Chapter 6 Bus Law: Contracts, Sales, and copyrights and patents Flashcards
3 Methods of Forming contract (Ex-If-IL)
Expressed - Oral or written
Implied-in-Fact - by Conduct
Implied-in-Law - Remedy for plaintiff to recover
Executory vs Executed
Executory - Performance still needed
Executed - COMPLETE
What law applies to the contract?
Common Law or UCC
Common Law (RISE) R - Real Estate I - Insurance S - Services E - Employment
UCC- Sale of movable goods
3 elements of contract (O&A,E,L)
Offer and Acceptance
Exchange consideration of legal value
Lack of defense
The only contracts that need to be in writing are what?
ONLY Contracts under Statutes of Fraud.
What 3 element create a contract?
Offer and Acceptance
Consideration exchanged
No Defenses
What is needed to establish Fraud as a defense?
MAIDS
Fraud in inducement vs Fraud in execution?
Inducement is Voidable defense = defrauded party is aware they are making a contract
Execution is VOID defense = defrauded party is unaware they are making a contract
BOTH: there are material misrepresentations
Duress vs undue influence
Duress (unlawful use of force or harm) = VOID Undue influence (abuse of trust) = VOIDABLE
Statute of Frauds (MYLEGS)
These must be in writing M - Marriage Y - Multi YEAR contracts L - Land E - Executors G - Goods sold > $500 S - Surety (Paying someone elses debt)
Accord and satifaction vs novation
Novation = Same AGREEMENT, New PARTIES Accord = Same PARTIES, New AGREEMENT
Parol evidence rule MUST KNOW what is admissible?
Subsequent Modifications (Oral or written)
Are punitive Damages available under contract law?
NO
Compensatory Damages used for?
Personal service contracts
Specific Performance Damages used for?
Land or Unique items
Liquidating Damages are used for?
Damages agreed in contract BUT NOT PENALTIES
Merchant Firm Offer THINGS TO KNOW
1) Was it sold by a merchant?
2) Was it a good being sold?
3) Was it in writing?
4) IRREVOCABLE
Mirror Image Rule UCC vs Common Law?
UCC- Terms don’t have to be the same unless they are merchants.
Common Law: MUST BE SAME
What is notice of accommodation’s role in shipment of nonconforming goods?
w/ NOA = Counteroffer!
W/out NOA = acceptance and breach
UCC vs Common law Modifications without consideration?
UCC modifications to contract are enforceable without considerations
Common = modifications are NOT enforceable
Doctrine of substantial performance (UCC vs Common Law)
Common Law: Non-breaching party may get minor monetary remedies BUT CAN’T CANCEL OR RESCIND CONTRACT.
UCC: Non-breaching party CAN CANCEL CONTRACT. Seller requires perfect tender
FOur main questions I got were:
1) Will this person win or lose suit?
2) Is this person liable or not?
3) Is this contact formed or not?
4) Is this contract enforceable or not?
TBD
Who is liable under most contracts?
Contracts are only enforceable against the person who signed the contact.
what is LEGAL consideration?
It must be BARGAINED FOR!
LEGAL VALUE! (parties weren’t obligated to do that before)
Intended beneficiary vs incidental?
Intended (NAME PARTY SPECIFICALLY) = Enforceable
Incidental (NOT NAMED SPECIFICALLY) = NOT Enforceable
What offer’s can’t be revoked? (OMU)
Option contract (offeree buys time) Merchant firm offer Unilateral contracts (promise given for performance
Sale or Return Risk of loss/title?
Risk on Buyer until returned
Sale on Approval Risk of Loss/title?
Risk remains with Seller until Buyer approves.
Express Warranty states?
Goods will conform to the statement of fact (made by seller), to the description, or to the sample model. MUST BE (BoB) Basis of Bargaining
3 Implied Warranties are? (TMP)
of Title
of Merchantability
of Particular purpose
Warranty of Title?
Every sales contract
May only be disclaimed SPECIFICALLY or specific circumstances (judicial sale) (not “as is”)
Warranty of Merchantibility
Applies to Merchant Sellers
CAN disclaim things generally (“as is”)
Goods fit for ORDINARY PURPOSE
Warranty of Fitness for a PARTICULAR purpose?
SELLER must select Goods Suitable for Buyer’s purpose
Can be disclaimed generally (“as is”)
An action for strict liability tort will succeed if?
1) Product was sold in defective condition
2) Seller was in business of selling goods
3) Defect in product caused injury
4) Product was expected to and DID reach the customer without substantial change.
No privity required.
No Negligence required. Seller strictly liable
Do shipping contract rules of passage of title apply EVEN when nonconforming goods?
YES.
