Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Bar > Contracts > Flashcards

Contracts Flashcards

You may prefer our related Brainscape-certified flashcards:
MBE flashcards
1
Q

If seller doesn’t deliver goods, buyer’s options

A

1) Benefit of the bargain: recover k - market price at breach
2) Cover: recover k - cost of replacement goods
* cover: contract in good faith and without delay

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

buyer’s damages for seller’s anticipatory breach

A

market price when learned at breach - contract price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

buyer’s damages for seller’s breach of warranty

A

value of goods delivered - value of contracted goods + incidental/consequential

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

If buyer accepts nonconforming goods, buyer’s damages

A

Loss in value: value of goods delivered - value of contract goods

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

If buyer repudiates/refuses conforming goods, seller’s options

A

1) resale damages: k price - resale price
2) market damages: k price - market price @ delivery
3) custom goods: k price - cost to seller
4) lost volume seller: lost profits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

land contracts: damages

A

contract price - fair market value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

construction contracts, damages for owner’s breach

A

before completion: expected profits + costs to date

after completion: contract price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

construction contracts, builder’s breach

A

cost of completion + compensation for delay

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

expectation damages (definition + use)

A

damages sufficient to buy substitute performance, to put the non breaching party in the position they would have had under the contract

default damages

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

reliance damages (definition + use)

A

damages sufficient to put the nonbreaching party in the position they would have as if the contract was never formed

Use if: damages are too speculative

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

incidental damages

A

expenses resulting from a breach (transportation, storage, etc.)

always recoverable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

consequential damages

A
  • damages resulting from breach based on particular needs that a reasonable person would foresee at the time of the contract, and the breaching party knew about
  • damages proximately caused by a breach

Use if: buyer (sale of goods)
*for UCC goods, consequential damages must be unpreventable by cover

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

liquidated damages - requirements to use

A
  1. damages are hard to estimate

2. amount is a reasonable forecast (based on damages)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

unilateral contract - 2 situations

A

1) offeror clearly indicates completion of performance is only manner of acceptance
2) offer to the public like a reward offer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

requirements for a valid offer (CL)

A
  • promise, undertaking or commitment to enter into a contract
  • definite and certain terms
  • communication to offeree
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

ways to terminate an offer

A
  • lapse of time
  • express rejection
  • counteroffer (NOT a mere inquiry)
  • conditional acceptance
  • revocation (indirect or direct) – UNLESS an option, merchant’s firm offer, detrimental reliance, unilateral contract with performance, performance has begun
  • by law: death, insanity, illegality
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

effect of a conditional acceptance

A

treat as a new offer that can’t be accepted by performance

if performance occurs, a contract is formed by the parties’ conduct, NOT based on the new terms

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

mailbox rule

A
  • a rejection is effective on receipt
  • an acceptance is effective on dispatch (EXCEPT options - effective on receipt)
  • if reject and then accept –> whichever is received first
  • if accept and then reject –> accept unless rejection arrives first and there is detrimental reliance
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Merchant’s firm offer rule

A
  1. if a merchant
  2. offers to buy or sell goods in a signed writing
  3. and the writing gives assurances it will be held open
    - -> offer isn’t revocable for lack of consideration during time stated, or at least 3 months
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

battle of the forms rules (merchants vs. non merchants)

A

if both parties are merchants –> new terms are added to a contract unless they materially alter the contract, the offer limits acceptance to the terms, OR the offeror objects to the new terms
–> different terms are “knocked out”

if one party is a non merchant –> new/differing terms are proposals to modify a contract; offeror must expressly agree to them (unless acceptance is conditioned on accepting new terms)

21
Q

mutual mistakes - when a contract is voidable

A

1) mistake is on a basic assumption of the contract
2) mistake has a material effect on the agreement
3) party seeking avoidance did not assume the risk of the mistake

22
Q

statute of frauds – types of contracts covered

A

MY LEGS
marriage
contract for term of years

land contract
executor’s promise to pay debts
sale of goods over $500*
surety

*Exceptions: SWAP
specially made goods, written confirmatory memo, admit in court the contract was made, paid for

23
Q

doctrine of part performance

A

part performance that unequivocally indicates that the parties have contracted for the sale of land takes the contract out of the SoF
–> must have two of possession, payment, valuable improvements

24
Q

parol evidence rule

A

any expressions made prior to or contemporaneous with an integration are inadmissible to vary the terms of the writing

25
Q

parol evidence rule - evidence outside of the scope of the rule

A

evidence on validity, collateral agreements/naturally omitted terms, interpretation, true consideration paid, reformation, subsequent modifications

26
Q

parol evidence rule - Art. 2

A

a party can’t contradict a written contract unless (1) merger clause or (2) writing was intended as a complete and exclusive statement of the terms of an agreement

BUT can be explained/supplemented by evidence on course of performance > course of dealing > usage

27
Q

implied warranty of fitness

A

1) seller should know of a special purpose for goods that buyer is relying on seller to select
2) buyer in fact relies on skills/judgment

28
Q

express warranty

A

fact/promise made by the seller, description of goods, sample/model that is part of the basis of the bargain

generally not disclaimable

29
Q

implied warranty of merchantability

A

every contract by a merchant who deals in specific goods: warranty goods are merchantable (fit for ordinary purpose for which they are used)

30
Q

disclaiming warranties

A

specific disclaimers

  • warranty of title: by specific language/circumstances
  • implied warranty of merchantability: specifically by mentioning merchantability, conspicuously
  • implied warranty of fitness: conspicuous writing

UCC general disclaimer methods: implied warranty of merchantability/fitness can be disclaimed through “as is” language, buyer’s examination, course of performance

31
Q

frustration of purpose defense

A

if purpose of a contract becomes valueless through no fault of either party, may discharge duty

32
Q

Risk of Loss: rule for buyers; non carrier vs. carrier cases; FOB and FAS

A

buyers: seller bears risk of loss if reject nonconforming goods or revoke acceptance

non carrier contracts:
if seller is a merchant, RoL passes on possession
if seller is a non merchant, RoL passes on tender of delivery

carrier contracts
shipment contract (default under UCC) RoL passes to buyer on delivery to carrier 
destination contract, RoL passes on tender to buyer at destination

FOB: free on board, where RoL passes to buyer
FAS: free alongside, RoL passes once goods delivered to dock

33
Q

parties options if a condition doesn’t occur

A

(1) terminate their liability

2) continue under the contract (election waiver

34
Q

options for innocent party on anticipatory repudiation

A
  • sue
  • wait for performance time and sue
  • treat contract as discharged
  • ignore the repudiation and urge the promisor to perform
35
Q

test for a divisible contract, effect on excuse of conditions

A

test = performance divided into two or more parts, number of parts from each party is the same, performance of each part is equivalent to the corresponding part from the other party

if party completes one part, entitled to agreed-on equivalent for that unit even if fail for another

36
Q

novation

A

(1) previous valid contract
(2) agreement among all parties to new contract
(3) immediate extinguishment of old contract
(4) valid new contract

37
Q

impossibility

A

objective impossibility; duties of contract could not be performed by anyone, which arises after the contract is entered into

includes: death of necessary party, supervening illegality, destruction of subject matter

38
Q

impracticability (+ UCC rule)

A

CL: extreme and unreasonable difficulty/expense; nonoccurence of event was a basic assumption of the parties; neither party assumed the risk of the event

UCC: if parties would not have placed on the seller an extraordinary occurrence, seller is discharged to extent of impracticability (e.g. raw material shortage, war, embargo; NOT increases in cost)

39
Q

frustration

A
  • supervening act/event
  • at time of contract, act was not foreseeable
  • purpose of contract destroyed
  • purpose of contract realized by both parties at contracting
40
Q

UCC: methods of acceptance

A
  • indicate that goods conform
  • fail to reject in a reasonable time
  • act inconsistently with seller’s ownership
41
Q

grounds for rescission

A 
mutual mistake
unilateral mistake if other party knew
unilateral mistake if extreme hardship 
misrepresentation of fact/law
duress, undue influence, illegality, capacity, consideration
42
Q

UCC definition of merchant

A

one who regularly deals in goods of the kind sold or otherwise by their profession holds themselves out as having special knowledge/skills as to practices or goods involved

43
Q

effect of fraudulent inducement, fraud in the factum, material misrepresentation

A

inducement: if a party fraudulently induces another to enter a contract, based on false assertions of fact, contract is voidable by the innocent party if they justifiably relied on it

fraud in the factum: if a party fraudulently induces another to sign a contract by misleading about the nature of the document, contract is void

material misrepresentation: whether or not fraudulent, if a misrepresentation would induce a reasonable person to agree or the maker knows it would induce that person, contract is voidable if there is justifiable reliance

effect of misrepresentation –> can sue for damages, rescission, reformation

44
Q

contract condition (definition)

A

1) an event or state of the world which must occur BEFORE a party has a duty to perform
2) an event or state of the world, the occurrence or nonoccurence of which releases a party from their duty to perform

45
Q

elements of consideration

A
  • bargained for exchange

- legal value: benefit to promisor or detriment to promisee

46
Q

k language on assignments:

  • contract can’t be assigned
  • contract rights can’t be assigned
  • attempts to assign are void
A
  1. can’t delegate duties
  2. obligor can sue for damages
  3. assignment isn’t operative
47
Q

things to analyze for materiality of a breach

A
  • amount of benefit received
  • adequacy of damages
  • extent of performance
  • hardship to the breaching party
  • whether the breach was negligent/willful
48
Q

ways that a condition can be excused

A
  • hindrance/failure to cooperate
  • waiver
  • election waiver
  • actual breach
  • anticipatory repudiation
  • prospective inability to perform
  • substantial performance
  • performance of part of a contract
  • impossibility, impracticability, frustration
49
Q

ways that a duty to perform can be discharged

A
  • complete performance
  • occurrence of a condition subsequent
  • supervening illegality
  • rescission (express/unilateral)
  • modification
  • cancellation
  • release
  • substituted k
  • accord/satisfaction
  • novation
  • impossibility, impracticability, frustration
  • account stated
  • lapse
  • running of SoL

Bar (8 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions