Contract (MBE) Flashcards
1
Q
What are the three ways a third-party beneficiary’s rights can vest?
A
(1) Justifable reliance
(2) Assent
(3) Initiation of a lawsuit
2
Q
When does anticipatory repudiation NOT apply in a contractual setting?
A
Anticipatory repudiation DOES NOT apply if one side has fully performed and the only thing left is payment.
3
Q
A contract is [void or voidable] for one who has been adjudicated mentally incompetent, but [void or voidable] for one in which no judgment has been made
A
A contract is void for one who has been adjudicated mentally incompetent, but voidable for one in which no judgment has been made.
4
Q
An accord requires consideration to be valid. What happens if that consideration is worth less than what was agreed in the original contract?
A
Consideration can be worth less than what was agreed in the original contract if:
(1) There is a good-faith dispute as to the amount owed and
(2) The new consideration is of a different type than what was owed under the original contract
5
Q
If a seller ships nonconforming goods and ____ the buyer that the goods are tendered as an ________, then the accomodation operates as a __________.
A
seasonably notifies
accomodation
counteroffer
6
Q
In determining whether a third-party beneficiary can sue under the contract, what key thing needs to happen?
A
The beneficiary’s right needs to VEST.
7
Q
The parol evidence rule does not apply when a party is raising ___________.
A
The parol evidence rule does not apply when a party is raising a defense to contract formation or enforcement.
8
Q
When a party does not have a required license, the enforceability of the contract depends on whether the purpose behind the license requirement is ____ or ________.
A
economic or regulatory
9
Q
The subject matter of an offer is destroyed. What happens to the offer?
A
The offer is terminated by operation of law
10
Q
When is a contract ‘unconscionable’ (such that the court may modify or refuse to enforce it)?
A
A contract is unconscionable when it is so unfair to one party that no reasonble person in that party’s position would have agreed to it.
11
Q
Under the objective theory of contract, the parties’ ________ do not control.
A
subjective beliefs
12
Q
Incapacity due to intoxication is a defense when the intoxicated party cannot ____________ AND _____________.
A
Intoxication is a defense when the intoxicated party cannot understand the nature and consequences of the transaction and the other party had reason to know of the intoxication
13
Q
What are the remedies for mutual mistake?
A
Reformation: Rewrite the contract if prior agreement existed.
Rescission: Voidable if mistake impacts basic assumptions and adversely affected party did not assume the risk.
14
Q
What law governs contracts for the sale of goods versus services?
A
UCC governs contracts involving the sale of goods.
Common law governs contracts involving services.
Mixed contracts: Whichever predominates determines the governing law.
15
Q
If a substitute contract is breached, a party can sue under _______.
A
If a substitute contract is breached, a party can sue under the substitute contract only
16
Q
What are the three requirements for a valid contract?
A
Offer. Acceptance. Consideration.
17
Q
What happens if an offeree acquires reliable information that the offeror has taken definite action inconsistent with the offer?
A
The offer is automatically revoked (i.e. constructive revocation) and can no longer be accepted.
18
Q
Party A has expressed an anticipatory repudiation of the contract. Party B wants to sue for breach, but the date of Party A’s performance hasn’t arrived yet. When can Party B sue?
A
If the date of performance has not passed, then the nonrepudiating party must wait until the repudiating party’s performance is due before filing suit.
19
Q
When can a minor not void a contract?
A
A minor cannot void a contract for necessities (e.g. shelter, food, clothing). The minor must pay the reasonable value of the goods (but not necessarily the contract price).
20
Q
Unless a party ____ and ____ indicated their willingness to perform, there is no anticipatory repudiate
A
clearly and unequivocally
21
Q
When can a donee beneficiary sue a promisee?
A
The promisee may be sued if the promisee tells the beneficiary about the contrat and the beneficiary foreseeably, justifiably, and detrimentally relies on it.
22
Q
A buyer and seller create a requirements contract under the UCC but don’t specify an EXACT quantity. Does this violate the requirements for valid contract formation?
A
The UCC requires a quantitiy term in a contract. If you have a requirements contract, the quantity term is sufficiently definite to satisfy UCC. It can be ascertained according to buyer’s need.
23
Q
What is required for valid consideration?
A
A bargained-for change in legal position. Both sides must suffer legal detriment (e.g., promising to act or refrain from action). Courts do not evaluate adequacy of consideration.
24
Q
If a buyer wrongfully converts goods (e.g. by selling them), what can the seller recover?
A
The seller can recover the fair market value of the goods at the time of the conversion.
25
Can an option be terminated if the duty to keep the offer open is discharged?
Yes, an offer can be terminated if the duty to keep the offer open is discharged, such as through impracticability.
26
When is a liquidated damages clause unenforceable?
A liquidated damages clause is unenforceable as a penalty if the amount is so unreasonbly large in realtion to the actual / anticipated damages that it punishes the breaching party.
27
If both parties know about the illegal purpose of a contract, is the contract void or voidable?
Void and unenforceable
28
What is the expectation for delivery to ensure perfect-tender?
Delivery is expected to come in a single shipment
29
When does the beneficiary's right to enforce the contract vest?
(There are three situations)
The beneficiary's right to enforce the contract vests when they detrimentally rely on the rights created, assent to the contract, or initiate a lawsuit.
30
A minor enters a contract. Can they choose to enforce it or is it automatically void?
A minor can enforce a contract if:
(1) The minor entered into the contract before reaching adulthood.
(2) The minor has now reached the age of majority.
(3) The minor ratifies the contract either explicitly or implicitly (by failing to disavow the contract)
31
In a requirements contract, a buyer's purchase of goods from another seller violates ______?
In a requirements contract, a buyer's purchase of goods from another seller violates the **implied duty of good faith and fair duty and constitutes a breach of contract. **
32
# True or False
The UCC prohibits a seller from communicating with the auctioneer using pre-arranged singals.
False! There is no such prohibition in the UCC. Sellers can communicate with auctioneers.
33
The warranty of merchantability is only implied when the seller is a ____________.
The implied warranty of merchantability is only implied when the seller is a **merchant with respect to the goods sold**
34
If a debt is disputed in good faith, how can the debtor satisfy the debt?
If a debt is disputed in good faith, the debtor can satisfy the debt by giving the creditor a check with a conspicous 'payment in full' notation.
35
A mutual mistake may render a contract ______?
A mutual mistake may render a contract **voidable by the adversely affected party**
36
What is a substitute contract?
A substitute contract is when the parties form a second agreement that **immediately discharges the original contract**.
37
What should you analyze if a contract includes both goods and services?
Look for facts indicating both apply, explain why UCC and common law might govern, and determine whether goods or services predominate.
38
Under the UCC, a contract for goods is formed if both parties manifest __________.
Under the UCC, a contract for goods is formed if both parties manifest **an objective intent to be bound.**
39
What are the four types of offers that are irrevocable?
1. **Option** contracts
2. UCC **Firm-Offers**
3. When there is **detrimental reliance**
4. When an offeree has **started performance** on a unilateral contract
40
Can an incidental beneficiary sue to enforce a contract if a breach of that contract causes them harm?
No, incidental beneficiaries do not have contractual rights and cannot sue to enforce them. This is true even if a breach of the contract causes them harm.
41
When will an offer terminated by lapse?
An offer will terminate by lapse if it is not accepted by the time stated in the offer. If no time is stated, the offer will lapse within a reasonable period of time.
42
With contracts for ____, the common law applies.
With contracts for ____, the UCC aplies.
services
goods
43
Under the mailbox rule, when is an acceptance effective?
Acceptance is effective upon dispatch/posting.
44
Can either party request reformation based on mutual mistake?
Yes, reformation based on mutual mistake can be granted at the request of either party as long as the requirements are met.
45
If goods are auctioned in lots, what does each lot represent?
If goods are auctioned in lots, each lot represents **a separate sale**
46
When does an offer terminate?
An offer terminates when the **offeror dies or becomes mentally incapacitated** - unless the parties formed an option contract.
An option contract will not terminate until the stated time because consideration was paid to keep it open.
47
When is acceptance effective under the mailbox rule? Are there any exceptions?
Effective: When mailed.
Exceptions: Option contracts or firm offers (acceptance effective on receipt).
48
The more formal the agreement (e.g. words discharging original duties, consideration on both sides), the more likely the fact finder will determine the parties intended to create a ________ contract.
**substitute** contract
49
Before ________ happens, the contracting parties can modify or rescind a contract without the third-party beneficiary's consent.
the beneficiary's rights vest
50
Is consideration required to modify a contract under common law?
Yes, consideration is required to make a contract modification at common law, unless:
(1) New obligations on both sides or
(2) Existence of circumstances unforeseen by either party
51
A seller delivers nonconforming goods to the buyer. What are the buyers options?
The buyer may accept or reject the nonconforming goods and sue for damages.
The buyer may also accept just part of the delivery and return the rest.
52
A seller has breached a contract by failing to deliver some or all of the goods. What are the buyer's recoverable damges?
When a seller breaches a contract by failing to deliver perfectly conforming goods, the buyer's recoverable damages include the **cost of cover, incidental damages, and consequential damages** - but **NOT attorney's fees. **
53
When can an intended beneficiary sue to enforce their contractual rights, and what can the contracting parties do before that point?
When their rights vest
The contracting parties can modify the agreement without the consent of the beneficiary
54
Evidence of a prior or contemporaneous written or oral agreement can be admissible to...
(1) Establish the meaning of ambiguous terms
(2) As a defense to contract formation or enforcement
(3)
55
Does the UCC require consideration to make a modification of a contract?
No, as long as both parties are acting in **good faith**
56
# True or False
When delegation is permitted, the other contracting party must accept the delegatee's conforming performance or be in breach of contract.
True! If delegation is permitted, the delegatee's performance must be accepted (unless an exception applies). Refusal to accept is a breach.
57
If the offerree acquires reliable ____ that the offeror has taken ________ ________ ________ with the offer, the offer is automatically ________ and can no longer be accepted.
If the offeree acquires reliable **information** that the offeror has taken **definite action inconsistent** with the offer, the offer is automatically **revoked** and can no longer be accepted.
58
Is a contract formed if the two parties will only consider themselves bound if the price is set after the fact?
When an agreement reflects an intent to be bound only if the price is subsequently set, no contract is formed until that price is set.
59
What contracts are governed by the SOF?
Marriage.
Suretyship.
Contracts >1 year.
Sale of goods ≥ $500.
Real property.
60
What does the implied warranty of merchantability promise?
The implied warranty of merchantability promises that the goods sold are fit for their **ordinary, commercial purpose and use. **
61
What are the ways an offer can terminate?
Revocation (effective upon receipt).
Constructive revocation (offeree learns of inconsistent action).
Rejection by offeree.
Counteroffer by offeree.
Lapse of time.
Death of offeror.
62
When can an **intoxicated** party void a contract?
An intoxicated party can void a contract when:
- They are not able to understand the nature of the contract; **and**
- The other party knew (or had reason to know) of that fact.
63
A signed written confirmation for goods is sent from one merchant to another. How many days does the recipient have to object if she does not want to be bound?
She has **10 days** to object.
64
Define an intended third-party beneficiary?
An intended third-party beneficiary is a nonparty to a contract who receives an advantage or benefit from that contract that was intended by the contracting parties.
65
In a requirements contract, what's the rule if a seller delivers substantially more (or less) than the buyer agreed?
In a requirements contract, the seller is supposed to deliver what the buyer requires. Delivering substantially more (or less) is a breach! This amounts to nonconforming tender.
66
When is a person considered "mentally incompetent"?
A person is considered 'mentally incompetent' for the purposes of entering a contract when they:
- **Fail to comprehend ** the contract; or
- Comprehend it, but **act in an unreasonable manner**, and the **other party knows** the person is acting unreasonably.
67
What makes an offer irrevocable under the UCC?
Offeror is a merchant. Offer is in a signed writing with assurances it will remain open. Irrevocability lasts up to 90 days.
68
The winning bidder is at a forced sale (i.e. a foreclosure) and learns that the auctioneer accepted a bid by the seller to drive up the price. Can the winning bidder avoid the sale or pay the price of the last good-faith bidder?
No, at a forced sale (e.g. a foreclosure), the winning bidder cannot avoid the sale.
69
Contracts made under economic duress and/or other non-physical threats are ______.
voidable by the aggrieved party
70
True or False:
All intended beneficiaries can sue the promisor.
True! All intended third party beneficiaries can sue the promisor(s) - this includes donee beneficiaries.
71
Under the common law, a modification of an existing contract is permitted if it is supported by _______.
consideration
72
A bid is made at the same time as the end-of-sale announcement at an auction. What happens?
The auctioneer has the discretion to continue the bidding.
73
Do UCC rules always require both parties to be merchants?
No. Some rules, like the firm offer rule or warranty of merchantability, apply even if only one party is a merchant.
74
What is required for valid acceptance?
Objective manifestation of intent to accept. Manner of acceptance (reasonable unless specified).
UCC allows acceptance with changes (both merchants: changes may apply unless they materially alter the offer).
75
What is the perfect-tender rule for UCC goods?
The perfect-tender rule states that the **goods** and the seller's **delivery** of those goods must **fully conform** with the terms of the agreement.
76
Under the UCC "Firm Offer Rule," a signed assurance is a requirement. Must this be an actual signature?
No, a signature can be substituted for letterhead or initials.
77
# True or False
An offer contained on ________ or ____________ is sufficient for the signature requirement in a UCC firm offer.
An offer contained on **business letterhead** or i**nitialled by the company** is sufficient for the signature requirement.
78
Under UCC §2-207, what happens if an acceptance contains “additional or different” terms from the original offer if both parties are NOT merchants?
If one (or both) parties are non-merchants, any additional terms are not incorporated, but the acceptance is still valid.
The additional term is merely treated as a proposal, which the other party can accept/reject.
79
A donee beneficiary - i.e. the recipient of a 'gift promise' - may generally only sue _______?
the promisor
But the promisee may also be sued if the promisee tells the beneficiary about the contrat and the beneficiary foreseeably, justifiably, and detrimentally relies on it.
80
A contractual duty or obligatoin cannot be delegated when...
(1) The other party has a substantial interest in having the delegating party personally perform
*or*
(2) The delegation is void under the contract
81
When is a suretyship agreement enforceable without writing?
A suretyship is enforceable without writing if it was made **mainly for the surety's own economic advantage (not the principal's benefit)** or to indemnify a creditor.
82
When contractual obligations or duties are delegated, what happens to the delegator's liability?
When contractual obligations/duties are delegated, the **delegator remains liable** under the contract unless the other party expressly or impliedly agrees to release her and substitute a new one (i.e. a **novation**).
83
How does one accept a **unilateral** offer?
1. **Full** performance; and
2. **Notice** to offeror that you accepted within a reasonable time frame after performance starts
⚠️ Note: *partial performance* does not constitute acceptance (but you may still be able to argue detrimental reliance or quasi-contract)
84
For partial integration, evidence of additional *consistent* terms is admissible unless the court concludes...
that the parties **certainly** would have included those terms in writing
85
The parties' contract omits a price term. The UCC will gap-fill - but what price will it supply?
a reasonable price **at the time of delivery**
86
When can a court reform a contract due to mutual mistake?
A court may reform due to mutual mistake if:
(1) There was a prior agreement;
(2) The parties agreed to put the agreement in writing
(3) There is a difference between the agreement and the writing due to mistake.
87
# True or False
A merger clause is definitive evidence that a contract is completed integrated.
False. A merger clause is strong - but not definitive - evidence of total integration.
88
What is the 'merchant's exception' to the Statute of Frauds?
Under the merchant exception to the statute of frauds, a confirmation signed and sent by one merchant to another binds both parties if the recipient has reason to know its contents and does not object within 10 days.
89
Under the UCC "Firm Offer Rule," what is required for the offer to be irrevocable?
An offer is irrevocable if:
(1) The offeror is a merchant
(2) There is an assurance the offer will remain open
(3) The assurance is contained in a signed writing from the offeror.
90
Assuming no deadline is given, under the UCC "Firm Offer Rule" how long can an irrevocable offer stay open? Can it be extended?
Cannot exceed three months unless consideration paid to keep open longer
91
What is required in order for an option contract to be irrevocable?
1. Offeror promised to keep offer open for a **specific period of time**;
2. This promise was supported by **consideration**
92
What is the rule if a seller ships nonconforming goods as an **accomodation**?
If a seller ships nonconforming goods *and* **seasonably notifies** the buyer that the goods are tendered as an accomodation, then the **accomodation operates as a counteroffer**.
93
If the tender of goods in one delivery is unreasonable (because, for example the seller attempts to deliver substantially more than agreed), can the buyer reject the ENTIRE delivery as imperfect tender?
Yes, they can!
94
When can a contracting party's duty to perform be discharged by impracticability?
Impracticability is availabe to discharge duty to perform when:
(1) An **unexpected or extraordinary event** makes it impracticable for the party to perform
(2) The contract was performed under a **basic assumption that event would not occur**
(3) The party seeking discharge is **not at fault**
95
Who bears the burden to show that the contract was made without undue influence?
The party being accused bears the burden.
96
Does a promise to surrender a claim or defense constitute valid consideration for a **settlement agreement?**
Yes, a promise to surrender a claim/defense constitutes consideration so long as:
(1) The claim / defense is valid or subject to a good faith dispute
*and*
(2) The surrendering party believes the claim / defense is valid.
97
# True or False
If a seller at a forced sale gives notice reserving the right to bid, can the winning bidder avoid the sale?
No, this is a situation where the winning bidder cannot aboid the sale.
98
What is the 'charitable subscription' exception to promissory estoppel?
A charitable subscription - i.e. a written promise to contribute money/property to charity - is enforceable on promisorry estoppel grounds **without** proof of **detrimental reliance or substantial injustice**. All that is needed is inducement.
99
An offer terminates when the offeror ____ or becomes ________.
dies
mentally incapacitated
100
What are the three forms of incapcity?
(1) Infancy
(2) Mental Incompetence
(3) Intoxication
101
What happens if a contract omits the price term (or if the parties agree to set the price in the future but fail to do so)?
The UCC will gap-fill the missing price term by supplying a **reasonable price at the time of delivery**.
102
For the parol evidence rule, the UCC presumes that contracts for goods are ________. Therefore, evidence that ________ a written contract is admissible. Evidence that ________ a written contract is inadmissible.
For the parol evidence rule, the UCC presumes that contracts for goods are **partially integrated**. Therefore, evidence that **supplements** a written contract is admissible. Evidence that **contradicts** a written contract is inadmissible.
103
How will the court determine whether a 'reasonable period of time' has passed such that an offer will lapse? What factors are used?
Reasonableness depends on:
(i) the **nature** **of the contract;**
(ii) the **purpose and course of dealing** between the parties; and
(iii) **trade usage**
104
When can a winning bidder at an auction avoid the sale (or pay the price of the last-good faith bid)?
A winning bidder can avoid the sale if the auctioneer:
(i) knowingly accepted a bid by the seller or on the seller's behalf; or
(ii) procured the seller's bid to drive up the price
105
Unilateral mistake is not grounds to avoid a contract unless...
(1) The mistake would make enforcement of the contract **unconscionable**
(2) The **nonmistaken party caused**, knew, or had reason to know of **the mistake**.
106
Is separate consideration needed for a UCC firm-offer to be enforceable?
No, separate consideration is NOT needed for a UCC firm offer to be enforceable.
107
For how long is a firm offer irrevocable under the UCC?
Under the UCC, a firm offer is irrevocable for the **time stated in the contract**. If no time is stated, it will remain open for a **reasonable time not to exceed three months** (unless consideration is given to keep it open for longer).
108
Who qualifies as a merchant under the UCC?
- Someone who regularly deals in the goods involved in the transaction.
- Someone holding themselves out as having special knowledge or skill related to the goods.
- A businessperson if the transaction is of a commercial nature.
109
Under what circumstances can a gratuitious assignment NOT be revoked by the assignor?
A gratutitous assignment can be revoked unless:
(1) The obligor has already performed
(2) A document symbolizing the assigned right has been delivered
(3) A written assignment signed by the assignor has been delivered
(4) The assignee has detrimentally relied on the assignment
110
# True or False
A court may modify or refuse to enforce a contract that is unconscionable.
True
111
Can the implied warranty of merchantability be disclaimed? If so, how?
Yes, the implied warranty of merchantability can be disclaimed for defects that an examination would have revealed if, before entering the contract, the buyer examined the goods fully or refused to examine them.
Can also be disclaimed orally or through conspicous writing - include term 'merchantability.'
112
What can a buyer do if the tender of goods in a single delivery is unreasonable (because, for example, the seller tries to deliver substantially more than agreed)?
If tender of goods in a single delivery is unreasonable, the **buyer can reject the delivery for imperfect tender**.
113
What do we call an assignment of rights made without consideration?
A gratuitious assignment
114
As 'master of the offer,' the offeror can dictate the ____ and the ____ by which the offer may be accepted.
The offeror can dictate the **manner** and **means** of acceptance.
115
What happens to a gratuitous assignment upon the death, incapacity or bankruptcy of the assignor?
A gratutitous assignment - i.e. an assignment that is not supported by consideration - is **automatically revoked** upon the death, incapacity, or bankruptcy of the assignor.
116
If the purpose behind a licensing requirement is economic the contract is ______.
If the purpose behind a licensing requirement is regulatory, the contract is _________.
**Economic**: the contract is **enforceable**.
**Regulatory**: the contract is **unenforceable** if the public policy behind the requirement outweighs the interest in enforcement.
117
What does a novation require?
A novation requires the parties to release the delegator from the contract and substitute in the delegatee.
118
# True or False
An accord requires consideration to be valid.
True
119
How do unilateral and bilateral contracts differ?
Unilateral: Accepted by complete performance (e.g., rewards, contests). Bilateral: Accepted by a promise or starting performance.
120
Contracts made under threats of physical violence are _______.
void
121
What is an illusory promise?
Promise that doesn’t obligate the promisee to anything, and therefore doesn’t qualify for consideration
122
What are three ways in which an offer to buy goods for prompt shipment can be acceted?
1. Promising to ship the goods
2. Shipping goods that conform to the order
3. Shipping nonconforming goods without notice that the goods are being offered as an accomodation
123
An offeror is silent about the manner and means of acceptance. The offeree wishes to accept by mail. Does the mailbox rule still apply?
Yes, the mailbox rule will apply if the offeree chooses to accept by mail. Acceptance is valid upon dispatch.
124
When is acceptance effective for a UCC Firm Offer? How about for an option?
Acceptance of both a firm offer and option is effectively only when it is **received**. The traditional **mailbox rule does not apply**.
125
Differentiate between contracts that have an illegal **purpose** vs. **subject matter. **
A contract with an **illegal purpose is voidable** by a party who:
- Did not know of the purpose; or
- Knew but did not facilitate the purpose and the purpose does not involve “serious moral turpitude”
A contract with an illegal subject matter is **void and unenforceable. **
126
# Pick one
An offer is presumed to be (unilateral) or (bilateral).
An offer is presumed to be **bilateral** if ambiguous.
127
What happens if both an acceptance and rejection are sent by the offeree when the:
- Rejection is sent first?
- Acceptance is sent first?
*Rejection is sent first:* Acceptance will be effective if received BEFORE the rejection
*Acceptance is sent first:* Acceptance effective upon dispatch (regardless of whether rejection is received before)
128
If a seller tenders non-conforming goods, what options does the buyer have?
If a seller tenders nonconforming goods, the buyer can:
1. Accept the goods in whole or in part
2. Reject the goods in whole or in part
Regardless of which they choose, a buyer can always sue for damages related to the seller's breach.
129
What is constructive revocation?
If an offeree acquires reliable information that the offeror has taken **definite action inconsistent with the offer**, the offer is **automatically revoked** and can no longer be accepted.
130
When is promissory estoppel used? What is the remedy?
Promise induces action or forbearance. Promisor reasonably expects this. Injustice can only be avoided by enforcement.
Remedy: Reliance damages.
131
How can a bilateral offer be accepted?
There are two ways to accept a bilateral offer.
1. Make a return promise
2. Start performance
132
Consent to a delegation [does/does not] create a novation.
Mere consent to a delegation **does not** create a novation.
133
What is the common law mirror-image rule?
Acceptance must be a mirror image of **every single term** of the offer.
If **any** part of the terms are **different**, it will function as a **counter-offer and rejection** of the original offer.
134
Is selliing a good 'as is' sufficient to disclaim the implied warranty of merchantability?
Yes, expressions like 'as is' or 'with all faults' is a sufficient disclaimer.
135
How can a contractual obligation be discharged through accord and satisfaction involving a negotiable instrument?
A contractual obligation is discharged by accord and satisfaction if a party tendered a negotiable instrument with a conspicuous statement that it was tendered as "payment in full" and the other party obtained payment of the instrument.
136
Is a modification permitted under the common law if one party agrees to compensate the other due to unanticipated difficulties?
Yes, an agreement to compensate owing to unanticipated difficulties is permitted so long as the modification is fair and equitable.
137
What is the 'merchant exception' to the Statute of Frauds?
Under the merchant exception to the Statute of Frauds, a confirmation signed and sent by one merchant to another merchant binds both parties if the recipient has reason to know its contents and does not object within 10 days.
138
The UCC requires a quantity term in a contract for goods. Does the lack of a concrete quantity term in a requirements contract violate this?
No, the quantity term in a requirements contract is sufficiently definite because the quantity can be made certain by reference to objective facts (i.e. the buyer's actual requirements).
139
A contract right cannot be assigned if the assignment...
(1) Materially increases the duty or risk of the obligor or reduces their chance of obtaining performance
or
(2) The assignment is void under the contract
140
An assignment for value is ___________.
irrevocable
141
A contract to perform an illegal act is ____ and _____.
A contract to perform an illegal contract is **void** and **unenforceable**.
142
What are the three elements of a valid offer?
Promise: Present intent to contract.
Terms:
- Common law: All essential terms (parties, subject matter, price, quantity).
- UCC: Parties, subject matter, quantity (other terms gap-filled).
Communication: Offer must be communicated to the offeree.
143
When is acceptance of an option contract effective?
Acceptance of an option contract is effective when it is **received**.
144
If a plaintiff confers a non-gratuitous benefit on another that results in unjust enrichment, under what theory can a plaintiff recover?
Quasi-contract
145
Until when can a seller cure their mistake of nonconforming tender?
You can only cure a non-conforming tender if the date of performance has not yet passed! After that, it's too late.
146
If a party knows at time time of the contract that they have limited knowledge of the facts and accept this knowledge as sufficient, can they void the contract on the ground of mutual mistake?
No, a party assumes the risk of the mistake if they do this - they cannot void the contract.
147
What are the five ways an offer can be terminated?
1. Rejection
2. Counteroffer
3. Death or incapacity of offeror
4. Revocation
5. Lapse
148
A new promise to pay a debt after the ____________ has run is ____ without any new consideration.
A new promise to pay a debt after the **statute of limitations** has run is **enforceable** without any new consideration.
149
# True or False
The offeror states that acceptance is effective only on receipt. Can he do this or does the mailbox rule apply?
The mailbox rule does not apply if the offeror states that acceptance is effective only on receipt.
150
Can an option holder make counteroffers during the option period without terminating the original offer?
Yes, an option holder can make counteroffers during this period without terminating the original offer.
151
Under the UCC, what happens if an acceptance contains **“additional or different”** terms from the original offer if **both parties are** **merchants**?
When both parties are merchants, a new or additional term becomes part of the contract unless:
1. The new term **materially alters** the contract.
2. The **offeror objects** to the new term within a reasonable time (or has already objected).
3. The offer was **expressly limited to the original terms**.
152
Can a bidder at an auction retract their bid?
Yes, a bidder at auction may retract their bid up until the auctioneer anounces the completion of the sale (usually with the fall of a hammer). However, a revocation will not revive earlier bids.
153
If a debt is certain and undisputed, can the debtor satisfy the debt by giving the creditor a check for a lesser amount with a 'payment in full' notion?
No, if a debt is certain and undisputed, it cannot be satisfied by a check for a lesser amount, even if the creditor cashes the check.
154
When is an offer *firm* under the UCC?
Under the UCC, an offer is firm if:
1. The offeror is a **merchant**
2. There is an **assurance** to keep the offer open
3. The assurance is contained in **signed writing** from the offeror
155
In an assignmenet for value, what does the assignor warrant?
The assignor warrants that she has the right to assign, she is not subject to limitations, and she will not defeat or impair the assigned rights.
156
If the offeror does not dictate a specific manner or means of acceptance, how can an offeree accept?
The offeree can accept in **any reasonable manner** and by **any reasonable means**
