Contracts Flashcards
What qualifies someone as an Intended Beneficiary?
For a party to be an intended beneficiary, it must be the case that giving him the right to sue would effectuate the intentions of the parties. From there, either the performance of the promise will satisfy the obligation of the promisee to pay the beneficiary money, or the circumstances indicate that he promisee intends to give the beneficiary the benefits of the promised performance. (No requirement for the intended beneficiary to be identified when the promise is made)
UCC material breach
Under the UCC a breach is material if the goods to be purchased would materially affect the other party’s performance but is not seasonably made/delivered OR where the party changes their position in detrimental reliance on the failure of the goods.
Perfect tender: Trade usage
Evidence of trade usage can be used to qualify or supplement terms of a kx to relieve a merchant of not delivering goods on time.
UCC Specially Manufactured Goods
However, section 2-201(3) provides that a writing is
not required where the contract is for “specially manufactured” goods not suitable for resale in the ordinary course of the seller’s business and the seller has made a substantial beginning of their manufacture or commitments for
their procurement. A contract will be fully enforceable if the goods are specially manufactured.
Buyers right to reject goods
The UCC gives a buyer the right to reject goods that do not conform to the contract until he has accepted the goods.
Acceptance occurs when the buyer:
(I) indicates that he will keep the goods, after reasonable inspection, even though they are nonconforming;
(ii) fails to reject within a reasonable time after tender or delivery of the goods or fails to seasonably notify the seller of his
rejection; or
(iii) does an act inconsistent with the seller’s ownership.
Revocation: Notice to offeree
Notice to an offeree that the offeror has made an inconsistent contract with a third party operates as a revocation of the offer.
Unilateral Mistake: Recision of Contract
Rescission of a contract is available when one party is mistaken about material facts relating to a contract, the mistake adversely affects that party, and the other party knows of the mistake.
Damages: Breach of construction contract
In such cases where the builder breaches after partially performing, the owner of the land is entitled to damages which are the cost of completion plus reasonable compensation for any delay in performance. Courts generally allow the builder to offset or recover for work
performed to date to avoid the owner’s unjust enrichment.
Waiver of conditions
When a condition or duty of performance (i.e.,
payment) is broken, the beneficiary of the condition or duty has an election: it may (i) terminate its performance under the contract; or (ii) continue under the contract.
If it chooses to continue under the contract, it will be deemed to have WAIVED the condition or duty.
Excuse of conditions
Condition may be excused where:
1) party wrongfully prevents performance
2) party protected by condition waives it
3) estoppel if one party creates an impression he will not insist on satisfaction of condition
Buyer breaches–Seller has goods
(sale must be commercially reasonable)
When a buyer is in breach, and a seller resells the goods identified as part of the original contract, the seller is entitled to the difference between the contract price and the resale price AS LONG AS SALE WAS COMMERCIALLY REASONSBLE
Donee beneficiary
A donee beneficiary receives the benefit of a contract between two other parties as a gift from one of the parties to the contract.
Donee beneficiaries can sue the promisor, the party who will give the gift. However, donee beneficiaries cannot sue to promisee, the party who bargained for the gift. (if they sue, promisee will be limited to seeking nominal damages or possibly specific performance)
Delegation of duties
Delegation of duties regarding unique or personal skills cannot be delegated and the assignment will be invalid.
Impossibility: Death
Although the death of a party after formation of a contract does not automatically discharge that parties obligations under the contract, such an outcome does occur if the contract involves the performance of a personal service. In such circumstances, if the contract is silent regarding the death of a party, the deceased party’s performance is excused and his estate incurs no liability.
