Contracts

Question 1

Offers are generally revocable, unless:

Answer 1

• Paid-for option k
• Foreseeable detrimental reliance
• Started performance under unilateral k, or
• Merchant’s firm offer

Question 2

Termination of an offer

Answer 2

• Lapse of time → offer terminated if not accepted
• within reasonable time
• Revocation → offeror retracts offer
• Rejection → counter-offer, conditional acceptance
• Death

Question 3

Mailbox Rule

Answer 3

Acceptance effective when mailed

Question 4

Mirror Image Rule

Answer 4

• Under common law, acceptance must mirror offer terms
• No mirror image rule under UCC Art. 2 → offeree’s additional terms not in k unless:
  (1) not material, and
  (2) offeror doesn’t reject.
  Both parties must be merchants!

Question 5

Consideration

Answer 5

Bargained for exchange that makes k enforceable

Question 6

Statute of Frauds Categories

Answer 6

MY LEGS
* Marriage (k in consideration of marriage)
* Year (more than 1)
* Land sales (any interest in real property)
* Executors
* Goods for $500+
* Sureties

Virginia: Property devised by will in exchanged for services

Question 7

K for sale of goods $500+

Answer 7

must have defendant’s signature and quantity term

Question 8

Common law contracts must have:

Answer 8

all material terms and defendant’s signature

Question 9

To satisfy the Statute of Frauds in Virginia

Answer 9

the writing need not conclusively establish the existence of a contract as long as it provides the basis for believing that the offered evidence rests on a real transaction

Question 10

Land Sales Exceptions to the Statute of Frauds

Answer 10

• Lease equal to or less than 1 year
• Part performance of real estate k’s – payment, possession, improvement (need ⅔)

Question 11

Parol Evidence rule and exceptions

Answer 11

Rule: Excludes evidence of
* Prior and contemporaneous agreements
* Contradicting final writing

Exceptions:
* Fix clerical errors
* Explain ambiguous terms
* Establish defense

Question 12

When Parol evidence does apply, heirarchy:

Answer 12

1. course of performance
2. course of dealing
3. trade usage

Question 13

Delivery by common carrier (risk of loss)

Answer 13

risk of loss passes when seller delivers

Question 14

Shipment contract (risk of loss)

Answer 14

buyer bears risk before receiving goods

Question 15

Performance requirements

Answer 15

Common law: substantial performance
UCC: perfect performance

Question 16

Duty to notify seller of objections in VA

Answer 16

buyer is not required to notify seller initially of all of their objections, but is required to notify the seller that the transaction was troublesome

Question 17

Anticipatory repudiation

Answer 17

retractable unless relied upon

Question 18

Adequate assurances

Answer 18

must have reasonable grounds for insecurity

Question 19

Frustration of purpose

Answer 19

both parties must understand central purpose of k

Question 20

Specific performance

Answer 20

Money damages inadequate
Feasible to enforce decree

Question 21

Punitive damages

Answer 21

none for contracts

Question 22

Liquidated damages clause

Answer 22

• Okay if reasonable and damages hard to anticipate at time of contract
• No single lump sum payment

Question 23

Expectation damages

Answer 23

Put injured party in position they’d been in had k been performed

Question 24

Buyer’s damages options

Answer 24

• Cover damages = cover price - k price
• Market damages = market price - k price
• Loss in value = value promised - value delivered

Question 25

Seller’s Damages Options

Answer 25

Resale damages = k price - resale price
Market damages = k price - market price
K price if seller can’t resell goods
Lost profits for lost volume sellers

Question 26

Incidental damages

Answer 26

Cost incurred dealing with breach
Always recoverable

Question 27

Consequential damages

Answer 27

Recoverable if foreseeable at k formation

Question 28

Entrustment

Answer 28

BFP wins

Question 29

Virginia: damages for services in exchange for property devisement in will

Answer 29

promisee is entitled to recover on an implied contract the reasonable value of her services

Question 30

Intended 3rd Party Beneficiaries

Answer 30

Can enforce rights on k once vested
Right vest when:
* learn of k and assent (in manner requested by parties);
* learn of k and bring suit;
* learn of k and rely

Question 31

Assignment

Answer 31

2 step process:
* (1) Obligor contracts with the assignor
* (2) Assignor assigns his right to the obligor’s performance to the assignee

Must be present transfer
Can’t substantially change obligor’s duties

Question 32

Delegation

Answer 32

One party finds a replacement party to perform
Original party obligations not excused
No formal requirements

Question 33

Novation

Answer 33

Agreement to substitute new party for existing party.
New contract with new party, releases original party from contract
Requires assent of all parties