Changing Terms

Question 1

Good faith is required in … contracts

Answer 1

All

Regardless of kind of party sophistication

Question 2

Restatement Second of Contracts § 205

Answer 2

DUTY OF GOOD FAITH AND FAIR DEALING

Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.

You have to be really bad in your intentions to get a contract thrown out in this manner

Question 3

Reasons for courts to change terms of contracts

Answer 3

1. Forgotten terms (uncommon)
2. Achieve substantial justice whatever that ultimately means
3. Supply terms that the parties would have agreed to had they thought about the matter

Question 4

Why imply terms?

Answer 4

Implied terms can be added as a matter of public policy or because of empiricism aka what society views as the standard terms or views of other people in similar situations

Question 5

True or False: Illusionary promises are consideration

Answer 5

FALSE

Illusionary promises are not an exchange of value on both sides and therefore are not consideration

Question 6

Stokes v. Dish Network L.L.C

Answer 6

The implied duty of good faith and fair dealing cannot obligate a party to assume obligations that vary or contradict the contract’s express terms.

Under CO law, a contract is not illusory for lack of consideration where a party with seemingly unlimited discretion in performing has at least partially performed and thereby “incurred a sufficient detriment to provide consideration.

Question 7

Bloom v. National Collegiate Association

Answer 7

Implied duty of good faith and fair dealing requires that a party vested with contractual discretion exercise that discretion reasonably.

Question 7

Bloom v. National Collegiate Association

Answer 7

Implied duty of good faith and fair dealing requires that a party vested with contractual discretion exercise that discretion reasonably.

Question 8

True or False: Generally fair market rate or value do invalidate a contract for vagueness as long as it can be determined.

Answer 8

False. These are easily determined so they are not typically invalidating

Question 9

Last Shot Rule (Effect)

Answer 9

If the last person to sign makes changes not contested by the recipient it becomes acceptance by performance upon payment

Means terms tend to favor the final signer

Question 10

Last Shot Rule (Effect)

Answer 10

If the last person to sign makes changes not contested by the recipient it becomes acceptance by performance upon payment

Means terms tend to favor the final signer

Question 11

U.C.C. § 2-306

Answer 11

OUTPUT, REQUIREMENTS, AND EXCLUSIVE DEALINGS
(1) A term which measures the quantity by the output of the seller or the requirements of the buyer means such actual output or requirements as may occur in good faith, except that no quantity unreasonably disproportionate to any stated estimate or in the absence of a stated estimate to any normal or otherwise comparable prior output or requirements may be tendered or demanded.
(2) A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes unless otherwise agreed an obligation by the seller to use best efforts to supply the goods and by the buyer to use best efforts to promote their sale.

Question 12

U.C.C. § 2-204

Answer 12

FORMATION IN GENERAL
(1) A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.
(2) An agreement sufficient to constitute a contract for sale may be found even though the moment of its making is undetermined.
(3) Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.

Question 13

Pre-exiting Duty Rule

Answer 13

Provides that an initial contract cannot be modified unless additional consideration is provided beyond the preexisting duties assigned to both parties under the initial contract. The rule does not apply when unexpected or unanticipated difficulties arise during the course of performance of a contract that prompt parties to voluntarily modify the terms of the initial contract.

Question 14

Alaska Packers v. Domenico

Answer 14

If parties enter a new agreement under which one party agrees to do no more than he was already obligated to do under an existing contract, the new agreement is unenforceable for lack of consideration.

Old rule adjusted by Restatement § 89

Question 15

Angel v. Murray

Answer 15

When unexpected or unanticipated difficulties arise during the course of performance of a contract, the parties may modify the initial contract even without additional consideration for the modification as long as

(1) the parties voluntarily agree and the promise modifying the initial contract is made before the contract is fully performed on either side;

(2) the underlying circumstances prompting the modification are unanticipated by the parties; and

(3) the modification is fair and equitable.

Question 16

Restatement Second of Contracts § 89

Answer 16

A promise modifying a duty under a contract not fully performed on either side is binding

1. if the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made; or
2. to the extent provided by statute; or
3. to the extent that justice requires enforcement in view of material change of position in reliance on the promise.

Question 17

UCC § 2-209

Answer 17

1. In agreement modifying a contract within this Article needs no consideration to be binding.
2. A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party.
3. The requirements of the statute of frauds section of this Article ( [UCC 2-201]) must be satisfied if the contracts as modified is within its provisions.
4. Although an attempt at modification or rescission does not satisfy the requirements of subsection (2) or (3) it can operate as a waiver.
5. A party who has made a waiver affecting an executory portion of the contract may retract the waiver by reasonable notification received by the other party that strict performance will be required of any term waived, unless the retraction would be unjust in view of a material change of position in reliance on the waiver.

*Basically just need good faith with no fraud and no specific item that says not modification
*