Contracts Flashcards
If a buyer accepts a shipment of non-conforming goods (UCC), what remedies are available to the seller?
The seller may bring an action to recover the contract price of the goods. However, the seller’s reward will be reduced by any reasonable losses that resulted from the seller’s breach.
What is an executory accord?
An agreement by the parties to a contract by which one promises to render a substitute performance in the future and the other promises to accept that substitute performance in discharge of the existing duty.
Duty is not discharged at the moment the accord is made, but rather is discharged when the accord is performed.
What can a contractor recover in a construction contract when owner breaches?
Generally, can recover expectation damages of his expected profit on the contract, along with any labor and material expenses incurred UP UNTIL the time that he learned of the owner’s breach.
Illusory Promise Exception?
Where a promisor’s obligation is conditioned upon the occurence of an event that is OUTSIDE of the promisor’s control, the mere fact that the obligation is subject to a condition does not render the promise illusory.
Can a writing be enforceable even if it omits a material term?
Yes.
What is a wrongfully terminated employee expected to do after termination? What happens to the monetary damages in the different situations?
The employee is expected to mitigate damages by making a reasonable effort to seek comparable employment.
If they make reasonable efforts, and find a comparable job, they can recover the difference of the contracts. If they make reasonable efforts, and do not find a job, they can recover the remainder of the contract.
Under the modern rules of accord and satisfaction, a debtor may make an offer to settle a dispute by offering a check marked “payment in full.” A creditor who cashes a check marked like so, or other similar phrasing, will lose under UCC as long as:
(1) The check contained a conspicuous statement that it was tendered as full satisfaction of the claim;
(2) The claim was subjected to bona fide dispute; and
(3) The debtor acted in good faith.
How are expectation damages calculated?
They take into account what actually or possibly was lost by the non-breaching party.
Generally, a promise to guarantee a debt to a third person falls under the Statute of Frauds. However, what is the exception to this?
The promise will not fall under the statute where the principal purpose of making the guarantee was to benefit the promisor himself.
When a promise is voidable, may a promisor later reaffirm the promise?
Yes, even without consideration, and they will then be obligated to keep that promise.
Is a quitclaim deed, that seller has doubtful reason to believe is even legitimate, enough to satisfy the consideration element of a contract?
Yes. A “mere peppercorn” is enough.
How are expectation damages of a contractor contract calculated? What is the formula?
Expectation Damages = Loss in Value + Other Loss - Cost Avoided - Loss Avoided
Is a low-ball offer automatically “bad faith”?
No, there must be unreasonable, deceitful behavior by offeror.
What is an exception to the pre-existing duty rule? (Third Parties)
When a pre-existing duty was owed to a third party, a new promise to perform the same duty would not constitute consideration.
However, under prevailing modern rule, the new promise WILL constitute consideration when the original promise was owed to a third party.
When is a party able to recover a quasi-contractual remedy for the reasonable value of their partial performance?
When contractual duties are discharged by impossibility, impractibility, or frustration of purpose.
