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Contracts Flashcards

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1
Q

Four Questions to Break Down a Contract

(CoBRA)

A

Four Questions to Break Down a Contract (CoBRA, Contract, Breach, Remedies, Alternative)
1 K? Was there a Contract?
2 Breach? Was there a breach?
3 Remedies? What are the available remedies?
4 Alternative Recourses? If not a contract, what are the alternative recourses?

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2
Q

The Objective Theory of Contracts - Was there a contract?
Acronym

(GMaCD)

A

The Objective Theory of Contracts - Was there a contract?
Acronym

(GMaCD, Governing, Manifestation, Consideration, Defenses)

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3
Q

Predominant Factor Test
Definition & Factors

(LARN)

A

Predominant Factor Test (majority rule)
• When the factors show the K to be more based on goods, the UCC prevails; for K’s where services/land are the primary component, the common law prevails
• Factors (LARN, Language, Amounts, Reason, Nature)
◦ Language of K (terms describing the performance of the parties, description of their relationship, etc.)
◦ Nature of the business of the supplier of goods and/or services
◦ The Reason for the parties to enter into this K
◦ The Amounts charged under the K for goods and services

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4
Q

Manifestation of Mutual Assent

(MDC)

A

Manifestation of Mutual Assent
• A Valid and Enforceable Contract requires three components (MDC, Manifestation, Defenses, Consideration)
◦ Manifestation of Mutual Assent
◦ Consideration (or a consideration substitute)
◦ Defenses (Absence of Defenses to enforcement and formation)

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5
Q

Offers
Requirements of an Offer

(BP)

A

Offers
• Requirements of an Offer (BP, Bound, Power)
1 Offeror expresses an intent to be bound
2 Offeror intends to confer a power of acceptance onto recipient of communication

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6
Q

Advertisements
Significance of an Advertisement?
What features will change the significance of an advertisement?

(CDEN)

A

• Generally speaking, Ads are presumed not to be offers, but to be preliminary negotiations, aka an invitation to the consumer/audience to make an offer
• However, an ad could ripen into an offer if they are (CDEN, Clear, Definite, Explicit, Nothing)
◦ Clear
◦ Definite
◦ Explicit, AND
◦ Leave Nothing to Negotiation

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7
Q

Termination of An Offer

(RTDR)

A

• Termination of An Offer
◦ An offer can be terminated by (RTDR, Rejection, Time, Death, Revocation)
1 Rejection or Counteroffer by the Offeree
2 Lapse of Time
3 Revocation by the Offeror
4 Death or Incapacity of the Offeror or Offeree

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8
Q

(when is an ambiguous response to an offer a…) rejection and preliminary negotiation

(NTBA)

A

Rejection and preliminary negotiation
• (NTBA, No, Terms, Bound, Assent)
◦ No explicit acceptance
◦ Difference in terms
◦ And either
▪ No intent to be bound, OR
▪ No power of assent conferred

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9
Q

Acceptance by Silence

(BSP)

A

• Acceptance by Silence (BSP, Benefit, Stated, Previous)
◦ Generally, acceptance by silence is not a valid acceptance
Exceptions to this are described by Rest. 69(1):

1 Benefit Taken: Offeree takes the benefit of offered services, had reasonable opportunity to reject them, and has reason to know compensation is expected
2 Silence as Acceptance Stated: Offeror has stated or given reason to understand that assent may be manifested by silence/inaction, and offeree intends to accept with silence/inaction
3 Previous Dealings: Because of previous dealings or other circumstances, it is reasonable that offeree should notify offeror if offeree does not intend to accept

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10
Q

Disputed Term: factors used to determine the more objectively reasonable understanding of a disputed term

(LPN CD PTA)

A

• factors used to determine the more objectively reasonable understanding of a disputed term (LPN CD PTA, Language, Purpose, Negotiations, Conduct, Dealing, Performance, Trade, Anything)
◦ Language of the contract (oral or written)
• Ordinary Meaning
• Technical Terms/Meanings/Norms
• Purpose of the Contract
• Conduct other than words by which the parties manifested their assent
• Prior Negotiations
• Course of performance
• Course of dealing
• Trade usage
• Anything else

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11
Q

What constitutes “Performance” as Consideration

(FAR)

A

1 The performance may consist of (FAR, Forbearance, Act, Relation)
1 An act other than a promise, or
2 A forbearance, or
3 The creation, modification, or destruction of a legal relation

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12
Q

What is required for a Promise to be treated as valid Consideration

(PIW)

A

• Requirements of Consideration by Promises (PIW, Promise, Induce, Was)
1 Promisee’s promise
2 Promisor’s promise given to induce promisee’s promise
3 Promisee’s promise was induced by promisor’s promise

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13
Q

Promissory Estoppel

(PEAF)

A

Promissory Estoppel (PEAF, Promise, Enforcement, Actual, Foreseeable)
◦ Promise by Promissor
◦ Foreseeable Reliance
◦ Actual and Justifiable Reliance
◦ Justice Requires Enforcement AKA “has the promisee relied on the promise to his or her detriment; as a result of reliance, has the promisee changed his or her position in a way that harm would occur if the promise was not enforced?”

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14
Q

Elements of Unconscionability

(BRBL)
(BITE)

A

• Elements of Unconscionability (need both procedural AND substantive to satisfy)
1 Procedural Unfairness - steps in creating the contact were unfair to one party, such as (BRBL, Bargaining, Resources, Biases, Language):
◦ Unequal bargaining power
◦ Language barriers
◦ Negotiation resources
◦ Biases
AND
2 Substantive Unfairness - the terms to creating the contract were unfair to one party, such as (BITE, Bargain, Industry, [unequal] Terms, Effects):
◦ Unequal terms
◦ Unusual terms compared to industry
◦ One-sided bargain
◦ Overly-favorable effects of terms

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15
Q

inquiry for mental incapacity (regarding capacity to contract)

(U ARK)

A

• inquiry for mental incapacity examines whether the party is (U ARK, Unable Act, Reason Know)
◦ Unable to act in a reasonable manner in relation to the transaction AND
◦ The other party has reason to know of their condition

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16
Q

Incapacity due to Age

(CAM DMR)

A

• Elements (CAM DMR, Contract Adult Minor, Disaffirmed Minor Reasonable)
◦ Contract between adult and minor
◦ Minor disaffirmed
▪ while a minor or
▪ within reasonable time after reaching majority

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17
Q

Contracts: Misrepresentation

(FH JIM)

A

Elements:
• (FH JIM, Fraudulent, Harm, Justified, Induces, Misrepresentation)
1 A misrepresentation
2 That is either fraudulent or material
3 Which induces assent (meaning that it substantially contributes to the decision to manifest assent) AND
4 In a justified manner of reliance
Harm suffered (not required by all courts)

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18
Q

Duress

(TIN RA)

A

• (TIN RA, Threat, Induces, No Reasonable Alternative)
1 Improper threat, including action that would be a breach of the duty of good faith performance
2 That induces assent, and
3 Leaves the victim no reasonable alternative but to assent

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19
Q

Undue Influence

(V RIP)

A

• Elements of Undue Influence (V RIP, Vulnerable Relationship, Improper Persuasion)
1 The victim is particularly vulnerable to the persuasion of the other party because of some kind of relationship of submissiveness, dependence, or trust and
2 Improper or unfair persuasion is employed by the stronger party

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20
Q

Mutual Mistake - what is it and when is it a defense?

(B AMR)

A

• (B AMR, Both, Assumption, Material, Risk)
1 A mistake of both parties that
2 Goes to the basic assumption on which the contract was made
3 Which has a material effect on the agreed exchange of the parties, and
4 The party seeking relief did not bear the risk of mistake

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21
Q

Bearing The Risk of a Mutual Mistake

(AIA)

A

• (AIA, Agreement, Ignorance, Allocation):
◦ By agreement of the parties (e.g. express language, an “as is” clause, etc.)
◦ By conscious ignorance
◦ Allocation of the risk by the court

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22
Q

Unilateral Mistake

(O AMR UKR)

A

• (O AMR UKR, One, Assumption, Material, Risk, Unconscionable, Knew Reason)
1 Mistake of one party that goes to the
2 Basic assumption on which the contract was made
3 Which has a material effect on the agreed exchange and
4 The party seeking relief did not assume the risk.
5 The party must show that
1 Enforcement of the contract would be unconscionable and the other party has not relied to her detriment or
2 The other party knows or has reason to know of the mistake or her fault caused the mistake

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23
Q

Discharging Contractual Obligations

(FIRM SCAN)

A

Discharging Contractual Obligations (FIRM SCAN, Full, Impossibility, Release, Mutual, Substituted, Contract, Accord, Novation)
Full performance of contractual obligations
Impossibility, impracticability, or frustration of purpose
Release (in writing only)
Mutual rescission
Substituted contract
Contract or covenant not to sue
Accord & satisfaction
Novation

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24
Q

When a claim is unliquidated or otherwise subject to dispute, it can be discharged by accord and satisfaction if

(NFO)

A

When a claim is unliquidated or otherwise subject to dispute, it can be discharged by accord and satisfaction if (NFO, Negotiable, Full, Obtained):
The person against whom the claim is asserted tendered a negotiable instrument (i.e. a check),
The instrument was accompanied by a conspicuous statement indicating that it was tendered as full satisfaction of the claim (i.e. “payment in full”)
And the claimant obtained payment of the instrument

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25
Q

An offer can be terminated by

RTDR

A

An offer can be terminated by (RTDR, Rejection, Time, Death, Revocation)
Rejection or Counteroffer by the Offeree
Lapse of Time
Revocation by the Offeror
Death or Incapacity of the Offeror or Offeree

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26
Q

When is a response to an offer A rejection and preliminary negotiation?

NTBA

A

NTBA, No, Terms, Bound, Assent)
No explicit acceptance
Difference in terms
And either
No intent to be bound, OR
No power of assent conferred

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27
Q

Acceptance by Silence

BSP

A

Acceptance by Silence (BSP, Benefit, Stated, Previous)
Generally, acceptance by silence is not a valid acceptance
Exceptions to this are described by Rest. 69(1):
Benefit Taken: Offeree takes the benefit of offered services, had reasonable opportunity to reject them, and has reason to know compensation is expected
Silence as Acceptance Stated: Offeror has stated or given reason to understand that assent may be manifested by silence/inaction, and offeree intends to accept with silence/inaction
Previous Dealings: Because of previous dealings or other circumstances, it is reasonable that offeree should notify offeror if offeree does not intend to accept

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28
Q

factors used to determine the more objectively reasonable understanding of a disputed term

LPN CD PTA

A

factors used to determine the more objectively reasonable understanding of a disputed term (LPN CD PTA, Language, Purpose, Negotiations, Conduct, Dealing, Performance, Trade, Anything)
Language of the contract (oral or written)
Ordinary Meaning
Technical Terms/Meanings/Norms
Purpose of the Contract
Conduct other than words by which the parties manifested their assent
Prior Negotiations
Course of performance
Course of dealing
Trade usage
Anything else

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29
Q

Elements of Unconscionability (need both procedural AND substantive to satisfy)

Procedural Unfairness - BRBL
Substantive Unfairness - BITE

A

Elements of Unconscionability (need both procedural AND substantive to satisfy)
Procedural Unfairness - steps in creating the contact were unfair to one party, such as (BRBL, Bargaining, Resources, Biases, Language):
Unequal bargaining power
Language barriers
Negotiation resources
Biases
AND
Substantive Unfairness - the terms to creating the contract were unfair to one party, such as (BITE, Bargain, Industry, [unequal] Terms, Effects):
Unequal terms
Unusual terms compared to industry
One-sided bargain
Overly-favorable effects of terms

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30
Q

Contracts: the inquiry for mental incapacity examines whether (with regard to both parties)

U ARK

A

the inquiry for mental incapacity examines whether the party is (U ARK, Unable Act, Reason Know)
Unable to act in a reasonable manner in relation to the transaction AND
The other party has reason to know of their condition

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31
Q

Contracts: Incapacity due to Immaturity (when/how the underage person can void a contract due to their incapacity)

CAM DMR

A

CAM DMR, Contract Adult Minor, Disaffirmed Minor Reasonable)
Contract between adult and minor
Minor disaffirmed
while a minor or
within reasonable time after reaching majority

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32
Q

Misrepresentation

FH JIM

A

FH JIM, Fraudulent, Harm, Justified, Induces, Misrepresentation)
A misrepresentation
That is either fraudulent or material
Which induces assent (meaning that it substantially contributes to the decision to manifest assent) AND
In a justified manner of reliance
Harm suffered (not required by all courts)

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33
Q

Duress Elements

TIN RA

A

Duress Elements (TIN RA, Threat, Induces, No Reasonable Alternative)
Improper threat, including action that would be a breach of the duty of good faith performance
That induces assent, and
Leaves the victim no reasonable alternative but to assent

34
Q

Elements of Undue Influence

V RIP

A

Elements of Undue Influence (V RIP, Vulnerable Relationship, Improper Persuasion)
The victim is particularly vulnerable to the persuasion of the other party because of some kind of relationship of submissiveness, dependence, or trust and
Improper or unfair persuasion is employed by the stronger party

35
Q

Mutual mistake

B AMR

A

Elements (B AMR, Both, Assumption, Material, Risk)
A mistake of both parties that
Goes to the basic assumption on which the contract was made
Which has a material effect on the agreed exchange of the parties, and
The party seeking relief did not bear the risk of mistake

36
Q

ways in which a party may bear the risk

AIA

A

ways in which a party may bear the risk (AIA, Agreement, Ignorance, Allocation):
By agreement of the parties (e.g. express language, an “as is” clause, etc.)
By conscious ignorance
Allocation of the risk by the court

37
Q

Unilateral Mistake

O AMR UKR

A

Unilateral Mistake
Restatement § 153 (a) Elements (O AMR UKR, One, Assumption, Material, Risk, Unconscionable, Knew Reason)
Mistake of one party that goes to the
Basic assumption on which the contract was made
Which has a material effect on the agreed exchange and
The party seeking relief did not assume the risk.
The party must show that
Enforcement of the contract would be unconscionable and the other party has not relied to her detriment or
The other party knows or has reason to know of the mistake or her fault caused the mistake

38
Q

Unilateral Mistake

O AMR UKR

A

Unilateral Mistake
Restatement § 153 (a) Elements (O AMR UKR, One, Assumption, Material, Risk, Unconscionable, Knew Reason)
Mistake of one party that goes to the
Basic assumption on which the contract was made
Which has a material effect on the agreed exchange and
The party seeking relief did not assume the risk.
The party must show that
Enforcement of the contract would be unconscionable and the other party has not relied to her detriment or
The other party knows or has reason to know of the mistake or her fault caused the mistake

39
Q

Types of Parol evidence are

COW

A

Types of Parol evidence are (COW, Contemporaneous, Oral, Written):
Contemporaneous (with the K) oral agreements
Prior (to the K) oral agreements
Prior (to the K) written agreements

40
Q

Demanding Assurances - Requirements before Performance Can Be Suspended

WRIT

A

Demanding Assurances Requirements before Performance Can Be Suspended (WRIT, Writing, Reasonable, Insecurity, Time)
Grounds for insecurity in other party’s performance
Insecurity is reasonable
Request for assurance of performance is in writing
Other party is given reasonable time to respond
Reasonable time is 30 days if not otherwise specified. What makes the deadline reasonable is a circumstantial analysis

41
Q

Excuse for Nonoccurrence of Condition

WWED

A

Excuse for Nonoccurrence of Condition (WWED, Waiver, Wrongful, Estoppel, Disproportionate)
Waiver - party waives condition by words or conduct. Waiving party CANNOT RETRACT the waiver and reinstate the condition if the other party has detrimentally relied on the waiver.
Wrongful Interference - Party wrongfully prevents or interferes with conditions occurrence
Estoppel - Party indicates condition will not be enforced AND other party reasonably and detrimentally relies on belief that condition has been waived
Disproportionate Forfeiture - Party substantially performed and will be significantly harmed if condition is enforced

42
Q

Implied Contracts

A

Implied Contracts
Implied-in-fact
Formed when assent to offer is inferred solely from party’s conduct rather than spoken or written words
Remedy - Contract Damages
Implied-in-law (Quasi Contract)
Imposed by court when plaintiff confers measurable benefit on defendant without gratuitous intent and it would be unfair to let defendant retain benefit
Remedy - Restitution Damages equal to value of benefit conferred
Example: physician treats unconscious person in ER
Quasi Contract may find a Quasi Contract when (CBWGUDE, Conferred Benefit, Without Gratuitous, Unfair, Decline, Excuse):
Plaintiff conferred a measurable benefit on defendant
Plaintiff acted without gratuitous intent, AND
It would be unfair to let the defendant retain the benefit because
The defendant had an opportunity to decline the benefit but knowingly accepted it, OR
The plaintiff had a reasonable excuse for not giving the defendant such opportunity

43
Q

Quasi Contract

CBWGUDE

A

Quasi Contract may find a Quasi Contract when (CBWGUDE, Conferred Benefit, Without Gratuitous, Unfair, Decline, Excuse):
Plaintiff conferred a measurable benefit on defendant
Plaintiff acted without gratuitous intent, AND
It would be unfair to let the defendant retain the benefit because
The defendant had an opportunity to decline the benefit but knowingly accepted it, OR
The plaintiff had a reasonable excuse for not giving the defendant such opportunity

44
Q

When a party fails to mitigate losses due to a contract breach, or takes actions that increase the losses prior to the breach, what is the breaching party liable for?

A

The breaching party’s liability is limited to only the damages that would have materialize had the nonbreaching party acted reasonably.

A party to a contract must avoid or mitigate damages to the extent possible by taking steps that do not involve undue risk, expense, or inconvenience. The nonbreaching party’s standard of care is one of reasonable conduct in preventing loss.

45
Q

Can a warranty of fitness for a particular purpose be disclaimed by a general disclaimer of implied warranties, if the merchant or an agent of the merchant did make a warranty of fitness for a particular purpose?

A

YES.

A conspicuous writing that generally disclaims warranties does successfully disclaim the warranty of fitness for a particualr purpose, even when an explicit warranty had been made.

46
Q

Do both failures to perform a promise and failure of a condition precedent give rise to a valid suit for damages?

A

Failure to Perform = YES.
Failure of a Condition Precedent = NO.

Failure of a Condition Precedent merely relieves the other party of the duty to perform, but does not give rise to damages.

47
Q

What is an implied-in-fact contract, and how does it differ from a implied-in-law contract?

A

An implied-in-fact contract is formed when a party does not expressly engage in a contract but, by the party’s conduct consistent with engagement, the facts amount to sufficient manifestation of mutual assent.

An implied-in-law contract (quasi-contract) occurs when one party confers a benefit on another and has a reasonable expectation of compensation, lest the other party be unjustly enriched.

48
Q

Is a good faith contract modification for the sale of goods enforceable without consideration?

A

YES.

Under the UCC, which governs sale of goods contracts, a good faith modification is enforceable when both parties agree to the modification, even absent consideration.

49
Q

When is a contract modification made without consideration but with agreement from both parties enforceable under the common law?

A

When performance under the modified contract has been made. A contract modification under the common law requires consideration for the modification to become enforceable, but performance on the modification can serve as consideration.

50
Q

When, and to what extent, does risk of loss pass to the buyer in a UCC contract?

A

If the buyer is in breach of contract, the risk of loss passes to the buyer to the extent of any deficiency in the SELLER’s insurance coverage.

51
Q

If an offeree has been made an offer by a non-merchant and is told that it would stay open for a period of time, then during that time learns from a reliable source during that time that the offer was made to and accepted by another party, what is the outcome?

A

If there was no consideration to create a formal Option Contract (an irrevocable offer kept open for a period of time), then the offeree’s discovery that the offer was made to and accepted by another amounts to a CONSTRUCTIVE REVOCATION. This means the offer is automatically revoked and the offeree’s power to accept terminates.

Constructive Revocation can also occur when the offeree learns from a reliable source that the offeror has taken a definite action inconsistent with the offer.

52
Q

Does a Surety contract need to be signed? If so, by whom?

A

Suretyship is a three-party contract wherein one party (the surety) promises a second party (the obligee) that the surety will be responsible for any debt or other obligation of a third party (the principal) resulting from the principal’s failure to pay as agreed.

Under the Statute of Frauds, a suretyship contract MUST BE SIGNED BY THE PARTY TO BE CHARGED

53
Q

What are the factors considered when determining if there was undue influence?

UB IA S

A

UB IA S
Unfairness Bargain Independent Advice Suseptibility

A contract induced by undue influence is voidable by the assenting party.

Undue influence occurs when a party assents to a contract due to unfair or exceessive persuasion by someone who dominates or holds a special relationship of trust and confidence with the assenting party.

Persuasion is unfair or excessive if it seriously impairs the assenting party’s ability to exercise free and competent judgment.

The factors used to determine this are:
1. Unfairness of the resulting bargain
2. Unavailability of independent advice
3. Susceptibility of the assenting party

54
Q

When can the court reform (at a party’s request) a written contract that fails to accurately express the parties’ initial intent due to a mutual mistake?

PWD

A

PWD
Prior Writing Difference

  1. The parties had a prior agreement (oral or written)
  2. The parties put that prior agreement into writing
    AND
  3. The parties’ mistake caused a difference between the prior agreement and the written agreement
55
Q

Which type of damages will be awarded when a party attempts to revoke an irrevocable offer then refuses to perform?

A

The non-breaching party will be awarded EXPECTATION damages.

56
Q

CONTRACTS: What is the effect of promissory estoppel / detrimental reliance?

A

Promissory estoppel will cause an offer to be binding as an option contract and cause the offer to be irrevocable for a reasonable period of time if:
1. The offeror reasonably expected to induce reliance on the offer before acceptance
2. The offeree reasonably relied on the offer
AND
3. That reliance caused the offeree to suffer substantial detriment

In the case of detrimental reliance / promissory estoppel, when it is determined that a contract was formed, the result will be EXPECTATION DAMAGES if the offeror does not perform as offered

In the case of detrimental reliance / promissory estoppel, when it is determined that a contract was NOT formed, the result will be RELIANCE DAMAGES

57
Q

When is a third-party beneficiary required to sign off on a modification to the contract?

A

Only when the third-party beneficiary is given such a right in the contract.

58
Q

When are goods identifiable in a contract?

AECPSMD

A

AECPSMD
Agreed Executed Conceived Planted Shipped Marked Designated

Identification of goods occurs:
1. At a time explicity agreed to by the parties
2. For goods already existing and identified, when the contract is executed
3. For goods that are cattle to be born within 12 months or crops to be harvested within 12 months, when the cattle are conceived or crops are planted
OR
4. For goods that are not aleady existing and identified, at the earliest of when the goods are
a) shipped
b) marked
OR
c) otherwise designated by the seller

59
Q

What is required of the implied duty of good faith (and fair dealing) under contract law?

A

Good faith means honesty in fact and the observance of reasonable commercial standards of fair dealing.

The implied duty of good faith and fair dealing is imposed on each party in the performance and enforcement of any contract.

60
Q

If a party to a contract breaches a contract by failing to deliver or by anticipatory repudiation and the other party chooses to “cover” by reaasonably purchasing substitute goods, how will the party’s damages be measured?

A

Cost of cover: the difference between the original contract price and the cost of purchasing substitute goods

Incidental damages: commercially reasonable charges, expenses, or commissions incurred in effecting cover

Consequential damages: losses resulting from buyer’s particular circumstances that the seller had reason to know of at the time of contract and could not reasonably be prevented by cover or otherwise

The non-breaching party is not required to modify its contract with the breaching party to allow for performance and can even snub that party and use a slightly more expensive (still reasonable) party to cover, and use that higher cover price as the amount from which the original contract price is substracted to determine damages

61
Q

When is a contract divisible into separate parts?

A
  1. The parties’ duties can be broken down into at least two corresponding pairs of performance
    AND
  2. Those pairs of performances can fairly be regarded as agreed (bargained-for) equivalents

Courts prefer to interpret contracts as divisible for reasons of fairness. However, language in the contract stating that the duties are not divisible or that payment is due upon completion will not be divided.

62
Q

Are home construction contracts generally divisible into separate contracts?

A

NO.

Construction contracts (contracts for the building of a complete home or structure), even when payment is made after each major step in construction, are not considered divisible. This does not include renovations or improvements made to parts of a home, but only contracts for the entire building or a major addition to a building from the ground up.

Instead, home construction contracts that are only partially performed (but not substantially) constitute material breaches and are limited to restitution damages (value of benefit conferred less any damages suffered)

63
Q

If the offeror of a valid options contract (consideration paid for keeping it open) dies during the time the contract was agreed to be held open, what effect does this have?

A

An options contract does not terminate upon death because consideration was paid to keep the offer open and it is therefore irrevocable during the options period, even if the offeror dies.

In most cases an offer terminates as soon as the offeror or offeree dies or becomes incapacitated, but there is an exception for options contracts.

64
Q

If a store has a final sale policy, but the salesperson knew that the customer had an inaccurate understanding of the product and does not correct her, is the sale rescindable?

A

YES.

Failing to correct the misconception is tantamount to misrepresentation / fraud.

65
Q

If a suretyship contract is executed orally, and the surety is entering the contract specifically to protect their own investment, is the contract unenforceable for violating the statute of frauds?

A

NO.

A suretyship executed to protect the surety’s investment does not need to be in writing to satisfy the statute of frauds.

66
Q

When is an implied-in-fact contract formed?

A

When a party’s assent to enter a contract is inferred from the party’s conduct or failure to act. The inference arises when a party:
1. Intentionally engages or fails to engage in conduct
AND
2. Knows or has reason to know that the conduct may cause the other party to understand that the party assents

For example, if a person begins paving someone’s driveway without forming a contract to do so and the property owner watches but does not stop them, an implied-in-fact contract is formed.

67
Q

In a contract for a sale of goods (UCC), when the contract is silent on when payment is due for multiple shipments of goods, when does the gap-filler provision state payment is due?

A

Unless the contract specifies otherwise, payment is due at the time and place the buyer is to receive each shipment of goods.

68
Q

When is an offer to form an option contract revoked?

A

Revocation of an offer to form an option contract occurs when:
1. The offeror directly communicates the revocation to the offeree
OR
2. The offeree learns information from a reliable source that reasonably indicates the offer was revoked

69
Q

When a general contractor bases its bid for a job on a subcontractor’s agreement to perform part of the work, what how can the binding contract between the general contractor and subcontractor be described?

A

The subcontractor gave consideration for the general contractor’s conditional promise to award the subcontract to the subcontractor, the consideration being the general contractor’s legal detriment of binding itself to not hire a different subcontractor.

70
Q

Which types of political campaign-finance restrictions are subject to intermediate scrutiny?

A

Political Contribution Restrictions

Political Contribution Restrictions must be closely drawn / substantially related to an important government interest

Examples:
-Limits on amount of contributions to single candidates
-Limits on amount of contributions to a combination of political candidates, parties, and action committees
-Increases of limit on amount of contribution to candidate when self-financed opponent exceeds certain spending amounts

71
Q

Which types of political campaign-finance restrictions are subject to strict scrutiny?

A

Expenditure Restrictions

Political expenditure restrictions must be necessary / the least restrictive means to achieve compelling government interest.

Examples:
-Limits on spending by corporations or unions in support of or opposition to candidate
-Limits on spendying by candidate on his/her own behalf

72
Q

What types of forums are streets, sidewalks, and parks?

A

PUBLIC FORUMS

73
Q

What types of forums are schools and civic auditoriums?

A

DESIGNATED PUBLIC FORUM

74
Q

When content-neutral restrictions are applied to speech in a traditional or designated public forum, what level of scrutiny must the restriction survive?

TSA

A

TSA
Tailored Substantial Alternative

INTERMEDIATE SCRUTINY

Restrictions are impermissible unless they are
1. Narrowly tailored to
2. Substantial government interest
3. And alternative channels remain open

75
Q

When can a third party enforce a contract?

A

Of non-parties to a contract, only an intended beneficiary, one that the contracting parties clearly intended to benefit from the cotnract, can sue to enforce the cotnract.

76
Q

When are new business’s lost profits recoverable as damages in a breach of contract suit?

A

Under the prevailing modern view, lost profits of a new business are recoverable if they are established with reasonable certainty.

77
Q

When are contractual clauses barring oral modifications enforceable?

A

Common Law (services & real estate):
-No Oral Modification clauses are only enforceable if the modification must be in writing under the state of frauds

UCC (sales of goods):
-If all parties are merchants, the No Oral Modifications clause is always enforceable
-If at least one party is NOT a merchant, the No Oral Modifications clause in the merchant’s form must be SEPARATELY SIGNED by the nonmerchant(s) to be enforceable

78
Q

Does the UCC require, as a default, modifications to a contract for $500 or more to be in writing?

A

NO.

So long as the initial contract satisfies the statute of frauds (was in writing, states the quantity of goods, and is signed by the party to be charged), any modifications do NOT need to be in writing, unless there is a No Oral Modifications clause.

79
Q

Under the UCC, when is a No Oral Modifications clause waived?

A

A No Oral Modifications clause is waived by words or conduct, and the waiver CANNOT be retracted if a party has:
1. Materially changed its position
2. In reasonable reliance on the waiver

80
Q

If a suretyship is only evidenced by a signed writing to the obligor and not the obligee, does it satisfy the statute of frauds?

A

YES.

So long as a writing exists that evidences the contract and it is signed by the surety, it satisfies the statute of frauds. It does not necessarily need to be written to the obligee/creditor.

81
Q

When must a contract be unconscionable for it to be unenforced?

A

The contract must have been unenforceable at the time it was entered. A contract cannot later become unconscionable.

82
Q
A

Bar prep (16 decks)

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