Blaw Exam 2

Front 1

General rule of oral contracts

Back 1

enforceable unless there is a law requring written evidence of existece of contract

Front 2

Purpose of statute of frauds

Back 2

to avoid frauds; provide courts with best possible eveidnce of existence of a contract in situations where oral contracts problematic; difference between unenforabcle contract and void contract

Front 3

6 categories of statue of frauds

Back 3

in consideration of marriage; debt to another; by executor to pay estate debts from personal funds; cannot be performed in a year; transer of interest in real estate; sale of goods greater than 500

Front 4

Statue of frauds: answer for the debt of another

Back 4

"if he doesn't pay, I will"; watch out for the main purpose or leading object rule; if promise is made prinicpall in order to secure some benefit for himself, the coontract may not fall under this description (and therefore is enforcable even if oral)

Front 5

Statue of frauds: transfer of interest in real property

Back 5

includes leases of one year or more in length; exceptions:1. perfromance by seller - seller has already signed a deed and given it to buyer; 2. part performance by buyer - if buyer has paid part of purchase price and has entered onto land or made some substantial improvements

Front 6

Statue of frauds: writing requriement

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not necessarily a written contract, but a writing evidencing existence of contract; name subjet matter, all essential terms; signuatre of party against whom enforcement is being sought; U

Front 7

UCC Rules

Back 7

writing need only indicate existence of cntract; quantity and signautre requried

Front 8

Parol evidence rule

Back 8

Parol evidence - statements not contained in written contract; when parties enter into a written contract that they intend as a complete integration then evidence of prior or contemporary statemtns may not be used to add to, alter, or contradict the written contract

Front 9

Exceptions ot parole evidence rule

Back 9

partial or incomplete integation, explaining ambiguities, cirumstances invalidating the contract, existence of condition precedent, subsequent agreements/ modifications, course of dealing, usage of trade or industry

Front 10

Third party rights

Back 10

third parites may aquire rights in a contract if they are intended beneficiaries. Persons who are incdidentally benefited to not aquire rights in a contract

Front 11

How to determine if intended or incidental

Back 11

was the 3rd party identified in k; was performance to be made directly to the 3d party; does the 3rd party have any rights to direct the manner or means of performance; does the 3rd party have arelationship with the promisee such that an intent to benefit the 3rd party can be inferred

Front 12

General rule of assignment of contract rights

Back 12

generally all contract rights (the right to receive a performance) may be assigned, with certain significant exceptions

Front 13

Exceptions to general rule of assingemnt of contract rights

Back 13

Personal service contracts, contracts that substantially alter the obligors risk (i.e. insurance policies or extensions of credit), assignemnts against public policy

Front 14

pre-judgement wage assignments

Back 14

If you cant make credit card bills and credits tell you to let them have part of your wages from your employer every week; this is generally illegal; post judgement is legal - if a court sues you and wins then the creditor may apply to the court for an attachement of your wages

Front 15

How is an assignment carried out?

Back 15

there is no formal requirement. If the assignment is of a contract that is erequired by the statue of frauds to be in writing then the assingment may have to be in writing as well

Front 16

Exceptions ot general rule of delegation of duties

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Duties involvign personal judgement or skill, delegations that would change the obligee's expectation (i.e. requirements and outputs contracts); Delegations that are against public policy (i.e. public works jobs on bid)

Front 17

Is a provision in a contract prohibiting delegation of duties usually enforceable?

Back 17

Yes

Front 18

Who is liable for non performance if duties are delegated?

Back 18

Both or either of parites can be held liable

Front 19

How can obligor exricate himself from the obligation to perfrom

Back 19

secure a novation (new contract)

Front 20

Is a provision in a contract that prohibists assignement

Back 20

usually not effective to negate any assignement

Front 21

Condition

Back 21

an event, other than the passage of time, the occurance or non occurrence of which will create, limit or extinguish the absolute duty to perform under the contract

Front 22

Condition precednet

Back 22

one which must occur before an absolute duty of perfroamnce arises in the other party

Front 23

Condition subsequeent

Back 23

one which cuts off an already existing duty to perfrom

Front 24

conditions concurrent

Back 24

those which are caable of occuring together and the paries are bound to perfrom at the same time (neither is obligated to peform unless the other also concurrently performs

Front 25

4 ways an obligation can becoem discharged

Back 25

performance, material breach, agreement, operation of law

Front 26

substantial performance

Back 26

in many service contracts, espeicallly those involing significant services where perfect performance is difficult to measre or prove, the law merely requires substantial performance to discharge contractual obligations

Front 27

Material breach

Back 27

discharges a contract and extinguishes the promisees obligation to perform; may sue for damages

Front 28

minor breach

Back 28

does not relive the promisse from the obligation to perform, although a deduction for damages is appropriate

Front 29

anticipitory breach

Back 29

breach which is effective (it releases theothe party) prior to the scheduled date for the promisors performance; date that other party tells you they will not perfrom is the date the contract is breached

Front 30

Time is of the essence

Back 30

failure to perfrom on time, in and of itself, does not constitute a material breach unless "time is of the essence" - either expressly stated or implied

Front 31

subjective standard of personal satisfaction

Back 31

only applies when contract performance involves personal feelings, taste or judgement AND contract speficically demanded personal satisfaction

Front 32

recission

Back 32

only applicable where the contract is voidable for some defect

Front 33

Restitution

Back 33

typically required; putting the parties back in the position that they would have been in had there been no contract - paying for performance received or giving back consideration received; the non breaching party doesn’t want benefit of her bargain, they want to go back to where she was before contract was entered into; like a rewind button

Front 34

novation

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Substituion of a third partys performance with release of liabilty for original

Front 35

Settlement agreement

Back 35

where there has been a legitimate dispute over the extent, quality, circumstances, etc othe promised performance

Front 36

unilateral material alternation of a written contract

Back 36

discharges the innocent, non altering party

Front 37

Impossibility of performance

Back 37

discharges the obligation to perform; destruciton os subject matter, death of promisor (personal service contract), subsequent illegality

Front 38

Commercial impractibility

Back 38

may discharge the obligation to perform if: some even occurred which neither party anticipated (the non occurrence of which the parties relied upon) AND performance would be extraordinarily difficult and unfair

Front 39

frustration of purpose

Back 39

may discharge the obligation to perform some event occurred which neither party anticipated, rendering the contract valueless to one party; reserved for use in very rare situations

Front 40

general theory of remedies

Back 40

grant the non breaching party the "benefit of her bargain"; put them in the same place thtey would have been in if other party had not breached contract; money damages can never be the same as performance, but attempts to approximate ti

Front 41

3 tpes on interests for remeides

Back 41

expectation interests; reliance or (anticipatory) interest; restiutiton interest

Front 42

expectation interests

Back 42

Would would the party have gotten out of contract had it not been breached; compensatory damages, specific performance and injunctive relief are applicable

Front 43

Reliance (or Anticipiatory) interest

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Applies where expectation interest is too speculative to compensate.

Instead of putting non breaching party in position they would have been in; court tries to compensate party for investment or loss in anticipation of the contract beign performed

Hint 43

Instead of putting non breaching party in position they would have been in; court tries to compensate party for investment or loss in anticipation of the contract beign performed

Front 44

Restitution interest (equitabel remedies)

Back 44

Sometimes court must do more than reward money damages. In appropriate circumstatnces court can rescidn otherwise valid contract. It may be neccesary to order that a party who has gained a benefit at the expense of another to pay restitution damages to compensate the financially inured party

Front 45

Forumula for money damages

Back 45

Compensatory damages + Consequential damages + incidental damages - costs avoided

Front 46

purpose of compnesatory damages

Back 46

put the non breaching party into the position she would have been in had there been no breach

Front 47

Standard measure of compensatory damages

Back 47

Value of erformance promised or expected - value of performance received

Front 48

incidental damages

Back 48

losses resulting from attempts to mitigage (reduce, limit) damages or losses as a result of the breach; example: company decides not to hire you and as a result you hire a employment agency. The employment agency fees would be incidental damages

Front 49

consequential damages

Back 49

losses specifially incrurred by this particular party as a consequence of the breach, inlucind lost profits; should be considered if: they are not speculative AND they could have been reasonably forseen by the breaching party

Front 50

Liquidating damages

Back 50

attempts to determine the amount of damages wthat will be paid upons some future breach. Courts will enforce if: at time of entering into contract, it is difficult to estimate actual damages AND the liquidated damages are a reasonable attempt to approximate actual damages

Front 51

Mitigation of damages

Back 51

In all instances, the non breachign party cannot recover for damages that could have been avoided with reasonable effort

Front 52

Specific performance

Back 52

a court order that a breaching party actually render the performance, rahter than pay damages; extraordinary remedy and will be given only when money damages are insufficient to compensate the non breaching party; example- contracts for sale of real property; the law considers all real estate to be unique

Front 53

injunction

Back 53

An order requiring someone to do something or refrain from doing something; courts do not enter into injuctions lightly

Front 54

Reformation

Back 54

allows the court to rewrite certain aspects of a contract to cure an ambiguity or remove an illegality

Front 55

Punitive Damages

Back 55

extremely rare in contract cases, but may be rewarded for bad faith conduct by the breaching party to dscoruage such conduct by others. Usually some tort is involved in addition to the contract breach

Front 56

Negligence elements

Back 56

duty, breach of care, causation, injury

Front 57

To who is accoutants duty owed?

Back 57

the client; known user or class of users (known persons or known uses) (most states); anyone whose reliance could be reasonably foreseeable (even if unkonwn) (some states)

Front 58

Fraud

Back 58

false representaion of fact that is material made with knowledge of its falsity and intetnion to deceive (scienter) is justifiably relied on, causes injury

Front 59

Constructive fraud

Back 59

because of professional status of accountants, constructive fraud may be found from gross negligence even in the absence of scienter

Front 60

1933 securities act

Back 60

civil liability for any untrue satemetn or omission of fact in financial satement; liable ot anyone who purchases the securities without knowledge of the falsity

Front 61

Defendant accounts burdan of proof

Back 61

due dilligence

Front 62

1933 act penalites

Back 62

civil liability for negligence; criminal liability for intentional violation

Front 63

1934 ssecurities act

Back 63

covers more than fincial statemtns in registered filings; imposes liability for false stateemtsn; defense is good faith - which can even include negligetn acts