Intro2Law,chpt13

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Uniform Commercial Code- UCC

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originally drafted by the National Conference of Commissioners on Uniform State Law, it governs commercial transactions & has been adopted by all states, entirely or in part

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Bilateral contract

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one where a promise is exchanged for a promise

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Unilateral contract

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a promise is exchanged for an act

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express contracts

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formed through words either oral or written

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Implied in fact contracts

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formed through conduct

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Requirements contract

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a contract in which one party agrees to buy all its requirements for a particular product from the other party

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Output contract

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a contract in which one party agrees to deliver its entire output of a particular product to the other party

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Option contract

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a contract in which the buyer gives the seller consideration to keep the offer open for a stated time period

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Merchant's firm offer

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an offer made by a merchant in a signed writing that assures the buyer the offer will remain open for a specific period of time, it does not require consideration to be binding

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Mirror image rule

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the requirement that the acceptance exactly mirror the offer or the acceptance will be viewed as a counter offer

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Quasi-contract

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although no contract was formed, the courts will fashion an equitable remedy to avoid unjust enrichment

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Consideration

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anything of value; it must be present for a valid contract to exist, and each side must give consideration

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Unconscionable contract

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a contract formed between parties of very unequal bargaining power where the terms are so unfair as to "shock the conscience"

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Promissory estoppel

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occurs when the courts allow detrimental reliance to substitute for consideration

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Voidable

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a valid contract that can be set aside at the option of one of the parties

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disaffirm

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the ability to take back one's contractual obligations

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necessaries

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normally food, clothing, shelter and medical treatment

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Void

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a contract that is invalid even if it is not repudiated by either party

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Covenat not to compete

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a promise not to compete within a given geograhphic area for a specific period of time

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Adhesion contract

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a contract formed where the weaker party has no realistic bargaining power. typically a form contract is offered on a "take it or leave it" basis

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Exculpatory clause

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a provision that purports to waive liability

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Recission

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the act of canceling the contract & returning the parties to the positions they were in prior to the contract having been formed

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Warranty

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a guarantee, made by the seller or implied by the law, regarding the character, quality, or title of the goods being sold

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Implied warranty of merchantability

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an implied promise that the goods being sold will be usable for the purpose for which they were sold

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Implied warranty of fitness

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an implied promise that the goods being sold will satisfy a special purpose

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Parole evidence rule

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an evidentiary rule that a written contract cannot be modified or changed by prior verbal agreements

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Substantial performance

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although a breach of contract, performance of all the essential terms of the contract will entitle the breaching party to the contractual price minus any damages caused by the breach

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material breach

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such a grave failure to fulfill the contractual terms that the other party is relieved of all contractual obligations

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Perfect tender rule

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the requirement that the goods delivered exactly meet the contractual specifications

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Rescission

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the act of canceling the contract & returning the parties to the positions they were in prior to the contract having been formed

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Novation

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when a third party is substituted for one of the original parties

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Accord & satisfaction

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the agreement and then the performance of something different than originally promised

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Assignment

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the transfer by one of the original parties to the contract of part or all of his/her interest to a third party

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Delegation

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the transfer by one of the original parties to the contract of his/her obligations to a third party

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Specific performance

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when money damages are inadequate, a court may use this equitable remedy & order the breaching party to perform his/her contractual obligations

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Mitigation of damages

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the requirement that the nonbreaching party take reasonable steps to limit his or her damages

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Cover

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finding substitute goods

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Consequential damages

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indirect damages that must be foreseeable to be recovered

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Liquidated damages clause

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a contract provision that specifies what will happen in case of breach

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Contract reformation

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an equitable remedy that allows the courts to "rewrite" contract provisions