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CA Bar Exam > Contracts > Flashcards

Contracts Flashcards

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1
Q

Pneumonic?

A

Love For Dogs - Treat Every Rover Terrifically
-Law applies? UCC/common
-Formation issues: offer/acceptance/revocation/consideration
-Defenses: Capacity, Ambiguity, Mistake, Unconscionability, Duress, Statute of Frauds, etc.
-Terms: parol evidence, UCC terms/warranties, perfect tnder
Excuse: material breach, impossibility, frustration, conditions
Remedies: specific perf, expectation interest, liquidated damages
Third Party Problems: beneficiaries, assignment, delegation

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2
Q

What law does UCC Article 2 apply to?

A

Contracts for the sale of goods

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3
Q

What is a bilateral contract?

A

One where you accept by return promise OR performance

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4
Q

What is a unilateral contract?

A

Can only accept by performance

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5
Q

How do we determine whether there is an offer?

A

Objective reasonable person standard

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6
Q

Does general advertising constitute an offer?

A

No. But can become an offer if very specific.

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7
Q

Does an offer require a price?

A
  • Yes, under common law.

- No, under UCC.

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8
Q

Does an offer require a quantity?

A

Yes, under UCC

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9
Q

When does an offer terminate?

A

If not specified, after a reasonable time.

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10
Q

When can offeror revoke?

A

-At any time prior to acceptance - but a revocation is only effective if the offeree is aware of it.

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11
Q

What is the consequence of an offeree beginning to perform under a unilateral contract?

A

Offeror must allow a reasonable time for the offeree to complete performance. Note that mere preparation does not count as beginning performance.

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12
Q

When is a revocation effective?

A

Upon receipt

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13
Q

What is the effect of a counter offer?

A

Rejection of the offer

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14
Q

What is the effect of a conditional acceptance?

A

Rejection of the offer and a counter offer

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15
Q

What is the effect under UCC of including additional terms in your acceptance?

A

If the contract is between merchants, an additional term that is not a material change is incorporated as long as the other party doesn’t object within a reasonable time.

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16
Q

What is the effect of incorrect performance on offer/acceptance?

A

It is simultaneous acceptance and breach.

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17
Q

What is consideration?

A

Bargained for exchange of legal value. Courts do not question the adequacy of consideration.

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18
Q

Is there good consideration for a partial payment of agreed upon debt?

A

No

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19
Q

Is there good consideration for payment of time barred debt?

A

Yes, enforceable because viewed as a new promise.

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20
Q

Is there a legal way to enforce a promise even if there is no consideration?

A

yes, promissory estoppel. Occurs where a promise creates a foreseeable detrimental reliance.

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21
Q

Who does NOT have capacity to enter into a contract?

A

-Children
-intoxicated
-mentally incompetent.
All will have right to disaffirm

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22
Q

What gives rise to defense of ambiguity/misunderstanding?

A

Both parties have a reasonable misunderstanding or there is a material ambiguity. Two Ships Peerless.

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23
Q

What gives rise to a defense of mistake?

A

Both parties make a mistake re: the subject matter of a contract. Court can conclude that there was no contract.

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24
Q

What gives rise to a defense of unconscionability?

A

Unfair surprise and oppressive terms - as tested at the time the parties enter into the contract

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25
Q

Statute of Frauds Categories

A

MYLEGS

Marriage // Year + // Land // Executor // Goods of $500+ // Surety

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26
Q

Does a modified contract fall under SOF?

A

Only if the original contract did

27
Q

What is the required writing under SOF? At common law and UCC

A

UCC: quantity and signature of defendant
CL: all material terms

28
Q

What is real property exception to SOF?

A

2 of 3 PPI:

Paid // Possession // Improvements

29
Q

What is service contract exception to SOF?

A

Full performance

30
Q

What is partial sale exception to SOF?

A

Partial sale portion is taken out of SOF

31
Q

What is custom goods exception to SOF?

A

Substantial beginning takes out of SOF

32
Q

What is confirmatory memo exception to SOF?

A

If both parties are merchants, a confirmatory memo by the shipping merchant to the receiving merchant is good enough if it specifies quantity and receiving merchant doesn’t object

33
Q

What is general parol evidence rule?

A

Court will not admit evidence of any prior or contemporaneous agreements to contradict final written agreement

34
Q

What are the four exceptions to Parol evidence rule?

A
  1. correct a clerical error
  2. establish a defense against formation (e.g., fraud)
  3. interpret a vague or ambiguous term in the final written agmt
  4. add to a partially integrated writing
35
Q

What are the three types of conduct that a party may use to address performance under a contract / fill in ambiguities?

A
  1. Course of performance
  2. course of dealing
  3. trade custom
36
Q

What is the implied warranty of merchantability? Who does it apply to?

A
  • Applies to merchants who regularly deal in goods of the kind.
  • Warranty is goods must be fit for their ordinary foreseeable use
37
Q

What is the implied warranty of fitness for a particular purpose? Who does it apply to?

A
  • Applies to all - not just merchants

- If buyer has special purpose and is relying on seller to select it, the goods must be fit for that particular purpose

38
Q

What is the key way to limit an implied warranty?

A

Add a disclaimer (“as is” or “with all faults”)

39
Q

Can seller limit remedies for express and implied warranties?

A

Yes, as long as they are reasonable

40
Q

What is a shipping contract and who bears risk of loss?

A
  • Where seller ships goods “free on board” or “FOB”.

- Buyer bears the risk after the seller gets the goods to a common carrier

41
Q

What is a destination contract and who bears risk of loss?

A
  • Shipment doesn’t say FOB / free on board

- Seller bears risk of loss until they arrive at a particular destination

42
Q

In shipping scenario, how does merchant bear risk of loss? How about a non merchant?

A

Merchant bears the risk until buyer takes possession. Non-merchant only bears risk until he tenders the goods.

43
Q

What is the perfect tender rule? Any exceptions?

A
  • Under the UCC, seller is required to deliver perfect tender - the right goods in the right place at the right time.
  • Exception for Installment sales
44
Q

Does perfect tender rule apply outside of the UCC?

A

No, seller only needs to deliver substantial performance

45
Q

What are buyer’s rights under a UCC contract where seller failed to deliver perfect tender? What are remedies?

A
  1. Accept all goods
  2. Accept some goods
  3. Accept some / Reject some
    Remedies: return goods, get refund, or seek damages
46
Q

What is the rule of anticipatory repudiation?

A

If one party to a contract announces their intention not to perform, the other party can cease his performance as well.

47
Q

What is the rule of failure to give adequate assurance? What contracts does it apply to?

A
  • UCC
  • If a party reasonably worries the other party will not perform, they may seek assurance. If the other party fails to assure, the requesting party can be excused.
48
Q

Contracts: What is rescission?

A

mutual agreement to terminate the contract

49
Q

Contracts: what is accord/satisfaction?

A

Agreement to accept different performance in future satisfaction of an existing duty

50
Q

Contracts: what makes a contract impossible / impractical to perform?

A

A subsequent unforeseen event makes performance impossible / impractical (e.g. destruction of something nec’y for performance)

51
Q

Contracts: what effect does death of a party have?

A

Gives rise to an excuse right of the decedent had special / essential skills. Otherwise, no excuse.

52
Q

Contracts: what effect of a failure of a condition precedent or condition subsequent?

A

Gives rise to excuse right

53
Q

Contracts: when does a party have a right to specific performance?

A

Very rarely - only applies to real property and specific goods. Only applies when monetary damages are insufficient.

54
Q

Contracts - monetary damages - what is general rule?

A

Remedy is expectation damages.

55
Q

Contracts - monetary damages - what are buyer’s options if seller breaches a UCC contract?

A
  1. cover contract // damages = cover price - original price
  2. don’t cover // damages = market price - original price
  3. keep non-conforming goods // damages = value as promised - value as delivered
56
Q

Contracts - monetary damages - what are seller’s options if seller breaches a UCC contract?

A
  1. good faith resale // damages = contract price - resale price
  2. resale not in good faith // damages = contract price - market price
  3. can’t resell // damages = contract price
57
Q

Contracts - are punitive damages allowed?

A

No

58
Q

Contracts - when are liquidated damages allowed?

A
  • Damages were difficult to estimate when entering into contract
  • the liquidated damages are a reasonable forecast of damages
  • not enforceable if it looks like it’s meant to be punitive
59
Q

Contracts - when are incidental damages recoverable?

A

always

60
Q

Contracts - what consequential damages are recoverable?

A

Reasonably foreseeable. Calandrillo’s Be Chatty Rule

61
Q

Contracts - Assignment issues - who has rights when multiple assignments?

A

If Consideration: first in time prevails

No Consideration: last prevails

62
Q

Contracts - delegation - who is liable for breach?

A

Both the delegate and the delagee

63
Q

Contracts - delegation - who can delegate?

A

Most anybody - but not contract party with special skills relevant to performance

CA Bar Exam (15 decks)

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