Contracts

Question 1

Mitigation Expenses

Answer 1

A plaintiff is entitled to recover reasonable expenses incurred in seeking to mitigate after the breach, as long as reasonable. An unsuccessful attempt to mitigate does not mean that the expense is not recoverable.

Question 2

Adequate Assurances

Answer 2

Under UCC 2-609, a party to contract who has reasonable grounds for insecurity is entitled to request assurances, and is also entitled to suspend performance pending receipt of that assurance.

Question 3

Buyer’s Reliance on a Material Misrepresentation

Answer 3

A buyer is entitled to rely on the truth of material misrepresentations made by a dealer and need not conduct any independent tests to see whether the dealer is lying, even if such an independent test would reveal the lie.

Question 4

Material Misrepresentation

Answer 4

When a seller induces a buyer’s consent to a contract by means of a material misrepresentation, the resulting contract is voidable at the election of the buyer.

Question 5

Assignee Rights

Answer 5

An assignee succeeds to a contract as the contract stands at the time of the assignment.

Question 6

UCC Expectation Damages

Answer 6

A seller is entitled to the profit the seller would have made, plus an allowance for costs reasonably incurred, minus payments received for resale of the goods.
(Profit + costs incurred - resale)

Question 7

Statue of Limitations Consideration Exception

Answer 7

A promise to pay a debt after the running of the applicable statue of limitations is enforceable without consideration.

Question 8

Acceptance of Offer to Buy Goods for Prompt Shipment

Answer 8

Under 2-206, an offer to buy goods for prompt shipment is accepted when the seller ships or promises to ship the goods.

Question 9

Who controls when inconsistent?: Course of Dealing or Trade Usage?

Answer 9

A course of dealing, when inconsistent with a usage of trade, controls under UCC 1-303.

Question 10

UCC Parol Evidence

Answer 10

While a final written expression of agreement may not be contradicted by any prior agreement, it may be explained or supplemented by course of dealing or usage of trade or by course of performance.

A course of dealing, when inconsistent with a usage of trade, controls under UCC 1-303.

Question 11

Divisible Contract Damages

Answer 11

The rules for damages permit the separable components to be treated separately.

Question 12

Statue of Frauds Writing Requirement: When does it need to be written?

Answer 12

The writing required to satisfy the statue need not be written at the time of the making of the promise, nor need it be a writing addressed to the promisee - as long as parties identified.

Question 13

Different Meanings to the Same Material Term (Common Law)

Answer 13

When parties attach significantly different meanings to the same material term, the meaning that controls is the one “attached by one of them if at the time the agreement was made…that party did not know of any different meaning attached by the other, and the other knew the meaning attached by the first party.

Question 14

Unforeseeable Consquential Damages

Answer 14

Are not recoverable unless the breaching party had some reason to know about the possibility of these unforeseeable damages.

Question 15

Doctrine of Prevention

Answer 15

Requires that a party refrain from conduct that prevents or hinders the occurrence of a condition.

Question 16

General Expectation Formula

Answer 16

Loss in value + other loss - cost avoid - loss avoided

Question 17

Name one Circumstance where an addional term does not become a term of the parties’ contract under the UCC.

Answer 17

Where an additional term materially alters the parties’ contract.

Question 18

Acceptance of non-conforming goods

Answer 18

If a buyer accepts a shipment of non-conforming goods, the seller may bring an action to recover the contract price of the goods. However, the seller’s reward will be reduced by any reasonable losses that resulted from the seller’s breach.

Question 19

Constructive Condition

Answer 19

A constructive condition is one not agreed on by the parties, but which courts impose as a matter of law, in order to ensure fairness

Question 20

Time Period within which a party may avoid a contract due to misrepresention

Answer 20

The time period does not begin to run until that party either knows or has reason to know of the misrepresentation.

Question 21

Common Law Expectation Damages

Answer 21

1) loss in value to the non-breaching party;
2) any other loss, including incidental or consequential loss, caused by the breach; less
3) any cost or other loss that the non-breaching party has avoided by not having to perform.

Question 22

UCC Trade Usage

Answer 22

Under the UCC, any trade usage that is observed with sufficient regularity so as to justify an expectation that the parties contracted with reference to it can be introduced to interpret the parties’ agreement, so long as the usage can be reasonably construed as being consistent with the express terms of the contract.

Question 23

UCC Trade Usage

Answer 23

Evidence of a trade usage that can be construed as reasonably consistent with an agreement’s express language is admissible to interpret or supplement an agreement. The majority rule provides that trade usage will be viewed as consistent with an agreement’s express language unless the usage completely negates specific express language.

Admissible even if the parties intended the agreement to be completely integrated.

Question 24

Who bearers the burden of proving the condition required for enforcement has been satisfied

Answer 24

As the party who benefits from this eventual performance, the seller bears the burden of proving the condition required for enforcement has been satisfied.

Question 25

Intent of a Conditions to Benefit or Protect One of the parties

Answer 25

If it is clear that the intent of the condition was to benefit or protect one of the parties, the language of the condition will be interpreted as if that intent had been clearly expressed in the contract terms.

Question 26

Exclusive Dealing Obligations under the UCC

Answer 26

Under the UCC, a contract for exclusive dealing in a good imposes on the part of the seller an obligation to use best efforts to supply the good and an obligation on the party of the buyer to use its best efforts to promote the good’s sale.

Question 27

Resale Under the UCC

Answer 27

Where the buyer has repudiated a contract the seller may, if done in accordance with UCC rules, recover the difference between the contract price and the resale price, plus any incidental damages.
* requires giving notice to the buyer of any private resale.

Question 28

When is specific performance not available as a remedy?

Answer 28

Generally, To enforce a duty to perform personal services.

Question 29

Confirmatory Memo Rule

Answer 29

In contacts between merchants, if one party, within a reasonable time after an oral understanding has been reached, sends a written confirmation to the other party that binds the sender, it will satisfy the Statue of Frauds requirements against the recipient as well, if the recipient knew of the memo’s contents and failed to object to the memo’s contents in writing within 10 days of when the confirmatory memo was received.

Question 30

Is a quitclaim deed sufficient consideration to form a contract?

Answer 30

Yes, a quitclaim deed, even when the holder is aware that their claim to the property is doubtful, is sufficient consideration to form a contract

Question 31

How to satisfy an accord and satisfaction via a check

Answer 31

A debtor may make an offer to settle a dispute by offering a check marked “payment in full”
If notation was sufficiently plain that the creditor should have understood it, and if the amount owed to the creditor is an unliquidated sum, then cashing the check without protest amounts to an acceptance of the offer of accord and satisfaction of the debt.

Mere payment of a lesser sum would not be sufficient consideration to support the accord, consideration is furnished where the amount owed to the creditor is genuinely in dispute.

Question 32

What is an executory accord?

Answer 32

An agreement by the parties to a contract by which one promises to render a substitute performance in the future and the other promises to accept that substitute performance in exchange for the discharge of the existing duty.

Question 33

Restitution Calculation

Answer 33

Reasonable Value of the Benefit conferred on the non-breaching party, less any damages that the non-breaching party suffered due to the breach.

Question 34

Trade Usage to Supplement Complete Integrations

Answer 34

Trade usage will be view as consistent with an agreement’s express language unless the usage completely negates specific express language.

Question 35

Waiver After Nonoccurence

Answer 35

Needs no consideration or detrimental reliance to be binding. If the party’s manifestation of waiver induces the other party to change his position in reliance on the waiver, the courts will also hold the waiver binding without consideration.

Question 36

Repudiation

Answer 36

A repudiation is any possible statement by the obligor to mean that he will not or cannot perform his contractual duty

(Can be done via a statement, action, or indication via other means)

Question 37

Buyer Obligation to Pay UCC

Answer 37

Under the UCC, unless the contract specifies otherwise, a buyer’s obligation to pay is conditioned upon the tender of the goods by the seller

Question 38

Remedy of Reformation

Answer 38

Reformation is a proper remedy ONLY when the writing incorrectly summarizes the parties’ shared understanding, not when they fundamentally disagree on terms of the deal to begin with.

Clerical errors allow an action for reformation

Question 39

Remedy for Conversion

Answer 39

Fair Market Value of the goods at the time of conversion.

Question 40

Time Period to Avoid a Contract due to Fraud

Answer 40

The time period within which a party may avoid a contract due to misrepresentation does not begin to run until that party either knows or has reason to know of the misrepresentation.

Question 41

Contract Silent as to Shipment

Answer 41

Where the contract is otherwise silent, a shipment contract is presumed where the contract requires shipment by a third party carrier

Question 42

Mitigation of Damages

Answer 42

Injured party is expected to make reasonable efforts to mitigate the loss resulting from the other party’s breach

If an employee fails or refused to accept comparable offer of employment, the employee’s recovery is reduced by the amount of the loss that the employee could avoided by accepting comparable employment

Question 43

UCC nonconforming tender, allows a buyer to accept the whole, reject the whole, or partially accept or reject commercial unit.
Buyer who accepts a tender of goods, whether conforming or nonconforming, becomes a obligated to pay the seller the contract price of the goods

Question 44

No Oral Modification Clauses

Answer 44

May be enforceable unless the party has relied on a verbal request for extras

Question 45

Contract Silent as to Shipment or Destination Contract

Answer 45

A shipment contact is presumed where the contract requires shipment by a third party carrier

Question 46

When Waiver is not Retractable

Answer 46

A waiver is not retractable once the non-waiving party has relied on the waiver