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CA Bar: Elements > Contracts > Flashcards

Contracts Flashcards

1
Q

Contracts governed by the UCC Art. 2

A

UCC Art. 2 governs all Ks for the sale of goods (“substantial part”; if merchants special UCC provisions)

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2
Q

Contracts governed by common law

A

Any contract NOT governed by the UCC (e.g., service, real estate, construction contracts, etc.)

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3
Q

Formation of Contract (Mutual Assent)

A

(1) offer; (2) acceptance; (3) consideration; AND (4) NO defense

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4
Q

Offer (definition)

A

(1) expression of promise, undertaking or commitment to enter K; (2) certainty and definiteness of terms; AND (3) communication to identified offeree

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5
Q

Offer (termination)

A

i. Lapse of time;
ii. Termination by Operation of Law (death/Incapacity of either party after offer but before acceptance kills offer);
iii. Rejection by offeree (counter-offer, conditional acceptance, additional terms);
iv. Revocation by offerror (CL unless option K w/ consideration / detrimental reliance; UCC - unless firm offer with signed written promise);
v. Reliance - reliance that is reasonably foreseeable and detrimental

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6
Q

Lapse of Time

A

Must accept within specified time period or, if none, within reasonable time

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7
Q

Revocation

A

Words or conduct of the offeror terminating an offer (effective when received by offeree; unless the offer is irrevocable–option for value; merchant’s firm offer; or detrimental reliance)

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8
Q

Rejection

A

Words or conduct of the offeree rejecting the offer (effective when received by offeror; additional terms–CL rejection and counteroffer, UCC become part of K unless (a) one party not a merchant, (b) offer is limited to its terms, c) object w/i reasonable time, (d) materially alters obligation

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9
Q

Termination by Operation of Law

A

(1) death or insanity of either party; (2) destruction of subject matter of the K; or (3) supervening illegality of subject matter of the K

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10
Q

UCC - Output Ks

A

Seller commits to sell all goods it produces to buyer (valid)

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11
Q

UCC - Requirement Ks

A

Seller commits to sell all goods buyer requires (valid)

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12
Q

Acceptance

A

Must be unequivocal acceptance

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13
Q

Acceptance (CL - mirror image rule)

A

Manifestation of assent to each and every term of the offer

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14
Q

Acceptance (UCC)

A

Acceptance with additional/different terms is valid, but inclusion of terms governed by the “battle of the forms”

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15
Q

UCC “battle of the forms”

A

(1) Additional terms: become part of K unless (a) one party not a merchant, (b) offer is limited to its terms, c) object w/i reasonable time, (d) materially alters obligation
(2) Different terms: knockout rule
(3) Gap filler terms: normal meaning normally applied

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16
Q

Acceptance (method, CL)

A

Bilateral - full performance, start performance, promise, mailed acceptance;
Unilateral - K valid upon full performance

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17
Q

Acceptance (method, UCC)

A

Mailbox Rule; Battle of the Forms; or promise to ship/shipment of the goods (note: shipment of nonconforming goods is acceptance and breach, unless accommodation)

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18
Q

Acceptance (UCC - Mailbox Rule)

A

Effective upon dispatch; doesn’t apply to option Ks; offeree sends rejection, then acceptance–first received is effect; offeree sends acceptance, then rejection–acceptance effective unless rejection first and offeror detrimentally relies

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19
Q

Acceptance (UCC - revocation)

A

Acceptance can be revoked if 1) non-conformity substantially impairs value; 2) excusable ignorance as to non-conformity; and 3) reasonable time

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20
Q

Consideration

A

[must exist on both sides of the K] (1) Bargained for exchange; (2) for legal value (legal benefit to promisor or detriment to promisee)

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21
Q

Promissory Estoppel (consideration)

A

A promise is enforceable if necessary to prevent injustice if: (1) the promisor should REASONABLY expect to INDUCE action or forbearance; AND (2) such action or forbearance is in fact induced

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22
Q

Defenses to Formation of a K

A

“Some Make Illegal Icecaps Under Fraud” – (1) SoF; (2) Mistake/Ambiguity; (3) Illegality; (4) Incapacity; (5) Unconscionable; (6) Fraud / Duress

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23
Q

Statute of Frauds (requirements)

A

writing with all material terms + signed by the party to be bound

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24
Q

Statute of Frauds (agreements covered)

A

“MY LEGS” - (1) Marriage; (2) performance not within one Year; (3) Land; (4) Executor; (5) Goods > $500; and (5) Surety

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25
Statute of Frauds (service K)
full performance satisfies
26
Statute of Frauds (real estate)
partial performance if full / part payment; possession and/or improvements
27
Mistake / Ambiguity
mutual mistake voids -- 1) basic assumption, 2) material effect on exchange, 3) no assumption of risk by adversely affected P
28
Illegality
illegal consideration or subject matter voids K
29
Incapacity
1) age (must be 18+), 2) insanity, 3) intoxication
30
Unconscionable
K or provision unenforceable if unequal bargaining power
31
Fraud / Duress
physical / economic duress or intentional misrepresentation of material fact voids K
32
Contract Terms
"U-IMP" (1) UCC Risk of Loss; (2) Interpretation; (3) Modification; (4) Parol Evidence Rule
33
UCC Risk of Loss
1) Agreement of parties controls, 2) breaching party liable, 3) if common carrier, shipment or destination, 4) if merchant seller, shifts upon receipt, 5) if non-merchant seller, shifts upon tender, OR 6) Note - F.O.B. (Destination) must reach F.O.B. listed before risk of loss shifts
34
Interpretation
CL - plain meaning, custom/usage, dealing btwn parties; UCC 2-207 - Battle of Forms
35
Modification
CL - new consideration required; UCC - no consideration if in good faith
36
Parol Evidence Rule
parties express agreement in final writing ("integration"); other written/oral expressions, made prior to or contemporaneously w/ writing, inadmissible to vary, contradict, or add terms of writing
37
Parol Evidence Rule (outside the scope of PER)
"STARVIN" - (1) Subsequent modifications; (2) showing of "True consideration"; (3) Art. 2 - consistent terms OR course of performance, course of dealing, and usage trade to explain or supplement terms; (4) Reformation; (5) Validity issues (formation defects; conditions precedent to effectiveness); (6) Interpretation (only uncertainty or ambiguity in terms); (7) Naturally omitted terms and collateral agreements
38
Third Parties Beneficiaries
rights created in a 3rd party by K
39
Intended or Incidental
only intended have contractual rights. Beneficiary is intended if: (1) ID'd in K; (2) performance directly from promisor; OR (3) relations w/ promisee to indicate intent to benefit
40
Rights Vested
(1) assent to promise; (2) suit to enforce promise; OR (3) detrimental reliance on promise
41
Assignment
transfer of K rights by one party to a third party (generally all rights assignable)
42
Assignment (privity of K)
privity of K btwn obligor/assignee, extinguishes privity of estate between obligor/assignor
43
Assignment (exceptions)
Assignable unless - (1) subs. changes obligor’s duty/risk, (2) based on future rights for future Ks, OR (3) assignment prohibited by law/K provision
44
Delegation
delegate duty in one K to TP by another K; obligee must accept all duties that may be delegated
45
Delagator Liability
liable on K; K is between delegator & delgate & obligee is 3rd party beneficiary
46
Delegation (exceptions)
Able to delegate unless - 1) duties involve personal judgment/skill, 2) changes obligee’s expectancy, 3) special trust in delegator, OR 4) K restriction on delegations
47
Performance
Conditions, Discharge of Duty, Breach
48
Conditions (types)
1) precedent, 2) concurrent, 3) subsequent, 4) express, 5) implied, OR 6) constructive
49
Conditions (satisfaction)
1) express (literal compliance), 2) personal satisfaction requires good faith, OR 3) constructive condition satisfied by substantial perf (can act to excuse complete perf)
50
Conditions (EXCUSE)
1) anticipatory repudiation, 2) prospective inability to perform, 3) divisible K, 4) waiver or estoppel, 5) impossibility, 6) impracticability, OR 7) frustration of purpose
51
Discharge of Duty
"FIB" - (1) Frustration of purpose; (2) Impossibility (objective), Impracticability (subjective); (3) By parties
52
Impossibility (objective), Impracticability (subjective)
unanticipated/extraordinary event
53
Frustration of Purpose
K has become valueless by virtue of some intervening event
54
Discharge of Duty (By Parties)
"MRNA" - (1) Modification; (2) Rescission; (3) Novation; (4) Accord & Satisfaction
55
Modification
modified terms N/A (CL mutual assent/consideration, UCC good faith)
56
Rescission
oral/written between parties; invalid if only one party had duty to perform
57
Novation
new K, replaces valid K; all parties agree to release original party, sub in new party
58
Accord & Satisfaction
agree to accept diff perf than K, satisfaction is perf of accord
59
Breach
Material or Minor (CL); Less than Perfect Tender (UCC)
60
Breach (by seller)
Buyer may reject or accept all or part and sue for damages
61
Breach (cure)
Seller may cure imperfect tender if: (1) prior deals suggests it would be okay, OR (2) time for perf has not yet expired
62
Remedies
"C2R3S" Compensatory; Consequential; Restitution; Rescission; Reformation; Specific Performance
63
Compensatory Damages (definition)
put non-breaching party in position would have been in if no breach
64
Compensatory Damages (requirements)
Must be Certain in nature, Not Speculative, Duty to Mitigate
65
Compensatory Damages (formulas)
i. S breach; B has goods -> fair market price if perfect – fair market price as is ii. S breach; S has goods -> market price at breach OR replacement price – K price iii. B breach; B has goods -> K price iv. B breach; S has goods -> K price – market price OR resale price + lost profits v. Note -> Lost Volume Seller entitled to lost profits
66
Consequential Damages
foreseeable to a reasonable person at time of K formation
67
Restitution (quasi-K)
measured by value of benefit conferred; (K fails, non-breacher may recover in quasi-K to prevent unjust enrichment to parties; Puts ∆ in position if K never occurred)
68
Reformation
modify written K to reflect parties agreement
69
Specific Performance
if damages inadequate (real estate); not for personal services
70
Remedies (Defenses)
"SHLUMM" - (1) Sale to BFP (defense to specific performance only); (2) Hardship; (3) Laches; (4) Unclean Hands; (5) Mistake; and (6) Misrepresentation

CA Bar: Elements (7 decks)

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