contracts 2 Flashcards
(35 cards)
when is ambiguity a reason for not enforcing a contract?
- a material term open to at least two reasonable interpretations
- each party attaches different meaning
- neither party knows the term is open to at least two reasonable interpretations.
what are the delivery obligations for a seller under a shipment contract?
- get goods to common carrier
- make reasonable arrangements
- notify buyer.
what are the delivery obligations for a seller under a destination contract?
obligation not satisfied until buyer receives item.
what is implied warrant of merchantability?
merchant seller of goods of that kind, fit for the purpose
what is implied warranty of fitness for particular purpose
buyer relies on sellers jnowledge, good fit for purpose
can you disclaim an express warranty?
no.
what does perfect tender apply to?
the sale of goods
what if goods or delivery do not comply with contract?
buyer has right to reject, must take reasonable care and not use them.
when it comes to installment contracts when can a buyer reject?
when there has been a substantial impairment.
if buyer accepts goods, what happens?
he cannot reject them.
what happens when you fail to reject?
it is seen as acceptance.
what is required for revocation of acceptance?
- nonconformity that substantially impairs value
- buyer relied of sellers assurance/excuse
- revocation within a reasonable time after discovery of nonconformity
how do you identify a third party beneficiary problem?
- look for two parties contracting with the common intent of benefit to a third party
what is the vocabulary for third party beneficiary?
- promisor - person who makes the promise to pay tpb
- promisee - the one who gets the benefit
- third party beneficiary - gets benefit
when can a third party beneficiary agreement not be canceled?
when third party has 1) knowledge of agreement and 2) relies or agrees.
who can sue who under third party beneficiary?
- tpb can sue promisor
- promisee can sue promisor
- generally beneficiary cannot recover from promisee unless its to a preexisting debt
what are defenses to a third party beneficiary problem?
promisor can use any defense it has against promisee against beneficiary.
what is an assignment?
transfers right to a third party.
what is assignment vocabulary?
- assignee - not a party
- assignor - transfers rights
- obligor - person who has to pay assignee
what are the limitations to a assignment?
if it prohibits assignments, the assignor is liable but the assignee can enforce the contract if it didnt know.
if there is nothing in the contract about assignment what happens?
its valid unless it substantially changes the duties of the obligor.
what kind of assignments can be revoked?
gratuitous ones, free of consideration.
under assignments, who can sue who?
- assignee can sue obligor
2. assignor for consideration cannot recover from obligor
payment by obligor to assignor is effective until?
until obligor knows of assignment
