Cpa - Reg - Contracts

Front 1

1. Definition of a contract is

Back 1

1. An express or implied legally binding agreement btwn 2/more persons to perform/not perform some specific act or undertaking.

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2. Define: (a) Promisee, (b) Obligor

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2. (a) One to whom performance under a contract is owed has a contract right (the right to rec the perf)
2. (b) One who must perform under a contract has a contractual duty (the duty to perform).

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3. Bilateral vs Unilateral Contract

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3. Bilateral - both the contracting parties are bound by their mutual promises to fulfill reciprocal obligations towards each other (e.g. acct hired to prepare rtn for a fee).
3. Unilateral - 1 party promises a performance in return for an act or forbearance, and a 2nd party, w/out promising to do so, acts or forbears (eg reward for a found cat, 2nd party not obligated to look for the cat!)

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4. Executed vs Executory contract

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4. Executed - it has been perf'd fully & executory has not been perf'd fully.

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5. Express vs. Implied Contract

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5. Express - is created by the verbal/written expression of its terms by the parties involved. Implied - does not exist in form, but is implied in fact from the acts & circumstances of the parties.

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6. Def: Promise, Promisee, & Promisor

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6. Promise - declaration/ assurance, however expressed, to do or refrain from doing a specified. Legally enforceable promise is a contract.
Promisee is the person to whom a promise is made and the promisor is the person who makes the promise.

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7. Quasi-Contract

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(or implied-in-law contract) is a fictional contract created by courts for equitable, not contractual purposes.A quasi-contract is not an actual contract, but is a legal substitute for a contract formed to impose equity between two parties. The concept of a t is that of a contract that should have been formed, even though in actuality it was not. It is used when a court finds it appropriate to create an obligation upon a non-contracting party to avoid injustice and to ensure fairness.It is invoked in circumstances of unjust enrichment, and is connected with the concept of restitution.

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8. Unenforceable contract

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An unenforceable contract or transaction is one that is valid, but which the court will not enforce. Unenforceable is usually used in contradistinction to void (or void ab initio) and voidable. If the parties perform the agreement, it will be valid, but the court will not compel them if they do not.

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9. Void vs. Voidable contract

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A “void” contract is not recognized by law because the agreement cannot be enforced by either party. Technically, a void contract is a “no contract” situation- it is as if a contract was never formed, and neither party will be able to recover in the event of a breach. The contract is invalid from the beginning, even at the negotiation or signing stage. This usually involves performing a duty that is illegal or impossible to perform.

On the other hand, a “voidable” contract is a valid contract. Usually only one party is bound to the contract terms in a voidable contract. The unbound party is allowed to repudiate (cancel) the contract, at which time the contract becomes void. This typically involves situations where only one party has committed a breach.

The main difference between the two is that a void contract cannot be performed under law, whereas with a voidable contract, performance is still possible, although contract can be “voided” at the election of the unbound or non-breaching party.

The avoiding of a voidable transaction amounts to the rescinding it, or exercising a power of rescission, and as such is subject to the general law in that regard.

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10. Joint obligees

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The person in favor of whom some obligation is contracted, whether such obligation be to pay money, or to do, or not to do something.Obligees are either several or joint, an obligee is several when the obligation is made to him alone; obligees are joint when the obligation is made to two or more, and, in that event, each is not a creditor for his separate share, unless the nature of the subject or the particularity of the expression in the instrument lead to a different conclusion.

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11. Joint Obligors

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The person who has engaged to perform some obligation.
They are joint when they agree to pay the obligation jointly, and then the survivors only are liable upon it at law, but in equity the assets of a deceased joint obligor may be reached.

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12. Entire Performance, Surety's Rights to Recovery & Principal Debtor's Right to Recovery

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12. (a) Entire Perf - obligee can hold any of the joint obligors resp for the entire perf due. Btwn themselves, joint obligors may agree on how they are to share int he obligation, & if any pays > her/his share, s/he is entitled to reimbursement from the others.
(b) A surety may recover the entire perf from the principal debtor/a pro rata contribution from co-sureties.
(c) a principal debtor cannot recover from her/his surety, but is entitled to reimbursement from any other joint principal debtors.

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13. Several Obligees

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2 or more persons who are owed indv perf.

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14. Several Obligors

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14. 2 or more persons who separately promise the same perf in the alternative. They are several when one or more bind themselves each of them separately to perform the obligation.

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15. Effect of discharge, obligee's entitlement & recovery

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15. (a) Discharge of one does not discharge others.
(b) the obligee is entitled to only 1 perf
(c) if one obligor is req'd to perf more than her/his share, s/he is entitled to reimbursement from the others.

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16. Def of Assignment

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it encompasses the transfer of contract rights held by one party—the assignor (owed)—to another party—the assignee. Assignment of rights under a contract is the complete transfer of the rights to receive the benefits accruing to one of the parties to that contract.

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17. Assignment is not allowed under 2 instances: No Permission & Prohibited by contract - describe these 2

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17. (a) Without permission of the obligor, if 1 following applies:
(i) When an assignment has the effect of materially changing the duties that the obligor must perform, it is ineffective. Changing the party to whom the obligor must make a payment is not a material change of duty that will defeat an assignment, since that, of course, is the purpose behind most assignments. Nor will a minor change in the duties the obligor must perform defeat the assignment.

(ii)When it matters to the obligor who receives the benefit of his duty to perform under the contract, then the receipt of the benefit is a personal right that cannot be assigned.

(b) Prohibited by contract - Both the Restatement and UCC Section 2-210(3) declare that in the absence of any contrary circumstances, a provision in the agreement that prohibits assigning “the contract” bars “only the delegation to the assignee of the assignor’s performance.” [3] In other words, unless the contract specifically prohibits assignment of any of its terms, a party is free to assign anything except his or her own duties.

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18. Assignee's Rights Against Obligor - list the 5 of them (generally, the assignee takes whatever rights the assignor had against the obligor, but no more)

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Assignor Rights, "But No More",
Payment as Defense, Counterclaims, Nonconsumer Contracts under UCC

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19. Def Assignor Rights

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If the claim was covered by any security, the assignee gets the benefit of the security.

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20. "But no More"

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The assignee takes subject to any defenses & counterclaims arising from the contract that the obligor had against the assignor.

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21. Payment as Defense

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Pmt of the obligation to the assignor is a defense if made b4 the obligor had notice of the assignment.

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22. Counterclaims

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Against the assignor arising from collateral trans's may be asserted against the assignee, but if the assignee notifies the obligor of the assignment, the obligor can assert only those collateral counterclaims that accrued b4 notice was given.

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23. Non Consumer Contracts Under UCC

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UCC 9-403 - provides that an agreement by a buyer/lessee of personal property that s/he will not assert any claims or defenses s/he has against the seller/lessor is enforceable by an assignee who takes for value, in good faith, & w/out notice of any claim or defense. E.g. contract for sale of inventory

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24. Assignee vis-a-vis Assignor can happen in 2 ways--list them

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(a) Valid Assignment & (b) Revocation of assignment

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25. Valid Assignment - define

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It is effective btwn the parties w/out notice to the obligor. Assignor no longer owns the right; the assignee does. If assignor rec's perf or causes the obligor not to perf, then assignee can recover from the assignor.

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26. if the assignor wrongfully assigns the same right to 2 assignees, what happens?

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One of 2 rules will apply:
(a) 1 who 1st rec'd the assignment prevails over the other or
(b) 1 who 1st gave notice to the obligor prevails.

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27. Revocation of a gratuitous (e.g. w/out consideration) can happen unless one of three instances apply- list them

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(a) There is promissory estoppel
(b) The assignor delivers either a tangible document embodying the right assigned/written assignment
(c) The assignee collects the obligation prior to the attempted revocation.

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28. Delegation - define
(a) Delegator
(b) Delegatee
(c) Does delegation strip the delegator of duty?

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(a) the party having the duty
(b) the party performing the duty that satisfies the delegator's duty.
(c) No! S/he remains liable to the obligee until someone performs.

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29. In 2 instances, duties may not be delegated - list the 2

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(a) Personal Perf by Duty e.g. professional services
(b) Law/Contract

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30. Elements of a contract are?

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"A Cold Sip of COLA"
- Agreement
- Consideration - Mutual/Real Assent
- Statute of Frauds

- Legal capacity
- Offer
- Legal Subject Matter
- Acceptance

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31. When does an agreement happen?

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Mutual assent (expressed or inferred from a party's conduct) by the parties & must agree to the same bargain through the medium of offer & acceptance.

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32. what is the mirror image rule?

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common law contracts require an acceptance to mirror the offer to be effective. (change anything and it's a counteroffer)

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33. Offer
(a) Offeror
(b) Offeree

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Proposal made by one party (a) offeror to another (b) offree which manifests an intent to enter into a contract. The offeree has the power to create the contract by acceptance.

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34. Elements to an offer - list the 3 of them

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- Intent
- Communication
- Definiteness

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35. what are the three requirements of a legally enforceable contract?

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1. an agreement made up of an offer and an acceptance 2. an exchange of consideration
3. a lack of defenses

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36. in what manner can an offer be made?

Back 36

express - oral or written implied - based on conduct

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37. to be an offer, the communication must:

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create a reasonable expectation in the offeree that the offeror intends to make a contract

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38. what are the three questions to be considered about an offer?

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1. was there an intent to make a contract? 2. were the terms definite and certain?
3. was there communication to the offeree?

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39. are advertisements offers?

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generally no. they are usually considered only to be invitations seeking offers. e.g. I would consider selling or I quote u a price...

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40. How can an advertisement be an offer?

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(1) if it specifies the offeree. an advertisement that limits the scope of the persons who can accept (like first five customers to call) or
(2) if it is for a reward-unilateral contract which may be accepted only by performance

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41. Terms are definite and certain in a UCC contract offer if they include:

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Quantity

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42. For terms to be definite & certain in an offer 2 things must be included are:

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(a) Identification - a certain offeree/class of offerees must be identifiable by the terms of the offer
(b) Subject matter - the offer must identify subject matter adequately. e.g. an offer to sell some of my farmland is not an offer!

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43. Offer can be made how?

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Written, oral or implied

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44. 3 types of offers are?

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(a) General/Specific
(b) Continuing Offer - may result in a series of contracts by successive acceptances
(c) Illusory Offer - the offeror retains the unlimited option to perf the promise. It usually results in an unenforceable contract.

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45. What are the 4 ways to terminate an offer?

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1. revocation by offeror
2. lapse of Time
3. offer provisions
4. rejection

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46. (a) When can an offeror revoke his offer? (b) What are the 3 exemptions to this?

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(a) generally any time before acceptance by communicating the revocation to the offeree & it has been rec'd by the offeree or published
(b) (three exceptions: option, partial perf (unilateral & bilateral), firm offer)

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47. how are offers made by publication revoked?

Back 47

same manner they were offered.

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48. what is an option contract?

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distinct contract in which the offeree gives consideration to keep the offer open

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49. what are the ways an offeree can terminate the offer?

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1. rejecting it 2. counter offer 3. silence

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50. how to distinguish between a counteroffer or an inquiry?

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counteroffer is both a rejection and an offer. an inquiry is just feeling the other party out by questioning

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51. what time period must an offeree accept an offer?

Back 51

within the time specified, or if no time period is specified, within a reasonable time

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52. what are the ways an offer an be terminated by operation of law

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1. death or insanity of parties 2. destruction of subject matter 3. illegality 4. bankruptcy/insolvency

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53. if the offeror specifies a method of communication, that method must be used. a purported acceptance utilizing another method is a ______

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Counteroffer

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54. offers, rejections, revocations, and counteroffers effective when

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received

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55. What are the some of the parts of Acceptance that are req'd & may be used?

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- Requirements
- When effective
- Who may accept
- Silence as acceptance

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56. Acceptance must be made with what? & in the form of what? is it unconditional or conditional?

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(a) Knowledge of the offer & the intention to accept.
(b) Must be in form req'd by the offer (promise or act--act req's full perf)
(c) It must be unequivocal & unconditional & must comply w/any terms set forth in the offer.

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57. The req's of communication for acceptance for a (a) bilateral contract & (b) unilateral contract are/

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(a) The offeree must communicate acceptance to the offeror unless stated otherwise in the offer.
(b) The offeree need not communicate acceptance unless the offeror has know way of knowing the perf has been completed.

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58. what is the mailbox rule?

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acceptances of an offer are effective when they are dispatched (mailed, telegraphed, etc) if properly addressed

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59. how can an offeror opt out of the mailbox rule?

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by stating in the offer that the acceptances must be received to be effective

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60. If no mode of acceptance is authorized expressly, what are the rules under CL & UCC

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(a) CL Rule - the same mode by which the offer was sent
(b) UCC Rule - any reasonable mode dictated by business custom.

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61. who is allowed to accept an offer? (diff betwn Specific & General)

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(a) Specific - only the person to whom the offer was made (or to their agent). only option contracts are assignable
(b) General (reward cases) - usually can be accepted by whoever perf's the specified act, provided s/he knew of the offer & intended the act to be her/his acceptance.

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62. How is silence as acceptance dealt with?

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It is usually not acceptance but it may constitute acceptance if the circumstances are such that assent may be implied.

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63. What are the elements of consideration?

Back 63

there must be something of legal value given by each party and there must be a bargain for exchange.
Contracts must be supported by consideration to be enforceable.

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64. when is something of legal value?

Back 64

if it constitutes either a detriment to the promisee or benefit to the promisor. [promisee agrees to do something he is not already obligated to do]

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65. does consideration need to have monetary value?

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no. as long as promisee is promising to do something that he is not already obligated to do or promising to refrain from doing something that he legally could do

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66. does consideration need to flow to one of the parties?

Back 66

no, it could go to a third party

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67. does consideration have to be fair (provide a legal benefit to both parties)? is forbearance to sue a valid consideration?

Back 67

(a) No
(b) Yes

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68. what does a "bargained for exchange" mean?

Back 68

something is not consideration unless it was given in exchange for other consideration

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69. Test for consideration consists of?

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Legal detriment means the party must do something/bind himself to do something the party is not legally or otherwise bound to do, or the party must surrender a legal right to which s/he is otherwise entitled.

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70. What are the 2 types of consideration?

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(a) Act/Forbearance (given in xchange for a promise in a unilateral contract)
(b) Promise - promise to do something

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71. What are the 3 types of promises for consideration?

Back 71

- Illusory Promise (perf/not to perf)
- Conditional Promise (promisor is bound to perf upon the occurrence of a condition beyond the promisor's ctrl.
- Right to choose- right to do 1 of 2 or more acts but can reserve the right to choose which one, no mutuality of obligation unless each act is a legal detriment.

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72. Common situations lacking consideration are/

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(a) Perf/Promise to Perf Preexisting Duty
(b) Past Consideration
(c) Moral Obligation

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73. Exceptions to common situations lacking consideration

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- commercial paper
- contracts under seal
- other UCC exceptions
- promissory estoppel

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74. what is detrimental reliance/promissory estoppel

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an express promise made by promisor and detrimentally relied upon by another (which would cause an injustice) can be enforced without consideration.

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75. Special contracts - what are the 3 types of these

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- Req'mt contracts - agreement of 1 party to buy his/her req's of a certain product from a certain supplier
- Output contracts - agreement by a supplier to sell all or a specified part of the products that s/he manufactures to the purchasing party.
- UCC Sale of Goods

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76. UCC sale of goods - Article 2 governs contracts for the sale of goods only & has 2 provisions concerning output, req'mt, & exclusive dealing contracts--which are?

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(a) Good faith
(b) Best Efforts

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77. Capacity - do parties have the mental capacity to enter into contracts--under which 3 areas do they not have the capacity?

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- Infants (Minors)
- Incompetent Persons
- Intoxication

Front 78

78. When is a contract voidable by a minor? What is the exception?

Back 78

When it is made by an infant, s/he may avoid perf. Contracts may not be avoid if it supplied the infant with necessities, such as food, shelter & clothing.

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79. Under CL what is the age of a minor? Does State Law supercede CL? What is the age of majority in most states?

Back 79

(a) 21
(b) Yes
(c) 18

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80. 2 types of incompetent persons are?

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(a) Insane - adjudicated by a court - contracts are void from the beginning (are still liable for necessities furnished to them)
(b) De facto insane - not judically declared generally are voidable

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81. Contracts made by someone who is intoxicated are generally what?

Back 81

Voidable by the intoxicated individual.

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82. Legal Subject Matter - 2 situations where contracts are illegal are?

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- Contrary to Public Policy
- Violation of Law

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83. Contracts that fall w/in the Statute of Frauds must be what? & if they are outside?

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W/in they must be in writing! They may be oral if they are outside the Statutes

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84. Writing req's for a contract under the Statutes must contain what?

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- Identity of the parties
- subject matter
- essential terms & conditions
- identity of the consideration
- signature of the party agains whom enforcement is sought.

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85. Effect of failure to comply makes a contract what?

Back 85

Unenforceable but not void/voidable.

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86. Contracts Covered by Statute of Frauds (GRIPE + Marriage)

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G - Sale of Goods (SOGS) of $500 or more; must state quantity
R - Real estate contracts
I - Impossible to perf w/in 1 yr from date contract is made
P - Promise to answer for the debt of another (surety or guarantor)
E - Promise of an Excecutor to be personally liable for the debt of the estate
M - a promise in consideration of marriage

Front 87

87. Examples of contracts that are outside the Statute of Frauds (2)

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(a) Indemnity Contract - btwn 2 parties whereby 1 undertakes & agrees to reimburse the other against loss/damage arising from some contemplated occurrence
Novation - a substitution of a new contract btwn the same or diff parties that discharges the old contract & extinguishes the O/S obligations.

Front 88

88. Def of Parole Evidence Rule

Back 88

It is a substantive CL rule in contract cases that prevents a party to a written contract from presenting extrinsic evidence that contradicts or adds to the written terms of the contract that appears to be whole. The supporting rationale is that since the contracting parties have reduced their agreement to a single and final writing, the extrinsic evidence of past agreements or terms should not be considered when interpreting that writing, as the parties had decided to ultimately leave them out of the contract.

Front 89

89. How does the Parole Evidence Rule apply to SOGS under UCC?

Back 89

UCC 2-202 section of the UCC allows the written contract to be explained/supplemented, but not contradicted, by evidence relating to course of dealing, usage of trade, or course of performance.

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90. what are some types of defenses?

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fraud, innocent misrepresentation, duress, undue influence, mutual mistake, illegality, minors, intoxication, mental incompetency, statue of limitations, statute of frauds, impossibility, substituted contract, novation, contions, prevention of performance, prol evidence, unconscionability

Front 91

91. 3 types of mistakes are?

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- unilateral
- mutual
- mistake in the inducement

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92. Def - Unilateral Mistake

Back 92

A unilateral mistake is where only one party to a contract is mistaken as to the terms or subject-matter contained in a contract. when a party is guilty of an error in business judgment, there is no relief.

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93. Mutual mistake (mistakes made by both parties), what happens in the following cases: (a) No agreement, (b) Materiality, & (c) Actual Agreement

Back 93

(a) No contract - then it is void
(b) If a party's obligated increased b/c of it contract is voidable unless a 3rd party would be adversely affected/ contract reformed or loss can be compensated.
(c) If mistake was made in reducing an oral agmt to writing, an equity court may reform the contract to make it conform to the actual agreement.

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94. Def mistake in the inducement

Back 94

If either/both parties were mistaken concerning their reasons for entering into the contract, this is a mistake in the inducement which is not, in & of itself, a ground for relief.

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95. what is an innocent misrepresentation?

Back 95

has all the elements of fraud except scienter. misrepresentation is made innocently, not intentionally. It can be grounds for rescission of the contract.

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96. what are the elements of fraud?

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1. misrepresentation of material fact - must be a material fact - opinions or statements of value do not constitute facts unless made by experts
2. actual and reasonable reliance by the plaintiff on the misrepresentation - the plaintiff relied on the misrepresentation
3. intent to induce plaintiff's reliance on the misrepresentation - the purpose in making the misrepresentation was to induce reliance
4. damages (injury results from the deception) - the defendant is liable to anyone who suffers a loss. the defrauded party may rescind the contract or sue for money damages, but not both.
5. scienter (knowing that the statement was false or made with a reckless disregard for the truth). - (constructive fraud or gross negligence)

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97. when does fraud in the execution occur?

Back 97

when a party is deceived into signing something that he does not know is a contract. void - no meeting of the minds. The defrauded party may seek damages in tort.

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98. when does fraud in the inducement occur?

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the defrauded party is aware she is making a contract, but terms are materially misrepresented. voidable (the defrauded party may affirm the contract of sue for rescission)

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99. What is duress?

Back 99

arises when a party's free will to contract is overcome by an unlawful use of a threat of harm.

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100. (a) in duress, if the harm threatened is physical force, the contract is
(b) in duress, if the harm threatened is economic or social force, the contract is __

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(a) Void
(b) Voidable

Front 101

101. Undue influence--what is it?

Back 101

is an equitable doctrine that involves one person taking advantage of a position of power over another person. It is where free will to bargain is not possible. Contract is voidable by the victim.

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102. What is unconsionability?

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(also known as unconscientious dealings) is a term used in contract law to describe a defense against the enforcement of a contract based on the presence of terms that are excessively unfair to one party. Typically, such a contract is held to be unenforceable because the consideration offered is lacking or is so obviously inadequate that to enforce the contract would be unfair to the party seeking to escape the contract.

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103. 3rd party beneficiary contracts are contracts that are likely to benefit a person other than the contracting parties. What are 3 types of these contracts?

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- Creditor
- Donee
- Incidental

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104. What is a creditor beneficiary contract & what is the remedy for failure to perf?

Back 104

A 3rd person to whom a debt/other duty is owed by the promisee. 3rd party can sue the promisor on the contract or recover the original obligation from the promisee.

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105. What is a Donee beneficiary contract & what is the remedy for failure to perf?

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A 3rd party to whom the promisee intends to make a gift, by having the promisor render perf to the beneficiary. No debt/duty owed by the promisse to the beneficiary. Donee can sue the promisor for breach of of contract but not the promisee. The promisee can sue the promisor for recission to recover any consideration pd.

Front 106

106. What is a Incidental beneficiary contract & what is the remedy for failure to perf?

Back 106

An incidental beneficiary is a party who stands to benefit from the execution of the contract, although that was not the intent of either contracting party. This beneficiary has no contract rights/cause of action if the parties fail to perform.

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107. 3 types of Defenses for 3rd party beneficiary contracts?

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- Original defenses
- Defenses after rights vested
- Defenses of Promisee

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108. Def Original Defenses

Back 108

the promisor can assert any defenses that could be asserted against the promisee, the beneficiary also becomes liable for counterclaims on the contract that the promisor could establish against the promisee.

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109. Defenses after rights vested

Back 109

Defenses against the promisee that arise after the rights vest in the beneficiary are not good against the beneficiary.

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110. Defenses of Promisee

Back 110

Defenses of the promisee against the creditor beneficiary on the original obligation cannot be used by the promisor against the beneficiary.

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111. Vesting rights in 3rd parties beneficiaries happens when?

Back 111

(a) Life insurance contracts - rights vest immediately unless stated
(b) Other contracts
(c) Modification or Discharge of Contracts

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112. There are three tests used to determine whether the third party beneficiary's rights have vested:

Back 112

(a) if the beneficiary knows of and has detrimentally relied on the rights created;
(b) if the beneficiary expressly assented to the contract at the request of one of the parties; or
(c) if the beneficiary files a lawsuit to enforce the contract

Front 113

113. Discharge of a contract happens 4 ways--which are they?

Back 113

- Performance
- Agreement
- Operation of Law
- Breach

Front 114

114. Most contracts are discharged by performance--what are the 3 performance types?

Back 114

(a) Complete Performance- perf'd exactly or close to it as to satisfy a reasonable person
(b) Substantial Performance - < complete but which satifies the contract to the extent that there is not a failure of consideration.
(c) Material Breach - major defect in perf that constitutes a failure of consideration & excuses the other party from her/his duty to perf.

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115. What are the 3 types of conditions to perf?

Back 115

(a) Condition Precedent - an uncertain future event that must occur b4 there is a duty to perf
(b) Condition subsequent - an uncertain future event that, if it occurs, relieves a party of a previously existing duty to perf.
(c) Condition Concurrent - 2 promises that are to be perf'd at/about the same time, 1 in exchange for the other.

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116. What are the 3 times of perf?

Back 116

(a) Unspecified - perf must be made w/in a reasonable time (which depends upon the circumstances)
(b) Specified - in contract, if failure to perf is a breach, it will give rise to damages.
(c) Of the Essence - failure to perf on time is a failure of a condition, & the other party is relieved of their duty to perf.

Front 117

117. Performance by means of pmt & perf by tender: define.

Back 117

(a) Pmt made by either the delivery of $ or negotiable instrument (conditional until it is pd).
(b) An attempt or offer to perform, which is proper in time, place, & manner. A refusal to accept proper tender, discharges the promisor & gives the promisor the right to sue for breach of contract.

Front 118

118. Discharge by Agreement - is done by 2 ways--what are they?

Back 118

contracting parties may agree to end or modify liability

Front 119

119. Discharge of contract through agreement via ending the agreement is done by 4 ways?

Back 119

- Release
- Waiver
- Cancellation
- Mutual Recession

Front 120

120. Release - define & list the requirements

Back 120

(a) Discharging of a contractual right
(b) Req's 1 of the following;
- seal
- consideration
- detrimental reliance
- deed of gift
- or gift of evidence of indebtedness

Front 121

121. Agreement - Waiver

Back 121

Promise to excuse the breach of promise or failure of condition, often binding without consideration.

Front 122

122. Agreement - cancellation

Back 122

Physical destruction of a written contract w/intent to destroy its legal effect.

Front 123

123. Agreement - mutual rescission

Back 123

Undoing of the contract on both sides & placing the parties in their original position.

Front 124

124. Under CL, is a clause in a written contract that contains a future oral modification/rescission allowed?

Back 124

NO, it is unenforceable b/c under CL it req's consideration.

Front 125

125. 4 ways to modify an agreement for discharge is?

Back 125

- Merger
- Accord & Satisfaction (Executory Accord)
- Substituted Contract
- Novation

Front 126

126. Merger under modification of a contract for discharge is?

Back 126

A contract duty is superseded by a higher duty.

Front 127

127. Accord & Satisfaction under modification of a contract for discharge is?

Back 127

Accord and satisfaction is a settlement of an unliquidated debt. The accord is the agreement to discharge the obligation and the satisfaction is the legal "consideration" which binds the parties to the agreement.

Front 128

128. Substituted Contract under modification of a contract for discharge is?

Back 128

The parties agree on a different contract that supersedes & replaces the old contract.

Front 129

129. Novation under modification of a contract for discharge is?

Back 129

Is the act of either: (1)replacing an obligation to perform with a new obligation, or (2)replacing a party to an agreement with a new party.

Front 130

130. Novation vs. assignment diff is?

Back 130

In contrast to an assignment, which is valid so long as the obligee (person receiving the benefit of the bargain) is given notice, a novation is valid only with the consent of all parties to the original agreement: the obligee must consent to the replacement of the original obligor with the new obligor.[1] A contract transferred by the novation process transfers all duties and obligations from the original obligor to the new obligor.

Front 131

131. Under UCC 2-209, can a contract be modified w/out consideration?

Back 131

Yes, it provides that a good faith modification is binding w/out it.

Front 132

132. Under what circumstances may unperformed contracts be excused by operation of law?

Back 132

- Impossibility
- Frustration of Purpose
- Impracticality
- Statute of Limitations

Front 133

133. Impossibility - definition

Back 133

is an excuse for the nonperformance of duties under a contract; this means that there is no consideration for the other party's perf, thus the other party is entitled to rescission. For such a defense to be raised, performance must not merely be difficult or unexpectedly costly for one party; there must be no way for it to actually be accomplished.

Front 134

134. 3 types of Impossibility are?

Back 134

(a) Subsequent to the formation of the contract, the perf contemplated becomes illegal
(b) Subject matter neccessary for perf is destoyed through no fault of the promisor
(c) Personal knowledge is req'd & the particular person to render or rec it dies or otherwise is incapacitated.

Front 135

135. Def Frustration of Purpose for a defense

Back 135

Occurs when an unforeseen event undermines a party's principal purpose for entering into a contract, and both parties knew of this principal purpose at the time the contract was made. It acts as a failure of consideration.

Front 136

136. Diff btwn Impossibility & Frustration of Purpose

Back 136

The distinction between the two is that impossibility concerns the duties specified in the contract, whereas frustration of purpose concerns the reason a party entered into the contract

Front 137

137. Impracticality can be used when?

Back 137

Generally unexpected difficulty or expense does not excuse perf. Under UCC 2-215, in contracts for the SOGS, states that there is no breach is perf becomes impracticable by the occurrence of a contigency that contradicts the assumptions upon which the contract was based.

Front 138

138. Diff btwn impossibility & impracticality

Back 138

Major difference is impossibility excuses performance where the contractual duty cannot physically be performed, the doctrine of impracticability comes into play where performance is still physically possible, but would be very burdensome for the party whose performance is due. Thus, impossibility is an objective condition, whereas impracticability is a subjective condition for a court to determine.

Front 139

139. Define Statute of Limitations

Back 139

Sets the maximum time after an event that legal proceedings based on that event may be initiated. Expiration of this does not necessarily discharge a party's perf, but it operates to bar the bringing of an action against a nonperforming party.

Front 140

140. Define Breach & list the 4 types of breaches

Back 140

An unexcused failure to perf a contractual promise.
- Renunciation
- Anticipatory
- Actions to Prevent Perf
- Violation of Contract Terms

Front 141

141. Define Renunciation

Back 141

During the course of perf is any act rendering substantial perf impossible, or a stmt that the promisor will not perf. Promisee is discharged & can sue for breach immediately.

Front 142

142. Define Anticipatory Breach

Back 142

Describes a declaration by the promising party to a contract, that he or she does not intend to live up to his or her obligations under the contract. Renunciation of a bilateral contract b4 perf is due.

Front 143

143. Under Anticipatory Breach, what options does the Promisee (obligee) have?

Back 143

(a) May sue immediately for damages/rescind the contract & sue for restitution;
(b) May wait to see if promisor (obligor) will change his/her mind & perf when perf is due.

Front 144

144. Actions to Prevent Performance - define

Back 144

Action on the part of 1 party that prevents the other party from performing, discharges the other party & gives her/him the right to sue for the breach.

Front 145

145. Violation of Contract Terms

Back 145

A slight breach entitles the other party to at least nominal damages. A breach discharges the other party's obligation if either of the following applies:
(a) Breach material hence a failure of consideration for the other party's promise.
(b) Breach amts to the failure of an express condition to the other party's perf.

Front 146

146. 2 areas of remedies of Breach are:

Back 146

(a) Election of Remedies
(b) Damages

Front 147

147. Under CL for a material breach, what are the remedies?

Back 147

(a) Rescind contract & sue for restitution (put back to where one was b4 contract) or
(b) Affirm the contract & sue for damages/specific perf.

Front 148

148. Under UCC 2-720 for the SOGS, remedy is what?

Back 148

Contract may be rescinded & damages recovered.

Front 149

149. Under Injunction what is the remedy?

Back 149

The court orders an equitable remedy wherein one party is ordered to do something (mandatory) or to refrain from doing something (prohibitory).

Front 150

150. In regards to remedy, what is the definition of Specific Performance

Back 150

An order of a court which requires a party to perform a specific act, usually what is stated in a contract. It is an alternative to award/ for awarding damages, and is classed as an equitable remedy commonly used in the form of injunctive relief concerning confidential information or real property.

Front 151

151. Under the remedy of specific performance what does "Granted" mean? What are some examples?

Back 151

Orders of specific performance are granted when damages are not an adequate remedy.
(a) Contract for sale of unique property (unique land/goods that are unobtainable elsewhere)
(b) Contract for which damages would be speculative or conjectural (output or req contracts)
(c) Enforceable contract not to compete

Front 152

152. When is specific perf not granted?

Back 152

If either spec perf would req close & complicated court supervision of complex matters or the contract req's personal services or a personal relationship (e.g. marriage or partnership).

Front 153

153. Damages - compensatory - define

Back 153

Awarded to compensate for losses & lost profits b/c of breach. If promisee had to obtain service elsewhere at a higher cost then damages are diff btwn Mkt price - contract price.

Front 154

154. Damages - consequential - define

Back 154

Damages that predictably follow as a consequence of the breach (e.g. losses resulting from the general/specific needs of the injured party that were known or should have been known by the breaching party).

Front 155

155. Damages - Special - define

Back 155

Arise from unusual or special circumstances, these are generally excluded as they are not w/in the contemplation of the parties. Not excluded if if it is determined such damages were reasonably foreseeable or "within the contemplation of the parties" at the time of contract formation.

Front 156

156. Damages - punitive

Back 156

Not allowed even if the breach is willful.

Front 157

157. Damages - nominal

Back 157

Allowed if there is a breach of contract, but no provable loss.

Front 158

158. Damages - liquidated

Back 158

Damages whose amount the parties designate during the formation of a contract for the injured party to collect as compensation upon a specific breach (e.g., late performance).

Front 159

159. If liquidated damages are excessive what will the courts do?

Back 159

The court may interpret them as a penalty & refuse enforcement.

Front 160

160. When are the enforceable generally? When are the enforceable under UCC 2-718?

Back 160

(a) If actual damage would be difficult to assess & the amt appears reasonable at time of contracting.
(b) if the amt is reasonable in light of the anticipated or actual harm caused by the breach.