Brainscape's Knowledge GenomeTM

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


See full index

MEE COMBINED > Contracts > Flashcards

Contracts Flashcards

1
Q

Goods & merchants

A

Goods: tangible personal property

Merchants: special rules apply if:

  1. a party regularly deals in goods of the kind involved
  2. one who, by occupation, holds out as having knowledge or skill peculiar to the practices / goods involved; AND
  3. any businessperson when the transaction is of a commercial nature
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

applicable law when it’s both services & goods?

A

Apply the predominant purpose test.

Factors: contract’s language, nature of supplier’s business and final product, relative value of goods and services

  1. Goods predominate –> UCC applies to the entire transaction but doesn’t preclude application of other law to aspects that don’t relate to sale of goods
  2. Services predominate –> only UCC provisions that relate primarily to the sale of goods aspects apply (e.g. warranties, risk of loss, tender of non-conforming goods)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

how’s a contract formed?

A

through mutual assent (meeting of the minds)

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

What makes a valid offer?

A
  1. Manifestation of present intent to be bound.
  2. Communication to a specified offeree (exception: reward offers)
  3. definite & essential terms
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

definite and essential terms

A

CL: reqs ALL essential terms. parties, subject matter, price, quantity

UCC: subj matter + quantity
- gap fillers (implying reasonable terms) allowed for other terms
- output and requirement Ks are sufficiently definite!

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

unilat offer

A

terms of offer req complete performance for acceptance, not a mere promise.

Offeree must know of and be motivated by the offer. Once started, offeree is not bound to complete performance

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

how are ads treated

A

usually treated as an invitation to receive offers from the public

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

how is an offer terminated

A
  1. revocation by offeror: express or constructive, effective upon receipt
  2. rejection by offeree
  3. lapse of time
  4. operation of law
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

bilat offer

A

Offer is presumed to be bilat.

offeree can accept w a return promise or by starting/partial performance. must make offeror aware of acceptance

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

can an offer be revived

A

yes, if the offeror conveys that it’s still open. creates a renewed opp for the offeree to accept

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

constructive revocation

A

offeree acquires reliable info that the offeror has taken definite action inconsistent w the offer

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

when is an offer irrevocable

A
  1. detrimental reliance
  2. option K
  3. UCC merchant’s firm offer
  4. partial performance of unilat contracts
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

irrevoc offer: detrimental reliance

A

offeror could reasonably foresee reliance on offer and offeree reasonably relies to his/her detriment

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

irrevoc offer: partial performance of unilat K

A

offeror invites acceptance by only performance & offeree begins to perform

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

option contract

A

Under CL, a promise to keep an offer open for a specified period of time must be supported by separate consideration to be enforceable.
*so if no consideration, offeror CAN revoke prematurely. still has to revoke the offer before the other party accepts tho!

This keeps the offer open even if the offeror dies / becomes incapacitated.

Option holder has the right to make counteroffers during the option period w/o terminating the og offer.

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

UCC Merchant’s Firm Offer

A

An offer is irrevocable if:
1. the offeror is a merchant
2. there’s an assurance the offer will remain open
3. the assurance is contained in a signed writing from the offeror

No consideration needed

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

how long does merchant’s firm offer stay open

A

It’s irrevocable for the time stated in the offer OR, if no time is stated, for a reasonable time.

In either case, period of irrevocability can’t exceed 3 months unless consideration is given to keep it open longer.

Nevertheless, it remains open until termination!!

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

mailbox rule and irrevocable offers

A

Mailbox rule doesn’t apply.

Acceptance of a firm offer, option, or other irrevocable offer is effective only when it’s received by the offeror before the offer expires.

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

Irrevoc Offer: Lapse of time

A

If no time is stated, the period of irrevocability lapses after a reasonable period of time. Reasonableness factors:
1. nature of the contract
2. purpose and course of dealing btwn the parties, and
3. trade usage

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

how to accept an offer

A

CL: mirror image rule. ANY change in terms is a rejection and counteroffer

UCC: can accept by promise or performance

promise –> battle of the forms rule

performance –> shipment of non-conforming goods is both an acceptance + breach UNLESS buyer is notified the goods were sent as an accomodation

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

Battle of the Forms

A

Acceptance is effective even if it contains new or additional terms. Acceptance including a change in terms is valid unless agreement to the changed terms is made a condition of acceptance.

If ONE of the parties is a nonmerchant, then the new/revised terms are treated just as proposed additions to the K.

IF both are merchants, the new/diff terms control, unless:
1. the og offer limited acceptance to its terms
2. they materially alter the offer, or
3. the offeror doesn’t object within a reasonable time
4. knock-out rule: some states treat diff terms as nullifying each other

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

Consideration

A

Bargained-for exchange of legal value between parties; there must be a benefit to promisor or detriment to promisee.

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

“bargained for”

A

Mutuality of promises.

  • gifts aren’t bargained for; consider promissory estoppel
  • past consideration isn’t bargained for; modern trend allows if needed to prevent injustice
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

bargained for exchange “of legal value” ?

A

Maj: Looks for legal detriment: obligation to do/refrain from doing smth the person would otherwise not be obligated to

Min: looks for detriment OR benefit

  • Adequacy: promise to do or not do smth; performing / refraining from performing an act
  • Pre-existing legal duty: insufficient unless giving smth new or different
  • Illusory promises: not valid unless required to act in good faith (e.g. upon satisfaction)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Consideration substitutes

A

promissory estoppel:
1. promisor should reasonably expect promisee’s reliance
2. promisee detrimentally relied, and
3. interest of justice reqs enforcement of promise

quasi-contract:
implied in law to avoid unjust enrichment; get value of benefit conferred

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

3 potential issues w terms

A
  1. modification
  2. Parol Evidence Rule
  3. warranties (UCC)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Modifications

A

Look for + analyze an offer to modify, acceptance, and consideration.

Note: Mod may be subj to SoF if the modified contract is subj to SoF.

CL: requires additional consideration. must overcome pre-existing duty rule.

UCC: requires good faith but not additional consideration

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

Parol Evidence Rule

A

PER bars extrinsic evidence of prior or contemporaneous statements that contradict the written agreement, if the agreement is integrated.

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

PER: Integration

A

Integrated writing is intended as the final expression of the parties’ agreement.

Merger clause is evidence of full integration.

Partial integration: evidence that SUPPLEMENTS is ok, not evidence that CONTRADICTS.
- UCC Ks more lenient. Presumed partial, but can be fully integrated.

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

PER: exceptions

A
  • defenses to formation / enforcement
  • explain ambiguous terms
  • explain whether writing is integrated and if yes, whether fully or partially
  • show conditions precedent

UCC ONLY: can ALWAYS explain terms by
1. course of performance
2. course of dealing
3. trade usage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

express warranty + how to disclaim

A

promise, description, or sample (but not opinion) that is a basis of the bargain.

general disclaimer is not valid

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

implied warranty of merchantability + how to disclaim

A

(only if seller is merchant w/r/t goods sold)

warrants that product is fit for ordinary purpose.

to disclaim:
- must use term “merchantability”
- if in writing, must be conspicuous
- “as is” disclaimer valid so long as use terms “as is” or “with all faults” or use similar lang that makes plain that there’s no implied warranty of merchantability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

implied warranty of fitness for a particular purpose + how to disclaim

A

Seller (merchant or not) warrants that goods are fit for buyer’s purpose if seller knows that buyer has a particular purpose, and buyer relies on seller to select suitable goods.

To disclaim:
- must be in writing AND be conspicuous
- “as is” disclaimer valid so long as use terms “as is” or “with all faults” or use similar lang that makes plain there’s no implied warranty of fitness

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

5 defenses to formation

A
  1. mistake (mutual / unilateral)
  2. misunderstanding
  3. misrepresentation / fraud
  4. duress / undue influence
  5. incapacity
34
Q

Mistake

A

Defense to Formation

Mutual: mistake as to basic assumption that materially affects performance AND adversely affected party didn’t assume the risk of mistake.

Unilateral: mistake makes K enforcement unconscionable OR non-mistaken party caused / knew / should have known of the mistake

35
Q

Misunderstanding

A

Defense to Formation

Each party attaches different meanings to the same material term.

36
Q

Misrepresentation / Fraud

A

Defense to Formation

Untrue assertion of fact OR nondisclosure of a known fact IF the nondisclosing party knows disclosure is necessary to prevent the previous assertion from being fraudulent.

Note: K no longer voidable if facts are cured to accord with previously misrepresented facts sometime between the misrepresentation and before the deceived party voids the contract.

37
Q

Duress vs Undue Influence

A

Defense to Formation

Duress: improper threat that deprives party of meaningful choice

Undue influence: unfair persuasion of a party to assent, that deprives them of meaningful choice

38
Q

Incapacity

A

Defense to Formation

Due to age, mental illness, or intoxication

39
Q

4 Defenses to Enforcement

A
  1. Illegality
  2. Unconscionability
  3. Public Policy
  4. Statute of Frauds
40
Q

Illegality

A

Defense to Enforcement

Consideration or performance is illegal. A party unaware of the other’s party illegal purpose may still recover.U

41
Q

Unconscionability

A

Defense to Enforcement

So unfair to one party that no reasonable person in that party’s position would have agreed to it. Foreseeability is NOT a factor.

42
Q

Public Policy

A

Defense to Enforcement

Violates a significant public policy, such as restrains marriage, reqs commission of a tort, or unreasonably restrains trade

43
Q

Statute of Frauds + exceptions

A

Ks subject to the SoF must be in writing and signed by the party to be charged.

SoF applies to Ks of
- marriage
- real estate
- surety
- one year
- UCC goods of $500+

Exceptions:
1. full or part performance (goods delivered + accepted or combo of payment / possession / improvements to land)
2. UCC specially manufactured goods
3. merchant’s confirmatory memo

44
Q

Part Performance as SoF Exception

A

Most Jx’s req 2 of the 3 following acts to establish sufficient past performance:
1. payment of all / part of purchase price
2. possession by the purchaser, OR
3. substantial improvement of the property by the purchaser

45
Q

Merchant’s Confirmatory Memo

A
  • Written confirmation need only be signed by 1 merchant and sent to the other merchant.
  • recipient has reason to know contents
  • no written objection within 10 days
46
Q

3rd party beneficiary

A

3PB issues arise when parties to a K intend that performance by one party benefits a 3rd party (who is NOT a party to the K).

Intended: can sue on K
Incidental: cannot sue on K

47
Q

how to modify K with 3PB

A

K modification okay until rights vested, otherwise 3PB notice and consent needed.

Rights vest when INTENDED 3PB:
1. materially changes position in justifiable reliance on the rights created
2. manifests assent to the K at a party’s req OR
3. files a lawsuit to enforce the K

48
Q

3PB rights

A

Depends on 3PB status as donee or creditor

  1. donee: generally, may only sue promisor. May sue promisee if promisee tells 3PB about the contract AND 3PB justifiably relies to his detriment
  2. creditor: may sue either promisor or promisee (only 1 recovery is allowed)
49
Q

Assignment + Rights/Duties of Parties

A

Right to K benefit transferred to a 3P after k formed. Assignee stands in the shoes of the assignor.

50
Q

how to know if there’s a proper assignment

A
  1. Look at present intent to assign. No formalities needed.
  2. Proper assignment: can’t materially increase a duty
51
Q

Delegation + rights/duties of parties

A

Duty to perform K transferred to a 3P after K formed.

Delegator still liable; delegatee can’t be compelled to perform UNLESS he has assumed the duty (promise + consideration)

52
Q

how to know if there’s a proper delegation

A
  1. Look at present intent to delegate. No formalities needed.
  2. Proper delegation: Generally delegation is okay UNLESS involving personal judgment/skill OR K says no.
53
Q

Conditions

A

Conditions have to be excused or satisfied to obligate both parties to perform.

Performance under a K may be:
- conditioned upon a condition precedent (which delays performance) OR
- a condition subsequent (which excuses performance)

54
Q

6 ways to excuse non-occurrence of condition

A
  1. anticipatory repudiation
  2. prospective inability to perform
  3. estoppel
  4. waiver
  5. wrongful interference
  6. disproportionate forfeiture
55
Q

Excusing Non-Occurrence of Condition: Estoppel

A

Party indicates condition will not be enforced AND other party reasonably and detrimentally relies on belief that condition has been waived.

56
Q

Excusing Non-Occurrence of Condition: Waiver

A

Party waives condition by words or conduct.

57
Q

Excusing Non-Occurrence of Condition: Wrongful Interference

A

Party wrongfully prevents or interferes w condition’s occurrence.

58
Q

Excusing Non-Occurrence of Condition: Disproportionate Forfeiture

A

Party substantially performed and will be significantly harmed if condition is enforced.

59
Q

How to satisfy conditions?

A

By substantial or complete performance.

BUT subst performance won’t suffice for EXPRESS conditions

60
Q

Condition vs Promise

A

Failure of a condition relieves a party’s performance obligation. Failure of a promise leads to a breach.

61
Q

Discharge of Duty: Definition and 8 ways

A

A duty must be discharged or performed to avoid being in breach.

  1. Modification
  2. Rescission
  3. Impossibility
  4. Impracticability
  5. Frustration of Purpose
  6. Accord and Satisfaction
  7. Substitute Contract
  8. Release / Novation
62
Q

Discharge of Duty: Impossibility vs Impracticability

A

If an unforeseen event occurs after K formation but before performacne is complete, performance may be discharged as impossible or impracticable.

Requires:
1. An unforeseen event, which neither party assumed would occur, that makes:

  1. (Impossible) performance objectively impossible (e.g. death, incapacity, illegality, destruction of subject matter)

OR

(Impracticable) performance only possible with extreme and unreasonable difficulty or expense. (Proponent must not be at fault and didn’t assume the risk).

Restituion damages are recoverable for both.

63
Q

Discharge of Duty: Frustration of Purpose

A
  1. Unforeseeable event occurs and undermines (frustrates) 1 or both party’s principal purpose for entering the K.
  2. Unforeseen event is not fault of frustrated party, AND
  3. Non-occurrence of the event was a basic assumption of K
64
Q

Discharge of Duty: Accord + Satisfaction

A

Parties agree to accept different performance in satisfaction of the og obligation. It is an agreement to resolve disputed amount plus payment

Consideration is generally required. Consideration of lesser value is OK if either:
- different than originally bargained for consideration
- to be paid to a 3P, or
- to resolve a good faith dispute concerning the og K

Breach: Can sue under OG contract OR under accord agreement

65
Q

Discharge of Duty: Substitute K

A

2nd agreement that immediately discharges the OG K.

Remedy limited to terms of 2nd K.

66
Q

Discharge of Duty: Novation / Release

A

All 3 parties agree to change the obligation or party to the agreement.

67
Q

Discharge of Duty: Rescission

A

Rescission serves to discharge duties under K.

Limits:
- mutual rescission may be made orally
- EXCEPT: if K is subj to SoF and/or UCC –> writing required
- parties can’t rescind if rights of 3PB have vested

68
Q

Anticipatory Repudiation + Retraction

A

A party clearly and unequivocally indicates an unwillingness to performa a promise before the time for performance is due.

Can retract BEFORE other party
1. cancels K
2. materially changes position, OR
3. indicates repudiation is final

69
Q

what can non-repudiating party do when other party anticipatory repudiates

A

If they don’t retract in time, can:
1. Treat repud as breach + sue immediately
2. If futile + commercially reasonable, suspend performance until performance date is due + wait to sue
3. Treat repud as an offer to rescind + treat K as discharged, OR
4. Ignore repud and demand performance.

BUT if date of performance hasn’t passed AND non-repudiating party has fully performed, they MUST wait until performance is due to file suit.

70
Q

CL standard of performance

A

If 1 party has SUBSTANTIALLY PERFORMED, other party is obligated to perform.

“Substantial” usually considered at least halfway complete. Less than perfect OK –> other party still obliged to perform but may seek money damages for difference between performance rendered vs expected

BUT subst performance won’t suffice for EXPRESS conditions!

Party can’t materially breach.

71
Q

CL material vs minor breach + remedies

A

Material breach occurs:
- when a party’s failure to perform makes the other party not receive the substantial benefit of the bargain OR
- minor breach w anticipatory repudiation.
Non-breacher may suspend performance + pursue remedy. Breacher can’t recover on K, only in restitution for any benefit conferred minus damages for the breach.

Minor:
party receives substantial benefit of the bargain and must still perform.
Non-breacher can recover on the K (K price - cost to receive full performance)

72
Q

UCC Standard of Performance

A
  1. Perfect Tender Rule: Seller’s performance must be perfect w/r/t to both the goods and delivery, or the buyer can sue for breach.

Perf Tender Rule doesn’t apply to installment contracts. Apply substantial performance standard instead.

  1. Warranty: Breach occurs when the goods fail to fulfill the terms of the warranty.
73
Q

Perf Tender Rule: Buyer’s Options if Breach

A

Keep the goods + sue for damages

Reject some/all the goods + sue for damages. Rejection requires:
1. Notify seller in reasonable time
2. Hold it w reasonable care + time to allow seller to reclaim

In absence of other instructions, buyer can return goods to seller, store goods for seller, or resell goods on behalf of seller. If buyer is merchant, goods are perishable, and there’s no local agent to return goods to –> must sell on seller’s behalf.

74
Q

Installment K

A

Delivery of goods occurs in separate lots. Rejection is limited to the defective installment, not entire K.

Buyer can only cancel entire K due to a defective installment if the installment substantially impairs the entire K’s value.

75
Q

Compensatory Remedies

A

Aim to put the nonbreaching party in the same position as if the K had been performed so that the nonbreaching party receives the “benefit of the bargain”

Typically expectation + incidental + conseq - costs avoided (by discontinuing performance) - loss avoided (by mitigating losses)

76
Q

Expectation Damages

A

Puts the non-breaching party in as good a position as performance would have.
- UCC buyer: market price minus K price OR cost to cover
- UCC seller: full K price + incid dmgs, OR lost profits if lost volume seller
- Warranty: difference in value is measured at time / place of acceptance

77
Q

Consequential Damages

A

Reasonably foreseeable damages other than expecation damages that are related to the breach + arise from the non-breacher’s special circumstances.

3 elements:
1. foreseeability
2. causation
3. certainty (cannot be speculative) e.g. loss profits for a new bizI

78
Q

Incidental Dmgs

A

Commercially reasonable expenses incurred by non-breacher while trying to remedy the breach. Typically includes warehousing, transportation, inspection.

79
Q

Reliance

A

In lieu of expectation damages, reliance damages intend to put the non-breaching party in the same position as if the contract were never formed.

Typically available / more attractive if:
1. nonbreacher can’t prove a profit would have been made on the K
2. K would have produced a loss, or
3. Damages can’t be calculated w reasonable certainty

80
Q

Restitution

A

Allows a party to recover value of the benefit conferred upon the other party to avoid that other party’s unjust enrichment.

May be measured by:
1. reasonable value of P’s services
2. cost to P in conferring the benefit
3. increase in D’s wealth from having received that benefit, OR
4. price fixed in the agreement btwn the parties

Permitted where non-breaching party has partially performed a below-market price K; otherwise breacher would profit from its breach

81
Q

Liquidated Damages

A

Damages to be recovered by one party w/o proof of actual loss. Upheld if damages would be difficult to ascertain and the amount is reasonable.

In real estate: Seller can retain buyer’s deposit if buyer breaches, if amt is no more than 10% of purchase price. Seller must suffer actual loss.

82
Q

Specific Performance

A

Equitable remedy that forces performance by court order.

Requirements:
1. legal remedy inadequate (subj matter rare, unique)

  1. definite + certain terms in a valid K
  2. feasibility: enforcement may not be feasible if court lacks Jx or if it reqs too much supervision or if it’s a service K (except neg covenats e.g. noncompetes)
  3. mutuality: party seeking SP has already fully performed or can show that he can + will perform. Conditions req’d for D’s performance must be satisfied
  4. no defenses
83
Q

Defenses to SP

A
  1. Laches: Operates when a party has delayed in bringing the action so that there’s prejudice to the other party.
  2. Unclean Hands: Party who seeks equitable relief himself engages in srs misconduct (meaning unethical or immoral) in close relation to the claim.
  3. Defense to K Enforcement

MEE COMBINED (5 decks)

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