terms. If complete, no PE allowed. If only 'integrated,' only consistent additional terms is allowed. Merger clause decisive
Extrinsic evidence allowed in to prove meaning only if vagueness exists within the 4 corners.
Contextual Approach
If completely integrated, no PE allowed, if only integrated, evidence of consistent addl terms are permitted. The terms of the K itself and the extrinsic evidence are both used to determine level of integration.
To prove meaning, ct can either look to the K, or to extrinsic evidence to which K language is reasonably susceptible
SOF applies to
Ks with completion more than 1 yr away.
The Writing required for SOF
- just needs to be a memo, can even be lost by time of litigation
- must contain enough info to show agrmnt is made
(parties, nature of exchange, material terms)
- UCC 2.201 only requires quant
- Must be signed by party enforcement is sought against
Exceptions for SOF
- If past performance shows clear reliance on K made
- 2.201.3 - if goods are specially made for the buyer
Consideration: DEF
RS 71 - consideration is a performance or a return promise that must be bargained for
Bargain Theory
RS 72 - a performance or a return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise
Bargain v Gratuitous Promise
will often depend on how high or low the 'award' is relative to the task
Effect of motive on consideration?
RS 81 - immaterial, even if both parties know
When past/moral consideration will be sufficient
RS 86 - any time necessary to prevent injustice; when there would otherwise be unjust enrichment (Webb/McGowan)
Existing Duty Rule
there is no consideration when one side maintains the exact same obligations and the only thing that changes is pay
When Modification is not required
RS 89 = if the modification is fair and equitable and based on unforeseeable circs, as long as there has not been material change of position in reliance on the promise
Modification and UCC
unless expressly req'd, no need for new consideration, you only need to show good faith 2.209
When is adequacy of consideration an issue?
in instances of fraud, duress, misrep, when the consideration is asymetric
What types of performance = consideration?
RS 71-3: an act other than a promise, a forebearance, or a creation, modification, or destruction of a legal relationship
When is a bargain insufficient?
When it is a sham.
When is forbearance of an invalid claim sufficient for consideration?
RS 74 - when the claim or defense is doubtful b/c of uncertainty as to fact or law; or the forbearing party believes it to be valid (judged from time promise was made)
When is nominal consideation legitimate?
RS 87-1-a : for a non-bargained for option, so long as it is short term
Is an intent not to be bound legitimate?
Yes, RS 21. "manifestation of an intention that a promise shall not effect legal relations may prevent the formation of a K"
Handbook case nuances
If there is an clear and conspic, express disclaimed intent to enter into a K in the handbook, the promises in the book will not be binding, unless the other ees show that they treated it as if it was binding.
Elements of PE
RS 90
1. a promise reasonably expected to induce performance or forbearance
2. was relied on to detriment
3. and enforcement is the only way to avoid injustice
When is proof the the promise did not induce action or forbearace not required
for marriage settlements and charitable subscriptions
How do sub-con bids work in context of PE?
RS 87-2: if an offer is made that is expected to induce subst reliance before formal acceptance, it will be considered an option, irrevocable until reasonable time for acceptance has passed
(functions the same as UCC 2-205 firm offer)
How do you distinguish PE as consideration subst from PE as a COA?
COA has added component of misrepresentation. Additionally, COA is when terms aren't nearly as precise as they would be in K, especially in regards to the expectation damages.
What are the damage diff's between PE as COA and as consid subst
Consid subst is entitled to expectation, COA is entitled to reliance
What kinds of promises won't be enforced under PE
Illusory - when there is a way out with no ramifications.

When the granting of the promise is only a possibility (order of the coif case)
What is a promise?
RS 2 - a manifestation of an intention to act or refrain from acting so made as to justify a promisee in understanding that a committment has been made
What is the difference between puffery and promise?
Puffery is sales talk about future intentions, including hyperbole - but no bright line difference.
When does reliance cease to be reasonable?
Once you find that you should not be relying on a promise, any detriment undertaken from that point will be at your cost.
What is the def of good faith, and where is it found?
Honesty in fact and the observance of reasonable commercial stds of fair dealing

UCC 1-203, RS 205
Can good faith be K'd around?
IN UCC, no. In RS, courts are split.
Analysis for good faith performance of a promise.
(from lease cases)
1. look at terms of K, see if the term in dispute is explicit
2. look at the intent of the parties at the time the K was made (ex ante)
3. look at the purpose of the act in question: is it for fraud and trickery, or is it for sound biz reasons? (ex post)
Implied warranty of merch facts
2-314, only for merchants, requires goods to be of fair and avg quality
Implied warranty of fitness
When the seller at K has reason to know any particular purpose, and the buyer relies on the skill and judgment of the seller; applies to any seller
Express warranties test
warranty is only in regard to the product itself, not the service of it, and not for puffery; must be for specific facts
K'ing around a warranty
allowed by 2-316-3 by using language like 'as-is,' but may always be susceptible to consumer protection statutes
Conditions analysis
1. have all operative acts/facts occurred on which the duty to perform depends?
2. are any of these operative facts actual promises rather than conditions to performance?
3. if they are conditions, have they been waived or excused?
When are conditions most likely to be enforced
When they are express and there is strict compliance
Consequences of finding promise or condition?
If it is an unmet condition, it will rescind the K; if it is a promise, there will be breach, and damages.
What if there is a conflict re: condition and promise?
Court will normally find a promise b/c they hate forfeiture.
Such clauses will often be interpreted against insurers.
What is the difference between a waiver and modification?
Waiver requires no new consideration; occurs when the beneficiary of a condition agrees to perform even in the absence of condition
How is a waiver established?
Can be express, or established by making continued promises even in the knowledge that the condition will not be met (Clark v West Publishing)
Revocation of a Waiver?
Yes, RS 84-2. As long as it is before condition was to be completed, leaves adequate time for it, and will not work injustice
What is a constructive condtion?
An incidental condition that does not make or break K, stands independant of all other Ks.
What are the different kinds of condtions?
Condition subsequent
Condition precedent
Mutl conditions performed at the same time
Incidental conditions
How does the court identify which kind of condition it is?
By looking to the essence of the argument/K.
Jacob and Youngs v Kent rule
even when the covenants are dependant, as long as the promise is substantially performed, the other party's duty is created; insignificant variations are independant and collateral
How is substantial performance judged?
In relation to the essence of the K.
e.g. in JACOB, the essence was determined to be about building the house, not about using a specific kind of pipe.
Condition Analysis
1. look to the conditions of the K
2. if there is an express condition, there will be strict compliance
3. if not, ask if there was a constructive condition
4. if so, ask if it was substantially performed.
5. consider the reason for non performance, the purpose of the K, and injustice of holding one way or the other.
Doctrine of anticip repud
repudiation alone gives rise to a claim for damages for total breach
Def of anticip repud
a definite and unequivocal manifestation of intent that he will not render the promised performance when the time fixed for K arrives
What is not anticip repud?
A mere request for change in terms or even a request for mutual cancellation of the K.
UCC on Repud
2-610: if before perf is due, the aggrieved party may await performance, or resort to another remedy for breach, even if he has notified the party he will wait or if he has requested retraction
Adequate Assurance of Perf
when there are reasonable grounds for insecurity
the other may demand in writing assurances, and he must be clear
and can suspend duties while awaiting answer
(these can't modify the terms of K)
Adequate Assurance of Perf
RS 251: very similar, says nothing about writing, allows for stopping performance, becomes total repudiation if no answer within a reasonable time
When is a breach material?
You could use RS 241, with list of five factors, or ask:
Does the breach destroy the bargain?
Doctrine of Perfect Tender
2-601, 508
1. basic rule: perfect tender is the responsibility of the seller, and there will be time to cure if before K is due.
2. If goods are not perfect, the the buyer can reject.
3. If accepted, can be revoked later for hidden defect, and the seller must be given a right to cure.
4. If defect is known, can't be rejected after acceptance.
5. If deadline is past, there is still opportunity for cure, but seller has to establish they thought goods would conform (qualified right to cure)
What are the two expectation damages with regards to unfinished construction?
RS 348
1. the diminution of the market price or the property caused by the breach (pragmatic)
2. the reasonable cost of completing performance if not clearly disproportionate to the probable loss of value to him (express + subj value)
What are the three ways to determine mental incompetence?
cognitive test (able to understand)
volitional test (able to act voluntarily)
RS 15 compromise (either cognitive or volitional + other party's knowledge)
Exceptions for mental incompetence re: benefits received
Incompetent party must make full restitution of benefit, unless the other party knew of incompetence at K, unless it is for necessarieis (PUPA)
What is the rule for infancy.
RS 14 - K's made before the day before the 18th b-day are voidable.
What are necessaries?
Those things required for infants to live on their own. Does not include housing if they are still able to move back with parents.
What is misrepresentation?
RS 164: occurs when the promisor intends to induce assent, believing that the promise is false, or lacking confidence in it, or if there is no reason to say it.
What type of promise can be misrepresented?
RS 162: THe misrep'd fact has to be a material part of the K, and it has to be the kind of statement that would induce a reasonable person to assent.
Misrepresentation analysis
1. would a reasonable person be induced by this misrepresentation?
2. is the recipient justifiably relying on the statement?
Misrepresentation and Opinion Rule
opinion can only be the basis for misrep when
1. there is a lie about the opinion
2. the opinion maker has special knowledge
Can an inference be the basis of misrepresentation?
Yes, in the Byers case, the seller led the buyer to infer that he owned the property.
When can there be reasonable reliance on an opinion?
RS 169
1. when the person stands in relation of trust to the promisor
2. the opiner is an expert
3. when the person is 'particularly susceptible' to such a misrepresentation
What is Duress?
Rs 175 - When a party's assent is induced by an improper (not illegal) threat and the victim is left no reasonable alternative, the K is voidable
What threats are improper?
1. crimes or torts
2. crim persec
3. use of civ pro in bad faith
4. breach of good faith
What is undue influence?
RS 177 - Unfair persuasion of a party under the domination of person exercising this persuasion; OR who by virtue of their relationship presumes that they have their best in mind.
What is unconscionability?
behavior so extreme as to appear unconscionable according to the mores and biz pracs of the time and place (Corbin)
What is the two-prong test for unconscionability?
1. absence of a meaningful choice, combined with
2. terms unreasonably favorable to the other party
What are the authorities for unconscionability
UCC 2-302 and common law
What are the two ways to look at unconscionability in a K?
Procedural - events leading up to K, relationship of parties, unfair surprise
Substance - the actual content of the K, small print, oppressive terms, terms not expected