contracts

Question 1

Merchant

Answer 1

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.

Question 2

Offer

Answer 2

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.

Question 3

good faith and fair dealing

Answer 3

UCC contracts all requiry this. It’s Honesty in fact and observance of reasonable commercial standards.

Question 4

quasi contracts

Answer 4

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.

Question 5

Acceptance

Answer 5

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.

Question 6

Methods of acceptance:

Answer 6

UCC- any reasonable means
Unilateral K- by performance
Bilateral K- Promise or performance.

Question 7

Mail Box rule

Answer 7

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.

Question 8

void contract

Answer 8

void contract: totally without any legal effect from the begining

Question 9

voidable contract

Answer 9

one that one or both parties may elect to avoid, This happens when. you use the defense of mental illness, or age.

Question 10

Unenforcable contract

Answer 10

valid but not enforceable due to a defense extraneous to the contract formation such as the Statute of Frauds

Question 11

Contract Creation

Answer 11

The parties must show the following when seeking for enforce a K or obtain damages.

Was there a K?

1. need mutual assent
2. consideration or a substitute of it?
3. defenses to the creation of the K?

Question 12

mutual assent

Answer 12

a meeting of the minds. Words or conduct that manifest a present intention to enter into the contract. (think the offer.)

Question 13

Quantity Term in UCC and

Land and Price terms in real estate transactions

Answer 13

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)

Question 14

Requirements’ K
and
outputs K

Answer 14

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”

Question 15

Vague terms

Answer 15

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

Question 16

Merchant’s firm offer:

Answer 16

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

Question 17

Inquiry vs. counteroffer

Answer 17

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

Question 18

Unilateral K - Acceptance

Answer 18

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.

Question 19

shipping nonconformiing goods EXAMPLE WHEN ACCEPTANCE BY SHIPMENT

Answer 19

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.

Question 20

Merchant’s confimatiory Memo:

Answer 20

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.

Question 21

Consideration

Answer 21

1. bargained for exchange between the parties
2. 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.

Question 22

Promissory estoppel or detrimental reliance

Answer 22

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”

Question 23

Mistake

Answer 23

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.

Question 24

Misunderstanding

Answer 24

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.

Question 25

Fraudulent Misrepresentation

Answer 25

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.

Question 26

material misrepresentation

Answer 26

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.

Question 27

Capacity defense- age

Answer 27

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.

Question 28

Capacity defense- mental incapacity

Answer 28

no ability whatsoever to k once a guarian has been appointed. K is voidable and during lucid intervals or full recovery may affirm.

Question 29

Intoxicated persons

Answer 29

Voidable promis if the other party knew he was intoxicated. They can affirm when recovereed.

Question 30

Duress

Answer 30

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 1. susceptibility to pressure by one party 2. excessibe preasure by the other party.

Question 31

Statute of Frauds

Answer 31

Writing signed by the party to be charged. 1. reasonably identify the subject matter 2. indicate that a contract has been made between the parties 3. state with reasonable certainty the essential terms.

Question 32

Agreements always requireng statute of Frauds

Answer 32

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.

Question 33

Statute of Frauds UCC not requried

Answer 33

``` SWAP specially manufactured goods- writeten confimaiton by a merchant admission in court or performance- payment or delivery of goods. ```

Question 34

Merchant confimatory memo rule:

Answer 34

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.

Question 35

Noncompliance with SOF

Answer 35

noncompliance makes a contract unenforcable at the option of the party to be charged. IF not raised as a defense then it's waived.

Question 36

Part performance- SOF

Answer 36

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.

Question 37

Unconscionability

Answer 37

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: 1. refuse to enforse 2. ef=nforce the remainder of the K without the unconsionable clause 3. 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.

Question 38

General Rules of Contract construction

Answer 38

General rules: contracts are construed as a whole, words are generally given their ordinary meaning, written or typed terms prevail over printed, custom and usage in business and locale is considered, court will try to find contract valid, and ambiguities are construed against the contract’s preparer

Question 39

Parole Evidence

Answer 39

Parties to a K reduce their agreement to writing with the intent that it embody the final and full expression of their agreement. It's an integrated K. any statements or writings prior or contemporanious with the K is inadmissible.

Question 40

Integrated agreement

Answer 40

the writing must have been intended as the finall expression of the agreement whether the integration was intended to be complete or partial. Partial integration allows terms to supplement with consistent additional terms. But cannot be contradicted.

Question 41

Merger clause:

Answer 41

states agreement is complete on its face, is evidence of full integration.

Question 42

UCC Gap-Fillers

Answer 42

``` If missing, Article 2 provides: price (reasonable at time of delivery), place of delivery (seller’s business), time of shipment (reasonable), time for payment (receipt of goods), and assortment (buyer’s option) ```

Question 43

Noncarrier Risk of Loss cases

Answer 43

Merchant seller- risk passes to the buyer upon taking physical possession non merchant seller- risk passes upon tender of delivery

Question 44

Carrier Risk of Loss cases: | Shipment K

Answer 44

Shipment contracts: Seller must deliver to the shipper. Risk of Loss shifts from seller to the buyer when goods are delivered to the shipper this is anyting that does not contain an FOB term.

Question 45

Carrier Risk of Loss cases: | Destination K

Answer 45

MUST CONTAIN AN F.O.B. TERM. (free alongside, free along board) destination K: seller must tender delivery of goods to the buyer at the destination. risk of losss shifts from the seller to the buyer when the seller tenders delivery of goods to the buyer at the destination FOB: risk passes on delivery to FOB location

Question 46

risk of loss and breach

Answer 46

Defective goods: buyer has right to reject goods the risk does not pass to the buyer until the defects are cured or she accepts the goods in spite of their defects. If the buyer revokes then their acceptance is treated as never having the risk of loss pass to them from the seller. if The goods were Identified but the loss had not shifted to the buyer and they were destroyed not at the fault of the parties then the contract is avoided.

Question 47

Warranties

Answer 47

``` Types of waranties: —title, against infringement, merchantability, fitness, express ```

Question 48

Warranty of title:

Answer 48

ANY SELLER NOT JUST MERCHANTS. seller of goods warrants that title transfered is good. It;s an automatic waranty can be disclaimed or modified if the buyer is given notice

Question 49

Warranty against infingement:

Answer 49

ANY SELLER NOT JUST MERCHANTS | goods are free of patent, trademark, copyright, or similar claims. Unless the buyer requested a violating good.

Question 50

implied warranty of merchantability

Answer 50

implied in every contract for a sale by a merchant who deals in goods of that kind sold that there is a warranty that the goods are fit for the ordinary purpose for which such goods are used. If defective and seller doesn't know it doesn't matter they are absolutely liable. disclaimer can only occur by mentioning merchantability if in writing it must be conspicuous

Question 51

Fitness for a particular purpose

Answer 51

ANY SELLER NOT JUST MERCHANTS whenever any seller has reason to know the particular purpose for which the goods sold are to be used and that the buyer is relying on the merchant's skill and judgment to select goods and the buyer does in fact rely. Can be disclaimed only by conspicuous writing. Can be super general.

Question 52

Disclaimer of the warranty ofwarranties

Answer 52

"as is" will make all warranties including implied ones disclaimed. cannot be fine print or hidden. a buyer denies examining or does exaim the exact goods then there is no warranty. Course of dealings can also disclaim.

Question 53

Warranty damages

Answer 53

Damages—difference between goods tendered and as warranted

Question 54

Modification of K terms Common Law

Answer 54

General contract law a K cannot be modified unless the modification is supported by new consideration. Modern view permit's modification without consideration if 1. modification is due to circumstances that were unanticipated by the parties when the K was made 2. it is fair and equitable. Oral modification is effective under common law even if the written K expressly requires that the K be modified only in writing.

Question 55

Modification of K Terms UCC

Answer 55

UCC only requires that the modifications be made with good faith, but does not require consideration. If the K falls within the SOF then it must be in wiriting. if it was less than $500 before and will now be for $500 then you must reduce it to writing. if a k explicitly states that modification requires a writing then it must be followed. If a non merchant you need a spearate signature.

Question 56

Conditions

Answer 56

A party may not have to perform unless some condition is fulfilled. Failure to perform if not fulfiled would deem their feairure justified. Here you're not breaching just releaved from having to perform. Has the condition been excused? 1. Hindrance or failure to cooperate 2. Breach of contract 3. Anticipatory repudiation—party unequivocally indicates he will not perform before time of performance 4. Prospective inability or unwillingness to perform—doubts as to party’s performance 5. Substantial performance 6. Divisibility of contract 7. Waiver or estoppel

Question 57

Condition types

Answer 57

Precedent- one that must occur before an absolute duty of immediate performance arises in the other party. concurrent: capable of occuring together bound to perform at same time. Subsequent- when it occurs cuts off an already existing absolute duty of performance. If K is not enforcible bc of a failure of a condition, and one party has fully performed they can recover damages under UNJUST ENRICHMENT.

Question 58

Hindrance or failure to cooperate

Answer 58

One party preventing the condition from occuring by wrongful action will legallly excuse the condition.

Question 59

Conditions and Breach

Answer 59

Legally excuses the condition if there has be a MATERIAL breach, not a minor one.

Question 60

Anticipatory repudiation

Answer 60

promisor indicates that he will not perform when time comes. Sue immediately, spend your own performance and wait to sue until the performance date, treat the repudiation as an offer to rescind and treat the K as discharged. You can still urge performance. must make sure that they have unequivicovly repudiated.

Question 61

Prospective inability or unwillingless to perform.

Answer 61

reasonably believs the other party will be unable or unable to perform. less thanrepudiation. suspend performance until you get adequate assurance.

Question 62

substantial performance

Answer 62

condition of complete performance can be excused. This is only applied in a CONSTRUCTIVE condition is involved not for an express.

Question 63

Divisibility of K

Answer 63

Three tests must all be perfomed: 1. performance of each party is divided into two or more parts under the K 2. number of parts due from each party is the same 3. performance of each part by one party is agreed on as the equivalent of the coresponding part. not considered a condition. Price per unit is ALWAYS this. UCC this is an installment K.

Question 64

Discharge of Duty

Answer 64

Once determined that a party is under an immediate duty to perform the duty to perfrom must be discharged. 1. Performance or tender of performance 2. Occurrence of condition subsequent 3. Illegality of subject matter after contract was made 4. Impossibility, impracticability, or frustration of purpose 5. Rescission of contract 6. Modification of contract

Question 65

Discharge of Duties

Answer 65

nonoccurrence of the event was a basic assumption of the parties in making the K and neither has assumed the risk of the event occuring, k duties can be discharged.

Question 66

Impractability

Answer 66

Also called impossibility: impposible to perform the duty. it's objectively impossible. Never subjective. Must happen after K entered into. All excused from their duty. can be Partial Impossibility or temprory (suspends If a party partially performed they can recover in quasi-K at the K rate or reasonable value Impractability: Test: extreme and unreasonable difficulty and or expense and its nonoccurence was a basic assumption of the parties.

Question 67

Destruction of Contract

Answer 67

If it is a K to build then the construction co is not entitled to anything but the original K price with a delayed time of completion (bc construction is not rendered impossible). If they are remodeling or repairing and there is nothing left to repair they can recover in restitution the value of what was done.

Question 68

Frustration

Answer 68

Performance is STILL POSSIBLE 1. supervening act or event. 2. parties did not reasonably foresee the intervenig act at time of contracting 3. PURPOSE of the K is almost completely destoryed 4. Purpose of the K was realized by both parties at the time of making the K.

Question 69

Mutual Rescission

Answer 69

is discharge by an express agreement between the parties. Consideration can be giving up by each party of her right to counter performance by the other third party beneficiary issue- their interest cannot have vested. can be made orally unless SOF or land.

Question 70

novation

Answer 70

new k substitutes a new party to receive the benefits and assume duties that originally belonged to the old parties under the old K. Discharges the old K. 1. previous valid K 2. agreement among all parties including the new party to the K 3. the immediate extinguishment of contractual duties as between the original K parties 4. a valid and enforcable new K.

Question 71

Accord

Answer 71

an accord is an new agreement that suspends the original agreement until a new future performance is conducted. Satisfaction occurs when the performance has occurred and thus the original K is discharged. There's usually a dispute for an amount due. modification would want the K to continue

Question 72

Breach

Answer 72

the promisor is under an absolute duty to perform and this performance has not been discharged, then the failure to perform in accordance with the contractual terms will amount to a breach of the K. The nonbreaching party will show that they were willing and able to perform but for the breaching party's failure to perform.

Question 73

Minor breach:

Answer 73

oblegee gains a substantial benefit of her bargain. it does not relieve the aggried party of their duty to perform under the K.

Question 74

Material Breach

Answer 74

if obligee does not recieve substantial benefit of her bargain, breach is material. non breaching party my treat the contract as at it's end, no counterperformance, will have an immediate right to remedies for the entire contract and total duties.

Question 75

Factors to consider if a breach is minor or material.

Answer 75

amount of benefit on the nonbreaching party, adequacy of compensation on the nonbreaching party, extent of part performance of the breaching party, hardship to the breaching party, negligent or willful behavior of the breching party, likelihood that the breaching party will perform the remainder of the K. Might need them on an essay answer

Question 76

Perfect tender rule

Answer 76

A ucc rule. goods or their delivery fail to conform to the K in any way the buyer generally may reject all, accept all, or accept any commercial units and reject the rest. Buyer has accepted the goods when they have indicated that the goods conform after having a reasonable amount of time to inspect the delivery. However if they accept defected they can get damages for the breached amount.

Question 77

Perfect Tender rule- revoking acceptance

Answer 77

Buyer may revoke acceptance if the goods have a defect that substantially impairs their value to her and 1. she accepted them under the reasonable belief that they would be cured of the defect. 2. there was difficult discovering defects or bc the sellers assurance that the goods conformed to the K.

Question 78

Installment contracts- Perfect tender rule.

Answer 78

nonconformity of one delivery does not impair the whole contract, the entire contract is only impared if there is a substantial impairment to the whole contract.

Question 79

Seller's right to cure

Answer 79

cure by notice and new tender within time for performance. The buyer must then accept the goods. Beyond original contract time- if the seller reasonably believed they were acceptable, and the buyer rejects them the seller can reasonably notify the buyer that they will make conforming tender within a further reasonable time beyond the original contact. seller reasonably believed the goods were conforming if: 1. trade practice, or prior dealings with the buyer lead seller to believe that the goods would be accepted. 2. seller could not have known the defect despite proper business conduct.

Question 80

specific performance

Answer 80

specific performance: legal remedy is inadequate this is an order from court ordering the preaching party to perform or face contempt of court charges. (good for land, and rare things) not available for service K because of indentured servitude injunction preventing a party from acting (employee working for competitor)

Question 81

Non compete clauses:

Answer 81

services to be performed are unique and the covenant is reasonable meaning it is to protect a legitimate interest of the party benefited by the covenant, reasonable in geographic scope and duration, and does not harm the public.

Question 82

Laches

Answer 82

a claim that the P has delayed bringing an action that the delay has prejudiced the D.

Question 83

bonafide purchaser

Answer 83

sold to a purchaser for value and in good faith.

Question 84

Replevy

Answer 84

WHEN BUYER has partially paid for the goods, they have been identified under the K and Seller has not delivered he may replevy the goods if seller becomes insolvent within 10 days after receiving buyers first payment, OR goods were purchased for personal, family, or household purposes. Buyer must tender any unpaid portion of the purchase price to the seller. special case when the buyer can't find adequate substitute goods (COVER)

Question 85

compensatory damages

Answer 85

to put the non breaching party in the position they would have been in had the promise been performed.

Question 86

expectation damages

Answer 86

sufficient damages for her to buy a substitute performance. Also known as Benefit of the bargain damages.

Question 87

reliance damages

Answer 87

cost of the P's performance, to put the p back in the position they would have been in had the contract never been formed.

Question 88

consequential damages

Answer 88

may be recovered if at the time the contract was made a reasonable person would have forseen the damages as a probable result of the breach. of the breaching party knew or had reason to know of the special circumstances giving rise to the damages. (aka a seller can never claim these)

Question 89

liquidated damages clauses

Answer 89

1. damages for contractual breach must have been difficult to estimate or ascertain at the time the K was formed, 2. The amount agreed on must have been a reasonable forecast of compensatory damages in the case of breach. if unreasonable the courts will consure it as a penalty andnot enforce the provision.

Question 90

Buyer's damages in sale of goods

Answer 90

1. the market price or 2. the cost of buying replacement goods (cover) plus incidental and consequential damages (less expenses saved as a result of the sellers breach.

Question 91

Warranty damages

Answer 91

difference between the value of the goods as delivered and the value they would have had if they had been according to contract, plus incidental and consequential damages.

Question 92

consequential damages- UCC

Answer 92

1. the seller had reason to know of the general or particular requirements 2. the subsequent loss resulting from the needs could not be prevented by cover.

Question 93

Buyer Repudiates or refuses to accept conforming goods

Answer 93

1. recover the difference between the market price (@ time and place of delivery) 2. resell the goods and recover the difference between the K price and the resale price 3. if they are inadequate recover under a lost profits measure the difference between the K price and the cost to the seller.