Contracts Flashcards
What is a “good” for the purposes of the UCC?
A good is movable, personal property
What is an offer?
An objective manifestation of an intention to be bound
If a buyer agrees to pay more for services after a contract has been formed, is that agreement binding?
No. A modification solely for the benefit of one of the parties is generally unenforceable in contracts not governed by the UCC.
Can a party assign contractual rights even if the contract prohibits assignment?
Assignment of contractual rights, such as the right to be paid, is effective even if the contract prohibits it, unless the clause makes assignments “void” or the assignee had notice of the assignment.
A court also might find that the contract is not assignable if assignment would: materially change the duty of the obligor; increase the obligor’s burden or risk; or impair the value of the contract to the obligor or impair the chance of the obligor receiving the performance it bargained for, which are also not present.
If a contract does not state the place of delivery, where must the products be delivered?
Unless the contract specifies otherwise, under UCC § 2-308, the place of delivery is the seller’s place of business, and payment is due at the time and place where the buyer is to receive the goods
Under what circumstances does a sale of >=$500 in goods not require a written contract under the Statute of Frauds?
When the goods are:
(1) delivered and accepted,
(2) paid for, or
(3) where the contract is for “specially manufactured” goods not suitable for resale in the ordinary course of the seller’s business and the seller has made a substantial beginning of their manufacture or commitments for their procurement
When can a seller enforce an oral land sale contract?
A seller can enforce an oral land sale contract only if the seller conveys the property to the buyer
Under the UCC, when will a seller be given extra time to make a conforming tender?
The UCC provides that in cases where a buyer rejects a tender of nonconforming goods that the seller reasonably believed would be acceptable “with or without money allowance,” the seller, upon a reasonable notification to the buyer, has a further reasonable time beyond the original contract time within which to make a conforming tender.
A seller will probably be found to have had reasonable cause to believe that the tender would be acceptable if the seller can show that trade practices or prior dealings with the buyer led the seller to believe that the goods would be acceptable, or the seller could not have known of the defect despite proper business conduct.
When may a nonbreaching party not seek specific performance?
For breach of a service contract. Otherwise, a nonbreaching party may seek specific performance when the legal remedy is inadequate, for example when the subject matter of the contract is land or otherwise unique
When is specific performance unavailable as to a land contract?
If the subject matter of a goods or land contract has already been sold to another who purchased for value and in good faith, the right to specific performance is cut off. This is known as the equitable defense of sale to a bona fide purchaser.
Are there any exceptions to the pre-existing duty rule?
An exception to the pre-existing duty rule arises when a pre-existing legal duty was owed to a third party. Traditionally, when a pre-existing duty was owed to a third party, a new promise to perform the same duty would not constitute consideration. However, under the prevailing modern rule, the new promise WILL constitute consideration when the original promise was owed to a third party.
Under what circumstances can an obligator delegate the performance of their duty to another?
When the delegation is not contrary to public policy or the terms of the promise
Can parole evidence be allowed to clarify terms in a completely integrated contract when a term’s meaning is ambiguous?
Yes
If party A promises X in exchange for party B promising Y, is Y a condition precent to X?
Yes, Y is a condition precedent to X and vice versa
When does a tenancy at will terminate?
Such a tenancy terminates by operation of law if:
- Either party dies;
- The tenant commits waste;
- The tenant attempts to assign his tenancy;
- The landlord transfers her interest in the property; or
- The landlord executes a term lease to a third person
What happens when an easement owner uses the easement in a way that exceeds its scope?
When the owner of an easement uses it in a way that exceeds its legal scope (i.e., the easement is surcharged), the servient landowner may enjoin the excess use and possibly collect damages
If a buyer says “I accept your offer, provided that you agree to a 10% discount if payment is made within 10 days from date of billing” is a contract formed?
No. The reply is a conditional acceptance, which is a rejection of the offer.
When do the rights of a TPB vest, thereby preventing the original contracting parties to modify the contract without the TPB’s consent?
The rights of the third-party beneficiary do not vest until: (i) it manifests assent in a manner invited or requested by the parties; (ii) it learns of the contract and detrimentally relies on it; or (iii) it brings a lawsuit to enforce its rights
Can a party withdraw their repudiation?
A repudiating party may at any time before his next performance is due withdraw his repudiation unless the other party has canceled, materially changed his position in reliance on the repudiation, or otherwise indicated that he considers the repudiation final.
When are reliance damages appropriate?
When expectation damages are too speculative. For example, if P sues a lender for failing to provide the loan they promised to P to build a retailer, the value of the retailer (i.e., the expectation damages) are too difficult to accurately calculate - thus, reliance damages are appropriate.
reliance damages are designed to put the performing party in the same economic position they would have been in if the contract had never been performed.
How do courts interpret clauses prohibiting assignment of a contract?
Unless there are circumstances suggesting otherwise, a clause prohibiting the assignment of the “contract” will be construed as barring only the delegation of the assignor’s duties
When is a party’s contractual right “personal” for the purposes of assignment?
a party’s contractual right is only personal where the nature of the contract is such that the assignment would impair the other party’s reasonable expectations or would offend public policy.
When a debt amount is in dispute, can the debtor send a check marked “payment in full” as an accord and satisfaction of the debt?
Yes. Under the rules of accord and satisfaction, a debtor may make an offer to settle a dispute by offering a check marked “payment in full.” If the notation was sufficiently plain that the creditor should have understood it, and if the amount owed to the creditor is an unliquidated sum, then cashing the check without protest amounts to an acceptance of the offer of an accord and satisfaction of the debt. Although mere payment of a lesser sum would not be sufficient consideration to support the accord, consideration is furnished where the amount owed to the creditor is genuinely in dispute
When is a communication an offer?
For a communication to be an offer, it must create a reasonable expectation in the offeree that the offeror is willing to enter into a contract on the basis of the offered terms.
Courts usually hold that if a statement is made broadly, such as in an advertisement or catalog, it will not constitute an offer because it is not reasonable to expect that the sender intended to make offers to all who received the advertisement; rather, the courts usually find such advertisements to be invitations seeking offers. However, price quotations may be considered as offers if given in response to a specific inquiry
