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Contracts Flashcards

1
Q

What are expectation damages?

A

Expectation damages aim to put the party in the position they would have been had the contract been performed

Expectation damages must be foreseeable with reasonable certainty.

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2
Q

What is the basic formula for calculating expectation damages?

A

The contract price minus what would have been received plus any costs

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3
Q

What are reliance damages?

A

Damages that put the party in the position they were in prior to the contract due to reliance on the other party’s promise

Usually awards when expectation damages cannot be obtained

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4
Q

What are restitution damages?

A

The value of the benefit that was already given under a partially performed contract

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5
Q

How are restitution damages measured?

A

By the market value of the services

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6
Q

What are consequential damages?

A

Foreseeable losses that occur as a result of a breach

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7
Q

What are incidental damages?

A

Out-of-pocket expenses that had to be paid due to a breach

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8
Q

What are liquidated damages?

A

Damages determined at the time of the contract that can be enforced if reasonable and not a penalty

10% of the value of the contract is generally ok, more than that starts to look like a penalty

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9
Q

What is quantum meruit?

A

Breaching party is recovering the reasonable value of services provided minus damages incurred

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10
Q

What damages does a seller receive if goods have been delivered and accepted under UCC?

A

The contract price

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11
Q

What is the formula for seller damages if some or none of the goods have been delivered and not resold?

A

Contract price minus the market price

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12
Q

What is the formula for seller damages if some or none of the goods have been delivered and sold?

A

Contract price minus the resale price

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13
Q

What is a lost volume profit?

A

The profit the seller would have made minus the payment for the resale

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14
Q

What is the formula for buyer damages if the seller breaches and the buyer has bought replacement goods?

A

Contract price minus what they paid for the new goods

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15
Q

What is the formula for buyer damages if the seller breaches and the buyer has not bought replacement goods?

A

Contract price minus market price at the time they learned of the breach

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16
Q

Define

Equitable remedies

A

Remedies used when the legal remedy is inadequate

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17
Q

What is specific performance?

A

A remedy requiring a party to perform their contractual obligation when the item is unique

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18
Q

What is an injunction?

A

A court order preventing someone from doing something to avoid irreparable harm

Usually applies to trade secrets; employment contracts

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19
Q

What is rescission?

A

Restoring parties to their pre-contractual position due to there being no meeting of the minds

Occurs when there was a mistake; misrepresentation; duress; or lack of capacity

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20
Q

In non-carrier cases, when does the risk of loss pass from seller to buyer?

A

If the seller is a merchant, when the buyer takes possession; if not, when the goods are tendered to the buyer

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21
Q

In carrier cases

What is the default rule for risk of loss in a shipment contract?

A

FOB seller; risk of loss passes to buyer when the seller gives goods to the carrier

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22
Q

In carrier cases

What is the default rule for risk of loss in a destination contract?

A

FOB any other location; the risk of loss is on the seller until the goods are delivered to the destination

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23
Q

What is a requirement contract?

A

A promise to sell all goods that a party has or can make

Look for the works acting in good faith

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24
Q

What is needed for a valid modification of a contract under common law?

A

Additional consideration

Modification can be oral or written

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25
What is need for modifying a contract under UCC?
No new consideration is needed, just good faith ## Footnote A clause prohibiting oral modifications are valid
26
# Define a condition precedent
An event that must occur before a party is obligated to perform
27
# Define a condition concurrent
An event happens at the time of the performance of the contract
28
# Define a conditon subsequent
event happens after the contract
29
What happens if a condition is not met?
then party does not have to perform
30
When must a party perform regardless of whether a condition was met?
* waiver of condition - now the party must perform * bad faith - one party acts in bad faith then they must perform. (did they even try) * avoiding forfeiture - if someone suffers a great loss
31
What is a waiver of condition?
A situation where a party must perform despite a condition not being met
32
What happens if the seller delivers non-conforming goods?
The buyer may accept, reject, or partially accept the goods
33
What happens if seller delivers non-conforming goods but had reasonable grounds to think buyer would accept the goods?
The seller can fix the delivery if they give reasonable notice to conform and can deliver conforming goods in a reasonable time
34
What happens if sellers delivers non-conforming goods prior to the delivery date?
The seller can fix it if: * they give reasonable notice; and * deliver the goods on time. ## Footnote Buyer must give them reasonable time to cure
35
# Define Installment Contracts
A contact that allows a party to delivergoods in several different shipments
36
What if one shipment of an installment contract is non-conforming and seller can fix it?
The buyer has to give them time to cure
37
What if one shipment of an installment contract is non-conforming and seller cannot fix it?
The buyer can decide to reject the goods
38
What if that one non-conforming delivery would materially impair the value of the whole contract?
The buyer can hold seller in breach
39
What if seller gives an accommodation for non-conforming goods?
The buyer can either accept or reject the goods
40
# Define discharge by impracticability
A defense when unforeseen circumstances make performance extremely difficult or expensive ## Footnote Some increase in price will not mean contract is impractical
41
# Define Impossibility
Something is impossible if no one can perform * UCC - if goods are destroyed * performance has become illegal ## Footnote Impossibility will not apply if the parties have prepared for that event
42
# Exception to Impossibility defense
Temporary impossibility is not a valid defense
43
# Define Frustation of Purpose
The core reason to enter the contract has been frustrated which allows a party can be discharged from performance
44
What is anticipatory repudiation?
When one party unequivocally refuses to perform before the contract is due
45
What can the non-repudiating party do?
They could wait to see if the first party will show up or find someone else to perform * If the first party shows up anyways then the other party can decide to accept or reject performance
46
# What can non-repudiating party do after a demand for assurances?
If the original party responds within a reasonable time and gives assurances then they must wait to sue ## Footnote If that party does not respond or does not give adequate assuranced, the non-repudiating party can do whatever they want (sue or find someone else)
47
UCC requirements for a demand for assurances
Demand must be in writing and reasonable amount of time is 30 days
48
The repudiating party can retract unless:
The other party * has sued them already * accepted the repudiation * relied on the repudiation
49
What does parol evidence apply to?
Terms negotiated or talked about prior to or at the time the contract was formed ## Footnote Does not apply to terms talked about after the contract is formed
50
# Is parol evidence admitted in Final or complete intergations?
Generally, no. ## Footnote The facts will tell us it is a final integration. Look for a merger clause or facts that the court determined it was final.
51
When is parole evidence admissible for final integrations?
Evidence is admissible only if it is to clear up an ambiguous term
52
# Is parol evidence admitted in partial integrations?
Yes, any evidence that explains/supplements the terms in the contract is admissible
53
When is parole evidence inadmissible for partial integrations?
Evidence that contradicts or materially alters a term of contract
54
Other ways evidence is admissible even in a final integration:
Any evidence to show: * fraud * duress * mistake * an existence of a condition precedent * in sale of goods any evidence that shows customs of the trade/course of dealing * a condition of the contract
55
# Define an offer
An outward manifestation of intent to enter into a contract with specific terms
56
What does a valid offer need?
Specific terms
57
When are offers terminated?
Offers are terminated by: * Death * Lapse of time - offer available for a reasonable amount of time * Rejection * A counteroffer - change of the material term of the offer * Revocation - offeror can revoke the offer before the offeree accepts ## Footnote Offers are revocable before they are accepted
58
# List Irrevocable offers
* Option Contract - promise to keep the option open for a period of time with additional consideration. If there is no consideration then it defaults to just being a revokable offer. * UCC Firm Offer - a merchant's signed promise to keep offer open for a reasonable time (3 months if not stated). * Unilateral contract - a promise for completed performance. The moment performance begins, the offer becomes irrevocable.
59
# Define Acceptance
an objective manifestation of the assent to terms ## Footnote At CL, acceptance has to mirror the offer
60
# Exception to the mailbox rule
When rejection is sent first, and then an acceptance is sent the first one to arrive wins. ## Footnote If rejection is received first then it is rejected; if acceptance is first then the offer is accepted
61
# Exceptions to UCC Acceptance rule
* if a change of terms materially alter a term of the contract then it is invalidated. * if offeror objects the change in a reasonable time that will invalidate the acceptance * the offer limits the acceptance
62
What constitutes consideration?
A bargained-for exchange between parties
63
Difference ways MBE tests on Consideration:
* illusory promise - not valid consideration. looks like a promise but the party making the offer is not really giving up anything * Gifts: the promise to give a gift is invalid consideration. If the gift is already given then they cannot get it back. Giving the gift is enforceable * past or moral consideration - not enforceable consideration * promise to pay a debt that was barred by the SOF - valid consideration * promise to pay debt discharged by bankruptcy - valid consideration * forbearance to sue - A has the right to sue, but gave up that right when A promised not to sue then that is valid consideration
64
What is promissory estoppel?
A promise that induces reliance to the detriment of the promisee, preventing the promisor from going back on their promise

MBE Rules (7 decks)

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