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Contracts Flashcards

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1
Q

Four types of irrevocable offers

A
  1. option contract
  2. merchant’s firm offer under 2-205
  3. performance begun following offer for unilateral contract
  4. detrimental reliance
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2
Q

How can an offer be accepted?

A

Unilateral contract can only be accepted through performance (becomes irrevocable once performance begins), bilateral contract can be accepted with performance or a promise to perform

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3
Q

Merchants confirmatory memorandum

A

Applies only when both parties are merchants
Written confirmation of oral agreement
Merchant must object within 10 days or lose SOF defense

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4
Q

Mailbox rule

A

In a bilateral contract, acceptance is effective upon dispatch
Exceptions: option contract, unilateral contract, offer stipulates that acceptance is valid only upon receipt

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5
Q

Acceptance under UCC

A

Generally, a buyers order is an offer

Seller can accept by promising to ship the goods or promptly shipping the goods

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6
Q

Frustration of purpose

A

Purpose of the contract has become valueless by virtue of an intervening event

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7
Q

Commercial impracticability

A

Unforeseen circumstances that make performance extremely and unreasonably difficult and expensive

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8
Q

Shipping nonconforming goods

A

Shipping nonconforming goods is both an acceptance of the offer and a breach of the contract
Buyer can accept the whole shipment, reject the whole shipment, or accept any commercially reasonable unit and reject the rest and seek damages

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9
Q

Accommodation exception for nonconforming goods

A

If seller uses prompt shipment as form of acceptance and notifies the buyer, that goods are being offered as an accommodation, the shipment is viewed as a counteroffer, so buyer can wholly accept or wholly reject the shipment

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10
Q

Acceptance under UCC – Battle of the Forms

A

An acceptance that contains additional or different terms is effective as an acceptance, unless the acceptance is expressly made conditional on assent to the additional terms
Where both parties are merchants, the additional terms become part of the contract, unless
-they materially alter the terms,
-offer expressly limits acceptance, or
-offeror rejects within a reasonable time

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11
Q

SoF Specially Manufactured Goods Exception

A
  1. Goods must be specially manufactured for the buyer
  2. Seller must have made a substantial beginning on their manufacture or made commitments for their purchase AND
  3. Goods must not be suitable for sale in the seller’s ordinary course of business
    If the exception applies, K may be enforceable without a writing
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12
Q

K =

A

MA (O + A) + C – D

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13
Q

Express contracts are formed by

A

Language, oral or written

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14
Q

Implied contracts are formed by

A

Conduct

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15
Q

Are quasi-contracts contracts?

A

NO

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16
Q

Bilateral contract

A

Exchange of a promise for a promise

Each party a promisor and promisee

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17
Q

Unilateral contract

A

Offeror asks for performance rather than a promise
Offeror/promisor promises to pay promisee on completion
Once the act is completed, a contract is formed
Can ONLY accept by performance, not a return promise

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18
Q

A unilateral contract occurs in only two situations:

A

(1) when the offeror clearly (unambiguously) indicates that completion of performance is the only manner of acceptance; and (2) where there is an offer to the public, such as a reward offer
Look for: “my offer can be accepted only by …”
Ex: reward for lost dog

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19
Q

Definition of “goods”

A

Anything movable when identified to the contract

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20
Q

UCC definition of “merchant”

A

for seller/buyers:
one who regularly deals in goods of the kind sold or who otherwise by their profession holds themselves out as having special knowledge or skills as to the practices or goods involved
for general business practices:
almost anyone

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21
Q

Which law applies for contracts involving goods and nongoods?

A

determine which aspect is dominant and apply the law governing that aspect to the whole contract
However, if the contract divides payment between goods and services, then Article 2 will apply to the sale portion and the common law will apply to the services portion

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22
Q

For a communication to be an offer, it must

A

create a reasonable expectation in the offeree that the offeror is willing to enter into a contract on the basis of the offered terms
consider:
-was there an expression of a promise, undertaking or commitment to enter into a k?
-were there certainty and definiteness in the essential terms?
-was there a communication of the above to the offeree?
MUST be objective intent to enter into a contract (reasonable person standard)

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23
Q

Advertisements

A

Generally not offers, but invitations to deal

Can be offers if there is a quantity term

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24
Q

Exceptions to the general rule that ads are not offers

A
  • ad contains a promise
  • terms are certain and definite
  • offeree is clearly identified
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25
Q

Offer must be definite and certain in its terms. How to determine?

A

Whether enough of the essential terms have been provide to make it capable of enforcement?

  • offeree’s name
  • offer’s subject matter
  • price
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26
Q

Land sale offers must include

A
  • price

- description of land (some particularity, but a deed description is not required)

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27
Q

Sale of goods offers must include

A

Quantity term

court will fill in price if needed

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28
Q

Requirements contract

A

B promises to buy from S all goods B requires

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29
Q

Output contract

A

S promises to sell to B all goods S produces, B agrees to buy that amount

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30
Q

Good faith assumption for requirements and outputs contracts

A

It is assumed that the parties will act in good faith; so, there can’t be a tender of or a demand for a quantity “unreasonably disproportionate” to (1) any stated estimate, or (2) (in the absence of a stated estimate) any normal or other- wise comparable prior output or requirements

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31
Q

Employment contracts that don’t specify the duration

A

Creates an at-will contract

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32
Q

Offers for contracts for services must include

A

The nature of the work

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33
Q

If a contract does not specify the price

A

Does not prevent formation EXCEPT in real property contracts

If it is goods, the UCC provides that the price will be a reasonable price at the time of delivery

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34
Q

Methods of termination

A
  • lapse of time
  • revocation
  • rejection
  • death
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35
Q

Termination by lapse of time

A

Offer terminated of not accepted within time specified by offer or within reasonable time
For the exam, more than a month – raise the issue

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36
Q

Termination by rejection

A

-express rejection (ex statement by offeree)
-counteroffer (same subject matter as original offer, but differs in terms)
COUNTEROFFERS KILL
–Mere bargaining is not rejection (“will you take x?”)
. = counteroffer
? = mere bargaining

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37
Q

Counteroffers are

A

Both a rejection and a new offer (conditional acceptance)

Reverses the roles of the parties

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38
Q

Termination by revocation

A

Offeror’s retraction of offer

Can be done any time before acceptance

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39
Q

Offer may be indirectly revoked if

A

-offeree receives correct information
-from reliable source
-of offeror’s acts indicating revocation
OFFEREE HAS TO KNOW

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40
Q

Revocations are effective upon

A

Receipt

NO mailbox rule

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41
Q

Option contract definition

A

Offeree gives consideration for offeror to not revoke offer for a period of time

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42
Q

Limitations on power to revoke

A
  • option contract
  • merchant’s firm offer under Art 2
  • detrimental reliance
  • beginning performance in response to true unilateral contract offer
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43
Q

Merchant’s firm offer rule

A

-merchant promises
-in signed writing (letterhead works)
-to keep offer open for time stated or a reasonable time
Enforceable for up to three months
Consideration not needed to keep offer open

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44
Q

Detrimental reliance and revocation

A

When the offeror could reasonably expect that the offeree would rely to their detriment on the offer, and the offeree does so rely, the offer will be held irrevocable as an option contract for a reasonable length of time

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45
Q

Mere preparation to perform

A

Does not equal performance

If substantial, could constitute detrimental reliance if foreseeable

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46
Q

The following events terminate an offer by operation of law:

A
  • death or insanity of either party
  • destruction of subject matter
  • supervening illegality
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47
Q

Effect of death on a formed contract

A

Not automatically terminated

The obligation goes to the estate of the deceased

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48
Q

Language of the offer controls the manner of

A

Acceptance

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49
Q

Can the right to accept an offer be assigned?

A

Only if it is an option contract

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50
Q

Acceptance of an offer for bilateral contract

A

unless an offer specifically provides that it may be accepted only through performance, it will be construed as an offer to enter into a bilateral contract and may be accepted either by a promise to perform or by the beginning of performance

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51
Q

a unilateral contract cannot be accepted until performance is

A

completed
starting performance can create an option so that the offer is irrevocable
(offeree is not bound to complete)

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52
Q

Shipping the wrong goods =

A

Acceptance and breach

unless sent as an accommodation with shipment as acceptance

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53
Q

Does silence equal acceptance?

A

No

Exception: custom (eel skins)

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54
Q

common law mirror image rule

A

acceptance must mirror offer terms exactly

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55
Q

Article 2 acceptance

A

No mirror image rule

“seasonable expression” of acceptance

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56
Q

Under Article 2, if both parties to the contract are merchants, additional terms in the acceptance will be included in the contract unless:

A
  • materially alter the original terms of the offer
  • offer expressly limits acceptance to those terms OR
  • offeror objects within a reasonable time
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57
Q

For Article 2 acceptance, are disclaimers considered a material change?

A

Yes
Material change = likely to cause hardship or surprise to offeror
Industry custom is not a material change

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58
Q

Mailbox rule

A

Acceptance effective when sent

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59
Q

Exceptions to the mailbox rule

A
  • offer stipulates not effective until received
  • option contract
  • offeree sends a rejection and then an acceptance (then whichever arrives first is effective)
  • offeree sends an acceptance and then a rejection, then the acceptance is effective UNLESS the rejection arrives first and the offeror detrimentally relies on it
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60
Q

Two elements of consideration

A
  1. bargained-for-exchange

2. legal value (benefit to promisor OR detriment to promise)

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61
Q

Promise for a promise equals consideration?

A

Yes

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62
Q

Can forbearance constitute consideration?

A

yes

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63
Q

Is past consideration consideration?

A

no

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64
Q

Consideration and modifications

A

Common law – need new consideration to modify (pre-existing duty rule)
Article 2 –no consideration required to modify (just need good faith)

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65
Q

Undisputed debt

A

Mastercard can make the promise and break the promise to take a lesser amount

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66
Q

Promissory estoppel

A

Does not require consideration—only the right answer if there is no consideration
A promise is enforceable if necessary to prevent injustice if:
1. The promisor should reasonably expect to induce action or forbearance AND
2. such action or forbearance is in fact induced
(ex: bookkeeper who quit her job bc of $2k grandpa promise)

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67
Q

Defendants without capacity can

A

Disaffirm contract

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68
Q

Forms of incapacity

A
  • minority
  • mental incapacity
  • intoxication
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69
Q

Retaining benefits after gaining capacity =

A

Implied affirmation

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70
Q

Incapacitated party still liable for

A

Necessaries

but only in restitution for reasonable value, not the contract price

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71
Q

Duress can be either ___ or ___

A

physical or economic

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72
Q

Effect of ambiguity in contract terms

A

Neither party aware of the ambiguity: no contract unless both intended same meaning
Both parties aware: no contract unless both intended same meaning
One party aware: binding contract based on ignorant party’s reasonable belief of the meaning of the ambiguous words (subjective intent counts here)

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73
Q

If there is a mutual mistake about existing facts, the contract may be voidable by the adversely affected party if:

A

(ex cubic zirconia v diamond)

  • mistake concerns a basic assumption
  • mistake has a material effect on the agreed-upon exchange
  • party seeking avoidance did not assume the risk of the mistake
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74
Q

Mutual mistake about the existence of the subject matter vs mutual mistake about the value

A
  • subject matter - no contract (Rose the pensive cow)

- value – contract

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75
Q

Unilateral mistake

A

Only one party is mistaken
Does not prevent formation unless the nonmistaken party knew or should have known about the mistake
Must be material and obvious
Mistaken party must not have borne risk of mistake

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76
Q

Unconscionability

A

Unfair terms AND oppressive surprise

Tested when contract formed

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77
Q

Common instances of unconscionability

A
  • inconspicuous risk-shifting provisions
  • contracts of adhesion
  • exculpatory clauses
  • limitations on remedies
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78
Q

Statute of Frauds categories

A 
MYLEGS
Marriage
Year
Land sales
Executors
Goods $500+
Sureties
79
Q

SOF: marriage

A

A promise the consideration for which is marriage must be evidenced by a writing. This applies to promises that induce marriage by offering something of value (other than a return promise to marry—for example, “if you marry my son, I will give the two of you a house”)

80
Q

SOF: year

A

Contracts impossible to complete in 1 year BY THE TERMS
Part performance does not satisfy the Statute of Frauds in this case. The date runs from the date of the agreement and not from the date of performance

81
Q

SOF: land sales

A

Includes

  • promises creating an interest in land
  • leases for more than a year
  • easements for more than a year
  • mortgages
  • fixtures
  • minerals/structures/etc. if severed by the buyer
82
Q

SOF: executors

A

Promise by executor to pay estate debts from another source (usu their own funds)

83
Q

SOF: goods

A

$500.00 or more

84
Q

SOF: sureties

A

A promise to answer for the debt or default of another

85
Q

Exceptions to SOF

A

Modifications must be in writing only if the contract as modified falls under SOF
Leases of 1 year or less
Part performance of real estate contracts (starts oral, then part performance (payments, possession, or improvements) (need 2 out of 3))
Full performance for service contracts
Goods accepted or paid for
For custom goods: show a substantial beginning to satisfy the SOF
Merchant’s confirmatory memo

86
Q

Clauses that prohibit oral modification

A
  • unenforceable in common law contracts

- enforceable in Article 2 contracts

87
Q

Do judicial admissions satisfy SOF?

A

Yes
If a party admits in pleadings or testimony that there is an agreement, it’s treated the same as though the party signed a writing

88
Q

What is an adequate writing to satisfy SOF for Article 2?

A

Contract must have

  • quantity term
  • D’s signature
89
Q

What is an adequate writing to satisfy SOF for common law?

A

Contracts for services must have

  • all material terms (who are the parties what is the contract about?)
  • D’s signature
90
Q

Parol evidence rule

A

Excludes evidence of
-prior or contemporaneous agreements
-contradicting final writing
Requires the existence of a final writing (not applicable for oral agreements)

91
Q

Exceptions to parol evidence rule

A
  • partially integrated writing
  • defense against formation (not contradicting the writing)
  • explain a vague or ambiguous term
  • correct clerical error
92
Q

Course of dealing

A

Parties’ conduct in prior contracts

Can help define terms in current contract

93
Q

Course of performance

A

Parties’ conduct in current contract

94
Q

Trade usage

A

Industry norms that parties are aware of

95
Q

Express warranty

A

Any affirmation of fact or promise made by the seller to the buyer, any description of the goods, and any sample or model creates an express warranty if the statement, description, sample, or model is part of the basis of the bargain

96
Q

Implied warranty of merchantability

A

Implied in every contract for sale by a merchant who deals in goods of the kind sold, there is a warranty that the goods are merchantable. To be merchantable, goods must at least be “fit for the ordinary purpose for which such goods are used.”

97
Q

Implied warranty of fitness for a particular purpose

A
  • buyer comes in with special purpose
  • seller knows of special purpose
  • seller picks out goods fit for buyer’s special purpose
98
Q

Sellers can only disclaim ___ warranties, not ____ warranties

A

Implied, express

99
Q

Two ways sellers can disclaim all implied warranties

A

Magic words: “as is” “with all faults”

Conspicuous disclaimer- reasonably obvious to a reasonable person

100
Q

Limitations on damages clauses

A

Seller can limit damages available for breach of any warranty
As long as the limitation is not unconscionable
Limiting remedies for personal injury for consumer goods = unconscionable

101
Q

Risk allocation rules

A
  1. If the agreement allocates risk, that controls
  2. If there is no common carrier, and if seller is a merchant, the risk of loss passes to the buyer only when they take physical possession. If seller is not a merchant, risk of loss passes to the buyer upon tender of delivery
  3. If there is a common carrier, risk of loss shifts to buyer when seller completes delivery obligation (NOT when actual delivery occurs)
102
Q

Shipment contract definition and risk of loss

A

-seller delivers goods to common carrier
-arranges for delivery, and
-notifies buyer
Risk of loss passes to buyer on delivery to carrier
(look for the term “FOB” [location]) location is sellers city = shipment contract

103
Q

Destination contract definition and risk of loss

A

Seller must delivery goods to buyer’s location
Risk of loss passes to buyer when goods arrive at the location
(look for the term “FOB” [location]) location is buyers city = destination contract

104
Q

Common law performance

A 
Substantial performance (meets contract’s essential purpose) is enough
material breach is not substantial performance
105
Q

Perfect tender rule (UCC Art 2)

A

Seller’s delivery must be perfect- right goods, right place, right time
Or buyer has right to reject all goods

106
Q

Installment contracts

A

Requires delivery of goods in separate installments over a specified period

107
Q

Conditions definition

A

Language that limits obligations created by contract language
Conditions are not promises

108
Q

Express conditions must be

A

Perfectly satisfied

109
Q

Satisfaction condition

A

Satisfaction measured by a reasonable person standard unless

-contract deals with art or personal taste

110
Q

Express condition precedent

A

Performance not due until the event occurs

111
Q

Condition subsequent

A

Events after performance that could terminate duty to pay

112
Q

Conditions may be excused by

A

Action or inaction of person protected by condition

Person protected has to cooperate in good faith with the condition or they lose the protection of the condition

113
Q

Waiver of condition

A

Voluntary giving up the condition’s protection

114
Q

Anticipatory repudiation

A

Early statement of nonperformance

115
Q

Can repudiations be retracted?

A

Repudiations can be retracted if not relied upon

116
Q

Failure to give adequate assurance (Art 2)

A
  • party may ask in writing for assurance other party will perform
  • assurance not received = anticipatory repudiation
  • have to have reasonable grounds to suspect they won’t perform
  • only entitled to adequate assurance, cannot use it to rewrite contract or demand certain assurance
117
Q

Recission

A

Party’s mutual agreement to cancel contract

Each party must have some performance remaining, cant rescission if completely done

118
Q

Modification agreement

A

Replaces existing contract with a new one immediately

119
Q

Accord and satisfaction

A

Agreement to accept a difference performance to satisfy existing duty
Need to show accord is satisfied before old obligation is excused
(sort of like a condition, look for “if … then”)
Without satisfaction, the old obligation is NOT excused

120
Q

Difference between modification and accord and satisfaction

A

Modification: old obligation excused immediately

Accord and satisfaction: old obligation excused later (after accord)

121
Q

Novation

A

Agreement to substitute a new party for an existing one

122
Q

Delegation

A

One party finds replacement party to perform

Original party’s obligation not excused

123
Q

Impossibility/impracticability as excuse

A

Later unforeseen event makes party’s performance impossible
Can be death or incapacity of an essential person
Typically not impossible for buyers to pay (ex estate can pay if they die)

124
Q

If performance is made illegal by subsequent govt regulation

A

Performance excused (impossibility)

125
Q

Destruction of contract’s subject matter

A

Excuses performance (impossibility)

126
Q

Is increase in cost of performance an excuse?

A

Generally no

Has to be an extreme and unreasonable increase

127
Q

Frustration of purpose as excuse

A

-BOTH parties understood the central purpose
-performance excused if contract’s essential purpose undermined
(apt for thanksgiving parade)

128
Q

Breach definition

A

Failure to perform absolute duty

129
Q

Common law breach

A

-has the breaching party materially breached or substantially performed?
-if BP has substantially performed, the nonbreaching party cannot avoid performance (they must perform and then pursue remedies for breach)
(ex reding pipe case)

130
Q

Elements of material breach

A
  • no performance or substantial performance
  • no benefit of bargain to nonbreaching party
  • contract ended
  • counter-performance discharged
131
Q

To determine substantial performance, court looks to:

A
  • benefit received by nonbreaching party
  • part performance by breaching party
  • hardship to breaching party
132
Q

Failure to perform a contract within the stated time is generally not a breach unless

A

-time is of the essence (courts look to all circumstances)

133
Q

Perfect tender rule

A

If goods don’t conform, buyer may

  • reject entire shipment,
  • accept entire shipment, OR
  • reject in part, accept in part
134
Q

Acceptance of goods Art 2

A

Buyer accepts goods if they:

  • indicate goods conform to contract
  • indicate they’ll keep nonconforming good
  • fail to reject within reasonable time
  • fail to notify seller of rejection
  • act inconsistent with seller’s ownership
135
Q

When can acceptance of goods be revoked?

A
  • there is a defect that substantially impairs their value to the buyer AND
  • they accepted the goods on a reasonable belief that the defect would be cured OR
  • accepted because it was difficult to discover the defect or because the seller assured the goods conformed
136
Q

Seller has a right to ____ nonconforming goods within time for performance

A

Cure

137
Q

Installment contracts and nonconformity of goods

A
  • buyer can reject installment if nonconformity substantially impairs value of installment
  • contract breached if nonconformity substantially impairs entire contract’s value and seller cannot cure
138
Q

Anticipatory repudiation – effect on nonbreaching party

A

Injured party has immediate right to damages, creates obligation to mitigate, and discharges remaining duties of performance

139
Q

Requirements for specific performance as a remedy

A
  • money damages inadequate
  • feasible to enforce
  • usually for land (all land is unique)
  • available for goods if rare/unique (like art or antiques), or buyer unable to buy anywhere else
  • NOT available for service contracts
140
Q

Seller can get Art 2 reclamation if

A
  • buyer insolvent at time of receipt AND

- seller demands reclamation within 10 days of receipt and the buyer still has possession at the time of demand

141
Q

Exception to the reclamation rule

A

Seller can reclaim goods beyond the 10-day limit if

  • buyer misrepresents solvency
  • in writing
  • within 3 months before delivery
142
Q

Expectation damages

A

Default $ damages
Put the injured party in the position they’d be in had the contract been performed
(ex value of a perfect hand)

143
Q

Reliance damages

A
  • available if expectation damages are uncertain

- return non-breaking party to precontract status quo

144
Q

Restitution damages

A

Measured by value of the benefit conferred

145
Q

Incidental damages

A

Costs incident to breach
ALWAYS recoverable
Does not matter if foreseeable or not

146
Q

Consequential damages

A

Recoverable if foreseeable at time of formation

“be chatty up front”

147
Q

Liquidated damages clauses upheld if

A

-damages difficult to estimate at contract formation
-amount reasonable forecast of damages/bears reasonable relationship to damages
Otherwise it is an invalid penalty clause
Typically single lump sum amount is invalid

148
Q

If a liquidated damages clause is struck down as an invalid penalty clause

A

Can still get expectation damages, even if you don’t get the amount in the clause
Can do reliance damages if damages uncertain

149
Q

Art 2 Buyer’s damages: Cover damages

A

Cover price minus original contract price

150
Q

Art 2 Buyer’s damages: Market damages

A

Market price of similar goods – original contract price

151
Q

Art 2 Buyer’s damages: Loss in value

A

Value as promised minus value as delivered

152
Q

Are consequential damages available under the UCC?

A

Nope

153
Q

Lost profits must be ____ to be recoverable

A

Foreseeable at time of formation

154
Q

Buyers damages under Art 2 when seller in breach

A
  • cover damages
  • market damages
  • loss in value
155
Q

Sellers damages damages under Art 2 when buyer in breach

A
  • resale damages
  • market damages
  • can’t resell, then full contract price
  • lost volume seller rule
156
Q

Art 2 Seller’s damages: resale damages

A

Contract price minus resale price

must sell new goods in good faith

157
Q

Art 2 Seller’s damages: market damages

A

Contract price minus market price

158
Q

Art 2 Seller’s damages: If the seller can’t resell the goods,

A

Full contract price available

Often the case for custom goods

159
Q

Art 2 Seller’s damages: Lost volume seller rule

A
  • unlimited supply/inventory

- lost profits measure of damages

160
Q

Avoidable damages

A

Damages that could have been avoided are not recoverable
Don’t forget to subtract these out!
Duty to mitigate limited to similar/comparable subject matter
(ex big country big man)

161
Q

Entrustment

A

Merchant who ordinarily deals in goods of kind sells entrusted goods to BFP
Owner has no rights against BFP
Owner has rights against merchant for conversion

162
Q

Intended third party beneficiary scenario

A

Two parties contract to benefit third party

Intended third party beneficiary can enforce the contract directly even though they never made it

163
Q

Intended beneficiary

A
  • named in contract

- can enforce contract

164
Q

Who is the promisor and promisee in a third-party beneficiary contract?

A

Promisor: party who promises to perform for the third party
Promisee: party who secures the promise

165
Q

Promisor in third-party beneficiary contract has defenses against whom?

A

Promisor has the same defenses against TPB and promise

166
Q

Do incidental beneficiaries have rights to enforce TPB contract?

A

NO

167
Q

Who can enforce rights against promisor in TPB contract?

A

Either promise or beneficiary

168
Q

Rule for recission/modification of TPB contracts

A

Contract can be rescinded/modified until beneficiary’s rights have vested

169
Q

Vesting in a TPB contract

A
  • beneficiary’s rights vest when they learn of the contract or rely on it
  • promisor and promisee can’t cancel contract after vesting unless beneficiary consents or contract provides otherwise
170
Q

Assignment

A

-two parties contract
-one party (assignor) assigns rights to third party (assignee)
-assignee can enforce rights against party who owes duty (obligor)
Assignee is NOT an original party to the contract

171
Q

Valid assignment requirements

A
  • language of present transfer (“I assign” not “I promise to assign”)
  • no consideration needed (gift assignments are ok)
172
Q

Restrictions on assignments

A
  • language of prohibition = assignments not permitted (assignee without knowledge can still collect)
  • language of invalidation = assignments null and void (assignee can NOT collect)
173
Q

Assignments ___ substantially change the duties of the obligor

A

cannot

pay different person = not substantial, different person performs = maybe substantial

174
Q

Assignee ____ recover from obligor directly

A

Can

175
Q

Who does obligor have defenses against?

A

Obligor has same defenses against assignee as against assignor

176
Q

Gift assignments

A
  • easily revocable
  • last gratuitous assignee wins
  • later gift assignment revokes the previous gift assignment
  • best to be at the back of the line!
177
Q

____ assignee for consideration wins over all subsequent assignees AND previous gift assignees

A

First

178
Q

Later assignee for consideration will prevail if

A

Doesn’t know of earlier assignment and is the first to get a payment from or a judgment against the obligor

179
Q

Delegation

A

Party to contract delegates duty to third party
Generally, obligor can delegate duties without obligee’s consent
Can contract to prohibit delegations = no delegations allowed
If the person has special skills, cannot delegate, even to another person w/ special skills (if both parties agree it is a novation)

180
Q

In contract clauses, no assignment also means

A

No delegations

181
Q

Delegating party is ____ liable to the obligee

A

ALWAYS

182
Q

A delegate who gets consideration is

A

Liable

no consideration = generally not liable, bc gift promises are not enforceable

183
Q

Delegations for consideration create

A

Intended third party beneficiary obligations

184
Q

Course of performance –course of dealing—trade custom(in order of importance)

A

thats it, thats the card

185
Q

In order to accept an offer, you have to ___ of the offer to begin with

A

know

186
Q

Gap fillers only for

A

UCC contracts

187
Q

Mailbox rule only applies to

A

acceptance

188
Q

Mailbox rule: if you write address incorrectly

A

The acceptance is effective on receipt

189
Q

Court can never gap fill the ____ term under the UCC

A

Quantity

190
Q

Battle of the forms- effect of acceptance + new term

A

Material: knocked out, contract under terms of original offer
Nonmaterial: becomes part of contract unless offeror timely objects

191
Q

Material alterations for battle of the forms are those that affect

A

Money, liability, or remedies

192
Q

Battle of the forms: If the offeree makes acceptance CONDITIONAL on assent to an additional term, then it is a

A

Counteroffer

193
Q

Three ways for TPB contract to vest

A
  1. TPB learns + assents
  2. TPB learns + relies
  3. TPB learns + sues
194
Q

Evidence of a condition precedent is an exception to the

A

parol evidence rule

Bar Prep (9 decks)

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