Contracts Flashcards
When does a revocable assignment terminate?
Death, incapacity or bankruptcy of the assignor
When is a gratuitous assignment NOT revocable?
1: Obligor already paid
2: Document symbolizing assigned right delivered (e.g. stock certificate)
3: Written and signed assignment delivered
4: Promissory Estoppel Applies
What is procedural unconscionability?
Party induced to enter into contract w/o meaningful choice due to deception, compulsion, or significantly uneven bargaining power.
Examples:
- boilerplate contract provisions that are inconspicuous, hidden, or difficult to understand.
- contract of adhesion (ie, take-it-or-leave-it contract) when parties have greatly unequal bargaining power
What is substantive unconscionability?
Substance of contract itself is duly unfair—eg:
- one-sided terms
- gross disparity in value of consideration exchanged
Accord Agreement
when a party agrees to accept different performance in satisfactionof (i.e., in place of) the original promise; after breach, the party can sue under either the original contract or the accord agreement.
Substitute Contract
when the parties form a second agreement that immediately discharges the original contract; after breach, a party can sue under the substitute contract only.
Anticipatory Repudiation
a contracting party clearly and unequivocally repudiates (i.e., indicates an unwillingness to perform) a promise before performance is due
When can a repudiation be retracted?
If the nonrepudiating party receives notice of the retraction before:
- canceling the contract
- materially changing position in reliance on the repudiation or
- indicating that he/she considers the repudiation to be final.
Condition Precedent
If the parties expressly agree to a condition precedent, then the condition precedent will be strictly enforced. This means that a contracting party must fully comply with the condition before the other party’s performance is due.
Entrustment of Goods
Gives a merchant the power to convey good title. Good title can be conveyed to a buyer in the ordinary course of business—i.e., someone who buys goods:
1) in good faith
2) without knowledge that the sale violates the owner’s rights to the goods and
3) from a merchant in the business of selling goods of that kind.
When is acceptance of a firm offer occur?
Upon receipt (not sending e.g. mailbox rule)
When will SOF not prevent enforcement of an oral modification
1) the promisor should have reasonably expected to—and did—induce action or forbearance on the modification and
2) ** injustice **can be avoided only by enforcing the modification.
Is consideration needed to modify the sale of goods under the UCC?
NO
When may the nonoccurence of a condition be excused?
if the party who would benefit from the condition waives it by words or conduct.
And the waiving party cannot retract the waiver once the other party has detrimentally relied on it.
When is a buyer required to sell non-conforming goods in its possession?
- The buyer is a merchant—i.e., one who regularly deals in goods of the kind involved or who, by occupation, holds him/herself out as having knowledge or skills unique to the goods involved
- the goods involved are perishable or threaten to speedily decline in value and
- the seller has no local agent to whom the goods can be returned.
What factors are used to determine material breach?
- Extent to which nonbreaching party will suffer loss
- Extent to which nonbreaching party can be adequately compensated for loss
- Extent to which breaching party will suffer forfeiture
- Likelihood of cure by breaching party
- Absence of good faith or fair dealing by breaching party
Do option contracts require separate consideration?
YES (unless you are a merchant)
See Firm Offer Rule
Under the PER, when can course of performance explain or supplement contract terms?
the agreement involved repeated occasions for performance by a party and
the other party accepted performance without objection and with knowledge of the course of performance.
Partial Integration
PER evidence inadmissible to contradict contract.
Complete Integration
PER evidence inadmissible to contradict OR supplement contract.
Do option contracts terminate on death?
NO
When does SOF not apply to UCC sale of goods over $500?
when payment for the goods has been made and accepted
Exceptions to PER
- whether writing is integrated and, if so, completely or partially.
- meaning of ambiguous term.
- defense to formation or enforcement (eg, fraud, duress, mistake).
- ground for granting or denying remedy (eg, rescission, reformation).
- subsequent contract modifications.
- condition precedent to effectiveness.
Condition Precedent
duty to perform **arises **upon the occurrence or nonoccurrence of an uncertain future event
