Contracts Flashcards
What does Article 2 of the Uniform Commercial Code (UCC) apply to?
Transactions in goods. Goods are ‘things moveable’ at the time of identification to the contract.
What are the necessary components for contract formation?
Offer, acceptance, and consideration.
Define an offer in contract law.
A statement of ‘willingness to enter into a bargain’ so that the other understands that ‘his assent to the bargain is invited and will conclude it.’
What constitutes a counteroffer?
A statement that changes the terms of the initial offer, which is not an acceptance.
What is required for a promise to hold an offer open to be binding?
Consideration, unless the UCC firm offer exception applies.
When is an acceptance effective?
Upon dispatch (the mailbox rule).
What terminates the offeree’s power to accept an offer?
A rejection.
What is consideration in contract law?
A legal detriment or bargained-for exchange.
What is the preexisting-duty rule?
Promising to perform a legal duty already owed is not valid consideration.
What is a material benefit in the context of consideration?
An exception to past consideration limitations where a promise is made after receiving a significant benefit.
How does the UCC treat modifications to contracts?
Only good faith is needed to modify a contract.
What is promissory estoppel?
A substitute for consideration that enforces a promise when there is (1) a promise, (2) foreseeable reliance, and (3) enforcement is necessary to avoid injustice.
What are gap fillers in contract law?
Provisions that apply when a contract for the sale of goods is missing terms, including course of performance, course of dealing, and trade usage.
What is required for performance under common law?
A party must ‘substantially perform’ its contractual obligations.
What is the difference between buyer’s rejection of goods and revocation of acceptance?
Rejection can occur for any reason under the perfect-tender rule; revocation occurs after acceptance if certain conditions are met.
What are the conditions for revoking acceptance of goods?
- Nonconformity substantially impairs value * Accepted due to reasonable belief of cure * Revocation within a reasonable time * Before substantial change in condition.
Define anticipatory repudiation.
An unequivocal manifestation by one party that they cannot or will not perform their obligations before performance is due.
What is prospective inability to perform?
Reasonable grounds for insecurity that the other party is unable or unwilling to perform.
What is the Statute of Frauds?
A requirement that certain contracts be in writing and signed to be enforceable.
What mnemonic helps remember contracts within the Statute of Frauds?
MYLEGS: marriage, year, land, executor, goods over $500, suretyship.
What is the general measure of damages for breach of contract?
Expectation damages, which aim to give the nonbreaching party the benefit of the bargain.
What are punitive damages in breach of contract cases?
Generally not recoverable unless the breach also constitutes a tort for which punitive damages can be recovered.
What is restitution in contract law?
Recovery for any benefit conferred by way of part performance in excess of the loss caused by the breach.
What is the mitigation principle in contract damages?
A party cannot recover damages for a loss that could have been avoided by reasonable efforts.
