Contracts Flashcards
When can a buyer of goods may obtain specific performance
When the seller refuses to deliver goods if:
- the good are unique, or circumstances are otherwise proper
Buyer receives non conforming goods
Buyer can accept all, reject all, or reject some and accept some
If buyer rejects, buyer must do so within a reasonable time after delivery or notify the seller of the rejection
When a builder in a construction contract breaches during construction
The non breaching party is entitled to the cost of completion plus compensation for any damages caused by the delay in completing the building
If a buyer has rejected goods because of defects
The seller may “cure” within the time originally provided for performance
An intended 3rd Party beneficiary can enforce a contract when?
After their rights have vested :
1. Manifests assent to the promise in a manner invited or requested by the parties
2. Brings suit to enforce the promise or
3. Materially changes position in justifiable reliance on the promise
Remember: they know about their interest AND they do something about it
Who is liable when a contract is assigned?
Both the original promisor on the contract and the party who is assigned and now assumes the contract
What makes an enforceable requirement contract?
A buyer promises to buy all the goods the buyer needs from a certain seller,
And the seller agrees to sell that amount to the buyer.
(I) quantity is certain by reference to objective, intrinsic facts
(II) consideration is present as promisor is suffering a legal detriment by not buying goods from another
Surety contracts
Contracts to pay the debt of another must be in writing to be enforceable
Defenses to contract formation
Mistake
Illegality
Lack of capacity
Statute of frauds
Elements for contract formation
- Mutual assent
- Consideration
- No defenses apply
Mutual assent
One party accepts the others offer, by word or conduct that manifests a present intention to enter into a contract
Consideration
Bargained for exchange of something of legal value OR a substitute for consideration such as promissory estoppel, detrimental reliance, or good faith modifications under the UCC
Effect of lack of capacity to contract
Makes contract void or voidable
Illegality of K
Makes k void
When parol evidence is argued so as to keep testimony of oral negotiations out, the best argument against this is:
The memorandum signed is not a complete integration of the agreement
Shipment Contracts
The presumed contract under the UCC unless there is a contrary agreement
It requires seller to ship goods by carrier and the risk of loss generally passes to the buyer once delivered to the Carrier
Exception: Nonconforming goods
- if seller ships nonconforming goods this constituted a breach by seller
- breach by seller gives buyer the right to reject good
- when buyer has the right to reject, the seller bears the risk of loss until the goods are accepted or defects are cured
Express warranty
Arises from any statement of fact or promise
Implied warranty of merchantability
The goods must be fit for ordinary purposes
The implied warranty will arise in every sale by a merchant unless disclaimed
Offer by merchant to hold open
1) Under the UCC offer by a merchant
2) to buy or sell goods in a signed writing
3) terms give assurances it will be held open
4) not revocable for lack of consideration during the time stated.
If an offer is prepared by the offered
It must be separately signed by the offeror. If it is not he can revoke.
Revocation is effective when
“Received”:
• it comes into the persons attention, or
• it is delivered at a place of business through which the contract was made
Anticipatory Repudiation
Where a promisor, prior to the performance time, unequivocally indicates that he cannot or will not timely perform.
This allows the nonrepudiator the option of suspending performance and waiting to sue until the performance date OR to sue immediately.
Option contract
Contract in which the offered gives consideration for a promise by the offeror not to revoke
Neither can terminate before the end date (last day of time period)
Recovery for Substantial Performance
Can recover contract price minus damages for the minor breach
