Contracts - 13 Flashcards
If you can foresee the damaages that will result from a breach of contract and you are the non breacher - what will happen
It you can foresee the damages then you can take action to prevent or reduce losses
These will effect the amount of monetary damages that could be recoved
What are action that reduce a non breaching parties losses called
This is the mitigation of damages - they reduce the losses
What happens to a contract if you have a mutual mistake of fact
it is voidable
What if you have a mutual mistake of fact
This wont void a contact, but may cause the parties to renegotiate the price
What is you have a unilateral mistake of value or fact
This is when one of the parties to the contract make a mistake in value or fact but the correct info was available to them and
This does NOT void a contact
What if you have a mutual mistake of value
This wont void the contract, but may cause you to reevaluate the price
When is a contract with minor enforceable
A contract entered into with a minor is only voidable by the minor
What if the party has a preexisting duty - like police to catch a thief
if you promise to give them money of they do - not enforceable because it is already their job
What is the patrol evidence rule
This define what evidence can be admitted into court
All contemporaneous oral agreements BEFORE the contract the contradict what was in the written contract - is barred
Under patrol evidence rule can oral modification AFTER a contract was signed be admissible
Yes they are because after wards
When can you assign rights
This is when you can delegate the duties to another
- doesn’t have to be in writing - can be oral
- does not require notice to assignee - don’t need their consent
- what you do need is that the assignors intent to transfer
Who is an obligor and obligee
The obligor provide something to the obligee
the obligee gets the benefit
The obligor is the parent that is required to pay child support to the obligee ( child
Obligor is contractually commuted
What is an assignor and assignee
assignor is a person who first entered into a contract to sell a piece of property. They can then turn around and assign the proceeds for the sale ( of the contract) to a third party- the assignee
AN assigner transfers rights they hold to another entity
The assignee gets the benefit. They get the benefit assigned to them.
IF you are assigned the benefit A -> B-> C you are C can you sue A if they do not pay you
Yes - this is because you as C are the third party Called the “intended creditor beneficiary” and is owed the rights.
C can sue A
When is a liquidating damages clause enforceable
It is only enforceable if it is a reasonable approximation of the loss resulting from the breach
- Not enforceable if it is considered punitive damages
- Not enforceable even if the breach was intentional
Can a seller demand specific performances
Nope - only the buyer can demand specific performances
If you have an original note that the 2 parties later agreed to satisfy with a lower amount can the receiving party later sue them?
No - if you pay the debt earlier than the due date and it was accepted. The party receiving it will ( by accepting the lower amount of money) the contract will have been considered to be satisfied and the original note will have been discharged
When can you or can’t you assign the rights over to a third party
You generally can unless
- it materially changes the contract or responsibilities if the parties involved
- it is forbidden - like personal services
Can you assign option contract right
Yes - no special reason not too
can you assign malpractice insurance policy right
NO - because this would materially change the contract and therefore it is forbidden
Void or voidable?
Undue influence by a dominant party in a confidential relationship.
Voidable Undue influence by a dominant party in a confidential relationship merely renders the contract voidable, not void.
Void or Voidable
Duress through improper threats.
Voidable
Duress through improper threats merely renders the contract voidable, not void.
Void or voidable
Duress through physical compulsion.
Void
Void or Voidable
Mutual mistake as to facts forming the basis of the contract.
Voidable
Mutual mistake as to facts forming the basis of the contract merely renders the contract voidable, not void
Parole Evidence Rule
The parol evidence rule does not bar evidence of subsequent modifications of a written contract. It does bar evidence of all prior agreements, oral or written, that contradict the later written contract.
Can state of frauds be satisfied by a combination of written documents
Yes it can
What are the $ rules with stature of frauds
The sales of Goods must be more than $500.
This money level isn’t important for other types of contracts
Who must sign the contract in order for it to qualify for breach of contract
the contract needs to be signed by the defendant being charged
The plaintiff does not have to have signed
When can you discharge a contract
- When a party is prevented from performing the contract
- When the contract is satisfied
- when the parties agree to the discharge
- by operation of law
- by a breach of contract
WHAt are the exceptions to the writing requirement for goods over $500
SPAM
If the goods are Specifically made for you -
It the contract is already partially executed - you already get half of them
If the contract has already been admitted into court
If you are a manufacturer - and do not reposed in 10 day s- bound by silence
What happens to your contracts if you are ruled insane
contracts you entered be fore ruled insane are voidable
contract you enter AFTER you are ruled insane are void
Are contract to make a gift enforceable
No - the contract lacks consideration lacks money
Does past consideration support a contract
no - if you did something in the past - it does not make it relevant to a brand new contract
What is a liquidating damages provision
this is a predetermined amount of money that must be paid as damages for failure to perform under a contract
when are liquidating damages considered valid
they are valid as long as they are considered reasonable - and not punitive
do you need to have a written contract to assign an interest in a sum of money to someone else
NO - its not covered by the statute of fraud and therefore is valid - without it having to be in writing
How does it work when you take out an insurance policy one one person where a second person is the beneficiary
This is a valid assignment
the gain does not have to be part of the specific insurance policy
If you are a merchant and seller make an offer and it has no expiration date - what does that mean
Under UCC - if offer will remain open for a reasonable period of time
This is the mailbox rule
Which means that a contract is formed on the day you mail in the acceptance offer - not when it is received
What is fraud in the indictment
one part male misrepresentations to induce the other party to enter into the contract
What is the defense of unconscionability
The contract terms are extremely unfair to one person in eh contract
Who is entitled to sue as a intended beneficiary
You are only entitled to sue under a contract if you are an intended beneficiary - not an incidental one
What is accord and satisfaction
This is the agreement by the parties to a contract to substitute the performance of n alternate duty to discharge the original duty
when can a minor disaffirm a contract
up to a reasonable time after reaching eh age of majority
Under a personal service contract will going bankrupt or dying cause a discharge of a parties duties
if you are RECEIVING service
- dying no - service go to your estate
bankruptcy - no still get the service
If you are the party GIVING service ‘
- if you die - the contract is discharged
- if you go bankrupt - discharge of duties
What if you have a patent
Patents are unique. Therefore, a court will generally grant the remedy of specific performance because other remedies are inadequate substitutes for a unique patent.
What is novation
A novation refers to the substitution of one contractual agreement for another.
Rules on stature of limitations
- computed from the date of the alleged breach
- applies to all contract both oral and written
- means that a claim must be filed in a certain period of time
- the limitation are determined for each category of legal claim, not individually
What is a rescission
Rescission is the cancellation of a contract and restoration of the situation that existed before it was made.
what is a revocation
It is a withdrawal of an offer prior to its acceptance
What i a release
Release involves the discharge of a party from any remaining obligations under a contract.
Void or voidable?
fraud in inducement
Voidable
Void or voidable
physical coercion
Void
Void or Voidable
fraud in the execution
void
Does an offer have to be in writing it if is for more than 1 year
A contract has to be in writing that is over 2 years , but an offer does not have to be in writing
Is a fax acceptable for a written acceptance
Yes it is considered acceptable
If you specify that the offer needed to be received by a date would it be valid if the office was closed that date
No because you specified that it need to be received by that date and if they were not there to receive it - they did not get it and therefore it is not effective when sent
If you sent something by fax on the proper date, but they did not receive it because they were closed what is the result
The offer would not have failed because it was NOT sent timely - it failed because it was NOT received by them on a timely basis
If you reject an offer inside the window can you later ( inside the window) accept it
No - its terminated when you reject it the first time
Can you assign punitive damages to a breach of contract
No not usually for a breach of contract
usually for wrongdoing
can you orally accept an offer for a job that take up more than 1 year
no - you must have a written contract for that
does an offer have to have a date or time
no - it will remain open for a reasonable amount of time
On January 15, East Corp. orally offered to hire Bean, CPA, to perform management consulting services for East and its subsidiaries. The offer provided for a three-year contract at $10,000 per month. On January 20, East sent Bean a signed memorandum stating the terms of the offer. The memorandum also included a payment clause that hadn’t been discussed and the provision that Bean’s acceptance of the offer would not be effective unless it was received by East on or before January 25. Bean received the memorandum on January 21, signed it, and mailed it back to East the same day. East received it on January 24. On January 23, East wrote to Bean revoking the offer. Bean received the revocation on January 25.
What was the effect of the event(s) that took place on January 20?
What was the effect of the event(s) that took place on January 21?
What was the effect of the event(s) that took place on January 23?
What was the effect of the event(s) that took place on January 24?
What was the effect of the event(s) that took place on January 25?
What was the effect of the event(s) that took place on January 20?
Submission of a written offer.
What was the effect of the event(s) that took place on January 21?
Attempted acceptance of an offer. Since East’s offer indicated that acceptance must be received by January 25 to be effective, the mailbox rule does not apply. Bean’s acceptance was not valid when it was mailed on January 21. It will be valid when received.
What was the effect of the event(s) that took place on January 23?
Attempted revocation of an offer.
What was the effect of the event(s) that took place on January 24?
Formation of an enforceable contract. On January 24, upon receipt of the signed acceptance by Bean, an enforceable contract was formed. Since the revocation mailed on January 23 was not effective until received by Bean, as of January 24, there has been an offer and a valid acceptance resulting in a valid contract.
What was the effect of the event(s) that took place on January 25?
Invalid revocation because of prior acceptance of an offer. The revocation mailed by East on January 23 would not have been effective until it was received by Bean on January 25. Prior to Bean receiving the revocation, however, East received Bean’s valid acceptance of the offer resulting in an enforceable contract. As a result, the revocation was invalid.
On March 1, East Corp. orally engaged Snow Consultants to install a corporate local area network system (LAN) for East’s financial operations. The engagement was to last until the following February 15 and East would pay Snow $5,000 twice a month. On March 15, East offered Snow $1,000 per month to assist in the design of East’s Internet homepage. Snow accepted East’s offer. On April 1, citing excess work, Snow advised East that he would not assist with the design of the homepage. On April 5, East accepted Snow’s withdrawal from the Internet homepage design project. On April 15, Snow notified East that Snow had assigned the fees due Snow on the LAN installation engagement to Band Computer Consultants. On April 30, East notified Snow that the LAN installation agreement was canceled.
What was the effect of the event(s) that took place on March 1?
What was the effect of the event(s) that took place on March 15?
What was the effect of the event(s) that took place on April 5?
What was the effect of the event(s) that took place on April 15?
What was the effect of the events(s) that took place on April 30?
What was the effect of the event(s) that took place on March 1?
Formation of an enforceable contract.
What was the effect of the event(s) that took place on March 15?
Formation of an enforceable contract. On March 15 East made a valid offer which Snow accepted. As a result, an enforceable contract was formed.
What was the effect of the event(s) that took place on April 5? ‘
mutual rescission
What was the effect of the event(s) that took place on April 15?
Valid assignment of right
What was the effect of the events(s) that took place on April 30?
breach of contract
