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CA Bar Exam Essay Rules > Contracts > Flashcards

Contracts Flashcards

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1
Q

Applicable Contract Law?

A
  1. UCC Article 2 = Goods (movable tangible things) with special rules for Merchants (deals in goods of the kind or holding out as having special skills/knowledge)
  2. Common Law = Everthing else

If contract has both goods and other things, predominance test (what is predominate purpose of contract) determines which governs the whole contract.

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2
Q

Contract Formation Requirements?

A
  1. Offer
  2. Acceptance
  3. Consideration
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3
Q

Three Common Law Offer Requirements?

A
  1. Intent
  2. Definite Terms (QTIPS - Quantity, Time of performance, Identity of parties, Price, Subject matter)
  3. Communicated to Offeree
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4
Q

Termination of Offer?

A
  • Rejection
  • Counteroffer
  • Revocation (any time before acceptance) (direct or indirect, unambigious words or conduct, of which offeree is aware)
  • Lapse of Time (if stated or otherwise reasonable)
  • Death or Incapacity of either party (unless option with consideration)
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5
Q

UCC Offer Requirements?

A

Inviting acceptance in any manner and by any medium reasonable in circumstances. Purchase order is typically an offer under UCC.

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6
Q

Irrevocable Offers?

A
  1. UCC Firm Offers: (a) by a merchant (b) signed writing (c) three month max
  2. Option Contract
  3. Detrimental reliance (reasonably relied or started performance)
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7
Q

Acceptance?

A
  • Bilateral (both promise) v. Unilateral (offeror promises and offeree actual performs)
  • Must be within reasonable time
  • Only by offeree and only in response an offer
  • In manner required by offer; if none, then reasonable means
  • Common law Mirror Image Rule - acceptance terms mist mirror offer exactly
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8
Q

Mailbox Rule?

A

Acceptance is effective upon proper dispatch (i.e., no longer has control of the acceptance)

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9
Q

Mailbox Rule Exceptions?

A
  • Offer says otherwise
  • Option Contract (upon receipt)
  • If both acceptance and rejection sent: if acceptance sent first, then on dispatch; if rejection sent first, acceptance if received first.
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10
Q

Acceptance Varying From Offer (Common Law)?

A

Mirror Image Rule - Acceptance terms must mirror exactly offer, otherwise rejection and counteroffer.

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11
Q

Acceptance Varing From Offer (UCC)?

A

Additional Terms:
* If one not a merchant, then proposal only
* Both merchants, then add terms unless (1) offer limited to terms expressly, (2) material alteration; or (3) objection in reasonable time.

Conflicting Terms:
* Knock Out Rule (Majority): Conflicting terms cancel each other out and applies UCC gap fillers
* Treat As Additional Terms (Minority): Apply additional term test above
* Fall Out Rule (Minority)

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12
Q

Acceptance by Shipping (UCC)?

A
  • Shipping conforming goods = acceptance
  • Shipping non-conforming w/o acknowledging = acceptance and breach
  • Shipping non-conforming w/ acknowledgement = no acceptance but counteroffer
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13
Q

Consideration?

A
  • Illusory Promise - not supported by consideration; not enforceable
  • Requirements contract - seller will be exclusive source of all buyer’s requirements; enforceable
  • Output contract - buyer agrees to buy all seller’s output; enforceable
  • Past/pre-exsting duty - not consideration; not enforceable
  • Promissory estoppel - promise that foreseeably (to the promisor) induces reliance and is relied upon; enforceable.
  • Gifts - not consideration; not enforceable
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14
Q

Five Categories for Statute of Frauds (MR DOG)?

A

MR. DOG
2. Marriage
2. Real property
3. Debt of another
4. One year (incapable of performance within year)
5. Goods $500 or more

Exceptions exist for all.

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15
Q

Two SOF Writing Requirements?

A
  1. Essential terms
  2. Signed by party to be charged
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16
Q

Three SOF Writing Requirement Exceptions?

A
  1. Merchant’s confirming memo - requires two merchants, one receives signed confirmation, no objection in 10 days
  2. Judicial admission in pleadings/testimony that there was agreement
  3. Promissory estoppel - party relied to her detriment (recovery limited to prevent injustice)
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17
Q

Contract Formation Defenses?

A
  • Statute of Frauds
  • Misrepresentation
  • Fraud
  • Unconscionability
  • Mistake (mutual and unilateral)
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18
Q

Two Mistakes in Contract Formation?

A

Mutual: (1) Basic assumption; (2) Material effect; and (3) Risk not assumed by party affected
Unilateral: Same as above plus must show other party knew or should have known.

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19
Q

Two Conditions in Contracts?

A
  1. Express = strict compliance
  2. Constructive = substantial compliance
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20
Q

Two Waivers of Conditions?

A
  1. Keeping the benefit on contract
  2. Failure to insist on compliance

Can retract waiver unless reliance.

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21
Q

Parole Evidence Rule?

A

Limits the extent to which evidence of things prior to or contemporaneous with signed contract can considered part of contract.

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22
Q

Parole Evidence Rule - Partial Integration?

A
  • Intended to be final express of agreement but not all details.
  • PER cannot contradict
  • PER allowed to supplement
23
Q

Parole Evidence Rule - Total Integration?

A
  • Intended to be final expression of agreement and include all details.
  • Not allowed to contradict or supplement
24
Q

Parole Evidence Rule Exceptions/Does Not Bar?

A
  1. Subsequent communications
  2. Contract formation defect evidence (evidence of fraud, duress, mistake, etc.)
  3. Condition precedent to contract effectiveness
  4. Interpret ambigous terms (course of performance, course of dealing, usage of trade)
25
Q

Two Requirements for Contract Modification (Common Law)?

A
  1. Mutual assent
  2. Consideration
26
Q

Two Requirements for Contract Modification (UCC)?

A
  1. Mutual assent
  2. Good faith

Consideration NOT required.

27
Q

Suit by Third Party Beneficiaries?

A

Intended Beneficiary: Can sue to enforce contract
Incidental Beneficiary: Cannot sue to enforce contract

28
Q

Assignment of Contract Rights?

A
  • No consideration required
  • Gratuitous assignment (gift) allowed
  • Assignee stands in shoes
  • Can’t assign if material change
  • Generally, all rights assignable; if contract says no, may still assign but then in breach.
29
Q

Delegation of Contract Duties?

A
  • Delegator remains liable
  • Cannot delegate if duty of skill
  • Generally, all duties delegable
30
Q

Novation?

A
  • Substitution of third party into contract (often deligee)
  • Obligee must accept
  • Releases and terminates deligator’s liabilty
31
Q

Breach - Anticipatory Repudiation?

A
  • Unequivical expression
  • That party will not perform
  • Before performance due.
32
Q

Breach - Anticipatory Repudiation Responses?

A
  • Sue immediately
  • Suspend performance
  • Treat contract as discharged
  • Urge performance
33
Q

Right to Demand Adequate Assurances?

A

If party has not unequivically expressed it will not perform, but something less, may ask for adequate assurances if:

  1. Reasonable grounds for insecurity
  2. In writing
  3. Allowed to suspend performance pending assurances
34
Q

Material v. Minor Breach Factors (Common Law)?

A
  • Still received substantial benefit of bargain?
  • Extent of part performance
  • Willfullness of breach
  • Time not of the essence unless contracted for
  • Divisible contract = each agreed equivalant separate K for breach only
35
Q

UCC: Perfect Tender Rule?

A
  • Reject the whole
  • Accept the whole
  • Accept a commercial unit
    Does not apply to installment contract.
36
Q

UCC: Seller’s Right to Cure Two Requirements?

A
  1. Notice to buyer
  2. Timely new tender
37
Q

Four Types of Possible Warranties?

A
  1. Express
  2. Implied Waranty of Merchantability (goods fit for ordinary purpose)
  3. Fitness for Particular Purpose (only where buyer relies on seller’s judgment)
  4. Implied good faith and fair dealing (all contracts)
38
Q

Accord?

A
  • Agreement to substitute perfomance
  • Consideration required
  • Does not discharge original contract
39
Q

Satisfaction?

A
  • Perfomance of the accord
  • Discharges both contracts (original and accord)
40
Q

Contract Defenses?

A
  • No mutual assent
  • No consideration
  • No writing and was required
  • Misrepresentation/fraud/duress/undue influence
  • Unconscionability
  • Lack of capacity
  • Illegality of conduct
  • Condition precedent not met
41
Q

Impossibility, Impractiability, and Frustration of Purpose?

A

Impossibility: supervening, unforseeable event makes permformance impossibe and neither assumed risk
Impractiability: event the parties assumed would not occur does, makes performance extremely and unreasonably difficult; concerns basic assumption of K
Frustration of Purpose: party’s purpose for entering contract destoryed; both must know purpose of contract, even not reasonably forseeable, and total frustration.

42
Q

Contract Damages Limitations?

A
  • Foreseeability
  • Duty to mitigate
  • Certainty
  • Causation
43
Q

Expectation Damages?

A

As if contract was performed.

44
Q

Consequential Damages?

A
  • Direct, foreseeable consequences
  • Unique to plaintiff
45
Q

Incidental Damages?

A
  • Expenses reasonably incurred
46
Q

Reliance Damages?

A

As if contract was never made.

47
Q

Liquidated Damages?

A
  • Appropriate when damages difficult to calculate
  • Must be reasonable approximation of damages
  • Cannot be punitive
  • If used, no other damages allowed
48
Q

Nominal Damages?

A

Rights violated but no financial loss suffered.

49
Q

Quasi-Contract/Restitution?

A
  1. D derived a benefit
  2. Unfair to allow D to keep
50
Q

Replevin?

A

Return personal property

51
Q

Ejectment?

A

Return of real property

52
Q

Recission?

A

Undo a contract

53
Q

Reformation?

A

Rewrite contract

54
Q

Remedy - Specific Perfomance Requirements?

A
  1. Valid contract
  2. Conditions satisified
  3. Inadequate legal remedy
  4. Mutuality of performance
  5. Feasibility of enforcement
  6. No defense (laches, unclean hands, etc.)

CA Bar Exam Essay Rules (16 decks)

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