CA Contracts Flashcards
The UCC governs
The sale of goods
An OFFER requires:
- intent to contract demonstrated by promise, undertaking or commitment
- Definite and certain terms
- communicated to an identified offeree
What is an OUTPUT contract?
A contract where seller commits to sell all the goods it produces to the buyer.
Such contract’s are valid even though no specific quantity is mentioned or accepted by the offeree.
What is Acceptance?
An Acceptance is a manifestation of assent to the terms of an offer in the manner prescribed or authorized by the offer
What is Consideration?
Consideration requires a bargained for exchange between the parties involving legal value
Statute of Frauds requires:
Agreements for the sale of goods of $500 or more must be in writing to be enforceable.
And contracts of more than 1 year must be in writing.
When is a breach of contract a material breach?
When the promisee does not receive the substantial benefit of the bargain as a result of the bench
Damage Remedies
Under UCC what is the “cost of cover” remedy?
Where buyer purchases substitutes goods & recovers the difference between price of the substitute goods and the contract price
What are incidental & consequential damages?
Damages that are foreseeable
What is the duty to mitigate?
Non-breaching party is under a duty to mitigate damages.
This prevents non-breaching from losing substantial monies
What is the Merchant Firm Rule?
- Both parties must be merchants to apply
- An offer by a merchant to buy or sell goods in a signed writing that gives assurances that it will be held open, is not revocable for lack of consideration for the time stated or at least a reasonable time, not to exceed 3 months.
What is the Quasi contract rule?
Where a contract fails, the non-breaching party may recover in quasi-contract to prevent unjust enrichment of one of the parties
What is Discharge by Impossibility?
Where occurrence of an unanticipated or extraordinary event may make contractual duties impossible to perform
What is Discharge by Impracticability?
When a party under a duty to perform has encountered extreme & unreasonable difficulty & expense that was not anticipated
What is Discharge by Frustration?
Frustration of contract exists if the purpose has become valueless because of some supervening event, not the fault of the party seeking discharge
There must be a supervening event that the parties did not foresee which destroys the purpose of the contract
When is a Breach of contract minor?
When the obligee gains the substantial benefit of her bargain despite the obligor’s defective performance
When does compensatory damages come into play?
Where the breach is minor, the remedy is an award of damages sufficient to compensate for defective performance
How does a non-breaching party obtain Consequential Damages?
The damages must have been foreseen at the time of formation of the contract
What is the certainty rule?
Damages must be certain in their nature and not speculative
Who has the duty to mitigate damages?
The non-breaching party is under a duty to mitigate damages
When does Quasi Contract apply?
Where a contract fails, the non-breaching party may recover in quasi contract to prevent unjust enrichment of one of the parties.
What is the Parol Evidence Rule?
When parties to a contract express their agreement in a final writing, the prior writings or expressions made are not admissible to vary the contract terms
The UCC applies to what type of contract?
Contracts for goods and not services
An offer requires?:
- A promise, undertaking or commitment to enter a contract
- Certainty & definiteness in the essential terms
- Communication to offeree
Acceptance Requires?
A manifestation of assent to the terms of an offer in the manner prescribed or authorized by the offer
The S.O.F. does not apply when…..
The contract can be performed within a year
The Parol Evidence Rule states:
Prior expressions that vary the express terms of the contract are not admissible
When is a Breach Minor?
When the non-breaching party obtains the substantial benefit of her bargain despite the defective performance
What is Anticipatory Repudiation?
Where the Promisor, prior to the time set for performance unquestionably indicates that she will not perform.
Who is considered a Merchant?
One who regularly deals in goods of the kind sold or who otherwise by his profession holds himself out as having special knowledge or skills to the practices or goods involved.
What are the 2 provisions of the S.O.F?
- Writings are required for the Sale of Goods of $500 or more &
- Any agreement which cannot be performed w/i one year must be in writing
Under UCC, modifications made in good faith are . . .
Valid without consideration
S.O.F requires modifications to contract to be……….
memorialized
When is Specific Performance Appropriate?
When the legal remedy is inadequate
The elements of an offer are….?
1 intent to contract demonstrated by promise, undertaking or commitment
- Definite & certain terms
- Communicated to an identified offeree
Contract Law
- UCC governs?
- Common law governs?
- UCC = Sale of goods
2. Common Law = contracts other than sale of goods
How do you address mix contracts (goods and non-goods)?
Determined by the more important part of the deal, except divided contract in which both UCC and common law rules apply
What is a unilateral contract?
A contract where performance is required as a method of acceptance.
What is an Option contract?
Its an agreement to leave open in exchange for consideration
What are ads in relation to contract law?
Generally preliminary proposal, unless words are identifiable person.
eg. first come first serve
What is “Excuse of Condition by Waiver or Estoppel?
Where a party indicates that she is “waiving” a condition before it is to happen & the other party relies upon such indication, the court will hold this to be a binding waiver.
eg. if you accepted defective performance on at least 6 occasions the party w/duty to perform may rely on such conduct.
When is a breach of contract material?
A breach of Contract is material if the obligee does not receive the substantial benefit of her bargain
What is Promissory Estoppel?
Promissory Estoppel prevents one party from withdrawing a promise made to a second party if the latter has reasonably relied on that promise.
A promise made w/o consideration is generally not enforceable.
What is the Good Faith Condition?
aka Covenant of Good Faith
Implied condition that the parties will act in good faith in carrying out their obligation under the contract.
When is Specific Performance not granted?
When the legal remedy is adequate.
When does Specific Performance apply?
Where the legal remedy in inadequate the non-breaching party may seek specific performance
What is necessary to modify an existing contract?
consideration
Under Common Law of Contract
When can a contract be terminated?
- When duty to perform has been breached
2. Material Breach of contract
What is the Parole Evidence rule?
Where the parties to a contract have expressed their agreement in writing with the intent that it embody the full & final expressions of the contract, other prior expressions are inadmissible to vary the terms of the writing
What is a Condition Precedent?
A condition that must occur before an absolute duty of immediate performance arises in the other party
eg. Notify you that container is 80% full, a condition that requires you to empty container
A valid contract requires:
- an offe
- acceptance, and
- consideration
