Contracts Flashcards

Question

Sales of Goods Exceptions in the Statute of Frauds

Answer 1

**Part Performance** takes a sale of goods contract out of the Statute of Frauds *for the goods already accepted* when: (1) the goods have been specially manufactured (why else would you get a purple sneaker with sparkle wings??) (2) the goods have been either paid for or accepted.

Answer 2

Where both parties are merchants, one party can use their own signed writing to satisfy the SoF. ...unless there's an objection by the recipient within 10 days. **Example:** Vera Wang Design Studios sends Victoria’s Bridal Shop a signed letter “confirming our earlier oral agreement over the phone for the sale of 9 gowns for $2,700.” Victoria’s Bridal Shop does not respond. Will Vera Wang’s letter satisfy the Statute of Frauds against Victoria’s? Yes! Victoria loses SoF Defense.

Answer 3

**Article 2:** - Quantity Term - Defendant's Signature *(Watch out for signature on the bar. They'll bury the actors in the whole question and obfuscate whose signature it is. Parse to make sure it's the Defendant's.)* **Contracts for Services must have:** - All material terms (who & what) - Defendant's signature

Answer 4

You cannot use evidence outside the text of the contract to contradict the final writing. **Applies to evidence that happened *before* the agreement was finalized, not after. (After would be a modification.)**

Answer 5

- *Condition Precedent to the Contract.* If the Parol Evidence was a *condition* that needed to be fulfilled *for* the contract to be operative, that's valid. - *Partially Integrated Writing.* If it's an incomplete writing that wasn't intended as the final expression of the agreement --> parole evidence allowed. - *Example:* J. Lo and a Hotel contracted for her wedding and said nothing about sleeping arrangements. J. Lo claims that, before signing the lease, the manager promised to “throw in the bridal suite for free.” Is this admissible? Yes! Because apparently that writing wasn’t fully integrated. - *Defense Against Formation.* You can use external evidence if you want *out* of the contract. *Example:* J. Lo says the hotel manager said the bridal suite would be soundproof and it's not. She can get out. - *Explain a Vague Term* - *Correct a Clerical Error (Typo)* (When the Bar uses “partial” or “complete integration,” it’s usually the wrong answer.)

Answer 6

*Course of Performance:* The parties’ conduct under prior installments of the current contract. Can help define, e.g., the term ‘chicken’ in the current transaction. *Course of Dealing:* Parties’ conduct in prior contacts. (Same two parties, but different contract.) *Trade Usage:* Industry norms parties are aware of. “Baker’s Dozen.”

Answer 7

*Implied Warranty of Merchantability:* Goods fit for ordinary, foreseeable purpose. Applies to a merchant who **regularly sells this type of good.** - *More often tested.* *Express Warranties.* An affirmation of fact or promise the buyer could have relied upon when they entered the contract. *This includes showing a sample/model of the product.* - *Distinct* from puffery: "This is the best!!" *Implied Warranty of Fitness for Particular Purpose.* Seller picks out a good for a special purpose that the buyer needs it for. **Don't have to be a merchant!!**

Answer 8

Sellers can ONLY disclaim *implied warranties!!** The Disclaimer must be *conspicuous,* IOW so a *reasonable person would notice it.* Sellers CANNOT disclaim express warranties.

Answer 9

Contract clause that limits the *damages available* in the case of a warranty breach (even express warranties), as long as it is not *unconscionable.* E.g. you cannot limit damages for personal injury.

Answer 10

- *Who is in Breach.* Whoever breaches the contract bears the risk, even if the breach has nothing to do with the damage. E.g. Starbucks sends coffee late, rat infestation --> Starbucks bears risk. - *Merchants* hold the risk *until the buyer receives the goods. E.g. Costco bears risk of a couch being ruined until the buyer picks it up. - *Nonmerchants* hold the risk *until they tender the goods (sell them). So *less time than for merchants. E.g. garage sale guy bears risk only until he tells the buyer where to pick it up. - *Delivery by Common Carrier.* The Bar's favorite category!!! See other card.

Answer 11

Risk of loss shifts to the buyer when the seller completes its delivery obligations - not when actual delivery occurs. Or vice versa. To tell which, look for the word FOB: 1) **FOB [Originating Point City Name],** and the city is the originating point --> Shipment Contract, where risk passes from seller to buyer when they: (a) Deliver goods to common carrier (b) Arrange for delivery (c) Notify the buyer (assume you're looking at a shipment contract - that's what the Bar normally does.) 2) **FOB [Destination Point City Name]** --> Destination Contract, where risk passes from seller to buyer when the goods *are delivered* to the buyer.

Answer 12

*Performance at Common Law:* Substantial performance is enough. You met the 'essential purpose' of the contract. *Article 2 Perfect Tender* is required when seller is a merchant. *Buyer's Right of Inspection:* Buyer has a right to inspect goods before they pay, unless the contract says otherwise. ...but *time* matters. Can't wait a month then demand return. *Payment:* Cash or checks are good. - *Bar Tip:* They always give you one of these sales of goods where the buyer wil lhave a deadline on a weekend. Buyer comes in with a check right at the deadline. Question: Has the buyer met her performance obligation? Yes! Buyer can use the check unless otherwise agreed. Question Two: Can the seller refuse her check? Yes, but that gives the buyer an additional reasonable time to come in with the cash. *Conditions:* Limit obligations created by contract language *must be perfectly satisfied.* Look out for these terms to see conditions: if, as long as, when, unless, provided that... *Satisfaction Condition:* Satisfaction measured by a reasonable person standard except with contracts that *deal with art/personal taste.* *Express Conditions Precedent:* Performance not due until the event occurs. *Conditions Subsequent:* Events after performance that could terminate duty to pay.