Contracts Flashcards
if the facts involve a transaction in goods– do you apply common law or the UCC?
UCC
only applies to a transaction in goods
without a transaction in goods the common law of contracts governs
what are two examples of topics that are covered by common law?
real estate and services
ESSAY:
because this is a services contract, the common law of contracts governs instead of the UCC
what is a transaction in goods?
a sale of tangible personal property
what is a merchant
one who regularly deals in goods of the kind sold or who otherwise by their profession hold themselves out as having special knowledge or skills as to the practices or goods involved
formation of a contract consists of…
offer
mutual assent
consideration
REMEMBER: ALWAYS STATE absent of any defense to enforcement
bilateral contract
formed by an exchange of promises
unilateral contract
formed by a promise in exchange for performance
what is mutual assent?
whether there was an offer and acceptance of that offer
what is an offer?
when there is intent to enter a contract through a promise or undertaking
terms must be:
definite and certain
communicated to the offeree
giving the offeree actual knowledge
creates a power of acceptance in the person to whom the offer was made
can not be accepted if it wad terminated
termination of the offer by the offeror…
revocation
termination of the offer by the offeree..
rejection
counteroffer
what is a counter offer?
terminates the offer and creates a new offer
REMEMBER: mere bargaining is not a counter offer
conditional acceptance terminates the offer
LOOK FOR: “provided” or “so long as”
mirror image rule
if the acceptance does not contain the exact same terms as the offer, then the new terms are treated like a revocation of the original offer and a counteroffer under common law
under the UCC is a change of terms a counter offer?
NO and can constitute acceptance unless stated otherwise in one of the forms.
EX: when a buyer places an order and the seller’s acceptance form contains different terms or the terms are not addresses in the order at all.
battle of the forms
unless acceptance is expressly made conditional to the additional terms the nonconforming acceptance creates a valid and binding contract
battle of the forms:
if the buyer is a consumer….
then the additional terms are treated as proposals.
battle of the forms
if the buyer is a merchant….
then the additional terms become part of the contract unless the offer expressly limits acceptance to its terms
the offeror objects within a reasonable time
or
the additional terms would materially alter the contract.
battle of the form…
knockout rule
if the terms are different, then the knockout rule applies and omits the offeror’s original provision and the offeree’s differing provision from the resulting contract
can the offeror control the method of acceptance?
yes!
both in common law and UCC
by stating the conditions
if the offer is silent as to the method of acceptance then…..
the offeree can indicate acceptance by starting performance
in a unilateral contract– the offeree must complete performance
when is acceptance by letter valid?
upon dispatch
AKA when placed in the mail
what happens when the offeree changes their mind and after mailing the acceptance letter mails another letter?
What letter controls?
whichever letter is received first is what controls
what is consideration
a bargained for exchange
REMEMBER: the promise must induce the detriment and the detriment must induce the promise
does an act of restraint count as consideration?
Yes, if it gives the offeror a benefit
does a pre-existing contractual or statutory duty count as consideration under common law?
NOT for a new promise
New consideration is always required
does a pre-existing contractual or statutory duty count as consideration under the UCC?
or
is new consideration required?
New consideration is not required.
good faith is the test for changes to an existing sale of goods contract
what is promissory estoppel?
AKA detrimental reliance
substitute for consideration
requires:
promise
reliance that is reasonable
enforcement
what are the defenses to the enforcement of a contract?
lack of capacity
SOF
illegality
misrepresentation
nondisclosure
duress
unconscionability
mistake of fact
defenses:
lack of capacity
individuals who lack capacity to contract
include:
intoxicated persons if the other person has reason to know
under the age of 18
mental incompetents that lack the ability to understand
defenses:
SOF
what kind of contracts do SOF apply to?
applies to:
contracts that are in writing that are one of the following:
SURETYSHIP (promise to pay someone else’s debt)
promise in consideration of MARRIAGE
service contract not capable of being performed within ONE YEAR
REAL ESTATE
SALE OF GOODS ($500 or more)
what is the UCC’s writing requirement?
that the writing states that it is a contract for the sale of goods and contains the quantity of goods
mistake of fact
when both parties to a contract are mistaken about the material fact, then the contract is voidable by the adversely affected party
what happens when only one party is mistaken about the facts of the contract?
the mistake does no prevent the enforcement of the contract
BUT if the other party knew or had reason to know then the contract is voidable
what are the different types of warranties?
express
implied warranty of merchantability
implied warranty of fitness for a particular purpose
express warranties
created by the seller
become apart of the agreement if they are the basis of the bargain
implied warranty of merchantability
included with every sale of goods
goods must be fit for their ordinary purposes
implied warranty of fitness
direct representation by the seller or the seller’s representative that the product fits what the buyer wants
how can a seller alter the implied warranties?
language like “as is” or “with all faults”
parol evidence rule
2 questions to ask
what is the purpose that the evidence is being used for
does the evidence relate to a term or contract that is integrated?
when is parol evidence allowed?
when it is being used tot explain or interpret the terms of a written contract
parol evidence rule
when does the UCC allow for parol evidence to be used?
usage of trade
course of dealing
course of performance
to supplement terms of the written contract
when is a duty to perform discharged?
performance
tender of performance
completed condition subsequent
if performance is:
- illegal
- impossible
- impractical
- rescinded
breach
occurs when there is a failure to perform when under a duty to perform
minor breach
does no relieve the non-breaching party from performance but that party is entitled to damages
material breach
excuses the non-breaching party from performance and he is entitled to all available remedies
under the UCC what happens if the goods or the delivery fail to conform in any way with the contract?
the buyer may reject them, accept them or just accept certain ones
under the UCC what happens if the goods or the delivery fail to conform in any way with the contract…
when can the buyer NOT reject the goods?
buyers cannot reject them after already accepting by inspecting and indicating the goods do confirm or by failing to inspect
under the UCC what happens if the goods or the delivery fail to conform in any way with the contract…
when can the buyer revoke acceptance?
if the goods are so defective that their value is substantially impaired.
under common law:
what are the buyer’s remedies?
monetary damages:
expectation damages
reliance damages
restitution
liquidated damages
under the UCC
what are the buyer’s remedies?
AND what do they rely on?
FIRST: depends on if the goods have been delivered
REMEDIES: damages or specific performance
REMEMBER: key factor is if the buyer has recovered is loss by purchasing replacement goods
what are equitable remedies?
specific performance
restitution
unjust enrichment
negative injunctive relief
what is specific performance and when is it available?
only available when a monetary reward would not be adequate
available:
unique objects
real property
NOT available:
for personal services
what type of 3rd parties are involved in contract disputes?
beneficiary
- intended
- incidental
assignment
delegation
incidental beneficiary
those that benefit from a promisor’s performance but are not intended to benefit.
has no standing to enforce the contract
intended beneficiaries
when the promisor’s performance was intended to benefit that third party
has standing against the promisor
BUT can not sue the promisee there must be an independent obligation for the promisee to be liable
assignment
transfer of a right to receive a performance under a contract
what rights are unassignable?
substantially change the contract’s risks/duties
are for future rights to arise under future contracts
those that are illegal
delegation
when a third party agrees to satisfy a performance obligation owed by one of the parties to the contract
novation
when the obligee agrees to release the delegator in return for the liability of the delagatee
AKA substitute the person who entered the contract with another
what rights are not delegable?
personal performance contracts when the recipient relies on the qualities of someone who is to render performance
THINK: world-famous artist
federal statute: certain airports can regulate how much limos charge for rides to that airport
redville is one of the airports listed. redville is next to greenville and share the airport in redville.
redville city council sets the limo price
a limo company in greenville charges cheaper rates than the rates city council allows
must the limo company comply with the council rules?
yes because congress has authorized this form of regulation by redville and removed any constitutional impediments to it that may have otherwise existed
supremacy clause- federal law governs
commerce clause- states cannot pass regulations of local aspects of interstate commerce that discriminate against out-of-state parties to benefit local interests
Defendant was on trial for murdering his father.
Defendant’s defense was that it was an accident
prosecutor calls cop to testify that on several different occasions they were called to the defendant’s home for beating his father.
the evidence is….
admissible to show that the defendant killed his father intentionally
evidence of prior fights and beatings are admissible for the purpose of establishing the defendant’s intent or absence of mistake
REMEMBER: state can not initiate evidence of bad character of the defendant to show they are more likely to have committed the crime
state law made it a criminal offense for any state employee to knowingly provide educational services to an undocumented person.
principal being charged under state law.
what constitutional proviion would be the most helpful for the principal?
the ex post factor clause of article I, section 10
ex post factor laws punish conduct that occured before the law becomes effective
