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Themis > Contracts > Flashcards

Contracts Flashcards

1
Q

What is required of a goods contract?

A

Quantity

Intent of parties to create a contract

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2
Q

Prior extrinsic evidence to a final goods contract CANNOT be entered as evidence if:

A
  • the evidence directly contradicts the terms of the contract as written
  • the evidence would have certainly been included in the written contract
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3
Q

What is required for the right of reclamation of goods by seller?

A
  • Buyer is insolvent at the time of receipt of the goods
  • Seller must demand the return of goods within 10 days of receipt, or a reasonable time if buyer misrepresented his solvency to the seller
  • Buyer still has the goods
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4
Q

What is true when an offeree begins performance of an unilateral contract?

A
  • Offeror cannot revoke the offer
  • Offerree will have a reasonable amount of time to complete performance
  • Offeree cannot be required to complete the performance
  • Unilateral contract is not formed until performance is complete
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5
Q

What is the UCC firm offer rule?

A

Offer to buy or sell goods is irrevocable if:

  • Offeror is a merchant
  • There is assurance that the offer is to remain open
  • The assurance is contained in a signed writing from the offeror

Lasts for up to 90 days

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6
Q

What are the requirements of a quasi-contract?

A
  • A measurable benefit is conferred by one party on another
  • The benefit is conferred with the expectation of payment
  • Retention of the benefit without compensation would be unfair
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7
Q

What is constructive revocation?

A

Offeree learns that offeror has taken an action that is absolutely inconsistent with continuing ability to contract.

Ex. Selling a house to someone else

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8
Q

A contract for the transfer of real property interest can satisfy the Statutes of Frauds if

A

Two of the following have been met:

  • Payment
  • Possession
  • Improvements of the property
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9
Q

In a sale of goods for which there was a written offer and a written purported acceptance, if there is not a contract but the parties act as if there is, which of the following is true?

A
  • Only the terms on which both writings agree become part of the contract
  • Other terms are supplied by the UCC acting as default rules
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10
Q

What is required for waiver of express conditions?

A
  • The party receiving the protection of the condition may waive the condition by words or conduct
  • The other party wrongly interferes or hinders the occurrence of the condition (judged by a good-faith standard)
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11
Q

What is delegation?

A

One party outsources her duties under a contract to another party

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12
Q

Who can be sued in event of breach after delegation?

A

The delegating party

The delegatee, if they have received consideration from the delegating party

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13
Q

What is novation?

A

BOTH parties agree that a substitute person will take over the contractual obligations

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14
Q

What is true of novation?

A

The original promise is excused from performance

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15
Q

What is true of partial performance in bilateral contracts?

A

Commencement of performance operates as promise to render complete performance

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16
Q

Acceptance by silence

A

Not acceptance unless:

  • Offeree has reason to believe offer could be accepted by silence
  • Previous dealings make it reasonable to believe that offeree must notify offeror if he does not intend to accept
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17
Q

How does the mailbox rule apply where there is a rejection following acceptance?

A

Acceptance will control even if offeror receives the rejection first
However, if offeror detrimentally relies on rejection them offeree is estoppel from enforcing K

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18
Q

How does the mailbox rule apply for acceptance following rejection?

A

Mailbox rule does not apply; the first one received will prevail

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19
Q

When can new terms be added to a goods contract?

A
  • Both parties are merchants
  • The new term doesn’t materially alter the deal
  • The initial offer did not expressly limit acceptance to its terms
  • The offeror doesn’t object within a reasonable time to the new term
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20
Q

What is the preexisting duty rule?

A

Action does not qualify as consideration unless the promise gives something in addition to what is owed, or varies preexisting duty in some way

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21
Q

What is required for modification at common law?

A

New consideration
Or:
- Rescission of existing contract and entering into new contract
- Unforeseen difficulties arise and one party agrees to compensate other party for them
- New obligations arise on both sides

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22
Q

What is required for modification for goods contract?

A

Good faith

- No new consideration is necessary

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23
Q

What happens in the event of a breach of accord?

A

The other side can sue for either the original obligation or the new promise.

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24
Q

What are the requirements for unilateral mistake?

A
  • Mistake existed when contract was formed
  • Mistake relates to basic assumption of contract
  • Mistake has material impact on transaction
  • Adversely affected party did not assume the risk of mistake
  • Mistake would make enforcement of contract unconscionable
  • Non-mistaken party caused the mistake, had duty to disclose or failed to disclose mistake, and knew or should have known the other party was mistaken
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25
Q

Can misrepresentation be cured?

A

Yes, if cured before deceived party has avoided the contract

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26
Q

When is misrepresentation voidable?

A
  • There was misrepresentation of fact
  • The misrepresentation was material or fraudulent
  • The misrepresentation was made under circumstances in which it was justifiable to rely on representation
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27
Q

What is true of illegal contracts?

A

When the parties are not equally at fault, the less guilty party may recover under restitution

A party who withdraws from an illegal contract before the improper purpose has been achieve may recover under restitution when the party has not engaged in serious misconduct

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28
Q

What is required for implied warranty of merchantability?

A
  • Seller is a merchant dealing in the goods at issue
  • Goods must be fit for their ordinary purpose
  • Warranty can be disclaimed by use of “as is,” “with faults,” or similar language
  • Disclaimer may be oral, but must use the term “merchantability” and be conspicuous if in writing
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29
Q

What is implied warranty of fitness for a particular purpose?

A
  • Seller has reason to know (from any source) that buyer has particular use for goods
  • Seller does not have to be a merchant
  • Buyer relies on a seller’s expertise to select a special type of good that is used for a special purpose
  • Warranty can be disclaimed in conspicuous writing only
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30
Q

What is a recission?

A

The canceling of any contract so as to restore the parties to the positions they had before the contract was made.

Nondefaulting party or both paroles can rescind contract

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31
Q

What is a release?

A

Writing that manifests intent to discharge another party from an existing duty

At common law, must be supported by consideration

For UCC, written waiver signed/delivered by aggrieved party is sufficient

32
Q

Third party beneficiary’s rights vest when:

A
  • Beneficiary detrimentally relies on rights created
  • Manifests assent to contract at one party’s request
  • Files lawsuit to enforce contract
33
Q

What are the exceptions for goods contract under Statutes of Frauds?

A
  • Specially manufactured goods
  • Part payment
  • Receipt and acceptance
  • Judicial admission
  • Failure to object to memo within 10 days
34
Q

What is the constructive condition of exchange?

A

It is the common law view of implied conditions that one party’s performance is conditional on the other side’s performance.
The doctrine of substantial performance states that a party satisfied if there is not material breach, only if failure is not willful

35
Q

What does the UCC require for performance?

A

Perfect tender:
Perfect goods
Perfect delivery

36
Q

How should performance of express conditions be judged?

A

Objective standard of satisfaction

Aesthetic tastes: subjective standard

37
Q

What are exceptions to perfect tender of goods?

A

Installment contracts: can reject only when there is substantial impairment in installment that cannot be cured

38
Q

What is an exception to the statute of frauds for services that cannot be performed within one year of making?

A

Full performance has occurred by the party seeking to enforce the contract.

39
Q

What happens if the accord is not performed?

A

The other side can sue on either the original obligation or the new promise

40
Q

What is true of installment contracts for sale of goods?

A

Payment by the buyer is due upon each delivery, unless the price cannot be apportioned.

41
Q

Until what time can repudiation be retracted?

A
  • Promisee acts in reliance on the repudiation
  • Promisee signifies acceptance of the repudiation
  • Promisee commences in action for breach of contract
42
Q

What is the formula for expectation damages?

A

Loss in value + other loss (consequential and incidental damages) - cost avoided (cost that nonbreaching party can avoid by rightfully discontinuing performance) - loss avoided (beneficial effect of breach due to ability to salvage or reallocate resources)

43
Q

What is the rule of lost volume profits?

A

Seller can receive the price of profits if they are a volumes dealer in that good
Sale price - manufacturing costs (profits)

44
Q

What is the expectations damage for partial performance?

A

Partially performing party can generally recover for work performed plus expectation damages the work not yet performed

Ex. Expected profit + Incurred costs - loss avoided

45
Q

When is the parol evidence rule inapplicable?

A
  • Party raises a defense to the formation of a contract
  • Party establishes a defense to the enforcement of a contract (illegality, misrepresentation)
  • Parties have made a separate deal
  • There was a condition precedent to the existence of the contract
  • There is ambiguity that needs to be interpreted or clarified
46
Q

What is an exception to the effect of illegality?

A

A party can recover if he is justifiably ignorant of the facts that make the contract illegal and the other party acted with knowledge of the illegality

47
Q

What is true where a party to a contract breaches the contract and the only remaining duty with respect to the contract is the payment of money in installments?

A

The non-breaching party is only entitled to damages based on the payments that are currently due and owing

48
Q

What is true if a contract prohibits assignment?

A

The power to assign is retained by the parties, and the only consequence is that an assignment operates as a breach of contract

49
Q

How can a bilateral offer be accepted?

A

Performance or promise

Performance constitutes a promise to complete performance

50
Q

How can a unilateral offer be accepted?

A

Complete performance only. Promise is not sufficient.
Once the performance has begun the offer is irrevocable for a reasonable period of time to allow for complete performance

51
Q

When can a delegation become novation?

A

A novation maybe express or implied after delegation if 1) the original obligor repudiates liability to the original promisee and 2) the obliged subsequently accepts performance of the original agreement from the delegate without reserving rights against the obligor

52
Q

What must be true for a creditor to accept a lesser amount in full satisfaction of the debt, and discharge the original debt?

A
  • When there is some dispute either as to the validly it of the debt or the amount of the debt
  • When the payment is of a different type than called for under the original contract
53
Q

What is true of charitable subscriptions?

A

The doctrine of promissory estoppel will enforce promises if they are in WRITING even though the charity has not relied on the promise

54
Q

What are restitution damages for a breaching party?

A

Benefit conferred on nonbreaching party less the nonbreaching party’s damages for the breach

55
Q

What is true if an express warranty has been made and a disclaimer follows?

A

Disclaimer clauses that conflict with express warranties are ignored

56
Q

What is promissory estoppel?

A

A doctrine that allows gifts to be enforceable if the donor should reasonably expect the promise to induce detrimental reliance by the donee, the promise actually induces such reliance, and the failure to enforce the promise will cause injustice

57
Q

What happens when a offeror lacks the subjective intent to enter into a contract and the offeree knows or should have known of this fact?

A

A contract is not formed

58
Q

What is true if a seller “seasonably” notifies the buyer that the nonconforming goods are rendered as an accommodation

A

No acceptance has occurred and no contract is formed. The accommodation is deemed a counteroffer and the buyer may then either accept or reject

59
Q

What are expectation damages for construction contracts with breaching constructor?

A
  • Difference between the contract price and the cost of construction by another builder
  • Compensation for delay in completion of the construction
  • Any deposits made to the constructor (if no work has been done)
60
Q

What are expectation damages for a construction contract where homeowner breached?

A
  • Profit that builder would have earned
  • Costs incurred by the builder
    Minus
  • Amount of any payments made by the owner to the contractor
  • Materials purchased by the contractor that are used by the contractor on another job
61
Q

What is true of a material breach of contract?

A

The failure to substantially perform means the nonbreaching party can withhold any promised performance (pay) and pursue remedies for the breach

62
Q

When is restitution available?

A

When there has been a breach by nonperformance or repudiation. Nonperformance where the breach gives rise to a claim for damages for total, not partial, breach

63
Q

What is true of the mailbox rule as applied to irrevocable offers?

A

It does not apply. The acceptance must be received by the offeror before the offer expires

64
Q

When can the implied warranty of merchantability be nullified?

A

Oral disclaimer using “merchantability” or conspicuous written disclaimer
Buyer has examined the goods as fully as he desires or has refused to examine the goods

65
Q

What is true of a gratuitous assignment?

A

It is revocable unless the obligor has already performed or promissory estoppel applies
If the contract right that is being assigned is evidenced by a document that symbolizes the right, then delivery of that document makes the assignment irrevocable

66
Q

When does a seller have a right to reclaim goods if a buyer is insolvent?

A

Within 10 days of the buyer’s receipt of goods. If the buyer has misrepresented solvency to the seller in writing within three months before delivery, seller has longer

67
Q

How can several writings satisfy the statute of frauds?

A

If one of the writings references the other

68
Q

When must assurances be provided if requested?

A

Within a reasonable time, not to exceed 30 days.
If assurances are not given, the other party can cancel the contract or materially change position.
If the other party does not do so, the repudiation can be retracted

69
Q

What is not allowed to be presented under parol evidence rule?

A

Contradictions to the writing

70
Q

How is risk of loss calculated?

A
  1. Check whether the parties have already dealt with the risk problem in the K
  2. Did one party breach? If so, breaching party bears risk of loss
  3. If delivery contract, what type: shipment, buyer; destination, seller
  4. Is seller merchant?
    Yes, risk of loss stays with seller until buyer receives goods. No, risk of loss moves to buyer when seller tenders goods
71
Q

When can a party not claim impracticability?

A

When the party has assumed the risk of an event happening that makes performance impracticable

72
Q

When does a seller have a right to cure a defective tender?

A

Time for performance under the contract has not yet lapsed

Seller had reasonable grounds to believe the buyer would accept the goods despite the nonconformity

73
Q

Must a delegation be accepted by the other party?

A

Yes, but the other party can hold the delegator liable

74
Q

When is a revocation effective?

A

When it is communicate or the offeree acquires reliable information that the offeror has taken definite action inconsistent with the offer (constructive revocation)

75
Q

Does an option contract terminate at the death or incapacity of the offeror?

A

No.

Themis (12 decks)

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