Contracts & Sales Mnemonics

Front 1

The ingredients for a valid contract are [TACO]:

Back 1

T Definite TERMS, express or implied
A ACCEPTANCE of terms
C CONSIDERATION
O OFFER inviting acceptance

Front 2

An offer expires when it gets [TIRED]:

Back 2

T Reasonable TIME after an offer is made, or after expiration date expressly
stated in an offer
I Mental INCAPACITY or death of offeror or offeree
R REVOCATION of an offer communicated to an offeree before acceptance
E EXPRESS or implied rejection communicated to offeror
D DESTRUCTION of the subject matter of the offer or intervening illegality
terminates an offer by operation of law

Front 3

Options can [DIE] by:

Back 3

D DESTRUCTION of subject matter
I Intervening ILLEGALITY
E EXPIRATION of a stated option time extinguishes the option

Front 4

Look at [HAIL] to determine whether a breach is material or immaterial

Back 4

H HARDSHIP on breaching party if total material breach is declared
A AMOUNT of benefit bestowed on non-breaching party
I Whether breach was INNOCENT
L LIKELIHOOD of full performance being achieved

Front 5

Breach of contract defenses are [I3 FU2MED & I SIP]:

Back 5

I INFANCY
I INSANITY – INCOMPETENCY
I INTOXICATION
F FRAUD
U UNCONSCIONABILITY
U UNDUE INFLUENCE
M MISTAKE
E EQUITABLE DEFENSES
D DURESS
I IMPOSSIBILITY of performance
S STATUTE OF FRAUDS
I ILLEGALITY
P PAROLE EVIDENCE RULE

Front 6

The following [SMART FLYS] contracts must be in writing, subscribed by the party to
be charged with the breach (i.e., must contain defendant’s signature):

Back 6

S SURETY contracts
M MARRIAGE contracts
A ANSWER for debts discharged in bankruptcy
R REAL ESTATE contracts
T TESTAMENTARY promises (NY ONLY)
F FINDERS FEE arrangements
L LEASES longer than 1 year
Y Contracts not capable of complete performance within 1 YEAR
S UCC Article 2 SALES CONTRACTS

Front 7

There are 4 [T-CUP] elements for a constructive trust:

Back 7

T TRANSFER of property in reliance on promise
C Existence of CONFIDENTIAL or fiduciary relationship
U UNJUST enrichment to transferee of property or to some third party, AND
P PROMISE, express or implied, to hold property for plaintiff’s benefit, which
promise has been breached

Front 8

The following [SMART FLYS] contracts must be in writing, subscribed by the party to
be charged with the breach (i.e., must contain defendant’s signature):

Back 8

S SURETY contracts
M MARRIAGE contracts
A ANSWER for debts discharged in bankruptcy
R REAL ESTATE contracts
T TESTAMENTARY promises (NY ONLY)
F FINDERS FEE arrangements
L LEASES longer than 1 year
Y Contracts not capable of complete performance within 1 YEAR
S UCC Article 2 SALES CONTRACTS

Front 9

A [THUG] may render a contract illegal:

Back 9

T TYPE of illegality & extent to which the public is harmed
H HARM that forfeiture would cause if contract was declared unenforceable due
to illegality; ct looks to see whether contract has been substantially performed
U UNJUST ENRICHMENT (a windfall) to party asserting illegality defense
G Relative GUILT of each party

Front 10

[OF MICE] permits parole evidence:

Back 10

O To establish an ORAL condition precedent to legal effectiveness of contract,
provided it doesn’t contradict express term(s) of the contract
F Party can’t invoke the Parole Evidence Rule to shield that party from allegations
of FRAUD or Misrepresentation
M To establish MUTUAL Mistake or claim for reformation of contract
I To establish ILLEGALITY
C To establish failure of CONSIDERATION
E To EXPLAIN ambiguous or missing terms, or show that no enforceable
agreement was ever intended

Front 11

Contract law does not allow damages recovery for [CAPS]:

Back 11

C To recover CONSEQUENTIAL DAMAGES, unless they were within the
contemplation of both parties when the contract was executed
A Damages that party could have AVOIDED
P Damages for PAIN & Suffering or Emotional Distress resulting from a
breached contract, even if such damages were foreseeable
S SPECULATIVE damages aren’t recoverable (all damages must be proven
within a reasonable certainty)

Front 12

Additional terms will not be added to the contract when [OCAN]:

Back 12

O The offeror OBJECTS to additional terms within a reasonable time
C The offer expressly CONDITIONS the agreement on accepting the terms in
the offer as they are
A The additional terms materially ALTER the offer
N Either or both parties are NON-MERCHANTS

Front 13

A [J STRAW] clause materially alters an offer if it would cause surprise or hardship to
the offeror if the offeror was not made aware of its existence:

Back 13

J Bestowing JURISDICTION on a particular court, or requiring offeror to
consent to jurisdiction in particular state
S Shortening the STATUTE OF LIMITATIONS to sue for non-conforming goods
T Limiting TORT liability
R Altering UCC rules for RISK OF LOSS
A Adding an ARBITRATION CLAUSE (unless customary to do so in the trade)
W Adding a clause negating a WARRANTY (e.g., one of merchantability or
fitness)

Front 14

Exceptions to the Statute of Frauds requirement are [SWAMP]:

Back 14

S Contracts for SPECIALLY manufactured goods
W WAIVER
A Judicial ADMISSION of contract
M “MERCHANT MEMORANDUM”
P PART PERFORMANCE

Front 15

Remedies available to a Seller are [SPARKLE]:

Back 15

S STOPPING goods in transit
P Suing for the entire contract PRICE
A Demanding ASSURANCES
R RE-SELLING goods to another buyer
K KEEPING part of a breaching buyer’s deposit, never more than $500
L Suing for LOST Profit
E EXERCISING the right to reclaim goods delivered to the insolvent Buyer

Front 16

Remedies available to a Buyer are [CID’S WAR]:

Back 16

C COVER
I INCIDENTAL & consequential damages
D DAMAGES for lost benefit of the bargain, or for the price paid
S SPECIFIC PERFORMANCE on a contract for unique goods
W Breach of WARRANTY
A ACCEPTANCE revocation
R REJECTING non-conforming goods

Front 17

Lack of contractual capacity arises from the [3 Is]:

Back 17

I INFANCY
I INTOXICATION
I Mental INFIRMITY

Front 18

[SI2R M] is a fraud:

Back 18

S SCIENTER
I D lied with an INTENT to defraud the P
I P suffered an economic INJURY
R P justifiably RELIED on D’s misrepresentation
M D misrepresented a MATERIAL fact, which induced P to enter the K

Front 19

A unilateral mistake in calculating figures may allow the mistaken party the remedy of
equity of rescission, if he calls the [COPS]:

Back 19

C The computational mistake was COMMUNICATED to the other party before
that person changed his/her position in reliance on those mistaken figures
O The mistake involved was one of ORDINARY negligence
P The mistaken party gave PROMPT notice of the mistake
S The mistake will impose SUBSTANTIAL hardship on the party if not corrected

Front 20

Generally, contracting parties are free to modify a 3rd party beneficiary (3PB) K, unless,
prior to receiving notice of the K modification, the 3PB got [MAD]:

Back 20

M MANIFESTED an assent called for in the 3PB K, at the request of one of the
contracting parties (i.e., accepted a K offer arising from the 3PB K)
A Commenced a breach of K ACTION against the promisor, or
D DETRIMENTALLY relied on the K

Front 21

Contract assignments may involve the [ADA]:

Back 21

A ASSIGNMENT of a contractual right to collect money owed under the K
D DELEGATION of the performance required under the K
A ASSUMPTION of liability for performing the K

Front 22

Absent express language in a K prohibiting assignment, K rights are freely assignable,
except those of [SIRP]:

Back 22

S Where a STATUTE expressly prohibits the assignment of a K right (but if that
claim is reduced to judgment, it is assignable)
I Where the assignment is coupled with an IMPROPER delegation of a duty
under the K to a person unqualified to fulfill that duty
R Where the assignment increased the RISK to the other contracting party
P Where the services to be rendered are highly PERSONAL in nature (because
that would materially alter the bargain)

Front 23

In New York, by statute (see SIRP), you cannot assign a [WASP]:

Back 23

W WORKER’S COMPENSATION
A ALIMONY or child support payments
S SPENDTHRIFT TRUSTS
P PERSONAL INJURY or wrongful death causes of action

Front 24

The theory of impossibility frequently involves the [4 Ds]:

Back 24

D DEATH
D DANGER to life/ill health
D DESTRUCTION of the subject matter of the law suit
D DELAYS, temporarily causing performance to become impracticable or
impossible

Front 25

[OF MICE] permits parole evidence:

Back 25

O To establish an ORAL condition precedent to legal effectiveness of contract,
provided it doesn’t contradict express term(s) of the contract
F A party cannot invoke the Parole Evidence Rule to shield that party from
allegations of FRAUD or Misrepresentation
M To establish MUTUAL Mistake or claim for reformation of contract
I To establish ILLEGALITY
C To establish failure of CONSIDERATION
E To EXPLAIN ambiguous or missing terms, or show that no enforceable
agreement was ever intended

Front 26

Generally, parties can put whatever terms they’d like into a K, except for [PLUS]:

Back 26

P Terms that violate PUBLIC POLICY
L Terms providing for an excessive amount of LIQUIDATED DAMAGES
U Terms that are UNCONSCIONABLE
S Clauses providing that one party can seek SPECIFIC PERFORMANCE in the
event of a breach (the contract does NOT have to enforce these clauses)

Front 27

Apply a [TISSUE] to a covenant restricting a former employee from competing

Back 27

T TIME restriction must be reasonable (usually two years or fewer)
I INABILITY of the employee to gain work elsewhere
S The geographic SPACE/SCOPE of the restriction must be as narrow as
possible (must only be to the extent necessary to protect employer’s interest)
SUE The employee services must be SPECIAL, UNIQUE, or EXTRAORDINARY.

Front 28

If a sales contract is silent on a topic, the UCC implies the following [CIDER] rules:

Back 28

C Seller is not obligated to extend CREDIT to the buyer
I Buyer has the right to INSPECT the seller’s tendered goods (except no right
to inspect when the transaction involves a bill of lading)
D Seller’s tender of DELIVERY is implied to be at seller’s place of business,
unless both parties know that the goods are located elsewhere
E Buyer and seller must EXCHANGE performance concurrently
R RISK OF LOSS is on the party in the best position to bear that risk

Front 29

[SOAL-V] and [SORE-V] affect risk of loss:

Back 29

SOAL V SALE ON APPROVAL LATE VESTING (goods held by the buyer are not
subject to claims of the buyer’s creditors)
SORE V SALE OR RETURN EARLY VESTING (title and ROL vest immediately in the
buyer, even though the buyer has a right to rescind the K)

Front 30

A sales contract contains [MFEET] warranties:

Back 30

M Warranty of MERCHANTABILITY
F Warranty of FITNESS for a particular purpose
E Warranty against ENCUMBERANCES
E EXPRESS warranties
T Warranty of TITLE

Front 31

Express warranties are [SAD]:

Back 31

S SAMPLE or model, which is the basis of the bargain
A Written or oral AFFIRMATION of fact or promise made by the seller relating to
the goods
D DESCRIPTION of the goods in advertisements, brochures, or catalogs

Front 32

A P’s claim against a seller for a defective good can be based on one or more
overlapping but different [PINE] theories of liability:

Back 32

P Torts theory of strict PRODUCTS liability
I Contract theory for breach of IMPLIED warranty
N Torts theory of NEGLIGENCE
E Contract theory for breach of an EXPRESS warranty

Front 33

[G. P2ALMS] can use the following defenses against a breach of warranty claim:

Back 33

G GOVERNMENT military contract defense
P Lack of PRIVITY of contract
P Federal PREEMPTION
A ASSUMPTION of risk (can be asserted against any [PINE] claim)
L LACK of timely notice to a seller
M Unforeseen MISUSE of a product
S STATUTE OF LIMITATIONS expiry

Front 34

When asserting a strict products liability claim, P must prove that a [DIM] dangerous
defect in the product proximately caused a physical injury:

Back 34

D DESIGN defect
I INADEQUATE warning
M Mistake in the MANUFACTURING process