Mbe K2 2007

Front 1

10 arguments K should NOT be enforced

Back 1

1) 1 is SOF!
2) Public policy as a defense to K enforcement
3) Illegality
4) Duress
5) Fraud or misrepresentation
6) Ambiguity
7) Unconscionability

Front 2

How is SOF satisfied?
Performance

Back 2

Statute of frauds satisfied by Performance or writing
1) Performance by either party. If YES, performance by either party, K is enforceable. I.e. Ludacris completes the materials. Part performance does not satisfy SOF! So party in part performance CANNOT recover under Contract Law. Instead, Quasi K theory.
2) Sale of goods
(a) If delivered. No SOF defense if goods delivered
(b) If not delivered. Yes, SOF defense if goods not delivered. I.e. suit for 1000 goods not delivered? Defense of SOF.
(c) Exception for specially manufactured. No SOF defense for specially manufactured is substantial beginning.
3) Performance and transfers of interest in real estate.
(a) Part performance satisfies SOF if full or part payment, possession and/or improvements. 2 of the 3.

Front 3

How is SOF satisfied?
Writing

Back 3

1) SIGNED Writing to satisfy SOF must contain all material terms. Signed and identifying who & what. Signed by party asserting SOF defense. Need not be a K. memo enough. Multiple writings enough.
(a) Who is making the agreement, what are they agreeing to do.

Front 4

How is SOF satisfied?
Writing under UCC

Back 4

1) Under the UCC the writing must contain the quantity of goods. Ask how many? Doesn’t require who or what.
2) Doesn’t require purchase price! But UCC Statute of Frauds only applies to K for goods equal or greater than $500.
3) If both parties merchants, and no signature by party asserting SOF (D) defense, if they failed to respond to the K, SOF is satisfied. D should have objected when the writing was sent, if there really was “fraud.”

Front 5

How is SOF satisfied?
Judicial admission of sale of goods agreement

Back 5

1) If a party admits there was a K in a judicial pleading, the SOF is satisfied.

Front 6

Authorization to enter into a K for someone else requires

Back 6

1) When does law require that a person have written authorization in order to enter K for someone else?
2) Equal dignity rule. Written authorization required for any K within the statute of frauds.

Front 7

SOF & Contract Modification

Back 7

1) Remember common law requires new consideration for K modification
2) Under SOL, does the modification need to be in writing?
(a) Look at the deal with the alleged change (the new deal) and determine whether the deal with the change would be within SOF. If so, modification must be in writing.
3) If terms of K require all modifications in writing?
1. Common law unenforceable.
2. Under UCC sale of goods, provision requiring modification in writing enforceable, unless there's waiver.

Front 8

Illegality

Back 8

1) Distinguish illegal subject matter from illegal purpose
(a) If illegal subject matter, K is unenforceable.
(b) If illegal purpose, K enforceable by party unaware of the illegal purpose.

Front 9

Public policy as a defense to K enforcement

Back 9

1) Public policy i.e. exculpatory contracts! Essay question

Front 10

Misrepresentation or fraudulent concealment as a defense to enforcement

Back 10

1) Look at communications before formation.
(a) False assertion of fact or concealment that induces the contract.
2) Distinguish torts Q from K question. If money damages, its torts. But if party seeking rescission, that’s a contracts Q.
3) For Contract, even honest, innocent misrepresentation is a basis for rescission, if concerning material fact. No torts recovery for honest mistakes. Duh!

Front 11

Duress as defense to enforcement

Back 11

1) Physical or economic duress. Economc duress involves a “bad guy” making an improper threat, i.e. threaten to breach, and a “vulnerable guy” with no reasonable alternative. I.e. buyer w no other source, seller threatens breach unless additional sweetheart deal.

Front 12

Mistake of fact as a defense to enforcement
Mutual mistake

Back 12

1) Mutual mistake of fact. I.e. fertility of the cow or genuine art. If mutual mistake of fact, no K if
(a) Both parties mistaken
(b) Basic assumption of fact
(c) Materially affects the agreed exchange
(d) Not a risk that either party bears.
2) Mistake of price doesn’t invalidate.

Front 13

Mistake of fact, unilateral mistake

Back 13

1) Usually no relief for one parties mistake, unless palpable mistake, where other party knows or should have known of the mistake. Relief to mistaken party.

Front 14

Armidillos from texas.

Back 14

1) Terms. Not disagreement about existence of K, but disagreement about terms

Front 15

Parol Evidence Rule
Analysis

Back 15

1) No E in Parol
2) Think of admissibility of evidence. Asks what evidence court can consider and the purpose that evidence can be used for. For which the evidence may be used.

Front 16

10 arguments K should NOT be enforced

Back 16

1) 1 is SOF!
2) Public policy as a defense to K enforcement
3) Illegality
4) Duress
5) Fraud or misrepresentation
6) Ambiguity
7) Unconscionability

Front 17

How is SOF satisfied?
Performance

Back 17

Statute of frauds satisfied by Performance or writing
1) Performance by either party. If YES, satisfied by either party, K is enforceable. I.e. Ludacris completes the materials. Part performance does not satisfy SOF! So party in part performance CANNOT recover under Contract Law. Instead, Quasi K theory.
2) Sale of goods
(a) If delivered. No SOF defense if goods delivered
(b) If not delivered. Yes, SOF defense if goods not delivered. I.e. suit for 1000 goods not delivered? Defense of SOF.
(c) Exception for specially manufactured. No SOF defense for specially manufactured is substantial beginning.
3) Performance and transfers of interest in real estate.
(a) Part performance satisfies SOF if full or part payment, possession and/or improvements. 2 of the 3.

Front 18

How is SOF satisfied?
Writing

Back 18

1) Writing to satisfy SOF must contain all material terms. Signed and identifying who & what. Signed by party asserting SOF defense. Need not be a K. memo enough. Multiple writings enough.
(a) Who is making the agreement, what are they agreeing to do.

Front 19

How is SOF satisfied?
Writing under UCC

Back 19

1) Under the UCC the writing must contain the quantity of goods. Ask how many? Doesn’t require who or what.
2) Doesn’t require purchase price! But UCC Statute of Frauds only applies to K for goods equal or greater than $500.
3) If both parties merchants, and no signature by party asserting SOF (D) defense if they failed to respond to the K, SOF is satisfied.. D should have objected when the writing was sent, if there really was “fraud.”

Front 20

How is SOF satisfied?
Judicial admission of sale of goods agreement

Back 20

1) If a party admits there was a K in a judicial pleading, the SOF is satisfied.

Front 21

Authorization to enter into a K for someone else requires

Back 21

1) When does law require that a person have written authorization in order to enter K for someone else?
2) Equal dignity rule. Written authorization required for any K within the statute of frauds.

Front 22

SOF & Contract Modification

Back 22

1) Remember common law requires new consideration for K modification
2) Under SOL, does the modification need to be in writing?
(a) Look at the deal with the alleged change (the new deal) and determine whether the deal with the change would be within SOF. If so, modification must be in writing.
3) If terms of K require all modifications in writing?
1. Common law unenforceable.
2. Under UCC sale of goods, provision requiring modification in writing enforceable, unless there's waiver.

Front 23

Illegality
Illegality of subject matter vs Illegality of purpose

Back 23

1) Distinguish illegal subject matter from illegal purpose
(a) If illegal subject matter, K is unenforceable.
(b) If illegal purpose, K enforceable by party unaware of the illegal purpose.

Front 24

Public policy as a defense to K enforcement

Back 24

1) Public policy i.e. exculpatory contracts! Essay question

Front 25

Misrepresentation or fraudulent concealment as a defense to enforcement

Back 25

1) Look at communications before formation.
(a) False assertion of fact or concealment that induces the contract.
2) Distinguish torts Q from K question. If money damages, its torts. But if party seeking rescission, that’s a contracts Q.
3) For Contract, even honest, innocent misrepresentation is a basis for rescission, if concerning material fact. No torts recovery for honest mistakes. Duh!

Front 26

Duress as defense to enforcement

Back 26

1) Physical or economic duress. Economc duress involves a “bad guy” making an improper threat, i.e. threaten to breach, and a “vulnerable guy” with no reasonable alternative. I.e. buyer w no other source, seller threatens breach unless additional sweetheart deal.

Front 27

Mistake of fact as a defense to enforcement
Mutual mistake

Back 27

1) Mutual mistake of fact. I.e. fertility of the cow or genuine art. If mutual mistake of fact, no K if
(a) Both parties mistaken
(b) Basic assumption of fact
(c) Materially affects the agreed exchange
(d) Not a risk that either party bears.
2) Mistake of price doesn’t invalidate.

Front 28

Mistake of fact, unilateral mistake

Back 28

1) Usually no relief for one parties mistake, unless palpable mistake, where other party knows or should have known of the mistake. Relief to mistaken party.

Front 29

Armidillos from texas.
Terms

Back 29

1) Terms. Not disagreement about existence of K, but disagreement about terms

Front 30

Parol Evidence Rule

Back 30

1) No E in Parol
2) Think of admissibility of evidence. Asks what evidence court can consider and the purpose that evidence can be used for. For which the evidence may be used.

Front 31

Admissibility of parol evidence 4 rules

Back 31

1) Words contradicting the written deal excluded. Words of a prior oral agreement inadmissible to contradict the terms of the written K.
(a) But post-contract statements not barred by Parol Rule
(b) Exception: Mistake in integregation. That’s a clerical error. Then parol evidence is admissible.
2) Getting Out of the Deal. Parol evidence is admissible for purpose of asserting a defense to the K, seeking rescission. Ask what purpose evidence is offered. If party seeking rescission, evidence of prior agreements is admissible. Not seeking reformation. Not asking court to change the deal.
3) Explaining terms in the written deal. Parol evidence admissible for purpose of interpreting terms in the written K.
4) Adding to the written deal. Evidence of early agreements for the purpose of adding terms admissible if the K is a partal integration, not a complete integration. The exam will tell you if it’s a complete integration.
Usually irrelevant whether writing is complete or partial integration. Those answers are usually wrong! Unless parol evidence offered to add terms!

Front 32

Distinguish parol evidence rule and SOF

Back 32

1) Parol evidence rule triggered by the presence of a written agreement, SOF concerns absence of a written agreement.

Front 33

Course of performance as means of interpreting terms
3 types of ourse of performance

Back 33

1) Course of performance of same people same K is most pursave for showing terms
2) Course of dealing, same people different but similar K
3) Custom and usage, different but similar people, different but similar K.

Front 34

UCC default terms in sales of goods.

Back 34

1) No place of delivery stated, default is seller’s place of business.
2) Delivery obligation of seller if delivery by common carrier. What must seller do to complete delivery obligation?
(a) If “shipment K” seller must get goods to CC, make reasonable arrangements, and notify buyer. In shipment K, seller completes delivery obligation before delivery completed.
(b) If “destination K” seller does not complete delivery obligation until goods arrive
(c) FOB. Free on Board. If FOB + seller’s city, it’s a shipment K.
3) Risk of Loss of Goods, UCC default term.
(a) Where K formed, but goods damaged or destroyed before buyer receives goods and nobody’s at fault.

Front 35

Risk of Loss of Goods, UCC default term.

Back 35

Risk of Loss of Goods, UCC default term. 4 rules
1) Agreement by the parties w/r/t risk governs.
2) If breach, breaching party liable for loss even if loss unrelated to the problem.
3) If delivery by common carrier not seller, risk shifts to buyer when seller has completed delivery obligations.
4) If none of the above, agreement, breach, or common carrier, then if seller is MERCHANT, risk of loss shifts to buyer only upon receipt. Why? Because seller merchant can spread the costs. If seller not MERCHANT then buyer has risk of loss upon TENDER of the goods by the seller. TENDER is telling buyer where the goods are and how to get them.

Front 36

Terms of the K: warranties of quality

Back 36

1) Express warranty: Look for words that promise describe or state facts, or a sample or model. Distinguish from sales talk, opinion.
2) Implied warranty of merchantability
3) Implied warranty of fitness for a particular purpose.

Front 37

Implied warranty of merchantability

Back 37

1) Implied warranty of merchantability
2) If seller is merchant—but merchant limited to person in business of dealing in that type of goods
3) Implied term that the goods are fit for ordinary purpose for which such goods are used.

Front 38

Implied warranty of fitness for a particular purpose

Back 38

1) Requires buyer has a particular purpose
2) Buyer relies on seller to select suitable goods
3) Seller has reason to know of purpose and buyer’s reliance.

Front 39

Contractual limitations on warranty liability

Back 39

1) Disclaimer
(a) “there are no warranties.” Only implied warranties can be disclaimed. “as is” or “with all faults” effective to disclaim implied warranty. Need not be conspicuous.
(b) Or CONSPICUOUS language of disclaimer that mentions merchantability.
2) Limitation of remedies
(a) Does not eliminate remedy. Sets limits on recovery. Remedy for Express & Implied warranties can be limited. But express warranty can’t be eliminated.
1. Unconscionable limits are void. Unconscionable to limit warranty for personal injury caused by consumer goods. Warranty limited to replacement parts and defective consumer causes fire. Limitation enforced if not unconscionable. But if fire results in personal injury, limitation on warranty unenforeceable.

Front 40

Performance for common law K

Back 40

1) Terms of K govern performance under common law

Front 41

Performance concepts for sales of goods
6 concepts

Back 41

1) Perfect tender rule
2) Rejection of goods. Must occur before acceptance of the goods. Limited by option to cure, installment K, or acceptance.
3) Cure. Seller has a 2d chance to cure where no perfect tender.
4) Installment sales K.
5) Acceptance of the goods. If buyer accepts the goods, he cannot reject.
6) BUT revocation of acceptance!! Buyer may revoke acceptance if:
(a) Nonconformity of gds substantially impairs their value
(b) There’s excusable ignorance of grounds for revocation or reasonable reliance on seller’s assurance of satisfaction and
(c) Revocation within reasonable time after discovery of nonconformity.
(d) NOTE, buyer cannot reject the goods, but can REVOKE ACCEPTANCE.

Front 42

Remedies for unexcused nonperformance
In rem remedies—non monetary remedies.

Back 42

EXAM mostly non-monetary remedies
(a) Specific Performance. Equitable remedy so only avail if $$ damages would be inadequate. Usually, find money damages adequate.
(b) Sale of Gds Reclamation. Right of unpaid seller to get goods back. Repo Man.
(c) Right of good faith purchaser in entrustment. Property law.

Front 43

In rem remedies—non monetary remedies.
Right of good faith purchaser in entrustment. Property law.

Back 43

1) Right of good faith purchaser in entrustment. Property law.
Owner leaves gds with a person who sells goods to that kind and the person wrongfully sells the goods to 3d party. Good faith purchaser keeps. Owner takes risk that entrusting to dishonest person. Recovery for conversion. No reclaimation.

Front 44

In rem remedies—non monetary remedies.
Sale of Gds Reclamation

Back 44

1) Sale of Gds Reclamation. Right of unpaid seller to get goods back. Repo Man.
2) Reclamation Requires
(a) Insolvent buyer at receipt
(b) Timely demand for return. 10 days from receipt.
3) Buyer still has possession.

Front 45

In rem remedies—non monetary remedies.
Specific Performance

Back 45

1) Specific Performance. Equitable remedy so only avail if $$ damages would be inadequate. Usually, find money damages adequate.
(a) Exception for sale of real estate. Real estate is soo special. Unless breach by selling to bona fide purchaser. Bona fide purchasers are soo special too. NO SP.
(b) Exception to no SP rule: K for sale of unique goods. Gotta be antique, art, or custom made.
(c) No SP for services contracts. But injunctive relief avail to enjoin from working for competitor.

Front 46

Expectation defined

Back 46

1) General measure of K damages
2) Put plaintiff in same economic position as if K had been performed!

Front 47

UCC Sale of Goods: Performance
Perfect Tender Rule

Back 47

Perfect tender rule
(a) Seller must deliver perfect goods under terms of K. If not perfect, buyer has option to reject all goods.

Front 48

UCC Sale of Goods: Performance
Rejection of goods

Back 48

2) Rejection of goods. Must occur before acceptance of the goods. Limited by
(a) Cure, installment K, or acceptance.
3) Cure. Seller has a 2d chance to cure where no perfect tender.
(a) Option to cure only where seller reasonably believed it would be “okay.” I.e. if buyer accepted imperfect tender in the past. Then seller has option to cure.
(b) Option to cure if time for performance has not yet expired.

Front 49

UCC Sale of Goods: Performance
Option to Cure

Back 49

3) Cure. Seller has a 2d chance to cure where no perfect tender.
(a) Option to cure only where seller reasonably believed it would be “okay.” I.e. if buyer accepted imperfect tender in the past. Then seller has option to cure.
(b) Option to cure if time for performance has not yet expired.

Front 50

UCC Sale of Goods: Performance
Installment Sales K

Back 50

4) Installment sales K. Installment sales K where delivery in separate lots, separately accepted. If installment sales K, buyer can reject only if there is substantial impairment. I.e. 9 out of 10 on one delivery. Not substantial impairment. It’ll come out in the wash.

Front 51

UCC Sale of Goods: Performance
Acceptance of Goods

Back 51

5) Acceptance of the goods. If buyer accepts the goods, he cannot reject. But payment w/out inspection not acceptance. Retention after opportunity to inspect is IMPLIED ACCEPTANCE.