Contracts Flashcards
How to revoke offer
(1) Communicated. Effective on receipt if by mail.
(2) Offeree acquires reliable info that offeror has taken action inconsistent with intent to keep offer open.
Term of employment agreements
Assumed to be at will.
“Permanent” is too vague, means at will.
Limitations on power to revoke
(1) Option; needs consideration, unless merchant under UCC.
(2) Promissory estoppel: foreseeable reliance, to the extent necessary to avoid injustice.
(3) Partial performance: BUT offeree must have knowledge of offer when beginning performance.
(4) UCC firm offer: irrevocable if (i) offeror is merchant (type of goods/special knowledge); (ii) assurances that offer will remain open; (iii) authenticated writing.
Revocation of general offers
Must be at same level of publicity as original offer. Effective against everyone.
Mailbox rule
Acceptance effective upon mailing.
Rejection effective upon receipt.
Revocation effective upon receipt
(includes email, fax, etc.)
IF offeree sends acceptance then rejection, acceptance controls, UNLESS offeror detrimentally relies on rejection.
IF offeree send rejection then acceptance, the first to be RECEIVED will prevail.
Options: acceptance must be RECEIVED before option expires.
Counteroffers
Rejection + new offer.
BUT does not terminate option.
Notice of acceptance in unilateral K
Notice of starting performance only required if reason to know offeror would not learn of performance with reasonable certainty and promptness, UNLESS:
(1) reasonable diligence to notify offeror;
(2) offeror learns of performance in reasonable time;
(3) offer indicates notification not required.
Shipment of nonconforming goods
Acceptance + Breach.
UNLESS seller seasonably notifies buyer that goods are an accommodation –> counteroffer.
Silence as acceptance
(1) offeree intended to accept by silence;
(2) due to prior course of dealings, reasonable to believe that offeree must affirmatively decline to accept.
Mirror image rule
Common law: modification or addition of terms –> counteroffer.
UCC: modification or addition of terms is still acceptance, UNLESS:acceptance expressly conditioned on assent to new terms.
Additional terms in acceptance between nonmerchants
new terms are separate proposal, which must be separately accepted.
Additional terms in acceptance between merchants
K is under terms of the acceptance, UNLESS:
(1) terms materially alter the original K;
(2) offeror expressly limited acceptance;
(3) offeror has already objected to new terms or objects within reasonable time.
Acceptance w/ different terms
Knock-out rule (majority): different terms nullify each other, fill gap with default terms.
Last-shot rule (minority): different terms treated the same as additional terms.
UCC rules for auction sales
Each lot separate sale.
Sale is complete when auctioneer announces end.
In reserve auction, goods can be withdrawn at any time before completion of sale. Non-reserve, cannot withdraw unless no bid.
If sellers bids, then winner may cancel bid or take goods at price of last good faith bid, UNLESS (1) seller bid at forced sale or (2) seller gave notice that he would be bidding in auction.
Gift vs. valid consideration
Look to whether the offeree could have reasonably believed that the intent of the offeror was to induce the action.
Preexisting duty rule
Common law: promise to perform preexisting duty is not consideration UNLESS third party offer promise contingent upon performance by a party.
Partial payment of liquidated debt is invalid for lack of consideration, UNLESS compromise disputed in good faith (even if reason for dispute was invalid).
Past consideration
Past consideration invalid, BUT can be enforced to prevent injustice, UNLESS promisee intended act as gift. Promise enforceable only to the extent of the value received.
Modification
Common law: must have consideration, UNLESS: (1) rescission and entry into new K; (2) unforeseen difficulties, and one party agrees to compensate the other; (3) new obligations on both sides.
UCC: no consideration, good faith only.
Modification and SOF
Modification must comply with SOF if K as modified falls within SOF.
Oral modification in violation of SOF may be withdrawn, UNLESS other party relied.
Modification under installment Ks
Waiver can be withdrawn at any time by beneficiary, UNLESS retraction would be unjust because other party materially changed position based on waiver.
Accord K
Consideration required. Both parties surrender claims.
If creditor accepts lesser amount, original K is not cancelled UNLESS there is some dispute about validity or amount, or if payment is of different type than called for in original K.
Satisfaction
discharges both accord and original K.
if accord is not satisfied, then both accord and original K have been breached.
Voidable and unenforceable promises
NOT valid consideration
Req’t and output K
quanities may not be unreasonably disproportionate to estimates of prior course of dealings.
Settlement of legal claim
Party surrendering claim must have honest belief in claim, and reasonable basis for belief.
Promises binding w/o consideration
(1) promise to pay debt barred by SOL
(2) Promise to perform voidable duty
(3) Material benefit rule: to the extent necessary to prevent injustice, UNLESS intended as a gift.
Promissory estoppel
(1) promisor should reasonably expect reliance or forbearance by promisor.
(2) promise actually induces reliance or forbearance.
(3) injustice can be avoided only be enforcement.
Charity exception: no proof of reliance required.
Construction Ks: sub-K cannot revoke offer after general K places bid.
Unilateral mistake
Mistaken party can void K if:
(1) enforcement unconcionable; or
(2) the non-mistaken party caused the mistake or failed to disclose mistake despite knowing or having reason to know that other party was mistaken or had duty to disclose the fact about which other party was mistaken;
AND
(3) no serious prejudice to other party.
Mutual mistake
Both parties mistaken about essential element of K, with no intent by the parties to allocate risk of that element of the K.
Voidable by the party adversely affected.
NOT voidable if curable by reformation of K.
NOT voidable if conscious ignorance (must be aware of limitations of one’s own knowledge).
NOT voidable if failure to learn fact constitutes failure to deal in good faith (but negligence not sufficient to show lack of good faith).
Reformation for mistake
Available if:
(1) prior agreement;
(2) agreement was put into writing;
(3) as a result of mistake, there is difference between the agreement and the writing.
Misunderstanding
IF neither party knows or should know of misunderstanding, then no K.
IF one party knows of should know, then K is formed as per understanding of the unknowing party.
IF both parties know or should know of misunderstanding, there is no K.
IF one party waives misunderstanding defense, K can be enforced as per understanding of other party.
Misrepresentation in general
Assertion contrary to existing fact (not law), or affirmative concealment of a fact.
Fraudulent misrepresentation
(1) knowingly;
(2) without confidence in the assertion;
(3) knows there is no basis for assertion.
Nondisclosure
Tantamount to assertion that fact does not exist if party knows:
(1) disclosure necessary to prevent previous assertion from being fraudulent;
(2) disclosure necessary to correct mistake AND failure to disclose would be bad faith;
(3) disclosure would correct mistake about contents or effect of writing;
(4) disclosure warranted by confidential or fiduciary relationship.
Fraud in the factum
Party does not know character or essential terms of the K. K is void UNLESS reasonable diligence would have revealed the true terms.
Fraud in the inducement
Induces other party to enter K. K is voidable by adversely affected party if reliance on misrepresentation was reasonable.
Non-fraudulent misrepresentation
K is voidable by adversely affected party IF:
(1) misrepresentation was material (reasonable person would agree to it);
(2) assent induced by the misrepresentation;
(3) reliance was justified.
Cure of misrepresentation
If facts are cured after formation of K but before K is voided, K is no longer voidable.
Reformation for misrepresentaiton
When one party misrepresents content or legal effect of writing, other party can void or force reformation of writing to express the agreed upon content and legal effect.
Unfair persuasion
Relationship where:
(1) one party reasonably believes other party will not act to his detriment; OR
(2) one party is dominant and the other dependent.
Confidential relationship
Dominant party has burden of proving K is fair, and is held to higher standards of disclosure.
Third-party undue influence
Victim may void K, UNLESS non-victim party materially relied on K in good faith without knowledge of the undue influence.
Remedy for undue influence
Restitution damages
Duress
Improper threat that deprives a party of meaningful choice.
improper threat = threat of criminal (good or bad faith) or civil (bad faith only) action; bad faith threat to breach K.
deprivation of meaningful choice = no reasonable alternative to succumbing to the threat. in civil action, defense is reasonable alternative, UNLESS seizure of property would make person unable to perform on other K.
Subjective standard for determining assent.
Effect of duress
If compelled by threat to inflict physical violence, K is void.
If other duress, K is voidable.
If duress caused by third party, victim may void K, UNLESS non-victim party gave value or materially relied on the K while acting in good faith w/o knowledge of duress.
Restitution damages.
Types of incompetency
Infancy Mental illness or defect Guardianship Intoxication Corporate incapacity
infancy
Voidable by infant until reasonable time after age of majority. If not voided, deemed to assent.
Liability for necessities (quasi-K): recovery limited to reasonable value.
Statutory exceptions: educational loans and insurance Ks.
Mental illness
If adjudicated mentally incompetent, K is void.
If no adjudication, K is voidable if individual unable to (1) understand nature and consequences of transaction, or (2) act in reasonable manner with regard to transaction AND other party knows it.
If made during lucid period, K is enforceable, UNLESS adjudicated incompetent.
Guardianship
Person under guardianship has no capacity to contract, BUT may be liable for reasonable value of necessities.
Intoxication
Voidable by intoxicated party IF:
(1) intoxicated party unable to understand nature and consequences; AND
(2) non-intoxicated party knew of intoxication.
Intoxicated party must promptly disaffirm and return any value received. Can be liable in quasi-K for fair value of goods or services received.
Corporate capacity
When a corporation acts ultra vires, K is voidable.
Illegality
Not enforceable, no restitution for consideration, no remedy for partial performance.
Exceptions:
(1) If one party knows of illegality and other party is justifiably ignorant, ignorant party can recover;
(2) If only one party had illegal purpose, good faith party can recover if he did not know of purpose OR if he did no facilitate the purpose AND the purpose was not of moral turpitude.
(3) If K is divisible, can recover on legal parts of K.
(4) If illegality is due to violation of revenue-raising licensing requirements (as opposed to public health, etc.), promise is enforceable.
(5) if parties are not equally at fault, less guilty party may get restitution.
(6) if one party withdraws prior to achieving improper purpose, he may get restitution.
Unconcionability
UCC: court may modify or refuse to enforce unconscionable K.
Unconsionabiltiy = no reasonable person in the position of the parties would have agreed. Also applies to unfair surprise in biolerplate language.
Unconscionability is a question of law.
Unenforceable due to public policy
K restraining marriage.
Implied-in-law K
Confer benefit with reasonable expectation of compensation, allowing benefited party to retain benefit without compensation would be unjust.
Unjust enrichment =
(1) measurable benefit;
(2) without gratuitous intent;
(3) retention unfair because defendant had opportunity to decline but knowingly accepted OR plaintiff had reasonable excuse for not giving opportunity to decline.
Remedies for quasi-K
Usually restitution for fair value of benefit given.
occasionally reliance damages.
rarely expectation damages.
Quantum meruit recovery
Breaching plaintiff can recovery under quasi-K less defendant’s damages for breach, if it is shown that defendant:
(1) acquiesced to provision of services;
(2) knew that provider expected compensation;
(3) was unjustly enriched.
BUT plaintiff may not recover for willful breach.
UCC restitution for defaulting buyer: (refund of payments) - (damages provable by seller) + liquidated damages OR (20% of the value of K OR $500, whichever is greater).
Warranty of merchantibility
Implied if merchant party.
Goods are fit for their ordinary purpose and pass without objection in trade.
Disclaimable orally or in writing, but must be conspicuous and use the term “merchanitibility”.
If buyer has examined goods prior to purchase or refused opportunity to examine, then no warranty.
Warranty of fitness for particular purpose
(1) seller knows that buyer has particular use for the goods;
(2) seller knows buyer is relying on seller’s expertise in selecting the goods.
Seller need not be merchant.
Disclaimable by general language, but must be (1) conspicuous and (2) in writing.
Situations of impracticability
(1) performance becomes illegal after K is made;
(2) the specific subject matter of the K is destroyed;
(3) performing party to a personal services K dies or becomes incapacitated (unless delegable);
(4) performance becomes impracticable.
Elements of impracticability
(1) unforseeable event;
(2) non-occurrence of event was basic assumption on which K was made;
(3) party seeking discharge not at fault.
Seller must notify buyer of impracticability.
NOT if one party assumes risk.
Events sufficient to discharge K
Unforeseen natural disasters, war, trade and military embargoes, strikes, local crop failures.
Seller’s duty under partial impossibility
Allocate goods among buyers in commercially reasonable way. Buyer may refuse.
Failure of particular source of supply
If K names particular supply source and that source fails, K is void, even if other sources available.
Failure of method of transport
If method of transport specified in K fails, any commercially reasonable method of delivery can be used and must be accepted.
Frustration of purpose
Frustrated party can rescind if:
(1) nonoccurrence was basic assumption of K (not necessarily unforseeable, but unexpected); AND
(2) frustrated party not at fault.
Frustration must be so severe that it is outside assumption of risk.
Grounds for rescission
Mutual mistake, fraud, misrepresentation, unilateral mistake.
Non-defaulting party may rescind and reclaim any benefits conferred.
Rescission by mutual agreement, UNLESS rights of a third-party beneficiary have already vested.
Release
Common law: must have consideration.
UCC: without consideration, must be in signed writing delivered.
Destruction of identified goods
IF goods destroyed before risk of loss passes to buyer, K is void. If goods damaged, buyer has option to take goods at reduced price.
IF destroyed or damaged after risk of loss passes to buyer, K still valid.
Creditor and Donee beneficiaries
First restatement approach
Creditor beneficiary = beneficiary of duty by promissee, promisee did not intend to make gift. Has right to sue either promisor or promisee to enforce K.
Donee beneficiary: promisee conferred gift. Has right to sue promisor.
Intended and Incidental beneficiaires
Second restatement approach
Intended beneficiary: promisee has implicit or explicit intent to benefit, either as gift or to fulfill obligation. Can recover.
Incidental beneficiary: unintended beneficiary of the K. No right to enforce or collect.
Elements of third-party beneficiary claim
Third party must show:
(1) K between A and B;
(2) clear and manifest intent that the K primarily or directly benefit the third party;
(3) breach of K;
(4) damages to third party resulting from breach.
Vesting of beneficiary’s rights
Rights vest when:
(1) beneficiary detrimentally relies on the rights;
(2) beneficiary manifests assent to the K at one of the parties’ request; or
(3) beneficiary files suit to enforce K.
Once rights have vested, parties to K cannot rescind unless beneficiary agrees.
Defenses to 3rd party beneficiary
Promisor can raise any defense against 3rd party beneficiary that he could raise against promisee.
Beneficiary can be liable for counterclaims.
Promisor may NOT assert promisee defenses against the beneficiary.
Unallowable assignments
Assignments are disallowed if they materially increase the duty or risk of the obligor OR materially reduce the obligor’s chance of obtaining performance.
Even if prohibited by K, parties still have power to assign. Assignment is valid but party is then in breach.
Requirements for assignment
No formalities required, but must have present intent to transfer right immediately.
No consideration needed, but assignment w/o consideration is revocable.
Assignment by document is irrevocable after document is delivered.
Gratuitous assignment is automatically revoked upon death, incapacity, or bankruptcy or assignor.
Rights of assignee
Assignee takes all rights of assignor under K at time of assignment, subject to any defenses that could be raised against the assignor.
Rights are subject to any modification or payment made before obligor had notice of assignment.
Subsequent assignment of same rights revokes any prior revocable assignment. First assignee has priority if irrevoable, unless second assignee is purchaser for value without notice.
Delegation of duties
delegator is not released from liability, recovery available if delegatee does not perform.
Novation
Express or implied after delegation if:
(1) original obligor repudiates liability to original promisee; AND
(2) obligee accepts performance from delegatee without reserving rights against delegator.
Effects of delegation
UCC: delegation is grounds for insecurity. obligee may demand assurances from the delegatee.
No release of delegator liability unless there is a novation.
Assignment is enforceable by both assignor and original promisee.
SOF Requirements
(1) in writing
(2) signed by party against whom enforcement is sought
(3) contain essential elements of deal.
Types of K within SOF
Marriage - not the promise to marry, but any consideration.
Suretyship (except indemity K AND surety’s own economic benefit)
One year+ (from day after K is made) (BUT if full performance, no SOF)
UCC $500+
Real property interest (EXCEPT lease or easement of less than 1 year, assignments of mortgages, and licenses) (BUT enforceable based on partial performance even if SOF not satisfied).
UCC and SOF
If goods $500 or more, must have a memo of sale containing:
(1) K has been made
(2) identity of parties
(3) quantity term
(4) signed by party to be charged
Mistake does not destroy validity, BUT enforcement is limited to quantity term contained in the writing. Can use parol evidence for omitted terms.
Exceptions to writing req’t:
(1) specially manufactured goods, not suitable for sale to other, where manufacturer has already made substantial beginning or committed to procurement;
(2) part payment;
(3) receipt and acceptance;
(4) judicial admission;
(5) failure to respond to memo within 10 days
PER for partial integration
Can introduce supplementary evidence of other terms that are consistent w/ writing, BUT no contradictory evidence.
PER for complete integration
No extrinsic evidence.
PER intent of parties rules
Common law “four corners”: in determining integration, only look to language of K.
2d restatement: If extrinsic term would naturally be omitted from writing, then term can be introduced as long as it does not contradict writing.
UCC rule: presumes partial integration, outside terms allowed unless they would certainly have been included in the writing.
Situations where PER does not apply
(1) Raising excuse to K
(2) establishing defense to K
(3) evidence of separate deal
(4) evidence of condition precedent
(5) ambiguity and interpretation
(6) subsequent agreement
(7) UCC: trade usage and course of dealings
Plain meaning rule
terms in K have their objective meaning, regardless of party intent.
Context rule
meaning of terms in K should be judged with reference to facts and circumstances of transaction.
Burdens of proof for express conditions
Condition precedent: plaintiff must prove condition has occurred.
Condition subsequent: defendant must prove condition has occurred.
Satisfaction Clause
Subjective taste must be exercise in good faith.
Time of Payment
Terms making payment conditional upon an event are usually interpreted as payment dates, not as conditions precedent to payment.
Performance of conditions
express conditions: full performance.
implied conditions: substantial performance.
Substantial performance
Party may recover for substantial performance, UNLESS the failure is willful.
Damages: value of K - cost of obtaining complete performance.
Doctrine of prevention
party must refrain from conduct that prevents of hinder the occurrence of a condition.
UCC implied warranties
(1) good title (disclaimable by specific language of circumstances)
(2) transfer is rightful
(3) good are delivered free from any security interest (UNLESS buyer is aware)
UCC default rules of tender
In a reasonable time after K is made.
Tender in one shipment, unless circumstances make it reasonable to use lots.
Tender at seller’s place of business, unless parties know goods are at some other location.
Methods of tender
(1) seller’s place of business
(2) shipment K
(3) destination K
(4) goods in the hands of bailee
CIF: includes cost of goods, transport, and insurnace.
CF: includes costs of goods and transport.
UCC default rules for payment
Buyer must pay before seller is obligated to tender.
Any payment is okay, unless seller demands legal tender and provides sufficient time for procurement.
Buyer’s right to inspect
right to inspect is condition of payment. buyer is not entitled to inspect prior to delivery if K is COD or such is implied by trade usage or course of dealings.
Expenses paid by buyer, but may be recoverable if goods are nonconforming.
Installment K under UCC
Buyer can reject nonconforming tender only if:
(1) value of shipment is substantially impaired;
(2) cannot be cured (if seller makes assurances of cure, buyer must accept).
Waiver of condition
waiver is only valid for non-material conditions.
conditions can be reinstated if:
(1) retraction of waiver is communicated before condition is due to occur,
(2) no detrimenal reliance.
waiver by election: continuance with K after condition is broken.
Breaching party damages
Breaching party not entitled to damages, but entitled to fair value of benefit already conferred under K.
Standards for breach
Common law: material and nonmaterial breaches.
UCC: every breach is a material breach, except for in an installment K.
CL Anticipatory repudiation
must be clear and unequivocal.
other party can treat it as a breach or ignore it and demand performance.
if only performance left is payment, other party must wait for payment to be due before suing.
Retraction of repudiation
Can be retracted until promisee:
(1) acts in reliance on repudiation;
(2) signified acceptance of repudiation; or
(3) commences action for breach of K.
UCC Anticipatory repudiation
unequivocal refusal of the buyer or seller to perform OR failure to provide assurances within 30 days of reasonable demand.
retractable if other party has not cancelled K or materially changed position.
UCC assurances
IF reasonable grounds for insecurity, can demands assurances and suspend performance until given. failure to give assurances within 30 days is repudiation.
Formula for expectation damages
= loss in value + other loss - cost avoided - loss avoided.
Damages must be forseeable and provable with reasonable certainty.
Expectation damages in construction K
If contractor breaches: cost of construction by another builder - K price + compensation for delay.
Breach by buyer: profits + costs - amounts already paid - cost of materials that can be used on another job.
Economic waste
if damages is disproportional to any economic benefit, court may reduce, UNLESS breach was willful and only completion will give nonbreaching party the benefit of its bargain.
Consequential damages
Foreseeability: in contemplation of the parties when K was make. (borrower’s lost profit is always unforeseeable)
Causation
Reasonable certainty: lost profits are difficult to prove.
UCC breach of warranty: damages can be limited or excluded UNLESS unconscionable. limitations for injury to persons are unconscionable.
Enforceability of Liquidated damages
(1) parties intended to agree in advance to settlement of damages;
(2) amount was reasonable at time of contracting in relation to damages that might be sustained;
(3) actual damages would be uncertain and difficult to prove;
(4) specific amount for a specific breach.
Restitutionary damages
May be awarded even though plaintiff would have suffered loss if defendant did not breach.
NOT awardable when K is already fully performed and only payment is breached.
Reliance damages
CANNOT get both reliance and expectation damages. if reliance, mitigated by losses plaintiff would have sustained if K was performed.
Factors in specific performance
Damages are inadequate if:
(1) difficult to prove with reasonable certainty;
(2) difficult to procure substitute performance;
(3) unlikely that damages can be collected.
NOT awarded if court cannot supervise.
Subject to defenses of laches and unclean hands.
Things that there are always specific performance for
Real property.
Unique goods.
Requirement/output contracts with no substitute.
Buyer’s remedies under UCC
Damages: market price at time of breach at place of tender - K price.
OR
Cover: cost of replacement goods - K price.
OR
specific performance for unique goods.
Replevin under UCC
If buyer has made partial payment, may get goods from seller IF (1) seller becomes insolvent within 10 days OR (2) goods were for family, personal, or household purposes.
buyer can obtain goods regardless of payment IF:
(1) buyer unable to cover;
(2) unavailing; or
(3) goods shipped under reservation, and security interest satisfied.
Nonconforming tender
Buyer has right to inspect, then to reject or accept.
Rejection: notice within reasonable time, before acceptance.
Buyer may store goods, ship them back to seller, or sell them for seller’s account. Perishable goods must be sold.
Acceptance under UCC
(1) expressly stated;
(2) using the goods;
(3) failing to reject goods.
Seller’s right to cure
(1) time of performance not yet elapsed; OR
(2) seller had reasonable grounds to believe buyer would accept despite nonconformity.
seller’s right to reclaim
If seller learns buyer was insolvent at time of delivery, can demand goods back within 10 days. 10 day limitation does not apply if buyer misrepresented solvency within 3 months.
COD sales: seller can reclaim if check bounces.
stopping goods in transit
seller can stop goods in transit for buyer's breach, UNLESS: (1) buyer has received; (2) carrier acknowledged buyer's rights; (30 goods have been reshipped; (4) title has been given to buyer.
seller can always stop based on buyer insolvency and demand cash on delivery.
Remedies for wrongful rejection
Damages: (K price - market price OR lost profits) + incidental damages
Resale: commercially reasonable resale price - K price.
Recovery of K price: only if goods are not resellable in regular course of business.
Lost volume seller: list price - cost
Risk of loss shifting
Shipment K: when goods given to carrier.
Destination K: when seller tenders.
Goods held by bailee: when buyer received document or acknowledgment of title.
Otherwise: if seller is merchant, when buyer takes possession. if seller is not merchant, when seller tenders.
If buyer repudiates or breaches, risk of loss is immediately shifted.
Insurable interests in goods
Seller: as long as title or security interests.
Buyer: when goods are identified by K.
UCC entrusting
Entrustment of goods to one who ordinarily sells those goods gives trustee power to convey title to buyer in ordinary course.
Voidable title
sale is voidable because fraud, lack of capacity, failure to pay, bounced check.
SOL for breach of K
Sales K: 4 years after accrual (parties can reduce to not less than 1 year, but cannot extend).
accrual = when breach occurs. breach of warranty occurs at delivery. breach of future warranty occurs when discovered.
NY: non-compete agreements
enforceable if reasonable in time and area, necessary to protect employer’s legitimate interest, not harmful to public, and not unreasonably burdensome to employee.
NY: unsolicited goods
unsolicited goods are an unconditional gift.
NY: revocation of unilateral offer
unilateral offers are revocable at anytime before offeree completes performance.
NY: promise of reward
enforceable if in writing or published.
NY: option contract
offer is irrevocable if stated in writing that it cannot be revoked. no consideration needed.
NY: consideration for real property
promises or warranties in deeds need not be supported by consideration.
NY: written promise expressing past consideration
valid if past or executed consideration is:
(1) expressing in writing;
(2) proved to have been performend; and
(3) would have been valid consideration at time of performance.
NY: written modification or discharge
written agreement for modification or discharge of debt is not invalid due to lack of consideration, as long as signed by party against whom enforcement is sought.
NY: Ks not voidable due to infancy
(1) Ks entered into by adults;
(2) Ks involving marital home;
(3) judicially approved Ks for artistic or athletic services;
(4) student loans Ks;
(5) life insurance Ks by those 14.5 years or older.
NY: usury
interest rate cannot exceed 16%.
NOT applicable where violation is a regulation and there are statutory penalties.
NY: exculpatory clauses
enforceable against negligence claims.
NOT enforceable against willful acts or gross negligence.
NOT enforceable for construction/repair/maintenance Ks that exempt liability for negligence.
NY: pay if paid Ks
no longer allowable for construction Ks to make general contractor payment a condition precedent of subcontractor payment.
NY: assignment
assignments in writing are irrevocable and do not require consideration.
NY: additional SOL Ks
(1) subsequent or new promise to pay debt discharged in bankruptcy;
(2) assignment of insurance policy;
(3) services K for real estate transactions (EXCEPT licensed real estate brokers);
(4) agreement to change or modify obligation regarding real property.
NY: past performance
oral K for transfer of property is enforceable if two out of the three are true:
(1) partial or full payment;
(2) substantial improvement;
(3) possession.
NY: time is of the essence
K must explicitly state that time is of the essence, other NOT material breach.
NY: duty to mitigate in real property leases
landlord has no duty to re-let. when tenant abandons, landlord has 3 options:
(1) do nothing;
(2) accepted surrender, re-let for own account;
(3) notify tenant that he is reletting for tenant’s account.
