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169 Cards in this Set
- Front
- Back
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The mnemonic for possible issues: Armadillos from Texas play rap, eating tacos. |
Applicable law |
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Contract Formation--3 questions |
1.) mutual assent? -one party must accept the other's offer (obj. standard, words or conduct) 2.) consideration? 3.) defenses?
*always consider all 3 to decide if a contract is enforceable |
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Defenses to K Formation |
1. Mistake 2. Lack of Capacity 3. Illegality 4. Statute of Frauds |
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How is a unilateral contract formed? |
Results from an offer that expressly requires performance as the only possible method of acceptance
Offeror promises to pay on the completion of the requested act |
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On the exam: bilateral contract unless what two situations?
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Only 2 situations unilateral K formed:
1. Reward, prize, contest |
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What are the elements of quasi-contract?
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1. P has conferred a benefit on D,
2. P reasonably expected to be paid, 3. D realized unjust enrichment if P not compensated |
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What is the measure of recovery for quasi-contract?
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The value of the benefit conferred--NOT the K price. K price is a ceiling if P is in default.
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When does the UCC apply?
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Sales of gooods |
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What body of law applies to a real estate K?
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common law |
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What body of law applies to a services K?
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common law |
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What body of law generally applies when a deal includes goods and non-goods?
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Generally, it depends on what is the more important part of the deal |
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What is the exception to the general rule that, in a mixed deal, the applicable law depends on the most important part of the deal?
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When the contract divides payment between the separate parts, the UCC applies to the sale of goods part and the common law applies to the rest.
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Under what circumstances is a price term required for an offer?
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Sales contract for real estate (common law: need price & land description to = offer) |
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Is a price term required in an offer for sale of goods?
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NO--can still be an offer even without price term (price will be reasonable price at time of delivery) |
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What is the result of vague or ambiguous material terms in an offer? What kind of terms are considered vague or ambiguous on the exam? |
A communication with vague or ambiguous material terms is not an offer under common law or UCC |
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What degree of specificity is required in a requirements K or output K?
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A K for the sale of goods can state the quantity of goods to be delivered under the K in terms of the buyer's requirements or the seller's output=sufficient specificity for an offer |
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What restrictions exist on a buyer's increased requirements in a requirements K?
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Increase must be in line with prior demands, not unreasonably disproportionate. |
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Advertisement Rule |
An advertisement or price quotation is not an offer
Exceptions: 1. If it is in the nature of a reward 3. Price quotation can be an offer if sent in response to an inquiry |
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List four ways that a K offer can be terminated
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1. Lapse of Time--time stated or reasonable time |
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What is the effect of death or incapacity of either party on an offer? State the general rule and the exception.
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General rule: Death or incapacity of either party after the offer but before acceptance terminates the offer.
Exception: Irrevocable Offers |
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How may an offer be revoked by words and by conduct?
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Unambiguous statement by offeror to offeree of unwillingness or inability to contact |
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Do multiple offers work a revocation of an offer? Can I make the same offer to A and B?
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Multiple offers do not work a revocation; the offer can be "shopped around" |
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List 4 situations in which an offer cannot be revoked.
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1. Option |
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What is an option?
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Offer + 2 1.)promise to not revoke/keep offer open AND 2.)consideration |
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What is the UCC "Firm Offer Rule"? |
An offer cannot be revoked for up to 3 months if |
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For exam purposes, what is a merchant?
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Generally, a merchant is a person in business.
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A offers a unilateral K; B starts performance. Can A revoke the offer, and if not, for how long must A leave it open? |
NO--must leave open for a reasonable time to complete performance. |
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For exam purposes, what is the difference between start of performance and mere preparation?
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mere preparation=not actually starting performance but merely getting ready to perform |
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What are three methods by which an offer may be indirectly rejected?
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1. Counteroffer |
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What is the effect of making a counteroffer? What is its effect on an option?
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A counteroffer (not bargaining) generally terminates the offer and creates a new offer |
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For exam purposes, how to distinguish between a counteroffer and mere bargaining?
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Statement = counteroffer |
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What is the effect of conditional acceptance?
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A conditional acceptance terminates the offer -common law: rejects & becomes counteroffer, acceptance can be by conduct (K=counteroffer) -UCC: rejects & can become K based solely on parties' conduct (K limited to common terms)
Look for a response to an offer with the word accept followed by: if, only if, provided, so long as, but, or on condition that |
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What is the effect under the common law of adding additional terms in an acceptance?
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Under common law, a response to an offer that adds new terms is treated like a counteroffer rather than an acceptance (Mirror Image Rule) |
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UCC: Acceptance of offer includes additional terms but does not make the acceptance conditional on the new terms. Is there a contract?
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Generally, such a response is treated as an acceptance, and a K is formed. |
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UCC: Acceptance of offer includes additional terms but does not make the acceptance conditional on the new terms. Are the additional terms part of the K?
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General rule is NO, unless: 1. both parties are merchants 2. additional term isn't material 3. not objected to by original offeror |
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What may an offeror control regarding the mode of acceptance? |
The offeror can control: 1.the method of acceptance 2. the time that a distance acceptance is effective (ex. offer states acceptance effective only when received at offeror's office), or 3. whether the offeree must give notice that it has accepted by performance |
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What is the general rule regarding acceptance by start of performance?
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Start of performance is acceptance -starting to perform is treated as an implied promise to perform, so there's a bilateral K
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What is the exception to the general rule that start of performance is acceptance?
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Unilateral K--Completion of performance is required for acceptance. Offers to enter into unilateral Ks cannot be accepted by a promise. |
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Which types of communications are effective only when received?
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All communications other than acceptance.
(Offers, revocations of offers, rejections). |
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What type of communication is effective when mailed?
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An acceptance (generally)
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If a rejection is mailed before an acceptance is mailed, which is effective?
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Neither is effective until received; i.e. the first one received is effective.
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What is the primary limitation on the mailbox rule?
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You cannot use the mailbox rule to meet an option deadline (doesn't matter when sent, it's when it arrives) |
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Is a rejection effective when the envelope is received or when the offeror actually knows what is in the envelope?
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When the envelope is received; no knowledge by offeror is necessary. |
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UCC: What result when seller of goods sends the "wrong" goods?
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General Rule: Acceptance and breach |
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What is the accommodation exception to the general rule that seller sending the wrong goods constitutes acceptance and breach?
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Accommodation: If the seller sends the wrong goods with an explanation of "I'm out of what you ordered--will this do?" =counteroffer and no breach. |
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Who can accept an offer?
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Generally, only a person who knows about the offer at the time she accepts who is the person to whom the offer was made |
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Can an offer be assigned?
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NO--except for OPTIONS, which may be assigned |
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Legal Reasons for not Enforcing an Agreement |
1. lack of consideration/substitute, 2. lack of capacity of promisor, 3. SoF, 4. existing laws prohibiting performance, 5. public policy, 6. misrepresentations, 7. nondisclosure, 8. duress, 9. unconscionability, 10. ambiguity in words of agreement, 11. mistakes at time of agreement as to material facts |
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What is the three-step process for analyzing a consideration problem?
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1. Identify the promise breaker (person-specific) |
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Can a promise be consideration?
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Oh hell yes. |
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What is an illusory promise? |
not consideration, ex. reserving right in agreement to terminate at any time without notice (need some element of detriment) |
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Past Consideration |
generally not consideration -UNLESS it was expressly requested by the promisor and the promisee expected payment |
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How does the common law treat a preexisting contractual or statutory duty as consideration?
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Under common law, doing what you are already legally obligated to do is not new consideration -new consideration is required for K modification |
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What are the exceptions to the common law rule regarding inadequacy of preexisting contractual or statutory duty as consideration?
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1. Addition to/change in performance (e.g. sing a different song; paint a different room) |
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What consideration is requred to modify a K under the UCC?
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New consideration is not required to modify a sale of goods K -good faith is the test for changes to an existing sale of goods K |
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Can part payment serve as consideration for release? (i.e. promise to forgive balance of debt) |
If the debt is due and undisputed: part payment NOT consideration for promise of release
If the debt is not yet due or is disputed: new consideration (early payment/legit dispute) |
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Consideration Substitutes |
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What are the elements of promissory estoppel?
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1. Promise
promissory estoppel: fact pattern no one asked her to do something, vs. consideration: fact pattern involving something she was asked to do |
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Who lacks capacity to contract?
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1. Infant--under 18 |
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What are the consequences of incapacity?
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1. Right to disaffirm by person without capacity |
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What are "necessities" for purposes of quasi-K law of incapacity?
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food, clothing, medical care or shelter |
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What kinds of Ks are within the statute of frauds? |
1. Suretyship: promises to answer for debt of another (IF other person doesn't himself pay)
MYLEGS |
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What is the "main purpose exception" to a suretyship that would otherwise be within the statute of frauds?
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If the "main purpose" of the obligation allegedly guaranteed was to benefit the guarantor, then not even that guarantee is within the statute of frauds. |
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Does the staute of frauds apply to a task when there is nothing in the K about time?
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NO--must assume unlimited resources to complete the task |
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Does the statute of frauds apply to an obligation for life?
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NO--life might end tomorrow |
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Does the statute of frauds apply to sale of an easement?
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YES--transfer of interest in property |
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Two of these three things are necessary for performance to satisfy statute of frauds in a real estate transfer: |
part performance satisfies the SoF in a real estate transfer--requires oral agreement + any 2 out of:
1. Improvements to the land |
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When does performance satisfy statute of frauds in a services K? |
full performance by either party |
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Sale of goods K: SoF with part performance & ordinary goods |
ordinary goods: general rule is part performance of a K for sale of goods satisfies SoF, but ONLY to the extent of the part performance
*look to see if question is about delivered or undelivered goods ex. S orally agrees to sell 2,000 sacks of grits to B for $10K. S delivers $600 sacks. -S sues B for payment of 600 delivered sacks * B has no SoF defense* S has a SoF defense |
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Sale of goods K: SoF with part performance & specially manufactured goods |
SoF satisfied as soon as the seller makes a substantial beginning -enough work that it is clear that what she is working on is custom made/made to order |
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What must be included in a writing to satisfy SoF (other than Article 2)? |
1. All material terms (who and what) |
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What must be included in a writing to satisfy Article 2 SoF? |
1. writing must indicate that there is a K for sale of goods, and 2. contain the quantity term (does not have to include price)
-generally must be signed by D, except if transaction between 2 merchants where there's a delay in responding |
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What is the exception to the Article 2 rule that a writing must be signed by the person asserting the defense to satisfy its statute of frauds? |
K between merchants--one party within reasonable time after oral agreement made sends to other party written confirmation &
1.) recipient has reason to know of the confirmation's contents, and 2.) he doesn't object to it in writing within 10 days of receipt |
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writing signed by D not required for sale of goods K over $500 |
SWAP
1. specially made goods 2. written confirmation by a merchant 3. admission in court 4. performance |
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SoF: Judicial Admissions |
If D admits in pleading or testimony that he had an agreement with P, SoF is satisfied |
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SoF: Estoppel |
some cases hold that P's reliance on D's oral promise can estop D from asserting a SoF defense
*possible CA essay issue--won't see on MBE b/c not a majority rule yet |
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How does the statute of frauds apply to questions on the bar exam other than whether there is a statute of frauds defense to enforcement of an agreement? |
1. Equal dignities rule: to execute K for someone else, RULES OF LAW require that the authorization be in writing only if the K to be signed is within the SoF |
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What if an agreement is in writing and requires that all modifications be in writing?
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Common Law: Requirement not effective; ignore K language. |
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What is the rule regarding illegal subject matter/illegal purpose?
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If the subject matter is illegal, the agreement is not enforceable
If the subject matter is legal but the purpose is illegal, the agreement is enforceable IF P did not have reason to know of D's illegal purpose |
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On the exam, what facts indicate that a K should not be enforced as a matter of public policy?
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An exculpatory agreement that exempts intentional or reckless conduct from liability, or
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What facts give rise to a misrepresentation issue?
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1. Statement of fact before the K,
Look for answer choice that says no K |
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When is nondisclosure grounds for rescission of a K?
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Generally, a person has no duty to disclose -only when disclosure includes wrongdoing -look for fiduciary-like relationship or concealment. |
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Duress/Undue Influence |
1. physical duress (person signs b/c gun pointed to her head)
2. economic duress -"bad guy:" improper threat which is usually a threat to breach existing K, and -"vulnerable guy:" no reasonable alternative
3. undue influence: look for special relationship between the parties & improper persuasion of the weaker by the stronger |
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unconscionability |
originally applied only to sales of goods but now part of K law generally--empowers court to refuse to enforce all or part of an agreement, 2 basic tests:
1. procedural unconscionability (fine print/hard to understand) 2. substantive unconscionability (fairness of the terms) *key word=oppressive |
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Ambiguity in Words of the Agreement |
no K if:
-parties use a material term that's open to at least 2 reasonable interpretations -each party attaches different meaning to the term, and -neither party knows/has reason to know the term is open to at least 2 reasonable interpretations |
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What is the result of a mutual mistake of fact without assumed risk? |
K may be rescinded--both parites have to be mistaken (not just uncertain) & person seeking relief didn't bear the risk of mistake
mistake vs. misrepresentation: mistake is when the wrong idea is arrived upon by each individual himself |
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What is the result of a unilateral mistake of material fact? |
Generally, courts are reluctant to let a party avoid a K for mistake made only by 1 party UNLESS the other party had reason to know of the mistake ("palpable mistake") |
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Describe the parol evidence rule for purposes of the bar exam |
issue is whether evidence is admissible, and admissibility often depends on the purpose for which the evidence is to be introduced
policy: final written version of a deal replaces earlier agreements, negotiations, and conversations *look for final written K & earlier words of one/both parties |
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What is an integration for purposes of the parol evidence rule?
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written agreement that the court finds is the final agreement, triggers the parol evidence rule. |
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What is a partial integration?
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An agreement that is written and final, but not complete |
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What is a complete integration?
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Written and final and complete |
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What is a merger clause? What is its effect on the parol evidence analysis?
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A K clause that states "this is the complete and final agreement." |
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What is parol evidence?
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Oral or written words of a party before integration (doesn't include custom/usage) |
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What is reformation?
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Equitable action to modify a written K to reflect actual agreement, often after admission of parol evidence |
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The parol evidence rule prevents a court from ____________ or ______________ terms of a written K, regardless of whether is is a ________________ or ______________ integration.
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changing |
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Can a court consider parol evidence to determine whether there was a mistake in integration; i.e. a mistake in reducing the agreement to writing?
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YES
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Can a court consider parol evidence in determining whether there is a defense to the enforcement of the agreement such as misrepresentation, fraud, or duress? |
YES, regardless of whether the writing is a complete or partial integration |
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Can a court consider parol evidence to resolve ambiguities in the written K?
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YES--regardless of whether the writing is a complete or partial integration |
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Under what circumstances may a court consider evidence of earlier agreements as a source of consistent, additional terms? |
If the court finds that
*one situation where it matters if it's a complete or partial integration (remember merger clauses are persuasive, not conclusive) |
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What types of conduct can serve as a source of contract terms? List them in order from most persuasive to least persuasive.
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1. Course of Performance--same parties, same K |
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Under the UCC, what does the seller have to do to complete its delivery obligation by common carrier under a shipment K? |
Seller's delivery obligation is complete when it (i) gets the goods to a common carrier, and (ii) makes reasonable arrangements for delivery, and (iii) notifies the buyer |
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Under the UCC, what does the seller have to do to complete its delivery obligation by common carrier under a destination K?
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Seller's delivery obligation is complete when the goods arrive at the destination |
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How to tell if a K for sale of goods delivered by common carrier is a shipment K or a delivery K?
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Shipment-FOB followed by city where seller is or where goods are |
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What facts give rise to a risk of loss problem?
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1. After K has been formed but before buyer receives the goods; |
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What are the possible consequences in a risk of loss problem?
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If on the buyer, he has to pay the full K price for the lost or damaged goods |
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What is the first risk of loss rule to apply?
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Agreement--agreement of the parties as to risk of loss controls |
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What is the second risk of loss rule to apply?
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Breach--breaching party is liable for any uninsured loss even though breach is unrelated to problem |
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What is the third risk of loss rule to apply?
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Delivery by common carrier other than seller--risk of loss shifts from seller to buyer at the time the seller completes its delivery obligations |
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What is the fourth risk of loss rule to apply?
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Catch All: risk of loss determined by whether SELLER is a merchant -shifts from merchant-seller to buyer on buyer's "receipt" of the goods -shifts from non-merchant seller to buyer on seler's "tender" of the goods |
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When have goods been "tendered" by a non-merchant seller?
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When they are made available to the buyer (seller tells buyer where the goods are & how to get them) |
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What is an express warranty of quality? |
Words that promise, describe, or state facts; or use of a sample or model
Distinguish from sales talk, which is more general, an opinion |
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What is the implied warranty of merchantability? What is the triggering fact on the exam?
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A warranty attaching to any goods sold by any merchant--states that goods are fit for ordinary purpose for which such goods are used. |
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What is the implied warranty of fitness for a particular purpose? What is the triggering fact on the exam? |
a. Triggering facts: Buyer has a particular purpose; buyer is relying on seller to select suitable goods; seller has reason to know of purpose and reliance |
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Limitations on Warranty Liability |
Statute of Limitations: 4 year SoL, generally starts running on possible warranty actions when the "tender of delivery is made" (not when buyer learns the product is defective)
Privity: If D didn't buy goods from D (no privity of K), possible issue
Buyer's Examination of the Goods: no implied warranties as to defects which would be obvious on examination (no effect on express warranties) |
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Disclaimer (i.e. there are no warranties) |
express warranties generally can't be disclaimed
implied warranties of merchantability & fitness can be disclaimed by either: 1.) Conspicuous language of disclaimer, mentioning merchantability, OR 2.) "as is" or "with faults" (doesn't have to be conspicuous) |
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How can contract terms limit warranty liability? |
Limitation of remedies: does not eliminate warranties, simply limits or sets recovery for any breach of warranty -general test: unconscionability -prima facie unconscionable if breach of warranty on consumer goods causes personal injury |
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For what kinds of warranties may remedies be limited by contract provision? |
Possible to limit remedies for any warranties, even express warranties |
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What three things must I know about perfect tender for the bar exam?
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1. Perfect tender applies only to sales of goods |
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Rejection of Goods |
1. distinguish rejection of an offer from rejection of the goods
2. if seller doesn't meet perfect tender standard, buyer has option to retain & sue for damage or reject "all or any commercial unit" & sue for damages
3. buyer must take reasonable care of the rejected goods & shouldn't continue to use them
4. this rejection alternative is limited by cure, installment contracts, and acceptance |
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In what situations may a seller "cure" imperfect tender? |
1. Seller's reasonable grounds to believe goods tendered would be acceptable, perhaps with a money allowance -fact pattern about prior dealings with such an allowance
*buyer can't compel seller to cure |
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Installment Contracts |
REQUIRES or AUTHORIZES 1.)delivery of the goods in separate lots 2.)to be separately accepted
*buyer has right to reject installment only where there is a substantial impairment in that installment that can't be cured (not just any nonconformity) |
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Acceptance of the Goods |
If the buyer accepts the goods, cannot later reject them
payment is not determinative -payment without opportunity for inspection is not an acceptance
failure to reject after buyer had reasonable time is acceptance
if buyer keeps the goods without objection=implied acceptance |
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Revocation of Acceptance |
same as rejection of goods: buyer returns goods & seller returns payment
requirements: 1.) nonconformity substantially impairs the value of the goods 2.) excusable ignorance of grounds for revocation or reasonable reliance on seller's assurance of satisfaction, and 3.) revocation within a reasonable time after discovery of nonconformity |
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Rejection vs. Revocation |
Timing -Rejection: early, before acceptance -Revocation: later, after acceptance
Standard -Rejection: general, perfect tender -Revocation: substantial impairment
Other Reqs -both: seasonably notify seller, hold goods for seller, follow reasonable seller instructions
Consequences -both: goods back to seller, no buyer payment obligation |
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delegation |
party to a K transferring work under that K to 3rd party |
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assignment vs. delegation |
assignment is the transfer by a party to a K of his rights or benefits under the K to a 3rd party who was not a party to the K
delegation is the transfer by a party to a K of his duties or burdens under the K to a 3rd party who was not a party to the K |
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delegable duties |
generally, contractual duties are delegable, unless: 1.) K prohibits delegation or prohibits assignments, or 2.) personal services K that calls for very special skills |
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nonperformance by delegatee |
1. delegating party always remains liable 2. delegatee liable only if she receives consideration from delegating party -delegation for consideration creates a 3rd party beneficiary situation (both delegating party & 3rd party beneficiary can recover from delegatee) |
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assignment |
transfer of rights under a K
1. K between 2 parties 2. one of the parties later transfers rights under that K to a 3rd party *recall: offers cannot be assigned |
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Assignments: Contract Prohibition vs. Invalidation |
prohibition: takes away the right to assign but not the power to assign -assignor is liable for breach of K but assignee who doesn't know of the prohibition can still enforce the assignment
invalidation: takes away both the right to assign & the power to assign -breach by assignor & no rights in assignee |
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Assignment that substantially changes the duties of the obligor |
barred by common law, even if K doesn't limit right to assign
1.assignment of right to payment=never a substantial change 2. assignment of right to K performance other than payment=usually substantial change on Bar |
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Consideration required for assignment? |
general rule is that consideration is not required
but, only gratuitous assignments can be revoked |
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Assignments: who can sue whom? |
1. assignee can recover from obligor -obligor has same defenses against assignee as it would have against assignor 2. assignor for consideration CANNOT recover from obligor
*payment by obligor to assignor is effective until obligor knows of the assignment & modification agreements between obligor & assignor are effective if obligor didn't know of assignment |
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Implied warranties of assignor in an assignment for consideration |
assignor warrants: 1.)the right assigned actually exists 2.)the right assigned is not subject to any then existing defenses by the obligor, and 3.)the assignor will do nothing after the assignment to impair the value of the assignment
*assignor does not warrant what the obligor will do after the assignment |
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multiple assignments |
all gratuitous assignments: last assignee generall wins
multiple assignments for consideration: 1st assignee for consideration wins -exception: a subsequent assignee takes priority over an earlier assignee for value only if he both: * doesn't know of the earlier assignment, and* is the first to obtain payment, a judgment, a novation, OR indicia of ownership ("4 horsement" rule) |
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Third-party beneficiary |
not a party to the K; able to enforce K others made for her benefit
intended vs. incidental: only intended beneficiaries have K law rights -determined by the intent of the 2 parties to the K -intended beneficiaries are either creditors or donees |
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Canceling/Modifying K with 3rd Party Beneficiary |
test: whether the 3rd party knows of and has relied on or has assented as requested -if so, her rights have vested and the K cannot be canceled or modified without her consent UNLESS the K otherwise provides |
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K with 3rd Party Beneficiary: who can sue whom? |
3rd party beneficiary can recover from promisor (& promisor can assert any defense he has against promisee) OR Promisee can recover from promisor (can't be both)
3rd party beneficiary cannot recover from promisee -exception: creditor beneficiary can recover from promisee BUT ONLY on pre-existing debt |
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Specific Performance/Injunction |
available only if money damages are inadequate
historically an equitable remedy
raises additional concerns about judicial administration |
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Availability of Specific Performance |
Contracts for sale of real estate, contracts for sale of unique goods (ex. antiques)
no specific performance for contracts for services (possible injunctive relief) |
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Seller's Reclamation from an Insolvent Buyer of Goods |
1.) buyer must have been insolvent at the time that it received the goods, and
2.) seller demands return within 10 days of receipt (or within reasonable time if buyer expressly represented solvency before delivery), and
3.) the buyer still has the goods at time of demand |
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Entrustment |
original owner takes their personal property to someone for service/repair--taking that risk
if sold, bona fide purchaser prevails |
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Money Damages: Purpose |
The purpose of $ damages is to compensate P by protecting her expectation interest. That means in same dollar position as if no breach. |
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Expectation Damages |
people who contract expect that the other person won't breach
-look to facts for dollar value of performance without breach -look to facts for dollar value of performance with breach -compare the 2 to determine amt. of damages |
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Sales of Goods: Damages for Seller's Breach |
Seller breaches, buyer keeps the goods: -FMV if perfect - FMV as delivered, or -cost of repair
Seller breaches, seller has the goods: -mkt. price at time of discovery of the breach - K price -reasonable replacement price - K price |
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Sales of Goods: Damages for Buyer's Breach |
Buyer breaches, buyer keeps the goods -K price
Buyer breaches, seller has the goods -K price - resale -unless seller cannot resell, in which case seller can recover the K price & in provable lost profits if lost volume seller |
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Incidental Damages |
costs incurred in dealing with the breach, such as costs of storing rejected goods in a sale of goods or finding a replacement in a services K=ALWAYS recoverable |
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Consequential Damages |
damages arising from P's special circumstances and recovery is limited to situations in which D had reason to know of these special circumstances at the time of the K |
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Avoidable Damages |
no recovery for damages that could have been avoided without undue burden on P -burdens of pleading & proof on D
ex. nonbreaching party continuing to perform after other party's breach, nonbreaching party turning down other comparable opportunity |
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Damages that can't be established with reasonable certainty |
fact pattern involving services K & P engaged in new business/new business activity -consider reliance damages instead of expectation damages |
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Liquidated Damages |
K provision fixing the amount of damages--concern is whether the provision is too high (penalty), tests: 1.) damages were difficult to forecast at time K made 2.) provision is a reasonable forecast
*anytime it's a single set # vs. a range/formula it's suspect & unlikely to be reasonable forecast |
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Anticipatory Repudiation |
unambiguous statement or conduct that 1.) repudiating party will not perform 2.) made prior to the time that performance was due
*excuses the other party's duty to perform |
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Anticipatory Repudiation: Time of Recovery |
generally gives rise to an immediate claim for damages for breach UNLESS the claimant has already finished her performance (then no recovery until the K date) |
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Retraction of Anticipatory Repudiation |
can be withdrawn (retracted) so long as there has not been a material change in position by the other party
if timely retracted, duty to perform is reimposed but performance can be delayed until adequate assurance is given |
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Ambiguous words/conduct that make performance uncertain |
*look for this in sale of goods problems
1.)reasonable grounds for insecurity, 2.)writted demand for adequate assurance 3.)commercially reasonable to stop performance |
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Excuse because of Improper Performance |
Article 2: perfect tender rule- if seller doesn't make a perfect tender buyer can give goods back & excused from paying
Common law: material breach rule 1.) damages can be recovered for any breach 2.) only a material breach by one party excuses the other from performance 3.) whether a breach is material is a fact question 4.) if there is substantial performance then breach is not material (if breach is material then performance was not substantial) |
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Material breach due to quantity of performance
P contracts to paint 10 identical apartments for O for $10K, P breaches after painting 2 apts. |
P's breach=material
K law: O is not obligated to pay P for painting the 2 apartments
quasi-K law: O is obligated to pay P for the 2 apts. |
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Divisible Contract Exception |
In a "divisible contract" there can be a K law recovery for substantial performance of a divisible part even though there has been a material breach of the entire K.
look at whether the price is stated as a lump sum or on a per performance basis |
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Excuse because of Nonoccurrence of an Express Condition |
express condition=language in a K, limits obligations created by other K language (doesn't create a new obligation) *strict compliance is required
triggering words: if, only if, provided that, so long as, subjec to, in the event that, unless, when, until, and on condition that
(distinguish from conditional acceptance=not a K) |
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Condition of a Personal Satisfaction of 1 Party |
exception to the general rule of strict compliance (courts look to whether a reasonable person would be satisfied)
a promise by X to pay Y for her work only if X is satisfied is not an illusory promise, but X is excused from paying Y only if X's not being satisfied is honest & in good faith |
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Elimination of Express Conditions |
1. waiver: the person who benefits from or is protected by the express condition gives up the benefits/protection
2. prevention: person protected by the express condition hinders/preventsthe occurrence of the express condition |
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Rescission |
key: whether performance is still remaining from each of the K parties -if yes, rescission is valid -if no, invalid |
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Accord & Satisfaction |
substituted performance
accord questions have an agreement by the parties to an already existing obligation to accept a different performance in satisfaction of the existing obligation
if the new agreement (accord) is performed (satisfaction), then performance of the original obligation is excused -if not, then the other party can recover on either the original obligation or the accord |
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Modification |
substituted agreement
agreement by the parties to an existing obligation to accept a different agreement in satisfaction of the existing obligation -other party cannot revocer on original agreement because it's excused by the substituted agreement |
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Novation |
agreement between BOTH parties to an existing K to the substitution of a new party (same performance, different party)
excuses the contracted for performance of the party who is substituted for/replaced |
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Delegation vs. Novation |
novation requires the agreement of BOTH parties to the original K & excuses the person replaced from any liability for nonperformance
delegation does not require the agreeement of both parties & does not excuse |
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Damage/destruction of subject matter of K |
common law performance is excused if post-K occurrence makes it impossible to perform
Article 2 risk of loss: if on buyer, then buyer pays; if on selller, buyer doesn't have to pay & seller excused if specifically identified good in the K, otherwise it's still possible to perform |
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Death after K |
death does not make a person's contract obligations disappear -exception: death of a party to K who is "special" person excuses performance |
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Subsequent Law or Regulation |
later law makes performance of K illegal=excuse by impossibility
later law makes mutually understood purpose of K illegal=excuse by frustration of purpose |
