Contracts

Question 1

How do you create an assignment?

Answer 1

2 parties contract. Later on, 1 party (assignor) signs away his rights to a 3P (assignee)

Rights and benefits may be transferred (assigned) to a third-party if:
* Assignor manifests his intent to transfer (language of present transfer); AND
* Language of present transfer = must clearly show that the assingor wants to transfer his right fully and immediately.
*Assignee assents to the assignment

Question 2

What is the parol evidence rule?

Question 3

When can a party recover consequential damages?

Question 4

When can a party recover incidental damages?

Question 5

Explain what happens if the offeree’s response an offer proposes adding/deleting/changing terms under

CL?

UCC?

Question 6

If a contract breaks the law, it is unenforceable because it goes against public policy…but

When can a contract that violates the law still be enforceable on grounds of public policy?

see this card

Answer 6

Exception:

If the law that was violated was meant to protect the person seeking to enforce the contract (like the homeowner), the contract might still be enforceable.

This is to make sure the protective purpose of the law is not defeated.

Question 7

How does the UCC protect against abuse in requirement contracts?

Answer 7

Buyer: the buyer will order quantities that are reasonably proportionate to a good faith estimate of what they actually need.

Seller: the seller will, in good faith, use its best efforts to supply those necessary goods to the buyer.

Question 8

When would a court refuse to enforce a contract or provision based on unconscionability?

see this card

Answer 8

Unconscionability is when a court refuses to enforce part or all of a contract to avoid unfairness. This determination is based on the circumstances at the time the contract was made.

• Substantive Unconscionability:

Based on price alone.

A price may be considered unconscionable if it is set at about two or three times the market price of similar goods.

• Procedural Unconscionability:

Exists when there is unequal bargaining power.
Found when a party was induced into agreeing to the contract without any meaningful choice.

Question 9

Whats an express contract?
see this card

Answer 9

Express contracts are formed by language, oral or written.

Question 10

Whats an implied contract?
see this card

Answer 10

Implied contracts are formed based on conduct, not language (either written or oral).

ex. if a person sits in a barber’s chair and the barber cuts his hair, a contract has been formed by the parties’ conduct).

the offeree is manifesting assent via is conduct

Question 11

What is a quasi-contract? Is it a real contract?
see this card

Answer 11

Quasi-contracts are not contracts at all.

They are constructed by courts to avoid unjust enrichment by permitting the plaintiff to bring an action in restitution to recover the amount of benefit conferred on the defendant.

Question 12

The pre-existing duty rule focuses on the “bargain” aspect of consideration.

What are the exceptions to this pre-existing duty rule?

Question 13

What are the exceptions / substitutions to consideration?
(1) material benefit

see this card

Answer 13

Material Benefit Rule – A promise made in
recognition of a benefit previously received is
binding to the extent necessary to prevent
injustice.
▪ BUT, not applied when: (a) conferred as
a gift; or (b) value of promise is
disproportional to the benefit conferred.

Question 14

What are the exceptions / substitutions to consideration?
(2) promissory estoppel

see this card

Answer 14

Promissory Estoppel – Applies when: (1) a
party reasonably & foreseeably relied to their detriment on other party’s promise, (2) promisor
reasonably expected a change of position in
reliance, AND (3) it’s necessary to avoid
injustice.

Question 15

What are the exceptions / substitutions to consideration?
(3) promise to pay a SOL expired debt

see card

Answer 15

− Promise to Pay a Non-Legally Enforceable
Past Debt – Is binding without new
consideration if in writing.

Question 16

what is an illusory promise?
see card

Answer 16

an illusory promise is a statement that appears to be promising something but does not actually commit the promisor to anything at all.

Examples
**Illusory: **
* When a promisor reserves the right to change his mind, which does not bind him to anything. “I’ll buy it if I feel like it.” (Not binding)

• Non-Illusory Promise
• “I’ll pay $100 when I can.” (Binding if she can pay). The woman’s promise to pay $100 “as soon as I am able” is a commitment and limits her freedom of action, making it enforceable.

Question 17

how do you accept a bilateral contract?

see card

Answer 17

Bilateral contracts can be accepted in any reasonable manner

That might include accepting by either
* Promising to preform
* Simply beginning performance

Question 18

how do you accept a unilateral contract?

see card

Answer 18

Unilateral contracts can only be accepted by complete performance

Note - once performance has begun, it becomes an irrevocable offer. Offeror must then allow the offeree a reasonable time necessary to complete performance

Also Note - offeree is NOT bound to complete performance tho. Offeree may withdraw at any time prior to completion of performance

Question 19

what are the 2 ways a seller could accept an offer to buy goods for immediate or prompt shipment?

see card

Answer 19

(1) by prompt promise to ship or

(2) by prompt shipment

Question 20

what happens if a seller tries to accept by prompt shipment, and he ships non-conforming goods?

see card

Answer 20

■ If the seller ships non-conforming goods in response, the seller has both made a contract and has also breached it

●But note - exception: If non-conforming goods are shipped and the shipment is accompanied by a notice that it is intended as a mere accommodation, then it does not constitute acceptance and breach. Instead, it’s treated as a counteroffer. The original offeror (the buyer) can either accept this counteroffer (accept the non-conforming goods) or reject it.
a. **An accommodation is a counteroffer

Question 21

In a contract, sometimes one party’s duty to perform depends on a specific condition occurring.

Ex. neither of us are bound in this K for you to paint my house, unless my wife approves the color.

If the condition doesn’t happen, normally they don’t have to perform.

Excused Condition: However, there are situations where the party still has to perform even if the condition doesn’t happen. This is called excusing the condition.

What are the instances where the condition is excused, and both parties still must perform?

see card

Answer 21

Waiver: 2 types

(1) waiver before non-occurance
But before you preform, the promisor indicates that he will not insist upon the occurrence of the condition. This excuses the condition. Requires consideration to make waiver enofrceable.

(2) waiver after non-occurance
before you preform, the condition has failed. But the promisor has indicated he will ignore the non-occurance, and go ahead with the contract anyway. This excuses the condition. no consideration req

Question 22

what is a quasi-contract?

see card

Answer 22

Quasi contracts are not at all, but a legal concept courts use to prevent unjust enrichment when no enforceable contract exists

When P confers a benefit on D under circumstances that are not legally enforceable as a contract, the courts may allow P to recover the value of the benefit through a restitution claim to prevent D from being unjustly enriched

Question 23

what type of recovery is permitted for a party who has partially preformed, but then both parties duties were discharged due to impossibility, impracticability, or frustration of purpose?

Answer 23

restitution

If part performance has been rendered by either party, that party will have a right to recover in quasi-contract for the reasonable value of their partial performance.

Question 24

what is impossibility?

see card

Answer 24

Impossibility occurs when it is literally and objectively impossible to perform the contract due to an unforeseen event.

If an event occurs during the performance of a contract that is unexpected by either of the parties at the time of the contract and which affects the feasibility of even performing the contract, both parties will be discharged by the doctrine of impossibility

Question 25

what is impracticability?

see card

Answer 25

Impracticability occurs when performance is possible but would be extremely difficult, costly, or burdensome due to an unforeseen event.

prevents the performance of a contract because it would be extremely costly, time-consuming, or otherwise impracticable, though not literally impossible to complete a full performance.

Question 26

what is a crossoffer?

what is the effect of a crossoffer?

see card

Answer 26

A cross-offer will function as a rejection, followed by a counter-offer.

Question 27

When performance of a duty is delegated, does the delegator remain liable for the delegate’s performance of that duty?

see card

Answer 27

YES. When performance of a duty is delegated, the delegator remains liable for the delegate’s performance of that duty.

if the obligee merely consents to the delegation –> delegator will still be* liable *delegate’s performance

if the obligee agrees to accept the delegate’s performance in lieu of the delegator’s and release the delegator from liability –> this is a novation. And delegator is not liable for anything.

aka the obligee’s consent to the delegation is not enough to insulate the delegator from liability.