Hi Barbri Contracts

Front 1

What is the analytic framework for any contract?

Back 1

"a. Applicable Law (Armadillos)
b. Formation of contracts (From)
c. Terms of contract (Texas)
d. Performance (Play)
e. Remedies for unexcused nonperformance (Rap)
f. Excuse of nonperformance (Eating)
g. Third-party problems (Tacos)"

Front 2

When should we use remedies for quasi-contracts?

Back 2

"In Equity.
1. No contract law applies: statute of frauds, consideration
2. Any time application of K law rules produce result that is unfair, unjust, inequitable -> turn to quasi contract."

Front 3

What are the elements for quasi-contracts?

Back 3

"1. P has conferred a benefit on D, and
2. P reasonably expected to be paid, and
3. D realized unjust enrichment if P not be compensated"

Front 4

What is the measure of recovery for quasi-contracts?

Back 4

"1. K price is not the measure of recovery. Focus on value of benefit conferred.
2. K price is a ceiling if P is in default."

Front 5

What is a unilateral contract?

Back 5

results from an offer that expressly requires performance as the only possible method of acceptance

Front 6

What types of contracts are governed by the UCC instead of Common Law?

Back 6

UCC: contracts that are primarily for the sale of goods

Front 7

What law applies when the contract involves both a sale of goods and a sale subject to the Common Law?

Back 7

UCC: contracts that are primarily for the sale of goods

Front 8

What law applies when the contract involves both a sale of goods and a sale subject to the Common Law?

Back 8

"1. General rule: it is all or nothing - apply either UCC or CL. Look at more important part of deal.
2. Exception: if contract divides payment, then apply UCC to sale of goods part and common law to the rest."

Front 9

What law applies when the contract involves both a sale of goods and a sale subject to the Common Law?

Back 9

"1. General rule: it is all or nothing - apply either UCC or CL. Look at more important part of deal.
2. Exception: if contract divides payment, then apply UCC to sale of goods part and common law to the rest."

Front 10

What is the analytic framework for contract formation?

Back 10

1. Offer: initial communication
2. Termination of Offer: what happens after the initial communication
3. Acceptance: who responds and how she responds"

Front 11

When does something constitute an "Offer"?

Back 11

" GENERAL RULE: An offer is a manifestation of an intention to contract: words or conduct showing commitment.
TEST:
1. 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, OR
2. Whether a reasonable person in the position of offeree would believe that her assent creates a K"

Front 12

Must an offer contain price?

Back 12

"CL: price required
UCC: price NOT required. Court will supply a reasonable price at time of delivery if parties cannot agree."

Front 13

Can a contract leave material terms vague or ambiguous?

Back 13

"CL: NO
UCC: NO
(e.g., ""appropriate"", ""reasonable"", or ""fair"")"

Front 14

Are requirements / output contracts allowed?

Back 14

"(Defn: K for sale of X quantity of goods to be delivered in terms of the buyer's requirements, seller's output, or terms of exclusivity)
CL: Valid; UCC: Valid
Buyer must act in good faith. Increases must not be ""unreasonably disproportionate"" with prior demands.
(E.g., a 3% increase is valid, but a 50% increase is NOT)"

Front 15

Can an advertisement be an offer?

Back 15

"Generally, NO.
Except:
1. Rewards
2. Specific as to quantity and specific as to who may accept
(E.g., ""Shirts for $10"" on counter -> ad)
(But see "1 fur coat $10 - first come, first served." -> offer)"

Front 16

Can an offer be accepted after it has been terminated?

Back 16

NO

Front 17

What are the ways to terminate an offer?

Back 17

"1. Lapse of Time
2. Words or Conduct of Offeror (Revocation)
3. Words or Conduct of Offeree (Rejection)
4. Death of a party prior to acceptance"

Front 18

When has an offer terminated due to lapse of time?

Back 18

"An offer must be accepted by EITHER
A. the time stated OR
B. a reasonable time (i.e. 30 days as a rule of thumb or if there is any delay)"

Front 19

What is the rule for "Revocation"?

Back 19

"ONLY the Offeror can revoke, EITHER by:
A. Unambiguous statement by offeror to offeree of unwillingness or inability to contract, OR
B. Unambiguous conduct by offeror indicating an unwillingness or inability to contract that offeree is aware of
Remember: offeree must be aware of revocation"

Front 20

When is Revocation effective?

Back 20

"General Rule: No communication is effective until it is received. This includes Offers sent via mail.
BUT NOTE: An offer cannot be revoked after it has been accepted."

Front 21

What offers cannot be revoked?

Back 21

Generally, offers can be freely revoked by the offeror.
BUT: 4 situations where offers CANNOT be revoked
1. Option
2. Firm Offer Rule
3. Detrimental Reliance
4. Unilateral Contract"

Front 22

When can an option contract NOT be revoked?

Back 22

"IF the Offeror has BOTH
1. promised to keep the offer open/promise not to revoke AND
2. this promise is supported by consideration"

Front 23

When does the Firm Offer Rule prevent revocation?

Back 23

"ONLY UCC: an Offer cannot be revoked for up to 3 months (EVEN IF Offer provides for longer) IF
1. offer to buy or sell goods,
2. signed, written promise to keep the offer open, AND
3. Offeror is a merchant"

Front 24

When will Detrimental Reliance prevent revocation?

Back 24

"When the offeree's reliance is ""reasonably foreseeable""
E.g., a subcontractor's bid (offer) for a construction job"

Front 25

Under what circumstances may an offeror not revoke a unilateral contract?

Back 25

"""Start of Performance"" pursuant to an offer to enter into a unilateral K makes that offer irrevocable for a reasonable time to complete performance.
NOTE: ""Mere Preparation"" is NOT sufficient for ""Start of Performance."" Resolve ambiguities in favor of ""Mere Preparation"""

Front 26

What is constitutes "Rejection" of an offer?

Back 26

The words or conduct of an Offeree can constitute Rejection.
There are also 3 ways to indirectly Reject an Offer:
1. Counteroffer
2. Conditional Acceptance.
3. Additional Terms (CL ONLY)"

Front 27

When does a "Counteroffer" terminate the offer (via Rejection) and become a NEW Offer?

Back 27

"Mere Bargaining is NOT a Counteroffer, and does NOT terminate the Offer.
TIP: Declarative sentences = Counteroffer; Questions = Bargaining"

Front 28

When does "Conditional Acceptance" terminate the offer (via Rejection) and become a NEW Offer?

Back 28

When acceptance is conditioned on something not in the contract.

Front 29

If the offeree accepts with additional terms, is there a contract?

Back 29

"CL: NO.
UCC: MAYBE. IF the NEW terms are NOT a condition of acceptance, then under UCC 2-207 there is acceptance (a ""seasonable expression of acceptance"")."

Front 30

Under UCC 2-207, when an offeree SUCCESSFULLY accepts with ADDITIONAL terms, are those additional terms part of the contract?

Back 30

"A. When 1 of the parties is NOT a merchant: the addition is NOT part of the contract. It is a mere proposal to be accepted or rejected.
B. When BOTH parties are merchants: the additional term IS part of the contract.
UNLESS:
i. the additional term MATERIALLY changes the offer (e.g., an arbitration clause) OR
ii. the Offeror objects to the change {w/in 10 days?}"

Front 31

When does Death terminate an offer?

Back 31

"In general, Death or Incapacity by either party terminates an offer.
EXCEPT:
A. An option
B. After the ""start of performance"" of a unilateral contract"

Front 32

What is the general rule for who can accept an Offer?

Back 32

"Generally, an offer can be accepted only by a person who:
1. Knows about the offer, AND
2. Is the person to whom it was made."

Front 33

Can offers be assigned?

Back 33

"Generally, NO.
BUT: Options CAN be assigned. UNLESS: Option says otherwise."

Front 34

What circumstances can give rise to acceptance?

Back 34

"1. Full Performance
2. Start of Performance
3. Offeree Promises to Perform
4. Offeror and the offeree are at different places and there are conflicting communications
5. Seller of goods sends the ""wrong"" goods
6. Offeree is silent"

Front 35

When is Full Performance acceptance?

Back 35

"ALWAYS.
BUT: Notice of Performance may be required - turns on A. what offer provides AND B. whether offeree has reason to believe that offeror will not learn of the acceptance."

Front 36

Is the Start of Performance acceptance?

Back 36

Bilateral Contract: YES
Unilateral Contract: NO. ONLY Full Performance of a contract is acceptance.
HOWEVER: a Unilateral Contract CANNOT be REVOKED once performance has started."

Front 37

Is a Promise to Perform acceptance?

Back 37

"Generally, YES.
EXCEPT: Unilateral Contracts AND Reward Offers (performance is required)."

Front 38

What is the "Mail Box Rule"?

Back 38

"Generally, communications (offers/revocations/etc) are effective only when received.
However, ACCEPTANCES are generally effective when SENT.
EXCEPTION: If a rejection is mailed BEFORE an acceptance, then NEITHER is effective until received.
EXCEPTION: Options. Then the acceptance is only effective when RECEIVED."

Front 39

Does sending the "wrong" goods amount to acceptance?

Back 39

Generally, sending the ""wrong"" goods amounts to BOTH Acceptance AND Breach
BUT: ""Accomodation Exception."" If the offeree sends the ""wrong"" goods with an explanation (i.e. ""we're out of the 'right' goods"") then this is a COUNTEROFFER."

Front 40

When is silence acceptance?

Back 40

"Generally, silence is NOT acceptance.
UNLESS: Offeree, by words or conduct or course of deal, agrees that silence is acceptance."

Front 41

What qualifies as consideration?

Back 41

"1. Performance, i.e., doing something not legally obligated to do
2. Forbearance; i.e., not doing something legally entitled to do
3. Promise to perform
4. Promise to forbear
NOTE: Consideration must be part of an ""exchange"" that is ""bargained for"""

Front 42

When is a promise NOT consideration?

Back 42

"An Illusory Promise is not consideration (i.e. "I promise to do this unless I don't want to").
So long as termination clause has a condition, it is NOT illusory.
TIP: usually the WRONG answer"

Front 43

When is consideration inadequate?

Back 43

Never. Irrelevant in contract law.

Front 44

Will past consideration suffice?

Back 44

"Generally, past consideration is NOT consideration
UNLESS: the party A expressly requested performance AND party B had an excpectation of payment. {check}
ALSO: ""Preexisting Contractual or Statutory Duty Rule"""

Front 45

What is the "Preexisting Contractual or Statutory Duty Rule"?

Back 45

CL: doing what you are already legally obligated to do is not consideration for a promise to pay you more to do merely that. Need NEW consideration in order to modify a CL contract.
EXCEPT:
A. Addition to or change in performance OR
B. 2. Unforeseen Difficulty So Severe as to Excuse Performance
MODERN R.: the preexisting duty rule does not apply if the duty is owed to a third person
UCC: Do not need new consideration to alter an existing sales contract; ONLY ""good faith"""

Front 46

Can Part Payment be consideration for release from outstanding obligations?

Back 46

"If debt is due and undisputed; Part payment is NOT consideration for release.
NOTE: creditor can make this promise; and then break it
BUT: agreement to pay lesser amount BEFORE payment is due IS BINDING because early payment is a legal detriment (valid consideration)"

Front 47

Can a written promise to satisfy an obligation for which there is a legal defense (i.e. the statute of limitations) be enforceable without consideration?

Back 47

YES.
For example, an agreement to pay half of a debt that is barred by the statute of limitations will be enforceable as to that half."

Front 48

When will Promissory Estoppel serve as a substitute for consideration?

Back 48

Elements:
1. Promise
2. Reliance that is reasonable, detrimental and foreseeable
3. Enforcement necessary to avoid injustice"

Front 49

When does a party lack Capacity to contract?

Back 49

1. Infant - under 18
2. Mental incompetents - lacks ability to understand agreement
3. Intoxicated persons if other party has reason to know"

Front 50

What are the consequences of Incapacity?

Back 50

Right to disaffirm by person without capacity (e.g., kid can sue, but not adult)
BUT: Quasi-Contract Liability for necessaries (food, clothing, medical care or shelter)
BUT ALSO: Implied affirmation by retaining benefits after gaining capacity (ratification)"

Front 51

What types of contracts fall within the Statute of Frauds?

Back 51

"CL:
1. Service Contract NOT capable of being performed within a year from the time of the contract.
2. Transfers of Interest in Real Estate
3. Promise to creditors to answer for (guarantee) the debts of another (suretyship) [if the other person doesn't pay]
4. Promise By Executor or Administrator to Pay Obligation of Estate Personally (Key: promise to pay the estate's expenses from other fund)
UCC:
1. Sale of goods for $500 or more (incl. exactly $500)"

Front 52

How can the Statute of Frauds satisfied? (have the requirements been met?) If SOF is satisfied, then no SOF defense

Back 52

1. Performance
2. Writing
3. Judicial Admission

Front 53

When is performance sufficient to satisfy the Statute of Frauds?

Back 53

A. For Service Contracts: FULL performance by EITHER party is sufficient BUT PARTIAL performance is NOT.
B. For Sale of ""Ordinary Goods"" Contracts: Part performance of a K for the sale of goods satisfies SOF only to the extent of the part performance (e.g., as to Delivered goods, but NOT as to Undelivered goods).
C. For Sale of ""Specially Manufactured Goods"" Contracts: SOF satisfied as soon as the seller makes a ""substantial beginning"" of making or obtaining the goods
D. For Real Estate Transfer Contract: Performing 2 of the following 3 is sufficient: i. Full or Partial Payment, ii. Possession, AND/OR iii. Improvements."

Front 54

When is a writing sufficient to satisfy the Statute of Frauds?

Back 54

"CL:
A. ""All Material Terms"" Test AND
B. signed by D
UCC:
A. Must have Quantity (but not price) AND
B. signed by D. UNLESS: BOTH merchants AND D does not respond w/in 10 days"

Front 55

When is the authorization to enter into a contract for someone else ALSO subject to SOF?

Back 55

Authorization must be of "Equal Dignity": if the K is w/in SOF, then the authorization is also w/in SOF

Front 56

When is there a legal requirement that Contract Modifications be in writing?

Back 56

"""Contract Modification Rule"": Determine whether the deal with the alleged change would be within the statute of frauds.
CL: Contract provisions requiring that all modifications be in writing are IGNORED.
UCC: Contract provisions requiring written modifications are effective unless waived."

Front 57

Is a contract with "Illegal Subject Matter" enforceable?

Back 57

NO. (e.g., a contract to hurt someone)

Front 58

Is a contract with an "Illegal Purpose" enforceable?

Back 58

The agreement is enforceable ONLY by the person who did not know of the illegal purpose.

Front 59

Is an exculpatory agreement that exempts intentional or reckless conduct from liability enforceable?

Back 59

NO, for "Public Policy" reasons

Front 60

Is a covenant not to compete enforceable?

Back 60

"If the covenant is WITHOUT a reasonable need OR reasonable time and place limitations then
NO, for ""Public Policy"" reasons"

Front 61

When will a "misrepresentation" make a contract unenforceable?

Back 61

"1. a statement of ""fact"" before the contract,
2. by one of the contracting parties or one of their agents,
3. that induces the contract,
4. that is FALSE.
NO wrongdoing is required."

Front 62

When will "Nondisclosure" make a contract unenforceable?

Back 62

Generally, a contracting party has NO duty to disclose what she knows. BUT: look for a fiduciary-like relationship OR concealment.

Front 63

When will "Duress" (physical or economic) make a contract unenforceable?

Back 63

"1. Improper threat (look for ""bad guy"") (threat can be to breach existing contract) AND
2. No reasonable alternative (look for ""vulnerable guy"")"

Front 64

When will "Unconscionability" make a contract unenforceable?

Back 64

"At the Time The Agreement Was Made EITHER:
1. Procedural unconscionability - unfair surprise; OR
2. Substantive unconscionability - oppressive terms,

Front 65

When will "Misunderstanding" make a contract unenforceable?

Back 65

Ambiguity In Words of the Agreement: There will be no contract IF
1. Parties use a material term that is open to at least two reasonable interpretations, and
2. Each party attaches different meaning to the term, and
3. Neither party knows or has reason to know the term is open to at least two reasonable interpretations.

Front 66

When will "Mutual Mistake of Fact" make a contract unenforceable?

Back 66

1. Both parties mistaken, and
2. Basic assumption of fact, and
3. Materially affects the agreed exchange, and
4. Not a risk that either party bears.

Front 67

When will "Unilateral Mistake of Fact" make a contract unenforceable?

Back 67

Generally, Cts have been reluctant to allow a party to avoid a K for a mistake made by only one party.
EXCEPT:
1. "Palpable/Obvious"" Mistakes, where the NONmistaken party knew or should have known, OR
2. Mistakes discovered before significant reliance by the other party

Front 68

What is "Parol Evidence"?

Back 68

Oral or written words of party(ies) before integration (agreement was put in writing)

Front 69

What is "Integration"?

Back 69

Written agreement that court finds is the final agreement, triggers the parol evidence rule

Front 70

What is "Partial Integration"?

Back 70

Written and final, but not complete
MBE TIP: "partial integration" -> Usually will be wrong answer "

Front 71

What is "Complete Integration"?

Back 71

Written, final, and complete
a. MBE TIP: "complete integration" -> Usually will be wrong answer "

Front 72

What is "Merger Clause"?

Back 72

K clause such as "This is the complete and final agreement."
Highly persuasive but NOT conclusive"

Front 73

What is "Reformation"?

Back 73

equitable action to modify written K to reflect actual agreement

Front 74

What triggers the Parol Evidence Rule?

Back 74

"1. Written K that court finds is the final agreement; AND
2. Oral statement made at the time the contract was signed OR earlier oral or written statements by the parties to the contract"

Front 75

Can a Court admit evidence of earlier agreements for the purpose contradicting the terms in the written contract?

Back 75

NO, the Parol Evidence prevents admission of such evidence.

Front 76

May a court consider Parol Evidence for the purpose of determining whether there was a Mistake in Integration (i.e., a mistake in reducing the agreement to writing)?

Back 76

YES, this will not violate the Parol Evidence Rule.

Front 77

May a court consider Parol Evidence to determine whether there was Misrepresentation, Fraud or Duress?

Back 77

YES, this will not violate the Parol Evidence Rule.

Front 78

May a court consider Parol Evidence to resolve Ambiguities in the written contract?

Back 78

YES, this will not violate the Parol Evidence Rule.

Front 79

May court consider Parol Evidence to add terms to an agreement?

Back 79

"NO, the Parol Evidence prevents admission of such evidence.
UNLESS:
1. The Written Agreement was only a Partial Integration OR
2. The additional terms would ordinarily be in a separate agreement"

Front 80

May courts look to conduct as a source to determine the terms of a contract?

Back 80

"YES. In order of priority courts will look to:
1. Course of Performance (same people, same K)
2. Course of Dealing (same people, similar K)
3. Custom and Usage"

Front 81

In the absence of an agreement, where must the goods be delivered?

Back 81

Absent an agreement as to place of delivery, then the place of delivery is the seller's place of business.
UNLESS: BOTH parties know that the goods are some place else in which case that place is the place of delivery."

Front 82

For "Shipment Contracts," when does the seller complete her delivery obligations?

Back 82

Seller completes its delivery obligation (before delivery) when she...
1. Gets the goods to a common carrier,
2. Makes reasonable arrangements for delivery, and
3. Notifies the buyer.
NOTE: most contracts

Front 83

For "Delivery Contracts," when does the seller complete her delivery obligations?

Back 83

Obligation is not complete until goods received

Front 84

How does one distinguish a "Shipment Contract" from a "Delivery Contract"?

Back 84

Most contracts with delivery obligations are Shipment Ks.
FOB (seller city or location of goods) = Shipment K.
FOB (any other city) = Destination K."

Front 85

When does the "Risk of Loss" Rules apply?

Back 85

"1. After the contract has been formed but before the buyer receives the goods
2. Goods are damaged or destroyed and
3. Neither the buyer nor the seller is to blame."

Front 86

What is the "Risk of Loss" Rule when there is an agreement?

Back 86

Agreement of the parties controls

Front 87

What is the "Risk of Loss" Rule when there is a breaching party?

Back 87

Breaching party is liable for any uninsured loss EVEN THOUGH breach is unrelated to problem.

Front 88

What is the "Risk of Loss" Rule when there is delivery by common carrier other than seller?

Back 88

Risk of loss shifts from seller to buyer at the time that the seller completes its delivery obligations.

Front 89

What is the "Risk of Loss" Rule when there is NEITHER agreement, breach, nor delivery by a common carrier?

Back 89

"KEY: Whether the SELLER is a merchant.
MERCHANT-SELLER: Risk of loss shifts from merchant-seller to the buyer on the buyer's ""receipt"" of the goods.
NON-merchant seller: Risk of loss shifts from a non-merchant seller when he or she ""tenders"" the goods.
""Receipt"" = physicial possession
""Tender"" = seller has told buyer where good is and how to get it"

Front 90

When has a seller provided an "Express Warranty of Quality"?

Back 90

"1. Look for words that promise, describe or state facts.
2. Distinguish from sales talk which is more general, an opinion. [puffery]
3. Using a sample or model is an express warranty"

Front 91

What does the sale of a good have the "Implied Warranty of Merchantibility"?

Back 91

When Seller is a Merchant who deals in goods of THAT KIND, the Merchant implicitly warrants that the goods are fit for the ORDINARY PURPOSE for which such goods are used

Front 92

When does the seller provide an "Implied Warranty of Fitness for a Particular Purpose"?

Back 92

1. Buyer has particular purpose;
2. Buyer is relying on seller to select suitable goods;
3. Seller has reason to know of purpose and reliance."

Front 93

Can a seller issue a Disclaimer as to any warranties?

Back 93

A seller can disclaim IMPLIED warranties, but NOT EXPRESS warranties.

Front 94

May a seller limit the REMEDIES for a warranty?

Back 94

YES, even for express warranties.
UNLESS: Unconscionable at the time of the contract.
Prima facie unconscionable if breach of warranty on consumer goods causes personal injury"

Front 95

When is "Perfect Tender" required?

Back 95

For UCC contracts. Seller is obligated to perfectly deliver perfect goods.
If not PERFECT tender, buyer has option of rejecting some or all of the goods."

Front 96

What is the rule for Rejecting an Imperfect Tender?

Back 96

Rejection of the goods must occur before acceptance of the goods.
If the goods are less than perfect, the buyer has the option to reject
UNLESS:
1. Cure
2. Installment Sales Contract
3. Acceptance"

Front 97

When may the seller Cure an Imperfect Tender?

Back 97

"IF
A. given a 2nd chance,
B. if seller had reasonable belief imperfect tender would be acceptable, OR
C. time for performance has not yet expired."

Front 98

Can the Buyer Compel the Seller to Cure?

Back 98

No

Front 99

When may a buyer reject an imperfect delivery regarding an "Installment Sales Contract"?

Back 99

Buyer has the right to reject an installment ONLY where there is a "Substantial Impairment" in that installment that CANNOT be cured.

Front 100

When has the buyer accepted delivery of goods?

Back 100

"""Express Acceptance"" BUT: Payment without opportunity for inspection not acceptance
""Implied acceptance""--retention after opportunity for inspection without objection"

Front 101

When may a buyer REVOKE an acceptance of goods?

Back 101

In limited circumstances, a buyer can cancel a K by revoking its acceptance of the goods. REVOCATION requirements:
a. Nonconformity substantially impairs the value of the goods,
b. Excusable ignorance of grounds for revocation or reasonable reliance on seller's assurance of satisfaction, AND
c. Revocation within a reasonable time after discovery of nonconformity"

Front 102

When is specific performance an appropriate remedy?

Back 102

"Specific performance is an equitable remedy. There must be no adequate remedy at law.
1. Sale of Real Estate. UNLESS: there is a Bona Fide Purchaser
2. The sale of ""Unique"" goods.
BUT NEVER: services contracts (possibly other equitable remedies)"

Front 103

What are defenses to equitable remedies like specific performance or an injunction?

Back 103

a. Laches - a claim that the P has delayed bringing the action and that the delay has prejudiced the D.
b. Unclean hands - a claim that the party seeking specific performance is guilty of wrongdoing in the transaction being sued upon
c. Sale to a bona fide purchaser - a claim that the subj matter has been sold to a person who purchased for value and in good faith"

Front 104

When might "Reformation" be an appropriate remedy

Back 104

"Look for Mistake in writing the agreement that does not correctly express the agreement in writing (e.g., a clerical error)
Also, look for fradulent misrepresentation as to what is in the agreement (to get it enforced v. innocent misrepresentation to get out of the deal)
NOTE: ""Reformation"" is an equitable remedy. Courts (and bar examiners) are slow to go with reformation"

Front 105

What is "Reclamation"?

Back 105

"1. Buyer must have been insolvent at the time that it received the goods, AND
2. Seller demands return of his goods within 10 days of receipt, AND
3. Buyer still has goods at time of demand.
4. Also - if Buyer is insolvent, UCC permits the seller to REFUSE to deliver except for cash, including payment for all goods previously delivered under the K.
NOTE: ""10-day rule"" becomes a ""reasonable time rule"" if before delivery there had been an express representation of solvency by the buyer"

Front 106

What is the measure of money damages for breach of contract?

Back 106

For Essay: ""In California, Contract Money Damages rules are based on protection of the Expectation Interest."" ""Expectation simply means that people who contract expect the other person will not breach."" Accordingly,
1. Detrermine dollar value of performance without breach,
2. determine the dollar value of performance with breach, AND
3. Compare 1. and 2. to determine the amount of damages."

Front 107

When is "Reliance" the measure of damages?

Back 107

"Goal: Put P in same economic position as if contract had never happened.
Used in cases where expectation damages are speculative. P may recover reliance damages (i.e. the cost she has incurred by performing)"

Front 108

When is "Restitution" the measure of damages?

Back 108

Goal: Put Def in same economic position as if contract had never happened.
If non-breaching party transferred a benefit to the breacher while attempting to perform, the non-breacher is entitled to restitution for the benefit transferred."

Front 109

How are damages allotted in the UCC context depending on 1. who breached AND 2. who has the goods?

Back 109

"Seller breaches, buyer keeps the goods: [(FMV if perfect) - (FMV as delivered)] (K price is irrelevant)
Seller breaches, seller keeps the goods: [(FMV when breach discovered) - (contract price)] OR [(replacement price) - (contract price)]
Buyer breaches, buyer has the goods: [contract price]
Buyer breaches, seller has the goods: [(contract price) - (FMV at t & place of delivery)] OR [(contract price) - (resale price)] OR for Loss Volume Seller: provable lost profits"

Front 110

What are "Incidental Damages" and when are they recoverable?

Back 110

"""Incidental Damages"" = Costs incurred in dealing with breach/finding a replacement.
ALWAYS recoverable."

Front 111

What are "Consequential Damages" and when are they recoverable?

Back 111

"""Consequential Damages"" = Damages unique to this P (special), but would not have been suffered by everyone else.
ONLY recoverable if D had reason to know at time of K (foreseeable)."

Front 112

Can P recover for avoidable damages?

Back 112

No recovery for damages that could have been avoided without undue burden on P. Burdens of pleading and proof on D.

Front 113

What is the "Certainty Limitation" and how does that affect damages?

Back 113

Courts will not award damages that are speculative in nature. Courts will instead look to Reliance Interest.

Front 114

When are Liquidated Damages clauses valid / enforceable?

Back 114

Concern is whether Liquidated Damages are a penalty provision. Test:
1. Damages were difficult to forecast at time contract was made AND
2. Provision is a reasonable forecast

Front 115

Can a contract provision limit the amount that can be recovered?

Back 115

YES, BUT: look out for Unconscionability

Front 116

When does the other party's breach excuse performance?

Back 116

UCC: Apply ""Perfect Tender"" Rule
CL: All breaches allow for money damages. BUT ONLY a ""Material"" Breach excuses performance. ""Materiality"" is a fact question.

Front 117

Are "Substantial Performance" and "Material Breach" mutually exclusive?

Back 117

YES

Front 118

What is the "Divisible Contract" Exception?

Back 118

In a "divisible contract" there can be a contract law recovery for substantial performance of a divisible part even though there has been a material breach of the entire contract.

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What is an "Express Condition" in a Contract?

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A condition is a mutually agreed upon promise modifier. It is language in a contract - not merely language in a response to an offer - that does not create a new obligation, but merely limits obligations created by other language in the contract. {basically, a way to define material breach / substantial performance into K}

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How does one identify an "Express Condition"?

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Created by language of the K.
Watch for words such as ""if"", "only if", ""provided that, ""so long as"", ""subject to"", ""in the event that"", "unless", "when", "until", and ""on condition that.""
(E.g., "O's payment for B's work is expressly conditioned on B's using Reading pipe throughout.")"

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What is the difference between "Conditional Acceptance" and an "Express Condition"?

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"It is ""Conditional Acceptance"" if it is a response to an offer.
It is an ""Express Condition"" if the condition is agreed by both parties."

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What is the standard for satisfying an "Express Condition"?

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Strict Compliance.

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Can a condition be based on approval of one of the contracting parties?

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"YES.
If a condition is based on approval of one of the contracting parties, the condition is satisfied if a reasonable person would approve.
EXCEPT: art and other inherently discretionary matters"

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What is the legal effect when Party A to a K waives / gives up a condition that benefits Party A BEFORE that conditioning event was to occur?

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"Party A may be Estopped from enforcing the condition against Party B IF Party B ""Relies"" on the giving up.

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What is the legal effect when Party A to a K waives / gives up a condition that benefits Party A AFTER that conditioning event was to occur?

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Party A cannot enforce the condition REGARDLESS of whether Party B relied on the waiver.

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What is the legal effect when Party A to a K "hinders" or "prevents" an Express Condition in the K that benefits Party A?

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The Express Condition is excused and cannot be enforced against Party B.

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What is "Anticipatory Repudiation"?

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"""Anticipatory Repudiation"" is an unambiguous statement
1. that the repudiating party will not perform
2. made prior to the time that performance was due."

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What is the legal effect of "Anticipatory Repudiation"?

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"Anticipatory Repudiation by 1 party excuses the other party's duty to perform.
Anticipatory Repudiation generally gives rise to an immediate claim for damages for breach,
EXCEPT: If claimant already finished performance, must wait until K date to sue since repudiating party could retract."

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What is the "Retraction Rule"?

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"Anticipatory repudiation can be reversed or retracted so long as there has not been a material change in position by the other party.
If the repudiation is timely retracted, the duty to perform by the other party is reimposed.
BUT: performance can be delayed until adequate assurance is provided."

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When does "Insecurity" excuse performance?

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"IF
1. reasonable grounds for insecurity;
2. unmet demand for adequate assurance; AND
3. commercially reasonable to stop performance"

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When is a contract "Executory"?

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A contract is executory if NEITHER party has FULLY performed.

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When is a contract subject to rescission (cancellation)?

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Both parties can agree to rescind a K ONLY IF it is NOT executory.
BUT: quasi-K remedies are available for partial performance."

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What is "Accord and Satisfaction"?

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"Accord is an agreement by the parties to an already existing obligation to accept a different performance in satisfaction of the existing obligation.
NOTE: NOT a different performance if new agreement to discharge prior debt with less money
BUT: at Common Law: when there is a bona fide dispute as to amount owed, an accord and satisfaction generally may be accomplished"

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What is the legal effect of "Accord and Satisfaction"?

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"If the Accord is NOT performed, then the other party can sue on EITHER the original obligation OR the Accord.
The Accord creates a new legal obligation BUT ONLY Satisfaction makes the old obligation go away."

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What is the distinction between "Accord and Satisfaction" and a "Modification"?

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Modification is an agreement by parties to an existing obligation to accept a DIFFERENT AGREEMENT in satisfaction of the existing obligation.

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What is a "Novation"?

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Agreement between BOTH parties to an existing contract to the substitution of a new party, i.e., same performance, different party

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What is one's liability after Novation?

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Novation excuses the contracted for performance of the party who is substituted for or replaced.

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What is the distinction between "Delegation" and "Novation"?

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"""Delegation"" does NOT require the agreement of both parties and does NOT excuse.
""Novation"" requires the agreement of BOTH parties to the original contract AND excuses the person replaced from any liability for nonperformance. "

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When will performance be Excused because of a later Unforeseen event

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IF the unforeseen event makes performance impossible, commercially impracticable, or frustrates the mutually understood purpose of the performance.

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Does Death excuse performance?

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"Generally, NO.
UNLESS: there is some special indication that the person himself must do the job"

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Does a subsequent law that makes performance illegal excuse performance?

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Yes

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What is a "3d Party Beneficiary"?

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Not a party to the K. Able to enforce K others made for her benefit.

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Who is the "Promisor" in the "3d Party Beneficiary" context?

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Person who is making the promise that benefits the 3rd party

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Who is the "Promisee" in the "3d Party Beneficiary" context?

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Person who obtains the promise that benefits the 3rd party

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Who is the "Promisee" in the "3d Party Beneficiary" context?

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Person who obtains the promise that benefits the 3rd party

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When is a 3d Party able to enforce a K as a "3d Party Beneficiary"?

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MUST BE:
1. The ""Intended Beneficiary"" AND
2. the 3d Party's Rights must ""Vest"""

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When is a 3d Party the "Intended Beneficiary"?

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A. Will be identified in the K,
B. Receives performance directly from the promisor, OR
C. Has some relationship w/ promisee to indicate intent to benefit."

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When has a 3d Party's Rights Vested?

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"A. Manifests assent to a promise in the manner requested by the parties;
B. Brings a suit to enforce the promise, OR
C. Materially changes position in justifiable reliance on the promise."

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When is a 3d Party Beneficiary a Creditor or a Donee?

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A "Creditor" is owed by the promisee.

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Can a K be rescinded or modified without the 3d Party Beneficiary's consent?

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NOT IF the 3rd party knows of and has EITHER relied on or assented as requested

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Who can sue whom in a 3d Party Benficiary context?

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"1. Beneficiary Can Sue Promisor
2. Promisee Can Sue Promisor
3. Donee beneficiary can NOT sue promisee; but creditor beneficiary can sue promisee on pre-existing debt
4. Creditor beneficiary can sue the promisee on the original debt"

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What defenses can the Promisor raise against the 3d Party Beneficiary?

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Any defenses Promisor could have raised against Promisee

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What is the distinction between "Assignment" and a "3d Party Beneficiary"?

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"3rd Party Beneficiary as 1 act play
CONTRAST: For an Assignment . . .
Step 1. K between only two parties; and
Step 2. 1 of the party's later transfers rights under K to a 3d party"

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What is an "Assignor"?

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Party to the K who later transfers rights under the K to another

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What is an "Assignee"?

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Not a party to the K. Able to enforce the K because of the assignment.

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What is an "Obligor"?

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The Other Party to the Assigned K

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Is Consideration necessary for an Assignment?

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Generally, NO.

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What is the legal significance of a "Prohibition" vs. an "Invalidation" of assignments in a K?

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"""Prohibition"": Takes away the ""Right"" to assign BUT NOT the ""Power"" to assign. Therefore, the assignor is liable for breach of K but an assignee who does not know of the prohibition can still enforce the assignment. UCC: no effect on an assignment for the right to RECEIVE payment.
""Invalidation"": Takes away BOTH the ""Right"" to assign AND the ""Power"" to assign so that there is a breach by the assignor and no rights in the assignee."

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How does one identify a "Prohibition" vs. an "Invalidation" of assignments in a K?

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"1. ""Prohibition"" ex's: "don't" or "can't" or "Rights hereunder are not assignable."
2. ""Invalidation"" ex's: "even if you do, won't be any good." or "All assignments of rights under this contract are void.""

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When is an assignment barred even WITHOUT a K provision?

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"CL: bars an assignment that substantially changes the duties of the obligor.
E.g., Assignment of right to payment -> does not substantially change the duties of the obligor -> NOT barred
E.g., Assignments of other performance rights -> if substantially change the duties of the obligor -> BARRED"

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What are the rights of an Assignee?

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"1. Assignee can sue the obligor.
2. Assignor cannot recover from obligor. (different than third party beneficiary law b/c promisee can sue the promisor)
3. Obligor has same defenses against assignee as it would have against assignor.
4. Payment by obligor to assignor AND Modification Agreements b/w obligor & assignor are effective UNTIL obligor knows of assignment. "

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What is the "Warranty for Assignment" in an "Assignment FOR VALUE"?

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For assignment for consideration only, the Assignor warrants
1. the Right assigned actually exists AND
2. that the Assignor will do nothing to impair the value of the assignment.
NOTE: multiple assignments breach the warranty
BUT: Assignor does NOT warrant what the Obligor will do"

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Are "Assignments For Value" revocable?

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"Assignments For Value: NO, so ""First in Time"" assignee wins.
BUT: A subsequent assignee takes priority over an earlier assignee for value only IF
A. does not know of the earlier assignment AND
B. is the first to obtain i. payment, ii. a judgment, iii. a novation, OR iv. indicia of ownership."

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Are Gratuitous Assignments revocable?

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"Gratuitous Assignments: YES, directly AND indirectly, so ""Last in Time"" assignee wins.
(E.g., bankruptcy, death, the assignor taking performance directly from the obligor, or the making of another assignment)
UNLESS:
A. If subject matter of a writing delivered to the assignee,
B. Assignee has received some sort of indicia of ownership, or
C. Assignee has relied on the assignment in a way that is reasonable, foreseeable, and detrimental. "

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If a party cannot assign, can the party still delegate?

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No

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What is "Delegation"?

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Party to a K transferring work (duties/burdens) under that contract to third party.

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Which Duties are Delegable?

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K duties are generally delegable.
UNLESS EITHER:
1. K prohibits delegations or prohibits assignments OR
2. K calls for VERY SPECIAL skills OR
3. Person to perform contract has a VERY SPECIAL reputation."

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Who is liable if the Delegatee does NOT perform?

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1. Delegating party always remains liable.
2. Delegatee liable ONLY IF she received consideration from Delegating party."