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FLT > Contracts > Flashcards

Contracts Flashcards

1
Q

Choice of law

A

UCC for the sale of movable goods, common law for services, land contracts, and everything else

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2
Q

Contract Formation

A

Offer, acceptance, and consideration

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3
Q

Offer

A

An offer is an objective manifestation of willingness to be bound to reasonably certain terms communicated to the offeree which creates the power of acceptance in the offeree.

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4
Q

Revocation

A

Revocation is an action by the offeror which terminates the power of acceptance.

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5
Q

Types of Non-revocable Offers

A

Option K (common law), firm offers (UCC)

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6
Q

Option K

A

At common law, an option contract is a promise to hold the offer open, which is enforceable if supported by consideration.

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7
Q

Firm Offer

A

Under the UCC, a written promise to keep the offer open for a period of time, signed by a merchant, creates an irrevocable firm offer

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8
Q

Rejection

A

A rejection is an action by the offeree which terminates the power of acceptance

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9
Q

Counteroffer

A

A counteroffer acts as a rejection of the original offer and acts as a new offer

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10
Q

Acceptance

A

An objective manifestation of agreement to be bound by the offeror’s term by an offeree with the power of acceptance.

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11
Q

Mailbox rule

A

Under the mailbox rule, acceptance is effective when sent

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12
Q

Mirror image rule

A

Under common law, acceptance must mirror the terms of the offer

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13
Q

Deviant acceptance

A

The UCC permits a deviant acceptance. A definite and seasonable acceptance acts as an acceptance, even if it contains additional or different terms, unless the offeree expressly makes acceptance subject to the offeror agreeing to the additional or different terms. When one party is not a merchant, the additional or different terms are mere proposals that only become part of the contract if the offeror expressly agrees to them. Between merchants, unless they materially alter the terms or the offeror objects, additional terms become part of the contract, while conflicting terms get knocked out.

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14
Q

Consideration

A

A bargained-for exchange of benefit to the promisor or detriment to the promisee. Florida uses the legal detriment test.

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15
Q

Promissory estoppel

A

Promissory estoppel requires a promise which results in foreseeable detrimental reliance. An aggrieved party can only get reliance damages, not expectation damages.

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16
Q

Defenses to contract formation

A

Mistake, SOF, Misrepresentation, fraud, duress, undue influence, and minority.

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17
Q

Mistake

A

A mistaken belief which is a basic assumption of the contract, material, and adversely affects a party who did not assume the risk. Mistakes can be either unilateral, or mutual.

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18
Q

Unilateral mistake

A

No defense. The contract is formed unless the non-mistaken party knew or had reason to know about the other’s mistake

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19
Q

Mutual mistake

A

Total defense, results in no contract

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20
Q

Statute of Frauds

A

The SOF requires contracts which cannot be performed within a year, for the sale of land, or the sale of goods over $500 to be evidenced by a writing containing any essential terms and signed by the party to be charged

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21
Q

Exception to SOF

A

Part performance or specially manufactured goods

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22
Q

Misrepresentation

A

Misrepresentation is an untrue statement as to a material existing fact which causes a reliance

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23
Q

Fraud

A

Fraud is an intentional lie as to a material existing fact

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24
Q

Duress

A

Duress is an improper threat which leaves a party with no choice but to acquiesce

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25
Q

Undue influence

A

Undue influence is an unfair persuasion

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26
Q

Minority

A

Minors have capacity to contract, but the contract is voidable at the option of the minor

27
Q

Minority exceptions

A

Necessaries (contracting for things necessary to live), or lying about age

28
Q

Counterargument to defenses against formation

A

Ratification, where the aggrieved party can ratify a voidable contract

29
Q

Breach

A

A breach occurs when a party is under an absolute duty to perform, but either does not perform, or performs deficiently

30
Q

Types of breaches

A

Material breach, minor breach, and perfect tender

31
Q

Material breach

A

A material breach goes to the essence of the contract and the aggrieved party fails to receive the benefit of the bargain. Material breaches relieve the aggrieved party of the duty to perform.

32
Q

Minor breach

A

When a minor breach occurs, the aggrieved party still receives the benefit of the bargain and must still perform, but can sue for damages for the minor breach.

33
Q

Perfect tender

A

Under the UCC perfect tender rule, if the goods fail to conform in any respect to the contract, a buyer can accept or reject any non-conforming goods, or accept some and reject some

34
Q

Anticipatory repudiation

A

An anticipatory repudiation is an unequivocal refusal to perform, or an act inconsistent with performance, which occurs prior to performance being due. An aggrieved party can sue immediately, rescind the contract, or encourage performance. In Florida, the non-breaching party must show they could have performed.

35
Q

Reasonable Grounds for Insecurity

A

When there are reasonable grounds for one of the parties to be insecure about the other party’s performance, the insecure party may request adequate assurances and suspend their performance until assurances are given. The failure to provide reassurance can be treated as a breach, and the aggrieved party may sue immediately, rescind, or encourage performance.

36
Q

Conditions

A

A condition precedent is something other than the passage of time that must occur before a duty to perform arises. Conditions can be waived or excused.

37
Q

Divisible Contract

A

Divisibility allows a breaching party to recover for partial performance when the performance of each party can be divided into multiple equal parts, and the performance of each part is agreed upon equivalent of the corresponding part from the other party. Note: if its pay all at the end, it in not divisible!!

38
Q

Defenses to enforcement

A

Illegality, impossibility, impracticability

39
Q

Illegality

A

Illegality is when the consideration or subject matter is illegal. This makes the contract void.

40
Q

Impossibility

A

When a contract is impossible, no one can perform the contract

41
Q

Impracticability

A

For performance to be impracticable, there must be unanticipated extreme and unreasonable difficulty or expense, not just increased cost. In Florida, performance needed is now different from anticipated performance.

42
Q

Types of Money Damage Remedies

A

Expectation, restitution, reliance, liquidated, consequential, and incidental

43
Q

Expectation damages

A

Expectation damages place the plaintiff in the position they would have been had the contract been performed. The plaintiff has a duty to mitigate damages to get their full expectancy.

44
Q

Cover (Expectation Damages)

A

When a seller breaches, the buyer can either get the goods from someone else (cover) or not to do so. If the buyer chooses to cover, then the expectation damages are calculated as the difference between the cover price and the contract price. If the buyer does not cover, they may recover the difference between the contract price and the market price. Plus incidental and consequential damages, minus expenses save.

45
Q

Resell (Expectation Damages)

A

When a buyer breaches, the seller can either sell the goods to someone else (resell) or not to do so. If seller chooses to resell, then the expectation damages is a calculation of the difference between the contract price and the resale price. If the goods are not resold, the seller may cover the difference between the contract price and the market price.

46
Q

Lost profit

A

If the seller can produce an unlimited supply of goods and lost volume of sales due to the buyer’s breach, the seller can recover lost profits

47
Q

Restitution damages

A

Restitution damages are measured by the value of the benefit conferred to avoid unjust enrichment

48
Q

Reliance damages

A

Reliance damages can be awarded if expectation damages are uncertain. They are the amount expended in reliance on the contract or promise.

49
Q

Liquidated damages

A

Liquidated damages are agreed upon in the contract. Liquidated damages are unenforceable if they act as a penalty.

50
Q

Consequential damages

A

Consequential damages flow indirectly from the breach and must be foreseeable to both parties

51
Q

Incidental damages

A

Incidental damages are costs incurred as a result of breach.

52
Q

Equitable remedies

A

Specific performance and injunctions

53
Q

Specific performance

A

Specific performance is awarded when the subject matter of the contract is unique, but NOT for personal services

54
Q

Injunction

A

A court may enjoin a breaching party from working for an employer’s competitor

55
Q

Rescission

A

Rescission puts the parties in the position the were in before the contract

56
Q

Reformation

A

Reformation is when, due to mistake, a court rewrites the contract to reflect the parties’ intent

57
Q

Modification (Common law)

A

At common law, modification requires additional consideration. In Florida, some change in performance is sufficient consideration.

58
Q

Modification (UCC)

A

Under the UCC, modification does not require any additional consideration, just good faith.

59
Q

Parol Evidence

A

Parol evidence prohibits admitting prior or contemporaneous evidence to vary the terms of a fully integrated written agreement, unless it is to explain or interpret ambiguous terms or in defense against contract formation.

60
Q

Assignment

A

An assignment of rights is valid. It is revocable if gratuitous, but irrevocable with consideration. Assignments are subject to all contract defenses.

61
Q

Delegation

A

A delegation of duties is valid unless it involves personal judgment or personal skills

62
Q

Third Party Beneficiaries

A

Intended beneficiaries and Incidental beneficiaries

63
Q

Intended beneficiaries

A

Intended beneficiaries can sue, but they have the same rights as the contracting parties

64
Q

Incidental beneficiaries

A

Incidental beneficiaries cannot sue under the contract

FLT (5 decks)

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