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Contracts Flashcards

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1
Q

Structure?

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(Preliminary Issues)

A
  1. Governing Law
    1. Sale of Goods = Article 2 of UCC
      1. Definition of Goods
    2. All Other Contracts = General Common Law Majority View
    3. Mixed Contracts
  2. Types
    1. Express v. Implied
      1. Express Contract
      2. Implied Contracts
        1. Implied in Fact
        2. Implied in Law = Quasi-Contract (Equitable Remedy)
    2. Unilateral v. Bilateral
      1. Bilateral Contracts = Exchange of Promises
        1. Bilateral Unless
          1. Reward, Prize or Contest, OR
          2. Offer Expressly Requires Performance for Acceptance
      2. Unilateral Contracts = Acceptance by Performance
        1. Notice of Acceptance Required
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2
Q

Topics? (5)

(Formation)

A
  1. Requirements
  2. Offer
  3. Termination of Offer
  4. Acceptance
  5. Consideration
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3
Q

Structure?

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(Formation: Requirements)

A
  1. Mutual Assent
    1. Acceptance
    2. Offer
  2. Consideration
  3. No Defenses to Formation
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4
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Structure?

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(Formation: Offer)

A
  1. Intent to be Bound
    1. Reasonable Person Standard
    2. Advertisements = Invitation to Deal
      1. Exceptions
        1. Ad in Nature of Reward, OR
        2. Specific to Quantity & Who Can Accept
  2. Definite & Certain Terms
    1. Essential Terms
    2. Requirements for Specific Types of Contracts
      1. Real Estate Transactions
      2. Sale of Goods
        1. No Price Requirement
        2. Output, Requirements, & Exclusivity Contracts
          1. Increase OK if Not Unreasonably Disproportionate
    3. Employment Contracts
      1. Permanent Employment
    4. Common Vague & Ambiguous Terms
  3. Communicated to the Offeree
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5
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Structure?

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(Formation: Termination of Offer)

A
  1. Lapse of Time
  2. Death or Incapacity of Either Party Prior to Acceptance
  3. Revocation
    1. Methods of Revocation = Unambiguous Words or Conduct of Unwillingness or Inability to Contract
    2. Offeree Must Have Notice & Notice Effective Upon Receipt
    3. Multiple Offers
    4. Irrevocable Offers
      1. Option Contracts Supported by Consideration
      2. Detrimental Reliance (Promissory Estoppel)
      3. Performance Commenced on Unilateral Contract
      4. UCC “Firm Offer” Rule
        1. Definition of Merchants
        2. Three Months Maximum
  4. Rejection
    1. Express Rejection
    2. Counteroffers = Always Terminate & Become New Offer
      1. Bargaining Has No Legal Effect
        1. Interrogative Statements
        2. Declarative Statements
    3. Conditional Acceptance = Terminates & Becomes New Offer
      1. Conditional Acceptance Language
  5. Supervening Illegality
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6
Q

Topics? (5)

(Formation: Acceptance)

A
  1. Requirements
  2. Only the Offeree Can Accept
  3. Additional Terms
  4. Mode of Acceptance
  5. Methods of Acceptance
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7
Q

Structure?

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(Formation: Acceptance: Requirements)

A
  1. Offeree with Knowledge of the Offer
  2. Unequivocal Terms of Acceptance
    1. Statement of Intention
  3. Communication of Acceptance
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8
Q

Exception?

(Formation: Acceptance: Only the Offeree Can Accept)

A

Exception: Option Contracts Supported by Consideration

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9
Q

Structure?

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(Formation: Acceptance: Additional Terms)

A
  1. Common Law = Mirror Image Rule
  2. UCC Exception
    1. Only One Party is a Merchant
    2. Both Parties are Merchants
      1. Offer Expressly Limits Acceptance to Terms of the Offer
      2. Material Alteration, OR
      3. Offerer Objects to the Change
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10
Q

Structure?

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(Formation: Acceptance: Mode of Acceptance)

A
  1. UCC Mode of Acceptance
  2. The Mailbox Rule = Acceptance Generally Effective Upon Dispatch
    1. Exceptions
      1. Offer Provides Otherwise
      2. Rejection Sent First, OR
      3. Option Contracts
    2. All Communications Other than Acceptance = Effective Upon Receipt
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11
Q

Structure?

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(Formation: Acceptance: Methods of Acceptance)

A
  1. By Promising to Perform
    1. Bilateral Contracts = Yes
    2. Unilateral Contracts = No
  2. By Completing Performance = Acceptance Unless Failure to Give Notice
    1. Failure to Give Reasonably Prompt Notice
    2. Substandard or Improper Performance = Acceptance & Breach
  3. By Starting Performance
    1. Bilateral Contracts = Yes
    2. Unilateral Contracts = No But Makes Offer Temporarily Irrevocable
  4. By Shipment of Goods (UCC)
    1. Shipment of Nonconforming Goods = Acceptance & Breach
      1. Accomodation Exception = Counteroffer
  5. By Silence = Generally No Acceptance
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12
Q

Topics? (5)

(Formation: Consideration)

A
  1. Elements
  2. Adequacy of Consideration
  3. Past Consideration = Not Consideration
  4. Pre-existing Legal Duty
  5. Consideration Substitute
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13
Q

Structure?

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(Formation: Consideration: Elements)

A
  1. Bargained For
    1. Gifts
  2. Legal Detriment or Forbearance
    1. Performance
    2. Forbearance
    3. Promise to Perform
    4. Promise to Forbear
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14
Q

Exception Structure?

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(Formation: Consideration: Adequacy of Consideration)

A
  1. Entirely Devoid of Value (aka Token Consideration) = Not Consideration, OR
  2. Illusory Promises
    1. Output, Requirements, & Exclusivity Contracts
      1. Exclusivity Implied in Requirements Contracts
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15
Q

Exception?

(Formation: Consideration: Past Consideration = Not Consideration)

A

Promise to Pay for an Expressly Requested Act

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16
Q

Structure?

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(Formation: Consideration: Pre-existing Legal Duty)

A
  1. Common Law Contract Modification Rule
    1. Addition or Change in Performance
    2. Unforeseen Difficulty, OR
    3. Third Party Promise to Pay
  2. UCC Sale of Goods = No New Consideration Required
    1. Good Faith Requirement
  3. Part Payments on Debt
    1. Debt Due & Undisputed = Not Consideration for Settlement or Release
    2. Debt Not Yet Due or Disputed = Consideration for Settlement or Release
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17
Q

Structure?

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(Formation: Consideration: Consideration Substitute)

A
  1. Seal
  2. Written Promise to Satisfy a Legal Obligation Barred by Law
  3. Promissory Estoppel (aka Detrimental Reliance)
    1. Words of Promise
    2. Reliance
      1. Reasonable
      2. Detrimental
      3. Foreseeable
    3. Enforcement Necessary to Avoid Injustice
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18
Q

Topics? (9)

(Defenses)

A
  1. Void v. Voidable v. Unenforceable
  2. Lack of Consideration
  3. Lack of Capacity
  4. Statute of Frauds (SOF)
  5. Misrepresentation
  6. Mistake of Fact
  7. Mistake Due to Ambiguity
  8. Unconscionability
  9. Public Policy Detense of Illegality
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19
Q

Structure?

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(Defenses: Lack of Capacity)

A
  1. Who
    1. Minors (under 18)
    2. Mental Incompetents, OR
    3. Intoxicated Persons
  2. Consequence = Right to Disaffirm by Party without Capacity
  3. Implied Affirmation
    1. Quasi-Contract Liability for Necessaries
  4. Lack of Votional Consent
    1. Duress
      1. Economic Threats
    2. Undue Influence
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20
Q

Topics? (3)

(Defenses: Statute of Frauds (SOF))

A
  1. Contracts Within the Statute of Frauds
  2. Satisfaction of the Statute of Frauds (Requirements)
  3. Other Statute of Frauds Bar Exam Issues
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21
Q

Structure?

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(Defenses: Statute of Frauds (SOF): Contracts Within the Statute of Frauds)

A
  1. Contracts Incapable of Being Performed within One Year
    1. Early Termination = Irrelevant
    2. Contracts That Require Performance on a Specific Date
    3. No Contracts for Specific Tasks
    4. No Lifetime Contracts
  2. Sale of Goods $500 or More
  3. Promise Made in Consideration of Marriage
    1. Alleged Promises of Marriage
  4. Guarantee to Pay Debts of Another
    1. Answer For = Guarantee
    2. Main Purpose Exception
  5. Executor Promises to Pay Estate Debts w/ Own Funds
  6. Transfers of Interests in Real Estate
    1. Exception = Leaseholds of One Year or Less
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22
Q

Structure?

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(Defenses: Statute of Frauds (SOF): Satisfaction of the Statute of Frauds (Requirements))

A
  1. By Writing
    1. Common Law
      1. All Material Terms
        1. Who
        2. What
    2. UCC Contracts
      1. Writing Sufficient to Indicate Contract for the Sale of Goods
      2. Quantity
      3. Signed by the Party Asserting the SOF Defense
        1. Exception: Both Parties Are Merchants = Confirmatory Memo Rule
  2. By Performance
    1. Performance & Services Contracts
      1. Full Performance = Yes
      2. Part Performance = No but Quasi-Contract
    2. Sale of Goods Contracts
      1. Part Performance by Seller of Ordinary Goods
        1. Delivered Goods = Yes
        2. Undelivered Goods = No
      2. Part Performance by Seller of Specialty Goods = Substantial Beginning
      3. Part Performance by Buyer
        1. Multiple Items = Yes to Extent of Payment Made
        2. Single Item = Yes & Agreement Legally Enforceable
    3. Sale of Land Contract
      1. Buyer Takes Possession
      2. Buyer Pays All or Part of the Purchase Price
      3. Buyer Makes Substantial Improvements to Land
  3. By Judicial Admission
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23
Q

Structure?

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(Defenses: Statute of Frauds (SOF): Other Statute of Frauds Bar Exam Issues)

A
  1. Equal Dignity Rule
  2. Contract Modifications
    1. Contract as Modified Within the SOF = Modification Must be in Writing
    2. Contract Expressly Prohibits Oral Modification or Requires Writing
      1. Common Law = Ignore Such Provisions
      2. UCC Contracts = Valid Unless Waiver
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24
Q

Structure?

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(Defenses: Misrepresentation)

A
  1. Fraud in the Inducement = Contract Voidable
    1. Fraudulent Misrepresentation = Voidable by Defrauded Party if Justifiable Reliance
      1. No General Duty to Disclose
        1. Affirmatively Hiding Material Facts = Fraudulent Misrepresentation
      2. Statute of Limitations
    2. Non-Fraudulent Misrepresentation = Voidable If Justifiable Reliance & Material
  2. Fraud in the Factum = Contract Void
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25
Q

Structure?

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(Defenses: Mistake of Fact)

A
  1. Mutual Mistake of Material Fact
    1. Mistaken Basic Assumption of Existing Fact
    2. Material Adverse Effect on Agreement
    3. No Assumption of Risk
      1. Seller Presumption
  2. Unilateral Mistake of Mistake Fact
26
Q

Requirements?

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(Defenses: Mistake Due to Ambiguity)

A
  1. Material Term Subject to at Least Two Reasonable Interpretations
  2. Each Party Has a Different Meaning in Mind
  3. Neither Party Aware of Ambiguity
    1. One Party Aware = Contract
27
Q

Structure?

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(Defenses: Unconscionability)

A
  1. Tested at Time of Contract Formation
  2. Common Unconscionable Contracts
    1. Contract One-Sided
    2. Substantially Disparate Bargaining Power
    3. Against Public Policy
    4. Inconspicuous Risk Shiting
    5. Contracts of Adhesion
28
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Structure?

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(Defenses: Public Policy of Illegality)

A
  1. Consideration or Illegal Subject Matter = Contract Void
    1. Exceptions
      1. Plaintiff Unaware of Illegality/Defendant Aware
      2. Parties Not in Pari Delicto
  2. Illegal Purpose = Contract Voidable
    1. Voidable by Party Who
      1. Unaware of Illegal Purpose, OR
      2. Aware But Did Not Facilitate Purpose & Purpose Did Not Involve
        Serious Moral Turpitude
  3. Contract Violates a Regulatory Statute
29
Q

Topics? (3)

(Parol Evidence & Interpretation)

A
  1. Parol Evidence
  2. Interpretation of Contract Terms
  3. Default UCC Terms
30
Q

Structure?

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(Parol Evidence & Interpretation: Parol Evidence)

A
  1. Test
    1. Integration
      1. Partial
      2. Complete
    2. The Rule
      1. Complete Integration = Inadmissible to Contradict or Supplement
      2. Partial Integration = Inadmissible to Contradict
    3. Evidence Not Subject to Parol Evidence Rule
      1. Both Complete or Partial Integration
        1. To Contradict = Inadmissible
          1. Exception: Mistake in Integration
        2. To Show Defense to Contract Formation = Admissible
        3. To Show Existence of Condition Precedent = Admissible
        4. To Show Consistent Collateral Contract = Admissible
        5. To Clarify Ambiguous Terms = Admissible
      2. Only if Partial Integration
        1. Add Consistent Terms (aka Supplement) = Admissible
  2. Merger Clause
  3. Reformation
31
Q

Structure?

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(Parol Evidence & Interpretation: Interpretation of Contract Terms)

A
  1. Theories of Interpretation
    1. Four Corners
    2. Plain Meaning
    3. Liberal Approach
  2. Maxims of Interpretation
    1. Interpreted as a Whole
    2. Primary Purpose
    3. Words
      1. Negotiated Terms Control
      2. Ambiguities Construed Against Drafter
      3. Prevailing Meaning Controls
        1. Technical Terms & Words of Art
  3. Course of Performance, Course of Dealing or Usage of Trade
    1. Course of Performance
    2. Course of Dealing
    3. Custom & Usage (aka Usage of Trade)
32
Q

Structure?

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(Parol Evidence & Interpretation: Default UCC Terms: Delivery Obligation)

A
  1. Time for Delivery = Within a Reasonable Time
  2. Place for Delivery
  3. Delivery Not By Common Carrier
    1. Merchant Seller = Buyer Receives Goods
    2. Non-Merchant Seller = Seller Tenders Goods
      1. Tender
  4. Delivery By Common Carrier
    1. Shipment Contracts = Freight on Board Seller’s City
      1. Deliver Goods to a Common Carrier & Make Reasonable Delivery Arrangements
      2. Deliver Any Document Necessary to Enable Buyer to Obtain Possession
      3. Promptly Notify the Buyer of the Shipment
    2. Destination Contracts = Freight on Board Any City Other than Seller’s City
33
Q

Topics? (2)

(Parol Evidence & Interpretation: Default UCC Terms)

A
  1. Delivery Obligation
  2. Risk of Loss
34
Q

Topics? (8)

(Parol Evidence & Interpretation: Default UCC Terms: Risk of Loss)

A
  1. Agreement to the Parties
  2. Breach
  3. Non-Common Carrier Delivery
  4. Common Carrier Delivery
  5. Warranties of Quality
  6. Price = Reasonable Price at Time of Delivery
  7. Payment
  8. UCC Parol Evidence Rule
35
Q

Structure?

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(Parol Evidence & Interpretation: Default UCC Terms: Risk of Loss: Non-Common Carrier Delivery)

A
  1. Merchant Seller = Buyer Receives Goods
  2. Non-Merchant Seller = Seller Tenders Goods
36
Q

Structure?

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(Parol Evidence & Interpretation: Default UCC Terms: Risk of Loss: Common Carrier Delivery)

A
  1. Shipment Contract = Seller Completes Delivery Obligation
  2. Destination Contract = Goods Delivered at Final Destination
37
Q

Structure?

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(Parol Evidence & Interpretation: Default UCC Terms: Risk of Loss: Warranties of Quality)

A
  1. Express Warranties of Quality
    1. Statements of Value or Opinion
  2. Implied Warranties
    1. Warranty of Title
    2. Implied Warranty of Merchantability = Fitness for Ordinary Purpose
      1. More Limited Definition of Merchant
      2. Warranty Against Infringement
    3. Implied Warranty of Fitness for Particular Purpose
  3. Contractual Limitations on Warranties
    1. Disclaimer of Warranties
      1. Express Warranties Generally Cannot be Disclaimed
      2. Implied Warranties of Merchantability Can Be Disclaimed If Conspicuous:
        1. Conspicuous
        2. “As Is” or “With All Faults”
    2. Limitation of Remedies = OK Unless Unconscionable
  4. Third Party Beneficiaries of Express or Implied Warranties
    1. Alternative A
    2. Alternative B
    3. Alternative C
38
Q

Structure?

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(Parol Evidence & Interpretation: Default UCC Terms: Risk of Loss: Price = Reasonable Price at Time of Delivery)

A
  1. Price Fixed by Buyer or Seller = Good Faith Requirement
  2. Price Payable in Goods = Each Party Seller of Goods it Provides
39
Q

Structure?

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(Parol Evidence & Interpretation: Default UCC Terms: Risk of Loss: Payment)

A
  1. Noncarrier Contract = Upon Tender of Delivery
  2. Carrier Contract = Buyer Receives Goods
40
Q

Structure?

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(Parol Evidence & Interpretation: Default UCC Terms: Risk of Loss: UCC Parol Evidence Rule)

A
  1. By Course of Dealing or Usage of Trade or By Course of Performance
    1. Course of Performance
    2. Course of Dealing
    3. Custom & Usage
  2. By Evidence of Consistent Additional Terms
41
Q

Topics? (8)

(Discharge)

A
  1. Rescission
  2. Accord & Satisfaction
  3. Contract Modifications (Substituted Agreement)
  4. Novation (Substituted Person)
  5. Later Unforeseen Events
  6. Failure of Condition Precedent
  7. Anticipatory Repudiation
  8. Material Breach
42
Q

Structure?

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(Discharge: Rescission)

A
  1. Mutual Rescission
    1. Writing Not Required
    2. Original Contract Must Be Executory on Both Sides
    3. Third Party Beneficiaries
  2. Unilateral Rescission
43
Q

Structure?

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(Discharge: Accord & Satisfaction)

A
  1. Accord
    1. Effect of Accord
  2. Satisfaction
    1. Effect of Satisfaction
    2. If Accord Not Satisfied
44
Q

Structure?

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(Discharge: Contract Modifications (Substituted Agreement))

A
  1. Requirements
    1. Consideration
      1. Common Law
        1. Addition or Change in Performance
        2. Unforeseen Difficulty, OR
        3. Third Party Promise to Pay
      2. UCC Sale of Goods = No New Consideration Required
        1. Good Faith Requirement
    2. Writing
      1. Contract as Modified Within the SOF = Modification Must be in Writing
      2. Contract Expressly Prohibits Oral Modification or Requires Writing
        1. Common Law = Ignore Such Provisions
        2. UCC Contracts = Valid Unless Waiver
  2. Effect of Modification
45
Q

Structure?

  1. _
    1. _
    2. _
    3. _
  2. _
  3. _

(Discharge: Novation (Substituted Person))

A
  1. Requirements
    1. Previous Valid Contract
    2. An Agreement by all the parties including the new third party (or parties)
    3. A valid and enforceable new contract
  2. If Not Mutually Agreed Upon = Delegation
  3. Effect = Immediate Extinguishment of Contractual Duties
46
Q

Structure?

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(Discharge: Later Unforeseen Events)

A
  1. Frustation of Purpose
    1. Requirements
      1. Purpose of Contract Known by Both Parties
      2. Unforeseeable Supervening Event Out of Defendant’s Control
      3. Original Purpose Unavailable
    2. Distinguish from Impossibility
  2. Impracticability
    1. Requirements
      1. Circumstances Affecting the Contract Have Changed
      2. Change is Not Due to Any Act by Defendant
      3. Undue Hardship on Defendant
    2. Temporary Impracticability Not Impracticability = Uncertain Weather or Unanticipated Market Conditions
  3. Impossibility
    1. Requirements
      1. Circumstances Affecting Contract Have Changed
      2. Change Not Due to Any Act by the Defendant
      3. Change of Circumstances Causes Performance to be Impossible
        1. Objective Impossibility Excuses Performance
        2. Subjectively Impossibility Does Not Excuse Performance
    2. Specific Examples of Impossibility
      1. Supervening Illegality
      2. Death or Physical Incapacity
        1. Exception: Death or Incapacity of Person Necessary to Effectuate Contract
      3. Destruction of the Subject Matter of Contract
        1. UCC Rule
    3. Temporary Impossibility
47
Q

Structure?

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(Discharge: Failure of Condition Precedent)

A
  1. Definition of Express Condition
    1. Distinguish from Conditional Acceptance
    2. Condition Does Not Make Promise Illusory
  2. Language of Condition
  3. Strict Compliance Standard
    1. Only Protected Party Can Avoid Performance
  4. Excuse of Express Conditions
    1. Waiver
    2. Estoppel
    3. Prevention of Performance by Protected Party
    4. Avoidance of Forfeiture
      1. Forfeiture
48
Q

Structure?

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(Discharge: Anticipatory Repudiation)

A
  1. Unequivocal Manifestation of Intention Not to Perform
    1. Adequate Assurances
      1. Failure to Provide Adequate Assurances within Reasonable Time = Anticipatory Repudiation
    2. Anticipatory Repudiation through Conduct
  2. Non-Repudiating Party’s Options
    1. Treat as Offer to Rescind
    2. Sue for Damages Immediately
      1. Exception: Non-Repudiating Party Has Completed Performance
    3. Suspend Performance & Sue When Contract Becomes Due
    4. Do Nothing & Encourage Performance
  3. Retraction of Anticipatory Repudiation
  4. UCC Reasonable Grounds for Insecurity (aka Adequate Assurance Doctrine)
    1. Demand Must Be Reasonable & Justified
49
Q

Topics? (4)

(Breach & Remedies)

A
  1. UCC Sale of Goods = Less than Perfect Tender
  2. Common Law = Substantial Performance
  3. Monetary Remedies
  4. Equitable (Non-Monetary) Remedies
50
Q

Topics? (6)

(Breach & Remedies: UCC Sale of Goods = Less than Perfect Tender)

A
  1. Perfect Tender Rule
  2. Cure
  3. Installment Sales Contract = Substantial Impairment
  4. Buyer’s Acceptance of Goods
  5. Revocation of Acceptance of Goods
  6. Options & Cooperation Respecting Performance
51
Q

Structure?

  1. _
    1. _
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(Breach & Remedies: UCC Sale of Goods = Less than Perfect Tender: Perfect Tender Rule)

A
  1. Buyer’s Options if Tender Less than Perfect
    1. Reject All Goods & Sue for Damages
    2. Accept All Goods & Sue for Damages, OR
    3. Accept Some, Reject Nonconforming & Sue for Damages
52
Q

Structure?

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  2. _

(Breach & Remedies: UCC Sale of Goods = Less than Perfect Tender: Cure)

A
  1. Time for Performance Has Not Expired
  2. Reasonable Grounds to Believe Less than Perfect Tender Acceptable
53
Q

Structure?

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(Breach & Remedies: UCC Sale of Goods = Less than Perfect Tender: Installment Sales Contract = Substantial Impairment)

A
  1. Buyer’s Right to Reject Installment = Substantial Impairment of Installment
  2. Buyer’s Right to Reject Entire Contract = Substantial Impairment of Entire Contract
  3. Previous Acceptance of Nonconforming Tender
54
Q

Structure?

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(Breach & Remedies: UCC Sale of Goods = Less than Perfect Tender: Buyer’s Acceptance of Goods)

A
  1. Acceptance After Reasonable Opportunity to Inspect
    1. Payment Without Opportunity to Inspect - Acceptance
  2. Failure to Reject Within Reasonable Time
  3. Act Inconsistent With Seller’s Ownership
55
Q

Structure?

  1. _
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(Breach & Remedies: UCC Sale of Goods = Less than Perfect Tender: Revocation of Acceptance of Goods)

A
  1. Nonconformity Substantially Impairs Value of the Goods
  2. Excusable Ignorance or Reasonable Reliance on Seller’s Assurances of Conformity
  3. Revocation Within Reasonable Time After Discovery of Nonconformity
56
Q

Structure?

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(Breach & Remedies: UCC Sale of Goods = Less than Perfect Tender: Options & Cooperation Respecting Performance)

A
  1. Good Faith Requirement
  2. Default Rules
    1. Assortment of Goods = Buyer’s Option
    2. Arrangements Related to Shipment = Seller’s Option
  3. Effect of Failure
57
Q

Structure?

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(Breach & Remedies: Common Law = Substantial Performance)

A
  1. Material Breach Excuses Performance
    1. Order of Performance
      1. Simultaneous Performance
      2. Performance Requires Period of Time
  2. Non-Breaching Party’s Options
    1. Treat Contract As Terminated
    2. Immediate Right to All Remedies For Breach
  3. Multiple Acts W/Lump Sum Payment
    1. Material Breach = Less Than Half
58
Q

Structure?

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(Breach & Remedies: Monetary Remedies)

A
  1. Expectation Damages
    1. Expectation Interest
    2. General Formula = Loss in Value + Other Loss - Cost Avoided - Loss Avoided
  2. Incidental Damages
  3. Consequential Damages (aka Special Damages)
    1. Foreseeability
  4. Reliance Damages
  5. Restitution Damages
    1. Quasi-Contract
  6. Punitive Damages
  7. UCC Monetary Damages
    1. Seller Breaches
      1. Buyer Keeps Goods = [FMV if Perfect - FMV as Delivered]
      2. Seller Keeps Goods
        1. Buyer Covers= [Replacement Price - Contract Price]
        2. Buyer Does Not Cover = [FMV@ Time of Discovery of Breach - Contract Price]
    2. Buyer Breaches
      1. Buyer Keeps Goods = [Contract Price]
      2. Seller Keeps Goods
        1. Seller Resells Goods= [Contract Price - Resale Price]
          1. Provable Lost Profits for Volume Seller = [Contract Price - Resale Price + Lost Profits]
        2. Seller Does Not Resell Goods = [Contract Price - Market Price @
          Time of Delivery]
    3. Buyer or Seller in Barter Contracts
      1. If Issue Involves X = A is the Seller of X
      2. If Issue Involves Y = B is the Seller of Y
  8. Limitations on Damages
    1. Duty to Mitigate (Avoidable Damages)
      1. Consequential Damages Only
      2. Mitigation Expenses Can Be Recovered
    2. Reasonable Certainty
    3. Causal
    4. Foreseeable at Time of Contract
  9. Liquidated Damages
    1. Requirements for a Valid Liquidated Damages Clause
      1. Damages Difficult to Ascertain at Time of Contract Formation
      2. Reasonable Forecast of Damages
      3. Cannot Be a Penalty
    2. Single Set Number = Presumptively Invalid
    3. Sliding Slade = Presumptively Valid
59
Q

Structure?

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(Breach & Remedies: Equitable (Non-Monetary) Remedies)

A
  1. Specific Performance
    1. Requirements
      1. Valid, Definite & Certain Contract
      2. Mutuality
      3. Legal Remedy Inadequate
      4. Plaintiff Has Fully Performed All Obligations Under the Contract
      5. Enforcement Feasible
    2. Sale of Real Estate Contracts = Yes
      1. Exception: Subsequent Bona Fide Purchaser
    3. Service Contracts = No
      1. Negative Specific Performance
    4. Sale of Goods = Unique Goods or Other Appropriate Circumstances
    5. Unclean Hands Defense
  2. Rescission
  3. Reformation
  4. Reclamation (UCC)
    1. Buyer Insolvent When Goods Received
    2. Demand Return Within 10 Days of Buyer’s Receipt
    3. Buyer Must Still Have the Goods at Time of the Demand
      1. Exception: Subsequent Bona Fide Purchaser
60
Q

Structure?

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(Third Party Rights Beneficiaries, Assignment & Delegation: Third Party Beneficiaries)

A
  1. Third Parties
    1. Promisor
    2. Promisee
    3. Third Party Benediciary
      1. Knowledge of and Reliance on Contract
      2. Intended Beneficiary v. Incidental Beneficiary
        1. Intended Beneficiary = Contract Rights
          1. Creditor Beneficiary v. Donee Beneficiary
        2. Incidental Beneficiary = No Contract Rights
  2. Discharge or Modification by Original Parties
    1. Detrimentally Relies on the Promise
    2. Brings Suit on the Promise, OR
    3. Manifests Assent to the Promise at the Request of Either Party
  3. Who Can Sue
    1. Third Party Beneficiaries
      1. Promisor = Only If Intended Beneficiary
        1. Promisor’s Defenses
      2. Promisee
        1. Third Party Donee Beneficiary = No
        2. Third Party Creditor Beneficiary = Yes
    2. Promisee
      1. Promisor = Yes
61
Q

Structure?

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(Third Party Rights Beneficiaries, Assignment & Delegation: Assignment)

A
  1. Two Steps
    1. Valid Contract Between Two Parties
    2. One Party to Contract Transfers Rights or Benefits Under Contract to Third Party
  2. The Parties
    1. Assignor
    2. Assignee
    3. Obligor
  3. Requirements
    1. Writing Not Required Unless
      1. Wage Assignments
      2. Interest in Land
      3. > $5,000
      4. Security Interests Under Article 9 of UCC
    2. No Consideration
      1. Gratuitous Assignments
        1. Freely Revocable
          1. Automatic Revocation
          2. Irrevocable
    3. Present Language of Assignment
  4. Restrictions on Assignment
    1. Contract Provisions
      1. Prohibits Assignment
      2. Invalidates Assignment
    2. Common Law = Assigned Rights Substantially Change the Duty of the Obligor
      1. Assignment of Right to Payment = Valid
      2. Personal Service Contracts for Unique Service = Invalid
      3. Requirement & Output Contracts
  5. Rights & Liabilities of the Parties
    1. Assignee v. Obligor
      1. Obligor’s Defenses
      2. Payments Before Notice of Assignment Effective
    2. Assignor v. Obligor
    3. Assignee v. Assignor = Only for Assignment for Consideration
      1. Implied Warranties of Assignment
        1. Right Assigned Actually Exists
        2. Right Assigned Not Subject to Defenses
        3. Documents Genuine
        4. Assignor Will Not Impair Value
  6. Multiple Assignments
    1. All Gratuitous Assignments
      1. Exception = Irrevocable Gratuitous Assignment
    2. Assignments for Consideration
      1. Obtains Payment or Judgment First
      2. Obtains New Contract from the Oblioer by Novation, OR
      3. Possesses Some lndicia of Ownership
62
Q

Structure?

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(Third Party Rights Beneficiaries, Assignment & Delegation: Delegation)

A
  1. Valid Delegation
    1. Contract Prohibits Delegations or Prohibits Assignments
      1. No Delegation
      2. No Assignment
    2. Contract Calls For Special Skills or Reputation of Delegator
  2. The Parties
    1. Delegator
    2. Delegatee
    3. Obligee
  3. Non-Performance by the Delegatee = Delegating Party Always Liable Unless Consent by Obligee or Performance by Delegatee
    1. Delegation Without Consideration = Delegatee Not Liable
    2. Delegation For Consideration = Delegatee Liable

Bar Essays (15 decks)

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