Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
80 Cards in this Set
- Front
- Back
|
Oral agreement in consideration of marriage
|
Unenforceable
- Statute of Frauds |
|
|
Remedy after rejection of goods for non-conformity
|
Refund
Return Damages - If seller refuses return request, then buyer may sell the goods and claim damages. |
|
|
Buyer of goods is insolvent upon delivery
|
Seller may refuse to deliver except for cash, including payment of all goods previously delivered under contract
|
|
|
Mistake as a ground for K rescission
|
- Mistake is mutual
- Mistake is a basic assumption of the contract (materiality) - Mistake materially affects the agreed-upon exchange - The party seeking avoidance did not assume the risks. [Mistake as to price is not material] |
|
|
Remedy for buyer of goods if buyer accepts the nonconformity goods
|
Damages equal to the difference of:
- Expected value - Actual value (Market values) |
|
|
General contractor relies on the sub-contractor's bid (2 effects)
|
- Option contract under Restatement 87 (acceptance by General Contracter through placing bid based on the sub-contractor's bid)
- Irrevocable offer by subcontractor for the subject matter even if there is no consideration (foreseeable reliance) |
|
|
Good faith oral moification by merchants for sale of goods, which violates the Statute of Fraud, has 2 effects
|
- The modification is not enforceable
- The modification constitutes a waiver by the detrimented party; if a party relies on the waiver (e.g. incurred costs based on the increased price), the waiver may not be retracted. |
|
|
Contract remedy
|
- Contract
- Restitution (for unjust benefit) |
|
|
Offer
|
- Manifestation of intent to be bound
- Requirement contract valid under UCC - No price: implies reasonable price - Advertisement is not offer |
|
|
Unilateral contract
|
Offer specifies acceptance by performance only (awards, competition, etc)
|
|
|
Bilateral contract
|
Offer allows flexible acceptance
|
|
|
Offer termination
|
- Lapse of time
* Contract specified time * Reasonable time - Revocation - Rejection - Death of party for revocable offer |
|
|
Revocation of offer
|
- Express or implied:
* Acts showing intent to revoke * Known to offeree - Revocation effective upon arrival - Offer must be revocable Irrevocable: - Option contract - Foreseeable reliance - Partial performance - Firm offer under UCC |
|
|
Option contract
|
- Promise to keep offer open
- Requires consideration under Common Law - NY: signed writing enforceable |
|
|
Partial performance (irrevocable offer)
|
Bilateral contract:
- Partial performance is acceptance - MBE: also promise to complete Unilateral contract - Complete performance is acceptance - MBE: partial performance irrevocable - MBE: offeree may walk away - NY: revocable until completion |
|
|
Firm offer under UCC
|
- Promises to keep offer open
- In signed writing - Made by merchant - Specified time/reasonable time - No more than 3 months |
|
|
Rejection of offer
|
- Counter offer: rejection
- Conditional acceptance: rejection - C/L: mirror image rule - UCC 2: difference is acceptance UCC altered terms included: * Between merchant * Not material terms * Not objected within reasonable time - Industry custom is not material |
|
|
Acceptance
|
Bilateral contract:
- reasonable way - starting performance * also with promise to complete Unilateral contract: - complete performance Improper performance: - Acceptance and breach - UCC: if accommodating, no acceptance Offer may specify method of acceptance * But not single-handedly make silence so Timing: mailbox rule |
|
|
Mailbox rule of acceptance
|
Acceptance effective upon mailing.
Exception: - Offer is irrevocable (by arrival). - Offer specifies differently. - Rejection sent first (by arrival). - If rejection sent second but arrives first, and offeror relies, then rejected. |
|
|
Defenses to formation of contract
|
- Ambiguity
- Mutual mistake - Public policy - Unconscionability - Material undisclosure/misrepresentation |
|
|
Defenses to enforcement of contract
|
- Lack of capacity
- Duress (economic duress) - No consideration - Statute of fraud |
|
|
Incapacity defense to contract
|
- Infant, insane, intoxciation
- May disaffirm after gaining/regaining ability - Accepted benefits after ability: estoppel - Liable for necessary items for restitution (fair value) |
|
|
Economic duress defense to contract
|
- Generally not good defense
Elements: - Preexisting contract - Current emergency - Threat to breach unless additional K |
|
|
Consideration defense to contract
|
Consideration:
- benefit/detriment - bargained-for - Adequacy irrelevant (unless illusory) Issues: - Past consideration - Modification - Discharge of debt - Promissory estoppel |
|
|
Past consideration
|
- MBE: not good
- NY: in signed writing, provable: good |
|
|
Modification consideration
|
- C/L: new consideration required
- NY: signed writing is good UCC 2 enforceable without consideration: - Good faith modification - Between merchants |
|
|
Discharge of debt: consideration
|
Discharge of past due, undisputed debt: no consideration.
Discharge of not due, or disputed debt: consideration. NY: in signed writing: good. |
|
|
Assumption of time-barred debt
|
- Enforceable without consideration
|
|
|
Promissory estoppel
|
Even without consideration, a promise is enforceable if:
- Promisor reasonably foresees to induce detrimental reliance - Promisee relied |
|
|
Ambiguity for Formation of Contract
|
- 2 parties said same thing but meant different things: no contract.
- 1 party knows ambiguity: the other party's meaning controls. |
|
|
Mutual mistake for formation of contract
|
- 2 parties both thought Fact A
- Turn out to be Fact B - Fact A is the basic assumption of K - Not about the price |
|
|
Unilateral mistake of contract
|
K is still valid:
- One party mistake - The other party does not - No fraud or misrepresentation |
|
|
Undisclosure or misrepresentation re Contract
|
- Contract is void
- No need to have fault - Innocent non-disclosure is sufficient |
|
|
Public Policy (non-compete)
|
- No non-compete for lawyers, except
* Sale of business * Conditional retirement benefit - Reasonable in duration and scope - Reasonable in person to be bound |
|
|
Unconscionability for contract
|
- Substantive unconscionability
- Procedural unconscionability - 'Shock the conscience' |
|
|
Statute of fraud: list of situations
|
- Real estate
- Performance > 1y - UCC 2: $500 or more - UCC 2A: $1,000 or more - Suretyship - Modification - NY mics |
|
|
Statute of fraud: real estate
|
Land contract within statute of fraud
Requires: - Consideration - Description of land - Signed by transferor - Lease agreement > 1y is SOF - Deed is SOF - Mortgage deed is SOF - Except partial performance doctrine |
|
|
Partial performance doctrine
|
2 of 3 suffices statute of fraud:
- Partial payment - Possession - Substantial improvement |
|
|
Statute of fraud: performance
|
- Performance not complete within 1y
- Not duration of performance - MBE: life K within 1y (not SOF) - NY: life K is beyond 1y (SOF) - Complete performance exception |
|
|
Statute of fraud: UCC 2
|
- Sale of goods $500 or more: SOF
- Requires quantity and sign Exception: - Party admission in judical proceeding - NA for partially paid/accepted goods - NA for custom-made goods - Merchant: * Between merchant * Sends confirmation * Citing agreement/quantity * No objection within 10 days |
|
|
Statute of fraud: UCC 2A
|
- Lease of personal property (not RE)
- $1,000 or more - Requires: * 'lease' * term, rent, and quantity * signed |
|
|
Statute of fraud: suretyship
|
- One is liable for other's debt
- Requires all material terms and sign - Except: primary purpose is benefit self |
|
|
Statute of fraud: modification
|
If modified agreement within SOF: modification requires SOF
- No matter the writing of current K Private SOF for modification: - C/L: not allowed - UCC 2: allowed |
|
|
Statute of fraud: NY specific
|
- Promise to pay discharged debt
- Transfer of insurance policy - Finders fee, except to: * Attorney * Auctioneer * Licensed RE broker |
|
|
Parol evidence rule
|
Writing supercedes:
- Prior/contemporaneous writing - Prior/contemporaneous oral agreement - Not affecting subsequent oral - May supplement agreement - May not supplement if merger clause - May attack validity - May show clerical error - May explain ambiguity |
|
|
Conducts to explain contract
|
- Prior course of performance
- Prior dealings between parties - Trade usage / industry custom |
|
|
Express warranty
|
- Specimen or sample
- Hard to disclaim |
|
|
Implied warranty of merchantibility
|
- UCC 2 sale of goods
- Seller is merchant - Fit for ordinary use - Not for financial lessor Disclaimed by: - Magic: 'as is' or 'with all fault' - Conspicuous disclaimer w/ 'merchantibility' |
|
|
Implied warranty of fitness for specific purpose
|
Seller knows:
- Buyer has specific purpose - Buyer relies on seller to pick - Not for financial lessor Disclaimed by: - Magic: 'as is' or 'with all fault' - Conspicuous disclaimer |
|
|
Limit in remedy (disclaimer in K)
|
- Seller may limit if conscionable
- Unconscionable if: * Consumer goods; and * Personal injury - Limit: 'Damage is limited to [number].' - Limit: 'Damage is limited to replacement.' - Warranty disclaimer: 'Not responsible for ...' |
|
|
Risk of loss (UCC 2)
|
- Contract provisions
- Breaching party Carrier shipment: - Shipment: handing to carrier - Destination: tender to buyer Non-carrier delivery: - Merchant: buyer actual possession - Non-merchant: tender to buyer - Lease of goods: lessor - Financial lease: lessee |
|
|
Risk of loss: land transfer
|
- C/L: upon signing contract
- Now/NY: transfer to buyer upon: * Taking possession * Transfer of title (closing) |
|
|
Shipment contract (risk of loss)
|
FOB. Seller address
- Delivery to common carrier - Carefully choose carrier - Get all paper for buyer to take possession |
|
|
Destination contract (risk of loss)
|
FOB. Buyer address
- Select carrier - Arrange for shipping - ROL transfer upon tender |
|
|
Performance of contract
|
Common law: substantial performance
UCC: perfect tender rule - Option to cure before deadline - Post-deadline: see prior dealing Payment: - Buyer may tender check - Seller may refuse - Buyer has reasonable time to tender cash |
|
|
Excuse for performance
|
- UCC 2: reject delivery
- Installment: substantial impairment - Common law: substantial breach - C/L: late in time not material - C/L: K may specify time essential - Impossibility - Condition not satisfied - Subsequent agreements * Recission * Modification * Accord and satisfaction * Novation - Anticipatory repudiation - Inadequate assurance |
|
|
UCC 2 rejection of goods
|
- If not perfect tender, buyer may reject
Accepted: - Express acceptance - no objection with opportunity to inspect - Revocation of acceptance if: * Latent defect * Substantial impairment of value - Remedy for rejection/revocation: * Refund * Return * Damages |
|
|
Installment contract
|
- No rejection for imperfect tender
- Rejection only if substantial impairment |
|
|
Common law breach as excuse of contract performance
|
- Substantial performance: must perform
- Material breach: excused - Divisible contract: material breach regarding each part |
|
|
Impossibility as excuse of performance
|
- Destruction of property essential for K
* Common law: excuse * UCC 2: risk of loss; earmarked goods - Death of essential persons - Governmental policy change - Primary purpose known to promisor |
|
|
Anticipatory repudiation as excuse of contract performance
|
- It equals material breach
- It may be retracted if not relied on |
|
|
Inadequate assurance as excuse of contract performance
|
- It works as anticipatory repudiation
- It equals material breach - May not demand specific assurance - May not used to reform contract |
|
|
Unsatisfactory conditions as excuse to contract performance
|
- Conditions:
* Precedent * Concurrent * Subsequent - Satisfaction condition: * Objective as default * Taste, personal service: subjective - Condition must be fully satisfied - Non-cooperative party cannot use this - Protected party may waive - Protected party may retract waiver not relied |
|
|
Recission as excuse for performance
|
- Both party partially performed
- Both party consent - No consideration if either fully performed |
|
|
Accord and satisfaction as excuse for performance
|
- Accord: future performance as satisfaction
- Performance: performed |
|
|
Novation of contract
|
Assignment and delegation with other party's consent
- Releases original party - New party has obligation |
|
|
Increase of costs of performance
|
MBE: Not good reason
NY: Depending on amount and % |
|
|
Contract remedy
|
- Specific performance
- Reclaim of delivered goods - Damages * Punitive damages not allowed * Liquidated damages * Expectation damages * Incidental damages * Consequential damages * Avoidable damages |
|
|
Contract specific performance
|
- Valid, enforceable contract
- Monetary damages inadequate - RE: inadequate - Goods: unique; proper circumstances - Service: * no specific performance * injunction proper |
|
|
Reclaim of delivered goods
|
- Usually cannot reclaim
Exceptions: - misrepresentation within 3/m of delivery - Notice after delivery: * insolvency upon delivery * demand return within 10 days |
|
|
Liquidated damages
|
C/L: valid if at time of contract:
* Difficult to assess damages * Reasonable forecast of damages * Not punitive (i.e. flexible) UCC 2: valid if 3 above * At time of contract * At time of breach |
|
|
Expectation damages
|
- C/L: difference between
* Expected value * Actual value - UCC 2: Buyer * Cover - K: good faith * market - K: bad faith * expected value - actual value if retains - UCC 2: Seller * K - resale: good faith * K - market: bad faith * Lost profit: lost volume dealer * K price: cannot resale |
|
|
Consequential damages
|
- Only reasonably foreseeable to D
|
|
|
Avoidable damages in K
|
- Damages reduced by avoidable amount
Personal service: - Same location - Same job |
|
|
Entrustment (3rd party)
|
- Owner entrusts to merchant
- Merchant deals with goods of same kind - 3rd party BFP - Owner has no claim against BFP |
|
|
Intended beneficiary
|
May not modify if vested, except:
- Contract provides modifiable - vested: beneficiary known and relied - Promisor L to intended beneficiary - Promisor has same defense - Promisor L to promisee - Promisee L to creditor beneficiary |
|
|
Delegation of K duty to 3rd party
|
- Does not require consent from promisee
- Promisee may sue: * Delegate (if for consideration) * Delegaing party - Delegation prohibited: * K prohibits delegation * K prohibits assignment * Service: rely on skill or reputation |
|
|
Assignment of rights to 3rd party
|
- No consent required
- May be gift or for consideration - No assignment if: * K prohibits assignment (damage) * K makes assignment void * Substantially changes obligor's duty - Obligor L to assignee if notified - Obligor has same defense |
|
|
Modification of assignment of K
|
Gift assignment:
- Later assignment revokes prior ones - NY: irrevocable if in signed writing Assignment for consideration: - First prevails against later assignments - Prevails against gift assignments Later assignment w/ consideration prevails: - Gets payment first - Gets judgment first |
|
|
Contract applicable law (contract)
|
- Most important part of subject matter
- Sale of Goods: UCC - Lease of Goods: UCC in NY - Other: Common law |
