Contracts #2 Flashcards

Question

Statute of Frauds - Signature Requirement

Answer 1

Any symbol with the intention to authenticate (i.e., stamp, initials, letterhead, etc.) is sufficient.

Answer 2

Writing doesn't need to be a single document. Multiple documents can be tacked together to collectively satisfy the Statute of Frauds. All documents are signed OR the signed document incorporates the unsigned documents by reference Otherwise, SOF can be satisfied if: (1) There is at least 1 signed writing unambiguously establishing a contractual relationship (2) The signed and unsigned documents clearly refer to the same subject matter; and (3) Clear and convincing evidence of agreement to the unsigned documents by the party against whom enforcement is sought.

Answer 3

LAND SALE Ks --> At least 2 out of the following (1) Payment of all or part of the purchase price (2) Taking possession of the land (3) Making substantial improvements to the land ONE-YEAR Ks --> If fully performed (otherwise might be able to recover reasonable value for part performance) Sales of Goods K --> Part performance

Answer 4

YES - but recover only for the value of the benefits conferred.

Answer 5

Can be applied in the following circumstances (1) Where one party promised to create the signed writing and the other party relies on that promise (and no signed writing was ever created) --> most courts will apply promissory estoppel (2) Just reliance on the underlying oral K --> Majority rule is to apply, but a substantial minority of states will refuse to apply promissory estoppel.

Answer 6

Applies to sale of goods > $500 (1) Signed Writing --> Must include the quantity to be enforceable UNLESS - other language in the K provides clear basis for measuring quantity or it's an output/requirements K (2) Merchant's confirmation (3) Judicial Admission (4) Partial Performance; OR (5) Specialty Manufactured Goods

Answer 7

2 merchants enter into oral agreement. 1 sends the other written confirmation of agreement. This will satisfy SOF if the recipient fails to object within 10 days. The written confirmation must be: (1) Sufficient (signed + quantity term) (2) Writing is in confirmation of the K (3) Sent within a reasonable time after formation. (4) Based on a real agreement or discussion between the parties (5) Must be actually received

Answer 8

Party admits K formation in a pleading, testimony, etc. But the K is enforceable only up to the quantity admitted.

Answer 9

Enforceable for (1) Goods for which payment has been made/accepted (2) Goods which have been received/accepted If the goods are divisible, then the K is only enforceable for the amount delivered/paid for. If the goods are NOT divisible, then partial payment will make the entire K enforceable.

Answer 10

All of the following must be true: (1) Specially manufactured good for buyer (2) Not suitable for sale to others (3) Substantially began to manufacture or made commitments to get (3) Actions to begin manufacture or procure occurred (a) under circumstances which reasonably indicate that the goods were for the buyer AND (b) before the seller received notice of the buyer's revocation

Answer 11

(1) Recovery for the Benefits Conferred (2) Promissory Estoppel --> requires detrimental reliance on unenforceable oral K If one party promises the other party he'll make the signed writing (and other party relies on the promise so doesn't take any steps) --> promissory estoppel applies But if there's no assurances - the other party just relies on the oral K itself --> MAJORITY - apply promissory estoppel MINORITY - promissory estoppel does NOT apply.

Answer 12

Applies to Ks for sale of goods of $500 or more under the UCC SOF. Satisfied by (1) Signed writing (2) Merchant's confirmation (3) Judicial Admission (4) Partial Performance (5) Specially Manufactured Goods

Answer 13

(1) Warranty of Title (2) Warranty of Merchantability (3) Warranty of Fitness for a Particular Purpose

Answer 14

Promise that (1) Good title to the goods (2) Rightful transfer of the goods (3) No liens attached to the goods - Can be excluded or modified by (1) specific language or (2) circumstances which give the buyer reason to suspect seller does not claim unencumbered title

Answer 15

That the goods are fit for ordinary purpose for which the goods would be used ONLY applicable if the seller is a merchant. Can be disclaimed but the disclaimer must: (1) specifically use the word "merchantability" and be conspicuous in the writing; OR (2) Any other language or circumstances would be reasonably understood by a buyer as excluding the warranty

Answer 16

Goods are fit for the particular purpose the buyer intends to use them for Only applies when, at the time of contracting, the seller has reason to know: (1) the particular purpose for which the goods are required AND (2) the buyer is relying on the seller's expertise to select reasonable goods.

Answer 17

Negated when (1) the disclaimer is written, clear, and conspicuous, OR (2) Goods have patent defects which were easily detectable.

Answer 18

Goods will conform to some standard. This arises whenever the seller expressly makes them as part of the basis of the bargain in the following ways: (1) Any affirmation of promise or fact; (2) Any description of the goods (3) Any sample or model (4) Need not use the words "warrant" or "guarantee" to create but a mere affirmation of the value of the goods (puffing) does not create value.

Answer 19

Pick the reasonable price at the time established by the K for delivery.

Answer 20

Pick a reasonable time.

Answer 21

Assumer seller's place of business (FOB seller)

Answer 22

Reasonable value for services rendered

Answer 23

Part of BOTH UCC and Common Law Being honest (and merchants have additional obligation to observe reasonable commercial standards of fair dealing in their trade). Output/Requirements K --> Whoever determines amount of goods sold does so in good faith

Answer 24

Objective > Subjective meaning EXCEPT when: (1) Party has reason to know of the other party's subjective understanding (so subjective controls); OR (2) At the time of contracting, both parties shared a subjective understanding (so subjective controls)

Answer 25

Construe against the drafter any ambiguous terms

Answer 26

Unambiguous terms can be interpreted against the drafting party if they conflict with the reasonable expectations of the other party (1) only applies to defeat enforcing boilerplate terms inconsistent with the purchaser's reasonable expectations Usually applied to insurance contracts or Ks of adhesion (boilerplate Ks)

Answer 27

Extrinsic evidence can be used to fill in gaps (supplement Ks) and resolve ambiguities (explain terms). CANNOT be used to contradict the express terms of the K.

Answer 28

Course of performance TRUMPS all. Otherwise Course of Dealing > Trade Usage.

Answer 29

Governs the admissibility of oral and documentary evidence of negotiations and other communications between the parties that took place prior to OR during execution of the K

Answer 30

Partial integration --> The terms within the K are intended as the final expression of those terms. Complete integration --> The K is intended to represent a complete and exclusive statement of all the terms To determine if there's partial or complete integration --> look for a merger clause (something in the K stating that the writing contains the complete/entire agreement)

Answer 31

Explain/interpret terms? --> ALWAYS PERMISSIBLE Supplement? --> ADMISSIBLE UNLESS K is completely integrated. (BUT under the UCC, trade usage, course of dealing, and course of performance can be used to supplement a completely integrated K) Contradict --> NOT Admissible

Answer 32

(1) Subsequent agreements entered into AFTER the execution of the written document. (2) Collateral agreements (entirely distinct from the K at issue) (3) Attacks on the validity of the written agreement

Answer 33

(1) Failure of oral condition precedent (2) Mistake or duress (3) Fraud (4) Reformation --> Must show (a) was an antecedent valid agreement (b) was incorrectly recorded due to mistake or fraud; and (c) proof by clear and convincing evidence

Answer 34

FOB Seller. Seller promises to turn the goods over to the carrier Once the goods have been delivered to the carrier, the risk of loss is on the buyer. So, if the goods are damaged in transit, the buyer bears the loss.

Answer 35

FOB Buyer Seller promises to tender delivery at a particular destination. Once the goods have been tendered at the location specified in the K, the risk of loss is then on the buyer. So, if the goods are damaged in transit to the location, the risk of loss is on the seller.

Answer 36

Shipment K --> FOB Seller Buyer bears the loss for goods damaged in transit.

Answer 37

If the seller is not a merchant, the risk of loss is on the buyer upon delivery (tendered). If the seller is a merchant, then the risk of loss is on the buyer only when the goods are physically in the buyer's possession.

Answer 38

Pre-Existing Duty Rule: Increasing compensation for duties already owed is an UNENFORCEABLE modification. BUT, the following are permissible modifications: (1) Mutual modification of an existing K if (a) both parties agree to different performance than originally required and (b) the difference is not a mere pretense of a newly formed bargain. (2) Unforeseen circumstances --> increased compensation is given in exchange for the same performance that has become substantially more burdensome than reasonably anticipated when the K was formed

Answer 39

No consideration needed. Just needs to be made in good faith.

Answer 40

(1) Mistake (2) Impossibility (3) Impracticality (4) Frustration of Purpose

Answer 41

Must significantly impact the value of transaction for 1 or both parties

Answer 42

1 party's mistake about material facts at the time of contracting NOT excused unless: (1) Other party knew or had reason to know of the mistake; OR (2) Serious clerical error and reliance (BUT won't be excused if the error was caused by extreme negligence or the other party relied on the clerical error)

Answer 43

Both parties had a common faulty understanding re present facts. Voidable by the DISADVANTAGED party when: (1) Mistake relates to material facts; (2) Mistake made by both parties; (3) Disadvantaged party did not bear the risk of mistake

Answer 44

Both parties excused if performance was rendered impossible by the events that occurred AFTER the K was formed. Requirements: (1) Impossibility is objective - literally impossible for anyone due to circumstances outside control (2) Contingency that creates the impossibility arose after making the K and was unknown/un-anticipated by the parties NOTE: available under both common law and UCC

Answer 45

Unforeseen difficulties made performance prohibitively expensive or otherwise extremely burdensome Requirements: (1) Impracticality was unforeseen (2) Risk was neither assumed nor allocated by the parties (3) Increased cost / burden of performance would now be far beyond what either party anticipated NOTE: Under the UCC, there will always be business risks. For this to apply, a shortage needs to be caused by war/embargo, local crop failure, or unforeseen shutdown of supply like a natural disaster.

Answer 46

The value to the receiving party is dramatically reduced. Receiving party's obligation is discharged when: (1) Principal purpose in entering the K is substantially frustrated (2) Frustration was substantial in nature; and (3) Non-occurrence of the event that cause frustration was a basic assumption of the K