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223 Cards in this Set

  • Front
  • Back
What are some examples of what UCC goods do NOT include?
intangibles, money, stocks, assignment of legal claim, services, employment, real property
In cases which involve both goods and services, how does the MAJORITY determine what source of K law should apply?
The "predominant purpose test"
What are the factors to consider for the "predominant purpose test"?
1. Language of the K
2. Nature of the business
3. Value of goods in comparison with value of the services
In cases which involve both goods and services, how does the MINORITY determine what source of K law should apply?
Apply the UCC to the goods and common law to the services
What is an "implied-in-fact" contract?
Agreement formed by conduct rather than words (e.g., guys hires plumber and he fixes the toilet)
What is an "implied-in-law" contract?
Exists where one party bestows a benefit to another party and it would be unjust (enrichment) for recipient to keep it (e.g., emergency services, accidentally delivered goods)
What is Quantum Meruit?
Cause of action for implied-in-fact (and more recently also implied-in-aw) K brought to recover reasonable value of benefits conferred
What two requirements need to be met for a K?
1) An outward manifestation of willingness to contract (oral, written, or via conduct)
--> offer not about subjective thoughts
2) Signal that acceptance of the offer will conclude the deal
What is the "American Advertising Rule"?
advertisements/ads are treated just as invitations for offers
What is language that creates an exception to the "American Advertising Rule"?
"first come, first serve!" or "first ten people only!"
What are the four ways to terminate the power to accept?
1) Lapse - time stated in offer/reasonable time
2) Death - of either party
3) Revocation - at an time before acceptance and communicated directly or indirectly to offeree
4) Rejection - by offerree
How do the courts determine a "reasonable time" regarding when an offer has lapsed?
1) Based on the subject matter and market conditions
2) Degree of urgency and means of transmission
How is an offer INDIRECTLY terminated?
1) An offerror takes action which is inconsistent with intent to go through with the deal, and
2) and the offeree learns about it through a reliable source
How does one revoke an offer made to multiple people?
Communicating revocation in the same manner as originally used or a "functionally equivalent" manner. Exception: If there is a better means reasonable available, must use this... (okay if offeree is not aware)
What is the American Rule of Free Revocabilty of Offers?
An offer can be revoked even if offeror expressly promised to keep it open
How does one keep an offer open under common law?
1) Offer
2) Subsidiary promise to keep open
3) A valid mechanism for enforcement of promise (consideration/money)
How do the courts treat "Sell By" dates in connection with option contracts?
That it may just be a date in which the offer lapses, unless... clear intent to keep open
What is a "False Recital" regarding consideration?
K states that consideration was paid, however consideration was never paid...
- Majority holds that the recital is rebuttable, minority says K will be enforced anyway...
Courts will sometimes enforce a promise to keep open without consideration if there has been...
Detrimental Reliance
What is the Special Rule regarding construction contracts?
When a general contractor uses a sub-contractor's bid to calculate his own, promissory estoppel applies
How does one keep open an offer ("Firm Offer") under the UCC?
1) Offer made by merchant
2) Made in writing and signed by merchant
3) Expressly stating it will be kept open
--> Do NOT need consideration!
How long will a "Firm Offer" be held open under the UCC?
the period of time stated OR a "reasonable time" not to exceed 3 months
How does one keep open a "Firm Offer" under the UCC longer than 3 months?
You need consideration to be binding
What are the three ways in which one can reject an offer?
1) Outright rejection
2) Counter-offer - treated as a rejection and a new offer
3) Rejection via non-conforming acceptance
What is rejection via non-conforming acceptance?
Under the "Mirror Image Rule," acceptance must mirror the terms of offer
--> any variation is treated as a counter-offer
In a Unilateral K, the offeror makes a promise, and seeks _____ from the offeree. The offeror is bound only after _____ .
performance and performance.
Under common law in a Unilateral K, the offeror can revoke the offer up until _______.
completion.
Under the modern rule, in a Unilateral K, the offeror can revoke the offer up until ______, NOT mere preparation.
performance begins.
If the offer is silent as to means of communication, how must one accept?
ANY reasonable means (unless stipulated otherwise).
What are three ways in which communicating an acceptance of an offer is "reasonable"?
1) the same means used by the offer
2) customary usage in similar transactions
3) means equivalent to the speed and reliability of the offer
What are the three situations where the "acceptance by silence" situation comes into play?
1) Offeree takes benefit of services with reasonable opportunity to reject and had reason to know it should be paid for, and
2) offeror gave offeree reason to understand that acceptance can be by silence
3) previous dealings
How is an offer accepted in a Unilateral K situation?
completion of performance.
Under the UCC, how can a seller accept a buyer's offer to purchase goods for prompt or current shipment?
1) Promise to ship conforming goods
2) Prompt shipment of conforming goods
3) ** Shipping non-conforming goods
Under the UCC, if the seller ships goods as an "Accommodation," courts view this as what?
A counter-offer
Under the UCC, the seller's shipment of non-conforming goods does what two things?
1) accepts the offer and forms a binding K, and
2) breaches the K
Under the UCC, if a Consumer receives a K with additional terms, then these terms are treated as a _____.
proposal.
Under the UCC, if two merchants are contracting and one of them receives a K with Additional terms, then these terms are treated as then ________.
now part of the contract, unless:
1) the offer expressly limits acceptance to their own terms, or
2) they object to terms by a reasonable time, or
3) if these terms would materially alter the K
Under the UCC, what is the definition of additional terms that "materially alter" a K?
Terms resulting in surprise or hardship if incorporated without knowledge.
--> warranty disclaimers, clauses that shorten deadline to sue, change usages of trade.
Under the UCC, if two merchants are contracting and one of them receives a K with Different terms, then the Majority treats terms as ________.
"Knock-out Rule" -- different terms on same topic are cancelled out of K.
Under the UCC, if two merchants are contracting and one of them receives a K with Different terms, then the Minority treats terms as ________.
mere proposals.
When dealing with Written Confirmations containing additional or different terms, if between non-merchants, these terms are treated as _________.
mere proposals.
When dealing with Written Confirmations containing Additional, if between two merchants these terms are treated as _________.
part of the contract, unless 1) they materially alter the K and 2) the receiving party objects within reasonable time.
When dealing with Written Confirmations containing Different, if between two merchants these terms are treated as _________.
mere proposals and they can reject.
If two merchants both send each other written confirmations containing conflicting terms...
the Knock-Out Rule applies.
Under the Majority rule, what constitutes Conditional Acceptance?
Clear and conspicuous language of such.
Under the Minority rule, what constitutes Conditional Acceptance?
the response must clearly indicate that the offeree is unwilling to proceed until the offeror agrees to it.
In Shrink-wrap K's (open the box and it contains an agreement), most courts hold that these are ____.
mere proposals and someone can reject (although some courts hold if consumer keeps and uses goods they have accepted).
What is the problem with Gratuitous Promises?
The lack consideration.
What does "want of," "lack of," "no," "insufficient," and "not supported by" consideration indicate?
There has been an absence of bargained-for exchange?
What does "failure of consideration" indicate?
A party has failed to perform in accordance with the K or has breached.
When does the Majority view that a promise is supported by consideration?
If based on exchange of values (or "legal" detriment).
What is the "Legal Detriment Test"?
Whether or not the party is doing something he has a legal right to do, or forwent something he had a right to do.
What is the definition and legal significance of "inadequate consideration?"
Someone claims they were not paid enough consideration for something
--> court don't police the fairness of consideration unless unconscionable.
What does it take to "Execute" a gift, thereby making it actual enforceable?
1) intent to gift, and
2) actual or symbolic delivery
What happens if a K recites consideration, but no consideration is actual given?
It is not sufficient, although minority allows this for written option-contracts.
How does one distinguish a "Condition on a Gratuitous Promise" from actual Consideration?
1) the language: self-interested words may indicate consideration
2) context: gifts rare in commercial settings, but not so far in family settings
3) benefit to the promissor: likely to be consideration
Is Past ("Moral") consideration valid?
Not unless... 1) a written promise to pay a debt that was barred by SOL, or
2) a written promise to pay a debt discharged by bankruptcy
What is the Minority Rule exception to the invalidly of Past ("Moral") consideration valid? (hint, "Material Benefit Test")
Enforceable as long as:
1) the promissee conferred a benefit (unless previously contracted for) on the promossor and not a third party, and
2) the benefit is material
What is Promissory Estoppel doctrine?
A promisee that reasonably relies to his detrimental on a gratuitous promise may be able to enforce if the (4) requirements are met.
What are the four requirements for Promissory Estoppel?
1) A promise was made
2) There was foreseeable reliance
3) Actual reliance (on promise)
4) There would be injustice otherwise (look at strength of proof of first three, blameworthiness, equity/position of parties, the extent of detriment)
In most states, which categories of agreements are governed by the SOF?
M - MARRIAGE K's
Y - LEASES > 1 year
L - LAND sales
E - EXECUTOR
G - GUARANTY/Surety
S - SALE of goods
Are Life or Permanent K's governed by the SOF?
No, person could die and therefore be performed within a year.
Guaranty and Surety Agreements must be in writing, except:
1) When a creditor discharges the original debtor from his obligation on the faith of a third party, and
2) Where the Main Purpose is to protect his own interests.
What does a memorandum need to include to satisfy the SOF?
1) identify of the parties
2) nature and subject matter of K
3) essential terms (date, price), except for gap fillers, and
4) legal description of land based on older cases.
A party may satisfy the SOF by "tacking" together several writings, as long as:
1) At least one signed writing unambiguously establishes a K relationship
2) The document all clearly refer to same subject matter, and
3) Clear and convincing evidence of acquiescence of the unsigned document document by the party
Part Performance may establish an otherwise unwritten land K if 2 or 3 of the following are satisfied:
1) Payment of all or part of the purchase price
2) Possession of the property, or
3) Substantial Improvements
Can sales of goods K's under the UCC also be satisfied by Part Performance?
yes.
A K is governed by the SOF if...
It is for the sale of goods worth more than $500.
Under the UCC, if there is no quantity term, a K is unenforceable, unless:
1) language in the writing provides an unambiguous basis for deduction, or
2) It is an output or requirements K
Does a Written Offer satisfy the SOF under the UCC?
No, unless the requirements for "Firm Offer" are met.
Under the UCC, how does one satisfy the SOF?
1) Signed Writing
2) Merchant Confirmation if fails to object in writing within 10 days (must be signed and having a quantity term)
3) Court/Pleading Admission
4) Partial performance (and actions by both parties - received and accepted - indicate)
5) Specially Manufactured Goods
Under the UCC, when there is Partial Performance of Divisible Goods, the K is ________.
enforceable only to the quantify actually delivered or paid for.
Under the UCC, when there is Partial Performance of Indivisible Goods, the K is ________.
enforceable.
Under the UCC, the SOF is satisifed when the munfacturer makes Special Goods when:
1) The goods are specially made for the buyer
2) The goods are not suitable for sale to others in the ordinary course of seller's business
3) The seller has substantially began to make, or made commitments to procure, the goods,
4) The actions undertaken reasonably indicate that the goods are for the buyer, and
5) The actions undertaken to begin to manufacture occurred before the seller got notice of revocation.
Under the UCC, the Majority (unlike the minority) finds that Promissory Estoppel is/or is not a work-around for enforcement under SOF?
Is.
Even if the SOF defeats a K, can the evidence of the K still be valid for other purposes?
Yes.
Re: the UCC Default Rules for Sale of Goods, there is a Warranty _____, ____, and _______.
1) Title - seller has title
2) Merchantability - goods are fit for ordinary purpose for which they are used (only applies to a merchant)
3) Fitness - Goods are fit for particular purpose
Re: the UCC Default Rules for Sale of Goods, how can Warranty of Title be excluded/modified?
1) Either circumstances, or
2) Circumstances that give reason o know the seller doesn't have good title
Re: the UCC Default Rules for Sale of Goods, how can Warranty of Merchantability be displaced?
1) Specific and "conspicuous" mention of merchantability in writing, or
2) Any other language or circumstances or language that would be understood by buyer
--> "As Is!", or "Take with all faults!"
Re: the UCC Default Rules for Sale of Goods, when does the Warranty of Fitness apply?
When the seller has good reason to know: 1) the purpose that the buyer has in mind, and 2) the buyer is relying on the seller's skill or judgement to select
Re: the UCC Default Rules for Sale of Goods, how is the Warranty of Fitness displaced?
1) Disclaimer in writing and is clear and "conspicuous," or
2) The goods have patent defects which are easily detectable
Under the UCC, in what ways can a contract create express warranties?
1) Affirmative of a fact or promise
2) Description of goods
3) A sample of model
Under the UCC, where Price Term is missing, the gap fill will be _____.
the reasonable price at the time of delivery.
Under the UCC, where Time Term is missing, the gap fill will be _____.
the reasonable time.
Under Common Law, where Price Term is missing for a service K, the gap fill will be _____.
a reasonable price/value.
Under Common Law, where Duration Term is missing for a employment K, the gap fill will be _____.
at-will employment (however, oral or written assurance made to employees may be sufficient).
Under both Common Law and the UCC, "good faith" in general regarding performance and enforcement of a K means ______.
honesty in fact.
Under both Common Law and the UCC, "good faith" in the case of Merchants regarding performance and enforcement of a K means ______ and ______.
honest in fact & observance of industry standards for fair dealing.
When interpreting a K where the parties addressed a topic but used ambiguous language, the courts will use ______ or _______ language.
Objective or reasonable.
--> Except where one party has reason to know of other party's subjective understanding.
If an ambiguous term is included in the K, in cases of doubt, the K will be construed _____.
against the drafter, if it was only drafted by one party.
--> called Contra Proferentem.
Under the Doctrine of Reasonable Expectations, even unambiguous terms can be interpreted against the drafters if they conflict with reasonable expectations of the other party when dealing with _______.
boilerplate terms.
Under the UCC, what are are the Trifecta extrinsic evidence that can be used to fill gaps and resolve ambiguities?
1) Use of Trade - the practice or method of dealing
2) Course of Dealing - Pattern of conduct regarding previous transactions between the parties
3) Course of Performance - During same K, repeated occasions of performance that is not objected to
Can the UCC Trifecta gap-fillers be used to contract express terms?
No.
What can Course of Performance do to a contract (that the other two cannot)?
Establish a waiver or modification.
How does the court determine if the K is meant to be Completely Integrated?
1) Is there a Merger Clause?
2) Other evidence, such as the detail of K provisions or length of the K.
Parol Evidence is _____ to Explain or Interpret the terms of a K.
always admissible
Parol Evidence is _____ to Supplement the terms of a K.
admissible, unless the K is Completely Integrated.
For UCC Sale of Goods cases, the Trifecta is ______ to Supplement a Completely Integrated K.
admissible.
As a general rule, Parol Evidence is _______ to contradict a K if the terms are integrated.
inadmissible.
When will the Parol Evidence not apply?
1) To Subsequent Agreements
2) To Collateral Agreements that are distinct
3) To attack validity of the written agreement (fraud, etc.)
In what was can one attack validity of the written agreement?
Allege: 1) Failure of an Oral Condition Precedent to the Agreement
2) Absence of Consideration
3) Mistake or Duress
4) Fraud
5) Reformation
Is Parol Evidence admissible to show Fraud?
Majority: Always
Minority: Admissible unless the K provides that the parties made no representations/reliance when making K.
If the seller is NOT a merchant and they agree to use a non-carrier (ship themselves), Risk of Loss is with ______.
with the buyer upon shipment.
If the seller is a merchant and they agree to use a non-carrier (ship themselves), Risk of Loss is with ______.
the seller until until buyer gets possession.
If the parties use a carrier (USPS, etc.) in a Shipment K, (FOB), Risk of Loss is with ______.
the buyer when the goods pass to carrier.
If the parties use a carrier (USPS, etc.) in a Destination K ("I will deliver"), Risk of Loss is with ______.
seller until it reaches the delivery point.
Under Common Law, promise to increase compensation already owed is an ________.
unenforceable modification
--> because no consideration.
Under Common Law, a promise to increase compensation already owed is under an existing K is enforceable as a mutual modification if:
1) both parties agree to a different performance
2) it is not a mere pretense to a new bargain.
Under Common Law, a promise to increase compensation already owed is under an existing K will not apply if performance has become _______.
substantially more burdensome.
Under the UCC, modification of a K needs no consideration as long is there is ______.
good faith.
--> and even if there is new consideration, if bad faith it is still unenforceable.
A Unilateral Mistake will or will not excuse a transaction?
will not, unless the other party knew or had reason to know of the mistake.
--> Minority adds if it is a serious clerical error (not caused by extreme negligence)
What makes a Mistake "Material"?
it significantly impacts the value of the transaction.
A Mutual Mistake will be voidable to the disadvantage party where:
1) The mistake was material
2) The disadvantage parties didn't bear the risk under the K
What are the requirements for a K to be Impossible?
1) Objectively Impossible - performance is impossible for anyone, and
2) The contingency that intervened was unknown, happened after, and was unanticipated
What are examples of circumstances that render a K Impossible?
1) Subject matter of K id destroyed
2) The law changes to render performance impermissible
3) Performer died/incapacitated
Although courts don't often excuse a K for Impracticability, under CL the courts may do so if:
1) It is unforeseen
2) The burden or cost is far beyond the advantage of performance
Under the UCC, cases where the courts have found Impracticability to excuse performance:
1) War
2) Embargo
3) Crop failure,
4) Supplier shutdown
What is the Modern test that will discharge a party's contractual obligations for Frustration of Purpose?
1) The party's principal purpose is frustrated (can't be non-material or incidental)
3) The frustration is substantial
2) The non-occurrence of the event must have been an assumption of the K
An Accord _____ the duty.
suspends
--> Satisfaction comes at completion.
What is an Accord?
Parties to a K accept substituted performance in satisfaction.
Consideration is required for Accords, unless either:
1) The Accord involves partial/substituted performance and this substitute different significantly from original, or
2) Where the Accord involves partial payment, and there is a good faith dispute
Anticipatory Repudiation is established by:
1) A party's definitive statement saying it will breach, or
2) Party's voluntary act that render it unable to perform
If Anticipatory Repudiation cannot be established (the party doesn't say they will breach), but there are reasonable grounds for insecurity:
the party can demand for adequate assurance of performance
--> Non-response (CL: reasonable time, UCC: 30 days), or doesn't provide assurance, this repudiates the K
What are the aggrieved party's rights upon Anticipatory Breach?
1) Cancel and terminate all rights and obligations
2) Can commence and action for damages
3) Or can ignore the repudiation and continue the K
A party who has made the Anticipatory Repudiation to the other party may retract the repudiation unless the other party has:
1) Acted in reliance
2) Accepted the repudiation, or
3) Commenced a suite for damages
What is a "Promissory Condition" to a K?
A condition which conditions the K on performance of another party.
What is a "Pure Condition" to a K?
A condition which conditions the K on events beyond the control of another party (such as weather).
The failure of an Express Condition (Pure or Promissory) will ______.
discharge the K.
What are the three conditions in which failure of the condition may Excuse the other party so they are NOT discharged?
1) Waiver - party can perform anyway
2) Bad-faith Conduct - other party prevented them
3) Gross Forfeiture - courts excuse performance to avoid loss to minor condition
If a breach of an Implied Condition is serious enough will treat it as an Express Condition and _____.
discharge.
-> If not material, court will treat performance as "close enough," or "substantial performance" and NOT discharge.
Where a party has failed to fulfill an Express condition OR is in Material Breach, he still might be able to recover _______.
Quantum Meruit, which is the reasonable value for services performed
--> will be reduced by damages he caused.
Under the UCC, if the seller fails to make perfect tender, the buyer can take three courses of action:
1) Reject,
2) Accept, or
3) Accept part and reject part (for units)
Under the UCC, to properly reject goods, the buyer must:
1) Reject within a reasonable time after delivery, and
2) Notify the seller
--> If not, it is a failed rejection and is deemed as "Acceptance"
Under the UCC, if a seller breaches and time remains on the K, the seller may ____.
cure, if they notify the buyer of their "seasonable" intention to cure and do it in a reasonable time.
A seller may prove he had Reasonable Grounds to believe the buyer would accept non-conforming goods if he has evidence of:
1) Express assurances, or
2) Trifecta
Under the UCC in an Installment K, if non-conforming goods substantially impair the value of the whole K:
the whole K is voidable because of a breach.
Under the UCC in an Installment K, if non-conforming goods substantially impair the value of the only that installment:
buyer can reject the installment, but not cancel the whole K.
Under the UCC in an Installment K, if non-conforming goods DO NOT substantially impair the value of the only eve that installment:
buyer must allow seller to cure.
If a Minor avoids a K, the Majority rule is that the Minor must return the goods if they are in possession, and he is _______ for any damages.
not liable
If a Minor avoids a K, the Minority rule is that the Minor must return the goods if they are in possession, and he is _______ for any damages.
liable
(for depreciation, damages, and compensation for services)
A Minor's K for Necessaries is ______, but the merchant has a right to recover _______.
reasonable value under the quasi-K theory.
Under the Minority, if a Minor has misrepresented his age to the other party, he may be:
equitably estopped from proving his real age in court.
If a party has been adjudicated Mental Incompetent, the K is _____; if not, the K is ______.
void; voidable.
If a Mental Incompetent person avoids a K and has received a benefit from the K:
He must may the person whole by paying a reasonable value.
If a Mental Incompetent person avoids a K and has received a benefit from the K, but the other party has taken unfair advantage of him:
the person does not get reasonable value, but any goods must be returned if there are still possessed by the Mental Incompetent person.
Incapacity defenses are ______ for Common Law and ______ under the UCC.
available, available.
What are the four element of Fraudulent Misrepresentation?
1) A misrepresentation (oral, written, concealment, half-truth)
2) Knowing (or having the idea) of its falsity
--> and with Intent to Mislead
3) Materiality (objective or subjective), and
4) Reasonable Reliance
What are the two types of of Non-Fraudulent Misrepresentation?
1) Negligent - would have known it to be false if exercised reasonable care
2) Innocent - made an assertion not in accord with facts
What is Fraudulent Non-Disclosure?
Defendant is silent about a material fact to the K, the other party reasonable relies, and there existed a duty to disclose
What are the three types of Duty-creating relationship for Fraudulent Non-Disclosure if the party is aware of material facts?
1) Parties have a relationship of trust and confidence
2) Party has made an assertion that is true at the time, but is later rendered untrue
3) Catch All: obligation of good faith would require party to disclose
What type of damages are available in Fraudulent and Non-Fraudulent Misrep?
Party may carry out the K and sue for the benefit of the bargain.
What type of damages are available in Fraudulent Misrep?
punitive damages
--> because it's an intentional tort!
Under modern law what are the three elements to a defense of Duress?
1) Threat - to inflict harm on a person via words or conduct
2) Wrongful - it's a tort or crime, economic duress, crim prosecution/civil suit
3) There's no reasonable choice bu to succumb to threat
What are three situations where someone is put under Duress with the threat of economic harm?
1) There's no adequate or reasonably priced substitute for services/goods
2) The threat would cause the person to breach his own K
3) Any alternative to acquiescing to threat and then suing is inadequate to remedy
--> Under the Minority rule, the aggrieved party must protest!
K's made under physical duress are ____ and all other are _____. The party duress-ed is entitled to ______.
void, voidable. restitution.
What are the two elements for Undue Influence?
1) Unfair persuasion or pressure
2) The other party is vulernable to persuasion due to either A) mental infirmity (age, illness), B) vulnerable due to trauma or event, or C) a relationship of trust/confidence.
If a K is the result of Undue Influence, the K is _____, and the aggrieved party is entitled to _______, but must return any benefits received.
voidable, restitution.
What do you need for a K to be Unconscionable?
1) Procedural Unconscionability: bargaining process created no reasonable choices (e.g., fine-print terms, absence of bargaining power
2) Substantive Unconscionability: K is actually extremely favorably to one party (e.g., grossly excessive price, terms, etc.)
What might the K do upon finding a K to be Unconscionable?
1) Refuse to enforce K
2) Excise the offending clause and enforce
3) Limit the application of the clause to avoid result
In what situations may one raise a defense to enforcement of a K based on Public Policy?
1) Subject of K is illegal
2) K is formed to commit a crime
3) K forms a tort
4) K would violate values and freedoms designed by state
_____ damages are considered the "default" damages that courts will award.
Expectation
What are Expectation Damages?
When the aggrieved party receives damages that will restore him to the position he would have been if the K had been executed fully.
Expectation Damages are calculated by adding the loss of value from the breach,
+ any ______ and ______ costs generated
- payments received
- costs saved by the breach
Incidental and consequential costs
What are the 4 situations where a party might not be able to recover the full amount of Expectation Damages?
1) The cost of performance greatly exceeds market value of performance
2) The expectation damages cannot be calculated with reasonable certainty
3) Damages are unforeseeable
4) Damages can be mitigated
What are Reliance Damages?
The monetary award designed to restore the party back to its position prior to the K.
How are Reliance Damages calculated?
Any expenditures made in preparation for or during performance, less any losses the party would have suffered anyway.
When will Reliance Damages usually be available?
When Expectation Damages aren't available
What are Restitutionary Damages?
the value of the benefits conferred upon the other party to the K (and not a third party)
--> They are only available where a party has partially, and not fully, performed.
How are Restitutionary Damages measured?
measuring 1) the reasonable value or cost or services, and
2) The extent to which the other party's property increased in value
What happens if the court finds a Liquidated Damages clause to be a penalty?
Will strike it an just use Expectation or Restitution Damages instead.
Although a Party loses a K cases due to the Statute of Frauds, he ma able to sue on the theories of ____ or ______.
Promissory Estoppel Quasi-Contract
The UCC permits Lost Volume Sellers to recover:
of the profit they would have made for sale.
For a Lost Volume Seller to recover profits, he must show:
1) He would have sold to both people
2) It would have been profitable, and
3) Would have made the additional sale even without the breach
Under the UCC, a Seller is able to recover _____ Damages, which are the costs associated with non-sale and having to re-sell (reduced by the expenses avoided by breach)
Incidental Damages
If a Seller breaches under the UCC, if the Buyer does Cover, he gets:
the difference between the K price and the Cover price.
--> But can seek Incidental and Consequential Damages
If a Seller breaches under the UCC, if the Buyer does NOT Cover, he gets:
the difference between the K price and the Market price.
--> But can seek Incidental and Consequential Damages
If a Seller breaches under the UCC, the Buyer can seek _____ and _____ Damages, which will be reduced ___________.
Incidental and Consequential Damages; Expenses actually Avoided by breach.
Under the UCC, if the Buyer accepts Non-Conforming goods, he is still able to recover:
the Value of K price - the Value of Goods received.
Specific Performance is Not Available When:
1) K for Personal Services, or
2) K Regarding on-going Cooperation between 2 parties
Under the UCC, Specific Performance for Goods is liberalized in 2 ways:
1) Even if a good isn't that Unique, if Buyer reasonably searched and came up short, or
2) Specific Performance okay in Output and Requirements K's
When an Employee is under a K for a certain period and the Employee breaches by leaving before the end of the period, a Negative Injunction will be available to prevent the Employee from Competing if:
his Services are Unique or Extraordinary.
The Validity of a Post-Employment Non-Compete K depends on 3 Factors:
1) Was there a Significant Business Justification for Enforcement?
2) Is the Scope reasonable in Duration and Geography?
3) Was there an Express Provision?
When a Party Bestows a Benefit on his Partner during a Failed K (incapacity, fraud, duress):
hey may Recover Benefits conferred.
A party that Breaches a K may recover Benefits Conferred as long as there is _______.
an Offset of Damages due to Breach.
A party that Mistakenly Confers a Benefit on another party may get Restitution, depending on 3 Factors:
1) Blameworthiness of error
2) Was party aware/ and had time to prevent?
3) Did party Avail himself of benefits?
Provisions Limiting or Excluding Damages are usually ________ unless they are _______, except the of _____ Damages in ________ cases.
enforceable; Unconscionable; Consequential Damages; Personal Injury cases.
Who is a Creditor Beneficiary?
the Party is seeking Performance from a Promissory that will Satisfy a Third Party's Debt (Intended)
Who is a Donee Beneficiary?
the Party is seeking Performance to make a Gift (Intended)
What is an Incidental Beneficiary?
a Party who will benefit as a practical matter but is not a Donee or Creditor (Unintended)
An _______ to a K does Not enjoy a right to seek Enforcement.
Incidental Beneficiary
Actual Parties to K are free to Modify or Rescind a K by Mutual Consent, destroying an Intended Beneficiary's rights, unless his rights have _______.
Vested.
An Intended Beneficiary's rights to a K have vested when:
1) Beneficiary has brought a suit
2) Beneficiary changes his position in Justifiable Reliance
3) Beneficiary Manifest Assent to a K at Request of the Promissor or Promisee
When a Promisor's Performance is Intended to only Benefit a Third Party Beneficiary and the Promisor breaches, the Promisee can only recover ________.
Specific Performance.
To make an effective Assignment of a K right, the right-holder must:
1) Manifest an Intent to Transfer
2) Make a Present Transfer of an Existing Right
The Majority rule is that rights are Assignable, except where:
1) It would Materially alter the Risks/Obligations to the new party
2) Where the party has a Personal Interest in Rendering the Obligation to that Party and not another
3) It is against the law
4) Anti-Assignment Clause in K
If a K has an Anti-Assignment Clause, most courts will treat a violation of this as a breach, but not:
as a basis for Nullifying the rights of the new person on the K.
An Assignment for Value is...
Valid against the Obligor and can't be revoked.
An Obligor's payment to the Assignor is a ______ unless the Obligor is ______.
a Defense; notified.
Unless the parties agree otherwise, one who Assigns for Value Impliedly Warrants:
1) He will do nothing to defeat or impair the value of the assignment and has no knowledge of anything that will impair
2) It actually exits and is subject to no limits/defenses
Absent _______, Delegation of Duties does not relieve Obligor from Duties under K.
Novation
The Delegatee is Liable to the Delagator if there was ________.
Consideration.
The Delegatee is Liable to the Obligee if there was ________.
Consideration
The Majority rule is that all Duties are ________, except when:
Delegable; 1) When the Performance is Personal, and
2) The K prohibits
Offer, Rejection and Revocation are Effective on _______.
Receipt.
Acceptance is Effective on _______.
Dispatch.
Pursuant to Common Law, ________ is required to Modify an Existing Contract.
New Consideration
The UCC provides that every Contract involved an Obligation of _______.
Good Faith.
In a Demand Contract, each party promises in Good Faith to Buy or Sell whatever amount is actually Required for by the Circumstances, and these _______ provide the ________.
Mutual Promises; Consideration.
A Plaintiff’s Willingness to Forgo Adjudication is still Sufficient ________ to Support the a Promise to Pay, as long as the PL honestly believed that the claim was ______.
Consideration; Valid.
Rescission is Available if the Contract was the Result of:
1) Mistake,
2) Duress,
3) Fraud, or
4) Materially breach
A Substantially Similar product Delivered in Lieu of Custom-Made Item Request is a _______.
Material Breach.
The Standard Measure of Damages Recoverable by an Owner where the Builder Breaches is:
the Cost of Actual Completion to Minus to the Price of the Breached Contract.
Under the "Mailbox Rule," an Acceptance is generally Effective upon _______.
Dispatch.
An enforceable contract requires:
1) an offer,
2) acceptance of that offer, and
3) An exchange of consideration.
Under Promissory Estoppel, a promisee who Reasonably Relies on a ________ to his Detriment may be able to _______ that promise.
Gratuitous Promise; Equitably Enforce
Damages are not Intended to allow the Injured Party to ______ or create _____ the other party.
Profit; Punish
The Parol Evidence rule Excludes oral or written statements made Prior to or Contemporaneous K where those statements would _____ or ______.
Vary; Contradict.
Evidence Offered to Supplement the K will be Admissible depending on whether the K...
is Partially or Completely Integrated.
A K is Partially Integrated they Intend a writing to be the Final and Complete Expression _____________, but intend other matters to be the subject of a __________.
of the Agreement as to certain Matters; a Separate Agreement.
If the Seller of the Goods is a "merchant," then there is a Warranty of __________, which guarantees that the goods are Fit ....
Merchantability; ...for the Ordinary Purposes for which those goods would be used.
The Warranty of Merchantability will be Displaced by...
Specific Mention of the "Merchantability," or any language that would be reasonably understood by a buyer to exclude that warranty.
Some courts have held an Estate liable pursuant to a Promise supported by Moral Consideration when:
(1) The promisor had received a Material Benefit during his Lifetime that motivated the subsequent promise;
(2) the promisor thereafter began Performance according to the Terms of his promise;
(3) the promisor Died without ever evidencing an Intention to Repudiate the promise; and
(4) There were No Superior Moral Claimants to the Benefits of his estate.
Where an Agreement is Silent regarding the Order in which the Obligations are be Performed...
the Obligation which ordinarily would take longer to complete should be Performed First.