Contracts Flashcards

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1
Q

Parol Evidence Rule Is COMPLETELY Inapplicable to: (regardless of complete integration):

A

(a) agreements made after the writing (b) defenses (c) condition precedent (d) ambiguity (e) trade usage/course of performance/dealing (f) remedies for breach (consequential damages)

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2
Q

The rights of an intended beneficiary vest when:

A

the beneficiary (a) detrimentally or materially relies on the rights created (b) manifests assent to the contract at one of the party’s request or (c) files a lawsuit

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3
Q

Accommodation

A

When a merchant ships goods in response to an order placed by a buyer, but says they are an “accommodation,” that is NOT acceptance.

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4
Q

Statute of Frauds applies in Ks for: (5)

A

Marriage; suretyship (paying off the debt of another); one year; UCC $500 or more; real property

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5
Q

Knock out rule

A

UCC merchants. Different terms in the offer and acceptance nullify each other and are “knocked out” of the contract. Court may use gap-filling.

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6
Q

UCC, merchants. Acceptance includes different terms. When will these add’l terms NOT be automatically included? (3)

A

(a) terms materially alter the original K; (b) offer expressly limits acceptance to terms of the offer (c) offeror seasonably objects within a reasonable time.

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7
Q

Implied in fact Ks

A

Assent is inferred solely from offeree’s conduct

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8
Q

Implied in law Ks

A

Benefit is conferred, and the party has a reasonable expectation of compensation because they acted without gratuitous intent. D would be unjustly enriched if there was no K. Remedy = restitution.

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9
Q

Disclaimers of implied warranties of (a) merchantability and (b) fitness for a particular purpose

A

Both must be conspicuous. Merchantability can be orally; fitness for a particular purpose must be in writing

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10
Q

When may the defense of impracticability be used? (4)

A

Due to an UNEXPECTED event, performance becomes impracticable; “special person” in a services K dies/incapacitated; performance becomes illegal AFTER K is entered into; subject matter of the K is completely destroyed

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11
Q

For UCC sale of goods for over $500, when mustn’t it be in writing?

A

(a) custom goods not suitable for sale to others where the seller has already begun manufacturing, (b) a portion of purchase price has already been paid, (c) receipt & acceptance of goods, (d) merchants’ failure to respond to confirming memo w/in 10 days

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12
Q

Remedy for failure to satisfy a condition precedent?

A

Trick question! No remedy, just excuses performance.

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13
Q

Frustration of Purpose (3) and Remedy

A

(a) Unexpected event (b) destroys one party’s purpose for entering the K (c) event is not at the fault of the frustrated party. Note, performance mustn’t be impossible. Remedy = rescission.

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14
Q

Constructive Revocation (2)

A

Offeror takes definite action inconsistent with the offer, and offeree knows about it. Does NOT apply with firm offers or options.

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15
Q

A debtor’s promise to pay all or part of a pre-existing debt is enforceable if: (2)

A

The debtor renewed their promise despite SOL being over, and the promise is made in writing or partially performed

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16
Q

Performance of K becomes illegal - when to apply mutual mistake, and when to apply impracticability?

A

Mutual mistake - illegal before K is entered into (and neither parties knows performance would be illegal). Impracticability - illegal after K is entered into

17
Q

Irrevocable waiver of condition

A

When the party waives a condition precedent/subsequent, the waiving party cannot change their mind if the other party relies detrimentally on it

18
Q

Which remedial doctrine applies in the absence of a valid contract?

A

Unjust enrichment

19
Q

Does the mailbox rule apply to irrevocable offers?

A

NO. Acceptance must be received by the specified deadline.

20
Q

Test for whether a gift is consideration

A

Whether the offeree could reasonably believe that the offeror intended to induce action

21
Q

Third party exception to pre-existing duty rule

A

A promise to perform something that is a pre-existing duty to a different person is adequate consideration

22
Q

Mutual mistake elements

A

Mistake existed when K was formed; relates to basic assumption; material impact on transaction; adversely did not assume the risk. Reformation the preferred remedy.

23
Q

Unilateral mistake elements

A

Mistaken party did not bear the risk; mistake would make K unconscionable OR other party at least should have known other party was mistaken

23
Q

Unilateral mistake elements

A
24
Q

Fraudulent Misrepresentation (K)

A

False assertion; intent to mislead; induced assent; justifiable reliance

25
Q

Rescission Requirements

A

Grounds for rescission must’ve existed at the time K was made;

26
Q

When are the parties NOT allowed to rescind a contract via mutual agreement?

A

Third party beneficiary contract where rights have already vested

27
Q

Can delegation of duties under a K be grounds for reasonable insecurity?

A

Yes

28
Q

Installment K for goods: when can buyer cancel the K?

A

When seller’s failure to comply substantially impairs the value of the ENTIRE K, not just that individual installment

29
Q

What are the two remedies for defective performance with construction K?

A

Cost to correct the defect, but if that would result in economic waste, and it was NOT a willful breach, diminution in market price

30
Q

Foreseeability of K consequential damages is evaluated at what point in time?

A

K creation, not time of breach

31
Q

When does a breaching party under a goods K have the right to cure?

A

If performance it not yet due under the K, OR seller has reasonable grounds to believe buyer would accept despite the nonconformity

32
Q

If impracticability rescinds a K, but a party has partially performed, what remedy do they have for this partial performance?

A

Quasi-contract - implied in law (unjust enrichment)

33
Q

Installment Ks: when is something a material breach, not just a partial breach?

A

When non breaching party fails to obtain substantial benefit of the K. It doesn’t matter that the party repudiated the rest of the K–you have to wait!