Contracts Flashcards
What is covered under a “due-on-sale” clause?
“due-on-sale” clauses are triggered by most transfers, including gifts
Acceptance
objective manifestation by the offeree to be bound by the terms of the offer
How to determine whether there is a gift or consideration
whether the offeree could have reasonably believed that the intent of the offeror was to induce the action
Illusory promised
essentially pledges nothing because they are vague or because the promisor can choose whether to honor it
i.e. void
Four-Corners rule
under common law, when looking for evidence of intent (regarding whether there is total, partial, or no integration) a court may only look at the writing itself
3 requirements for a promise to be binding under promissory estoppel
(1) promisor should reasonably expect it to induce action or forbearance
(2) they do rely on it
(3) injustice can only be avoided by enforcement of the promise
condition subsequent
excuses a duty to perform after a particular event occurs
Elements to void a contract under mutual mistake
(1) mistake of fact existed at the time the contract was formed
(2) mistake relates to a basic assumption of the contract
(3) mistake has a material impact on the transaction
(4) the adversely affected party did not assume the risk of the mistake
Warranty of merchanability
implied whenever the seller is a merchant
can be disclaimed:
-orally
-written -must use the term “merchantability” and must be conspicuous if it is in writing
Look for language like “as-is” or “with all faults”
Assignee
Takes all of the rights of the assignor as the contract stands at the time of assignment, but also take subject to any defenses that could be raised against the assignor
3 events that can cause the rights of an intended beneficiary to vest
(1) materially changes position in justifiable reliance on the rights created
(2) manifests assent to the contract at one party’s request
(3) files a lawsuit to enforce the contract
Conditions for the defense of impracticability
(1) an unforeseeable event has occurred
(2) nonoccurrence of the event was a basic assumption on which the contract was made; and
(3) the party seeking discharge is not at fault
Constructive condition of exchange
when both parties can perform at the same time and condition their performance on each other - need to perform simultaneously
Intended beneficiary
(1) someone the promisor will pay directly to relieve an existing debt, or
(2) someone the promisee intends to give the benefit of the promised performance
Doctrine of anticipatory repudiation
applicable when a promisor repudiates a promise before the time for performance is due
must be clear and unequivocable
may be conduct or words
