Contracts Flashcards
UCC Contract Formation Def
Under the UCC, a contract is formed if both parties intend to enter into a contract and there is a reasonably certain basis for giving a remedy. Other than the identity of the parties and subject matter of the agreement, the **quantity is the only term essential to forming the contract. ** As long as the parties intend to create a contract, the **UCC “fills the gap” **if other terms are missing—e.g., time or place for delivery.
UCC Def
The Uniform Commercial Code (UCC) Article 2 governs transactions involving the sale of goods.
General Contract Def
offer, acceptance, and consideration
UCC SOF
An oral contract for the sale of goods is valid and enforceable unless the contract is for the sale of goods for $500 or more.
To be enforceable, the UCC requires a memorandum for a sale of goods for $500 or more to (i) indicate that a contract has been made, (ii) identify the parties, (iii) contain a quantity term, and (iv) be signed by the party to be charged.
The writing need only be sufficient to indicate that the parties intended to enter into a contrac
A “signature” is any authentication that identifies the party to be charged—e.g., a letterhead on the memorandum.
A mistake in the memorandum or the omission of other terms does not destroy the memorandum’s validity.
An omitted term can be proved by parol evidence. However, enforcement of the agreement is limited to the quantity term actually stated in the memorandum.
SOF Exception
A contract for the sale of goods is outside the UCC Statute of Frauds to the extent that goods are received and accepted, and to the extent that payment has been made and accepted.
Merchant
A merchant is a person who regularly deals in the type of goods involved in the transaction or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction.
Merchants Confirmatory Memo Rule
- In contracts between merchants for the sale of goods for **$500 or more, **
- if a **memorandum sufficient (for SOF) **against one party is sent to the other party who has reason to know its contents,
- and the receiving party does not object in writing within 10 days,
==> then the contract is enforceable against the receiving party even though he has not signed it.
Predominate Purpose
If the sale-of-goods aspects of the transaction predominate, the UCC applies to the entire transaction, but it does not preclude the application of other law in appropriate circumstances to aspects of the transaction that do not relate to the sale of goods.
If the services aspects of the transaction predominate, only the provisions of the UCC that relate primarily to the sale-of-goods aspects of the transaction apply (e.g., warranties, risk of loss, and tender of nonconforming goods).
Contract Modification
At common law, modification of an existing contract must be supported by consideration. An agreement to modify a contract may still be enforced if there are new obligations on both sides.
UCC: Requires only good faith. No consideration is necessary
SOF
The statute of frauds requires the following contracts to be evidenced by a writing that contains all essential terms and is signed by the party against whom enforcement is sought (MY LEGS):
Marriage – a contract made in consideration of marriage
Year – a contract that cannot be completed within one year
Land – a contract for the sale or transfer of an interest in real property
Executor – a contract to pay an estate’s debt out of the executor’s personal funds
Goods – a contract for the sale of goods for $500 or more
Suretyship – a contract to answer for the debt or duty of another
This one-year period starts the day after the contract is made—ie, the day after the offer is accepted.
Duress
Duress is a defense to contract enforceability when a party was induced to assent by any of the following:
**Physical compulsion **– rendering the contract void if the party’s assent was compelled by physical force OR imminent threat of death or serious bodily harm
Improper threat by contracting party – rendering the contract voidable by the threatened party if he/she had no reasonable alternative but to succumb to the improper threat
Improper threat by third party – rendering the contract voidable by the threatened party if he/she had no choice but to succumb to the third party’s improper threat, unless the other contracting party did not know of the duress AND relied on the contract in good faith
Promissory Estoppel
A promise is binding if
(i) the promisor should reasonably expect it to induce action or forbearance on the part of the promisee or a third person,
(ii) the promise does induce such action or forbearance, and
(iii) injustice can be avoided only by enforcement of the promise.
Promise, not contract
Incapacity Def Req
Incapacity due to intoxication **renders a contract voidable if the intoxicated party could not reasonably understand the nature or consequences of the contract **
AND
the other party had reason to know of the intoxication.
The contract can then be set aside if the intoxicated party promptly disaffirms it upon becoming sober.
Illegal contract
An illegal contract arises when one or both parties’ purpose, formation, or performance is against the law.
These contracts are usually void, and there is no recovery for breach.
However, an exception arises if one party lacked an illegal purpose and **substantially performed **under the contract.
==> That party may recover expectation damages for breach—even if he/she knew of the other party’s illegal purpose.
This is true unless:
-the performing party took action to further the other party’s illegal purposeor
-the illegal purpose involves grave social harm (eg, threat to human life).
Anticipatory Repudiation
