Ch 1:Section 1 - Basis for Enforceable Contracts

Question 1

Contract

Answer 1

A promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty (Restatement 1)

Question 2

Promise

Answer 2

A manifestation of intention to act or refrain from acting in a specified way, so made to justify a promisee in understanding that a commitment has been made; promise may be stated in words either oral or written, or may be inferred wholly or partly from conduct (Restatements 2&4)

Question 3

Promisor

Answer 3

The person manifesting the intention; the person breaching the promise

Question 4

Promisee

Answer 4

The person to whom the manifestation is addressed; the person whom the promise is breached against

Question 5

Express Warranties

Answer 5

Any affirmation of fact or promise made by the seller to the buyer which relates to the good and becomes a basis of the bargain; any description of the goods which is made a part of the basis of the bargain; goods shall conform to the affirmation, promise, or description; statement of opinion or commendation does not create a warranty (UCC 2-313)

Question 6

Warrant of Merchantibility

Answer 6

Suitable for purchase or sale;

1) pass without objection under the contract description
2) are fit for ordinary purposes for which such goods are used
3) run of even kind, quality and quantity
4) are adequately contained/packaged/labelled
5) conform to the promises or affirmations of fact made on the container/label

Question 7

Merchant

Answer 7

A person who deals in goods of the kind; who by his occupation holds himself out as having knowledge or skill peculiar to the goods involved in the transaction

Question 8

Goods

Answer 8

things which are moveable at the time of identification to the contract for sale

Question 9

Sources of Contract Law

Answer 9

1) Case law (primary, stare decisis)
2) Restatement 2d (Secondary, persuasive)
3) UCC (primary, statutes; if the facts fit, the statute applies)

Question 10

UCC Article 2

Answer 10

Governs sale of goods (NOT SERVICES); regardless of merchant or not.

Question 11

Hybrid Contracts

Answer 11

Contracts with both goods and services;

what predominates the contract (in $$, time, …etc)

Question 12

Common Law and the UCC

Answer 12

Common law supplements Article 2 of the UCC; Article 2 of the UCC replaces the common law

Question 13

What Promises will the law enforce?

Answer 13

• Promises with moral components
• If the promisor intends the promise to be enforceable
• If the promisee is reliant upon the Promisor’s promise (restatement 90)
• if there is consideration attached to the promise

Question 14

Restatement 90

Answer 14

a promise which the promisor should reasonably expect to induce action on the part of the promisee and which does induce such action is binding if injustice can be avoided only by enforcement of the promise. (A promise that the promisee acts on then the promisor breaches, the promisee relied on the promise)