Contracts Flashcards
Valid Contract (UCC)
A valid contract requires (1) an offer, (2) acceptance, (3) consideration, and (4) no defenses to formation.
Under the UCC the essential term for enforceability is the quantity of goods. Other terms may be gap-filled, and consideration is satisfied by a bargained-for exchange.
Perfect Tender Rule (UCC)
Requires delivery of goods and performance exactly as specified in the contract. If the seller fails to conform, the buyer may reject the goods and sue for breach.
Expectation Damages
Expectation Damages, aim to place the non-breaching party in the position they would have been in had the contract been fully performed. This is typically calculated as:
(Market price - Contract price) × Quantity of goods.
Consequential Damages
Consequential damages are damages that arise as a result of the breach but are not part of the direct transaction. They are recoverable if they were foreseeable at the time of contracting and caused by the breach.
Mistake
Mutual mistake occurs when both parties agree on a term, but it is omitted or misstated.
Unilateral mistake occurs when only one party is mistaken about a material fact.
What is Specific Performance?
An equitable remedy requiring a D to perform their contractual obligation when (1) there is a valid contract, (2) the terms are sufficiently definite, (3) monetary damages are inadequate, and (4) there are no valid defenses.
What is the Parol Evidence Rule?
The PER prohibits the admission of extrinsic evidence to modify the terms of a written, integrated contract.
There are 4 exceptions to the rule: (1) to clarify ambiguous terms, (2) show that the writing is not fully integrated, (3) prove fraud, mistake, or misrepresentation, or (4) to add consistent, additional terms if the contract is only partially integrated.
When is a contract fully Integrated?
A contract is ‘fully integrated’ if it represents the final and complete agreement of the parties.
What are Equitable Defenses?
Equitable defenses include: Unclean hands, Laches, Impossibility.
When is contract reformation available?
To modify a written contract to reflect the parties’ true intent when (1) there is fraud or mutual/unilateral mistake, and (2) the modified terms are consistent with the parties’ agreement.
