contracts Flashcards
Merchant
anyone who regularly deals with goods of the kind sold or who otherwise by profession holds himself out as having special knowledge or skills as to the practices or goods involved.
When it comes to the implied warranty of merchantability requires a narrower standard that the person be a merchant with respect to goods of the kind involved in the transaction.
if you are a merchant purchsing for a hobby then. you are not treated as a merchant even if it’s also your profession.
Offer
A manifestation of a willingness to contract demonstrated by a promiss, committment, or undertaking, contains definite and certain terms and communicated to an identifiable oferee.
terminated by no response- by a specified time, or by a reasonable time
revocation-
effective at the time it is communicate to the offeree, by any person doesn’t have to be a party.
Irrevocable- merchant firm letter, option K, detrimental reliance
Rejection: Counter offer, words or conduct of the offeree rejecting the offer, effective when recieved by the offeror.
termination by operation of law:
death of either party,
destruction of subject matter of the K.
Superveinging illegality of sbuject matter of K.
good faith and fair dealing
UCC contracts all requiry this. It’s Honesty in fact and observance of reasonable commercial standards.
quasi contracts
are not contracts at all they are implied by courts to avoid unjust enrichment. Permit the Plaintiff to bring an action in restitution to recover the amount of the benefit conferred on the defendant.
Acceptance
Common law- each and every term of the offer must be accepted (mirror immage rule)
UCC- battle of the forms applies and only material terms are rejected from the later forms. Additional terms become part of the k, if the Oferror objects then the additional terms, even if immaterial are not part off the K.
Methods of acceptance:
UCC- any reasonable means
Unilateral K- by performance
Bilateral K- Promise or performance.
Mail Box rule
The offeror can opt out of the mail box rule.. If they send a rejection first then acceptance before it arrives is not valid.
It is deemed as being accepted when put in the mail.
void contract
void contract: totally without any legal effect from the begining
voidable contract
one that one or both parties may elect to avoid, This happens when. you use the defense of mental illness, or age.
Unenforcable contract
valid but not enforceable due to a defense extraneous to the contract formation such as the Statute of Frauds
Contract Creation
The parties must show the following when seeking for enforce a K or obtain damages.
Was there a K?
- need mutual assent
- consideration or a substitute of it?
- defenses to the creation of the K?
mutual assent
a meeting of the minds. Words or conduct that manifest a present intention to enter into the contract. (think the offer.)
Quantity Term in UCC and
Land and Price terms in real estate transactions
UCC quantity; certain or capable of being made certain.
Offer involving realty must identify the land with some particularity. Must also include PRICE (courts will not supply a price term)
Requirements’ K
and
outputs K
the buyer promises to buy from a certain seller all of the goods the buyer requires.
Outputs K: a seller promises to sell to a certian buyer all of the goods that the seller produces and the buyer agrees the amount from the seller.
ASSUME good fiath court will not permitt any unreasonably disproportionate quantity.
key words are “all” “only” “exclusivly”
Vague terms
a material term that is vague is not an offer in either the common law or the UCC. “appropriate” “fair” and “reasonable” are vague on the exam
Merchant’s firm offer:
Merchant
offers to buy or sell goods with a signed writting
and the writing gives assurance that it will be held open
it is NOT revocable for lack of consideration.
Cannot exceed 3 months
Inquiry vs. counteroffer
an inquiry is not a counter offer and does not reject the original offer
TEST that a reasonable person would believe it was an inquiry and not a counter offer
Unilateral K - Acceptance
A unilateral K is accepted if the offeree knew of the offer before acting if they discovered the offer after acting, then they cannot have accepted.
shipping nonconformiing goods EXAMPLE WHEN ACCEPTANCE BY SHIPMENT
WHEN acceptance is normall and not through shipment then nonaccomodating goods are a breach of the K.
when a merchant ships non conforming goods it is both an acceptance and a breach. Unless the offeree seasonably notifies the offerrer that the nonconforming goods are only offered as an accomocation. Buyer does not have to accept but the seller is deemed not to have breached becuase they seasonably notified.
Merchant’s confimatiory Memo:
merchants come to an oral agreement and confirmatory memo is sent with different or additional terms. Memo is treated as an acceptance and battle of the form.
Consideration
- bargained for exchange between the parties
- that which is bargained for must be considered of legal value (this is a benefit to the promisor or a detriment to the promisee)
just needs to have the posability of value. aka bitcoin
CANNOT BE FOR SOMETHING ALREADY DONE Very bad is “I promise to give you $ bc you did X for me today”
except a past act that was done by the promisee for the promisor was done at the REQUEST of the prommisor or in response to an emergency then the subsequent promise was made there is proper consideration.
Promissory estoppel or detrimental reliance
no consideration necessary. A promiss becomes enforcable when to prevent injustice
1 the promisor should reasonably expect to induce action or forbearance;
2 and such action or forbearance is in fact induced.
expectation damages under the contract are profided.
often relief is limited to “that which justice required”
Mistake
defense-
Unilateral mistake- contract is voidable if nonmistaken party knew or should have known of mistake.
mutual mistake- contract is voidable by adversely affected party if
Mistake concerns basic assumption on which contract was made
the mistake has a material effect
the party seeking avoidance did not assume risk.
A mistake in value isn’t a mistake.
Remedy is: In subcontractor case, avoidance of the k.
Misunderstanding
A term with at least two possible meanings the definition depends on the parties’ awareness of the ambiguity
neither party aware- no K unless both parties intended the same meaning
both parties aware- no k unless both parties intended the same meaning
One party aware- Binding K based on what the ignorant party reasonably believed to be the meaning of ambiguous words.
subjective intent for these.
Fraudulent Misrepresentation
Fraudulent Misrepresenation: Fraud in the inducement: inducing another to K by fraud then it’s voidable, if the other party
justifiably relied on the representation.
material misrepresentation
Doesn’t matter if the misrep is fraudulent K is Voidable, by innocent party if the justifiably relied on the the misrepresenation and it was a material misrepresentation.
Materiality
1. it would induce a reasonable person to agree
2 marketer knows that it would induce a specific person to agree even if a reasonable person would not.
Capacity defense- age
Minors: also called infants on the bar. under the age of 18. Cannot enter a K binding on themselves, however adults can make a binding contract benefiting a minor.
anytime before or shortly after turning 18 they can disaffirm a K. Failure to disafirm a K within a reasonable time after reaching 18 will result in the contract being affirmed and enforacble.
Permited K are sudent loans, insurance Ks, agreement’s not to reveal and employer’s proprietary information.
Capacity defense- mental incapacity
no ability whatsoever to k once a guarian has been appointed. K is voidable and during lucid intervals or full recovery may affirm.
Intoxicated persons
Voidable promis if the other party knew he was intoxicated. They can affirm when recovereed.
Duress
Are voidable so long as not affirmed.
Duress:
1. party threatens to commit a wrongful act that would seriously threaten the other contracting party’s property or finances;
2. there are no adequate means availible to prevent the threated loss
undue influence
- susceptibility to pressure by one party
- excessibe preasure by the other party.
Statute of Frauds
Writing signed by the party to be charged.
- reasonably identify the subject matter
- indicate that a contract has been made between the parties
- state with reasonable certainty the essential terms.
Agreements always requireng statute of Frauds
MY LEGS
Marriage
Year- promises that cannot be performed within a year from date of K (work until i die can still happen within one year not sof)
Land sales
Executors and administrators- promises to pay estate debts from own funds
Goods- for $500 or more. Exceptions- specially manufactured goods, goods accepted or paid for
Suretyship- promise to pay another’s debts.
Statute of Frauds UCC not requried
SWAP specially manufactured goods- writeten confimaiton by a merchant admission in court or performance- payment or delivery of goods.
Merchant confimatory memo rule:
one party within reasonable time after oral agreememnt sents another a written confimation of the understanding that’s fine for SOF and binds recipient if
1. has reason to know of it’s contents
he does not object to it in writing within 10 days.
Noncompliance with SOF
noncompliance makes a contract unenforcable at the option of the party to be charged. IF not raised as a defense then it’s waived.
Part performance- SOF
unequivocally indicates that parties have Ked for the sale of land takes the K out of SOF
UCC 1. goods have been specially manufactured or 2. paid for or delivered.
If taken out of SOF then the performing party can get expectation damages.
Unconscionability
Always look at bargaining power first. A court may refuse to enforce a provision or an entire K or to modify the K to avoid unfair terms usually due to some unfairness in the bargaining process.
Analyze by the circumstances at the time K was formed
If court finds unconsionable:
- refuse to enforse
- ef=nforce the remainder of the K without the unconsionable clause
- limit the applicaiton of the clause to avoid unconsionable result.
This is BOILERPLATE
Contracts of adhesion “take it or leave it” signer unable to procure necessary goods, from any seller without agreeing to a similar provison.
