Contracts Flashcards
Structure?
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(Preliminary Issues)
- Governing Law
- Sale of Goods = Article 2 of UCC
- Definition of Goods
- All Other Contracts = General Common Law Majority View
- Mixed Contracts
- Sale of Goods = Article 2 of UCC
- Types
- Express v. Implied
- Express Contract
- Implied Contracts
- Implied in Fact
- Implied in Law = Quasi-Contract (Equitable Remedy)
- Unilateral v. Bilateral
- Bilateral Contracts = Exchange of Promises
- Bilateral Unless
- Reward, Prize or Contest, OR
- Offer Expressly Requires Performance for Acceptance
- Bilateral Unless
- Unilateral Contracts = Acceptance by Performance
- Notice of Acceptance Required
- Bilateral Contracts = Exchange of Promises
- Express v. Implied
Topics? (5)
(Formation)
- Requirements
- Offer
- Termination of Offer
- Acceptance
- Consideration
Structure?
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(Formation: Requirements)
- Mutual Assent
- Acceptance
- Offer
- Consideration
- No Defenses to Formation
Structure?
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(Formation: Offer)
- Intent to be Bound
- Reasonable Person Standard
- Advertisements = Invitation to Deal
- Exceptions
- Ad in Nature of Reward, OR
- Specific to Quantity & Who Can Accept
- Exceptions
- Definite & Certain Terms
- Essential Terms
- Requirements for Specific Types of Contracts
- Real Estate Transactions
- Sale of Goods
- No Price Requirement
- Output, Requirements, & Exclusivity Contracts
- Increase OK if Not Unreasonably Disproportionate
- Employment Contracts
- Permanent Employment
- Common Vague & Ambiguous Terms
- Communicated to the Offeree
Structure?
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(Formation: Termination of Offer)
- Lapse of Time
- Death or Incapacity of Either Party Prior to Acceptance
- Revocation
- Methods of Revocation = Unambiguous Words or Conduct of Unwillingness or Inability to Contract
- Offeree Must Have Notice & Notice Effective Upon Receipt
- Multiple Offers
- Irrevocable Offers
- Option Contracts Supported by Consideration
- Detrimental Reliance (Promissory Estoppel)
- Performance Commenced on Unilateral Contract
- UCC “Firm Offer” Rule
- Definition of Merchants
- Three Months Maximum
- Rejection
- Express Rejection
- Counteroffers = Always Terminate & Become New Offer
- Bargaining Has No Legal Effect
- Interrogative Statements
- Declarative Statements
- Bargaining Has No Legal Effect
- Conditional Acceptance = Terminates & Becomes New Offer
- Conditional Acceptance Language
- Supervening Illegality
Topics? (5)
(Formation: Acceptance)
- Requirements
- Only the Offeree Can Accept
- Additional Terms
- Mode of Acceptance
- Methods of Acceptance
Structure?
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(Formation: Acceptance: Requirements)
- Offeree with Knowledge of the Offer
- Unequivocal Terms of Acceptance
- Statement of Intention
- Communication of Acceptance
Exception?
(Formation: Acceptance: Only the Offeree Can Accept)
Exception: Option Contracts Supported by Consideration
Structure?
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(Formation: Acceptance: Additional Terms)
- Common Law = Mirror Image Rule
- UCC Exception
- Only One Party is a Merchant
- Both Parties are Merchants
- Offer Expressly Limits Acceptance to Terms of the Offer
- Material Alteration, OR
- Offerer Objects to the Change
Structure?
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(Formation: Acceptance: Mode of Acceptance)
- UCC Mode of Acceptance
- The Mailbox Rule = Acceptance Generally Effective Upon Dispatch
- Exceptions
- Offer Provides Otherwise
- Rejection Sent First, OR
- Option Contracts
- All Communications Other than Acceptance = Effective Upon Receipt
- Exceptions
Structure?
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(Formation: Acceptance: Methods of Acceptance)
- By Promising to Perform
- Bilateral Contracts = Yes
- Unilateral Contracts = No
- By Completing Performance = Acceptance Unless Failure to Give Notice
- Failure to Give Reasonably Prompt Notice
- Substandard or Improper Performance = Acceptance & Breach
- By Starting Performance
- Bilateral Contracts = Yes
- Unilateral Contracts = No But Makes Offer Temporarily Irrevocable
- By Shipment of Goods (UCC)
- Shipment of Nonconforming Goods = Acceptance & Breach
- Accomodation Exception = Counteroffer
- Shipment of Nonconforming Goods = Acceptance & Breach
- By Silence = Generally No Acceptance
Topics? (5)
(Formation: Consideration)
- Elements
- Adequacy of Consideration
- Past Consideration = Not Consideration
- Pre-existing Legal Duty
- Consideration Substitute
Structure?
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(Formation: Consideration: Elements)
- Bargained For
- Gifts
- Legal Detriment or Forbearance
- Performance
- Forbearance
- Promise to Perform
- Promise to Forbear
Exception Structure?
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(Formation: Consideration: Adequacy of Consideration)
- Entirely Devoid of Value (aka Token Consideration) = Not Consideration, OR
- Illusory Promises
- Output, Requirements, & Exclusivity Contracts
- Exclusivity Implied in Requirements Contracts
- Output, Requirements, & Exclusivity Contracts
Exception?
(Formation: Consideration: Past Consideration = Not Consideration)
Promise to Pay for an Expressly Requested Act
Structure?
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(Formation: Consideration: Pre-existing Legal Duty)
- Common Law Contract Modification Rule
- Addition or Change in Performance
- Unforeseen Difficulty, OR
- Third Party Promise to Pay
- UCC Sale of Goods = No New Consideration Required
- Good Faith Requirement
- Part Payments on Debt
- Debt Due & Undisputed = Not Consideration for Settlement or Release
- Debt Not Yet Due or Disputed = Consideration for Settlement or Release
Structure?
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(Formation: Consideration: Consideration Substitute)
- Seal
- Written Promise to Satisfy a Legal Obligation Barred by Law
- Promissory Estoppel (aka Detrimental Reliance)
- Words of Promise
- Reliance
- Reasonable
- Detrimental
- Foreseeable
- Enforcement Necessary to Avoid Injustice
Topics? (9)
(Defenses)
- Void v. Voidable v. Unenforceable
- Lack of Consideration
- Lack of Capacity
- Statute of Frauds (SOF)
- Misrepresentation
- Mistake of Fact
- Mistake Due to Ambiguity
- Unconscionability
- Public Policy Detense of Illegality
Structure?
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(Defenses: Lack of Capacity)
- Who
- Minors (under 18)
- Mental Incompetents, OR
- Intoxicated Persons
- Consequence = Right to Disaffirm by Party without Capacity
- Implied Affirmation
- Quasi-Contract Liability for Necessaries
- Lack of Votional Consent
- Duress
- Economic Threats
- Undue Influence
- Duress
Topics? (3)
(Defenses: Statute of Frauds (SOF))
- Contracts Within the Statute of Frauds
- Satisfaction of the Statute of Frauds (Requirements)
- Other Statute of Frauds Bar Exam Issues
Structure?
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(Defenses: Statute of Frauds (SOF): Contracts Within the Statute of Frauds)
- Contracts Incapable of Being Performed within One Year
- Early Termination = Irrelevant
- Contracts That Require Performance on a Specific Date
- No Contracts for Specific Tasks
- No Lifetime Contracts
- Sale of Goods $500 or More
- Promise Made in Consideration of Marriage
- Alleged Promises of Marriage
- Guarantee to Pay Debts of Another
- Answer For = Guarantee
- Main Purpose Exception
- Executor Promises to Pay Estate Debts w/ Own Funds
- Transfers of Interests in Real Estate
- Exception = Leaseholds of One Year or Less
Structure?
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(Defenses: Statute of Frauds (SOF): Satisfaction of the Statute of Frauds (Requirements))
- By Writing
- Common Law
- All Material Terms
- Who
- What
- All Material Terms
- UCC Contracts
- Writing Sufficient to Indicate Contract for the Sale of Goods
- Quantity
- Signed by the Party Asserting the SOF Defense
- Exception: Both Parties Are Merchants = Confirmatory Memo Rule
- Common Law
- By Performance
- Performance & Services Contracts
- Full Performance = Yes
- Part Performance = No but Quasi-Contract
- Sale of Goods Contracts
- Part Performance by Seller of Ordinary Goods
- Delivered Goods = Yes
- Undelivered Goods = No
- Part Performance by Seller of Specialty Goods = Substantial Beginning
- Part Performance by Buyer
- Multiple Items = Yes to Extent of Payment Made
- Single Item = Yes & Agreement Legally Enforceable
- Part Performance by Seller of Ordinary Goods
- Sale of Land Contract
- Buyer Takes Possession
- Buyer Pays All or Part of the Purchase Price
- Buyer Makes Substantial Improvements to Land
- Performance & Services Contracts
- By Judicial Admission
Structure?
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(Defenses: Statute of Frauds (SOF): Other Statute of Frauds Bar Exam Issues)
- Equal Dignity Rule
- Contract Modifications
- Contract as Modified Within the SOF = Modification Must be in Writing
- Contract Expressly Prohibits Oral Modification or Requires Writing
- Common Law = Ignore Such Provisions
- UCC Contracts = Valid Unless Waiver
Structure?
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(Defenses: Misrepresentation)
- Fraud in the Inducement = Contract Voidable
- Fraudulent Misrepresentation = Voidable by Defrauded Party if Justifiable Reliance
- No General Duty to Disclose
- Affirmatively Hiding Material Facts = Fraudulent Misrepresentation
- Statute of Limitations
- No General Duty to Disclose
- Non-Fraudulent Misrepresentation = Voidable If Justifiable Reliance & Material
- Fraudulent Misrepresentation = Voidable by Defrauded Party if Justifiable Reliance
- Fraud in the Factum = Contract Void
Structure?
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(Defenses: Mistake of Fact)
- Mutual Mistake of Material Fact
- Mistaken Basic Assumption of Existing Fact
- Material Adverse Effect on Agreement
- No Assumption of Risk
- Seller Presumption
- Unilateral Mistake of Mistake Fact
Requirements?
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(Defenses: Mistake Due to Ambiguity)
- Material Term Subject to at Least Two Reasonable Interpretations
- Each Party Has a Different Meaning in Mind
- Neither Party Aware of Ambiguity
- One Party Aware = Contract
Structure?
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(Defenses: Unconscionability)
- Tested at Time of Contract Formation
- Common Unconscionable Contracts
- Contract One-Sided
- Substantially Disparate Bargaining Power
- Against Public Policy
- Inconspicuous Risk Shiting
- Contracts of Adhesion
Structure?
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(Defenses: Public Policy of Illegality)
- Consideration or Illegal Subject Matter = Contract Void
- Exceptions
- Plaintiff Unaware of Illegality/Defendant Aware
- Parties Not in Pari Delicto
- Exceptions
- Illegal Purpose = Contract Voidable
- Voidable by Party Who
- Unaware of Illegal Purpose, OR
- Aware But Did Not Facilitate Purpose & Purpose Did Not Involve
Serious Moral Turpitude
- Voidable by Party Who
- Contract Violates a Regulatory Statute
Topics? (3)
(Parol Evidence & Interpretation)
- Parol Evidence
- Interpretation of Contract Terms
- Default UCC Terms
Structure?
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(Parol Evidence & Interpretation: Parol Evidence)
- Test
- Integration
- Partial
- Complete
- The Rule
- Complete Integration = Inadmissible to Contradict or Supplement
- Partial Integration = Inadmissible to Contradict
- Evidence Not Subject to Parol Evidence Rule
- Both Complete or Partial Integration
- To Contradict = Inadmissible
- Exception: Mistake in Integration
- To Show Defense to Contract Formation = Admissible
- To Show Existence of Condition Precedent = Admissible
- To Show Consistent Collateral Contract = Admissible
- To Clarify Ambiguous Terms = Admissible
- To Contradict = Inadmissible
- Only if Partial Integration
- Add Consistent Terms (aka Supplement) = Admissible
- Both Complete or Partial Integration
- Integration
- Merger Clause
- Reformation
Structure?
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(Parol Evidence & Interpretation: Interpretation of Contract Terms)
- Theories of Interpretation
- Four Corners
- Plain Meaning
- Liberal Approach
- Maxims of Interpretation
- Interpreted as a Whole
- Primary Purpose
- Words
- Negotiated Terms Control
- Ambiguities Construed Against Drafter
- Prevailing Meaning Controls
- Technical Terms & Words of Art
- Course of Performance, Course of Dealing or Usage of Trade
- Course of Performance
- Course of Dealing
- Custom & Usage (aka Usage of Trade)
Structure?
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(Parol Evidence & Interpretation: Default UCC Terms: Delivery Obligation)
- Time for Delivery = Within a Reasonable Time
- Place for Delivery
- Delivery Not By Common Carrier
- Merchant Seller = Buyer Receives Goods
- Non-Merchant Seller = Seller Tenders Goods
- Tender
- Delivery By Common Carrier
- Shipment Contracts = Freight on Board Seller’s City
- Deliver Goods to a Common Carrier & Make Reasonable Delivery Arrangements
- Deliver Any Document Necessary to Enable Buyer to Obtain Possession
- Promptly Notify the Buyer of the Shipment
- Destination Contracts = Freight on Board Any City Other than Seller’s City
- Shipment Contracts = Freight on Board Seller’s City
Topics? (2)
(Parol Evidence & Interpretation: Default UCC Terms)
- Delivery Obligation
- Risk of Loss
Topics? (8)
(Parol Evidence & Interpretation: Default UCC Terms: Risk of Loss)
- Agreement to the Parties
- Breach
- Non-Common Carrier Delivery
- Common Carrier Delivery
- Warranties of Quality
- Price = Reasonable Price at Time of Delivery
- Payment
- UCC Parol Evidence Rule
Structure?
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(Parol Evidence & Interpretation: Default UCC Terms: Risk of Loss: Non-Common Carrier Delivery)
- Merchant Seller = Buyer Receives Goods
- Non-Merchant Seller = Seller Tenders Goods
Structure?
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(Parol Evidence & Interpretation: Default UCC Terms: Risk of Loss: Common Carrier Delivery)
- Shipment Contract = Seller Completes Delivery Obligation
- Destination Contract = Goods Delivered at Final Destination
Structure?
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(Parol Evidence & Interpretation: Default UCC Terms: Risk of Loss: Warranties of Quality)
- Express Warranties of Quality
- Statements of Value or Opinion
- Implied Warranties
- Warranty of Title
- Implied Warranty of Merchantability = Fitness for Ordinary Purpose
- More Limited Definition of Merchant
- Warranty Against Infringement
- Implied Warranty of Fitness for Particular Purpose
- Contractual Limitations on Warranties
- Disclaimer of Warranties
- Express Warranties Generally Cannot be Disclaimed
- Implied Warranties of Merchantability Can Be Disclaimed If Conspicuous:
- Conspicuous
- “As Is” or “With All Faults”
- Limitation of Remedies = OK Unless Unconscionable
- Disclaimer of Warranties
- Third Party Beneficiaries of Express or Implied Warranties
- Alternative A
- Alternative B
- Alternative C
Structure?
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(Parol Evidence & Interpretation: Default UCC Terms: Risk of Loss: Price = Reasonable Price at Time of Delivery)
- Price Fixed by Buyer or Seller = Good Faith Requirement
- Price Payable in Goods = Each Party Seller of Goods it Provides
Structure?
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(Parol Evidence & Interpretation: Default UCC Terms: Risk of Loss: Payment)
- Noncarrier Contract = Upon Tender of Delivery
- Carrier Contract = Buyer Receives Goods
Structure?
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(Parol Evidence & Interpretation: Default UCC Terms: Risk of Loss: UCC Parol Evidence Rule)
- By Course of Dealing or Usage of Trade or By Course of Performance
- Course of Performance
- Course of Dealing
- Custom & Usage
- By Evidence of Consistent Additional Terms
Topics? (8)
(Discharge)
- Rescission
- Accord & Satisfaction
- Contract Modifications (Substituted Agreement)
- Novation (Substituted Person)
- Later Unforeseen Events
- Failure of Condition Precedent
- Anticipatory Repudiation
- Material Breach
Structure?
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(Discharge: Rescission)
- Mutual Rescission
- Writing Not Required
- Original Contract Must Be Executory on Both Sides
- Third Party Beneficiaries
- Unilateral Rescission
Structure?
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(Discharge: Accord & Satisfaction)
- Accord
- Effect of Accord
- Satisfaction
- Effect of Satisfaction
- If Accord Not Satisfied
Structure?
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(Discharge: Contract Modifications (Substituted Agreement))
- Requirements
- Consideration
- Common Law
- Addition or Change in Performance
- Unforeseen Difficulty, OR
- Third Party Promise to Pay
- UCC Sale of Goods = No New Consideration Required
- Good Faith Requirement
- Common Law
- Writing
- Contract as Modified Within the SOF = Modification Must be in Writing
- Contract Expressly Prohibits Oral Modification or Requires Writing
- Common Law = Ignore Such Provisions
- UCC Contracts = Valid Unless Waiver
- Consideration
- Effect of Modification
Structure?
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(Discharge: Novation (Substituted Person))
- Requirements
- Previous Valid Contract
- An Agreement by all the parties including the new third party (or parties)
- A valid and enforceable new contract
- If Not Mutually Agreed Upon = Delegation
- Effect = Immediate Extinguishment of Contractual Duties
Structure?
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(Discharge: Later Unforeseen Events)
- Frustation of Purpose
- Requirements
- Purpose of Contract Known by Both Parties
- Unforeseeable Supervening Event Out of Defendant’s Control
- Original Purpose Unavailable
- Distinguish from Impossibility
- Requirements
- Impracticability
- Requirements
- Circumstances Affecting the Contract Have Changed
- Change is Not Due to Any Act by Defendant
- Undue Hardship on Defendant
- Temporary Impracticability Not Impracticability = Uncertain Weather or Unanticipated Market Conditions
- Requirements
- Impossibility
- Requirements
- Circumstances Affecting Contract Have Changed
- Change Not Due to Any Act by the Defendant
- Change of Circumstances Causes Performance to be Impossible
- Objective Impossibility Excuses Performance
- Subjectively Impossibility Does Not Excuse Performance
- Specific Examples of Impossibility
- Supervening Illegality
- Death or Physical Incapacity
- Exception: Death or Incapacity of Person Necessary to Effectuate Contract
- Destruction of the Subject Matter of Contract
- UCC Rule
- Temporary Impossibility
- Requirements
Structure?
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(Discharge: Failure of Condition Precedent)
- Definition of Express Condition
- Distinguish from Conditional Acceptance
- Condition Does Not Make Promise Illusory
- Language of Condition
- Strict Compliance Standard
- Only Protected Party Can Avoid Performance
- Excuse of Express Conditions
- Waiver
- Estoppel
- Prevention of Performance by Protected Party
- Avoidance of Forfeiture
- Forfeiture
Structure?
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(Discharge: Anticipatory Repudiation)
- Unequivocal Manifestation of Intention Not to Perform
- Adequate Assurances
- Failure to Provide Adequate Assurances within Reasonable Time = Anticipatory Repudiation
- Anticipatory Repudiation through Conduct
- Adequate Assurances
- Non-Repudiating Party’s Options
- Treat as Offer to Rescind
- Sue for Damages Immediately
- Exception: Non-Repudiating Party Has Completed Performance
- Suspend Performance & Sue When Contract Becomes Due
- Do Nothing & Encourage Performance
- Retraction of Anticipatory Repudiation
- UCC Reasonable Grounds for Insecurity (aka Adequate Assurance Doctrine)
- Demand Must Be Reasonable & Justified
Topics? (4)
(Breach & Remedies)
- UCC Sale of Goods = Less than Perfect Tender
- Common Law = Substantial Performance
- Monetary Remedies
- Equitable (Non-Monetary) Remedies
Topics? (6)
(Breach & Remedies: UCC Sale of Goods = Less than Perfect Tender)
- Perfect Tender Rule
- Cure
- Installment Sales Contract = Substantial Impairment
- Buyer’s Acceptance of Goods
- Revocation of Acceptance of Goods
- Options & Cooperation Respecting Performance
Structure?
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(Breach & Remedies: UCC Sale of Goods = Less than Perfect Tender: Perfect Tender Rule)
- Buyer’s Options if Tender Less than Perfect
- Reject All Goods & Sue for Damages
- Accept All Goods & Sue for Damages, OR
- Accept Some, Reject Nonconforming & Sue for Damages
Structure?
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(Breach & Remedies: UCC Sale of Goods = Less than Perfect Tender: Cure)
- Time for Performance Has Not Expired
- Reasonable Grounds to Believe Less than Perfect Tender Acceptable
Structure?
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(Breach & Remedies: UCC Sale of Goods = Less than Perfect Tender: Installment Sales Contract = Substantial Impairment)
- Buyer’s Right to Reject Installment = Substantial Impairment of Installment
- Buyer’s Right to Reject Entire Contract = Substantial Impairment of Entire Contract
- Previous Acceptance of Nonconforming Tender
Structure?
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(Breach & Remedies: UCC Sale of Goods = Less than Perfect Tender: Buyer’s Acceptance of Goods)
- Acceptance After Reasonable Opportunity to Inspect
- Payment Without Opportunity to Inspect - Acceptance
- Failure to Reject Within Reasonable Time
- Act Inconsistent With Seller’s Ownership
Structure?
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(Breach & Remedies: UCC Sale of Goods = Less than Perfect Tender: Revocation of Acceptance of Goods)
- Nonconformity Substantially Impairs Value of the Goods
- Excusable Ignorance or Reasonable Reliance on Seller’s Assurances of Conformity
- Revocation Within Reasonable Time After Discovery of Nonconformity
Structure?
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(Breach & Remedies: UCC Sale of Goods = Less than Perfect Tender: Options & Cooperation Respecting Performance)
- Good Faith Requirement
- Default Rules
- Assortment of Goods = Buyer’s Option
- Arrangements Related to Shipment = Seller’s Option
- Effect of Failure
Structure?
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(Breach & Remedies: Common Law = Substantial Performance)
- Material Breach Excuses Performance
- Order of Performance
- Simultaneous Performance
- Performance Requires Period of Time
- Order of Performance
- Non-Breaching Party’s Options
- Treat Contract As Terminated
- Immediate Right to All Remedies For Breach
- Multiple Acts W/Lump Sum Payment
- Material Breach = Less Than Half
Structure?
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(Breach & Remedies: Monetary Remedies)
- Expectation Damages
- Expectation Interest
- General Formula = Loss in Value + Other Loss - Cost Avoided - Loss Avoided
- Incidental Damages
- Consequential Damages (aka Special Damages)
- Foreseeability
- Reliance Damages
- Restitution Damages
- Quasi-Contract
- Punitive Damages
- UCC Monetary Damages
- Seller Breaches
- Buyer Keeps Goods = [FMV if Perfect - FMV as Delivered]
- Seller Keeps Goods
- Buyer Covers= [Replacement Price - Contract Price]
- Buyer Does Not Cover = [FMV@ Time of Discovery of Breach - Contract Price]
- Buyer Breaches
- Buyer Keeps Goods = [Contract Price]
- Seller Keeps Goods
- Seller Resells Goods= [Contract Price - Resale Price]
- Provable Lost Profits for Volume Seller = [Contract Price - Resale Price + Lost Profits]
- Seller Does Not Resell Goods = [Contract Price - Market Price @
Time of Delivery]
- Seller Resells Goods= [Contract Price - Resale Price]
- Buyer or Seller in Barter Contracts
- If Issue Involves X = A is the Seller of X
- If Issue Involves Y = B is the Seller of Y
- Seller Breaches
- Limitations on Damages
- Duty to Mitigate (Avoidable Damages)
- Consequential Damages Only
- Mitigation Expenses Can Be Recovered
- Reasonable Certainty
- Causal
- Foreseeable at Time of Contract
- Duty to Mitigate (Avoidable Damages)
- Liquidated Damages
- Requirements for a Valid Liquidated Damages Clause
- Damages Difficult to Ascertain at Time of Contract Formation
- Reasonable Forecast of Damages
- Cannot Be a Penalty
- Single Set Number = Presumptively Invalid
- Sliding Slade = Presumptively Valid
- Requirements for a Valid Liquidated Damages Clause
Structure?
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(Breach & Remedies: Equitable (Non-Monetary) Remedies)
- Specific Performance
- Requirements
- Valid, Definite & Certain Contract
- Mutuality
- Legal Remedy Inadequate
- Plaintiff Has Fully Performed All Obligations Under the Contract
- Enforcement Feasible
- Sale of Real Estate Contracts = Yes
- Exception: Subsequent Bona Fide Purchaser
- Service Contracts = No
- Negative Specific Performance
- Sale of Goods = Unique Goods or Other Appropriate Circumstances
- Unclean Hands Defense
- Requirements
- Rescission
- Reformation
- Reclamation (UCC)
- Buyer Insolvent When Goods Received
- Demand Return Within 10 Days of Buyer’s Receipt
- Buyer Must Still Have the Goods at Time of the Demand
- Exception: Subsequent Bona Fide Purchaser
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(Third Party Rights Beneficiaries, Assignment & Delegation: Third Party Beneficiaries)
- Third Parties
- Promisor
- Promisee
- Third Party Benediciary
- Knowledge of and Reliance on Contract
- Intended Beneficiary v. Incidental Beneficiary
- Intended Beneficiary = Contract Rights
- Creditor Beneficiary v. Donee Beneficiary
- Incidental Beneficiary = No Contract Rights
- Intended Beneficiary = Contract Rights
- Discharge or Modification by Original Parties
- Detrimentally Relies on the Promise
- Brings Suit on the Promise, OR
- Manifests Assent to the Promise at the Request of Either Party
- Who Can Sue
- Third Party Beneficiaries
- Promisor = Only If Intended Beneficiary
- Promisor’s Defenses
- Promisee
- Third Party Donee Beneficiary = No
- Third Party Creditor Beneficiary = Yes
- Promisor = Only If Intended Beneficiary
- Promisee
- Promisor = Yes
- Third Party Beneficiaries
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(Third Party Rights Beneficiaries, Assignment & Delegation: Assignment)
- Two Steps
- Valid Contract Between Two Parties
- One Party to Contract Transfers Rights or Benefits Under Contract to Third Party
- The Parties
- Assignor
- Assignee
- Obligor
- Requirements
- Writing Not Required Unless
- Wage Assignments
- Interest in Land
- > $5,000
- Security Interests Under Article 9 of UCC
- No Consideration
- Gratuitous Assignments
- Freely Revocable
- Automatic Revocation
- Irrevocable
- Freely Revocable
- Gratuitous Assignments
- Present Language of Assignment
- Writing Not Required Unless
- Restrictions on Assignment
- Contract Provisions
- Prohibits Assignment
- Invalidates Assignment
- Common Law = Assigned Rights Substantially Change the Duty of the Obligor
- Assignment of Right to Payment = Valid
- Personal Service Contracts for Unique Service = Invalid
- Requirement & Output Contracts
- Contract Provisions
- Rights & Liabilities of the Parties
- Assignee v. Obligor
- Obligor’s Defenses
- Payments Before Notice of Assignment Effective
- Assignor v. Obligor
- Assignee v. Assignor = Only for Assignment for Consideration
- Implied Warranties of Assignment
- Right Assigned Actually Exists
- Right Assigned Not Subject to Defenses
- Documents Genuine
- Assignor Will Not Impair Value
- Implied Warranties of Assignment
- Assignee v. Obligor
- Multiple Assignments
- All Gratuitous Assignments
- Exception = Irrevocable Gratuitous Assignment
- Assignments for Consideration
- Obtains Payment or Judgment First
- Obtains New Contract from the Oblioer by Novation, OR
- Possesses Some lndicia of Ownership
- All Gratuitous Assignments
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(Third Party Rights Beneficiaries, Assignment & Delegation: Delegation)
- Valid Delegation
- Contract Prohibits Delegations or Prohibits Assignments
- No Delegation
- No Assignment
- Contract Calls For Special Skills or Reputation of Delegator
- Contract Prohibits Delegations or Prohibits Assignments
- The Parties
- Delegator
- Delegatee
- Obligee
- Non-Performance by the Delegatee = Delegating Party Always Liable Unless Consent by Obligee or Performance by Delegatee
- Delegation Without Consideration = Delegatee Not Liable
- Delegation For Consideration = Delegatee Liable