BLAW FINAL Flashcards
1
Q
One of the elements of a contract is “must have a _____ purpose or object”.
A
Legal
2
Q
If an illegal agreement is executor, the Court (will/will not) enforce it, nor allow __________. If it has been executed, the Court will leave the parties as it finds them.
A
Will not; recovery of damages
3
Q
Illegality
A
Contracts to Commit Crimes or Civil Wrongs
4
Q
There are contracts that are ____ because they violate public policy even though it does not run afoul of any specific statute or the common law.
A
Void
5
Q
Contracts limiting liability for negligence are generally ______ as against public policy.
A
Unenforceable
6
Q
If the legislative (license) intent is primarily to raise revenue the contract is ________
A
Enforceable
7
Q
What us Usery
A
Charging a greater interest rate than allowed by law.
8
Q
What is the penalty for Usery in N.C.?
A
Forfeiture of the entire amount of interest charged. Preferred approach and the approach used in NC. (Don’t get interest back – forfeiture of ALL interest)
9
Q
Contracts in Restraint of Trade - Under the “old” Common Law an agreement that placed a restraint on a man’s right to pursue his trade or profession was ____ as against public policy.
A
Void
10
Q
Recently, the Courts have permitted the enforcement of certain restrictive covenants as long as they meet certain requirements.
A
Contracts in Restraint of Trade
11
Q
Covenants not to Compete – generally OK if they are what 3 things?
A
(1) for reasonable length of time (2) reasonable in geographic area of restriction, and (3) have the element of consideration
12
Q
_______ ___ ______ requires that certain types of contracts in writing, or there be written memorandum concerning the contract, signed by the party being sued for it to be enforceable.
A
Statute of Frauds
13
Q
Statute of Frauds: What is required of a contract to be said to “fall within the statue”.
A
Needs to be in writing to be enforceable
14
Q
Statute of Frauds: What is required of a contract to be said to “fall outside the statute”.
A
If the statute does not apply,
15
Q
The statute does not render an oral contract that falls within the statute void – just ________ .
A
Unenforceable
16
Q
When one promises to pay the debt incurred by another, the contract must comply with the Statute to beenforceable. Limited to collateral promises (in nature of guarantee) rather than primary promises.
A
Promise to Ansswer for the Debt of Another.
17
Q
“Sell the goods to Jones, and if Jones does not pay, I will pay” (writing required).
A
Collateral promise
18
Q
“Let Jones have the goods and I will pay” (no writing requirement).
A
Primary promise
19
Q
Agreement made upon consideration of marriage
A
Does not apply tomutual promises to marry or engagement agreements. Only occurs when the marriage is part of the consideration given in return for some other performance. Example: prenuptial agreements (must be in writing to be enforceable)
20
Q
Not only sale of land,but also any interest in land (real estate sales contract, easement, mortgage, rights-of-way) falls within the statute.
A
Contracts for the Sale of an Interest in land
21
Q
Does a license to hunt on real estate fall within the statute?
A
No – permission rather than sale.
22
Q
Purchaser has paid part of the price, taken possession, and made permanent improvements. This is a
A
Partial Performance Exception
23
Q
Agreements not to be performed within one year from the time oftheir making. Courts hold that only contracts on which performance within a year from the date of making is impossible fall within the statute (required to be ______).
A
In writing
24
Q
Statute of Frauds Section of the UCC
A
Any contract for the sale of goods under the UCC at a price of $500 or more must be in writing
25
One may not introduce oral evidence at a trial to contradict the clear, unambiguous terms of a written agreement. Does not prevent all oral testimony concerning a contract from being introduced at trial, only oral testimony that contradicts the clear, unambiguous terms of a written agreement.
Parole - Evidence Rule
26
3 Exceptions to the Parole-Evidence Rule?
(1) Evidence of any subsequent modification (2) Evidence to explain ambiguity (3) Evidence to “fill in the gaps” if the written agreement lacks one or more essential terms.
27
Occurs when the promisor obligates himself to satisfy a duty owed by the promise to his creditor.
Third-Party Creditor Beneficiary
28
Third party that may not sue to enforce any of the contractual provisions
Third-Part Incidental Beneficiary
29
Generally, when a third party beneficiary has accepted, adopted, or acted upon the agreement, the parties may not change it without his/her consent.
Rescission and Vesting
30
person who transfers his contractual right. (Original Party
Assignor
31
The person to whom the right is transferred.
Assignee
32
Party to the contract against whom the right may be exercised. (Original Party)
Obligator
33
An _______ under a contract occurs when one party transfers his rights under the agreement to a third person.
Assignment
34
As a general rule, one may assign contractual rights, but may not assign contractual duties. May “delegate” contractual duties if they do not involve personal service or the personal attention of the obligor.
Assignment
35
Future accounts or earnings that are not founded on an existing contract are generally not assignable because the account or debt is merely speculative and has no potential existence. These are...
Contractual Rights that may not be assigned
36
The assignee takes the assignment of the contractual right subject to all the defenses that the obligor could raise against the assignor i.e. the “_____ stands in the shoes of the ______”.
Assignee - Assignor
37
Notice of assignments - Multiple Assignments
the first bona fide assignee for value to notify the debtor of the assignment prevails, regardless of whether he/she is the first person to receive the assignment in point of time. Followed by the majority of jurisdictions.
38
may be either conditions precedent, conditions subsequent, or conditions concurrent.
Express Conditions
39
When the parties under a contract are required to perform simultaneously.
Conditions Concurrent
40
When applicable, the party substantially performing under the contract is entitled to recover but subject to the right of the innocent party to be compensated for the damages occasioned by the defects in performance, but is not excused from performance.
Doctrine of Substantial Performance
41
Applicable where full and exact performance of every detail of the contract has not been rendered but where there has been good faith attempt to perform the agreement, resulting in substantial compliance.
Doctrine of Substantial Performance
42
When a portion of the required performance is not completed, generally intentionally.
Doctrine of Partial Performance
43
Time of Performance: Usually, failure to perform on time will not discharge the other party from performing, unless the parties consider ...... ......., in which case failure to perform on time will create a discharge.
"Time to be of the essence,"
44
Simply offering to render the performance due under the contract.
Tender of Performance
45
A creditor may refuse to accept a check on the ground that is not a ____ _____. If accepted, the tender is conditional upon payment.
Legal Tender
46
If one’s contractual obligation consists of paying money, an offer to pay the debt when due has several effects if acceptance is refused by the creditor. Although the debt will not be discharged, 3 things may happen
(1) the interest will stop running as the date of tender, (2) any security interest in property securing the debt will be extinguished, and (3) the debtor is relieved from payment of Court costs should the creditor subsequently sue.
47
If performance of a contract is physically or legally impossible at the time of its making, neither party is liable.
Discharge by Impossibility of Performance and Frustration of Purpose
48
The general rule is: So called acts of God, or even unavoidable accidents rendering performance impossible will not allow one to escape liability for damages, absent a contractual provision excusing performance under such circumstances.
Subsequent Unforeseeable Events.
49
Exceptions to Subsequent Unforeseeable Events General Rule: When the subject mater of a contract is destroyed so that performance of the contract is impossible, the contract will be discharged. Ex. Painting Beach House - (Hurricane destroys house)
Destruction of the Subject Matter
50
Exceptions to Subsequent Unforeseeable Events General Rule: When a change in the law renders performance illegal and impossible, the contract is discharged
Change of Law
51
There is an implied condition in every contract that a party will do nothing to interfere with performance by the other. This is called
Prevention by Act of Party.
52
If the breach is ____ or _____, the innocent party may rescind the agreement and sue for damages.
Material or Total
53
If the breach Is _____, the innocent party may not rescind the contract and must still perform his/her promise – the remedy is to bring anaction for damages caused by the partial breach.
Partial
54
A material breach is one that goes to the
"essence of the contract"
55
As a general rule, the doctrine of anticipatory repudiation applies only if ______ ______ contracts
Executory Bilateral
56
an amount that places the injured party in the same position he/she would have been if there had not been a breach, including any damage that was the natural and probable consequence of the breath – however they may not be speculative or hypothetical.
Compensatory and Nominal Damages - Actual or compensatory damages
57
Punitive or Exemplary Damages are awarded in civil cases when there is _____ or ______ behavior shown on the part of the defendant.
Malice or Vindictive Behavior
58
Duty to keep the amount of loss sustained to a minimum.
Duty of Mitigation - A party may have a duty to take positive steps in order to mitigate his damages.
59
(1-deals with sale of goods; 2-does NOT involve real property/contracts dealing with dirt, Contracts dealing with services, or dealing with intangibles (intel prop, stocks, bonds)
UCC - Article 2 - The Sale of Goods
60
Article 2 deals with the sale of goods, it does not deal with the following 3 things:
(1) real property (2) services or (3) intangible property.
61
Other things attached to realty but capable of severance without _____ _____ to the land are considered to be ____ regardless of who severs them.
Material Harm - Goods
62
A person who deals in goods of kind involved in the transaction.
Merchant
63
One who, by occupation, holds himself or herself out as having knowledge and skill unique to the practices of goods involved in the transaction
Merchant
64
One who employs a merchant as a broker, agent, or other intermediary has the status of _____ in the transaction.
Merchant
65
Consumer Leases: A cconsumer may recover attorneys’ fees if Court determines the terms to be “________”
Unconscionable
66
Financing Leases: Lessor buying from supplier, have 2 contracts, each are _____ of the other.
Independent
67
UCC: If the parties have not agreed on a price, the court will determine a “_____ _____” at the ____ __ _______
Reasonable price - time of delivery
68
UCC: When the parties do not specify payment terms, when is payment due?
At the time and place at which the buyer is to receive the goods.
69
UCC: When no delivery terms are specified, the buyer takes delivery at the _____ place of business, or if the seller has no place of business, the seller’s ______.
Sellers - Residence
70
The UCC permits acceptance of an offer to buy goods for current or prompt shipment by either of these 2 actions:
(a) a prompt promise to ship, or (b) prompt shipment of conforming goods
71
UCC: In a unilateral offer, when the beginning of the performance is a reasonable mode of acceptance,
an offeror who is not notified of acceptance within a reasonable time may treat the offer as having lapsed before acceptance.
72
When one or both parties are nonmerchants the contract is formed according to the terms of ______________.
The Original Offer
73
When both parties are merchants, the additional or different terms automatically become part of the contract, unless one of these 3 are true
(1) the original offer expressly limits acceptance to its terms, (2) the new of changed terms materially alter the contract, or (3) the offeror objects to the new or changed terms within a reasonable time.
74
UCC: Statute of Frauds: Sales Contracts for goods priced at $___ or more (and lease contracts requiring payments of $1,00 or more) must be in writing to be enforceable.
$500
75
UCC - Exception to Statue of Fraud: An oral contract is enforceable if (1) it is for goods that are specially manufactured for a particular buyer (2) not suitable for resale to others in the ordinary course of seller’s business, and (3) the seller has substantially started to manufacture the goods. Once the seller has take action, the buyer cannot repudiate the agreement claiming the Statue of Frauds as a defense
Specially Manufactured Goods
76
UCC - Exception to Statue of Fraud: An oral contract for the sale or lease of goods is enforceable if payment has been made and accepted, or goods have been receeived and accepted ( at least to the extent of actual performance)
Partial Performance
77
UCC Parole Evidence Rule: If the court finds an ambiguity in the writing, it may accept evidence of consistent additional terms to ____ or ______ the ambiguity
Clarify or Remove
78
In cases of unconscionable contracts the UCC allows the court to do 3 things:
(1) Refuse to enforce the contract, or (2) Enforce the remainder of the contract without the unconscionable clause, or (3) Limit the application of the unconscionable clause to avoid an unconscionable result
79
UCC: Before any interest in specific goods can pass from seller to buyer two things must occur:
(1) the goods must be in existence, and (2) they must be identified as the specific goods designated in the contract.
80
UCC: When Title Passes: Once goods exist and are identified, title passes to the buyer at the time and place the seller performs the _____ ______ of the goods.
Physical Delivery
81
UCC: In a _____ contract: the seller is required only to deliver the goods into the hands of a carrier,, and the title passes to the buyer at the time and place of shipment.
Shipment Contract
82
UCC: Generally, all contracts are assumed to be ______ contracts if nothing to the contrary is stated in the contract.
Shipment
83
UCC: Delivery without movement of goods:
When a document of title is required, title passes to the buyer when and where the document is delivered
84
UCC: When goods are entrusted to a merchant who deals with goods of that kind, and the merchant sells the goods to a buyerin the ordinary course of business that buyer obtains good title to the property.
The Entrustment Rule
85
UCC: Delivery without movement of goods - When risk of loss shifts to buyer depending on if seller is a merchant or a non merchant.
*If the seller is a merchant, risk of loss passes to the buyer when buyer actually takes a physical possession of the goods. **If seller is not a merchant,risk of loss to goods passes to the buyer on tender of delivery.
86
UCC: When seller breaches – if the goods are so nonconforming that the buyer has the right to reject them, the risk of loss does not pass to the buyer until...
(1) the defects are cured, or (2) until the buyer accepts the goods in spite of their defects
87
UCC: Are goods that conform exactly to the description in the contract.
Conforming Goods
88
UCC: Tender must be at a reasonable ___ and in a reasonable ____
Hour - Manner
89
UCC: All goods called for in the contract must be tendered in a _____ delivery unless agreed otherwise. (generally contract would provide for this, but if it doesn’t)
Single
90
UCC: If buyer is expected to pick up the goods, the place of delivery is _____ place of business
Seller's
91
UCC: If ______ goods and parties know they are located at some other particular place, then such location is the place for their delivery.
Identified
92
UCC: Shipment Contracts – require/authorize the seller to ship goods by carrier. Unless otherwise agreed the seller must:
(1) Place goods into hands of carrier (2) Contract for their reasonable transportation (3) Obtain and promptly deliver or tender any documents to buyer necessary for possession (4) Promptly notify buyer that shipment has been made.
93
Delivery of goods in conformity with terms of the contract in every detail. If the goods or tender of delivery fail in any respect to conform to the contract, the buyer or lessee has the right to accept the goods, reject the entire shipment or accept part and reject part.
Perfect Tender Rule
94
UCC - Exception to the Perfect Tender Rule: Refers to the right of seller to repair, adjust, or replace defective or nonconforming goods. If time for performance has not expired the seller can notify buyer of the intention to cure and can do so within the contract time of performance. If time for performance has expired, the seller can still cure if he/she has reasonable grounds to believe that the nonconforming tender would have been acceptable to buyer.
Cure
95
UCC - Exception to the Perfect Tender Rule: Buyer can reject an installment, only if the nonconformity substantially impairs the value of the installment and cannot be cured
Installment Contracts
96
UCC - Exception to the Perfect Tender Rule: Delay in delivery or non-delivery is not abreach when performance has been made impracticable “by the occurrence of a contingency the nonoccurrence of which was a basic assumption on which the contract was made” The unforeseen contingency must be one that would have been impossible to contemplate in a given business situation.
Commercial Impracticability
97
UCC - Exception to the Perfect Tender Rule: If one of the parties has “reasonable grounds” to believe that the other party will not perform, he/she may “ in writing ,” demand adequate assuranc e of due performance. Until such assuranceis received, he/she may “suspend” further performance without liability. Ifnot forthcoming within reasonable time (not to exceed 30 days) the failureto respond may be treated as a repudiation of the contract.
Right of Asurance
98
UCC - Exception to the Perfect Tender Rule: When performance by one party depends on cooperation from the other, and such cooperation is not forthcoming, the other party can suspend his/her own performance without liability and hold the uncooperative party in breach, or proceed to perform in any reasonable manner.
Duty of Cooperation
99
UCC states, “Every contract or duty within the Act imposes an obligation of good faith in its performance or enforcement.” this refers to the
Good Faith Requirement
100
UCC - Good Faith Requirement - For Non Merchant
Honesty is in Fact
101
UCC - Good Faith Requirement - For Merchant
Honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade
102
A seller, who _____ agrees to sell real estate; takes a down payment, and; allows the buyer to take possession, will not be able to defend (win) an action for _____ ______ by the buyer on the grounds that the agreement is not in writing.
Orally - Specific Performance
103
In a personal services contract, ______ of the services to be performed will cause the discharge of a party’s duties.
Illegality
104
A contract in violation of a licensing statue that is intended to ____ ______ is not as likely to be declared illegal, as: a contract to commit a crime; a contract requiring the commission of a tort, or; an ________ clause that seeks to relieve one of the parties of liability for fraud.
Raise Revenue - Exculpatory
105
A contract that contains an ______ clause releasing one of the parties from any liability for negligent or wrongful behavior is generally _________ as a matter of public policy.
Exculpatory - Non-enforceable
