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226 Cards in this Set

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Define Contract
A legally enforceable agreement
X promises to give you $1000 next week. Y accepts. Agreement? Contract?
Agreement? YES
Contract? NO Why? No consideration
A says to B, “I’ll sell you my house for $1,000.” B accepts. However, A was joking. Contract?
No.
If one in B's position would reasonably have believed that A was serious, A is held to have made an enforceable offer, even if A was subjectively joking.
Both parties would like to be bound by their oral understanding, but believe that an oral contract cannot be enforceable. Are they correct?
No. This arrangement will be enforceable, assuming that it does not fall within the Statute of Frauds.
Is this an enforceable (legally binding) agreement? Husband promises to pay a monthly allowance to Wife, with whom he is living amicably.
No
In the absence of evidence otherwise, this agreement will be presumed not to be intended as legally binding, because it arises in a domestic situation.
Define Offer
The outward manifestation of the offeror’s willingness to enter into a bargain.


It has to be made in such a manner as to reasonably justify another into believing that he has the power, though his assent, to conclude such a bargain
Xoffers to buy Y’s car for $5,000, but X’s fingers are crossed and he doesn’tmean it. If Y accepts, is there acontractual agreement?
Yes, X is bound by the offer he made. Objective intent is what matters, NOT subjective intent.
X’sjeep is open and he’s pulling wires out and is pissed. He shouts, I would sellthis thing for $1. If Y drives buy andaccepts, is this a contract?
This is NOT a contract. Evidence of this type of statement made in rage or clear humor indicates that there was NO OBJECTIVE INTENT to make an offer.
X asks Y how much Y thinks the car is worth andY says I wouldn't take less than $10,000 for this thing. X says, “I accept!”. Contract?
NO
Y did NOT make an offer, but merely expressed an OPINION about the jeep's value
X lost cat and puts out ad giving anyone $100for anyone who finds cat by Friday. Y finds cat and brings cat to X onThursday. Does X owe Y $100?
Yes, even though the offer was extended to more the one person (i.e. he printed the ad in the community newspaper) X owes Y $100 even though the offer is extended to the world.
X walks down the trade pit on Wallstreet andpoints to everyone saying, “I accept!” “I accept!”. did he form contracts with the traders?
No!
The stock traders did not extend a specific offer to X so he cannot accept.
If an advertisement says: "Collector's Edition coins, $10 each at JC Penny, Starting Friday 10am–First Come, First Served.
Offer or Mere Solicitation to Make an Offer?
This is sufficiently detailed enough to be considered an OFFER.
Note: First Come, First Served" is a sign of the particularity needed for an advertisement to be considered an offer.
Who is the master of the offer?
Offeror
Why is it significant that the Offeror is the master of the offer?
Because the offeror can state the terms of the offer including the way in which an Acceptance will be valid. (ex. Offer states: "Please respond to my offer within 10 days by signing this document and mailing it back to me." If the Offeree accepts by performance instead of signing and returning the offer or accepts correctly but after 10 days, it will not be a valid acceptance)
Is this a valid offer? A says to B, “I’ll sell you my house for $100,000, if you give me a check right now for $10,000 and promise to pay the rest within 30 days.”
Yes
Is this a valid acceptance? A says to B, “I’ll sell you my house for $100,000, if you give me a check right now for $10,000 and promise to pay the rest within 30 days.” B says, "Here is my $10,000 check, and I’ll have the balance to you next week,”
This is an acceptance. After the acceptance occurs, the parties have an enforceable contract (assuming that there is no requirement of a writing, as there probably would be in this situation since it involves the sale of real estate).
Unilateral Contract
An offer that requires performance as acceptance.
Bilateral Contract
An offer that's a promise to perform and an acceptance that's a promise to perform.
Unilateral or Bilateral contract? Example: A says to B, ‘I promise to pay you $1,000 on April 15 if you promise now that you will walk across the Brooklyn Bridge on April 1.”
This is an offer for a bilateral contract, since A is proposing to exchange his promise for B's promise.
Unilateral or Bilateral contract? A says to B, “If you walk across the Brooklyn Bridge, I promise to pay you $1,000 as soon as you finish.”
When has performance begun?
Unilateral Contract.
A has proposed to exchange his promise for B’s act of walking across the bridge. Therefore, A has proposed a unilateral contract – B will accept by walking, not by promising to walk.

Performance will begin as soon as he starts to walk across the bridge. Note: If he buys new shoes in anticipation of getting that $1000, and A revokes his offer before B starts walking across the bridge, B CANNOT claim that this is part performance. His buying shoes for the walk is merely PREPARATION, NOT PERFORMANCE.
What is the duration of an offer?
An offer extends for as long as specified within the offer ("This offer is open for 10 days" or "You have until Friday at 10am to respond with your acceptance or rejection of my offer.") .


Note: if no time is specified on the day of expiration, it is MIDNIGHT of that date.


Note:If no specified expiration is stated in the offer, the offer remains open for a reasonable period of time
Which law governs when a contract deals with REAL ESTATE?
Common Law
Which law governs when a contract deals with GOODS?
UCC Article 2
Which law governs when a contract deals with SERVICES?
Common law
Which law governs a hybrid contract?
Under the Predominant Purpose Test, it depends on what part of the contract plays the dominant role.


Ex. If installation of a water heater is merely incidental in the contract for the purchase of the heater, the contract's predominant purpose is for the GOOD so it is governed by the UCC.
What happens if there is a DIVISIBLE CONTRACT where one portion covers the goods and the other portion covers the service part of the contract?
You may split the contract so that the portion for goods is governed by the UCC and the portion for the service is governed by common law.
What SPECIFICS are REQUIRED for an offer to be valid under Common Law?
All essential terms:
(1) SUBJECT
(2) PARTIES
(3) PRICE
(4) QUANTIY
What SPECIFICS are REQUIRED for an offer to be valid under the UCC?
(1) SUBJECT
(2) PARTIES
(3) QUANTIY



^price & time/place of delivery are NOT required. They can be filled
B offers to pay S $15 each month for the nextyear if he washes her car each week.


(1) Covered by UCC or common law?
(2) IS the offer valid?
(1) Service = common law
(2) under Common law, the offer needs (1) parties; (2) subject; (3) price; (4) duration. He meets the requirements. This is a valid offer.
B offers to buy 100 apples from S next week for$5 each. Valid offer?


(1) Covered by UCC or common law?
(2) Valid offer?
Covered by UCC because it’s a goods contract. Therefore, a valid offer because it names parties, subject, quantity.
B offers to buy 100 apples from S next week fora fair price.
(1) Covered by UCC or common law?
(2) valid offer?
Goods = UCC
Valid offer because a price term is not needed. UCC gap fillers will apply.
B offers to buy apples from S next week for afair price.
(1) Covered by UCC or common law?
(2) Valid offer?
(1) UCC
(2) NOT valid offer; QUANTITY TERM is needed.
Define Output contract
A promise by the seller to sell all he produces to the buyer.
"I don’t know how much of X I will produce overthe next 5 years, but I promise that however much I make, I will sell to you."
Define Requirements Contracts
A promise by the buyer to purchase all he needs from Seller.


"I don’t know how many of X I’ll need over thenext year, but I promise to buy them all from you."
B offers to buy all the apples he requires fromS for the next year at a fair price.
(1) Covered by UCC or common law?
(2) Valid offer?
Goods = UCC
Valid offer because it's a REQUIREMENTS CONTRACT


*Requirements and Output Contracts are the two types of contracts were the offer doesn't need a QUANTITY TERM under the UCC
Valid offer must give the power...
of acceptance to the other side
____________________ are preliminary communications, not offers
Invitations to deal
What is a type of invitation to deal?


What are the 2 types of exception?
Advertisements


Exception 1: Reward offers/advertisements ("if anyone finds my missing cat, I'll pay that person $500")


Exception 3: Advertisements that are VERY specific and leave nothing open to negotiation including HOW THE ACCEPTANCE IS TO OCCUR
X tells Y that Y better decide fast if he wantsto buy X’s house because he expects to have many offers next week and Y says “Iaccept.”


Valid acceptance?
No, because this probably isn't even an offer.


X is saying, if you hurry up, you can make me anoffer. X RESERVED THE FINAL APPROVAL RIGHT TO HIMSELF and has not given Y thepower to accept. He's inviting Y to make an offer to HIM!
X puts ad in paper promising to sell jeep for$5000 to first person who comes to X’s house– First–Come, First–Serve. Ycomes with $5,000 and says, “I accept.” IS this a valid acceptance?
Yes. Even though this is an advertisement (general rule is that ads are merely invitations to make an offer), X was VERY SPECIFIC in his add and left no question as to what he was selling, for how much, and the FORMULA FOR ACCEPTING.


Key words: "first come first served"
6 ways to terminate an offer
(1) offeror revokes offer by expressed communication to the offeree
(2) Offeror revokes offer by taking action that is absolutely inconsistent with the continuing ability to contract
(3) Offeree rejects offer
(4) Offeree makes counteroffer
(5) Offeror dies
(6) reasonable amount of time passes
4 ways an offer will be irrevocable
(1) PAID option contract
(2) MERCHANT'S firm offer
(3) Offeree's starting performance to a unilateral offer. (wan offer that requires acceptance by action)
(4) Detrimental reliance (contract–subcontractors)
In a unilateral offer, the offeree is free to..... at any time.
stop performance. (seller cannot sue the buyer for not finishing performance. The buyer is taking steps TOWARD acceptance as he performed. But if the buyer stops, he doesn't finish accepting)
X offers to sell house for $10000 to Y. Y alsopays $100 in exchange that X will not revoke offer. 5 minutes later, X revokes. Can Y still accept?
YES. Because Y bought an additional promise toprohibit X from revoking.


Note: This is true even if that $100 went towards the total purchase price
Elements making a Merchant's firm offer:
1. written
2. contain an explicit promise not to revoke
3. signed b offeror (not required to be signed by offeree)
How long does a merchant's firm offer last?
1. as long as stated in the firm offer
2. a reasonable period of time not to exceed 90 days.
Define Acceptance
A manifestation of a willingness to enter intothe agreement by the offeree
Acceptances are governed by ___ test
objective test
What if a seller tries to accept an offer but ships the wrong goods?
UCC treats this as an ACCEPTANCE + BREACH
x sends letter requesting that Y ship him 500apples for $500 next week. Y ships thembut they are oranges. Is this not an acceptance?
It IS an acceptance, but also a breach. She accepted by shipment (unilateral contract); but breached by sending nonconforming goods
Y finds X’s cat and returns it not knowing thatX ever put a reward poster out. Y sees the reward sign left hanging on the telephone pole the next week. Y goes back to X and demands the reward. Is Y entitled to the reward?
No


RULE: The offeree MUST KNOW ABOUT THE OFFER in order to accept it!
Mailbox rule
An acceptance is effective when the letter isSENT.
Does the mailbox rule apply when an Offeree first sends a rejection and then an acceptance?
NO. The rule applies only to acceptances, not rejections.
Does the mailbox rule apply to OPTION CONTRACTS?
NO.
If you are given 7 days to accept by an option contract, you cannot gain extra time through the mailbox rule.
I send you an offer.You mail back your acceptance. I call you before I receive your letter and Irevoke my offer. Is there a contract?
Yes
I send you an offer.You mail back your acceptance. The letter gets lost and never shows up. Isthere a contract?
Yes
I send you an offer.You mail back your acceptance. You change your mind and call me up before Ireceive your letter to reject the offer. Is there a contract?
Yes, unlessI detrimentally relied on the rejection by the time the letter of acceptancegot to me.
I send you an offer.You mail back a rejection. You change your mind and mail back an acceptance afew hours later. Both letters arrive at my house on the same day. Is there acontract?
Itdepends on what I open first.


The sender does NOT get the protection of themailbox rule because the rejection was sent first.


Thus, the offer was not accepted uponsending. So it depends on which letterthe receiver opens first.
4 instances where an offer can be accepted by silence
(1) unilateral reward offers/contests


(2) a unilateral offer where theparties are geographically close and the offeror would see the performance bythe offeree


(3) past history where silence serves asacceptance and the offeree should reasonably notify the offerror if the offereedoes not accept


(4) offeror says that acceptance must come viasilence and the offeror intends to accept it that way
I offerto sell you my Jeep for $500,000, saying, “you may accept this offer byremaining silent for five seconds.” You stare at me but don’t say a word. Afterfive seconds pass, do we have a contract.
NO, unless you intend to accept by silence. If you INTEND to accept by silence you canaccept it. But you cannot FORCE anofferee into acceptance by silence.
What is an "Implied in Fact" Contract?
You can communicate your acceptance withoutwriting or speaking, but by gestures or actions. This will be good enough toform a contract.
I walk into “CheapCuts,” a popular haircut franchise where the service offerings and prices areposted above the cash register. The energetic receptionist offers to put myname in, and I sit down to wait. A haircutter comes forward to call my name; Ifollow and she cuts my hair. When I walk toward the exit, the receptionisttells me that I owe them $15. Must I pay even though I never said a singleword?
Yes. Your action of going in an sitting down in the hairdresser's station and allowing her to cut your hair is an action that implied acceptance.
Common Law Mirror Image Rule
termsof the acceptance must match the terms of the offer exactly, or it becomes a counter offer
UCC and Mirror Image Rule
UCC is more forgiving than the Mirror Image Rule


2–207 applies (dickered terms are agreed upon, but need to determine what specifics govern)
2–207(1)
A definite and seasonable expression ofacceptance [or a written confirmation] which is sent within a reasonable time operatesas an acceptance even though it states terms additional to or differentfrom those offered or agreed upon, unless acceptance is expresslymade conditional upon assent to the additional or different terms.
You send a purchaseorder requesting acceptance of your chainsaw offer by this Friday. I send backmy confirming memo two weeks later. Is there a contract?
No. Timing problem under 2–207
§ Yousend a purchase order. I send back a timely confirming memo that says, “Thanks,but I no longer sell chainsaws; however, I have a hand saw which you can haveon the exact same terms.” Contract?
No. No definite acceptance under 2–207
Yousend a purchase order. I send back a timely confirming memo saying, “OK, on thecondition that you agree to indemnify me against a lawsuit for harm arisingfrom the chainsaw.” Do we have a contract?
No contract. There was no express consent to theadditional term under 2–207 ("on the condition that" <––requires express consent)
You send a purchaseorder. Myacceptance letter has a bunch of terms on the back, all of which matches yours,except “buyer agrees to indemnify seller against a lawsuit for harm arisingfrom the chainsaw.” Do we have a contract?
YES under 2–207 (remember, under common law this would be no)
Under 2–207(2) we decide what term controls the contract. The new term will only come in if ALL OF THE FOLLOWING are true:
Both parties are merchants
+
The new term does not materially alter the deal;
You send a purchase order. My acceptance letter has a bunch of terms on the back, all of which matches yours, except “buyer agrees to indemnify seller against a lawsuit for harm arising from the chainsaw.” Is my indemnity clause part of the contract?
No because they're not both merchants
You send a purchase order. My acceptance letter has a bunch of terms on the back, all of which matches yours, except “buyer agrees to indemnify seller against a lawsuit for harm arising from the chainsaw.” If both parties are merchants, will indemnification clause govern?
Yes, SO LONG AS the indemnification clause is NOT MATERIAL (here, it probably is material)
What about DIFFERENT terms?
Inconsistency in the courts. Some courts say "different" = addition; some say different cannot come in under 2–207(2) (thus the offeror's term applies); some say both differing terms get knocked out and icc gap fillers apply.
2–207(3) what happens if there is no real contract but the parties act as if there is?
2–207(3) there will be a contract by conduct and the ucc gap fillers will apply to all terms they didn't agree upon.
2–207(a) also applies when two parties have a contract, usually a verbal agreement upfront and a party sendsover a confirming memo with additional terms that go further than the earlieragreement. Do these terms come in?
2–207(1): "a written confirmation which is sent within areasonable time operates as an acceptance"


So if you see this fact pattern (early agreement+ written confirmation with new terms), just work through the same steps asabove for 2–207(2) – decide whether the new terms will come in. But recognizethat the new terms will very rarely come in.
Consideration
o A deal where parties are exchanging promisesthat involve a legal detriment or a benefit
I promise to pay you$1,000 if you promise not to watch the next season of “American Idol.” You donot watch the show, but I refuse to pay you the money. Consideration?
Even though "I" didn't incur a legal detriment, "you" did because you had to give up your show. Therefore, there is a bargained for consideration
2 exceptions to the requirement of consideration
(1) Gift Promises
(2) Conditional Gifts
Every year forChristmas, Mickey gives me a tacky tie, and I give her an ugly sweater. Can shesue me this year if I refuse to give her a present?
No. This is a gift
What about the Adequacy of Consideration?
A court will not need to approve of the amountof consideration or the fairness of the priceú But the pretense of consideration does notcount.
What about illusory promises?
A promisor must clearly commit to the deal orthere is no consideration
Is a satisfaction contract a real contract?
Yes. Satisfaction contracts, even though it seems like they are illusory, are real contracts.


"I promise to payMickey $500 if she paints a portrait of my family that meets my satisfaction.She says OK." Contract
You aretrying to win a race to Alcatraz when the sharks start to circle. I swing myboat over to pick you up. Grateful, you promise to pay me $500 for the rescue.Is there bargained–for consideration?
No. This is PAST CONSIDERATION.
Past consideration is NO consideration.
Is settlement of a legal claim adequate consideration or illusory?
Promising not to sue someone can count asconsideration as long as there is:


(1) an honestbelief in the validity of the claim
Contract Modification and Common Law
Preexisting duty rule= A promise to do something that you are already legally obligated to dois NOT consideration

You rent an apartmentfrom Slumlord for one year, rent is $2,000 a month. Later that year, you startrunning short on cash, and you both agree to modify the rent to $1,500 permonth. Can Slumlord sue you at the end of that month for the extra $500?YES atOld Common Law At common law, the modification contract has newconsideration.
(common law)
You rent an apartment from Slumlord for one year, rent is $2,000 a month. Later that year, you start running short on cash, and you both agree to re–rentthe apartment for another year when the rent is lowered to $1,500 per month.Can Slumlord sue you at the end of that month for the extra $500?
Exception to Modification:
He cannot sue because the modification had consideration
(common law)
You rent an apartment from Slumlord for one year, rent is $2,000 a month. Later that year, you start running short on cash. Slumlord’ssister, Slumlady, agrees to cover $500 of your monthly rent if you stay in theapartment. Is there bargained–for consideration?
Yes. Different person involved so this new deal has its own consideration.
Contract Modification and UCC
Doesn't follow common law preexisting duty rule.


A modification to a contract WILL BE BINDING even if it doesn't have consideration! So long as it was made in GOOD FAITH.
ú Mickeycontracts with Pabst to buy her weekly keg of beer for $75. Later in the week,Pabst calls back to say there is a worker shortage that week, and it can’t gether the beer unless she pays $100 so Pabst can outsource delivery. Mickey says,“OK charge what you must, I need my beer.” Is the price modification binding?
Yes the modification is binding
The modification was done in good faith
Mickey contracts withPabst to buy her weekly keg of beer for $75. Pabstknows that Mickey will do anything for her beer. On Friday morning, Pabst callsto say, “you better pay us $1,000 or we won’t deliver your keg.” Mickey says,“OK charge what you must.” Is the price modification binding?
Not binding; modification made in BAD FAITH.
4 Consideration Substitutes
(1) Promissory Estoppel
(2) Quasi–Contract (contract–implied–by–law)
(3) Moral Obligation + Subsequent Promise to Pay
(4) The Seal
Define Promissory Estoppel
Reliance that arises when one party makes a promise, and the other party relies on that promise to take some action
3 Elements to Promissory Estoppel
(1) Promise is made that would reasonably be expected to induce reliance
(2) Promisee does take detrimental action in reliance on the promise
(3) Injustice can only be avoided by enforcement of that promise
Grandpa Moneybags promises to pay hisgranddaughter Katie $100,000 next month so that she doesn't have to workanymore. Katie quits her job. Is this bargained–for consideration?
No.
HOWEVER, grandpa will have to keep his promise under the reliance theory
What one thing doesn't need to prove detrimental reliance when pursuing a reliance theory?
Charities
They don't need to prove detrimental reliance when trying to collect on a charitable–gift promise (If X makes a pledge to donate, they just have to show that he did; they do not have to show that they relied to their detriment).
Define Quasi–Contract (contract implied–in–law)
Situation in which you would have made acontract if you could have, but you couldn’t.


Look for:A situation in which one party conferred a benefit on another party, and itwould be fair to pay for that benefit.
Elements of a Quasi–Contract
(1) Plaintiff confers a benefit on the defendant (2) Plaintiff reasonably expected to get paid(they weren’t just being nice)
(3) It would be unfair to let the defendant keepthe benefit without paying (look for an opportunity to decline or a good reasonwhy there was no opportunity to decline)
I am teaching away for this bar review course,when I suddenly grab my chest and keel over with a heart attack. A studentrushes out to hire a doctor, who saves my life. Later, that student asks me topay her back for the doctor's fee.Must I?
YES—it’s reasonable to expect to get paid backfor the doctor’s fee that she’d didn’t have to incur for saving the teacher andthe teacher was unconscious so he couldn’t make a contractú This is different than above past consideration
In what way can Quasi–Contracts be limited?
Sometimes limited to the Fair Market Value of the benefit conferred by the Plaintiff


(Whenever you see a situation that doesn’tsatisfy the normal requirements for a contract but still strikes you as unfair,ask whether quasi–contract might apply)
Example of Moral Obligation + Subsequent Promise to Pay? (followed by only a few jurisdictions)
You are trying to win a race to Alcatraz, whenthe sharks start to circle. I swing my boat over to pick you up. Grateful, youpromise to pay me $500 for the rescue.


Is therebargained–for consideration? NO. This is past consideration which is noconsideration at all.


Might I argue moral obligation plus subsequentpromise? Yes under this exception; but this is a theory followed by only afew jurisdictions.
What is the purpose of a seal as a consideration substitute?
USED TO be the standard for legally a bindingcontract, but is NOT REALLY a standard anymore…don’t be tricked if you see thisas an alternative theory


(This is dead–letter law followed only by a few jurisdictions)
7 Types of Defenses to a Contract
(1) Misunderstanding
(2) Incapacity
(3) Mistake
(4) Fraud
(5) Duress
(6) Illegality
(7) Unconscionability
Misunderstanding occurs when...
each party is saying the same thing but attaching a different meaning to it
To prove Misunderstanding, you must show:
(1) parties used a material term that is reasonably open to 2+ interpretations
(2) each side, does in fact, attach a different meaning to that term
(3) NEITHER party knows about (or should know about) the confusion
I verbally contract to sell you a bike for"twelve fifty." You think I'm trying to unload the bike by selling itfor $12.50. I think you recognize that this is a rare edition bike and you arewilling to pay $1,250. Do we have a contract?
no
I verbally contract to sell you a bike for"twelve fifty." You think I'm trying to unload the bike by selling itfor $12.50. I know that you would never pay $1,250 for thebike and that you must think the price is $12.50. Is there a contract?
Yes. I know that you think it’d only be $12.50 so Ican’t assert this defense and try to charge you $1,250
Define Incapacity
Situation where one side may not have thecapacity to enter into that exchange
3 types of people who lack capacity to make a contract
(1) Minors under 18 (most protection)
(2) Mental Illness
(3) Very Intoxicated (least protection)
2 standards of Mental Illness
(1) Mentally Ill + You Don't Understand the Consequences of your Actions (irrespective of if the other side knows)


OR


(2) You cannot act in a reasonable manner in relation to the transaction (although you may know you're entering into some sort of agreement) + The other side knows this
Intoxication
So intoxicated that you don’t know the natureand consequences of your action
What happens if you make a contract with one lacking capacity?
VOIDABLE contract
What happens when a contract is entered into with an incapacitated person?
If the contract involves a NECESSITY, the incapacitated person must pay the bare cost
(food, clothing, shelter)
Can contracts with an incapacitated person be ratified?
A party without capacity can ratify the deal by keeping the benefits ofthe contract after maturity is obtained.
Amelia is 32 and takes LSD prior to buyingthe plane. She has no idea what she is doing, but witnesses say she seemedperfectly lucid while negotiating and buying the plane. Can Amelia get hermoney back?
No.
This is not a maturity issue of age.


Because this is intoxication that matters whatthe other party thinks! She looked and acted normal so she cannot get out ofthe contract.
Define Mistake
A belief that is not in accord with a presentfact
2 types of mistakes
(1) Mutual
(2) Unilateral
Define Mutual Mistake
Both parties are contracting about somethingthey’re mistaken about
To make out a defense of Mutual Mistake (to void a contract):
(1) there is a mistake of FACT existing at thetime the agreement was made


(2) must relate to the basic assumption of thecontract that has a material impact on the contract


(3) the adversely impacted party must not haveassumed the risk of the mistake
Define Unilateral Mistake
One party is fundamentally affected by themistake and the other party is unaffected
Statute of Frauds is a contract law defense where one party is....
trying to argue that the contract they entered into doesn't meet the SOF and isn't legally binding


**Big area of testing
Goal of SOF is to prevent...
false assertions about a contract that was never really created
Ask 2 questions:
(1) Does the SOF apply to this transaction?
(2) If SOF does apply, has the SOF been satisfied?
Types of Contracts the SOF applies to:
(1) K made in consideration of Marriage
(2) Suretyship guaranteeing the debt of another
(3) One Year from the date of signing, can the WHOLE THING cannot happen within 1 year
(4) UCC Goods of $500+
(5) Transfer Interest in Land
Mickey buys beer on credit from Pabst, promisingto pay $499 at the end of the month for her five kegs. Pabst sues her at themonth for failure to pay. Are we in Statute of Frauds world?
No. Therefore, the oral argument is binding
Mickey buys beer on credit from Pabst, promising to pay $499 at the end of the month for her five kegs. Pabst sues me claiming that I had offered to pay Mickey's bill if she could not. SOF apply?
Yes
This is Suretyship Agreement


Therefore, there needs to be a writing for it to be legally binding
What is the "Main Purpose Exception"?
If the main purpose in agreeing to pay the debtof another is for the surety's own economic advantage, then we are not inStatute of Frauds world.
(Interpreted vary narrowly)
Mickey buys beer on credit from Pabst, promisingto pay $499 at the end of the month for her five kegs. Pabst sells beer to Mickey that she brings overto my house for weekly parties. Pabst sues me, claiming that I had offered topay Mickey's bill if she could not. SOF apply?
NO–this is the MAIN PURPOSE EXCEPTION
SOF does NOT apply; does NOT need writing to be enforceable.
Iverbally contract with the mayor of Charlottesville to build an exact replicaof the Egyptian pyramids at the edge of town for $50 billion. SOF?
NO
May be difficult, but not impossible to complete the K within a year if you had unlimited resources. (…which soundscrazy, but it has to literally be impossible).
I verbally contract with the mayor ofCharlottesville to manage all city elections through 2020 for $50 per election. SOF?
Yes
K is specifically written to go through 2020. By its very terms it lasts longer than 1 yr
I contract on April 1 to hire a 1L student as myRA for three months during her 2L summer. Are we in Statute of Frauds world?
YES


The length of the employment is only threemonths, but it won't even start untilover one year from now.


Thus, this contract cannot happen for over a yearfrom the date of the contract being signed!!!


^BAR QUESTION


From the date of signing, can the WHOLETHING happen within 1 year? NO
William Shatner hires me to teach him contractlaw for the rest of his life. SOF?
NO
It's possible he can die within 1 year!
Shatner hires Spock to build a house onShatner's Enterprise Acre estate. SOF?
NO
It involves land but does not transfer an interest in land.
Shatner agrees to sell Enterprise Acre to Spockfor $499. SOF?
Yes
Transfer of Land (regardless of price)
Mickey verbally contracts with Pabst to buyexactly $500 in beer. SOF?
Yes
$500 or more puts us under the UCC part of theSOF.
Indetermining whether a contract is subject to the Statute of Frauds under theone–year rule, what is taken into consideration?
Whether the terms of the contract make itimpossible for performance to be completed within one year from the date onwhich the contract was entered into
Which ofthe following contracts is subject to the Statute of Frauds as a real estatecontract?


A. A contract to build a skyscraper for $1billion

B. A contract to buy a tiny sliver of land for$450


C. A contract entered into between a couple whoplan to marry and a builder to construct their residence for $300,000


D. A contract to serve as a caretaker of a farm
B
Two ways to satisfy Statute of Frauds
(1) Full Performance
(2) Writing
Shatner verbally agrees to hire Spock to build ahouse on Enterprise Acre estate. In exchange, Shatner will provide "charmlessons" to Spock for the next three years. Is this contract in Statute of Frauds world?
Yes
Doesn’t involve sale of property; doesn’t say ifthe goods cost $500+. BUT Shatner promises to provide charm lessons forthe next 3 years which makes this >1 year!!!
Shatner verbally agrees to hire Spock to build a house on Enterprise Acre estate. In exchange, Shatner will provide "charm lessons" to Spock for the next three years. o Spock builds the house, but Shatner refuses toprovide the lessons, asserting a Statute of Frauds defense. Is Shatner right?
NO
Spock has SATISFIED the SOF with this FULLPERFORMANCE


This fell within the SOF by full performanceof a services contract and Shatner cannot try to use the SOF as adefense
Can PART PERFORMANCE of a services contract satisfy the SOF?
NO
What elements are needed for a WRITING to satisfy the SOF?
Writing:
(1) indicates that a K was made
(2) identifies the parties
(3) contains any other essential elements
(4) signed by party against whom K is asserted


NOTE: do not need both signatures on the writing
NOTE: Writing does not have to be formal
What is the special rule involving Real Estate and the SOF?
Realestate deals are like other service deals in that a signed writing will satisfythe Statute of Frauds.


But, unlike other service deals, partperformance of a real estate contract can satisfy the Statute of Frauds if any 2 of the following 3 elements are met:
(1) Possession
(2) Payment
(3) Improvements to the land
Spock claims that Shatner agreed to sellEnterprise Acre for $5 million. There is no signed writing, but Spock nowpossesses the land and has erected a nice house on the lake. Is the K in the SOF world?
YES––this is a Transfer of Interest in Real Estate


SOF is satisfied: (1) in possession + (2) improvement to the land
Under the UCC, a signed writing will satisfy the SOF if:
(1) there is no need to mention price
(2) writing must mention QUANTITY of Goods sold
Mickey verbally contracts with Pabst to buy 100kegs of beer for $75 each. Later, Pabst sends her a signed confirmation orderstating that the parties agree to contract for 50 kegs of beer (no price islisted). Even later, Pabst asserts a Statute of Frauds defense and refuses tosell Mickey any beer. Can Mickey satisfy the SOF?
Yes, but only for 50 kegs
Does Part Performance on a goods contract satisfy the SOF?
Yes, but only for the quantity delivered or accepted
Mickey verbally contracts with Pabst to buy 100kegs of beer for $75 each. Mickey changes her mind and decides to ordersome kegs of Fat Tire beer. Later, Pabst delivers 25 kegs to Mickey, and she eagerlystores the kegs in her basement. Can Pabst satisfy the SOF?
Is Mickey obligated to buy the other 75 kegs from Pabst?
Yes, but only for the 25 kegs delivered and accepted


No, the Statute of Frauds will bar that claim. If Pabst sues Mickey trying to get her to buythe other 75 kegs, she can assert the SOF as a defense and Pabst will lose
Rule on Custom–Made/Specially Manufactured Goods and the SOF?
Custom–Made/Specially Manufactured Goods are EXEMPTED from SOF


A maker of custom–made goods can satisfy the SOFas soon as it makes a substantial beginning toward the manufacturing ofthe goods
I contract verbally with Brooks Brothers to buy100 white dress shirts with "GSG" monogrammed on the pocket for$10,000. Brooks Brothers sends me the shirts, but I change my mind and send theshirts back.


Can Iassert a Statute of Frauds defense if Brooks Brothers sues for the $10,000?
No, the custom–goods exception applies. ·

Brookes Brothers will argue the Custom–GoodsException to the SOF exists and thus, a writing was not required and I cannotuse the SOF as a defense.
Note: A judicial admission, such as a statement in apleading or during testimony, satisfies the Statute of Frauds under the UCC.

.
Note: The failure to object to a confirming memowithin 10 days will satisfy the Statute of Frauds—but only if BOTH PARTIES are Merchants!

.
Mickey verbally contracts with Pabst Blue Ribbonto buy 100 kegs of beer for $7,500. Later, Pabst sends her a signedconfirmation memo with all of the material terms. Mickey has changed her mind,crumples up the memo, and throws it in the corner. Ten dayslater, does Pabst satisfy the Statute of Frauds?
No–Mickey is Not a Merchant
Whole Foods verbally contracts with Pabst Blue Ribbon to buy 100 kegs of beer for $7,500. Later, Pabst sends her a signed confirmation memo with all of the material terms. Whole Foods changed its mind, the manager crumples up the memo, and throws it in the corner. Ten days later, does Pabst satisfy the Statute of Frauds?
Yes–even though there is no signed writing by Whole Foods, they are BOTH merchants.
The failure to object to a confirming memo within 10 days will satisfy the SOF and Pabst can use this rule to get paid.
Define Equal Dignity Rule
You need a signed writing to authorize an agentto form a contract that is in the SOF world.

Example: If you’re a company and you want to an authorizeone of your agents to enter into a contract, if that contract would fall intothe SOF, you have to authorize that agent to enter into a SOF contract by awriting
Suppose you have a deal that is in the SOFworlds, and the SOF requirements ARE MET. Now the parties want to modify that deal. The modification does not automatically satisfy the SOF.


Must ask whether the deal with the alleged modification would be within the SOF:
If so, _________
If not, __________
If the modification would fall within the SOF, the SOF requirements must be met.


If the modification would not fall within the SOF, there is NO statute of frauds requirement, even though initial deal was in the SOF world.
Mickey contracts with Pabst to buy five kegs ofbeer for $500.[sof applies] Later, Pabst sends her a signed confirmation memowith all material terms. Mickey alleges that they later modified the deal tothree kegs only for $300. [modification.]


Does she need to supply written proof of this alleged modification?
Therefore the modification is not within the SOF world.
Parol Evidence determines what the agreement entails (the scope of the agreement). What do you look for to determine if PAROL EVIDENCE applies?
To determine if you need to use PAROL EVIDENCE, look for:


(1) Written contract (that the court finds is an earlier agreement)
GATEWAY QUESTION OF PAROL EVIDENCE:
Have the parties created an integrated writing?


FULLY integratedmeans that the contract expresses all terms of the agreement.


PARTIALLYintegrated means that there is a writing and final writing, but someterms are not included.


NOT ATALL integrated not the final writing
How doyou distinguish an agreement that is not integrated from one that is completelyor partially integrated?
Look for whether the contract contains a MERGER CLAUSE (this evidences a complete integration)
Disney signs a contract with Hugh Grant to makea movie for $2 million. It contains the following language right above thesignature line: "This is the entire agreement between the parties. Norepresentations or promises have been made save for those set out in thismemorandum." Hugh later argues that Disney had verbally promised toprovide a free house in Beverly Hills while he was filming, and they did not. Can he introducethis evidence?
No, because this merger clause evidences a fullyintegrated contract
Disney signs a contract with Hugh Grant to make a movie for $2 million. It contains the following language right above the signature line: "This is the entire agreement between the parties. No representations or promises have been made save for those set out in this memorandum." § Hugh argues that during the meeting but afterthe written contract was signed, they verbally agreed that $2 million was notenough and that he would get $3 million. Disney later sent a check for $2million. Can Hughe introduce evidence that Disney promised to pay Hugh $3 million?
YES because this later verbal agreement was amodification and the Parol Evidence Rule does not apply.
Courts may also ask whether, under thecircumstances, an extrinsic term of the agreement would "naturally beomitted" from the writing.
If so . . .
it may not violate the parol evidence rule and can be introduced as evidence if it does not contradict the writing.
UCC Partial Integration Rule

.
The parol evidence rule does not bar evidence relevant to a defense against contractformation. This means you can use PAROL EVIDENCE to show:
duress, mistake, fraud
Even if a writing is totally integrated, a partycan introduce evidence of...
a SECOND, SEPARATE deal with separate consideration.
Even if a writing is totally integrated, a partymight be able to introduce evidence of a priorcommunication that is designed to
interpret an ambiguous term in the final agreement.
Determine whether the Bar is asking a PAROL EVIDENCE question or STATUTE OF FRAUDS question:


If the question does not have a signed writing,think ________________
If the question does have a signed writing,along with an earlier discussion of the deal, think __________________
If the question does not have a signed writing, think STATUTE OF FRAUDS


If the question does have a signed writing, along with an earlier discussion of the deal, think PAROL EVIDENCE RULE
To whichof the following situations does the parol evidence rule most likely apply?A. Aparty seeks to introduce evidence about a subsequent agreement.B. Aparty seeks to introduce the other party’s oral assertion made during thenegotiations of the agreement as evidence of mistake.C. Aparty seeks to introduce evidence of a written statement made before thewritten contract was entered into that directly contradicts a provision in thatcontract.D. Aparty seeks to introduce evidence of a second, separate deal.
C
Warranty =
A promise about a term of thecontract that explicitly shifts risk to the party making the promise.
I agree to sell you my Jeep for $5,000, but wedon't discuss any other term. If the wheel falls off as you drive away. Can youget out of the deal?
It's uncertain. The buyer would need to arguemistake, duty to disclose, etc. (this is why warranties are good. You wouldn’thave to try to argue breach in duty, etc.)
I agree to sell you my Jeep for $5,000. Iinclude a warranty that the Jeep will run fine for the next 1,000 miles. Can you get out of the contract?
You can get out of the deal
I might sell the Jeep on an "as is"basis. What does this mean?
I've disclaimed all warranties. The risk shifted to the BUYER to assume the risk
Three types of Warranties that arise in the UCC?
1. Express
2. Implied Warranty of Merchantability
3. Implied Warranty of Fitness for a Particular Purpose
Define Express Warranty
A promise that affirms or describes the goodsand that itself is part of the basis of the bargain is an express warrantyunless it is merely the seller's opinion.
Define Implied Warranty of Merchantability
This warranty is triggered only when the seller is a merchant dealing in the goods at issue. The merchant makes animplied warranty (unless disclaimed) that the goods are fit for ordinary commercial purposes


NOTE: If merchant is selling something that he doesnot typically sell (ex. car salesman selling fridge), THIS WARRANTY DOES NOTAPPLY.
Define Implied Warranty of Fitness for a ParticularPurpose
Triggered when a buyer relies on a seller'sexpertise to select a special type of good that will be used for a specialpurpose.
How can the Implied Warranty of Merchantability be disclaimed?

.
How can the Implied Warranty of Fitness for a Particular Purpose be disclaimed?

.
What is a "Condition?"
Another way to shift risk by stating that oneparty’s contractual obligations will kick in only if some future event takesplace
Like warranties, conditions can be express orimplied. By far, the most impliedcondition is something called the _________________.
"constructive condition of exchange."
What is the Constructive Condition of Exchange?

.
Express Conditions
= condition created by language in the contract
What words trigger an Express Conditions?
only if,” “provided that,” “on the conditionthat,” “only in the event that,” etc.
Express conditions must be satisfied _______ , unless the condition is somehow excused.
COMPLETELY
§ Mark contracts to work for The Egg House for 10weeks building a new henhouse for the chickens. The parties agree that Markwill get $10,000 for building the house, along with a bonus of $5,000 awardedon the condition that he shows up every day for work. Mark finishes thehenhouse, but he doesn't come to work for the last two days in week 10 becausehe is really sick. Can Markcollect the $5,000 bonus?
No
There are 2 WAYS TO SATISFY AN EXPRESS CONDITION:
(1) Objective Approach (preferred)


(2) Subjective Approach
What is the Objective Approach?
Use an objectivestandard of satisfaction.


If most reasonable people would be satisfied,then the condition is met.
What is the Subjective Approach?
Contracts involving aesthetic taste, such as artor tutoring services.


But note,the party can still breach if they claim dissatisfaction in bad faith.

I promise to pay Mickey $5,000 if she paints aportrait of my family, if the painting meets with my satisfaction. She says OK.After she is finished, the portrait is revealed, and all of the art criticsrave over the masterpiece and LOVE it! But I hate it. Must I pay Mickey the $5,000?
No, so long as your subjective approach is notmade with bad faith.


Objectively,it meets the art critics’ satisfaction, but subjectively it doesn’t meet yours.
A party receiving the protection of Conditions, may waive it by...
words or conduct.
You agree to buy my Jeep for $5,000 on theexpress condition that you can get a car loan for this amount at an interestrate of 10% or less. You can only get a loan for 12%, but you still want to buythe Jeep. § If youwaive the financing condition, must I sell you the Jeep?
Yes
You agree to buy my Jeep for $5,000 on theexpress condition that you can get a car loan for this amount at an interestrate of 10% or less. Notwithstandingthe fact that you couldn’t get that 10% loan, I tell you, "I’m gonna go ahead an waive thefinancing condition and you have to buy my jeep at 12%?”
No.
A condition is meant to protect the BUYER. Thus, only the buyer can waive a conditionthat would protect him.
A condition will also be waived if the otherparty wrongfully interferes or hindersthe occurrence of the condition. This will be judged by what standard?
Good Faith Standard
Regardingthe waiver of an express condition, which of the following statements is FALSE?



A. Anexpress condition can be waived only by express language




B. Aparty may waive an express condition by hindering its occurrence.




C. Aparty may waive an express condition by wrongfully interfering with its occurrence.




D. Whenthe occurrence of an express condition depends on the actions of a party, theactions undertaken by the party are judged by a good-faith standard.



A
Regardingan express condition in a contract, which of the following statements is TRUE?



A.Under the preferred approach, the satisfaction of an express condition isjudged by a subjective standard.




B.An express condition in a contract involving aesthetic taste is judged by anobjective standard.




C.An express condition must be strictly satisfied.




D.An express condition in a contract involving aesthetic taste cannot bebreached.



C
Regardingthe implied warranty of fitness for a particular purpose, which of thefollowing is FALSE?



A. The buyer must intend to use the goods for a special purpose.




B. The buyer must rely on the seller’s expertise in selecting the goods.




C. This warranty can be disclaimed.




D.The seller must be a merchant.



D
The Constructive Condition of Exchange means....
One party's performance is conditioned on the other side's performance. If you don't substantially perform your side of the contract, I don't have to pay you.
Under the Common Law, was the contract adequately performed?


Shaquille O'Neal hires me to build him a house.I build the doorways all at standard height (6'6") instead of the 8'listed in the contract. Shaquille is mad because he must duck to get from roomto room.
No. This is a MATERIAL BREACH and thus, not substantial performance.
Under Common Law, if something is substantially performed, the constructive condition of exchange is satisfied. However, if something is WILLFULLY Substantially Performed...
it will not satisfy the Constructive Condition of Exchange
I hire you to build the Geis Towers, a 150–storybuilding in Charlottesville, Virginia, for $100 billion. When you finish, Iconduct the final walkthrough and notice that the lobby walls are made of babyblue marble from North Carolina, not dark blue marble from Virginia, as calledfor in the contract specs.


Can Iavoid paying you the $100 billion?
No, as long as it wasn’t willful, it’ssubstantially completed§ Assuming the breach was innocent, the CCE hasbeen satisfied.
I hire you to build the Geis Towers, a 150–story building in Charlottesville, Virginia, for $100 billion. Our contract includes the following condition: "Geis's payment obligation under this contract is expressly conditioned onthe use of Virginia marble in the lobby."When you finish, I conduct the final walkthrough and notice that the lobby walls are made of baby blue marble from North Carolina, not dark blue marble from Virginia, as called for in the contract specs. Must Ipay the $100 billion?
Probably not. This is an express condition, not a constructivecondition, so it needed to meet your EXACT specifications.
Ifpayment needs to be made because the other party substantially performed, (because there is only a minor problem)the nonbreaching party CAN recover....
damages for the deficiency


Typically measured as the cost to complete the performance.


But, sometimes damages will be limited to the diminution in market value.
A breaching party who fails to satisfy the CCEdue to a material breach . . .
will not get paid under the contract, butmaybe under quasi–contract




NOTE: A breaching party who fails to satisfy an express condition will usually NOTGET PAID, even under a quasi–contract!
What about Divisibility and Material Breaches?
If a contract is clearly divisible, then it willbe broken down into mini–contracts for the purposes of determining if there hasbeen substantial performance.
Mickey contracts with Best Buy to install akegorator in each of the 20 rooms in her house for $2,000. If Best Buy onlyinstalls five kegorators before it abandons the job. Is thissubstantial performance?
No, because the contract is not divisible –Mickey is paying for the FULL job and breaking it down will not work.
Mickey contracts with Best Buy to install akegorator in each of the 20 rooms in her house. Mickey agrees to pay Best Buy $100 for each ofthe 20 kegorators. If Best Buy installs only five kegorators before it abandonsthe job, can it collect anything on the contract?
YES if the contract is divisible§ Can collect 5 × $100 = $500.



Whenevaluating substantial performance on a divisible contract, Best Buy canrecover on the mini contracts on which it has fully performed. (here, the 5completed ones)
UCC requires ______________ performance
Perfect Tender (NOT substantial performance)
Common Law requires ________


UCC requires ________________
DEFAULT RULES (unless parties otherwise explicitly agree in the contract):


COMMON LAW
= substantial performance


UCC
= Perfect tender for Single DELIVERY K's
Perfect tender has 2 main obligations:
Perfecttender has 2 main obligations:


(1) Perfect GOODS
(2) Perfect 
DELIVERY
Mickey contracts for 500 pints of Fireballwhiskey for $5,000. Fireball sends Mickey only 495 pints. Can Mickey reject all the whiskey?
YES because this is not perfect tender
When can a Buyer REVOKE acceptance of goods?
When the goods seem OK and are accepted atdelivery, but a defect is discovered within a reasonable time
Fireball delivers all 500 pints of the whiskeyin the example above, and Mickey stores the bottles in her cellar. A monthlater, she cracks a bottle to find that it is cola (not whiskey). Can she revoke acceptance?
Yes. Revoke and send them back.
If the seller fails to tender perfect goods andtime is left on the contract or the seller had reasonable grounds to believethat the buyer would accept a replacement, then the buyer must give the sellera chance to
cure the defect
3 Commonmethods of tender/delivery for goods contracts:
(1) Tenderat Seller's place of business. If the goods are tendered at the seller's placeof business, then the seller just needs to give the goods to the buyer.




(2)Shipment K = [F.O.B. Seller's place ofbusiness]




(3)Destination K = [F.O.B. Buyer's place ofbusiness]

Shipment K = [F.O.B. Seller's place of business]
Seller must take three actions to satisfyperfect delivery requirement:


(1) Getthe goods to a common carrier


+
(2) Makearrangements for delivery 


+
(3) notifythe buyer. 

Destination K = [F.O.B. Buyer's place of business]
(1) Sellermust get the goods to the BUYER’S business


+


(2) notifythe buyer. 

How do you know something is a Destination K?
F.O.B. Buyer's place of business
How do you know something is a Shipment K?
F.O.B. Seller's place of business
I contract with Brooks Brothers (located in NewYork) to buy "100 white dress shirts for $10,000 F.O.B.Charlottesville." Has Brooks satisfied its delivery obligation when itgives the shirts to FedEx and sends me an e–mail saying that they are coming?
NO because "F.O.B. Charlottesville"(where the buyer lives) makes this a destination contract. This would be okay for a shipment contract, but not a destination.
You can recognize a risk of loss problem whenthere ...
is a GOODS contract followed by DAMAGE OR DESTRUCTION OF THE GOODS before the buyer receives them.
To determine who bears the loss in a Risk of Loss Problem, go through these steps:
(1) Checkwhether the parties have already dealt with the risk problem in the contract.

(2) IfSO, their agreement will control. 
(easy)


(2) IfNOT, ask whether either party has breached (typically another part of the contract).


(3) Ifso, that breaching party bears the risk of loss. This true even if the breachis totally unrelated to the deliverydamage. If there has been a breach, the breaching party is liable for the risk floss.


(3) Ifthere is no breach, and the goods are being shipped, then ask what type ofdelivery contract it was:



4) Ifit was a SHIPMENT contract, then the risk of loss during delivery rests withthe SELLER(4) Ifit was a DESTINATION contract, then the risk of loss during delivery rests withthe BUYERIn all other cases, ask whether the seller is merchant:




(5) Ifso, the risk of loss stays with the seller until the BUYER RECEIVES the goods.(5) Ifnot, the risk of loss moves to the buyer when the seller TENDERS the goods.

I contract with Brooks Brothers to buy "100white dress shirts for $10,000." Brooks calls to tell me that the shirtsare ready, and I can pick them up at the store when I like. That night, thestore burns down, and my shirts are destroyed. DoI have to pay for them?
NO


First, we know this is a risk of loss problembecause the goods were destroyed after the contract was formed


In this risk of loss problem, you can tick offapplication of all but the last step in analysis. Seller is a merchant.Therefore the risk of loss stays with the seller.
Professor Geis contracts with the law–schoolbookstore to sell 10 used copies of his book for $10 each. He tells thebookstore manager that he has left the books outside his office, so she can getthem whenever. That night, a pack of law–review editors steals and burns all ofthe books.


Does thebookstore have to pay for them?
First, we know this is a risk of loss problembecause the goods were destroyed after the contract was formed§ Bookstore must pay Professor Geis. (Again, youcan tick off all but the last step in analysis. Because Professor Geis is not amerchant, the risk of loss moves to the buyer and the bookstore has to pay forthe books.)
Exam Tip:If you get a risk of loss problem (a goods contract followed by damage ordestruction of the goods before the buyer receives them) go through the fourpart analysis until you get an answer.

.
Regardingthe "perfect tender" rule, which of the following is FALSE?



A. A seller who has not made a perfecttender of the goods has a chance to cure the tender if there is time left onthe contract.




B. The perfect tender rule does not applyto an installment contract.




C. If the seller tendered nonconforminggoods under a reasonable understanding that the buyer would accept thereplacement goods, the buyer must allow for cure of the defective tender.




D. Once a buyer has accepted thegoods, the buyer cannot revoke his acceptance and return the goods.



D
Which ofthe following is TRUE with regard to the risk of loss in a sale of goods contract?



A. The breaching party does not bear therisk of loss when the breach is totally unrelated to the delivery of the goods.




B. When neither party has breached adestination contract, the risk of loss during delivery rests with the buyer,absent a contrary contract provision.




C. The parties may allocate therisk of loss by agreement.




D. If there is no breach ofcontract for the sale of goods, and the goods are being shipped under ashipment contract, the risk of loss during delivery rests with the seller,absent a contrary contract provision.

C