Contracts Flashcards
CONTRACTS - 1-Formation - A-Mutual Assent - 2b-Termination of Offer
When is an offer irrevocable?
MERCHANT FIRM OFFER
- merchant
- can be a businessperson - signed writing
- initial, letterhead, electronic
- separate signature needed for offeree form - assurance offer will remain open
- time
- for time stated
- if none, reasonable time
- can’t exceed 3 months - no consideration required
- may be given to hold open longer
IRREVOCABLE OPTION OFFER
- promise to hold open offer for a specified time
- either separate consideration or within contract
- can’t terminate by rejection, counter, revocation, death, incapacity
CONTRACTS - 1-Formation - B-Consideration - 2-Adequacy of Consideration
1. What is required for modification under CL?
2. What is required for modification under UCC?
1. CL MODIFICATION REQUIRES CONSIDERATION - OR UNANTICIPATED CIRCUMSTANCES
- under CL, modification requires new consideration
- modernly, courts may allow a modification where unanticipated difficulties arise and parties agree to a fair modification
2. UCC MODIFICATION REQUIRES GOOD FAITH - NOT CONSIDERATION
- under UCC, a modification doesn’t require consideration; requires good faith by all parties
CONTRACTS - 3-Third-Party Beneficiaries - A-Creditor & Donee Beneficiaries - 1-Creditor & Donee Beneficiaries
1. How does the 1st Restatement define 3rd party beneficiaries?
2. What is a creditor beneficiary & rights?
3. What is a donee beneficiary & rights?
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1. 1ST RESTATEMENT = CREDITOR & DONEE
- 1st restatement: determines beneficiary’s rights based on whether they’re a creditor or donee - 2nd restatement doesn’t use those
2. CREDITOR BENEFICIARY = DUTY & NO GIFT
- creditor beneficiary: promisee owes them a duty - didn’t intend a gift; creditor may sue promisor or promisee
3. DONEE BENEFICIARY = GIFT
- donee beneficiary: promisee intends to give them a gift; donee may sue promisor
CONTRACTS - 3-Third-Party Beneficiaries - B-Intended & Incidental Beneficiaries - 1-Intended Beneficiary
1. How is it determined whether someone is an intended beneficiary?
1. INTENDED BENEFICIARY IF GIFT OR SATISFIES DUTY
- if the promise of performance will satisfy a promisee’s duty to beneficiary or promisee intended a gift to beneficiary, then the 3rd party is an intended beneficiary
CONTRACTS - 3-Third-Party Beneficiaries - B-Intended & Incidental Beneficiaries - 2-Incidental Beneficiary
1. What is an incidental beneficiary and what are their rights?
1. INCIDENTAL BENEFICIARY HAS NO INTENT OR RIGHTS
- if there is no intent to benefit a 3rd party, but a 3rd party would benefit, they are an incidental beneficiary and have no rights
CONTRACTS - 3-Third-Party Beneficiaries - C-Parties Whom Intended Beneficiaries Can Sue - 1-Parties Whom Intended Beneficiaries Can Sue
1. What are the rights of a gift beneficiary?
2. What are the rights of a duty beneficiary?
1. GIFT BENEFICIARY CAN ONLY SUE PROMISSOR UNLESS RELIES ON PROMISSEE
- generally an intended gift beneficiary may only sue a promissor, but may also sue a promissee if detrimentally relies on their statement
2. DUTY BENEFICIAERY MAY SUE EITHER
- an intended duty beneficiary may sue either the promissor or promissee
CONTRACTS - 3-Third-Party Beneficiaries - D-Vesting of Beneficiary’s Rights - 1-Vesting of Beneficiary’s Rights
1. When do a 3rd party beneficiary’s rights vest?
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1. RIGHTS VEST IF ASSENTS, RELIES, OR SUES
- the rights of an intended beneficiary vest if they manifest assent, detrimentally rely, or sue; once rights have vested, the parties are bound to perform
CONTRACTS - 3-Third-Party Beneficiaries - E-Promisor’s Defenses - 1-Promisor’s Defenses
1. What defenses does the promisor have against the 3rd party?
1. PROMISOR CAN USE DEFENSES AGAINST PROMISEE
- if promisor is sued by the 3rd party, they can use any defense they could have used against the promisee
- if promisor assumes promisee’s obligation, they may use any defense the promisee would have
CONTRACTS - 3-Third-Party Beneficiaries - F-Promisee’s Rights - 1-Promisee’s Rights
1. If a contract intentionally benefits a 3rd party, when can the promisee sue the promisor?
1. PROMISEE CAN SUE PROMISOR FOR 3RD PARTY OR IF DUTY SATISFIED
- If a contract intentionally benefits a 3rd party, the promisee can sue the promisor:
- for specific performance on behalf of the beneficiary
- if promissee satisfies duty owed to beneficiary
CONTRACTS - 7-Conditions & Performance - D-Performance of Contractual Duty - 4-Divisible or Installment Contracts
1. When may goods be rejected in an installment contract?
🚯🏞️🍬 RIVer of SNAACCS
1. INSTALLMENT CONTRACTS = SUBSTANTIAL IMPAIRMENT OF VALUE, NOT PERFECT TENDER
- under UCC, goods in an installment contract can only be rejected if:
- the nonconformity substantially impairs the value of the shipment and
- it can’t be cured
- cure must be accepted if seller makes adequate assurances
- can only cancel contract if nonconformity substantially impairs the value of the contract
CONTRACTS - 8-Breach of Contract & Remedies - C-Damages for Breach of Contract - 2-Consequential Damages
1. What are general damages and when are they available?
2. What are consequential damages and when are they available?
3. What is the difference between general and consequential damages?
1. GENERAL DAMAGES ARISE NATURALLY & ARE ALWAYS AVAILABLE
- general damages arise naturally from the breach and are always available; not based on P’s particular circumstances; generally reasonably foreseeable
2. CONSEQUENTIAL DAMAGES ARE BASED ON P’S SPECIFIC CIRCUMSTANCES & MUST BE FORESEEABLE
- consequential damages are above and beyond general damages and arise from P’s particular circumstances; must be foreseeable at time of contract
3. GENERAL DMGS ARISE NATURALLY & CONSEQUENTIAL DMGS ARE BASED ON P’S CIRCUMSTANCES
- general dmgs arise naturally from the breach; consequential dmgs are above and beyond general dmgs and arise from P’s unique circumstances
CONTRACTS - 8-Breach of Contract & Remedies - C-Damages for Breach of Contract - 2-Consequential Damages - a-Lost Profits
1. When are consequential damages in the form of lost profits available?
2. Will a court award lost profits damages for a new business?
1. LOST PROFITS DMGS MUST BE REASONABLY CERTAIN
- P may receive lost profits dmgs so long as they are proven with reasonable certainty
2. MODERNLY LOST PROFITS ARE AVAILABLE FOR NEW BUSINESSES
- in the past, courts didn’t award lost profits dmgs for new businesses because they were thought to be too speculative, but modernly, courts will allow them so long as they are proven with reasonable certainty; may compare them to other established businesses
CONTRACTS - 6-Parol Evidence Rule - B-When the Parol Evidence Rule Is Inapplicable - 4-Condition Precedent
1. Does the parol evidence rule apply when showing evidence of a condition precedent?
1. PAROL EVIDENCE DOESN’T APPLY TO A CONDITION PRECEDENT
- PER doesn’t apply to evidence of an oral agreement that a written contract is contingent on a condition precedent; such evidence may be admissible
CONTRACTS - 4-Assignment of Rights & Delegation of Duties - B-Delegation of Duties - 1-When Disallowed
1. When is delegation of duties not allowed?
2. Does an exculpatory clause aeffect the ability to delegate?
1. NO DELEGATION ALLOWED WHEN: (1) SUBSTANTIAL INTEREST (2) SPECIAL SKILL (3) TRUST RELATIONSHIP (4) EXPRESS RESTRICTION
- a delegation isn’t allowed when: (1) there’s substantial interest in who performs; (2) based on special skill; (3) parties have a trust relationship or are competitors (4) expressly restricted in the contract
2. EXCULPATORY CLAUSE CAN LIMIT DELEGATION
- an exculpatory clause gives a party a substantial interest in who performs the contract which limits the ability to delegate
CONTRACTS - 8-Breach of Contract & Remedies - C-Damages for Breach of Contract - 10-Certainty
1. What happens if damages are speculative and not certain?
1. MUST PROVE LOSSES ARE REASONABLY CERTAIN, NOT SPECULATIVE
- to be awarded damages, P is required to prove losses with reasonable certainty; they cannot be merely speculative
