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Bar Prep > Contracts > Flashcards

Contracts Flashcards

1
Q

What is a contract?

A

A legally enforceable agreement.

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2
Q

What are the 2 types of contracts, and how are they formed?

A

Express-Oral or written language.
Implied-Conduct

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3
Q

What is a quasi-contract?

A

An unenforceable contract that results in the unjust enrichment of a party.

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4
Q

What is a unilateral contract?

A

A contract that requires performance as an acceptance.

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5
Q

When contracts mix goods and services, how do you determine controlling law?

A

The predominate purpose of the contract determines controlling law, unless the goods and services are separated by payment.

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6
Q

For purposes of Article 2 UCC, what is a ‘merchant’?

A

One who regularly deals in goods in the contract, or holds themselves out as knowledgeable in the goods, and entered the contract for the business.

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7
Q

How to know when there has been an offer?

A

When it creates a ‘reasonable expectation’ of intent to enter a contract.

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8
Q

Can an invitation to enter into negotiations or make an offer be an offer to enter into a contract?

A

No

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9
Q

An offer involving realty must include what 2 things?

A

Land description
Price

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10
Q

In a contract for goods, when the parties agree to a quantity unknown at the time of the contract, the quantity can never be what?

A

Unreasonably disproportionate to any estimates or comparable prior contracts.

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11
Q

Without a time limit for acceptance, an offer remains effective for how long?

A

Reasonable amount of time.

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12
Q

What’s the difference between a counteroffer and an inquiry?

A

A counteroffer rejects the original offer.
An inquiry just negotiates and doesn’t reject the original offer.

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13
Q

When is a rejection effective?

A

Upon receipt by the offeror.

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14
Q

What are the 3 requirements to prove an indirect revocation by the offeror?

A

Offeree receives correct info,
from a reliable source,
that offeror acted in a way that a reasonable person would interpret as revocation.

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15
Q

When is an offer revocation effective?

A

Upon receipt by the offeree, or when published through comparable means as the offer.

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16
Q

What is an option contract?

A

Where there is consideration paid for keeping the offer open for a certain amount of time.

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17
Q

A merchant’s firm offer is not revocable. What are the 3 elements?

A

Merchant,
Offers to buy/sell goods in writing,
writing gives assurance that offer will remain open (3 months max).

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18
Q

A merchant’s firm offer that doesn’t specify a time is valid for how long?

A

A reasonable amount of time no longer than 3 months.

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19
Q

When is there an acceptance for a unilateral contract?

A

When performance is complete.

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20
Q

When can a unilateral offer be revoked?

A

Before performance has begun.

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21
Q

Is mere preparation considered performance for a unilateral contract?

A

No, but it may be considered detrimental reliance.

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22
Q

What are the 3 ways a contract is terminated by law?

A

Death or insanity of party,
Destruction of subject matter,
supervening illegality.

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23
Q

For goods, is shipment of nonconforming goods considered acceptance?

A

Yes, but also a breach.

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24
Q

The mirror image rule generally applies accept in what kinds of contracts?

A

Contracts between merchants for goods.

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25
Q

When does the ‘mail box rule’ not apply-4 situations?

A

Offer stipulates acceptance by receipt,
Option contracts,
Offeree mails rejection before acceptance,
Offeree sends both but rejection is received first and offeror detrimentally relies on it.

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26
Q

What is consideration?

A

A benefit to the promisor, or a detriment to the promisee.

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27
Q

Under common law, what are the 2 requirements to modify an active contract WITHOUT further consideration?

A

Circumstances unanticipated by parties when forming contract,
Fair and equitable

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28
Q

A pre-existing duty to perform, for purposes of contract formation, only applies to when?

A

When the pre-existing duty to perform was to the same person as the new contract.

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29
Q

Who has the authority to dissolve a contract between a minor and an adult?

A

Only the minor if dissolving in whole and return whatever benefit remains.

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30
Q

A mutual mistake to a contract will render it voidable by the adversely affected party if these 3 requirements are met.

A

Mistake concerns a basic assumption to make the contract,
It has a material effect on the exchange,
Seeking party didn’t assume the risk of the mistake.

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31
Q

Is mistake of value usually a valid defense to contract formation?

A

No

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32
Q

A unilateral mistake will NOT render a contract voidable unless it is material, claimant didn’t assume the risk of the mistake, and:

A

Non-mistaken party had reason to know other party was making a mistake.

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33
Q

When does fraudulent misrepresentation render a contract voidable?

A

When the other party justifiably relied on the misrepresentation.

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34
Q

When is a non-fraudulent misrepresentation grounds for voiding a contract?

A

When the other party justifiably relied on the misrepresentation AND it was material to them entering the contract.

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35
Q

What are the 6 kinds of contracts that fall under the Statute of Frauds?

A

Marriage
Year-greater than 1
Land
Executor or administrator
Goods for $500 or more
Surety

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36
Q

The statute of frauds doesn’t apply to contracts lasting more than a year if:

A

It lasts for a party’s lifetime.

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37
Q

When do violations of the Statute of Frauds render a contract unenforceable?

A

Only when being used as a defense to enforcement.

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38
Q

What are the 4 requirements of a writing for purposes of the Statute of Frauds?

A

Reasonably identify subject matter of contract,
Indicate formation of contract,
State essential terms w/reasonable certainty.
Signed in some way

39
Q

What is the statute of frauds for 2 merchants?

A

Only one needs to confirm the deal in writing by sending it to the other to bind both parties…no signature required.

40
Q

What are the 3 exceptions to the statute of frauds?

A

Specially manufactured goods,
Admitting the contract in court,
Partial performance

41
Q

If partial performance is complete when statute of frauds was required but failed, what is the recovery for P?

A

Only the value of the partial performance

42
Q

Regarding a misunderstanding of ambiguous terms of a contract, what is the effect of both parties either being aware or unaware of the ambiguity?

A

There is no contract unless they both intended the same meaning of the ambiguous term.

43
Q

Regarding a misunderstanding of ambiguous terms of a contract, what is the effect if one party was aware of the ambiguous term?

A

Contract was formed according to the understanding of the unaware party.

44
Q

When are the two times the parol evidence rule does not apply?

A

Partial integration,
Contract validity issues.

45
Q

What is the implied warranty of merchantability?

A

A merchant who normally deals in the kinds of goods sold, imply that the goods are fit for the ordinary purpose the goods are used.

46
Q

Is a statement of an opinion regarding goods an express guarantee?

A

No

47
Q

What are the 3 elements to establish and implied warranty of fitness for a particular purpose?

A

Buyer has a particular purpose,
Buyer relies on seller to select goods,
Seller know buyer is relying on seller and purpose.

48
Q

Disclaimers can limit liability for what kind of warranties, and how must they be made?

A

Implied, but not express.
They must be conspicuous.

49
Q

What level of performance is due on contracts at common law…under UCC?

A

Substantial performance
Perfect Tender

50
Q

What are the 2 types of contracts for goods where the parties intend to use a carrier for delivery?

A

Shipment Contracts
Destination Contracts

51
Q

What is a shipment contract?

A

Contract for goods where the seller doesn’t agree to ship to a destination.

52
Q

What is a destination contract?

A

Contract for goods where the seller does agree to ship to a destination.

53
Q

When does the risk of loss transfer from the seller to the buyer for shipment contracts…destination contracts?

A

Shipment-When delivered to carrier.
Destination-When delivered at destination.

54
Q

For non-carrier contracts for goods, when does risk of loss switch from seller to buyer for merchants…nonmerchants?

A

Merchants-Physical possession by buyer.
Non-merchants - Upon delivery

55
Q

When does destruction of the goods before completion render the contract void-3 requirements?

A

Goods identified when contract formed,
Neither party at fault,
Risk still on seller

56
Q

What are the 3 requirements of a seller in a shipment contract?

A

Make a carrier contract and deliver to carrier,
Promptly notify buyer,
Provide buyer with documents for goods.

57
Q

Anticipatory repudiation of performance on a contract can be retracted as long as what?

A

The other party has NOT materially changed their position due to the repudiation.

58
Q

Is rescission of a contract available if one party has completed performance?

A

No

59
Q

When can a modification discharge the prior duty to perform?

A

When the modification immediately discharges the prior duty.

60
Q

What is a discharge by accord and satisfaction?

A

When a prior agreement is discharged upon performance of a new agreement in place of the original.

61
Q

What is a novation-4 requirements?

A

Old contract,
Immediate replacement of one party to the contract,
New contract,
All parties agree.

62
Q

Death is only a discharge for service contracts when what?

A

When the person who died was specifically needed to perform.

63
Q

Impossibility as a defense is only allowed if performance was made impossible by an objective standard or a subjective standard?

A

Objective-Not impossible simply for the party involved, but for generally anyone to perform.

64
Q

What is a minor breach?

A

When the claiming party has gained substantial benefit despite the other party’s defective performance.

65
Q

What is the remedy for a minor breach?

A

Offset damages

66
Q

What is a material breach?

A

When the claiming party has not received a substantial benefit due to the other party’s lack of performance.

67
Q

Generally failure to perform on time is not a breach if performed within a reasonable time unless:

A

There’s a “Time is of the essence” clause.

68
Q

What can a buyer do if the seller does not provide perfect tender under UCC?

A

Reject all,
Accept all,
Accept some and reject the rest

69
Q

What does a buyer do with goods they have rejected them?

A

Wait for instructions from Seller,
Then either reship, store for seller, or resell for seller.

70
Q

A buyer accepts goods unless they:

A

Reject the goods within a reasonable time.

71
Q

When can a buyer revoke their acceptance of goods-2 ways?

A

Reasonably believed a defect that substantially impairs value would be cured but hasn’t been;
Difficulty at time of acceptance to see a substantial impairment of the goods.

72
Q

What are the 2 requirements needed when revoking a prior acceptance of goods?

A

Revoke within reasonable time of discovering defect of goods;
Before a substantial change in goods

73
Q

When is specific performance available as a remedy-3 times?

A

Money damages are inadequate.
Land sales.
Unique goods.

74
Q

What are the 2 requirements for a seller to reclaim goods that were bought on credit when the buyer is insolvent?

A

Demand return from buyer within 10 days of receiving them,
Buyer must still have the goods.

75
Q

What is the exception to the 10 day rule for reclamation by a seller which would prolong the amount of time?

A

If the buyer misrepresented their insolvency in writing within 3 months of delivery.

76
Q

What are ‘expectation damages’?

A

The main form of monetary reward for breach. It puts the party in similar situation as if there was no breach.

77
Q

What are reliance damages?

A

It puts the party in similar situation as having never entered the contract.

78
Q

What are incidental damages?

A

Replaces the costs incurred due to replacing the party who breached.

79
Q

What are consequential damages?

A

Seller’s foreseeable costs to the buyer associated with the breach, other than the expectation damages.

80
Q

Are punitive damages available for contract issues?

A

No

81
Q

Do parties to a contract have a duty to reasonably mitigate damages?

A

Yes

82
Q

If a merchant sells another’s good (normally by merchant) to another bona fide purchaser, does the other have a right to sue the new owner?

A

No…only the merchant.

83
Q

What are the 2 kinds of 3rd party beneficiaries in contracts, and which has contractual rights?

A

Intended and incidental.
Only intended beneficiaries.

84
Q

A 3rd party contract can be rescinded or modified until when?

A

3rd party rights vest

85
Q

When does a 3rd party’s rights vest?

A

Suing to enforce,
Relying on the contract,
Assent as per the contract.

86
Q

Do assignments of contracts to a third party need to be in the past, present, or future tense?

A

Present

87
Q

To prevent assignment of a contract, what language is needed?

A

That all assignments are void.

88
Q

If a contract merely stats that assignments are not allowed, what remedy is there if a party assigns anyway?

A

Damages only if the assignee didn’t know about the prohibition, otherwise it cannot be assigned.

89
Q

When there are multiple gratuitous assignees, which has the legal claim?

A

The last gratuitous assignee.

90
Q

Who has rights when there are multiple assignees and at least 1 has provided consideration?

A

The 1st consideration assignment is effective against subsequent consideration assignments and all gratuitous assignments.

91
Q

Is delegation of duties under a contract are allowed if the obligor has special skills?

A

No

92
Q

Do delegations preclude the original obligor’s duty?

A

No

93
Q

When can a delegate be liable for damages?

A

If the delegate was paid consideration for taking the contract duties.

Bar Prep (7 decks)

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