Contracts Flashcards
1
Q
Common Law Contract Modification
A
- Common law: Preexisting legal duty rule
- Some courts: Fair and equitable in view of circumstances not anticipated by the parties on contracting
2
Q
UCC Contract Modification
A
- Good faith = no need for new consideration
- Good faith meaning legitimate commercial reason for modification
3
Q
Duress
A
- Improper threat that leaves victim no reasonable alternative
- Withholding something someone wants or needs will constitute economic duress if:
- Party threatens a wrongful act that would seriously threaten property or finances; and
- There are no adequate means of prevention
4
Q
UCC Firm Offer Rule
A
- Merchant;
- Offers to sell goods in a signed writing; and
- the writing gives assurances it will be held open; then
- the offer is not revocable for lack of consideration during the time stated (up to 3 months or reasonable amount of time)
5
Q
Merchant
A
- Dealer in goods of the kind; or
- By his occupation holds himself out as having knowledge or skill peculiar to the goods involved
6
Q
Can detrimental reliance create an option contract?
A
- Yes, promissory estoppel
- Offeror could reasonably expect
- That the offeree would rely to her detriment and does so rely
- Held irrevocable for a reasonable length of time
7
Q
Expectation Damages
A
- Put the non-breaching party in the position they would have been in had the contract been performed
8
Q
Consequential Damages
A
- Consists of losses beyond those covered by the standard measure
- That a reasonable person would have foreseen as a result of the breach
- Usually turns on breaching party’s knowledge
- Must be ascertainable with reasonable certainty
9
Q
Material Breach / Substantial Performance Factors
A
- Benefit received by non-breacher
- Adequacy of compensation to injured party
- Extent of part performance by breacher
- Hardship to breacher
- Negligent or willful behavior
- Likelihood that breacher will perform the rest of the contract
10
Q
Incidental Damages
A
- Foreseeability is irrelevant
- Usually in sale of goods contracts
- Reasonable costs associated with inspection, receipt, transportation, care, and custody of goods rightfully rejected
11
Q
Reliance Damages
A
- Put the party in the position as though the contract had never been made
- Use when expectation damages are too uncertain
12
Q
Construction Contract - Damages for Breach by Owner Before Completion
A
- Expected Profit + Costs expended
13
Q
Divisible Contract Elements
A
- Performance of each party must be divided into two or more parts under the contract;
- Number of parts due from each party must be the same; and
- Performance of each part by one party is agreed on as the equivalent of the corresponding part from the other party
- Generally turns on fairness
14
Q
Material Benefit Rule
A
- Minority Rule
- Will enforce a contract supported by past consideration if:
- Based on a material benefit conferred by promisee on promisor
- Promisee did not intend to confer the benefit as a gift, and
- Promise enforceable only to the extent it is proportional to the benefit
15
Q
Offer Requirements
A
- Definite and certain terms
- Communicated to offeree
