Contracts Flashcards
Offer
an outward manifestation to enter into a contract (1) Intent + (2) specific terms
Advertisements
not an offer, invitation to offer
Termination of Offer
(1) Death
(2) Lapse of Time
(3) Rejection
(4) Counter Offer
(5) Revocation
Indirect Reovcation
person receiving offer LEARNS another deal was made
Option Contract
additional consideration to have option contract to make irrevocable
Firm Offer
UCC K (1) between merchant (2) signed writing by merchant 1. If no time states 3 months is MAX time valid
Unilateral Contract
a promise for an act
1. Offer is Irrevocable when performance begins
Bilateral Contract
a promise for a promise – words enough for K
Acceptance
agree to offer
Mirror Image Rule
acceptance has to mirror offer, Common Law
Acceptance by Silence
effective if offeror know silence is okay
Acceptance by Performance
words or performance to accept
Mailbox Rule
Acceptance is effective when sent
Exception – Rejection 1st, then Acceptance, 1st in time wins
UCC Acceptance
sale of goods
1. Can accept even if there is difference
Consideration
bargained for exchange
Ways to be tested on Consideration
(1) Illusory Promise
(2) Promise to give a gift
(3) Past or Moral Consideration
(4) Promise to Pay
(5) Forbearance for Lawsuit
(6) Promissory Estoppel
(7) Accord and Satisfaction
Illusory Promise
not valid consideration
Promise to give a gift
invalid consideration
Past or moral consideration
not enforceable
Promise to Pay a Debt barred by SoL
Valid
Forbearance for Lawsuit
Valid
Promissory Estoppel
promise that induces on to rely to their detriment
Accord and Satisfaction
occurs when there is a debt. Settlement – cannot come after rest of it
a. Part payment even though paid in full, still owe remaining
b. Debt, can’t pay, settlement, can’t go after remaining
c. Not sure if there is debt, make payment, amount is final
Defenses to Enforceability
(1) Age
(2) Mental Illness
(3) Duress
(4) Undue Influence
(5) Unconscionability
(6) Illegal
(7) Mistake
(8) Misrepresentation
(9) Non-Compete Clause
(10) Statute of Frauds
Age
Voidable at option of Minor
Mental Illness
Void
Duress
Wrongful Threat
Undue Influence
Unfair Bargaining Position
Unconscionability
result of enforcing K is unfair
Illegal Contract
not enforceable
Unilateral Mistake
1 party is mistaken about term in K, not a defense, UNLESS (1) other party knew it was a mistake, OR (2) clerical error
Mutual Mistake
defense, no meeting of the minds. Remedy? Rescission
Intentional Misrepresentation
(1) intentionally say with scienter (2) w/intent to induce reliance
Negligent Misrepresentation
(1) special relationship (2) omission (3) reliance (4) injury
Non-Compete Clauses
MUST be reasonable to be enforceable
Statute of Frauds
(1) Marriage
(2) Ks over a Year
(3) Land
(4) Executor Contracts
(5) Guarantor Contracts
(6) Sale of Good over $500
Land Contracts - Part Performance Exception
pay or take possession or make improvements on the land, does not be in writing if part performance
Guarantor/Surety Contracts
promising to pay for debt of another
1. Exception: if purpose is to benefit me, not other person, then no need for writing
Sale of Goods over $500
Exception: part-performance also applies
Merchant Confirmation
if one merchant sends another a (1) written confirmation signed by sender (2) includes the quantity (3) no objection w/10 days of receipt (4) acts as a writing for SoF
What is included in a Legal writing?
- Parties Subject Matter
- Material Terms
- Signed by Party to be Charged
Parol Evidence and Interpretation
Applies to things prior to or at the time entered into the contract
Final/Complete Integration Contract
Parol Evidence is NOT admissible
Merger Clause
final agreement between parties
Ambiguous term
parol evidence allowed to clear up an ambiguity
Partial Integration
parol evidence is admission, anything that supplements original terms with contract that are CONSISTENT
i. Anything that contradicts or materially alters contract is NOT admissible
Always Admissible Parol Evidence
i. Fraud
ii. Mistake
iii. Duress
iv. Condition Precedent
v. Course of Dealing
vi. Trade Custom
Risk of Loss - NO Carrier
if seller is merchant, risk is on seller until buyer takes possession
1. If seller is not merchant, risk of loss is on seller until seller makes item available to buyer
Shipment Contract
default rule, risk of loss shifts to buyer when goods are delivered to carrier
Destination Contract
risk of loss shifts to buyer when goods are delivered to destination
F.O.B. Seller
shipment contract, risk until good delivered
F.O.B. “anything else”
destination contract, risk on buyer
Requirements Contract
desire to buy all the widgets
Good faith
as long as good faith okay
Modification - Common Law
needs new consideration
Modification - UCC
good faith, no new consideration
Oral or Written Consideration - Common Law
Both are valid
UCC Oral or Written Modification
clause prohibiting oral modification in K valid
Mutual Modification
as long as terms are fair and reasonable
Condition Precedent
event before contract
Condition Concurrent
event during contract
Condition Subsequent
event after contract
Waiver of condition
saying forget about condition, you may perform regularly
Bad Faith
if one party acts in bad faith then that party still has to perform
Avoiding Forfeiture
condition excused if big loss
Non-conforming goods
(1) may reject, (2) may accept, (3) may reject part and accept part
Installment contract & non-conforming goods
if one shipment is nonconforming then not total breach of contract if it affects the installment and it cannot be cured
1. If the 1 nonconforming shipment will ruin entire value of contract then contract is breached
Impracticability
unforeseen event makes performance too difficult or expensive
Impossibility
nobody can perform, i. Exception- (1) temporary impossibility or (2) preparation of impossibility
Frustrations of Purpose
reason you entered contract is no longer present
Anticipatory Repudiation
before contract performance, unequivocal refusal to perform = total breach
Demand Assurances
when doubtful about performance, need to respond to demand in a reasonable amount of time. In UCC, demand must be in writing and within 30 days
Expectation Damages
default, value of contract if performed; (1) foreseeable and (2) reasonably certainty
1. Contract price (–) minus what you already would have received (+) plus any costs
Reliance Damages
(1) unreimbursed costs prior to contract (2) cannot get expectation damages
Restitution Damages
market value of the services, option of the non-breach party instead of expectation damages. (1) getting back value already given and (2) contract partially performed
Consequential Damages
because of breach foreseeable costs
Liquidated Damages
determined at time of contract enforceable if (1) reasonable and (2) not a penalty
Quantum Meruit
BREACH PARTY is seeking damages, reasonable value of services, even breaching can recover value of work done minus whatever damages
Seller Damages
contract price if goods delivered and accepted
a. Some or none delivered and not resold – contract price minus market price
b. None delivered and resold – contract price minus resell price
c. Incidental Damages – seller can always get
d. Lost Volume Profits – measure by profit seller would have made plus any costs minus payment of resale
Buyer Damages
depends if buy replaced
a. If replaced, Contract price minus new goods
b. If not, contract price minus the market price of goods at the time you learn of the breach
Equitable Damages
when remedy at law is inadequate
Specific Performance
subject matter is unique, land is always unique
Injunction
to prevent irreparable harm
Recession
no meeting of the minds, if K never happened
a. Mistake
b. Misrepresentation
c. Duress
d. Lack of Capacity
