Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

BAR > Contracts > Flashcards

Contracts Flashcards

You may prefer our related Brainscape-certified flashcards:
MBE flashcards
1
Q

Acceptance

A

Acceptance is governed by an objective test. The offeree must demonstrate objective willingess to enter into the agreement.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Additional Terms

A

Under the UCC, additional terms become part of the contract unless 1 of 3 exceptions apply: 1) offer expressly limits contract to own terms; 2) Additional terms materially alter the deal; or 3) offferor rejects the additional terms in a reasonable amount of time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

xxxxxx Anticipatory Repudiation

A

Anticipatory repudiation arises through words or conduct when a party to a contract unequivocally indicates that he cannot or will not perform at the time performance is due.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Applicable Law - Contract for Services

A

The applicable law for contracts for services is the common law

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Applicable Law; Contracts for Goods

A

Article 2 of the UCC governs the sale of goods.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Assignment

A

Where there is no contractual provision prohibiting an assignment, contract rights are generally assignable.

For an effective assignment to occur, the assignor must manifest the intent to transfer the rights to the assignee, and the assignee assets to the assignment.

An assignment must not materially change the duty or materially increase the burden of the obligor.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Assignment Release

A

Where there was an assignment of a contract, a majority of courts construe it to include a promise by the assignee to assume the delegated duties of performance.

This means that absent a release, both the assignee and assignor remain liable on the contract.

A formal release and novation occurs through assent of all parties to substitute a new part of the original party to the contract.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Common Law when not displaced

A

Common law principles remain applicable when not displaced by the UCC (say this after the UCC statement applying to goods)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Company Letterhead (Signature)

A

Absent a signature, a document on company letterhead can constitute a signed writing as long as intent is present.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Condition Precedent

A

Where performance under the contract is contingent on the occurrence of a condition, this is known as a condition precedent. Good faith must be made to satisfy this condition, otherwise the condition is excused.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

xxxxx Consequential Damages

A

this takes into consideration damages that are a foreseeable consequence of the breach.

Consequential damages must be reasonably certain and not speculative

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Consideration

A

Consideration is a bargained for exchange with legal value. This usually arises where a detriment induces a promise and a promise induces a detriment.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

xxxx Constructive Revocation

A

When the offeree learns that the offer has taken action which is inconsistent with the ability to contract, this is a constructive revocation.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Contract Modification - Services

A

Under the common law, a contract cannot be modified without providing additional consideration

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Contract Modification - Goods

A

Under the UCC, a contract can be modified without additional consideration as long as it was sought in good faith.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Contracts Made After Formation

A

Oral and written contracts made after the formation of the contract are not covered by the Parole Evidence Rule because they can be considered new contracts or modifications to the existing contract

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Contracts required to be in writing - Statute of Frauds

A

MYLEGS - Marriage, Can’t be completed in less than 1 Year, Land, Executor of Will, Goods over $500, Suretyship.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Cost of Completion - Damages

A

When a breach is willful, and only the completion of the contract will enable the non-breaching party to use the land for its intended purposes, the cost of completion is considered to be the appropriate award.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Cost of Restoration - Damages

A

A measure of damages is the cost of restoration. Where an award might be wasteful, such that the cost to restore would greatly exceed the difference in value, damages may be determined by the difference in value between the land as promised and its current value.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Counteroffer

A

When the response and suggested change contains new or different terms, it is considered a rejection and a counteroffer. The counteroffer must be accepted to form a new contract.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Counteroffer

A

When the response to an offer contains new or different terms, it is considered a rejection and a counteroffer.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

xxxx Damages - personal services

A

If a party to a personal services contract breaches, damages may be sought. The non-breaching party cannot obtain specific performance.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

xxxx Demand for Adequate Assurances

A

Under the UCC, a party to the contract may demand for adequate assurances if they have a reasonable belief that the other party will not be able to perform its obligations under the contract.

The demand must be made in writing

Performance under the contract bay be suspended until such assurances are received.

Adequate assurances must be provided within a reasonable time, not to exceed 30 days.

Failure to provide adequate assurances may be treated as a repudiation of the contract.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

xxxx Divisible Contracts

A

Divisible Contracts are contracts in which each party’s performances are divided into matching pairs of duties. This is done so that a failure for the performance of one aspect of the contract will not necessarily result in a breach of the entire contract.

To determine if a contract is divisible courts look at whether the performance of each party is divided into two or more parts under the contract, the number of parts due from each party is the same, and the performance of the each part by one party is agreed on as the equivalent of the corresponding part from the other party.

The underlying consideration in interpreting whether a contract is divisible is one of fairness.

If a contract is divisible, the party who performed is entitled to collect the contract price for the parts performed.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

xxxxDuress

A

A contract can be voidable on the basis of economic duress where a party’s assent was induced by an improper threat leaving no other reasonable alternative.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

xxxx Exception to Statute of Frauds - Goods

A

Where a contract does not satisfy the statute of frauds, it is enforceable for goods for which payment has been made and accepted or which have been received and accepted.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Expectation Damages

A

Actual or expectation damages seek to put the non-breaching party in the position he would have been in but for the breach. Calculation of these damages aims to provide the non-breaching party with the benefit of his bargain.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Fair/Reasonable Modification

A

Under the modern view, modification is permitted without consideration if the modification is due to circumstances that were unanticipated at the time of contract formation and such modification is fair and reasonable.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

xxxxFirm Offer

A

For a UCC merchant firm offer, an offer may be kept open without consideration if 1) the party is a merchant, 2) the offer to buy or sell is in writing; and 3) the writing gives assurances that it will be held open.

30
Q

Formula for Expectation Damages

A

Loss of Value + Other Loss - Cost Avoided - Loss Avoided.

Other Loss = Incidental Damages and Consequential Damages

31
Q

xxxx Good Faith

A

Good faith requires honesty and reasonable commercial standards of fair dealing

32
Q

xxxx Incidental Damages

A

Incidental damages are those that are commercially reasonable costs incurred with the resale of goods.

33
Q

xxxxx Incidental Third Party Beneficiary

A

Where there is no indication that a third party beneficiary was an intended beneficiary to the contract, but as a result of the contract some third party benefits, the third party is an incidental third party beneficiary.

Incidental beneficiaries do not have any rights to sue for breach of contract.

34
Q

xxx Indirect Revocation / Constructive Revocation

A

Revocation is most often a direct communication from offeror to offeree.

Some courts have held that revocation may be communicated to the offeree indirectly. Indirect revocation occurs when the offeree learns from a reliable source that th eofferor has taken definite action that is inconsistent with an intention to enter into the proposed contract.

35
Q

xxxx Intended 3rd Party Beneficiary

A

Where a third party is not a party to the contract, they may still have a cause of action if they are an intended beneficiary.

An intended beneficiary is where one party contracts with another with the intention of benefitting a third party.

This intent can be manifested by the contract or by some verbal expression by the contracting parties.

36
Q

Knock-out Rule - Different Terms

A

If an acceptance includes different terms, under the UCC the different terms are knock-ed out, which creates a gap in the contract. This gap is then filled by UCC gap-fillers.

37
Q

xxxxLetter of Confirmation

A

in contracts between merchants, if one party within a reasonable time after an oral agreement was made, sends to the other party a written confirmation of understanding, that is sufficient to bind the sender under the statute of frauds. Such a letter of confirmation will also bind the recipient if not objected within 10 days.

38
Q

Loss in Value - Expectation Damages

A

The loss must be a probable result of the breach, or where the loss is beyond the ordinary course of events the breaching party must have had reason to know the circumstance.

39
Q

Lost Profits - Damages

A

Courts are reluctant to award lost profits because profits are generally too speculative to meet the reasonable certainty requirement in consequential damages.

40
Q

Mailbox Rule

A

An acceptance is effective upon dispatch under the “mailbox rule.” When an acceptance is sent after a rejection, whichever the recipient receives first is effective.

41
Q

xxxx Material Benefit Rule

A

In a minority of jurisdictions, under the material benefit theory, courts will enforce a K with past consideration.

This requires that the promisee conferred a benefit on the promisor, and that promise was not intended as a gift.

The courts will only enforce the promise to the extent it is proportional to the benefit.

42
Q

xxxx Material Breach - time of essence

A

Where time is of the essence under the contract, the breach is considered material and is unexcused

43
Q

xxxxMerchant Definition

A

Under the UCC a merchant is defined as one who regularly deals in goods of a kind sold, or through his occupation holds himself as having the skill or knowledge about ht products of the goods involved.

44
Q

Minor Breach

A

Substantial Performance is usually considered a minor breach.

45
Q

Mirror Image Rule

A

Under common law, an acceptance must be mirror image of the offer. if an offeree receives additional terms in the acceptance it is considered a counteroffer.

46
Q

Mitigation - Damages

A

The non-breaching party must mitigate damages or take reasonable steps to reduce damages

47
Q

Mutual Assent Elements

A

In order to have mutual assent there must be 1) an objective willingness to enter into the agreement; 2) power of acceptance in the specific offeree; and 3) the offeror must specify the necessary terms of the deal.

48
Q

Objective Willingness

A

Objective willingness is based on outward words and actions, not subjective thoughts.

49
Q

Offer

A

An offer must communicate a willingness to enter into a bargain, as opposed to preliminary negotiations. The offer must contain definite and certain terms and must be communicated to the offeree

An offer may be accepted by an offeree unless the offeree power of acceptance has been terminated.

50
Q

xxxxOption Contract

A

For a common law option contract, the offeree must give consideration for the offeror to keep the promise open, and the consideration should be memorialized in a writing.

51
Q

Oral Modification to Contract

A

Under common law, a contract can be modified orally as long as there is offer, acceptance and new consideration.

52
Q

xxxx Parole Evidence Rule

A

Under the common law, the parole evidence rule prohibits extrinsic evidence of prior contemporaneous agreements offered to contradict, vary or modify an unambiguous writing that the parties intended to be the full and final expression of an agreement.

53
Q

xxxx Parole Evidence Rule Interpretation

A

Under the old view, the PE rule was interpreted strictly when a written contract was clear with no obvious omissions.

Under the modern view, courts take a more lenient approach and would consider the content of the extrinsic evidence in determining both whether it should be admitted at all, and to what degree it should be allowed to influence the interpretation of the contract.

54
Q

Partially Integrated K

A

Were the agreement is only partially integrated, a prior oral agreement is discharged only if it is inconsistent with the written agreement.

55
Q

xxxx Past Consideration

A

Past consideration cannot induce performance, so it is not considered valid consideration

56
Q

Power of Acceptance

A

The power of acceptance in the specific offeree means that they can say accept and know that they have completed the deal.

57
Q

xxxx Pre-Existing Duty Rule

A

When there is a pre-exiting duty, the promise of performance is not considered sufficient consideration for a modification

58
Q

xxxx Predominate Purpose Test

A

In a mixed or hybrid contract including both services and the sales of goods, courts will apply the predominate purpose test to determine whether the common law or UCC applies to the contract as a whole, rather than dividing the contract into goods and non-goods aspects.

59
Q

xxxx Promissory Estoppel

A

Courts will use promissory estoppel to enforce a promise without consideration if:
1) the promisor knew that the promisee would rely through action or forbearance on the promise that was made; 2) the promisee relied or changed position based on the promise; and 3) such reliance was to his detriment.

60
Q

Punitive Damages

A

Punitive damages are not awarded in a contract matter unless the conduct constituting breach of contract was also a tort, where punitive damages may be awarded.

61
Q

Quantity (UCC)

A

For the Sale of Goods, the quantity must be certain, and will not be enforceable beyond the quantity shown in the writing

62
Q

Reasonable Amount of Time - Revocation

A

If too much time passes between an offer and acceptance, the offer is deemed to have been revoked.

63
Q

xxxx Remedies for Anticipatory Repudiation

A

Remedies for the non-breaching party include 1) treating this as a repudiation and suing immediately; 2) suspending performance and waiting to sue; 3) treating the repudiation as an offer to rescind the contract; and 4) to ignore the repudiation and urge performance.

64
Q

xxxx Restitution

A

Restitution compensates a party for the benefit conferred on the other party as a result of partial performance and is aimed at preventing unjust enrichment.

Recovery is calculated based on the value of work performed minus any incidental or consequential losses resulting from the breach.

65
Q

xxxxRetraction of Repudiation

A

A repudiating party may retract its repudiation before performance is due unless the non-repudiating party 1) cancelled the contract; 2) materially changed position in reliance on the repudiation; or 3) otherwise indicated that the repudiation was final.

The retraction must provide adequate assurances of intent to perform under the contract. Such a retraction reinstates the contract.

66
Q

xxxx Revocation of Offer

A

Generally an offer can be revoked at the will of the offeror prior to acceptance as long as such revocation is effectively communicated to the offeree.

This is true unless the offer contains a certain timeframe where the offeror promised not to revoke (firm offer or option K)

Revocation may occur when the offeror manifests the intention not to enter into the proposed contract.

67
Q

Statute of Frauds - Goods

A

Where a contract is for the sale of goods over $500, the contract must be in writing and signed by the party to be charged to satisfy the statute of frauds.

68
Q

Statute of Frauds - Services

A

The Statute of Frauds requires that all contracts that cannot be fully performed within one year must be in writing signed by the party to be charged.

The writing must reasonably identify the subject matter of the contract, the party to be charged, and state the contract’s essential terms.

69
Q

Substantial Performance

A

Performance at common law means each party’s duty to perform is conditioned on the other party’s performance. If a party fails to perform either completely or substantially then the other party is relieved from performance.

In evaluating whether performance was substantial, the courts consider factors including the amount of the contract performed, hardship to the breaching party, circumstances of breach and whether the breach was willful.

70
Q

terms of the deal

A

In common law, the contract must include the parties, subject matter, quantity and price.

Under the UCC, the contract must include parties, subject matter and quantity.

BAR (13 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions