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1L > Contracts > Flashcards

Contracts Flashcards

1
Q

UCC - Essencial Terms (how to start an essay)

A

The essential requirements to create an enforceable contract are offer, acceptance and consideration. Here, if there is a valid agreement between it will be one for the sale of goods governed by Article 2 of the Uniform Commercial Code

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2
Q

CL Essencial Terms (how to start an essay)

A

The essential common law requirements to create an enforceable contract are offer, acceptance and consideration. Here, if there is a valid agreement between it will not be one for sale of goods governed by Article 2 of the Uniform Commercial Code. Instead, the common law requirements for an enforceable contract will apply

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3
Q

What defines the Intent to Contract?

A

Objective theory, where the mental intentions of the parties are irrelevant.

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4
Q

Offer (generally)

A

Commitment communicated to identified offeree containing definite terms

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5
Q

UCC Offer

A

Objectively expressed intent to be bound to definite terms communicated to an identified offeree. Objective to what the offeree knows.

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6
Q

CL Offer

A

Definite and seasonable expression of acceptance communicated by any reasonable medium

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7
Q

Mutual Assent

A

An essential prerequisite to the formation of a contract is an agreement; a mutual manifestation of assent to the same terms

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8
Q

Generally, when can an Offer be revoked?

A

An offer may be revoked by the offeror (the party who makes the offer) at any time until the offer has been accepted

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9
Q

What are four ways offers can be revoked?

A
  1. Lapse of Time
  2. Death or destruction of subject material
  3. Revocation
  4. Rejection-Counter Offer
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10
Q

What is the Mailbox Rule?

A

Acceptance is effective on dispatch as long as it’s properly addressed and post-paid, rejection on receipt. Revoked offers are effective on receipt by the offeree.

If an offeree changes their mind, the mailbox rule no longer applies and there is a race situation.

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11
Q

What are five types of Irrevocable Offers?

A
  1. Option Contract
  2. Merchant Firm Offer
  3. Equitable Option
  4. Unilateral Contract
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12
Q

Option Contract

A

There is an option contract in which the offeree gave consideration for an irrevocable offer for some period of time

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13
Q

Merchant’s Firm Offer

A

When a merchant makes a written, signed offer to buy or sell goods including a promise to hold the offer open, the offer is irrevocable for the period stated, not to exceed three months. Liberal in the application, where even printed name can count as signature.

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14
Q

UCC Detriment - Irrevocable Offer

A

The offeree relied to his detriment upon the offer itself if the such detrimental reliance was reasonably foreseeable by the offeror

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15
Q

When are Unilateral Contracts Irrevocable?

A

Upon commencement of performance, the offeror must give the offeree the amount of time specified in the offer (or, in the absence of a specified time, a reasonable time) in which to complete the bargained-for promise. However, the offeree’s mere preparation to perform does not preclude the offeror from revoking

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16
Q

CL - Acceptance

A

Objectively expressed intent to be bound to all the terms of the offer, communicated in proper time and manner. Any new or additional terms change the acceptance to a rejection/counteroffer, and the offer will be dead.

As a general rule, the offeror is the “master of the offer” and may specify the precise acts or words the offeree must perform or use to properly accept the offer.

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17
Q

Parol Evidence Rule

A

No evidence of any prior oral or written, or contemporaneous oral negotiations may be entered to vary or contradict the terms of a complete integrated written agreement

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18
Q

Integrated Writing

A

if the writing is both final and complete, then the writing is integrated

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19
Q

Merger Clause

A

states that the writing is a final, complete, and exclusive statement of all the terms agreed on

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20
Q

Parol Evidence Exceptions

A

(DAM FOIL): To show duress, ambiguity, mistake, fraud, Illegality, or lack of consideration

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21
Q

Consideration

A

Consideration exists if both parties engage in a bargained for exchange of acts or promises and both parties incur new legal detriment as a result of the contract. Each promise must be binding and enforceable.

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22
Q

Contract Mods - Consideration - CL

A

Any contract modifications must also have consideration

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23
Q

Pre-Existing Duty Rule (Rel Consideration)

A

Where a person performs or promises to perform a legal obligation, or promises to refrain from doing or refrains from down what the person is not legally privileged to do, the person has not incurred detriment. Exceptions: written revival of a debt barred by statute of limitations or if the promise being made now would be inferable at the time it’s made.

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24
Q

Promissory Estoppel (Rel Consideration)

A

If the offeree determinately, reasonably, and foreseeably relies on the promise consideration is not needed.

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25
Q

Requirement Contracts

A

The buyer expressly agrees to buy all of the buyer’s requirements from the seller. The quantity ordered must be reasonable compared to historical ordering. Consideration was sufficient by buying all requirements.

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26
Q

Output Contracts

A

The seller agrees to sell all of its output to the buyer. The quantity ordered must be reasonable compared to historical ordering.

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27
Q

Infancy Rule

A

A contract is voidable by an infant until a reasonable time after reaching age of majority. If the infant confirms the contract after reaching the majority, it’s enforceable.

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28
Q

Intoxication (Avoidance/Reformation)

A

Intoxication by alcohol or the influence of narcotics can render a party legally incompetent.

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29
Q

Duress (Avoidance/Reformation)

A

Voidable by the party under duress. Can be shown if contracting party was violent or had a threat of violence, imprisons, wrongful seizing or withholding goods or land, or other wrongful acts or threats.

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30
Q

Undue Influence (Avoidance/Reformation)

A

A transaction that a dominant party had imposed on a subservient party. Can be shown by evidence.

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31
Q

Intentional Misrepresentation Affect (Avoidance/Reformation)

A

Contract is voidable by the other party

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32
Q

Unintentional Misrepresentation Affect (Avoidance/Reformation)

A

The contract is avoidable only if the term is material to the contract

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33
Q

Unilateral Mistake Affect (Avoidance/Reformation)

A

Normally there is no defense to the contract unless the other party knew or should have known about the mistake.

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34
Q

Mutual Mistake Affect (Avoidance/Reformation)

A

Both parties are mistaken about a material issue in the contract. Contract is voidable by either party.

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35
Q

Ambiguity in a material term Affect (Avoidance/Reformation)

A

There will be no contract, unless both parties intend the same meaning to the ambiguous material term, OR unless one party knows about the ambiguity and the other does not. In that case we will enforce the contract the way the non-knowing party thinks

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36
Q

Reformation Equitable Remedy

A

The remedy which records are ratified if there has been mistake, duress, etc. Only records are reformed, not the actual contracts themselves

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37
Q

Unconscionability Equitable Remedy

A

If the contract is unfair at the time of formation, than the court can do anything necessary to make the contract fair

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38
Q

Duty to Read

A

Under the objective theory, it doesn’t matter if a party actually read the contract as long as the other party thought they did.

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39
Q

Statute of Frauds (List)

A
  1. Real Estate
  2. Sales of goods over $500
  3. Performance of a promise over 1Y
  4. To answer another’s debt
  5. Where marriage is a consideration
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40
Q

Express Contract

A

Formed by statements of the parties

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41
Q

Implied in Fact Contract

A

Conduct of one or both parties to form the contract

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42
Q

Implied in Law Contract

A

A quasi-contract determined by the courts to avoid unjust enrichment of one party

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43
Q

Unilateral Contract Contract

A

Is formed only when one of the parties fully performs their duties under the contract. The offeror will create the offer with terms as such.

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44
Q

Bilateral Contract

A

Is formed when all parties promises are fully executory

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45
Q

Entire Contract (non-divisible)

A

Requires substantial performance of all obligations to avoid breach

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46
Q

Advertising Offer Majority Rule

A

They are not offers, but just invitation to offer. Only time it’s treated as an offer is when it lists all material terms, including specific offeree.

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47
Q

Auction Offer Rule

A

Always the bidder makes the offer, even without reserve.

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48
Q

Divisible Contract

A

One that is broken into separate individual components, and expected to be performed that way.

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49
Q

Required Offer Terms

A

Minority (wrong answer): Offer had to state all material terms. Majority: Offer must state the subject matter with certainty

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50
Q

Commitment Test

A

Objective, unless there is a difference from the normal course of dealing.

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51
Q

Offer Communication Test

A

The offer must actually be communicated to the offeree. Unilateral: offeree must know about the offer before completing performance

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52
Q

Offer Revocation

A

A manifestation of the intent not to enter into the proposed contract. Effective when the offeree receives it (not read or understood)

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53
Q

CL Rejection-Counter Offer

A

Replay includes a purported acceptance that adds qualifications or requires performance not contained in the offer. Offer is dead, and this becomes the new offer.

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54
Q

Equitable Option

A

If the offeree determinately, reasonably, and foreseeably relies on the offer, the offer will remain open for a reasonable time.

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55
Q

Offer Lapse of Time Offer Revoke

A

An offer may expire by the lapse of time (either language, or a reasonable length of time)

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56
Q

UCC Acceptance with New Term (Non Merchant)

A

Wew or different term is a proposal for addition to the contract

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57
Q

UCC Acceptance with New Term (Merchant)

A

New or different term becomes part of the contract. Unless:

  1. The offer was expressly limited to only it’s terms
  2. Offeror expressly rejects the new term
  3. Term materially alters the contract.
58
Q

Death Offer Revoke

A

In most jurisdictions a power of acceptance is terminated when the offeror dies

59
Q

UCC Modifications without Consideration

A

Can be made without consideration, if done in good faith

60
Q

Fraud in the Execution (Avoidance/Reformation)

A

Person is frauded into signing a contract that they didn’t know it was a contract. Contract is completely void

61
Q

Fraud in the Inducement (Avoidance/Reformation)

A

Misrepresentation of the subject matter. Voidable obligation by the frauded party.

62
Q

Illegality in Subject Matter (Avoidance/Reformation)

A

Basis of the contract is illegal. Contract is void.

63
Q

Illegality in Purpose (Avoidance/Reformation)

A

Legal contract, but use is illegal. Contract is voidable by the innocent party.

64
Q

Statute of Frauds - Definition

A

Under the statute of frauds, a contract for the sale of should be memorialized in writing to be enforced

65
Q

Stature of Frauds - Required Components

A
  1. Identify the parties
  2. State the subject matter
  3. State consideration to be given
  4. Signed by the party to be charged
66
Q

Statute of Frauds - Performance Exception

A

Part or full performance of an obligation makes the contract enforceable to the extent of the performance.

67
Q

Statute of Frauds - Real Estate Rule

A

If the buyer has taken possession of the property and paid for it or made valuable improvements, the court will likely find sufficient evidence to prove that a land-sale contract exists even without a sufficient writing

68
Q

Statute of Frauds - UCC Exceptions

A
  1. If the goods are speciality manufactured and seller has commenced manufactured.
  2. Merchant’s confirming memorandum (a merchant sends a confirmation and the other merchant does not object within 10 days).
  3. Admission in a judicial context.
69
Q

UCC Acceptance

A

Acceptance can be any medium reasonable from the circumstances

70
Q

Doctrine of Mutuality

A

Both parties are really committed and bound without unrestricted discretion (illusory)

71
Q

Statute of Frauds Debt Rules

A

Must be a collateral promise, and must not for the benefit of the promisor.

72
Q

Integrated Writing - Test

A

If reasonable people similarly situated would expect prior negotiations to survive the writing, then does not apply

73
Q

Implied Term in all Contracts

A

Obligation of good faith and fair dealing

74
Q

UCC Implied Warranties

A
  1. Title
  2. Merchantability
  3. Fitness for a particular purpose.
75
Q

Warranty of Title

A

Exists in every sale of goods. Seller warrants that the seller owns the goods and has a right to transfer them. Can be disclaimed by language or circumstances.

76
Q

Warranty of Merchantability

A

Seller who deals in goods of the kind creates an implied warranty that the goods will be fit for the ordinary purpose and safe to use. Can be disclaimed by the use of merchantability conspicuously or “as-is” or “with all faults”.

77
Q

Whole Contract Assignment/Delegation

A

If transfer the whole contract to someone else, it is regarded as the assignment of a right and delegation of the duty

78
Q

Third Party Rights

A

In order for them to have rights or obligations they will have to get them from a contracting parties. They will stand in the shoes of the contracting party from whom their rights have been derived

79
Q

Warranty of Fitness for a Particular Purpose

A

Seller knows the buyer is relying on seller’s skill and judgement to select suitable goods for a purpose. Can be disclaimed by any language that it’s being disclaimed.

80
Q

Intended Beneficiary - Donee

A

Gets the performance as a gift

81
Q

Indented Beneficiary - Creditor

A

Must show an underlying obligation already owed from the promisee to the beneficiary that the promisee is seeking to satisfy by this third party performance

82
Q

Intended Beneficiary Promisee Enforce

A

Intended beneficiary can enforce the promise the way it exists the way it exists at the point of vesting. Promisee can use promisor for performance.

83
Q

Creditor Beneficiary Promise Enforce

A

Can sue either the promisor on the third party promise, or the promisee on the underlying obligation

84
Q

Assignment/Delegation Limitations

A
  1. Contract prohibition
  2. Legal prohibition
  3. Whenever there has been a material change of performance due to the change (personal services)
85
Q

Intended v. Incidental Beneficiary Rights

A

Only intended beneficiary will have rights under the contract

86
Q

Intended Beneficiary Test

A
  1. Beneficiary identified in the promise.
  2. Performance must run directly to the beneficiary.
  3. Relationship between the promisee and the beneficiary that supports an intention to benefit.
87
Q

Incidental Beneficiary

A

Not named in the contract, or does not follow the intended beneficiary tests

88
Q

When Intended Beneficiary Vests

A

When the Intended Beneficiary learns about the promise and affirmatively assents to it

89
Q

UCC Assignment Prohibition Clause

A

UCC states that you can not have a clause that prevents the assignment of a right

90
Q

Multiple, un-revoked assignment rules. Who wins?

A

First valid un-revoked assignment wins. All other assanees have claim against assanor if they gave consideration

91
Q

Obligor

A

Person who owes the performance of the right begin assigned

92
Q

Assanor

A

Person who was originally going to receive the performance of the right being assigned

93
Q

Assanee

A

Person who will receive the performance of the right as a result of the assignment

94
Q

Elements to assign a right

A

Description of the right being assigned. Words of present transfer

95
Q

How to upset the first in time assignment rule

A

If a later assanee without knowledge of the others gets to the obligor first and gets: paid, judgement, symbolic writing, or works a novation

96
Q

Condition Precedent

A

Must be satisfied or excused before the performance comes due, or the ripened duty becomes excused

97
Q

Obligee

A

Person who is originally entitled to the performance to the duty being delegated

98
Q

Delegator

A

Person who is originally required to perform under the contract

99
Q

Delegate

A

Person who is now obligated to perform the duty as a result of the delegation

100
Q

Delegation Rules

A
  1. Obligee must accept the performance of the delegate.
  2. Delegate’s performance must be performance by the delegator as assurance.
  3. If the delegation is gratuitous, the obligee can not force the delegate to perform.
  4. If the delegation is for consideration, then the obligee can force the delegate to perform.
101
Q

Condition Concurrent

A

Same as precedent, but usually occurs when there would be simultaneous performances (i.e. buying and selling on the spot)

102
Q

Condition Subsequent

A

Occurrence will terminate what had, until the condition was triggered, been an enforceable duty to perform

103
Q

Express Condition

A

states in contract, must be strictly performed

104
Q

Implied Condition (implied in fact)

A

inherent in the promise, judged by the reasonable person test

105
Q

Constructive Condition (implied in law)

A

in all contracts, an event that is the other party’s performance

106
Q

Complete Condition Satisfaction

A

Required for express conditions, and must be fully completed before condition is completed. UCC perfect tender also requires.

107
Q

Express Condition with Implied Covenant

A

Event over which over which one or both of the parties have some control. Also implied covenant that the party with control will use reasonable and good faith efforts to cause it to happen

108
Q

Condition Waiver

A

A voluntary and intentional relinquishment of a known right. A manifestation of willingness to perform despite the non-occurrence of a condition. The condition being waved must be solely for the benefit of the party waiving it. It must be an immaterial part of the agreed exchange

109
Q

Condition Election

A

Waiver of a condition after the condition fails. Elections can’t be withdrawn, even if the other party has not relied on it.

110
Q

Anticipatory Repudiation - CL

A

When one of the parties makes a clear and unequivocal communication that he does not intend to perform. The other party may immediately sue for breach or wait until the performance due date, and the other party can suspend their performance. Does not apply if one party has fully performed; then they will need to wait

111
Q

Anticipatory Repudiation - UCC

A

Repudiating party may only retract repudiation if the aggrieved party has not changed position or communicated that the repudiation is final

112
Q

Substantial Condition Satisfaction

A

Enough for all other constructive conditions. Does not ned to be perfect, but anything that’s left out would cause a discount.

113
Q

Impossibility

A

No reasonable person could perform the contract is written (objectively)

114
Q

Novation

A

New party and new party and new performance is substituted for an old party and performance, as long as the other party agrees to the change.

115
Q

Impracticability

A

Suspends the duties until the impracticability ceases, or discharged if it is permeant (subjectively)

116
Q

Frustration

A

Supervening, unforeseeable event that neither party has assumed the risk that such an event could occur that both parties know about.

117
Q

Duty Modification

A

Parties change the duties under the original contract with new duties. Discharges some or all the duties under the original contract.

118
Q

Consequential Damages

A

Damages reasonable foreseeable at the time of contracting. Added to the expectation damages.

119
Q

Incidental Damages

A

Costs of obtaining a substitute performer. Added to the expectation damages

120
Q

Seller Commercially Reasonable Resale

A

Seller can go back out to market with the goods, and collect any lost revenue from the buyer. Notice is required is unless unless the goods will parish or decline in value quickly.

121
Q

Mutual Recision (Cancelation or Release)

A

Both parties agree to eliminate their duties under the prior contract.

122
Q

Accord/Satisfaction

A

Solving a dispute around the original duties. Changing a obligation with a different obligation. New accord or duty, isn’t complete until performed with satisfaction. Only then will the old duties will be discharged.

123
Q

Destination Contract

A

Free on Board (FOB), a place other than where the seller is. Seller has an obligation to get the goods to the named destination, then tender delivery

124
Q

Mitigation Duty

A

A party is required to mitigate damages, but the law only requires reasonable efforts to mitigate. Employee only needs to take similar work in the same area offered by the employeer to mitigate.

125
Q

Expectation Damages

A

Put the non-breaching in as good a situation as performance of the contract would have done.

126
Q

Lost Volume Seller Remedy

A

Infinite volume and buyers. Lost profit. Seller may elect to recover their profit from the buyer’s breach.

127
Q

Cover Buyer Remedy

A

Buying a reasonable substitute without unreasonable delay. The buyer gets the difference between the cost of cover minus the contract price

128
Q

Market Price Buyer Recovery

A

Buyer gets the difference between the market price when the buyer learned of the breach, less the contract price

129
Q

Recision Equitable Remedy

A

Used when the contract is void and a party wants to terminate all responsibility under that contract.

130
Q

Buyer Recovery on Warranties

A

Goods delivered but don’t meet warranty, buyer can recover expectation damages of the values of the goods warranted, less the value the buyer has in the goods delivered, plus any personal injuries

131
Q

Seller Market Price Damages

A

Contract price less the market price at the time and place of tender

132
Q

Honest Debt Dispute and Payment Rule

A

If the amount of debt is in honest dispute, or there is a good faith dispute as to whether any debt is owed at all, the creditor’s promise to accept a lesser payment than demanded is supported by consideration and will be enforced

133
Q

Liquidated Damages

A

Damages specified in the contract for non-performance as long as they are difficult to assertion at the time of formation, and the amount must be reasonable.

134
Q

Quasi-contract Recovery

A

Create a remedy when we don’t actually have a contract. Measure the value of any benefit conferred. Entitled to the fair value of that work. If there was no benefit, but just a cost, can recover the costs under reliance damages.

135
Q

Equitable Remedies, when can use

A

Only used when legal damages are inadequate, can’t be responsible, can’t wait too long, and can’t cause undue hardship

136
Q

Restitution Equitable Remedy

A

The aim of restitution is to place both of the parties in the position they had prior to entering into the transaction.

137
Q

Specific Performance Equitable Remedy

A

Available if the subject matter of the contract is unique (real-estate, good that are stated as unique). Forced performance of the contract as stated

138
Q

Willful Breach Recovery

A

Under the minority rule, a breaching party may seek restitution and recover the reasonable value of his services from the aggrieved party to prevent unjust enrichment. Under the majority rule, a willful breachor may recover nothing.

139
Q

Bona Fide Purchaser

A

If a party pays fair value for property and without any notice of defects in title, the property is rightfully theirs

140
Q

UCC Shipment of Goods as Acceptance

A

Shipping goods accepts the offer, even if it consists non-confirming goods. Unless the seller includes a notice of accommodation.

141
Q

Tendering Performance

A

Being ready, willing, and able to perform.

142
Q

What happens if contract is illegal at time of formation.

A

Courts will not do anything with it no cause of action on either side.

1L (3 decks)

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