Contract Flashcards
Untrue assertion may be
1) Statement not in accordance with the facts,
2) an act of overt concealment that prevents a party from discovering the facts
3) under certain cir, nondisclosure.
Misrep is fraudulent if
- It is intended to induce another’s asset to the contract, or
- party making the misrepresentation is substantially certain that it will induce assent,
- the party making the misrepresentation knows or believes the statement is false; or consciously disregards a significant risk of falsity.
- Material if it is likley to induce a reasonable person’s assentm or the party making it knows it will likley induce the particular recipient’s assent.
- Party’s reliance on an untrue assertion is justifiable, unless hte statement is patently false or the party knows it to be false.
Contractual duty can be delegated;
a duty is not delegable if
- K clearly states that a specific person must perform;
- Performance requires substantial skill and discretion; or
- there are other cir in whicch it is clear that the identity of the person rendering performance is a material part of the obligee’s bargained for exchange.
An obligor is discharged by the substitution of a new obligor.
in deligation, only if the K so provides or if the obligee makes a binding manifestation of assent; novation.
the obligee retains his original right against th eobligor
even though the obligor manifests an intent to substitute a new obligor in his place and the new obligor purports to assume the duty.
The obligee may also have rights against the new obligor
as an intended beneficiary of the new obligor’s promise to asume the old obligor’s Kduty.
UCC 2-306 (1)
Quantities subject to requirements contracts may not be unreasonably disproportionate to any stated estimate or in the absence of any stated estimate to any normal or otherwise comparable prior requirements.
Promissory Estoppel
Substantial reliance needed.
- Daughter called mom usual ly and visiting her at X mas, birthday, XXXXXXX
If you give me emotional support, I will leave you half of my estate:
the emotional support : given by the daughter would ahve been bargained for exchange by mother for part of her estate.
–> Mothers promise should induce the legal detriment.
Promis is illusory
when there is no consideration on both sides of the contract.
Consideration
need not be $$$ economic value; not preexisting duty.
Suretyship
will be bound by her promise to pay another’s debt as long as she makes her promise before the creditor (son) performs or promises to perform. The surety need not receive any separate consideration.
UCC 2 - 207 Acceptance containing additional or different terms is effective
unless the offeree expressly makes his acceptance conditional on assent by the offeror to the additional terms.
When the acceptance is made expressly conditional on the acceptance of new terms,
it is a rejection of the offer.
UCC 2 -207: parties are merchants;
acceptance with an additional term would result in the term becoming part of the contract unless
1- It materially altered the original terms of the offer.
2- The offer had expressly limited acceptance to the terms of the offer; or
3 - the offeror objected to the terms within a reasonable time after notice of it.
One party makes a unilateral mistake about a basic assumption on which the contract is based;
the other party knew or had reason to know of that mistake, the mistaken party will be allowed to resciend the contract.
Modification is enforceable
If it was made in good faith.
Consideration is not required
for an enforceable modification.
Any modification will be subject to the general code requirement of
Good faith and fair dealing; which requires honestly in fact and conformity with reasonable commercial standards.
Rights of the 3rd party beneficiary do not vest until
- It manifests assent in a manner invited or required by the parties;
- It learns of the contract and detrimentally relies on it.
- It brings a lawsuit to enforce its rights.
Until the 3rd party rights have vested,
a modification of the contract can take place without the consent of the 3rd party.
The 3rd party rights were not vested;
the contracting parties were free to modify the contract.
Anticipatory repudication
nonbreaching party can 1) sue for damages, 2) contract with a 3rd party; or 3) do nothing.
–>It is not a prospective inability to perform,
Defense: storm delay delivery (Impossible on time)
would not only to excuse performance; but also to excuse the delay in full performance.
Impracticability
discharges duty to perform to the extent of the impracticability so if the storm rises to the level fo impracticability and prevented the delivery of the 200 widgets, the manu duty to perform with respect to those widgets discharge.
Gratuitous assignment is
recovable.
- There was an assignment revocable; it was revoked when the shopkeeper accepted teh money from the employee.
Addition deletion or change: counter offer.
Rejection of the original offer
HO offered to pay $500. Landscaper wants to get $750
Landscaper hasn’t accepted.
- It is Rejection & Counteroffer.
Mirror image rule does NOT
require the very first communcation from an offeree to be a matching acceptance.
-Requests for information is not counteroffer
Response: counteroffer?
express contents & implied contents.
UCC 2 -207
If the party’s expression is otherwise valid as acceptance but contains terms additional to or different from those in th e offer; contract is formed.
If the offeree’s acceptance is expressly conditioned ot the initial offeror’s assent ot hte new or different terms;
counter offer.
In this case, no contract forms unless
the initial offeror assents to the new or different terms.
The offeree says, “not 200, but 205; for the lawnmower and its gas can”
It isn’t counter offer.
the Offeree has expressed that he is willing to purchase the lawnmover;
+ the neighbor has not conditioned his acceptance. (if 가 없음: I will buy it only if XXXX)
–> the contract has formed under UCC.
UCC 2-207 Both should be merchant
Aware about the forms: that one of the merchants bring.
If only one is a merchant;
The contract will contain any additional or different terms only if the offeror expressly agrees to them.
Merchants
1) in the business of selling goods of the kind at issue in the transaction or
2) holds herself out as having specialized knowledge of the goods or the type of transaction involved.
Here, the example says, at least one party is NOT A MERCHANT.
So, the terms regarding a higher price for including the gas can only become part of the contract if the HO expressly agrees to them.
UCC 2 207: any additional terms automatically become part of a contract involving merchants, unless an exception applies;
The HO and the neighbor are both merchants
The neighbor’s request to purchase a gas can is an additional term.
were not part of the offer at all. offer: was silent on that.
The neighbor’s offer to pay $205 is a different term;
addressed in the offer; but the offer and acceptance are not identical. $200 X 205
If exception applies;
the additional terms become part of the contract between merchants only if the offeror expressly agrees to them.
Exceptions
- Offer expressly limits acceptance to the offer’s terms;
- Additional terms materially alter those in the offer;
- Offeror objects within a reasonable time.
Additional terms materially alter those in the offer
would subject to offeror to undue surprise or hardship if the terms became part of the contract without the offeror’s knowledge.
EG. Undue surprise or hardship:
- Limitations of remedies;
- Disclaimers of implied warranties;
- Clauses requireing the parties to litigate contractual disputes in one jur and no other.
If all are merchants: any different terms
are dropped or knocked out of the contract. (Knockout rule).
Then, any gaps from the removal of the differing terms are filled by implication;
- By fact: evidence of trade usage in the industry;
- By law: UCC gap fillers.
UCC 2-207 (3) The parties written communications fail to form a contract
+ the Parties behave as though there were a contract by exchanging performance with each other
== > there is K.
Contract terms are limited by those
on which both parties writing agree; &
Supplemented by the UCC’s default provisions or gap fillers.
Acceptance
manifest by performance. manifest by words
Consideration
A bargain for exchange of promises, performances, or both.
Each party’s promise or performance induces the others.
Actual or promised performance
Actual or promised performance
- Do something (Affirmative act)
- Not to do something (forbearing refraining from sth she has a legal right to do)
- Creating or modifying a legal relationship.
Adequacy of consideration
The exchanged values need NOT be equal or even close to equal.
Peppercorn: a gross disparity in value that shocks the conscience:
would NOT necessarily prevent a contract from forming for inadequate consideration.
Inadequate Consideration: a gross disparity in value:
Might support a defense to enforceability; e.g., lack fo capacity to support an inference that one party was not in his right mind to make abargain.
What if nephew collapsed, and passerby rendered aid.
At hospital, nephew contacted the passerby and gifted “$10,000.” this is contract?
a promise for past benefit or moral obligation,
no K.
Even though parties are exchanging promises, their promises or performances are NOT truly bargained for;
promises can’t induce the benefit to be conferred. because promise did not exist at the time benefit was conferred in the first place.
EG., life saving aid was already rendered.
Promise to pay $10,000 did not induce passerby to render aid.
–> no consideration.
–> no contract.
K that gives a party a choice of alternative performance.
e.g, 1. “I can mow your lawn for $100.”
2. “OK, I will let you know if I need it.”
–> illusory.
no consideration.
–> If K allows one party to decide whether to perform it at all.
There should be mutuality of obligation;
Both parties have to give up sth in exchange for the other’s promise.
- holding not until they wanted it.
Purchase contract: after parties signed the contract but before closing, the bald seller says, “야, 힘들다 올려서 받을께.” $200K–> $300K.
The buyer agreed.
Preexisting rule at Common Law
Modification to an existing Contract is unenforceable without a new bargained for exchange, that is, new consideration on both sides.
New consideration (after modification –> $300K)
Each party promises to do something in addition to, or even different from, what was already promised.
Exception to the preexisting duty rule.
- If a contract is one for the sale of goods UCC 2, then, an modification in good faith is enforceable without new consideration.
Exception to preexisting rule
- CL: modification is enforceable without new consideration if the modification is fair and equitable in light of new developments that the parties did not foresee when they made the contract.
Here, hotel land contract; not UCC.
it is not about fair or equitable in light of new developments, + no new consideration here.
= The buyer is paying $10 k more (in consideration) for the same land.
= the seller is giving nothing
The bald seller’s proposed modification is not enforceable.
but if the seller is gonna provide a larger plot of land;
then, both considerations: OK. effective modification.
Preexisting duty rule and debts
Liquidated debts:
the amount owed is certain:
-a debtor’s promise to repay it is NOT consideration.
Unliquidated Debts
The amount owed is disputed;
then, the editor an debtor’s settlement of dispute is supported by adequate consideration.
Option contract
The offeror’s promise to refrain from revoking an offer for a period of time
Aquarium service: 1번째 면접 본자(단가 $200)가 아니라 2번째 면접본자(단가 $50)를 채용할 경우: the first offer was option contract; offeror’s promise to refrain from revoking the offer for a week.
Did she breached the option contract? NO.
Option contract in CL
An enforceable option K must be supported by new consideration, separate from any consideration on the table to support the offer the offeror is making to the offeree.
Aquarium service: CL. NOT UCC.
The office manager (woman) remained free to revoke her offer at anytime before the company accepted.
Option contract in the UCC: without consideration; it is enforceable if:
- The offer must be made by merchants,
- The offer is made in a signed wirting,
- The offer is held open no longer than 3 months.
CL Parol Evidence Rule
Binding Integrated Agreement
-Discharges prior agreements, to the extent that it is inconsistent with those prior agreements.
Evidentiary: PER:
extrinsic evidence may be used when construing a written contract.
Extrinsic Evidence
Evidence outside the four corners of the written contract.
Extrinsic Evi
Other oral or written agreements, negotiations or correspondence
The parties’ dealings with each other.
Evidence that is after contract formation does not fall under PER
Evidence that falls before or contemporaneous with the formation of the contract : is PER.
Integrated:
Constitutes final expression of one or more term of the agreements.
Competely intergrated agreements
discharges all prior agreements falling within the completely integrated agreements’ scope
Completely integrated agreement
XX doesn’t consider extrinsice evidence that contradicts the agreement.
XXX supplement the agreement with evidence of any consistent, additional terms.
Partially integrated agreement
Final but incomplete statement of the parties intent.
Binding Partially Integrated Agreement
discharges prior agreements if it is inconsistent with them.
Partially integrated agreement
XX doesn’t consider extrinsic evidence to contradict the agreements express terms.
OO considers extrinsic evidence to supplement the agreements consistent additional terms.
Merger Clause
strong through not conclusive evidence of complete integration.
Exceptions to PER: Courts may consider.
-whether Agreement was intergrated,
If integrated,
- completely or partially?
– meaning of the agreement; by clarifying an ambiguous term.
– Valid defense to enforceability, incld illegality, fraud, duress, mistake, lack of consideration, or any other invalidating cause.
Exceptions to PER
grounds that grant or deny a remedy for breach of contract, ind. Rescission, reformation, specific performance, or other remedy.
UCC PER
If the parties’ writing agree on the term, or if the agreement is integrated with respect to the term; then extrinsic evidence is inadmissible to contradict the term.E
Extrinsic evidence is admissible to explain or clarify the term
Evidence of consistent additional terms may be used to explain or supplement the agreement; unless the court finds that the agreement is completely integrated.
Types of extrinsic evidence
- Parties’ course of performance
- 2. Parties’ course of dealings.
– 3. Trade usage.
Chickens are goods: UCC.
Merger clause: Integration.
– Broiling or stewing chickens?
——>it is Latent Ambiguity.
———-> Therefore, ct can consider extrinsic evidence to clarify which type of chicken the parties intended to buy and sell.
UCC Sale of Goods:
When the essential term is omitted, a court will imply one that best carries out the parties objective intentions.
CL: Service Contract
Essential term depends on the facts, circumstances surrounding transaction.
For employment contract
Salary is usually essential term.
Nonessential term omitted;
Ct carries out the best objective of their intent.
Objective intentions can be gleaned
- Language of the K itself;
- Parties’ conduct,
- Facts and circumstances surrounding the contract
Dozen: Bakery: 13, Restaurant owner: 12라고 이해할 때:
K interpretation: Trade usage:
the meaning of a term supplied by trade usage will govern a transaction even if one of them is not aware of the trade usage.
K: “if the contract did not require that from us.” how to interpret?
Sorting through multiple possible meanings of them; courts prefer one that gives a reasonable lawful, and effective meaning.
UCC Gapfiller
If the parties do not specify the price: then, Market price?
- It is a reasonable price at the time of delivery.
If parties were , “did not intend to be bound without first establishing price.”
then, if there is no price; then, there is no contract.
If K UCC did not specify the time and the place for the delivery
Seller’s place of business of his residence (if he has no business address)
UCC 2-309: time for delivery shall be
a reasonable time.
UCC K: when payment is due (if it is not specified)
Unless otherwise agreed, payment is due at the time and place at which teh buyer is to receive the goods.
EG School buys 500 lbs of frozen chicken strips:
-delivery date specified;
-Time of payment unspecified;
-Manner of delivery unspecified.
- UCC 2-307
UCC 2-307
The seller must tender all goods under the contract in a single delivery, and payment is due only upon such tender.
Requirement contract
A buyer agrees to purchase as many of a good as the buyer can use or require all of its tires. (양껏)
Output contract
A buyer agrees to purchase as many of a good as the seller can produce.
Output contract
A buyer agrees to purchase as many of a good as the seller can produce.
Special rules of Requirement and Output contracts:
- Good faith.
- Neither party may demand or tender a quantity that is UNREASONABLY DISPROPORTIONATE TO
- —- Any stated estimate
—— Any comparable prior demands or tenders,
Contract must result from the exercise of free will.
Parties lacking capacity renders the contract VOIDABLE.
Infant: someone under 18: not majority
any contracts entered are voidable.
Exception: necessaries: food, clothing, shelter, and medical care.
Can’t ratify a contract until he reaches age of majority.
The incapacity defense is personal to the minor.
The minor’s legal guardian can sue to enforce the contract on his behalf.
- The adult party against whom the contract is enforced can’t defend on the basis of the minor’s incapacity.
Mentally incompetent Person:
- If the party doesn’t understands the contract OR
- The party understands the contract but acts irrationally.
Duress and undue influcence
Involve a problem with one contracting party’s exercise of free will.
“All the restaurants in the city use my service to supply linens. If you don’t hire me, you will never get a liquor license.”
“I accept your bid.” –> Duress
Duress
A contract party’s free will is overcome by an improper threat that leaves the party with no reasonable alternative but to agree to the contract.
Threat that constitute duress:
- Express or implied;
- Physical or economic harm,
- Improper.
Improper threat
- Criminal or tortious conduct,
- Criminal prosecution,
- Bad faith use of the civil litigation process.
- Breach of the duty of good faith and fair dealing.
–> Even if terms are fair,–> VOIDALBE.
Improper threat: unfair terms
-Threatened act would harm recipient and not benefit party making threat.
-History or prior unfair dealing,
-What’s threatened is otherwise a use of power for illegitimate ends.
Contract modification request
A party’s threat to breach a contract isn’t improper unless the threat breaches the duty of good faith and fair dealing.
Modification of contract requests:
- exploits threatened party’s vulnerability to leverage unfair advantage:
- Breach of duty of good faith and fair dealing. - Prompted by unforeseen cir:
- no breach of duty of good faith and fair dealing.
-no breach fo duty of good faith and fair dealing.
- breach is less likely.
Threats made by nonparties:
may also render the contract voidable.
- Contract is not voidable if nonthreatened party in good faith and without reason to know of threat, either gives value or materially relies on contract.
No reasonable alternative
but to accept despite the fact that bid was higher than others;
–> duress.
Undue influence
A contracting party’s free will is overcome by an especially strong influence exerted by someone else in a confidential relationship with the party
Elements of Undue Influence Elements
- There is a special relationship of trust between the victim and the other party (parents, children, attorney, clients, trustees)
- The special relationship puts the influencer in a dominant position over the victim; the influencer has a duty not to act contrary to the victim’s interests.
- The influencer ABUSES his special relationship by unfairly persuading the victim to enter into a contract that’s harmful to the victim’s interests.
Unfair influence exercised by nonparties.
- May render contract voidable.
- Contract is not voidable if nonthreatened party, in good faith and without knowledge of the undue influence, either gives value or materially relies on the contract.
Statute of Frauds
Specific types of otherwise valid contracts are unenforceable unless the terms appear in writing signed by the party to be charged; or the party against whom enforcement is sought.
Does the statute of frauds apply? 6.
- M.arriage
- Y.ear 1
- L.and interest
- E.xecutor admininstrator decedent’s liability
- G.ood Sales of $500. UCC.
- S.uretyship answer the 3rd party liabilty
Suretyship; guaranty contracts:
– A contracting party promises to answer for the 3rd party liability.
Exception: if the contracting party does so primarily for her own economic advantage and not for the 3rd party’s benefit.
Land: Contracts for the transfer of an interest in land;
Exception: rule does not apply short term lease less than 1 year duration.
- Contracts that can’t be fully performed by any or all parties in under one year.
Exception: contracts of indefinite or uncertain duration.
Sale of Goods $500 or more
Executor - Administrator contracts
An executor or administrator agrees to answer for the decedent’s liability.
Contracts in which part of the consideration is marriage
Exception: contracts in which the sole consideration is mutual promises to marry
CL: Statute of Frauds
Writing containing the K’s essential terms signed by the party against whom enforcement is sought?
CL: SoF: Writing suffices if it reasonably identifies:
1- Parties.
2. Subject Matter
3. Consideration,
4. Nature and
5. Time of the parties’ performance.
UCC: SoF Writing
- Furnishes a basis to believe the contract was made.
- States the quantity of goods.
Both CL SoF & UCC SoF:
The writing may consist of virtually any physical or electronic document; or series of related documents, setting forth the necessary information.
- Check real estate that references the land, parties, and prices.
The Writing (CL & UCC)
doesn’t have to be addressed to any of the contracting parties.
It does not have to be written at the time when the promises were made.
The signature
- Usually, handwritten.
- may consist of any mark placed on the writing; if it identifies the signer, and manifests intent to adopt the writing.
Delivery receipt (ex. of standmixer)
-Written.
-provides a basis of believing a contract was made.
-signed by the baker.
- receipt recites the quantity of goods purchased.
SoF was applied; there was not sufficient writing; then, whether an exception applies?
SoF exception:
- Confirmatory memos: merchants.
- Part performance exception.
Confirmatory memos:
facilitate commerce between merchants by streamlining the statute of frauds.
Qualifying for the confirmatory memo exception
- The receiving merchant must receive the writing within reasonable time.
Confirmatory memos 2.
- The writing must be sufficient to bind the sending merchant.
- that is, the sender must sign the writing to confirm.
Confirmatory memo 3.
- The recipient had a reason to know the contents.
1.2.3., –> Confirmatory memos between merchants;
unless she gives written notice of any objection to its contents within 10 days after receipt.
Partial performance
Oral agreement takes the place of a signed writing.
- Commonly arises in real estate transactions.
Qualifying for the part performance
- The party receiving an interest in real estate takes clear, definite, visible, and reasonably continuous possession of the property; with apparent intent to carryout the contract.
Qualifying the part performance exception
if the facts indicate that the recipient has taken possession for reasons other than existence of a sales contract. 이 경우 적용이 안 되는 듯. E.G., under a lease.
Part performance land real estate common
- The recipient pays at least part of the purchase price or
Service Contract
Full performance should be in a signed writing.
Service Contract
Part Performance:
- does not satisfy the SoF if you have oral agreement for employemnt for 2 years and were fired after one year; you can’t enforce against your old boss. but you would still be able to recover under Quasi K theory.
Real estate transfer K
partial performance. can satisfy the SoF.
- if
- partial pay
-possession
-improvements
2/3… then no writing needed.
If original contract is subject to SoF:
change or modification to any term of K needs to be in writing as well.
Misrepresentation
an assertion not in accord with the facts.
- Opinions and predictions for future are not misrepresentation because they are not factual statements.
Misrepresentation:
- Must relate to material fact.
- A fact that substantially correlates to a decision to enter into the contract. - The injured party must rely on the misrepresentation.
- Reliance must be justifiable.
Reliance
A party:
- is entitled to rely on the other’s representations.
- doesn’t have a duty to inspect, investigate, or verify another party’s representations.
Avoiding a contract due to misrepresentation
Time period begins to run when the party either knows or has reason to know of the misrepresentation.
Misrepresentation
- Fraudulent, or
- Negligent.
–> both render a contract voidable by the injured party.
Fraudulent misrepresentation
- Made deliberately,
- With knowledge that the statement is false, and
- With intent to induce the other party to enter into the contract.
A party assent induced by fraud;
Party may avoid performance, even if contract is fair.
Fraudulent misrep
- Affirmative misstatement,
- Deliberate conduct;
- Omission
Negligent misrepresentation
made without deceptive intent.
- Party may avoid performance.
- Justifiably relied.
-Party can avoid performance
- as long as material.
Parties have to have a reason to know that it is misrepresented fact that was material.
Mistake
a belief not in accordance with the facts.
Mistake - facts:
must ben then existing.
- not about what will happen in the future.
Mistake: mutual (2 stupidities).
- Must involve a basic assumption on which the contract is made;
- Must have a material effect on the agreed exchange of performance.
- The party adversely affected by the mistake who seeks to avoid the contract must not be the one on whom the contract implictly imposes the risk of the mistake.
Unilateral mistake
- 2.3., .. +
- Must be such that enforcing contract is unconscionable, or
- The nonmistaken party must have reason to know of the mistake or have otherwise cause the mistake.
Even if enforcing the contract against the mistaken party is unconscionable;
A court may still force K if:
1- the mistake isn’t the nonmistaken party’s fault;
2. - The nonmistaken party had no reason to know of the mistake;
3. non mistaken party materially and detrimentally changed position in reliance on the K.
K that are illegal unconscionable, or contrary to public policy;
not enforced.
Illegal K
neither party may enforce them.
- e.g., gambling agreements or agreements to perform services without a required license or permit.
Unconscionable contracts
- unfair terms coupled with an unfair bargaining process;
- so unfair or one sided that, as a matter of judicial policy, they shouldn’t be enforced.
Contracts contrary to public policy may be avoided;
e.g, contracts exempting a party from liability for intentional, knowing, or reckless misconduct;
- parties within the class protecte dby the policy are free to choose whether to enforce the contract or not.
Opinion misrep?
Opinion of Quality, Authenticity, or value is not misrep unless it is made by expert.
Partial integration
the parties agree on everything in the writing itself; but writing does not reflect everything they actually agreed to.
Full integration
the writing is both 1) final as to all the terms it recites on the sheet of paper; 2) complete, sheet of paper is a full, exhaustive, final and exclusive recitation of all their hopes and dreams about this contract.
- No outside agreements.
- Even if they are consistent with the written terms.
Parol evidence: Fully integrated K:
You get what is on the paper.
Partial integration:
if the parties first form an oral agreement; then create a writing that they adopt as a partial integration of their agreement we cannot 1) have any contradictory terms that parties orally agree to prior or contemporaneously at the same time as their writing. But we can have 2) any oral terms that are consistent with the writing, that do no more than dd to it and don’t change it or contradict it.
Students Always Need Coffee
Supplement, Add, Never, Contradict.
Partially integrated Agreement in PER.
Merger Clause Exception (Merger Clause가 있어도 들어올 수 있는 증거): PER
- Conditions precedent exception
- Parol evidence is allowed when you bring in evidence to show that the effectiveness of the agreement was subject orally agreed on condition.
“I will only buy this shit for $9,000 if it passes an inspection first.”» this comes in.
Merger Clause Exception (Merger Clause가 있어도 들어올 수 있는 증거): PER
- Collateral Deal Evidence
= allowed.
(1) Doesn’t contradict the direct terms of the written K. - It is not so closely related to the main contract such that it would be natural to include this in the main contract.
Merger Clause Exception (Merger Clause가 있어도 들어올 수 있는 증거): PER
UCC Sale of Goods:
K can be explained or supplemented by evidence of course of performance, trade usage, or course of dealing.
Merger Clause Exception (Merger Clause가 있어도 들어올 수 있는 증거): PER
Ambiguous Confusing Ass Terms:
PER Gets In.
PER can still get into
interpret, clarify, or explain a term in the contract.
PER: formation defects.
Fraud, Duress, Undue Influence, Incapacity, Mistake, Illegality.
–> PER ALL of this can be brought into show the contract was NOT validly formed in the 1st place.
Essential terms
Consistent additional terms for partially Integrated agreements.
If you want to show the agreement was preliminary; neither fully nor partial–>
You bring in evidence of that too.
Evidence of Typos
Gets In.
Parol Evidence Rule main exceptions
- To uncover shit like fraud and duress.
- To explain ambiguous terms.
- To show a triggering condition precedent,
- To show trade usage, course of dealing, or course of performance,
- Consistent additional Terms (just no contradiction).
- Mistake of integration (Clerical errors)
- To show side collateral oral agreements.
PER does not apply to:
Subsequent Modifications of Agreements (either oral or written) made AFTER the K at issue.
UCC tells us that express terms, course of dealingm and trade usage should all be used together when
they don’t contradict each other;
but when they do:
Course of Performance:
The same parties, same contract.
- How they dont shit before this contract.
Course of Dealing
The same parties; the different and similar contract earlier on.
-How they don’t shit in previous dealing
Trade usage
different people, in the same industry, with the same type of contracts.
- Express terms,
- Specific Terms,
- Boilerplate,
- Course of performance
- Course of dealing
- Trade usage.
Usage of trade = Custom
will control over the literal meaning of a contract if each party knows or has reason to know of the trade usage and neither knows or has reason to know that the other party is thinking of a usage inconsistent with the trade usage.
- The trade term controls even fi one trader did not know.
You can have clauses
ignoring customs of the industry too but these must be clearly stated.
If parties attach a significantly different meaning to the same material term (e.g., internally flawless)
The term that controls is from the ignorant person who did not know the meaning attached by the other party.
The jeweler did know that was the meaning that Goat attached to it.
–> So, the Goat’s meaning will control.
….Goat가 같은 industry or trade에 있는경우는 다름.:
Gap fillers
certain terms are not included in a contract for the sale of goods.
If the procie is not specified; left open or to be fixed by some standart the parties haven’t set yet;
Reasonable price at the time of delivery.
Shipment Contract
When the seller gets the goods to a common carrier (DHL) makes reasonable artangements for delivery, and notifies the buyer; the risk transfers to the buyer.
When they put the goods on the DHL truck, that is when the risk transfers in shipment contract.
Destination K
The buyer is paying for shit if the goods blow up.
Risk of loss if blowing up does not transfer until the goods reach to the buyer.
Predominant purpose test
- Contract language,
- Billing terms,
- Relative allocation of costs between goods and services.
- Nature of final product.
Offer
the offeror’s manifestation of willingness to enter a bargain on specified terms.
Offer
- must be reasonably certain,
- Must be communicated to the offeree.
- Must not have terminated prior to acceptance.
False offer
- Jokes, “you want that radio? it is $0.05.” and laughed.
- Invitation to deal.- “I will sell you that radio, if the price is right.”
- Ads: in general, not offer. “Only if it expressly promises to adhere to specific terms.”
puffery or exaggerated boasting about quality or alue is not an offer.
Termination of offers
- Rejection by the offeree
- Lapse of time,
- Revocation by the offeror,
- The offeror’s death or incapacity,
- Destruction of hte offer’s subject matter.
Revocation
Must be communicated.
- Directly
the offeree learns of the termination from the offeror.
Anytime before acceptance,
even if he promises to keep the offer open for a definite time.
Revocation: indirectly
offeree learns about the termination from a reliable source other than the offeror.
Option
a distinct contract in which the offeror promises to keep the offer open for a definite time, in exchange for consideration, or value from the offeree.
An offer terminates, if , before acceptance,
- Death,- Offeror dead.
- Incapacitation,
- Destruction: radio destroyed.
Offer
The offeror’s manifestation of willingness to enter a bargain on specified terms.
Acceptance
The offeree’s manifestation of assent to the offer.
Acceptance’s effectiveness
Objectively, would a reasonable person in the offeror’s shoes have understood the offeree’s words of conduct as an acceptance.
Method of Acceptance
-The offer doesn’t specify the exclusive methods of acceptance.
–> An offeree may accept by any reasonable method.
If the offer specifies an exclusive methods of acceptance:
an offeree must accept using that method.
The offer specifies a nonexclusive methods of acceptance
an offeree may accept using a different method. if it offers the same level of protection.
Typical acceptance methods
- The offeree’s return promise.
- The offeree’s performance.
Reward contract (lost cat) : unilateral offer.
Acceptance:
- when the man returns the cat, (at the time of performance,) he should know about the offer. otherwise, there was no acceptance.
Option Contract
-is created by the offeree’s beginning of performance in a unilateral contract; where performance can only be completed over time.
- protects the offeree from the offeror revoking after the offeree has begun performance, but before the offeree has completed performance.
When is the acceptance effective?
To be effective, an offeree’s acceptance must be communicated to the offeror.
Non instantaneous methods of communication or by performing
Mailbox rule
upon dispatch.
BUT
If it says, “acceptance effective upon receipt.” then, mailbox rule does not apply.
Acceptance is not properly dispatched;
Effective upon dispatch:
- only if the offeror ultimately receive it within the time in which a properly dispatched acceptance would have been received.
Notice of performance
IF THE OFFER REQUIRES IT, the offeree accepting by performance must give notice of his performance to the offeror.
An offeree must also give notice, even if the offer doesn’t require it,
if the offeree’s performance isn’t given directly to the offeror and the offeror has no reliable way of learning of the performance.
Discharge performance by
- Fully performing,
- Accord and Satisfaction,
- Substitution,
- Novation,
- Mutual rescission
- Release,
- Covenant not to sue.
Accord:
Agreement to satisfy and discharge an obligation in a manner different from the original duty created by an obligation.
Accord is:
-Agree to substitute performance,
-New Contract: therefore, NEW CONSIDERATION.
Consideration is often present in an accord.
The obligee is tentatively giving up its right to insist on performance under the original contract in exchange for the substituted performance.
- Subject to good faith dispute.
-Accord suspends the obligor’s duties under the original contract.
-If the obligor performs, her duties under the accord and the original agreement are discharged.
If the obligor materially breaches the accord;
then the obligee may enforce either the obligor’s original duties or the new duties under the accord.
Accord is supported by mutual consideration
- Restaurant: pay more.
- Chef: make more.
Ct deems the underlying monetary obligation discharged if (even if the check’s amount is less than the amount in owed accord and satisfaction)
- The payment in full notation is prominent enough that it’s reasonable to believe the oblige saw and understood it.
- The obligee chases the check, even if under protest,
- Underlying monetary obligation is unliquidated, unmatured, or subject to a good faith dispute regarding it enforceability or amount.2
UCC 3 311
The underlying obligation is not discharged if the obligee tenders repayment of the check within 90 days after cashing.
Substituted K
An obligee accepts new contractual terms in a complete, immediate discharge of the obligor’s duties under the original contract.
- If there is a breach, the obligee may only sue to enforce the duties under the new contract; because the original contract is discharged and unenforceable.
Substitute v. Accord, v. Satisfaction
Matter of interpretation
Substituted Contract
Must include clear language indicating that the parties intended that the new contract would immediately discharge the obligor’s duties under the original contract.
Novation
The parties agree to replace on party to the original K with a new party who agrees to the substitution. Immediately discharged.
Mutual rescission
New contract.
Each to the original K agrees to immediately discharge all of the other’s remaining duties of performance under the original contract.
Agreement of mutual rescission
Presupposes that each party has not fully performed under the agreement.
If one party fully performed, there is no mutual rescission because there is no consideration.
Release
one party agrees in writing to discharge a presently existing duty owed by the other party
Release
immediately or on occurrence of a condition.
Must be supported by
- Consideration
- Consideration substitue or
- Signed writing.
Covenant not to sue
oblige enters into an enforceable K not to sue an obligor to enforce a duty.
Promise not to sue–> then, discharged.
- Independent agreement, that meets the requirements of the enforceable contract: consideration.
Anticipatory repudiation
One party unequivocally communicates, before that party’s performance has become due, that is is unwilling or unable to perform.
Anticipatory repudiation: Express
The repudiating party clearly and unequivocally informs the other party of its intention not to perform.
