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61 Cards in this Set

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In common law contracts, can the of offeree add additional terms in his/her acceptance and still have a binding acceptance and binding contract?
No! In common law contracts, no additional terms can be added to the contract in the acceptance
In common law contracts, what happens to the contract if the offeree tries to add additional terms in acceptance?
Courts will see no effective acceptance and no contract made between the parties
In common law contracts, what is the person doing when adding additional terms to the contract in acceptance?
NOT accepting the offer; courts view this as a rejection of the offer and the making of a counteroffer
What's the mirror image rule?
It's the rule in contract law that states in order to effectively form a binding contract, the terms of the acceptance must exactly mirror the terms of the offer. If not, there is no contract.
In sales law contracts, can you add additional terms to the offer in acceptance and still form a contract?
Yes, sales law states that if the court finds a definite acceptance made, even with additional terms added, that there is still a binding contract formed
How do the additional terms added in sales law contracts effect the contract?
There is a contract, but if the person is liable for the additional terms depends if it's a contract between merchants or non-merchants
What happens when it's a sales law contract between non-merchants when you add additional terms to the k?
The additional terms are just considered to be mere proposals to be added to the k and they are not liable under the k for them
What happens when it's a sales law k between merchants when you add additional terms to the k?
The additional terms are not just proposals but automatically becomes a part of the contract unless 3 things happen; 1. the original offer expressly limits acceptance to the terms of the original offer 2. the additional terms materially alter the original offer or 3. the offeror objects to the new terms within a reasonable time period
How do you know if the new terms will materially alter the original offer and thus not automatically become a part of the sales k between merchants?
Material alteration is a question of fact that only a court can decide; unless it puts undue hardship or will be a big surprise for the offerer, the courts will not see the new terms as material alteration
Regardless if you're a merchant or not a merchant, in a sales k, when do the additional terms added not make for an effective acceptance aka no k?
If the additional terms are expressly conditional on the assent to the new terms; "...only if you agree that..."
What happens when the new terms trying to be added to the sales k are expressly conditional on assent to the new terms?
This is considered to be a rejection of the original offer and the making of a counteroffer; which he may or may not accept
If there's no written contract established but the conduct between the parties illustrates a contract (ordering over the phone and sending a mere acknowledgment letter), is there a contract and what are the terms? What happens if there's a dispute over the terms?
There is still intent to enter into a contract and both are liable under the k. But the terms of the k will be determined by the writings in which both parties agree; so additional terms that both don't agree to can be stricken by the court
What's the course of performance?
It's the conduct that occurs under the terms of a k
Why is course of performance so important in determining the terms of the k?
Because the parties who enter into the k know best what they meant by their express terms to the k, so their course of performance under the k is the best indication of what the they meant the terms to be
What's an example where the course of performance helps define the terms of the k?
If the k calls for repeated performances, like 5 deliveries, and there was no objection raised under the k in the first 3 deliveries, is relevant in determining what was actually meant to be the terms
What's the course of dealing?
It's the sequence of previous actions and communications between the parties to a particular transaction that established a common basis for their understanding
What's a usage of trade?
It's any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question
What are the rules of construction?
All four things; the express terms, the course of performance, the course of dealing, and trade usages should all be construed together when the courts are interpreting contracts if there's no reasonable contradiction between them. If such a construction is unreasonable, and the four things do not agree with one another, the courts will interpret the k based on the following priorities;
1. express terms
2. course of performance
3. course of dealing
4. trade usage
Do both common law k's and sales k's both require consideration to form a valid k?
Yes! There must be consideration given in both common law k's and sales k's to have a k
In common law k's, do you need to give new consideration to modify the k?
Yes, modification of the k will only be binding if new consideration is given
In sales k's, do you need to give new consideration to modify the k?
No, modification of the k can be effective and binding without any new consideration put up
Even if you don't need to give consideration to modify the terms of the k, what must you do?
Modify in good faith
What are certain situations where contract modifications without consideration require writing?
When the contract explicitly says that no modifications can be made unless in a signed writing. If the merchant includes this clause on the k and provides the form, the consumer must sign a separate acknowledgment to this prohibition against oral modification unless in a signed writing.
Any modification to the k that brings the k under the Statute of Frauds must be in writing in order to enforce the modification; oral sales k $400 --> $600 not enforceable, unless the four circumstances that exempt people from writing requirements under the Statue of Frauds
In common law k's, must all of the essential, material terms of the k be included in the offer?
Yes, all material terms must be included in the k or else the courts will not find the 'definite' enough for the parties to ascertain its essential terms when accepted, therefore unenforceable
In sales law k's, must all of the essential, material terms of the k be included in the offer or can you leave some things open?
No, all material terms do not need to be included in the k and open terms are acceptable as long as the court finds that 1. the parties intended to make a k and 2. there is a reasonably certain basis for the court to grant an appropriate remedy
If the price is left open in a sales k, what happens?
The courts will decide the price to be a 'reasonable price at the time for delivery'
When are the 3 instances where the price is left open and will be a 'reasonable price at the time of delivery?'
If 1. nothing is said about price at all
2. the price is left to be agreed by the parties and they fail to agree
3. the price is to be fixed in terms of some agreed set market price or other set standard or recorded by a third person or agency and its not so set or recorded
If the price is to be fixed by one of the parties, either the buyer or the seller, what must they do?
Fix the price in good faith
If the price is to be fixed and fails to get fixed through fault of the one of the parties, what can the other party do?
Cancel the contract or fix a reasonable price himself
If the parties intend not to be bound to the k unless there's a fixed price and it's not fixed, there's no k. What happens next?
1. The buyer must return any goods already received, and if unable to do so, must pay the goods reasonable value at the time of delivery
2. the seller must return any payment made on the purchase price of the goods
If no specified place for delivery is mentioned in the sales k, what happens?
If they haven't otherwise agreed to a place for delivery, the place for delivery of goods is the seller's place of business and if he has no place of business, then his residence is the place for delivery
If at the time of contracting for a sales k of identified goods, both parties know that the identified goods are in some other place, what happens?
That place is the place for delivery of the goods
If there is nothing in the contract that mentions a specific time for something under the contract to occur, like the shipment or delivery of the goods, what happens?
The time for shipment or delivery or any other action under the contract must be a reasonable time
How do courts determine what is reasonable?
Reasonable is a question of fact and only courts can determine this based off the facts
What does general contract law govern?
Non-sales contracts; contracts made outside the UCC such as contracts for services or contracts for land
What does UCC Article 2 govern?
Contracts for the sale of goods
What is a sale?
The passing of title (evidence of ownership rights) from the seller to the buyer in exchange for a price
In order to be characterized as a good, what 2 things must the property be?
1. tangible (physical existence)
and 2. movable (can be carried from place to place)
Can a party delegate his performance under a contract?
Yes, a party may delegate his performance under the contract unless they agreed to prohibit this or unless the other party has an interest in only that person performing under the k. But if delegated, this delegation of performance under the k does not relieve the party delegating the duty to perform of any duties to perform or liability for breach
Can a party assign his rights under a contract?
Yes, a party may choose to assign his/her rights under the contract unless the assignment would 1. materially change the other party's duty 2. materially increase the other party's risk/burden or 3. materially lower his chances of getting return performance under the k
Can you assign the right to get damages for breach of the whole contract or assign a right that stems from the assignor's due performance of his whole obligation?
Yes, even though agreements say otherwise, you still can assign these rights.
What does it mean if you are prohibited from assigning "the contract" in a sales contract?
This means you are only unable to delegate to the assignee the assignor's performance under the sales k, can still assign all of the right, just not a delegation of performance duties
What does it mean for somebody in a sales contract to assign "the contract" or assign "all of my rights under the contract"?
This is an assignment of rights and also a delegation of the assignor's duty to perform under the k and the assignee's acceptance is considered a promise to perform those duties; both the assignor or the other party to the original k can enforce the assignee's promise to perform under the k
Must the price given in the sale of goods be payable in money?
The price (consideration under the k) can be made payable in money, goods, realty, or otherwise.
What happens if the price given in the sale of goods is payable in goods?
The each party is a seller of the goods which he is to transfer to the other party
What happens if the price given in the sale of goods is payable in realty?
Even though the price can be made payable in realty, the transfer of the goods and seller's obligations are governed by Article 2 Sales Contracts, but the transfer of realty and transferor's obligations with respect to that is not governed by sales contract law.
What's a merchant? What are 3 ways that you can be defined a merchant?
1. Anybody who deal with the kind of goods involved in the sales contract (a merchant for one type of good is not necessarily a merchant for another type of good)
2. anybody who, by his occupation, holds himself/herself out as having knowledge or skill unique to the services or goods involved in the transaction (banks or universities also included here)
3. anybody who employs a merchant as a broker or some sort of agent is also a merchant in the transaction.
Merchants have a high level of expertise specifically related to the goods being sold in the contract.
What's a buyer?
anybody who buys or contracts to buy goods
What's a seller?
anybody who sells or contracts to sell goods
What's receipt of the goods mean?
Taking physical possession of the goods
What's good faith mean?
honesty in fact
What's the statue of limitations in sales contracts?
4 years; any action that you may want to pursue for breach of sales contract must be done within 4 years of the cause of action
Can the statue of limitations in sales contracts ever be less than 4 years or more than 4 years?
Yes. If included in the original sales contract, the parties can lower the statue of limitations period but not less than 1 year, but the parties are unable to extend it past 4 years
If there is fraud found in a sales contract, what are the possible remedies?
Remedies for fraud in a sales contract include all of the remedies available for a non-fraudulent breach of sales k; rescission of the k, return or rejection of the goods does not preclude one from seeking money damages or other remedies like in common law
Can you limit or exclude the amount of consequential damages?
Yes, consequential damages can be limited or excluded unless the limitation or exclusion is deemed unconscionable. When the loss is injury to a person is unconscionable and cant limit here, but when the loss is commercial you can limit all you want.
What are the seller's incidental damages?
any reasonable expenses, charges, or costs incurred with the returning or reselling of the goods after the buyer breaches like the stopping delivery, transportation, care, or custody of goods after the buyer breaches
When are you awarded specific performance?
when the goods are unique; cant seek money damages, buyer needs court order to force the seller to deliver the goods
When does the buyer have the right to get specific performance as a remedy?
only after reasonable efforts have been made to cover the goods identified to the k
What are the damages awarded to the buyer for breach of warranty in regard to accepted goods?
entitled to the difference between the value of the goods accepted (when accepted) and the value they would have had when accepted if they had been warranted
What are the buyer's incidental damages resulting from a seller's breach?
expenses incurred from inspection, receipt, transportation, care, etc. of the goods right-fully rejected or any expenses incurred with respect to "covering"
What are the rights of the seller if the buyer breaches the sales k and the seller is in possession of the goods? What is he entitled to?
1. The right to cancel the contract;
2. The right to withhold delivery;
3. The right to resell or dispose of the goods and recover damages
4. The right to recover damages for non-acceptance