Contracts Flashcards
1
Q
[CL] Pre-existing Duty re: Modification:
Exceptions?
A
- Parties agree to performance different than required by original K
- Unforeseen Circumstances: performance rendered substantially more burdensome than reasonably anticipated** **by the parties when they entered K
2
Q
Risk of loss:
Merchant? Non-merchant?
Breach?
A
- Merchant seller: risk passes to buyer when he receives[physical possession]
- Non-merchant: upon tender of delivery
- Effects of Breach:
- Seller breaches: risk remains with him
- Buyer breaches before risk passes–seller may-to extent of any deficiency in his insurance–treat risk of loss as resting on the buyer for commercially reasonable time
3
Q
[Common Law] Acceptance?
A
Must:
- Mirror offer &
- Communicate to offeror
*Offer silent re: method communication? reasonable
- same means that offeror used,
- means ordinary in the trade, OR
- means equivalent in expeditiousness & equivalence
4
Q
Accord & Satisfaction?
A
- A: K where oblige promises to accept substituted performance in satisfaction of obligor’s existing duty.
- Requires consideration SIGNIFICANTLY DIFFERENT from that required in original K. [Creditors allowed to accept partial payment as an A&S, if GF dispute as to amount owed.]
- A alone will not discharge the original duty, but suspend it until S is completed.
- S: performance of accord that will discharge original debt.·
5
Q
[Statute of Frauds]
[UCC]
Partial Performance?
re: Divisible Goods?
Indivisible?
A
K enforceable re: goods
- “paid for & accepted” or “received & accepted.”
- actions by both parties indicate K existence
- Divisible goods: PP secures enforcement quantity ALREADY
- Paid for by buyer OR
- Delivered by seller
- Indivisible: enforces entire K
6
Q
Ks governed by the Statute of Frauds?
A
M. SOUR:
- Consideration of Marriage
- Suretyship/Guarantee • Exceptions: (1) creditor discharged original debt on faith of guarentee by 3rd party OR (2) main purpose of guarontor’s promise is to protect own economic interest–not debtor’s interest–then not w/in SoF
- Longer than One Year [from creation of K to performance; if at all possible CAN end w/in a year, than iSoF (i.e., excludes lifetime employment K b/c can die w/in 1 year)]
- UCC- Sale of Goods over $500 [doesn’t have to be $ can be goods worth over $500]
- REAL PROPERTY - Sale of Interest in Land [future sale/lease not current] • Real estate brokerage agreements: service Ks not governed by SoF
7
Q
Misrepresentation: Fraudulent Nondisclosure?
A
∆’s silence where there is a duty to disclose
- nondisclosure was MATERIAL
- REASONABLE RELIANCE on nondisclosure&
- Following circumstances:
i) RELATIONSHIP of TRUST & CONFIDENCE ii) made an assertion that was true but rendered untrue by intervening events
iii) if GF would require that party disclose info
8
Q
Quantum Meruit?
A
Right to reasonable value of benefits
conferred
- Means of enforcing both implied-in-fact & implied-in-law contractual obligation
- measure of damages for services performed w/o a binding or enforceable contract
9
Q
Battle of the Forms?
A
“DEFINITE & SEASONABLE EXPRESSION OF ACCEPTANCE will operate as an acceptance EVEN THOUGH it states ADDITIONAL or DIFFERENT TERMS”
- Exception: Conditional Acceptance [Acceptance expressly made CONDITIONAL on ASSENT to ADD’L or DIFFERENT TERMS]
10
Q
Impossibility Exceptions?
A
- parties allocated for risk of contingency & provided remedial measures in event of occurrence
- performance rendered ONLY TEMPORARILY IMPOSSIBLE, then will typically only suspend obligations of parties until impossibility ended
11
Q
Statute of frauds:
time of writing?
A
Does not need to be written
at time promise is made
12
Q
[UCC]
Warranty of fitness for particular purpose:
Modification/exclusion REQUIRES?
A
CONSPICUOUS WRITING
13
Q
Incapacity:
MINOR:
EXCEPTIONS?
A
Necessaries: such as food, clothing, shelter, & medical [autos/educ. depends] are VOIDABLE;
Merchant’s relief is quasi-contractual only;
May ONLY receive reasonable value NOT K price.
14
Q
[UCC]
Express Warranties
A
- Affirmation fact/promise: Good will do what I said
- Description goods: Good resembles description
- Sample/model: Rest of goods like sample
15
Q
[Common Law]
Conditional acceptance?
A
counter-offer
(Look for “if,” “On the condition that,” “but,” etc.)
16
Q
[UCC]
Warranty of fitness for particular purpose: Modification/exclusion requirement is not need when?
A
Inconspicuous writing not needed if:
- buyer fully examined goods or refused to do so, b/c warranty waived if defect would have been apparent from examination
- Course of performance, usage or trade indicate warranty mod/ex
- K expressions like “as is” or “with all faults” that make plain there is no warranty
17
Q
[UCC]
Implied Warranties
A
Title against infringement
Merchantability
Fitness for Particular Purpose
18
Q
An individual who is the subject of a court-ordered guardianship over that individual’s property lacks the capacity to _______.
A
enter into a K.
- Consequently, any contract purportedly entered into by such an individual is void. (Note: If item is a necessity, may be able to recover reasonable value in restitution under a quasi-contract action, but cannot enforce original K of sale.)
19
Q
What happens when Transaction involves a “Shrink-Wrap” K?
A
[UCC]
- (a) “Shrink wrap” K: Ks contained w/in already purchased items
- Boilerplate terms mere proposal for K, follow rules governing transactions not “b/w merchants” OR retention & use constitutes acceptance of terms
20
Q
Invitation to
deal/receive offers
A
Preliminary communication
inviting others to produce an offer
that still reserves a final round of approval
with speaker
21
Q
[SoF][CL]
[Signing requirement]
“Tacking Together” Multiple Docs
A
All docs must be signed OR
signed docs incorporate unsigned docs
Not incorporated: EXCEPTION:
- a) @ least 1 signed writing unambiguously establishing contractual relationship b/w parties
- b) signed & unsigned docs clearly refer to same subject matter
- c) clear & convincing evid of acquiescence to unsigned docs by party against whom enforcement sought
22
Q
[UCC]
Warranty of merchantability? Modification?
A
fit for the ordinary purposes for which such goods are used
may be modified/excluded,
doesn’t need to be in writing
23
Q
Risk of loss:
Bailee
A
If held by bailee risk passes to buyer when
- title passes to buyer;
- bailee acknowledges buyer’s right to possession; OR
- bailee receives title & has time to present to bailee
24
Q
Delegable Duties–exclusions?
A
- Personal service cases
- When K prohibits delegation.
(a) CL: Attempt to delegate is a breach.
(b) UCC: Not an immediate breach, but it is reasonable grounds for insecurity allowing for a demand of assurances
25
UCC:
## Footnote
**Substantial Performance**
**w/ regard to an installment K?**
UCC requires perfect tender of goods, and substantial performance will not suffice. However, **UCC does permit substantial performance with regard to an installment K.**
* *When a nonconforming tender OR tender of nonconforming goods under one segment of an installment K, **buyer may cancel K ONLY if nonconformity SUBSTANTIALLY IMPAIRS value of entire K to buyer.***
26
[SoF][CL]
Writing Requirement?
Multiple docs?
1. I.D. parties
2. nature & subject matter of K
3. essential terms of unperformed promises in agreement
**Real prop Ks: Often require address & others more accurate description w/ monuments, meets & bound, etc.**
27
Express vs. Implied Conditions?
**Express**: parties expressly include in provisions of K
**Implied**: address order of performance & rights upon breach when not done so expressly. Fairly inferred from circumstances.
28
A firm offer made by the offeror in an \_\_\_\_\_\_\_
is irrevocable for the stated time period,
where such period is \_\_\_\_\_\_\_,
provided that the offeror is a merchant.
authenticated writing
90 days or less
29
[UCC]
Imperfect Tender:
Rejecting goods?
Buyer MUST:
1. exercise right of rejection w/in reasonable time after delivery &
2. notify seller of rejection w/in reasonable period
Once rejected:
* Buyer MAY: bring action for damages for imperfect tender
* Buyer MUST: use reasonable care in holding goods for reasonable time until seller can remove them
30
Promissory vs. Pure Conditions?
* **Promissory**: K performance conditioned on the occurrence of *PROMISED PERFORMANCE* by the other party
* **Pure**: K performance conditioned on the *occurrence of event BEYOND CONTROL of either party*
31
Anticipatory Repudiation:
Failure to provide reasonable assurances constitutes?
Aggrieved party's rights?
**Failure to provide *clear & unequivocal*** (Florida: *distinct, unequivocal,* & *absolute*) **assurances constitutes an anticipatory repudiation.**
Aggrieved can:
1. Cancel K
2. Bring an action for damages or specific performance
3. Ignore repudiation, but cannot run up damages
32
Implied-in-fact K?
**Consensual agreement that fails to express agreement of parties in its entirety**
[Mechanic fixes car w/o agreeing to price]
33
Annuity
K requiring payment of a fixed amount periodically for duration of a person’s life
* Purchaser assumes risk that person on whose life annuity is based will die before price paid for annuity is recouped, and issuer of K assumes risk that that person will live beyond recoupment date. This assumption of the risk is inherent in the nature of the annuity contract.
34
Limiting remedies, typically does not constitute a material alteration of a K. The statutory limitations period can be shortened by the parties to as short as\_\_\_\_\_\_\_\_\_.
**One year**
35
Excused Performance: Mistake?
Types?
**party makes faulty assumption about fact present at K creation that affects materiality**
Unilateral vs. Mutual
36
Defense:
Incapacity:
**Mental Incompetence:**
**LEGAL CONSEQUENCES?**
* Adjudication of mental incompetence: **VOID**
* No adjudication of incompetence: **VOIDable**
* **If** **voided**: MUST make other party whole by paying reasonable value for goods received
* **Responsible for damages,** unless, bad faith on other party then get goods “as is”
* **Possibility of Ratification** if becomes competent
* Incapacity defenses are available under both common law & UCC
37
Anticipatory Repudiation:
INSECURE PARTY'S RIGHTS?
Right to Suspend Performance, if:
1. Goods not yet received
2. Party doesn’t respond under a reasonable time, [UCC caps at 30 days]
3. Other party responds OR w/ response that doesn’t provide *clear & unequivocal* assurances (FL: *clear, unequivocal & distinct*). Reasonableness of response: i) circumstances ii) prior relationship iii) past dealings iv) nature of insecurity involved
38
Option:
## Footnote
**No Time Period Listed**
If no time period is provided for the option,
a reasonable term is implied.
39
Option?
Construction K exception(s)?
**An irrevocable offer**. Factors:
1. Offer
2. Promise to keep offer open &
3. Enforcement mechanism [consideration received]
* **Special rule for construction Ks**: Gen’l contractor uses particular subcontractor’s bid to formulate his own, an implied option K is created via promissory estoppel.
40
Incapacity--MINOR--RATIFICATION?
Minor may ratify K upon reaching age of majority [open manifestation of intent to be obligated]
41
[SoF] [UCC]
Signed Writing?
1. writing: intentional reduction to **tangible form**
2. signature: any symbol executed **w/ intention to authenticate writing**
3. ***_sufficient to indicate that a K for sale has been made b/w the parties_***
42
[UCC]
Warranty of fitness for particular purpose?
When
1. seller at time of K-ing has reason to KNOW
* (a) any particular purpose for which the goods are required &
* (b) that buyer is relying on seller's skill or judgment to select/furnish suitable goods,
2. goods shall be fit for such purpose.
43
Employment K provides "permanent employment"?
“Lifetime employment”?
**Permanent**: Absent contrary intention, “at will,” b/c duration term in K is considered too vague.
**Lifetime**: courts split--“at will” or literally lifetime.
Employment agreements overcome default rule of employment-at-will via express terms of K, rules published by the employer (such as those in an employee handbook), or by implication (by usage or conduct).
44
[FLORIDA DISTINCTIONS]
## Footnote
**Anticipatory Repudiation?**
A refusal to perform that is
“**distinct, unequivocal, and absolute**” is
repudiation permitting the other party
to seek assurance of performance,
to seek damages, or to mitigate damages.
45
Defense:
Misrepresentation:
Remedies?
1. **Avoidance**: defend against a breach of K claim
2. **Rescission & Reliance Damages**: bring tort action to rescind K & collect damages for reliance on the misrepresentation, including consequential damages
3. Victims of negligent & fraudulent misrepresentation **may live w/ the K & sue for the benefit of the bargain** [difference b/w received & expected]
4. **Punitive damages** are available for fraudulent misrepresentation [intentional tort]
5. Defenses **applicable under CL & UCC**.
46
Employment K doesn't state duration?
**Presumption of employment “at will”**
(either party can terminate any time, w/o it being deemed a breach of K (unless against public policy, i.e. fired for whistle blowing)).
47
Among \_\_\_\_\_\_\_, additional terms contained in an acceptance is automatically included in a K unless the (1) \_\_\_\_\_\_\_, (2) \_\_\_\_\_\_\_, or (3) \_\_\_\_\_\_\_.
Merchants
1. offer expressly limits acceptance to the terms of the offer,
2. the offeror has already objected to the additional terms or does so within a reasonable time, or
3. the term materially alters the original contract.
48
Where a party bestows benefits upon another in connection w/ an oral K, even if enforcement of that K is barred by SoF aggrieved party may recover via?
* **PROMISSORY** **ESTOPPEL** address reliance
* **QUANTUM** **MERUIT** for reasonable value of services rendered
* **RESTITUTION** may be filed for value of benefits conferred
49
Bargained-for-Consideration?
**Exchange of promises involving a legal detriment or benefit**
50
Gratuitous Promise
vs.
Gratuitous Transfer?
* Gratuitous Promise/executory **gift unenforceable**
* Gratuitous Transfer/executed **gift legally binding**
* ****How to “execute” a gift/gratuitous transfer:
* A) INTEND TO GIVE YOU GIFT &
* B) EFFECTUATE DELIVERY OR SYMBOLIC DELIVERY
51
[UCC]
K formation?
1. Both parties intend to contract &
2. there is a reasonably certain basis for giving a remedy.
52
[CL]
Specific Performance
**Breaching party ordered to perform.**
## Footnote
(1) Only available to aggrieved party when: money damages inadequate.
(2) Specific Performance generally available:
(a) unique objects or (b) real property
(3) Specific Performance Not Available for K for personal services.
53
Injunction
preventing someone from doing something
(Most common: Employment Ks)
54
An offeree ______ have knowledge of an offer in order to have the power to accept the offer.
MUST
**\*If an offeree does not become aware of the offer until after acting, then his acts do not constitute acceptance.\***
55
[UCC]
Written Confirmation of a K: ADDITIONAL vs. DIFFERENT terms?
**Transactions b/w merchants**: distinguish add’l & diff.
ADDITIONAL**:** **automatically enter K** UNLESS:
1. materially alters K
2. receiving party objects w/in reasonable time
3. Offer expressly limits acceptance to terms stated herein
DIFFERENT: **mere proposals for addition to K; omit both**
56
Illusory Promises?
Promise to perform that
leaves performance up to
the discretion of promising party
[doesn’t constitute consideration]
57
[UCC] Imperfect Tender: Buyer must accept non-conforming tender if it does _______ of this particular installment & seller gives \_\_\_\_\_\_\_?
**not substantially impair value**
**adequate assurance** he can cure
58
Unilateral K
Exchange of a promise that requests acceptance by an action.
Offeror cannot revoke offer once offeree begins performance—distinguish b/w beginning performance & mere preparations. Once performance begins, offeree will have a reasonable amount of time to complete performance but CANNOT be required to complete the performance.
59
Merchant
Both a person who regularly deals in the type of goods involved in the transaction, but also any business person when the transaction is of a commercial nature.
60
[3rd-Party Beneficiaries]
At what point does an intended beneficiary's right to sue vest?
1. Once beneficiary brings suit to enforce
2. Beneficiary changes position on reasonable reliance on K
3. Beneficiary manifests assent either by promisor or promisee's request
4. If rights have vested under express terms of K
61
[UCC]
Acceptance:
3 ways Seller can accept buyer’s offer to purchase goods for shipment?
1. Rending promissory acceptance
2. Ship conforming goods
3. Shipping non-conforming goods [CREATES BINDING K & BREACH]
* EXCEPTION: seller notifies buyer that goods *_sent as an “accommodation”_* to buyer then counter-offer not acceptance
62
**Right of**
**Replevin?**
an action enabling the return of personal property taken wrongfully or unlawfully
63
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, this breach does not \_\_\_\_\_\_\_\_\_.
give the other party a claim to damages for total breach.
64
UCC:
## Footnote
**Warranty of Merchantability:**
**If a buyer, before entering into a K,**
**has examined the goods as fully as the buyer desires,**
**or has refused to examine the goods,**
**there is no\_\_\_\_\_\_\_\_\_\_\_\_\_\_.**
**implied warranty with respect to defects that an examination would have revealed to the buyer**
65
[FLORIDA DISTINCTIONS] Construction Contracts and Indemnification?
Construction K--involving work on real property--b/w a real property owner and someone associated with the construction work on the property,
that contains an indemnity provision ***MUST have a monetary limitation on the indemnification***.
Monetary limitation MUST *not be less than $1 million per occurrence*, unless agreed by the parties.
66
Statute of Frauds: UCC:
A contract K ONLY covers?
K is only enforceable under SoF for the quantity mentioned
67
[UCC] Imperfect Tender: Non-conforming tender substantially impairs value of whole K?
**BREACH OF WHOLE K**
68
Constructive revocation?
i) action taken inconsistent w/ intention to enter proposed K, or
ii) learns of inconsistent action from reliable source (other than offeror)
69
Revival of offer
Terminated offer may be revived by Offeror. As with any open offer, the revived offer can be accepted by Offeree.
70
Reward?
Types?
offer naming price for service but not specifying an offeree:
(a) **SELF-LIMITING** REWARDS: only 1 person able to accept
(b) **OPEN-FIELD** REWARDS: may be performed by several parties
71
[UCC]
Pre-existing Duty re: Modification?
displaces common law preexisting duty rule • **agreement modifying exiting K for sale of goods needs no consideration to be binding**;
however, *must meet **UCC’s GOOD FAITH TEST*** (failure to met will make unenforceable) both for mods w/ & w/o consideration
72
Non-carrier cases: Destination K:
agreed to tender goods at a particular destination.
1. deliver goods to particular destination, seller must, at destination, put & hold conforming goods at buyer’s disposition
2. seller must also give buyer any notice of tender that’s reasonably necessary to obtain delivery.
73
Acceptance?
**MANIFESTATION** of
a **willingness** **to enter** into the **agreement**
by the offeree.
74
Excused Performance: Mutual Mistake?
Both parties have labored under a common faulty assumption regarding the present facts.
**K VOIDable by disadvantaged party**, if:
1. fact about which parties were mistaken is essential
2. both parties were mistaken &
3. disadvantage party does not bear risk or mistake under agreement
75
[SoF] [UCC]
Merchant’s
Confirmation?
Merchants enter an oral agreement & 1 of them sends other a written confirmation of agreement. Factors:
1. sufficient against sender [if sender signs & contains amount]
2. in confirmation of K
3. w/in reasonable time of oral agreement
4. Recipient has “reason to know” of content • **Exception: recipient objects w/in 10 days of receipt**
76
Offer and acceptance and the intent of the parties re: the same are governed by an \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.
objective standard/test
77
Expectation Damages
**aims to put you where you would be if fully & properly performed**
Limits on Full Recovery of Expectation Damages
1. *_Cost cannot greatly exceeds market value_* of full & proper performance;
2. *_Reasonably certain_*;
3. *_Foreseeability_*, entitled to consequential damages foreseeable at time of K &
4. *_Duty to mitigate damages_*, general is you cannot recover for losses you could have avoided without risk, burden or humiliation. You only have to make a reasonable attempt to avoid.
78
[UCC]
Provide examples of terms that typically are found to have materially altered an original K.
* Warranty Disclaimer
* Arbitration Clause
79
[CL] [Option]
Consideration?
Offeree must generally give separate consideration for option to be enforceable. If option w/in existing K, no separate consideration is required.
80
Non-carrier cases: shipment K:
* not obligated to deliver at named destination
* does not bear risk of loss while in transit
* Put goods in possession of a carrier
* make appropriate arrangements for them to be sent to buyer
* provide buyer w/ any docs necessary to enable possession of goods
* promptly notify buyer that goods have been shipped.
**Failure to notify buyer grounds for rejectment.**
81
Legal ramifications of breach of an accord?
(1) Obligor: Obligee no longer bound under A, and may choose b/w enforcing original duty or duty under the A
(2) Obligee: Original duty not discharged, but obligor may seek specific performance of the A
82
Counteroffer?
**Both a rejection & a new offer.**
Caveat---\> Mere Inquiry of offerer’s willingness to negotiate and an option holder has the right to make counteroffers during the option period without terminating the original offer.
83
Which UCC K types don’t require a specified quantity?
Output &
Requirements Ks
84
Good faith purchaser of goods in the ordinary course of business from a merchant takes ________ to the goods entrusted to a merchant when the merchant deals in the same kind of goods.
good title to the goods
85
Defense-Duress?
**compelling another party to act by means of inappropriate conduct**
1. **Threat**: manifestation of intent to inflict harm on other person (words or conduct)
2. Threat to purse criminal charges is always wrongful
3. Threat to purse civil action only wrongful, if done in bad faith
4. Economic duress
86
[FLORIDA DISTINCTIONS] Statute of Frauds governs?
**DHN**:
1. **DEBT**—K satisfying debt or obligation for less than full amount;
2. **HEALTH CARE**—K to charge H.C. provider any *_guarantee/warranty re: results of any medical procedure performed by a licensed physician,_* chiropractor, podiatrist, or dentist; &
3. **NEWSPAPER SUBSCRIPTIONS**—Subscriptions to newspapers other publications.
M. SOUR: 1. Marriage 2. Suretyship 3. One Year 4. UCC - $500+ 5. Real Property
87
Auctions “w/o reserve”?
auctioneer making offer to sell to highest bidder
88
\_\_\_\_\_\_\_ performance of service Ks does not satisfy Statute of Frauds.
**PART**
## Footnote
Exceptions: Land & Goods
89
Advertisements?
Considered ***invitations to receive offers*** from the public, unless:
1) Associated with **REWARD**, or
2) Ad **sufficiently specifies & limits** subject matter & who may qualify as an offeree (e.g., “Used car for sale for $5,000. First come, first served”; 1st 100 customers, anyone in store by 9:00 am).
90
CHARITABLE DONATION ONLY ENFORCEABLE IF EVIDENCED IN?
**WRITING**
## Footnote
*some courts recognize application of this doctrine without explicit proof that the charity relied on the promise, in order to enforce such a promise; promise of a charitable donation is enforceable under the doctrine of promissory estoppel (i.e., detrimental reliance)*
91
Post-Employment Relief: Injunction
Enforcement of employment K provisions that prohibit post-employment competition (non-compete clause) against employer. 3 factors:
1. Requires significant business justification, i.e. protecting info.
2. Scope must be reasonable in duration and location.
* i) Impact of info age on what counts as a reasonable geographical limitation: this is becoming broader
* ii) Impact of info age on what counts as a reasonable duration: shorter and shorter.
3. Express covenant, not likely to imply.
**“Blue Pencil” Rule: If it is overbroad court might re-write rather than deny enforcement altogether**
92
[UCC]
Missing Terms:
Price, Time & Place of Delivery
* Missing price: Reasonable price at time marked for delivery
* Missing time (e.g., time/date of delivery) is: Reasonable time
* Missing place of delivery: *Seller’s place of business*
93
[FLORIDA DISTINCTIONS] Pre-Existing Duty Rule?
Florida follows Second Restatement exception: Exception to pre-existing legal duty rule:
If a **3rd party offers a promise contingent**
**upon performance of a contractual obligation**
**by a party.** Under the exception,
**3rd party’s promise is**
**sufficient consideration.**
94
When contractual obligations are delegated, the delegator is not \_\_\_\_\_\_\_\_\_\_\_.
released from liability, and recovery can be had against the delegator if the delegatee does not perform.
95
Process by which the need for specific performance is decided?
Courts--not juries--decide. Factors:
1. whether the aggrieved party has “clean hands;” (IMPORTANT)
2. whether the terms of the K are fair; (IMPORTANT)
3. whether the terms of the K are sufficiently definite;
4. whether performance by aggrieved party can be reasonably assured; &
5. whether specific performance in the public interest.
96
If a deadline is not provided to accept an offer,
than a reasonable time is used.
What are the reasonable time factors?
1. SUBJECT-MATTER
2. MARKET CONDITIONS [home vs. milk]
3. DEGREE OF URGENCY used for communication [e-mails/text vs. letter]
97
[SoF] [UCC]
In-Court Admission
Party against whom enforcement is sought "admits" in his pleading, testimony, or otherwise in court that a K for sale was made
K is only enforceable: **against the AMOUNT of goods admitted**
98
Anticipatory
Repudiation?
**reason for parties to anticipate breach prior to time of breach.**
_Failure to provide CLEAR, UNEQUIVOCAL & DISTINCT assurances constitutes an anticipatory repudiation._
Based on: reneging party’s statement, OR (2) a voluntary act of party making him unable to perform. If neither applies, may ask for a reasonable demand [(a) UCC: Must be WRITTEN (b) CL: Oral or written] for clear, distinct, & unequivocal assurances
99
Detail assignments re: considerdation?
**No consideration is required, but an assignment for consideration is irrevocable.**
100
[UCC] “Firm” Offer? Enforceable for?
Merchant can make firm offer (***_irrevocable offer_***) to either buy or sell goods w/o consideration, if:
1. **MERCHANT** **OFFEROR**
2. Writing signed by Offeror (merchant)
3. Offer expressly *_states it will be held open_*
**ONLY ENFORCEABLE FOR 90 DAYS**
* Exception: 1) signed written renewal OR 2) option
101
Gratuitous promise?
Promisee has neither promised nor given anything in return to promisor; ***unenforceable*** for want/lack of consideration
102
“Past/Moral Consideration”? Exceptions?
**promise given in exchange**
**for something already given/performed**
**will NOT SATISFY bargain requirement**
Exceptions:
1. reobligating self for DEBT extinguished by statute of limitations [time not amt]; OR
2. reobligating self for debt extinguished by bankruptcy, debts discharged by BANKRUPTCY, reobligates self to prior debt
103
Defense-Unconscionability?
Types?
party uses **inappropriate bargaining tactics** to take **unfair advantage of a vulnerable party**.
## Footnote
It focuses on both the unfair process & unfair results. Types: Procedural & Substantive
104
Output K?
Buyer agrees to purchase all seller’s output for a particular good
105
Equitable Remedies Types
**Specific Performance & Injunctions**
106
Auction?
Exception?
By default an auction is?
auctioneer is inviting offers & responsive bids are offers.
Exception: auctions “w/o reserve,” auctioneer making offer to sell to highest bidder
By default, an auction is “with reserve .”
107
Assignment of Rights?
owner of right MUST
1. ***_manifest intention to assign_*,** AND
2. ***_make “a present transfer”_***
Contrast with a promise to make a *future transfer of a right* you expect to come into existence at a later date: Not an assignment.
108
[UCC]
Specific Performance
A) May be permitted if **“unique” goods** OR buyer has searched but is **unable to cover the breach**
B) Buyer has a **right of replevin** by which buyer can repossess goods identified in K, in 3 circumstances:
1. After Buyer made reasonable opportunity to cover & can't
2. Cover is futile
3. Seller shipped goods kept security interest & seller kept security interest.
109
Offers & rejections effective upon?
Receipt, not dispatch
110
Defense: Incapacity:
MINOR:
Power of avoidance (or Disaffirmance)?
Can create enforceable K **voidable at option of minor.**
* **Obligated to return goods** **upon avoidance**
* **Not liable for damages** caused to goods
* If goods sold, must **turn over proceeds earned**
* If **perishable** or non-returnable, then **no further obligation**
111
[Offers] Destruction or illegality of subject matter
Offer terminated.
112
Implied-in-law K?
[quasi-K/restitutionary obligation] Equitable imposition of a would-be K, which prevents unjust enrichment. (Emergency surgery on unconscious patient)
1. Confers **measurable BENEFIT** on Def;
2. Pl **reasonably expected to get paid**; &
3. **Unfair to let Def keep benefit w/o paying**
**look for an opportunity to decline or a good reason why there was no opportunity to decline**
113
Terms of the K must be?
**CERTAIN & DEFINITE**, or the contract fails for indefiniteness.
114
Excused Performance: 4 types?
**Mistake,**
**Impossibility,**
**Impracticability &**
**Frustration of Purpose**
115
[FLORIDA DISTINCTIONS] Punitive Damages
Punitive damages are
1. only awarded in cases of ***_intentional conduct or gross negligence_*** &
2. capped at either 3x compensatory damages or $500,000--whichever is higher.
116
Assignment of Rights--exclusions?
1. Materially alter right/risks/obligations of other party.
2. Obligor has personal interest in rendering service.
3. When it would goes against law or public policy
4. Offer cannot be assigned; option can
**Prohibited by the K: Power to assign still retained by parties & only consequence is that assignment operates as breach of K.**
117
Excused Performance: Impossibility? Types?
performance rendered impossible by events occurring after K formed
OBJECTIVE vs. SUBJECTIVE IMPOSSIBILITY
118
Specially manufactured goods cannot be?
...suitable for sale to others in the ordinary course of seller’s business.
119
Excused Performance: Impossibility:
OBJECTIVE vs. SUBJECTIVE IMPOSSIBILITY?
OBJECTIVE IMPOSSIBILITY occurs: when performance under K becomes literally impossible b/c of circumstances beyond parties’ control
SUBJECTIVE IMPOSSIBILITY occurs: performance under K becomes impossible b/c of some failure or fault on performing party. **Not excused at this point.**
120
[FLORIDA DISTINCTIONS] Promise to pay a debt after statute of limitations has run to be enforceable, must satisfy \_\_\_\_\_\_\_\_.
Statute of Frauds (written & signed by party to be charged)
121
[FLORIDA DISTINCTIONS] Construction Contracts and Indemnification: Indemnification claims do not include claims of, or damages from \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.
***Gross negligence, or willful, wanton***
***or intentional misconduct*** of the indemnitee
or employees, or for statutory violation or punitive damages
except when the statutory violation or punitive damages are caused by the indemnitor or its employees.
122
Satisfying SoF w/ part-performance--land?
Unlike other service deals, part performance of a real estate K can satisfy SoF if any 2 of the following 3 elements are met:
1. Possession
2. Payment &
3. Improvements
123
Requirement K?
**seller to supply buyer w/ all of buyer’s requirement for particular good •**
In addition to GF req, UCC prohibits any unreasonably disproportionate demand or tender, if there was either:
* stated estimate made b/w parties or
* in absence of such, any comparable prior outputs/reqs
124
Defense:
Substantive unconscionability?
**K terms unreasonably unfavorable to aggrieved party**
1. Grossly excessive price
2. Grossly disproportional consequences for a minor breach
3. Provisions binding one party but not the other
4. provisions are grossly unfair
125
Contract?
Legally enforceable agreement, which requires:
1. mutual assent (i.e., offer & acceptance) &
2. consideration.
126
Situations where parol-evidence rule does not apply to bar earlier evidence?
* **Subsequent Agreements** – agreements entered into after execution of written doc.
* Evidence relevant to a **defense against K formation** (duress, fraud, lack consideration, lack of written agreement, etc.)
* **Collateral Agreements** – PE will not affect agreement b/w parties that are entirely distinct from written agreements of K at issue.
* Evidence to interpret a **sufficiently ambiguous term** in the final agreement.
127
When a party performs an unrequested service for another party that constitutes a material benefit, the person may be entitled to recover to the extent that the other person has been \_\_\_\_\_\_\_\_\_\_\_\_.
unjustly enriched.
128
Liquidated Damages Clause:
## Footnote
**Penalty**
**provision to punish a breaching party to prevent them from breaching**. You have a right to breach & pay damages.
Factors:
1. intention of parties, benign or punishment.
2. reasonableness of liquidated clause; anticipated damages; possible to forecast damages.
3. breach vs. actual harm; is it reasonable comparable?
4. \*Burden of Proof: On party calling it a penalty. \*if the court concludes the liquidated damages clause is a penalty: the aggrieved party, takes out the provision and we’re left w/ CL.
129
Is the mailbox rule applicable if a rejection is sent first?
NO.
## Footnote
If a communication is sent rejecting the offer, and a later communication is sent accepting the contract, the mailbox rule does not apply, and the 1st one to be received by the offeror prevails.
130
[FLORIDA DISTINCTIONS] Fraudulent Misrepresentation?
Relief for a fraudulent misrepresentation: i
(1) person make false statement concerning material fact,
(2) that person knows representation is false,
(3) representation made with intent of inducing another to act on it, &
(4) party acting in reliance on the representation was injured as a result.
Not exempted by the doctrine of caveat emptor from responsibility.
131
[UCC]
Carrier cases
K where parties intend goods be moved by common carrier
132
SUBSTITUTE K
2nd agreement that immediately discharges original K, such that remedy for breach is limited to terms of 2nd K.
## Footnote
**\*If less formal, more an accord;**
**more formal, more likely substitute K.\***
133
[FLORIDA DISTINCTIONS] A refusal to perform that is ______________ is repudiation permitting the other party to seek assurance of performance, to seek damages, or to mitigate damages.
**“distinct,**
**unequivocal, &**
**absolute”**
134
Detrimental Reliance?
When offeree detrimentally relies on offeror’s promise, offer may become irrevocable; promissory estoppel
1. PROMISE
2. REASONABLE & FORESEEABLE RELIANCE
3. ACTUAL RELIANCE
4. INJUSTICE w/o ENFORCEMENT
135
Mutual Rescission?
parties agree to discharge each other’s remaining duties of performance under an existing K.
## Footnote
**Note: SoF will not prevent an oral agreement of rescission that discharges unperformed duties from being enforced unless rescission of a transfer of property is involved.**
136
Distinguish WANT/LACK/INSUFFICIENT, FAILURE, & INADEQUACY of consideration?
* Want/Lack/Insufficient - promise lacks consideration
* Failure - party has not performed in accordance w/ his promise
* Inadequacy - paid muchless than item’s worth
* courts don’t measure/weigh/fairness of exchange for purposes of measuring consideration doctrine, instead, they police through doctrine of unconsciounability
* **EXCEPTION**: in context of claim of specific performance in terms of real estate
137
Fraudulent misrepresentation need not be material, and may make K voidable at the option of adversely affected party. The K is no longer voidable, however, if, \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.
**following a misrepresentation but before the deceived party has avoided K**,
the facts are **cured so as to be in accord with the facts that were previously misrepresented**
138
[FLORIDA DISTINCTIONS] An _______ does not fall within the Statute of Frauds as a suretyship provision.
**indemnity contract**
(i.e., a promise to reimburse for monetary loss)
139
[Common Law]
How specific must an offer be?
**All ESSENTIAL terms**
must be covered in agreement.
Typically:
PARTIES, SUBJECT, PRICE, & QUANTITY.
140
[UCC]
Imperfect Tender:
Accept the Goods?
Despite improper tender, acceptance occurs when buyer has **reasonable opportunity to inspect** goods & signifies acceptance by either:
* stating goods conform to K
* taking goods despite non-conformance
* failing to make an effective rejection, or
* taking action inconsistent w/ rejection [put goods on display]
141
Partial intergration?
[Parol Evidence] Integration means that there is a writing and final writing, but some terms are not included.
142
Liquidated Damages Clause
impose a set amount of damages in the event of a breach;
cannot be a penalty
143
Defense:
## Footnote
**Undue Influence: Remedies?**
**VOIDABLE at option of aggrieved party**
* Aggrieved party entitled to restitution of any benefits conferred on other party, but must return the value in excess of those benefits to other party.
* Where vulnerable party suffers undue influence at hands of 3rd party rater than other party to K, aggrieved party has the power to avoid K at his or her option, unless:
* I. Other gives value or relies materially on the transaction; &
* II. Other party proceeding in GF w/o reason to know of undue influence.
144
Preliminary Negotiations?
Inquiry as to offeror’s exact demands for acceptance
145
Nondisclosure of a known fact is \_\_\_\_\_\_\_, if the party not disclosing the fact knows that disclosure would correct a mistake of the other party as to a basic assumption of the contract, and the failure to disclose would constitute lack of good faith and fair dealing.
**tantamount to an assertion that the fact does not exist**
146
[UCC] Non-carrier cases
Ks where PARTIES DO NOT INTEND FOR GOODS TO BE MOVED BY COMMON CARRIER
* Seller’s obligation to tender delivery & tender must be reasonable hour &
* goods must be kept available for period reasonable necessary to enable buyer to take possession [*Buyer must furnish facilities reasonably suited to receiving goods*]
147
Defense: Duress:
3rd Party Duress?
**wrongful threat made by 3rd party,**
**rather than other party to K,**
**aggrieved party will still have a valid duress claim.**
UNLESS other party to K:
1. GF w/o reason to know of duress &
2. gives value or relies materially on transaction.
148
Non-Fradulent Misrepresentation?
either NEGLIGENT or INNOCENT
1. made **false assertions** of an existing fact
2. **Material misrepresentation**
3. **Reasonable reliance**
4. Depends on whether negligent or innocent
a) **Negligent**: would known assertion was false had he exercised reasonable care
b) **Innocent**: made assertion not in accord with existing fact
149
Offer: Revocation?
Termination of offer; Offeror may revoke for any reason, if:
1. Revoked ***before offer acceptance***; &
2. ***Effectively communicated***
2 forms of revocation:
* a) Direct revocation: through direct communication
* b) Indirect revocation (Constructive revocation)
150
Acceptance under UCC?
ANY manner & medium reasonable under circumstances
151
Fradulent Misrepresentation?
**1. ∆ made false assertions of existing fact,** such as fraudulent concealment (active efforts to cover up the truth)
**2. MATERIAL misrepresentation******
a) Objective Materiality: likely to induce a reasonable person
b) Subjective Materiality: likely to specifically induce aggrieved party
**3. REASONABLE RELIANCE** Duty to read: reliance on characterization insufficient, UNLESS ∆’s a merchant and aggrieved a customer OR ∆ induces aggrieved no to read writing by devious means
**4. ∆’s state of mind**
a) Scienter [lied or didn't know the truth] &
b) Intent to mislead
152
Undue Influence?
**vulnerable but not incapacitated party who succumbs to untoward bargaining tactics & pressures from other party, where those pressures or tactics fall short of fraud or duress**
\*exam tip: a fidcuary will likely be involved\*
***_Unfair persuasion was used_***; (discussion at unusual/inappropriate time; insistent demands that transaction or business be finished immediately; use of multiple persuaders against the target of the persuasion; absence of 3rd party advisers to the target of the persuasion) &
***_Against a vulnerable party_*** (***__***mental infirmity due to age or illness, but falls short of mental incapacity; vulnerability due to recent trauma or even; vulnerable party is reliant on the other party b/c of some relationship of trust or confidence w/ the other party)
153
Defense-PUBLIC POLICY?
**K not enforceable b/c to do so would undermine or violate some important public policy**
## Footnote
(1) subject matter of K Itself is specifically prohibited by law
(2) K formed for purpose of committing a crime/illegal
(3) K performance doesn't constitute a crime, but would a tort
(4) K performance would violate values/freedoms designated by jurisdiction
Likely Contexts: (A) NON-COMPETE AGREEMENTS; (B) SALES OF GOODS FOR BRIBERY; (C) SALES OF GOODS INTENDED FOR UNLAWFUL USE; (D) LIABILITY LIMITATION PROVISIONS; & (E) UNLICENSED GOODS OR SERVICES.
154
Parol Evidence Rule
Bars the introduction of
1. Evidence of negotiations b/w parties
2. Taking place prior to or contemporaneously w/ the execution of a completely integrated, written K
\*EVIDENCE AFTER THE K’s COMPLETION ARE MODIFICATIONS,
NOT Parol Evidence ISSUE\*
155
STATUTE OF FRAUDS?
K unenforceable if not evidenced by signed writing by party against whom enforcement is sought; performance may also satisfy
156
[UCC]
Legal consequence of a failed rejection?
**Acceptance**
157
Statute of Frauds exemptions to Suretyship Ks?
1. Indemnity contracts; &
2. Contracts where the surety’s main reason for paying the debt is the surety’s own economic advantage
158
Promissory Estoppel?
Detrimental Reliance; Promissee who reasonably relies to her detriment on a gratuitous promise may be able to enforce the promise.
1. PROMISE;
2. REASONABLE & FORESEEABLE RELIANCE;
3. ACTUAL RELIANCE; &
4. INJUSTICE W/O ENFORCEMENT
159
Reliance Damages
**Put in position you were in before K was made.**
When can a party get reliance damages: Available as an alternative when expectation damages are not determined with certainty.
160
LEGAL Consequences of Duress?
* **Ks under physical compulsion are VOID**
* Other Ks entered under other forms of duress are **voidable at option of aggrieved party**.
Aggrieved party:
1. entitled to restitution of any benefits conferred under duress &
2. required to return excess value of benefits to perpetrator
161
Mailbox rule
**Acceptance effective upon dispatch—if properly addressed, postage, in hands of carrier**
## Footnote
\*Even if lost in mail still binding on parties [requires proof of dispatch] \*MB Rule not applicable: 1) if sent revocation sent 1st; & 2) options K
162
Excused Performance: Unilateral Mistake?
single party operating under a faulty assumption [party knew or had reason to know of mistake] about one or more material facts as they exist at the time of contracting.
**K void**, unless:
* based on clerical error [some jurisdictions] OR
* easily ascertainable
163
FREE ALONGSIDE
seller must deliver goods along side the vessel
164
[SoF] [UCC]
Substantial reliance by Seller of Specially Manufactured Goods
SoF EXCEPTION: Factors:
1) goods **specially manufactured for buyer**;
2) **goods NOT SUITABLE for sale to others in ordinary course of seller’s business**;
3) seller **substantially** began manufacture/procure goods; &
4) seller’s actions occurred **before receipt/notice buyer’s revocation.**
**If enforcement barred by UCC SoF, aggrieved party may have remedy via promissory estoppel**
165
**Is 3rd-party beneficiary’s right to sue subject to any defenses promisor may have to enforceability of K?**
* 3rd-party beneficiary’s rights are entirely dependent on underlying K; thus, defenses had against original party are transfered.
* Defenses that cannot be asserted: based on separate transactions.
166
Quasi-Contract?
[implied-in-law/restitutionary obligation] **Equitable imposition of a would-be K, which prevents unjust enrichment.** (Emergency surgery on unconscious patient)
1. Confers measurable on Def;
2. Pl reasonably expected to get paid; &
3. Unfair to let Def keep benefit w/o paying look for an opportunity to decline or a good reason why there was no opportunity to decline
167
Revocation of an Offer Made to Multiple Offerees
Functional Equivalents Rule: communication of revocation in ***_functionally equivalent manner_*** [power of acceptance lost, even if unaware; if more effective means of revocation reasonably available--must be used]
168
Defense-Misrepresentation? Types?
untrue statements or assertions that relate to existing facts at or before K formation [both an affirmative relief under tort or a defense]
* **Fraudulent Misrep**
* **Fraudulent Nondisclosure**
* **Non-Fraudulent Misrep**
169
Monetary Damages Types?
Expectation,
Reliance &
Restitutionary
170
[UCC]
How specific must
an offer be?
UCC is more willing to **PLUG IN THE GAPS** to find a K, even if agreement leaves out some key terms.
Generally, only need to I.D.:
Parties,
Subject, &
Quantity
**PRICE DOESN'T NEED TO BE STATED!**
171
Excused Performance: Frustration of Purpose
**contingency occurs that dramatically reduces value of performance to**
**receiving party.**
* party’s principal purpose in entering K is frustrated
* substantial frustration
* non-occurrence of event precipitating frustration was a basic assumption of the K
FoP, as an excuse to performance of a contractual obligation, is available under both the Common Law & UCC.
172
Mirror Image Rule
[CL] Acceptance must mirror terms of offer & any NON-CONFORMING acceptance is a counter-off
May allow creation if variation de minimis &
i) conclude variation was implicit in offer if
ii) bad faith on part of offeror to back out of K
“Last shot” rule: last communication governs/controls K
173
[FLORIDA DISTINCTIONS] Adequecy of consideration?
Subjective value: ***_Benefit to the promisor does not need to have an economic value._*** Regardless of the objective value, as long as promisor wants it, the giving of it will constitute adequate consideration.
[Difference in economic value b/w items exchanged is not grounds for finding that K didn't exist due to inadequate consideration]
174
Bilateral K
Exchange of promises, which is enough to render both enforceable.
**An offer requiring a promise to accept can be accepted either with a return promise or by starting performance. Commencement of performance of a bilateral K operates as a promise to render complete performance.**
175
Defense:
Procedural Unconscionability
**bargaining process producing K created an absence of meaningful choice for aggrieved party**
* Absence of bargaining power – party forced to accept proposed terms, such as Ks w/ “take it or leave it” clauses
* Fine-print terms – K included complex or arcane terms hidden in the maze of fine print in a lengthy standard form K
* Near-miss cases – party vulnerable to pressure of other party (language barriers or advanced age) but vulnerability falls short of mental incompetence/duress OR victim subjected to misleading/coercive sales tactics that fall short of actual fraud/duress
176
Excused Performance: Impracticability
**unforeseen difficulties have made performance prohibitively expensive or otherwise extremely burdensome**
1. caused by some unforeseen contingency
2. was neither assumed nor allocated by parties, &
3. increase in cost of performance would be far beyond what either party anticipated [increase in cost alone insufficient]
**UCC- Rise/collapse of market is a business risk, sort of contingency that fixed-price Ks are expected to account for. UCC recognizes impracticability: where shortage of raw materials is caused by war, embargo, local crop failure or other unforeseen SHUTDOWNS OF MAJOR SOURCES OF SUPPLY.**
177
Acceptance by silence? [Exceptions to requirement to communicate an acceptance to the offeror]
1. **REWARD** offers or contests
2. Offers where offeror can **view** **PERFORMANCE**
3. **B/C of PREVIOUS DEALING**, reasonable that offeree would notify offeror if he intends not to accept.
4. Offeror (1) gave offeree **reason to believe acceptance must come via silence**, & (2) offeree intends to accept the offer by silence
5. (1) Offeree **takes benefit of offeror’s services**; (2) w/ reasonable opportunity to reject; & (3) reason to know of offeror’s intention
178
Complete intergration?
[Parol Evidence] **A writing intended by parties to represent a final & an exhaustive account of their obligations**
* Judge--not jury--considers thoroughness & specificity of written instrument in connection w/ PE.
* **MERGER CLAUSE–reciting that writing ‘contains complete & entire agreement of parties’ is best indication of a complete K**
179
Failure of Condition Under the CL: Inexcusable Failed Condition:
DIVISIBILITY?
**series of performances over a period of time**
FACTORS:
1. Performance can be apportioned into corresponding pairs of parties’ performances?
2. Can each pair be properly regarded as agreed equivalents?
EXAM TIP: If the whole is merely the sum of its parts, it is divisible. If the whole is greater than the sum of the parts, it is not divisible.
180
Restitution Damages
**value of the benefits,**
**you confer on another party**
* *_Available at option of the aggrieved party_*,
* No double recovery, you can *_either get restitution or expectation_* not both.
* Restitution is *_only available in partial performance._*
181
Buyer obligation re: goods
* Accept conforming goods
* Tender payment in accordance w/ K
* Inspect goods. (***Buyer has right to inspect goods upon tender before making payment, even if accepted after tendering payment it does not constitute an acceptance, or negate buyer’s right for remedies***)
182
FREE ON BOARD [F.O.B.]
* If delivery point is seller’s place of business: seller need only, at his expense & risk, put goods in possession of carrier [shipment K]
* If delivery point is the buyer’s place of business or not seller’s place of business: seller must at his expense & risk, tender delivery of goods at destination location [destination K]
183
Material Breach
vs.
Substantial Performance?
* **Material breach:** treated like an express breach, discharge
* Total MB: damages based on all injured party’s remaining rights to performance
* Partial MB: damages based on part of injured party’s remaining rights to performance, i.e. a delay.
* **Substantial** **performance**: “close enough” to completely performance that courts won’t allow discharged of obligation • However, aggrieved party may still sue for damages
184
Restitutionary damages are permitted in cases where the nonbreaching party has __________ a below-market-price K. Consequently, a party may recover the __________ upon the developer as measured by the amount the the other party would pay to secure the \_\_\_\_\_\_\_\_\_\_.
partially performed;
benefit conferred;
same performance
185
UCC governs?
“Sales of goods” [not just goods sold by merchants]
186
Anticipatory Repudiation:
**Common Law vs. Florida?**
clear & unequivocal
vs.
distinct, unequivocal, and absolute
187
Failure of Condition Under the CL?
discharge party’s obligation to perform; thus, as if no K was formed
188
3rd-party beneficiary does not have the
right to sue until her rights \_\_\_\_\_\_\_\_\_\_.
VEST
* Parties to K free to modify or rescind it by mutual consent & may modify or rescind 3rd-party beneficiary provision w/o beneficiary’s consent unless & until beneficiary’s rights under the K have vested. **Unlike *_INTENDED_* beneficiaries, incidental beneficiaries: have no Standing to sue.**
189
Defense:
Incapacity:
**Mental Incompetence?**
**Need not be insane, but must be incompetent at time of K formation.** FACTORS:
* Adjudicated incompetent & guardian appointed
* No judicial declaration:
* **Cognitive defects**: unable to reasonably understand nature & consequences of transaction [on drugs]
* **Volitional defects**:
1. person *_unable to act reasonably in relation to transaction_*; &
2. *_other party knows of condition_* [manic depression when K-ing]
190
Calculating lapse of time in offers?
1. Date for offer termination: **Midnight on that date**
2. Specified # of days for offer termination: **Time starts to run from time offer received**
191
Pre-existing Duty?
cannot be deemed consideration
for a K
OR
modification of a K
192
Offer?
**MANIFESTATION**
**of a *willingness* to enter into an _agreement_**
(by offeror)
**that *creates a power* of _acceptance_**
(in offeree).
193
When Ks contain
services & goods?
DETERMINE APPLICABLE LAW BY PREDOMINATE PURPOSE OF K
#1: K LANGUAGE
#2: NATURE OF SUPPLIER’S BUSINESS
#3: RELATIVE VALUE OF GOODS VS. SERVICES EXCEPTION: Divisible Ks: Agreement divided into 2+ mini-contracts; each K is governed accordingly.
