Black Letter Law Flashcards
In a shipment contract, the risk of loss passes to the buyer when ____, unless the goods are ____.
the goods are delivered to the carrier; defective
A debtor’s payment of a smaller sum than due on an undisputed debt ____ be considered sufficient consideration for a promise by the creditor to discharge the debt.
will not
A contract to ____ can be delegated.
manufacture and deliver limited edition plates
Exceptions to the general rule that all duties may be delegated are:
- involving personal judgment and skill
- special trust has been placed in the delegator
- delegation will materially change the obligee’s expectancy
- delegation of which is restricted in the contract
When goods covered by a sales contract are defective, the risk of loss is on the buyer despite the defects ____.
once the defects are cured
If goods are defective, the risk of loss does not pass to the buyer until the defects are cured or the buyer accepts the goods despite their defects.
For a writing to be considered an “integration” of an agreement between two parties, the parties must intend that the writing ____.
embody the final expression of their bargain
It is not necessary that an integration include ____ of a contract.
all relevant terms
A waiver of a condition severs the right to treat the failure of the condition as a ____.
total breach excusing counterperformance
In the case of a sale of goods contract, if the standard measure of damages does not adequately compensate a seller for the buyer’s breach because the seller can manufacture or obtain as many goods as he can sell, he may recover damages based on ____.
lost profits
Generally, the lost profit is measured by the contract price with the breaching buyer minus the cost to the seller.
Under Article 2, if the buyer has a right to reject the goods, risk of loss does not pass to the buyer until ____
the defects are cured or the buyer accepts the goods despite the defects
Implied warranties may be disclaimed by specific or general disclaimers.
General disclaimers may include:
(a) language such as “as is” “with all faults”
(b) examination of goods by the buyer
(c) a refusal to examine when the defects would be revealed by examination
(d) course of dealing, course of performance, or usage of trade
A conspicuous writing and a disclaimer mentioning merchantability are both ____.
specific disclaimer methods
Under a UCC Article 2 shipment contract, the seller’s obligation of tender and delivery is fulfilled when the seller puts the goods in the hands of a reasonable carrier, obtains and tenders any documents necessary to enable the buyer to take possession, and ____.
promptly notifies the buyer of the shipment
What does it mean if a term is “collateral” to a written agreement?
The term is related to the subject matter of the agreement but is not part of the primary promise.
In an auction without reserve, once the auctioneer calls for bids on an article or lot, that article or lot cannot be ____.
withdrawn unless no bid is made within a reasonable time
If the auction is with reserve, the auctioneer may ____.
withdraw the goods at any time until he announces completion of the sale
In an auction with and without reserve, a bidder may ____ until the auctioneer announces completion of the sale, but a bidder’s retraction ____.
retract his bid; does not revive any previous bid
The subsequent physical incapacity of a person necessary to effectuate a personal services contract serves to discharge the contract by:
impossibility
____ occurs when the purpose of the contract has become valueless by virtue of a supervening event.
frustration
Unless the contract provides otherwise, in a shipment contract, payment is due ____.
when the goods are put in the hands of the carrier
In a destination contract, which also involves a carrier, the price is due when ____.
the goods reach the named destination
In a noncarrier case, one in which it appears that the parties did not intend that the goods be moved by carrier, unless the contract provides otherwise, the sale is for cash and the price is due ____.
concurrently with tender of delivery
An oral assignment of rights under an insurance contract is ____.
effective
The mere fulfillment of a condition to receive a gift is ____ consideration.
not adequate
____ or ____ may be sufficient to establish bargained-for consideration.
peace of mind; the gratification of influencing the mind of another
If a watch owner leaves her watch for repairs at the store where it was purchased and the store then borrows money from a bank, giving the bank the owner’s watch as pledged collateral, ____.
the watch owner can recover the watch from the bank immediately
The store had no right or power to use the watch as collateral, and title to the watch remained with the watch owner at all times.
The watch owner is under no duty to pay the bank the debt owed before recovering the watch. The watch owner was not a party to the contract between the store and the bank.
A suretyship contract is supported by proper consideration:
If the surety is compensated or makes the suretyship promise before (or at the same time as) the creditor performs or promises to perform.
Under the UCC, what is required to cure a defective delivery in a single delivery contract?
Reasonable notice of the intention to cure and a new tender of delivery of conforming goods within the time for performance.
Under the warranty of ____, goods are warranted to be fit for the ordinary purpose for which such goods are used.
merchantability
The ____ for a particular purpose arises when a seller has reason to know the particular purpose for which the goods are to be used and that the buyer was relying on the seller’s skill and judgment to select suitable goods when the buyer bought the goods.
implied warranty of fitness
In a case of anticipatory repudiation, how long does the repudiating party have to retract the repudiation?
Until performance is due, unless the other party has materially changed position in reliance on the repudiation.
Under the doctrine of substantial performance, can one party recover damages for the other party’s incomplete performance?
Yes, that party will be able to deduct any damages suffered due to the incomplete performance.
Mutual mistake can be a defense to the formation of a contract if:
The mistake concerns a basic assumption on which the contract is made.
A ____ occurs when one party has reasonable grounds to believe that the other party will be unable or unwilling to perform when performance is due.
prospective inability or unwillingness to perform
An example of this would be when a buyer declares bankruptcy prior to the time set for performance of the contract.
As a general rule, delay in performance in ____ contract is more likely to be deemed a material breach than delay in performance in ____ contract.
a mercantile; a land
In mercantile contracts, timely performance as agreed is important, and unjustified delay is considered material. In contrast, more delay is usually required in a land contract for a finding of materiality.
“Benefit of the bargain” damages are also known as:
expectation damages
____ damages put the plaintiff in the position she would have been in had the contract never been formed.
reliance
____ damages are special damages and reflect losses over and above standard expectation damages.
consequential
These damages result from the nonbreaching party’s particular circumstances. Usually, consequential damages are lost profits resulting from the breach.
____ damages may be granted for breaches of contracts for the sale of goods for expenses reasonably incurred by the buyer in inspection, receipt, transportation, care, and custody of goods rightfully rejected and other expenses reasonably incident to the seller’s breach, and by the seller in storing, shipping, returning, and reselling the goods as a result of the buyer’s breach.
incidental
____ will not terminate the offer when it is consistent with the idea that the offeree is still keeping the original proposal under consideration.
an inquiry into changing the terms of the offer
In an installment contract situation, an installment can be rejected by the buyer ____.
if there is a nonconformity that substantially impairs the value of that installment and cannot be cured
____ might be considered valuable consideration.
a promise with no economic value
A ____ is not considered valuable consideration as no bargained-for exchange is present.
promise to make a gift
Which of the following types of evidence may be outside the scope of the parol evidence rule?
evidence of a condition precedent
The parol evidence rule prohibits admissibility of ____ that seeks to ____.
extrinsic evidence; vary, contradict, or add to an integration
Courts will look primarily at the ____ of the surety’s promise in determining whether a gratuitous suretyship contract is supported by proper consideration.
timing
A writing is required for an assignment ____.
of wages
Will a binding promise to perform serve to discharge a party’s duty to perform?
No, because the tendering party must offer to perform and possess the present ability to perform.
A contract entered into between an infant and an adult is ____.
voidable by the infant but binding on the adult
In the case of an anticipatory repudiation, the nonrepudiating party ____.
may sue immediately or wait until the date performance is due to sue
A promise that the promisor will choose one out of several means of performance, most of which involve a legal detriment to the promisor is an example of what?
an illusory promise
What is the effect of the destruction of the subject matter of an offer prior to acceptance?
The offeree’s power of acceptance is terminated.
Homeowner enters into a contract with Paver for Paver to pave Homeowner’s driveway for $500. Paver dies immediately after beginning the project.
Paver’s contractual duties will:
not be discharged
The death of a person necessary to effectuate the contract serves to discharge it for impossibility. However, personal service contracts are discharged in this manner only if the services involved are unique. If the services are the kind that can be delegated, the contract is not discharged by the death of the person who was to perform them.
Under the UCC, when a thief attempts to sell the goods he has stolen, the title he passes to the purchaser is ____.
always void
A seller can transfer only the title he has or has power to transfer. Therefore, even a good faith purchaser for value generally cannot cut off the rights of the true owner if the seller’s title was void.
A and B enter into a contract under which A will service B’s car for $500. If, despite a clause prohibiting assignment of “the contract” by the parties, A assigns the contract to C, what is the result?
C has the right to the $500, but A has the obligation to service B’s car.
Absent circumstances suggesting otherwise, a clause prohibiting assignment of “the contract” is construed as barring only the delegation of the assignor’s duties.
If a person leaves an item of jewelry with a jeweler for repair, and the jeweler sells the item to an unsuspecting purchaser, ____.
the purchaser has title to the item and the true owner cannot recover it
Entrusting goods to a merchant who deals in goods of that kind gives him the power (but not the right) to transfer all of the rights of the entruster to a buyer in the ordinary course of business.
So long as the time for performance has not yet passed, a repudiating party may withdraw his repudiation ____.
unless the other party has indicated that she considers the repudiation final
At common law, ____ will excuse a contract condition.
an estoppel waiver
Whenever a party indicates that he is waiving a condition before it is to happen and the person addressed detrimentally relies on the waiver, courts will find a binding estoppel waiver.
If an assignee for value discovers that the assignor had previously assigned the same contract rights to another party for value, the assignee may ____.
sue the assignor for breach of warranty
Under the doctrine of ____, risk of fortuitous loss between the time the sales contract is signed and the closing is placed on the buyer.
equitable conversion
A misrepresentation is a ____.
false assertion of fact
A misrepresentation is fraudulent if it is intended to ____ and the maker ____.
induce a party to enter into a contract;
(a) knows or believes the assertion is false
(b) knows that he does not have a basis for what he states
(c) implies with the assertion
When contract language is ambiguous, and has at least two possible meanings, if neither party is aware of the ambiguity at the time of the contracting there is ____ unless ____.
no contract formed; both parties happened to have intended the same meaning
Reformation is the remedy whereby the ____ so that it ____, typically in the case of mutual mistake.
writing setting forth the agreement between the parties is changed; conforms to the original intent of the parties
Reformation is also available when the writing is ____.
incorrect because of innocent or fraudulent misrepresentation
Restitution is a ____ remedy designed to ____.
monetary; prevent unjust enrichment
A novation ____.
substitutes another party for one of the original parties to the contract
When a contract for the sale of goods is missing the price term, the price will be ____.
a reasonable price at the time of delivery
An important difference between the rights of a donee beneficiary and is that ____.
a creditor beneficiary can sue the promisee on the underlying obligation, but a donee beneficiary cannot
If the parties to an otherwise valid contract have included a term that is too vague, ____.
the contract will be unenforceable unless the vagueness can be cured
The failure of a condition:
discharges the liability of the promisor whose obligations on the conditional promise never mature
A vague term in a contract can be cured by ____.
part performance
Reservation of an unqualified right to cancel or withdraw at any time would be considered an ____.
illusory promise
For breach of a sale of goods contract, the buyer’s damages are measured as of the ____, while the seller’s damages are measured as of the ____.
time he learns of the breach; time for delivery
In a contract for the sale of goods, ____ may recover consequential damages.
only the buyer
An agreement that a contract will not become binding until a certain condition has occurred is a ____.
condition precedent to the contract’s effectiveness
For an assignment to be effective, there must be ____.
an adequate description of the right being assigned and present words of assignment
An assignment for value is ____.
irrevocable
An assignment is for value if it is done for ____.
(a) consideration
(b) taken as security for
(c) payment of a preexisting debt
If it reasonably appears that the parties intended to make a valid contract, a court may apply the presumption that the parties’ intent was to include a reasonable term to rectify any ____ term.
missing
At common law, a modification of a contract required ____ because the parties were ____.
consideration; under a preexisting legal duty to perform
A ____ is one the occurrence of which cuts off an already existing duty of performance.
condition subsequent
A ____ is one that must occur before an absolute duty of immediate performance arises in the other party.
condition precedent
Most states hold that a minor is bound to pay the reasonable value of ____.
necessities
In a unilateral contract, acceptance of an offer is possible only by ____.
performing a stipulated act
In a bilateral contract, acceptance of an offer is accomplished by ____.
promising to do the stipulated act
The assignee is subject to the ____.
same defenses that the obligor has against the assignor
If the man had a reasonable (good faith) belief in the enforceability of his claim, his surrender of the claim is ____.
valid consideration
Consideration will be considered adequate, provided that there is ____.
some possibility of future value in the bargained-for act
(even if the bargained-for act never actually becomes valuable)
____ can serve as a substitute for consideration.
promissory estoppel
Under the doctrine of promissory estoppel, a promise is enforceable even without consideration if ____
necessary to prevent injustice if the promisor should reasonably expect to induce action or forbearance, and such action or forbearance is in fact induced
The concept of ____ is the refusal of a court to enforce a contract provision or an entire contract to avoid “unfair” terms.
unconscionability
An offer creates a power of ____.
acceptance in the offeree and a corresponding liability on the part of the offeror
An acceptance is a ____.
manifestation of assent to the terms of an offer
