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172 Cards in this Set
- Front
- Back
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what are the 3 types of formations of contracts and details
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express - written or oral
implied - conduct implied-in-law/quasi - remendy to prevent unjust enrichment |
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what are the 2 types of contracts - ways to enter into
NOT express/implied |
unilateral contract - accepts promise with complete performance
bilateral - accepts with he's own promise |
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what are the 2 stages of performance
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executory contract - duties remain
executed contract - all duties have been performed |
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what types of transactions are governed by common law
(4 with saying) |
RISE
Real estate Insurance Services Employment |
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what types of transactions are governed by UCC
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sale of goods (movable things)
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what 3 things have to be present to have a legally enforceable contract
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OCD
offer and acceptance consideration lack of defenses |
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as a general rule - do contracts have to be in writting to be enforcable
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NO - only under Statute of Frauds
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what type of agreement has to take place for a contract to be formed
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mutual assent (offer AND acceptance)
meeting of the minds |
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what 3 things should be considered when deciding if an offer has been made
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intent
definiteness/certainty in terms communication NOT JOKING AROUND |
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are advertisements considered offers for contracts
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GR - NO, merely invitations seeking offers
EXEMPTION - specifying offerees "1st 5 customers get TV for $50" is an offer |
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what types of terms need to be agreed upon for form contract
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UCC - GR - quatity
Common law - all terms only way offer valid |
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does the other person have to have knowledge of offer to form contract
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YES - if I find dog but didn't know about reward, NOT entitled to reward
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if an offeree doesn't accept offer before it is terminated, what happens
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offeree's acceptance is a counter-offer
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what 3 ways can an offer be terminated
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revocation
rejection operation of law |
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after an offer is made, can it be revoked
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GR - YES at anytime before acceptance, even if I promise to keep it open for a time
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what 3 ways can an offer be revoked
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direct - written/oral
indirect - sold car to someone else publication - paper |
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when is a revocation of an offer effective
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when RECEIVED by offeree
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what 3 cases limit revocation of offers
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option contract when offeree GIVES CONSIDERATION
merchant's firm offer under UCC unilateral contracts - spend 80 hours already looking for lost dog (offerer must give offeree reasonable amount of time) |
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what must be present for an option contract to be irrevocable
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MUST BE CONSIDERATION
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what is a counter offer considered (2)
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BOTH
rejection (of original offer) AND an offer (new) |
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what do we have to look for when deciding if counter offer was made
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was it merely to "feel the other party out" rather than counter "would you consider $50?"
then NOT counter offer |
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when is a rejection of an offer effective
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effective when RECEIVED by offeror
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what if an offer is made and we hear nothing from offeree
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silence general = rejection within reasonable time
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what 3 things terminate an offer by operation of law
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automatically terminate
death or insanity of parties destruction of subject matter illegality (selling drugs) |
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who can accept an offer
are offers assignable |
ONLY the offeree
offers NOT assignable - however, option contracts are assignable |
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what method can be used to accept offer
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any reasonable method
UNLESS offeree specifies, then we need to do it their way |
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if offeree specifies method to accept offer and offeree uses another method - what happens
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offeree's response is viewed as counter offer
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under common law - what is an offer that is accepted with modifications to terms
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viewed as counteroffer
common law says MIRROR IMAGE |
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when are the following effective:
offer rejection revocation counteroffers acceptance |
offer - when received
rejection - when received revocation - when received counteroffers - when received acceptance - when DISPATCHED |
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what is the mail box rule
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since acceptances are effective when dispatched, as long as offeree get's the acceptance into the mail by deadline, offer is accepted REGARDLESS of when received
EXCEPTION - offeror can opt-out by stating "must be received" |
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how does mail box rule handle delayed or lost mail
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if offeror didn't opt-out, offer is accepted when mail REGARDLESS when received and how long it takes
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regarding consideration - which side (offeror or offeree) has to provide it and what amount
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BOTH parties must provide LEGALLY SUFFICIENT CONSIDERATION
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what are the 2 elements of consideration
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both parties give something of legal value (not necessarily $ value)
AND must be a bargained for exchange |
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what promises for acts are considered consideration
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acts that he was NOT already obligated to do
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does consideration have to have monetary value
do courts inquire into adequacy (fairness) does performance of existing legal duties count as consideration |
NO
NO NO |
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what is the exception to the rule that existing duties does not count as consideration
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is new duties are added, consideration given
UCC - good faith only common law - need to modify contract |
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what is the jist of bargained for exchange to create consideration
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your promise/act induced my promise/act
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is a gift enforceable
is a past or moral consideration enforceable (saving someone's life and they promise to pay you) |
GR - NO, since no consideration given
NO - you did it before you were promise - the promise did not induce you to act |
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what are the 2 exceptions to consideration being required to be enforceable
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detrimental reliance/promissary estoppel - quit job and more to FL to be with uncle and he'd buy me a house
promises to pay debts barred by statute of limitation (I wait too long to collect from Chad but Chad wants to do business with me to he writes and said he'll pay 1/2 - enforceable for 1/2 even though no consideration) |
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what do defenses do
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make contract unenforceable - innocent party duties to perform are discharged
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what are the things you have to prove with claiming a defense of fraud
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MAIDS
misrepresentation of material fact actual and justifiable relience on reps induce plaintiff's relience (intent) damages scienter (knowing statement was false or reckless with truth) |
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do opinions count as misrepresentations of material fact
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NO
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what does scienter mean
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knowingly and intentionally tried to deceive someone
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is a CEO saying the company is worth $5MM a misrepresentation of material fact
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NO - must check for yourself
# of customers IS representation of fact though |
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what is:
fraud in the execution fraud in the inducement void or voidable |
fraud in the execution - deceive someone to sign (no meeting of the minds) - VOID
fraud in the inducement - terms materially misrepresented - VOIDABLE |
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what is the difference between fraud and innocent misrepresentation or neglegant misrepresentation
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fraud has scienter (knowingly and intent)
MAIDS vs MAID |
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what type of duress is a contract void vs. voidable
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physical duress - void
all other duress - voidable |
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what is undue influence
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taking advantage of a relationship
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what is mutual mistake and is it void or voidable
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both parties misunderstand
voidable at option of screwed party |
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if subject matter is stolen or destroyed - is contract void or voidable
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void - no way to make it work
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what is a unilateral mistake and what's the outcome
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1 person misunderstands
TOO BAD - not a defense EXCEPTION - is other party knew about mistake or should have known about mistake (obvious computation error) |
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what happens if there is illegality in contract
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GR - VOID (too high interest rates)
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if a CPA or doctor performs his side of contract without license - what happens
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contract VOID - even if he performs good - he cannot collect
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what 3 things must be present in a non-complete contract
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reasonably needed to protect legitimate business interest
reasonable time (2-3 year) reasonable distance (50 miles) |
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can minors disaffirm contract - when must they do it
exceptions |
YES - as minor or reasonable time as adult
EXCEPTION - necessities: food, clothing, shelter |
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can a minor ratify contract
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YES - but must be adult
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what 2 things must be present for intoxication to be defense
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impaired
AND other party knew you were impaired |
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does insanity make a contract void or voidable
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insanity - voidable
adjudicated insane - void |
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what is the statute of limitations for:
UCC common law |
UCC - 4 years
common law - 4 - 6 years |
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what contracts under common law must be signed and by whom
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must be signed by defendant (we know plantiff thinks there is a contract):
MYLEGS Marriage (if you marry me, you get a house) Year - cannot be performed within a year Land - sale of or lease more than year Executors - pay estate debt out of personal funds Goods - sale of goods for $500 or more Surety (pay the debt of another) |
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if someone agrees to paint my house 18 months from now - does it have to be in writting
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YES - they won't start until 1 year limit is up - Y of MYLEGS - cannot be completed within a year
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concerning the Year - cannot be completed within year of MYLEGS - what are the 2 exceptions
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possible to perform in a year
full performance by 1 party (mow year for 18 months) |
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what are the 2 exceptions to land deals must be in writting
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leases for less than 1 year
full or partial performance |
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what is the only reason a service contract needs to be in writting
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if cannot be completed in less than year mYlegs
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if I've got a contract for sale of goods for 400 and we modify it to 600, written or oral
600 to 400 |
400 to 600 - WRITTEN (over 500)
600 to 400 - oral |
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do the following contracts have to be in writting
6 month mowing $400 6 month mowing $700 land $200 18 month mowing $200 |
6 month mowing $400 - NO
6 month mowing $700 - NO land $200 - YES 18 month mowing $200 - YES |
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in terms of writing - what does a plaintiff need to show regarding a contract
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GR - contracts don't need to be in writing but need to show some evidence of material terms signed by defendant
sale of goods need only quantity terms may be stated in more than one document |
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what if contracts under statute of frauds are unsigned
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unenforceable
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when does death of a party create an impossibility to honor contract
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when it's the party that must perform services - 50 cent dies before concert
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agreement to substitute one contract for another, and satisfaction is the execution of this
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accord - payment in watch instead of cash
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what does an accord do to original duty
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accord and satisfaction discharges original duty
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what is a novation
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new contract substitutes new party for an old party in existing contract - all parties MUST agree to realease
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what are the 3 types of conditions that can affect party's duty to perform (all permissible)
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condition precedent - mortgage approval
condition concurrent - sale - mow lawn, get paid condition subsequent - marriage - engagement ring |
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what happens if a party will not allow other party to perform (won't let them on lawn to mow)
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breach of contract and nonbreaching party is excused from performance
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what does the parol evidence rule do
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prohibits the admission of oral or written evidence to contradict terms of written contract subsequent to and up to contract signing
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what does the parol evidence rule assume
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if you signed the contract, you read it, understand it and agree to all terms
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what 2 things does the parol evidence rule NOT disallow
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subsequent modifications to agreement
evidence to explain ambiguous terms |
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what is the difference in common law vs UCC in breach
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common law:
material breach - nonbreaching party discharged minor breach - nonbreaching party NOT discharged, only entitled to damages UCC - perfect tender rule |
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what are the 3 options a nonbreaching party has under common law when anticipatory repudiation or early breach occurs
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sue now
wait to see and sue cancel contract |
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what is the goal of damages
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make nonbreaching party whole - put them in at least the same position as before
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what are compensatory damages typically calculated on
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enough money to obtain substitute performance (pay the difference)
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what are consequential damages
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extra money for reasonably foreseeable things (weathering on car because of no garage)
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what is the other option other than compensatory damages upon breach
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specific performance - land or unique items
CAN'T be used for personal service contract CAN'T have BOTH compensatory and specific performance - must pick 1 |
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are liquidated damages ok in contracts
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YES - a damage clause is enforceable if amount is REASONABLE
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when does punitive damages come into play
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FRAUD only
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what is the difference in common law and UCC regarding doctorine of substantial performance
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common law - can't rescind or cancel if contract was substantially performed - only get monetary damages if minor breach
UCC - perfect tender - may cancel contract for any breach |
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what is done regarding quasi-contract damages
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court will act as if there is a contract in order to prevent unjust enrichment - $500 from estate that was already paid, doctors working on guy and doesn't want to pay
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what 2 limitations on monetary damages are there
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must be foreseeable (at time of contract)
mitigation - can't just sit on 20-year lease |
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what is privity of contract
what's the exception |
only the parties to the contract have rights under contract
exception - intended 3rd parties have rights |
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what's the difference between intended and incidental beneficiaries
who can/can't enforce contract |
intended (can enforce) - donee beneficiary (pay grandma) and creditor beneficiary (pay debt at commerce)
incidental beneficiaries (can't enforce) - pizza shop next to real estate development |
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what is:
assignment of rights delegation of duties assignment of all rights under contract |
assignment of right - assign contract rights to 3rd party
delegation of duties - wants to have a 3rd party perform contractual duties assignment of all rights under contract - both assignments of rights and delegation of duties |
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what is the rule for assignment of rights/delegation of duties
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GR - any rights may be assigned and any duty delegated
EXCEPTION - if assignment will change risk OR if specialized personal service or heavily relies on person performing |
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what is the effect of delegation on parties liability
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BOTH parties liable unless there is novation
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what is the difference between an assumed mortgage and compare assignee taking subject to the mortgage
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assumed mortgage - both parties liable
taking subject to the mortgage - new owner NOT liable for mortgage, but property can still be taken by bank |
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what is the implied warranties of assignor
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has the rights assigned and that he will not do anything to interfere with those rights
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are offers assignable
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GR - no
option contracts are though |
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what communication must take place with assignments
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3rd party given notice
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what does UCC apply to
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sale of goods (regardless of price)
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what are "goods" under UCC
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all things movable and tangible
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who does the UCC apply to
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all contracts for sale of goods
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under UCC - what is the only way an offer is irrevocable
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merchant's firm offer
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what 3 things have to be present for merchant's firm offer
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WAM
offer in Writing AND signed gives Assurance it will be kept open seller is Merchant |
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what is the max amount of time a merchant's firm offer is held open for
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3 months
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changes made to offer
minor common law minor UCC 1 merchants minor UCC 2 merchants major UCC |
minor common law - counter offer
minor UCC 1 merchants - original offeror terms (changes ignored) minor UCC 2 merchants - original offeree terms (changed adopted) major UCC - NO contract |
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what 2 ways under UCC are contracts accepted
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promise to ship
OR prompt shipment |
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under UCC - what does shipment of nonconforming goods represent (2 things)
what's the exception |
acceptance AND breach
if sent as accommodation and notice given (blue dress) - shipment is NOT acceptance, it's a COUNTEROFFER |
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what terms must be stated in contract:
UCC common law |
UCC - quantity
common law - all terms |
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under UCC - what is the exception to quantity requirement in contract
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buy entire output if amount reasonable
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what is the difference regarding modifications to contract under UCC vs common law
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common law - consideration must be given for modification to be enforceable
UCC - modification can be enforceable without consideration if in good faith |
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is payment by check ok
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YES - unless seller demands cash
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what are the 4 exceptions to the $500+ goods (statute of frauds) having to be in writting
|
SWAP
Specially manufactured goods Written confirmations that aren't objected within 10 days Admitted in court (contracts) Performed (contracts) |
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what is the statue of limitations:
UCC Common law |
UCC - 4 years
Common law - 4-6 years FROM time of BREACH |
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what if modification is made to sale of goods (statute of frauds) - is writing required
400 to 600 600 to 400 |
400 to 600 - YES
600 to 400 - NO |
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under UCC - what HAS to be on writing to enforce - what's the exception
writing doesn't mean contract |
only quantity and signature
unless output or requirement contract (supply buyer with all of her requirements) |
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if contract says shipment via UPS and UPS on strike - is failure of agreed-upon method of transporation a DEFENSE
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NO - if unavialable or commercially unreasonable
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what MUST take place for risk of loss to even be a question
|
goods INDENTIFIED
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what are the steps to figure out who has risk of loss
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Step 1 - Follow contract terms (if any)
Step 2 - If none, determine if carrier/noncarrier if noncarrier - nonmerchant or merchant nonmerchant (garage sale) - ROL passes at tender (notice) merchant - ROL passes at delivery at THEIR store if carrier - ROL passes on either shipment or destination contract |
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in noncarrier situations: when does ROL take place
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nonmerchant - tender (notice)
merchant - delivery at MERCHANT's store |
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what is F.A.S. (free along side) and C.I.F. (cost insurance and freight)
|
both shipment contracts - buyer has ROL
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who has ROL during shipment on:
FOB - Shipping point FOB - Destination |
FOB - Shipping point - buyer
FOB - Destination - seller |
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what is the only shipping terms where the seller has ROL during shipping
|
FOB - Destination
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who has ROL in the event of nonconforming goods
|
breach - so seller retains ROL
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who has ROL on:
sale on approval sale or return (sale on consignment) |
sale on approval (test drive) - seller until approval
sale or return (sale on consignment) - buyer until returned |
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when does a insurable interest begin
|
when goods are identified
IT IS POSSIBLE FOR BOTH PARTYS TO INSURE SAME GOODS |
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what is the correlation of title and ROL
|
NONE - don't have to be same
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when does title pass
|
contract
if nothing in contract - upon delivery - shipment or destination |
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what happens to title with rejection of goods
|
title revests with seller (regardless if rightful or wrongful rejection)
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what are the 4 warranties in sales and which are implied/expressed
|
express warranties
implied warranty of title implied warranty of merchantability AND implied warranty of fitness for a particular purpose |
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under UCC - do express warranties have to be written
|
NO - can either be oral OR written
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what are the basics of express warranties
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statements of fact, descriptions or samples/models (NOT OPINIONS) made to induce purchase
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what must be a part of the express warranty
|
must be part of the basis of the bargain
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who can make express warranties: merchants or nonmerchants
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BOTH
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relating to the implied warranty of title - what is implied
|
IN EVERY SALE, seller has good title and right to transfer title - no liens, etc.
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can a implied warranty of title be disclaimed?
can it be disclaimed by "as is"? |
YES - but has to be specifically "i do not warrant title" or judicial sale - "as is" or "with all faults" DOESN'T count
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what is the only warranty that requires a seller to be a merchant (who deals in goods)
|
implied warranty of merchantability
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what does the implied warranty of merchantability do
|
promise goods fit for "ordinary purposes" - used car runs, breaks, lights, etc.
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can the implied warranty of merchantability be disclaimed
|
YES - using "as is" or "with all faults" or using "merchantability"
can be oral OR written |
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which warranties are disclaimed by "we hereby disclaim any and all warranties"
|
NONE - phrase does NOT do ANYTHING
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what are the 3 basics for the implied warranties of fitness for a particular purpose
|
merchant OR nonmerchant
buyer must rely on seller seller knows buyers purposes |
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is it possible to disclaim fitness for a particular purpose
|
YES - "as is" or "with all faults"
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which warranties are disclaimed by "as is" or "with all faults"
|
merchantability
AND fitness for a particular purpose |
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what is the difference between common law and UCC when relating to who can sue for damages
|
common law - privity - only party to contract can sue
UCC - anyone expected to use product (family, visting uncle) |
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what are the 2 types of torts (general)
|
intentional - fraud
unintentional - negligence |
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what is the basics of who would sue on tort and who they would sue
|
any injured party would sue: mfg, wholesaler and retailer for BOTH breach of warranty AND tort
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what are the 2 types of tort liability under which parties sue
|
negligence - focus on seller's conduct
strict product liability - focus on product (seller's conduct irrelevant) |
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what 4 things must be proven under tort negligence
|
duty of care
fail to use due care damages causation |
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what are the 5 things that need to be proven under strict product liability
KNOW THESE (PK) |
CU product is DUM
Causation product reached user Unchanged product Defective Unreasonably dangerous made seller is Merchant |
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are the following required under strict product liability
privity negligence |
privity - NO
negligence - NO |
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under UCC - what are the options for anticipatory repudiation
|
same as common - sue or wait
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under UCC - if one party reasonably believes other party can't deliver - options
|
demand assurance or treat as anticipatory repudiation and go elsewhere
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are punitive damages available under UCC
|
NO - only fraud
|
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what is our duty under UCC if other party backs out concerning possible losses
|
duty to mitigate
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for sellers under UCC - what are the rights if buyer breaches
|
cancel or rescind and sue
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if we have already shipped goods under UCC and buyer is insolvent - what do we do:
in transit already there |
in transit - STOP transit
already there - 10 days to reclaim |
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if we have to resell goods because of breach - what can we sue for
|
difference in price
FORESEEABLE damages (storage, cost of resale) |
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what is the only time that UCC allows seller to sue for full price of goods after breach
|
specially mfg goods - can't resell
|
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does the UCC allow for liquidated damages in contracts
|
YES - but must be reasonable and as long as it is NOT a penalty
|
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what are the rules under UCC concerning deposit upon breach
|
seller gets to keep lesser of $500 or 20%
|
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how does the UCC differ from common law on nonconforming goods
|
common law - only major defects rejected
UCC - any nonconformity can be rejected |
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3 options under UCC on nonconformity
|
reject all
accept all some/some |
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what are the requirements under UCC when rejection is made because of nonconformity
|
must be made in reasonable time
must notify seller (reasons) |
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if seller is notified under UCC of nonconformity - what are the rights
|
right to cure defect IF time remaining under contract
|
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under UCC - what are the buyers rights for nonconforming goods
accepted rejected |
accepted - can sue for difference in value of ordered/received
rejected - can cover (buy somewhere else) and sue for difference in price |
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under UCC - what is the only time buyer has right to specific performance or replevin
|
goods are unique or buyer cannot reasonably cover
|
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UCC - seller is involvent - when does buyer have right to recover goods (2)
|
paid for goods
goods are identified |
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what is the GR for sale of goods without proper title
2 exceptions |
GR - true owner has right to get property back
EXCEPTIONS entrusting (to merchant) - sells my watch to someone else - I can only sue merchant (can't go get watch) voidable title - get bad check from guy for car and then he sells car to honest guy - I can't get car back |
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|
what income is subject to FICA
(employeed) (self-employeed) |
gross wages (employeed)
net profits (self-employeed) |
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|
relating to social security:
who must pay tax (employee situation) what income is included/not is there a limit on SS/medicare |
who must pay tax (employee situation) - employor must pay and collect mine
what income is included/not - labor income / unearned income NOT taxed is there a limit on SS/medicare - limit on SS - not limit on medicare |
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who must participate in FUTA (2)
|
quarterly payrolls of $1,500+
OR employ 1+ for 20 weeks/year |
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who can deduct unemployment tax: employer or employee
|
employer - they pay it
|
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|
what is the benefit of low claim rate on unemployment
is an employee's benefits limited to contributions made on his behalf |
may get deduction
NO - my benefits aren't limited to contributions made |
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|
which employee is entitled to worker's comp:
negligent intoxicated fighting self-infliced wounds grossly negligent assumed at risk |
negligent - YES
intoxicated - NO fighting - NO self-infliced wounds - NO grossly negligent - YES assumed at risk - YES |
