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Contracts 2 Flashcards

1
Q

Parol evidence rule generally

A

when parties intend for a writing to be the final agreement, it’s an integration. generally, any other expressions - written or oral - made prior to the writing, as well as any contemporaneous w the writing, are inadmissible to VARY (contradict or supplement) the terms of the writing

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2
Q

2 parts to determining integration

A
  1. whether intended as final expression
  2. whether intended as partial or complete integration

can use evidence to show intent here

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3
Q

rules on partial integration

A

Can’t be contradicted but can be supplemented by CONSISTENT ADDITIONAL TERMS
The UCC presumes all writings are partial integrations

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4
Q

merger clause

A

states that this is intended to be final agrmt

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5
Q

evidence outside scope of parol evidence rule

A

-evidence bearing on validity like: (1) formation defects (fraud, duress, mistake, illegality); or (2) conditions precedent requirement
-collateral agreements and naturally omitted terms (collateral = related to but not part of primary promise and does not conflict; term naturally omitted if (1) doesnt conflict and (2) would not ordinarily be expected to be in the agrmt)
-evidence re interpretation (only if uncertainty or ambiguity in terms)
-evidence showing true consideration
-subsequent modifications

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6
Q

addtl terms under Art 2

A

generally follows parol evidence and exceptions but can add CONSISTENT ADDITIONAL TERMS unless (1) merger clause or (2) courts find from all circumstances that writing was intended as final agrmt.

can also explain or supplement via evidence of course of performance, course of dealing, and usage of trade - regardless of whether or not writing is ambiguous

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7
Q

general rules of kx construction

A

-construed as a whole
-terms use ordinary meaning unless shown otherwise
-written or typed prevail over printed
-want to find enforceable kx
-ambiguities construed against drafter
-course of dealing (within 1 transac) prevails over course of performance (within past transac) prevails over trade usage

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8
Q

Art 2 gap fillers

A
  • price (reasonable at time of delivery)
    -delivery place (seller’s place of business)
    -time for delivery (reasonable time)
    -payment time (due at time and place where buyer receives goods)
    -assortment (at buyer’s option)
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9
Q

general rule re warranties for goods

A

auto include warranty of title in most cases. may also include certain implied warranties and express warranties like implied warranty of merchantibility

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10
Q

express warranty

A

-affirmation of fact or promise to buyer is part of bargain if made at point when buyer could have relied on it when they entered into the kx
-buyer doesnt need to prove they actually relied
-statements of VALUE OR OPINION (like top-notch) don’t count

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11
Q

implied warranty of merchantability

A

implied in every kx for sale (1) BY A MERCHANT (2) DEALING IN THE KIND OF GOODS SOLD that the good s are (3) FIR FOR THE ORDINARY PURPOSE FOR WHICH SUCH GOODS R USED.

seller’s knowledge of defect irrelevevant. absolute L

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12
Q

implied warranty of fitness for a particular purpose

A

implied whenever: (1) ANY SELLER, merchant or not (2) has REASON TO KNOW the particular purpose for which the goods are using and (3) the buyer is RELYING on the seller’s skill and judgment to select suitable goods and (4) the buyer SO RELIES.

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13
Q

warranty of title and against infringement

A

-Title: ANY SELLER of goods warrant that title transferred is good and there are no liens unless stated. auto.
-Against Infringement: MERCHANT SELLER regularly dealing in goods sold are delivered free of patent, TM, copy right, or other similar claims. EXCEPT that a BUYER who FURNISHES SPECS himself must hold the seller harmless agaisnt such claims.

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14
Q

disclaimer of warranties

A

Title: can be disclaimed or modified only by specific notice
Implied Warranties: can be disclaimed by specific disclaimers or GENERAL methods of disclaimers
CANNOT DISCLAIM EXPRESS WARRANTIES.

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15
Q

disclaimer of warrant of merchantability

A

can be specifically disclaimed or modified only be mentioning MERCHANTABILITY. if the sales kx is in writing, disclaimer MUST BE CONSPICUOUS.

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16
Q

disclaimer of warranty of fitness for particular purpose

A

can be disclaimed only by CONSPICUOUS WRITING

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17
Q

conspicuous defined

A

(1) in larger type than surrounding text; (2) in contrasting type, font, or color; OR (3) set off from the text by marks that call attention to it

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18
Q

“as is” language

A

another way to disclaim implied warranties of merchantability and fitness
need not be conspicuous but can’t be hidden

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19
Q

what happens if a buyer examines or refuses to examine w/i reaosnable period of time

A

may destroy warranty

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20
Q

limitations on damages

A

parties can do this. but won’t be upheld if unconscionable. can’t do limits on personal injury.

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21
Q

buyer’s damages for breach of warranty

A

-generally, diff by the way goods tendered and as warranted
-title: value of item cus generally deprived of possession

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22
Q

delivery terms and risk of loss for defects

A

-if buyer has right to reject goods, risk of loss doesnt pass to buyer until defects are cured or buyer accepts in spite of defects

23
Q

noncarrier cases - delivery terms / risk of loss

A

-sale where parties didnt intend goods would be moved by common carrier
-if seller merchant, risk of loss passes to buyer only when they take physical possession of the goods. if the seller is not a merchant, risk of loss passes to buyer upon tender of delivery.

24
Q

delivery terms for nonconforming goods

A

risk of loss remains on seller

25
Q

carrier case

A

-goods moved by carrier
-two types of contracts: shipment and destination

price due at delivery/tender

26
Q

shipment kx

A

-if kx authorizes or requires the seller to ship the goods by carrier but DOES NOT REQUIRE THEM TO DELIVER THE GOODS TO A PARTICULAR DESTINATION, it is a shipment kx and risk of loss passes to the buyer when the goods are DELIVERED TO THE CARRIER.
-Art 2 presumes shipment kx unless otherwise stated

In a shipment contract, the seller must: (1) make a reasonable contract with the carrier on behalf of the buyer; (2) deliver the goods to the carrier; (3) promptly notify the buyer of the shipment; and (4) provide the buyer with any documents needed to take possession of the goods.

27
Q

destination kx

A

if kx requires seller to deliver goods at a PARTICULAR DESTINATION, risk of loss passes to buyer when goods are TENDERED TO BUYER AT DESTINATION.

Will say FOB: Buyer’s address
if doesnt say, then shipment kx

All contracts for goods require an address for delivery. Merely indicating an address for shipment doesn’t make a contract a destination contract

28
Q

goods destroyed before risk of loss passes

A

If goods that were identified when the contract was made are destroyed (1) without fault by either party and (2) before the risk of loss passes to the buyer, the contract is avoided (that is, the seller’s performance is
excused). If the goods were not identified until after the contract was made, the seller in this situation would have to prove impracticability.

29
Q

party’s basic performance duty at CL

A

substantially perform

30
Q

can u have good faith req under art 2

A

no

31
Q

tender of delivery

A

In a proper tender of delivery, the seller must put and hold conforming goods at the buyer’s disposition for a time sufficient for the buyer to take possession. The seller must give the buyer notice reasonably necessary to enable the buyer to take possession of the goods. The tender must be at a reasonable hour.

32
Q

installment kx

A

seller can demand payment for each installment unless contrary intent appears

33
Q

is failure of a condition to occur breach

A

no

34
Q

condition of satisfaction

A

-if mechanical fitness, utility, marketability, condition of satisfaction is reasonable person standard
-personal taste/judgment, like art, portraits, or dental work, require actual satisfaction (but any lack of satisfaction must be in good faith)
-satisfaction of 3d person (like construction kx - engineer) - req actual satisfaction (good faith req)

35
Q

types of conditions

A

-condition precedent
-conditions concurrent (capable of occuring at same time, like tender deed of cash, they are both essentially coditions precedent for each other)
-condition subsequent (once it occurs, cuts off an existing duty to perform)

36
Q

constructive conditions

A
37
Q

anticipatory repudiation reqs

A

-bilateral kx w unperformed duties on both sides
-unequivocal

38
Q

options for anticipatory repudiation

A

-treat as total repudiation and sue
-suspend own performance and wait to sue until performance date
-treat repudiation as offer to rescind and treat kx as dicharged
-ignor repudiation and urger promisor to perform

39
Q

retraction of repudiation

A

A repudiating party may at any time before their next performance is due withdraw their repudiation unless the other party has canceled, materially changed their position in reliance on the repudiation, or otherwise indicated that they consider the repudiation final. Withdrawal of the repudiation may be in any manner that clearly indicates the intention to perform, but must include any assurances justifiably demanded.

40
Q

prospective failure

A

-diff from anticipatory repud bc not unequivocal
-can ask for adequate assurances that performance is forthcoming

41
Q

excuse of condition by substantial performance

A

if party renders substantial performance, the other party’s duty to counterperofrmance becomes absolute

only applies when constructive condition, not express

doesnt apply to goods bc perfect tender req

42
Q

express v constructive condition

A

When a party’s duty is subject to an express condition, strict compliance with the condition is ordinarily required before the performance will be due. Constructive:A “constructive” condition is a condition that was not agreed upon by the parties, but that is supplied by the court to ensure fairness.

43
Q

kx recission

A

-can do in bilateral kx by mutual agrmt [even if partial performance] [can be done orally unless SJ falls within SoF]
-cannot do in unilat kx where party still has duty to perform. where partty has already performed, recission must be supported by: (1) an offer of new consid; (2) elements of promissory estoppel; (3) manifestation of gift intent.
-unilat recession must be supported by adewuate legal reasoning

44
Q

discharge by accord & satisfaction

A

An accord is an agreement in which one party to an existing contract agrees to accept, in lieu of the performance that they are supposed to receive from the other party, some other, different future performance.
The accord, taken alone, won’t discharge the prior contract; it merely suspends the right to enforce it in accordance with the terms of the accord contract. Satisfaction is the performance of the accord agreement. Its effect is to discharge not only the original contract but also the accord contract as well.

ex: John borrows $500 from Gabrielle and promises to repay her with interest. Later, Gabrielle agrees to discharge the debt if John promises to do her yard work for a year

The accord must be supported by consdieration, even if its less than the original consideration.

the majority view is that a debtor’s offer to
make a partial payment on an existing debt will suffice for an accord and satisfaction if there is some “bona fide dispute” as to the underlying claim or there is otherwise some alteration, even if slight, in the debtor’s consideration.

45
Q

checks as payment in full for accord and satisfaction

A

If a monetary claim is uncertain or is subject to a bona fide dispute, an accord and satisfaction may be accomplished by a good faith tender and acceptance of a check when that check (or an accompanying document) conspicuously states that the check is tendered in full satisfaction of the debt.

46
Q

diff between accord and satisfaction and modification

A

-for essay, if no dispute of amount due, generally look to modification rather than accord and satisfaction. also look to see if wanting to discharge kx, this is usually accord.

47
Q

discharge by novation

A

-a new kx substitutes a new party to receive benefits and assume duties that originally belonged to one of the original parties under the terms of the old kx
-serves to discharge an old kx
-elements:
–previous valid kx
–agrmt between all parties
–immediate extinguishment of kxual duties as by the way original kxing parties
–valid and enforceable new kx

48
Q

intended v incidental beneficiary

A

Renders performance to some third party

when looking to see if intended, consider whether:
-whether the beneficiary is IDENTIFIED in the kx
-receives PERFORMANCE DIRECTLY from the promisor; OR
-has some RELATIONSHIP W THE PROMISEE

2 types of intended beneficiaries: creditor and donee (creditor beneficiary can sue; donee may not unless grounds for detrimental reliance exist)

49
Q

vesting and third parties

A

third party can only enforce kx if rights vested. occurs when:
(1) manifest assent
(2) beneficiary bring suit to enforce promise
(3) materially change position in justifiable reliance on promise

prior to this, can modify or rescind beneficiary’s rights

50
Q

can assignments be revoked

A

if for value (done for consideration or taken as a security or payment for a preexisting debt)

if gratuitous, can

51
Q

In a contract with intended third party beneficiaries, when the promisor breaches their duties, what right does the promisee have against the promissor?
What if the beneficiary is a donee beneficiary?
What if the beneficiary is a creditor beneficiary?

A

When the promisor does not perform, the promisee has a claim for breach of contract against the promisor, and may possibly seek specific performance or damages, BUT…
If the promisor’s performance is intended to benefit a donee beneficiary, then the promisee has no damages, but specific performance may be appropriate.
If the promisor’s performance is intended to benefit a creditor beneficiary, then the promisee may seek enforcement of the promisor’s obligation

52
Q

What happens if there is an assignment of rights but the K says “assignment of rights under this contract is prohibited”?

A

The assignor has breached the contract, and is likely liable for damages to the obligor, but most courts would hold it is not a basis for nullifying the obligor’s obligation to perform to the benefit of the assignee.

53
Q

What is the effect if the contract prohibits “assignment of the contract” but does not specify further?

A

will be interpreted as banning delegation but not assignment

54
Q

Upon delegation, does the delegator remain liable for the delegatee’s performance?

A

Yes, can be sued if the delegatee doesn’t perform
⚠️ Exception: delegator isn’t liable if there is a novation (when all parties agree to a new contract to replace the old one)

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