Contracts Flashcards

Question 1

Q

Can a communication from S to B relating to S’s sale of Blackacre to B be an offer even though nothing is said about price? Offer?

Answer

A

No. Common law has an absolute rule than favors clarity - real estate needs price term.

Question 2

Q

General problems in contract law . . .

Answer

A

Applicable law
Formation of contracts
Terms of contract
Performance
Remedies for unexcused nonperformance
Excuse of nonperformance
Third-party problems
“Armadillos from Texas play rap, eating tacos.”

Question 3

Q

A homeowner mailed a letter to a prospective buyer on January 15 offering to sell her house for $25,000. The letter was delivered to the buyer on January 17. The buyer mailed a letter to the homeowner on January 19 stating that she accepted the offer.The buyer’s letter of January 19 operates as an acceptance even if:

Answer

A

The buyer’s letter is lost by the post office.Even if the post office loses the acceptance, a contract is formed. Under the mailbox rule, the acceptance becomes effective when the letter is put out of the possession of the offeree, i.e., when it is properly posted. This is true if the offeror at least implicitly authorized the offeree to usethe mails in accepting and the mails are a reasonable means of responding to the offer. Here, the homeowner’s mailing of her offer authorized the buyer to use the same method in accepting.

Question 4

Q

NBC offers Ashlee Simpson $25,000 to sing “Autobiography” on “Saturday Night Live.” Ms. Simpson agrees to sing. What if Ms. Simpson does not do what she agreed to do; what if she “lip syncs” instead of sings? Bilateral or unilateral contract?

Answer

A

Bilateral

Question 5

Q

Under the mailbox rule, the acceptance becomes effective when . . . .

Answer

A

the letter is put out of the possession of the offeree, i.e., when it is properly posted. This is true if the offeror at least implicitly authorized the offeree to usethe mails in accepting and the mails are a reasonable means of responding to the offer.

Question 6

Q

Law governing sale of goods

Answer

A

Article 2

Question 7

Q

How do you identify a gratuitous promise?

Answer

A

The mother made a gratuitous promise to the creditor; she received no consideration for it (she did not ask for anything in return for her promise).

Question 8

Q

Law governing real estate

Answer

A

Common law

Question 9

Q

Under section 90 of the Restatement (Second) of Contracts, a promisee could enforce a promise if . . .

Answer

A

he reasonably and foreseeably relied on the promise2. detrimental

Question 10

Q

Law governing services

Answer

A

Common law

Question 11

Q

The manufacturer has a cause of action for breach of contract. Because the contract was for goods priced at $500, the Statute of Frauds must be satisfied under U.C.C. section 2-201. Because both the retailer and the manufacturer are merchants, a memorandum of the terms of the sale sent by the manufacturer to the retailer satisfies the Statute of Frauds unless . . . .

Answer

A

the retailer objects within10 days

Question 12

Q

Law governing mixed deals AND exception

Answer

A

2 steps:

all or nothing
most important part

except: if contract divides payment, then apply UCC to sale of goods part and common law to the rest

Question 13

Q

The rights of the third-party beneficiary do not vest until:

Answer

A

(i) it manifests assent in a manner invited or requested by the parties; (ii) it learns of the contract and detrimentally relies on it; or (iii) it brings a lawsuit to enforce its rights.(microwave dinners; airline; microwave supply 3rd party)

Question 14

Q

General test: Manifestation of commitment

Answer

A

An offer is one person’s (the offeror) manifestation of willingness to contract. Look for words or conduct showing commitment by that person. The basic test is whether a reasonable person in the position of the offeree would believe that his or her assent creates a contract. If I offer to sell you my 1973 Cadillac for $400, that results in a legal obligation for me, the offeror, and an opportunity for you, the offeree.

Question 15

Q

A dealer in oriental rugs acquired an antique rug measuring 24 feet by 36 feet. A banker inspected the rug and orally agreed to buy it for the asking price of $65,000, provided he was successful in purchasing the house he was trying to buy, because it had a living room large enough to accommodate the rug. The sale agreement was later reduced to writing, but the provision concerning the purchase of the house was not included in the written agreement.If the banker is unsuccessful in acquiring the house he wants because the owner decided not to sell, and the dealer sues the banker for the purchase price. The banker will prevail b/c . . .

Answer

A

he was unable to acquire the house he wanted.In general, the parol evidence rule bars oral evidence contradicting a written agreement which was intended to be a final and exclusive embodiment of the parties’ agreement. However, one exception to this general rule provides that parol evidence is admissible to show a condition precedent to the existence of a contract.

Question 16

Q

Missing price term in sales contract

Answer

A

Sale of real estate – common law – price and description required, not an offer

Sale of goods – Article 2 – no price requirement

Question 17

Q

If there is an anticipatory repudiation, then the nonbreaching party can . . .

Answer

A

(i) sue for damages, (ii) contract with a third party, or (iii) do nothing.

Question 18

Q

Definition of Contract . . .

Answer

A

A contract is an agreement that is legally enforceable.

Question 19

Q

Difference b/w anticipatory repudiation and prospective inability to perform . . . (service)

Answer

A

AR language must be clear. Not “maybe.”

Question 20

Q

Definition of Offer and test . . .

Answer

A

An offer is one person’s (the offeror) manifestation of willingness to contract.

The basic test is whether a reasonable person in the position of the offeree would believe that his or her assent creates a contract.

Question 21

Q

If the fact pattern language amounts to a prospective inability to perform (service), the innocent party may . . .

Answer

A

suspend performance until he receives adequate assurances that performance will be forthcoming.

Question 22

Q

Missing price term in an real estate sale contract offer. Offer?

Answer

A

Sale of real estate – common law – price and description required, not an offer

Question 23

Q

If the buyer became insolvent, the manufacturer could, under the U.C.C., require that . . .

Answer

A

the buyer pay cash upon delivery or give assurances of payment.

Question 24

Q

Can a communication from S to B relating to S’s sale of Blackacre to B be an offer even though nothing is said about price? Offer?

Answer

A

No. Common law has an absolute rule than favors clarity - real estate needs price term.

Question 25

Q

A breaching party may seek restitution damages for _________ unless __________.

Answer

A

a. the fair value of any benefit conferred, the reasonable value of services providedb. there is an expressed condition that would reasonably be understood to provide for forfeiture of payment unless there is full performanceA landscaper entered into a written contract with a developer to landscape a 30-house subdi- vision at a price of $4,000 for each house. The contract provided for payment of the $120,000 only on completion of the landscaping for all the houses. After completing 20 houses, the landscaper demanded payment of $80,000. The developer refused. The landscaper then walked off the job without doing any landscaping on the other 10 houses.What may the landscaper recover from the developer?(C) The reasonable value of the landscaper’s services in landscaping the 20 houses, less the developer’s damages for the failure to landscape the other 10 houses.

Question 26

Q

Can a communication from S to B relating to S’s sale of her car to B be an offer even though nothing is said as to price?

Answer

A

Yes. Art. 2. Nothing said about price, but can still be an offer if parties still intend.

Sale of goods – Article 2 – no price requirement

Question 27

Q

Damages for an innocent party in a breached services contract where a benefit has been conferred and no express condition that would reasonably be understood to provide for forfeiture of payment unless there is full performance are?

Answer

A

As a nonbreaching party, the developer has the choice of remedies. The developer may enforce the benefit of this bargain and elect to pay the landscaper the contract price ($120,000) minus the cost to have the last 10 houses landscaped. Alternately, the developer may rely on the material breach as a reason to set aside the bargain, in which case the developer need only pay the landscaper the net benefit received, i.e., the reasonable value of the landscaper’s services for the first 20 houses, less any damages incurred due to the landscaper’s failure to perform.

Question 28

Q

Can a communication from S to B relating to S’s sale of her car to B be an offer if it provides for the sale for a fair price?

Answer

A

No. Another specific content problem to watch for: Vague or ambiguous material terms not an offer under either common law or UCC
[Appropriate, fair, reasonable]

Question 29

Q

B “offers” to buy grits from S for five years. There is not a specific quantity term in the “offer”; instead, it provides that B shall purchase all its grits from S. Offer?

Answer

A

Yes. This is an offer. Not vague or ambig. Any time we see this fact pattern, almost always
complimentary issue . . . increase in req . . . .
Requirements or output contracts are not vague or ambiguous and are valid.

Increase in requirements. Buyer can increase requirements so long as the increase is in line with prior demands. No unreasonably disproportionate limitation on increases.

Question 30

Q

B “offers” to buy grits from S for five years. B buys 1,000 pounds of grits in each of the first three years of the agreement. B then orders 1,020 pounds the fourth year. What result?

Answer

A

This is a permissible increase b/c not unreasonably disproportionate. It’s 20 compared to the
base of 1000. If 10, 10, 10, but then wants to increase by 20-30, then not valid.
(Note: law is clear on increases; law is unclear on decreases - where unclear, they don’t ask the questions
b/c want answers that can’t be challenged)

Increase in requirements. Buyer can increase requirements so long as the increase is in line with prior demands. No unreasonably disproportionate limitation on increases.

Question 31

Q

General rule of advertisements and exceptions . . .

Answer

A

General rules: An advertisement or price quotation is not an Offer.

Exceptions:

(i) An advertisement can be a unilateral offer if it is in the nature of a reward. For example, Carbolic Smoke Ball Company promises 100 pound reward to anyone who catches the flu after using its smoke ball as directed.
(ii) An advertisement can be an offer if it specifies quantity and expressly indicates who can accept. For example, Lefkowitz Department Store advertises “1 fur coat $10 – first come, first served.”
(iii) Price quotation can be an offer if sent in response to an inquiry.

Question 32

Q

Ways to terminate an offer . . .

Answer

A

(kill the caterpillar)

lapse of time
death of a party prior to acceptance
words or conduct of offeror; i.e., revocation of an offer
rejection

Question 33

Q

Duringthebreak,IwriteinyournotesthatIoffertosellyoumy1973Cadillac for $400. The writing fails to indicate how long the offer will be kept open. Can you accept the offer five years from now?

Answer

A

No. Offers don’t live forever after a reasonable time.
NOTE: mindset going into the bar is that every fact in the fact pattern is there for a reason - no fact is
filler; there to lead you or mislead you . . . ex. if they give you the date the offer was made and date of
response.

Question 34

Q

How is an offer is revoked . . .

Answer

A

(a) Later unambiguous statement by offeror to offeree of unwillingness or inability to contract, or
(b) Later unambiguous conduct by offeror indicating an unwillingness or inability to contract that offeree is aware of. (2 player game)

Question 35

Q

On January 15, I offer to sell Sharon Stone my 1973 Cadillac for $400. The next day, while standing in the shower, I exclaim, “I have changed my mind. I do not want to sell my Cadillac to Sharon Stone.” Is the offer to Ms. Stone revoked?

Answer

A

No. Not unless she’s in the shower with him. SHARON STONE must be in the shower with Epstein.

Question 36

Q

On January 15, I offer to sell Sharon Stone my Cadillac for $400. The next day I sell my Cadillac to Conviser. Is the offer to Ms. Stone revoked?

Answer

A

No. Understand that she won’t get the Cadi, but that’s not what they are asking. They are asking about her contract law rights. Answer the question that is asked.

Question 37

Q

On January 15, I offer to sell Sharon Stone my Cadillac for $400. The next day I sell my Cadillac to Conviser. Ms. Stone sees Conviser driving my Cadillac on January 16 and learns from him that he has bought the Cadillac. Is the offer to Ms. Stone revoked?

Answer

A

Yes. Offer is dead. We have the 2 steps: later unamb. and aware.

Question 38

Q

On January 15, I offer to sell Sharon Stone my Cadillac for $400. The next day I make the same offer to Conviser. Ms. Stone learns that I have made the offer to Conviser. Is the offer to Ms. Stone revoked?

Answer

A

Multiple offers not revocation.

No. Willing to sell the car to any of those people. Multiple offers not revocation.

Question 39

Q

Situations in which an offer cannot be revoked, i.e., the offer is irrevocable.

Answer

A

Option: An offer cannot be revoked if the offeror has not only made an offer but also (i) promised to not revoke (or promised to keep the offer “open”) AND (ii) this promise is supported by payment or other consideration (“option”)
UCC “Firm Offer Rule”: An offer cannot be revoked for up to three months if (i) offer to buy or sell goods, (ii) signed, written promise to keep the offer open, and (iii) party is a merchant. (Merchant is GENERALLY a person in business.)
Reliance: An offer cannot be revoked if there has been (1) reliance that is (2) reasonably foreseeable and (3) detrimental.
Unilateral contract: The start of performance pursuant to an offer to enter into a unilateral contract makes that offer irrevocable for a reasonable time to complete performance.

Question 40

Q

UCC Firm Offer Rule . . .

Answer

A

UCC “Firm Offer Rule”: An offer cannot be revoked for up to three months if (i) offer to buy or sell goods, (ii) signed, written promise to keep the offer open, and (iii) party is a merchant. (Merchant is GENERALLY a person in business.)

Question 41

Q

S, a used car dealer, offers to sell B a 1973 Cadillac for $400. The offer is in writing, signed by S, and expressly promises it will be kept open for a week. Can S revoke?

Answer

A

Not for a week. It is an offer to sell goods, we have a signed written promise not to revoke, the person
promising is a merchant. What is essential for an option, BUT NOT NECESSARY for merchant? No
requirement that paid for. Firm Offer ONLY applies to Art 2 and only if a merchant.

UCC “Firm Offer Rule”: An offer cannot be revoked for up to three months if (i) offer to buy or sell goods, (ii) signed, written promise to keep the offer open, and (iii) party is a merchant. (Merchant is GENERALLY a person in business.)

Question 42

Q

S, a used car dealer, offers to sell B a 1973 Cadillac for $400. The offer is oral and includes a promise that it will be kept open for a week. Can S revoke?

Answer

A

Firm offer rule requires that it must be in writing. Never have an oral triggering of firm offer rule.

UCC “Firm Offer Rule”: An offer cannot be revoked for up to three months if (i) offer to buy or sell goods, (ii) signed, written promise to keep the offer open, and (iii) party is a merchant. (Merchant is GENERALLY a person in business.)

Question 43

Q

S, a used car dealer, offers to sell B a 1973 Cadillac for $400. The written offer is signed by S and states it will not be revoked for six months. Can S revoke?

Answer

A

critical word: “six” - firm offer rule has an absolute cap of 3 months. It is irrevocable for 3 months. So if the parties agree on a time period that is longer than 3 months, then it gets to reduced to 3 months.

UCC “Firm Offer Rule”: An offer cannot be revoked for up to three months if (i) offer to buy or sell goods, (ii) signed, written promise to keep the offer open, and (iii) party is a merchant. (Merchant is GENERALLY a person in business.)

Question 44

Q

S, a used car dealer, offers to sell B a 1973 Cadillac for $400. The written offer is signed by S and states it will not be revoked but does not state a time period. Can S revoke?

Answer

A

No. Courts will supply a time period. Whatever reasonable under the 3 mths. Do not have to have a specific time period expressed.

UCC “Firm Offer Rule”: An offer cannot be revoked for up to three months if (i) offer to buy or sell goods, (ii) signed, written promise to keep the offer open, and (iii) party is a merchant. (Merchant is GENERALLY a person in business.)

Question 45

Q

S, a used car dealer, offers to sell B a 1973 Cadillac for $400. The written offer is signed by S. Can S revoke?

Answer

A

House = common law . . . therefore no Firm Offer Rule . . . therefore need paid for promise. Answer: Yes
can revoke.

Question 46

Q

An offer cannot be revoked if there has been reliance that is . . .

Answer

A

reasonably foreseeable and

2. detrimental.

Question 47

Q

G is a general contractor who is bidding on a contract to build a new hotel, using various subcontractors. S, a subcontractor, submits a bid to G to do the painting work for $100,000. G relies on S’s bid in making its bid and is awarded the hotel construction contract. Can S still revoke its bid?

Answer

A

No, detrimental reliance. Reasonably foreseeable.

Question 48

Q

The start of performance pursuant to an offer to enter into a unilateral contract makes that offer . . .

Answer

A

irrevocable for a reasonable time to complete performance.

Question 49

Q

O offers P $1,000 to paint O’s house. O’s offer states that it can be accepted only by performance. P starts painting. Can O still revoke?

Answer

A

This second sentence will appear at least 4 times. When see that = unilateral . . . if you see the word “offer”
followed by the phrase “only by,” it’s unilateral contract.
Answer: No. Can’t still revoke b/c the start of performance pursuant to an offer to enter
into a unilateral contract makes that offer irrevocable for a reasonable time to complete performance.

Unilateral contract: The start of performance pursuant to an offer to enter into a unilateral contract makes that offer irrevocable for a reasonable time to complete performance.
(i) Unilateral/performance.

Question 50

Q

O offers P $1,000 to paint O’s house. O’s offer states that it can be accepted only by performance. P buys paint. Does this trigger rule #4 so that O cannot revoke?

Answer

A

No. Mere prep. That is not the start of performance. If any doubt b/w performance and prep, always go to prep. Tested far more often. Opens the can of paint and stirs it = prep. Could be reliance, but needs to be a detrimental reliance. So they need to give you a fact like: can’t return the paint.

Question 51

Q

Methods of indirect rejection . . .

Answer

A

(1) counteroffer
(2) conditional acceptance, OR
(3) additional terms “mirror image rule” (NOT FOR CONTRACTS FOR SALE OF GOODS: CL ONLY)

First two apply to all contracts; additional terms rule does not apply to contracts for sale of goods, i.e., common law only.

Question 52

Q

Bargaining does/does not terminate the offer?

Question 53

Q

Counteroffers do/do not terminate options?

Question 54

Q

S offers Blackacre to B for $10,000. B responds, “I will only pay $9,000.” Can B later accept S’s offer to sell for $10,000?

Answer

A

No. Counteroffer rejects = kills the offer. No born again offers.

Question 55

Q

On January 15, S offers Blackacre to B for $10,000. B pays S $2 for S’s promise not to revoke the offer until April 5. On March 3, B makes a counteroffer to S of $9,000. Can B still accept S’s offer?

Answer

A

Yes. The counteroffer exception for options. Generally counteroffers kill. Exception = options.

Question 56

Q

S offers Blackacre to B for $10,000. B’s response is, “Will you take $9,000?” Can B later accept S’s offer?

Answer

A

Yes. Bargaining not a counteroffer. If the response to

an offer is interrogative sentence, then bargaining.

Question 57

Q

Conditional acceptance effect on offer - common law vs. UCC . . .

Answer

A

Common law: rejects and becomes a counteroffer that can be accepted by conduct

vs.

UCC: rejects

Question 58

Q

a. L offers to lease an apartment to T by sending T a signed lease that is silent about arbitration of disputes. T adds a paragraph that states that T “accepts provided that all disputes shall be resolved by arbitration of disputes” and signs. Has T accepted L’s offer creating an express contract?
b. If, after receiving T’s conditional acceptance, L sends T the keys to the apartment, is there a contract?
c. Is the arbitration term a part of the contract?

Answer

A

a. Lease = common law. No. Joe Biden rule.

b. Yes. There is a contract based on T’s communication as the offer and L’s conduct as the acceptance.
Common law = conditional acceptance kills the offer and replaces it.
Art. 2 = it’s a rejection

c. Yes.

Question 59

Q

a. B sends S a purchase order for polyester pant suits. The purchase order makes no mention of arbitration of disputes. S sends an acknowledgment form that provides for arbitration of disputes and states “accept only if you agree that all disputes shall be submitted to arbitration.” No further communications or actions. Has S accepted B’s offer creating an express contract?
b. If S sends B the polyester pant suits and B pays for them, is there a contract?
c. Is the arbitration term a part of the contract?

Answer

A

a. No. Conditional acceptance is rejection in Art. 2.
b. Yes. BUT, the contract is based solely on the conduct of both S and B.

c. No. This where differs from common law. In common law, treat response as new offer. Under Art. 2,
doesn’t make it b/c looking at the conduct of both parties.

Question 60

Q

Under common law, a response to an offer that adds new terms is treated like . . . .

Answer

A

Mirror Image Rule:
Under common law, a response to an offer that adds new terms is treated like a counteroffer rather than an acceptance. LIMITED TO CL

Question 61

Q

a. L offers to lease a building to T by sending T a signed lease that is silent about arbitration of disputes. T adds a sentence that states that “All disputes shall be resolved by arbitration of disputes,” and signs. Has T accepted L’s offer creating an express contract?
b. Can T later accept L’s offer?

Answer

A

No. Not Joe Biden Rule; not saying word accept followed by language.
Not acceptance. It is a rejection. It kills the offer. This is common law.

No. Dead offer.

Question 62

Q

UCC Article 2 (2-207)

Answer

A

Additional or different terms not rejection under UCC Article 2 (2-207): Seasonable expression of acceptance

Question 63

Q

2 questions to answering UCC 2-207 issue . . .

Answer

A

First question: Is there a contract?
Under the UCC, a response to an offer that adds additional or different terms, but does not make the new terms a condition of acceptance, is generally treated as an acceptance – a “seasonable expression of acceptance.” Whether the parties are merchants is irrelevant in answering this first question.

Second question: Is the additional term a part of the contract?
The additional term is not a part of the contract unless both parties are merchants. Even If both parties are merchants, the additional term is not a part of the contract if the additional term is “material” [fact question] or if the additional term is objected to by original offeror.

Question 64

Q

B sends S a signed purchase order for grits that is silent about arbitration of disputes. S responds by sending back a signed acknowledgment form that states that “All disputes shall be resolved by arbitration.” Is there a contract?

Answer

A

Yes. The difference w/ 33 is that in 33 there is EXPRESS INSISTENCE. If the response merely sets out a new term, then acceptance.

Answer 63

A

a. No. Saturday delivery not a contract term. Even if both merchants,
only part if not objected to later and not a material term.

b. No.
c. No. Not objected to later and not a material term. Material term is a question of fact.
d. No. “Accept on the condition that” is indirect rejection.

Answer 64

A

Exception: Start of performance is not acceptance of unilateral contract offers. Completion of performance is required. Again, start of performance is an implied promise to perform. Offers to enter into unilateral contracts cannot be accepted by a promise. If offer requires “performance” for acceptance, then “performance” for purposes of acceptance of that offer means completion of performance.

Answer 65

A

offer + only by = unilateral
No. In 27 we are looking at effect on offeror and here it’s offeree.

offer+no words+start of performance =
general rule: bilateral = painter has opportunity not obligation.

Answer 66

A

First, all communications OTHER THAN ACCEPTANCE are effective only when received.

Second, acceptance is GENERALLY effective when mailed (i.e., the “mailbox rule”).

Third, if a rejection is mailed before an acceptance is mailed, then neither is effective until received.

Fourth, you cannot use the mailbox rule to meet an option deadline.

Answer 67

A

Mailbox Rule
Rule 1: most communications have no effect until received
Rule 2: while most have no effect until received, an acceptance is effective when sent
Yes. There is a contract.

Answer 68

A

Mailbox Rule
Rule 3: if the rejection is the first thing sent, then nothing matters until it arrives (so Rule 3 replaces
Rule 2).

Answer 69

A

Mailbox Rule
No.
Option contract.
Rule 4: to meet an option deadline, must have been received b/f the deadline, not sent before the deadline. Rule 2 no effect on option deadlines.

Answer 70

A

a. Yes. Question is does he have legal rights.

b. Yes. Buyer doesn’t have to keep wrong widgets and can recover damages.

Answer 71

A

Accommodation (i.e., explanation) exception: counteroffer and no breach.

“explanation” - in 43 the seller sent the wrong goods, but here it’s wrong + explanation - he’s
trying to be helpful and we don’t want to impose. No contract.

No breach of contract.

Answer 72

A

1) a person who knows about the offer at the time she accepts (2) who is the person to whom it was made. Offers cannot be assigned; options can be assigned unless the option otherwise provides.

Answer 73

A

Rewards and knowing of the offer

who can accept?: person that knows about the offer. Not acceptance of the offer. NOTE: this will only
be relevant to reward situations.

Answer 74

A

Nonassignability of offers

No because . . . Offers are not assignable. But . . . options are.

Answer 75

A

Assignability of options

Yes. Offers are not assignable, but options are.

Answer 76

A

(1) lack of consideration or a consideration substitute for the promise at issue; (2) lack of capacity of the person who made that promise; (3) Statute of Frauds; (4) existing laws that prohibit the performance of the agreement; (5) public policy; (6) misrepresentations; (7) nondisclosure; (8) duress; (9) unconscionability; (10) ambiguity in words of agreement; and (11) mistakes at the time of the agreement as to the material facts affecting the agreement.

Answer 77

A

First, identify the promise breaker, i.e., the person who is not doing what she promised to do. Second, ask whether that person asked for something in return for her promise, i.e., bargained for something. Third, look at the person who is trying to enforce the promise and ask what requested legal detriment that person sustained. In sum, look for bargained-for legal detriment.

Answer 78

A

Asked for by the promisor IN EXCHANGE for her promises. Consideration fact patterns have people doing stuff that they were asked to do.

Answer 79

A

No. L never asked T to paint the apartment which means there is no consideration. (later we’ll talk about promissory estoppel)

“Bargained for” means:
Asked for by the promisor IN EXCHANGE for her promises. Consideration fact patterns have people doing stuff that they were asked to do.

Answer 80

A

Legal detriment

Even though its not something that you are actually doing, its something you have a right to do.
Therefore, yes. Legal consideration. Sidway case: drinking or smoking son

Answer 81

A

Promise as consideration

Yes. S’s promise to sell. Unless illusory.

Yes. B’s promise to buy. Unless illusory promise.

Answer 82

A

Illusory promise exception

a. No. S’s promise is illusory. We’ll see work illusory promise. Rule of thumb: every time you see illusory promise in the answer, it’s the wrong answer b/c they can’t test it without being too obvious. Won’t see illusory promise fact pattern.
b. No longer illusory.

Answer 83

A

“Past consideration”:

(a) General rule: not consideration
(b) Exception: expressly requested by promisor and expectation of payment by promisee:

promise maker/breaker: Homer
what bargaining for? nothing
Stuff that happened before the promise cannot be consideration for the promise. No new consideration.
Exception: expressly requested by promisor and expectation of payment.
No.

Answer 84

A

“Past consideration”:

(a) General rule: not consideration
(b) Exception: expressly requested by promisor and expectation of payment by promisee.

Answer 85

A

Yes. The expressly requested exception.

“Past consideration”:

(a) General rule: not consideration
(b) Exception: expressly requested by promisor and expectation of payment by promisee.

Answer 86

A

(a) Common law
(i) General rule: doing what you are already legally obligated to do is not new consideration for a new promise to pay you more to do merely that. Under common law new consideration is required for contract modification.
(ii) Exception: addition to or change in performance
(iii) Exception: unforeseen difficulty so severe as to excuse performance
(iv) Exception: third-party promise to pay

vs.

Article 2:
Article 2 does not have a pre-existing legal duty rule. New consideration is not required to modify a sale of goods contract. Good faith is the test for changes to an existing sale of goods contract.

Answer 87

A

a. Doing what you are already obligated to do is not past consideration. No, not legally enforceable. No
legal detriment. What Kinky did is what was already legally obligated to do. (sometimes called the
preexisting duty rule) . . . Except if addition to or change in performance AND unforeseen difficulties AND third party promise.

b. Yes. New consideration b/c change in performance therefore new detriment. Kinky gets the additional 5.
c. Yes. Unforeseen difficulty.
d. Yes. third party promise to pay exception.

“Pre-existing contractual or statutory duty rule” [Common law different from Article 2]:

(i) General rule: doing what you are already legally obligated to do is not new consideration for a new promise to pay you more to do merely that. Under common law new consideration is required for contract modification.
(ii) Exception: addition to or change in performance
(iii) Exception: unforeseen difficulty so severe as to excuse performance
(iv) Exception: third-party promise to pay

Answer 88

A

Article 2:
Article 2 does not have a pre-existing legal duty rule. New consideration is not required to modify a sale of goods contract. Good faith is the test for changes to an existing sale of goods contract.

a. No. No new consideration. All S did is what he is legally obligated to do.
b. Yes if in good faith. Art II does not require consideration but does require good faith.

Answer 89

A

Key is whether debt is due and undisputed. If debt is due and undisputed, then part payment is not consideration for release.

Answer 90

A

Part payment as consideration for release, i.e., promise to forgive balance of debt:
Key is whether debt is due and undisputed. If debt is due and undisputed, then part payment is not consideration for release.
(a) Due and undisputed:

a. If debt is due and undisputed then part payment is NOT consideration for release.
Undisputed = no disagree about existence or amount
Answer: No. No new detriment. If you owe 3, then you pay 2, then that’s no detriment to you.
No new consideration.

b. Yes. Not yet due (or disputed)

Answer 91

A

A written promise to satisfy an obligation for which there is a legal defense is enforceable without consideration.
Promissory estoppel
Seal

Answer 92

A

A promise is legally enforceable even though there is no consideration if there is one of the following consideration substitutes:
1. A written promise to satisfy an obligation for which there is a legal defense is enforceable without consideration.

a. A written promise to satisfy an obligation for which there is a legal defense is enforceable without consideration. No new consideration,
b. but yes C can enforce the new $600 promise.

Answer 93

A

Elements:

(i) Promise,
(ii) Reliance that is reasonable, detrimental, and foreseeable, and
(iii) Enforcement necessary to avoid injustice.

Answer 94

A

Comparison of consideration and promissory estoppels:

a. No. Wasn’t bargained for. Nothing in the fact pattern that says L asked T to paint.
b. Yes. Any time get a fact pattern in which someone does some unrequested act, we don’t analyze as consideration, we analyze as PE.

Answer 95

A

A. Who lacks capacity to contract?
1. infant – under 18,
2. mental incompetents – lacks ability to understand agreement, or
3. intoxicated persons if other party has reason to know.
B. Consequences of incapacity:
1. Right to disaffirm by person without capacity
2. Implied affirmation by retaining benefits after gaining capacity (ratification):
3. Quasi-contract liability for necessaries:
A person who does not have capacity is legally obligated to pay for things that are necessary such as food, clothing, medical care or shelter, but that liability is based on quasi-contract law, not contract law.

Answer 96

A

Implied affirmation by retaining benefits after gaining capacity (ratification):

No capacity at time of agreement. Capacity today. No complaint or objection. Law says:
when gained capacity, making agreement all over again. Yes. Now enforceable. Called: implied affirmation.

Answer 97

A

Quasi-contract liability for necessaries:
A person who does not have capacity is legally obligated to pay for things that are necessary such as food, clothing, medical care or shelter, but that liability is based on quasi-contract law, not contract law.

a. No. No contract L for necessaries. (Even if shelter) BUT instead there is quasi contract L.
b. Yes. Quasi contract L.

Answer 98

A

(1) performance (2) or a writing signed by the defendant.

Answer 99

A

The Statute of Frauds is a statute designed to prevent fraudulent claims of the existence of a contract. Statute of Frauds makes it harder to make such a false or fraudulent claim by requiring the claimant to have objective proof – proof other than just testimony that a contract exists – before the claimant gets its day in court.

Answer 100

A

Promises to answer for the debts of another [suretyship]
Service contract not “capable” of being performed within a year from the time of the contract (i.e., more than one year):
Transfers of interest in real estate (with exception for leases of year or less)
Sale of goods for $500 or more:

Answer 101

A

Courts try to limit the use of the Statute of Frauds. Courts have construed “answer for” in a way that substantially limits its applicability. “Answer for” is not merely a promise to pay someone else’s debts, but rather a promise to pay another person’s debts only if that person does not herself pay. LOOK FOR A GUARANTEE. LOOK ALSO FOR THE MAIN PURPOSE EXCEPTION. Courts have also created a “main purpose” exception. If the “main purpose” of the obligation allegedly guaranteed was to benefit the guarantor, then not even that guarantee is within the Statute of Frauds.

Answer 102

A

SOF/Promises to answer for the debts of another

No. FL and MBE, SOF limited to allegation that Conviser has promised to pay for debt of another. Not a guarantee. SOF does not apply. This is just an allegation. See 68.

Answer 103

A

SOF/Promises to answer for the debts of another

a. This is a guarantee. Compare 67. 67 allegation that he promise to pay. 68 is promise to pay if the other guy
didn’t pay. Answer: Yes. Makes no sense; should be treated like 67 but not.

b. Even if is guarantee like 68, then more limited by “main purpose exception.”
68 is guarantee for paint being used on Epstein’s house. 69, by compare, the allegation is that Conviser guranteed the payment being used on Convisor’s house. That’s a lot more credible. In that case, going to give them their day in court. This is because of the “main purpose exception.” Main purpose benefit gurantor, then not within guarantor.

Answer 104

A

Service contract not “capable” of being performed within a year from the time of the contract (i.e., more than one year):
(a) Specific time period, more than a year – S/F applies.

a. More than a year from time of contract. Can’t finish in one year, so yes within the SOF.
b. Yes. Early termination is IRRELEVANT.

Answer 105

A

Specific time, more than a year from date of contract – S/F applies.

Yes. Not capable of being performed in a year. The Kenny G problem: it is not how long the performance actually lasts. It’s can the performance be completed with a year. Look for date contract entered in to
and the date performance required.

Answer 106

A

Specific time, more than a year from date of contract – S/F applies.

“Starting next month” - No.

Answer 107

A

Task (nothing said about time) – S/F does not apply. Recall the language of the Statute: “not capable of being performed” within a year. “Capable,” in essence, means theoretically possible with unlimited resources; ignore what actually happens; key is what might have happened with unlimited resources.

No. If no time period specified, NEVER a SOF problem. Capable of being performed within a year. Capable = theoretically possible with unlimited resources. (move the pyramids to Coral Gables is capable)

Answer 108

A

Life – S/F does not apply.

No. Theoretically possible of within a year. P could die tomorrow.

Answer 109

A

Transfers of interest in real estate (with exception for leases of year or less):

No. No one is transferring interest in the land.

Answer 110

A

Transfers of interest in real estate (with exception for leases of year or less):

a. Yes. Transfer of interest.
b. Yes.

Answer 111

A

Yes. Does not have to be fee simple.

Answer 112

A

No. Your experience is that you sign a lease. They are trying to play on that. IF LEASE FOR
ONE YEAR OR LESS IT IS NOT WITHIN THE SOF.

Answer 113

A

Sale of goods for $500 or more:

a. Art 2 is old. $500 was big bucks. Yes. Its $500 or more. If it had been $400, not in SOF.

b. No. To say that it is within the SOF, doesn’t mean that the litigation is resolved. It means that one
particular D is not available to him.

Answer 114

A

performance
writing
judicial admission
estoppel

Answer 115

A

Performance:
The Statute of Frauds can be satisfied by performance. The five rules for satisfaction of the Statute of Frauds by performance vary depending on whether the contract is a real estate transfer contract, services contract, or a sale of goods contract.
(a) Performance and transfer of real estate. (performance rule #1):
Part performance satisfies the Statute of Frauds in transfers of real estate. Part performance requires any two of the three: (i) improvements to the land, (ii) payment, and (iii) possession.

a. oral + land = SOF
the objective evidence is possession of the land and makes improvement.
No. No SOF defense. Requires 2 of the three. They have them. Improvement and possession.

b. Yes. Doesn’t have any of the 3 needed for performance.

Answer 116

A

part performance in transfer of real estate (need 2 of 3: (i) improvements to the land, (ii) payment, and (iii) possession)
full performance by either party in a services contract
part performance does NOT satisfy SOF in services contract
Seller’s part performance – ordinary goods
General rule is that part performance of a contract for the sale of goods satisfies the Statute of Frauds, but only to the extent of the part performance. More specifically, look to see if question is about delivered goods or undelivered goods.
specially manufactured goods (custom)

Answer 117

A

CL = Look at the contents of the writing OR WRITINGS – all material terms test [who and what]. Look also at who signed the writing. The writing satisfies the Statute of Frauds so that there is no Statute of Frauds defense if the writing has been signed only by the defendant, i.e., person who is asserting the Statute of Frauds defense.

UCC 2 = The Article 2 Statute of Frauds’ requirements for contents of a writing are different from the common law “material terms test.” The writing must simply indicate that there is a contract for the sale of goods and contain the quantity term [how many]. Generally, the writing must be signed by the defendant with a limited exception for transactions between two merchants where there is a delay in responding.

Answer 118

A

the authorization must be in writing only if the contract to be signed is within the Statute of Frauds, i.e., the authorization must be of “equal dignity” with the contract.

Answer 119

A

By (1) looking at the deal with the alleged change and (2) determining whether the deal with the alleged change would be within the Statute of Frauds. If the deal with the alleged change would be within the Statute of Frauds, then the alleged modification agreement must be in writing.

Answer 120

A

CL = ineffective; ignore them

UCC 2 = effective unless waived

Answer 121

A

if the subject matter is illegal (kill x)

2. if there is an illegal purpose and P had reason to know of illegal purpose (Delta flies hitman)

Answer 122

A

exculpatory agreement that exempts intentional or reckless conduct from liability
a covenant not to compete without a reasonable need or reasonable time and place limits

Answer 123

A

(1) a statement of “fact” before the contract, (2) by one of the contracting parties or her agent,
(3) that is false, and
(4) induces the contract.
NOTE: No wrongdoing required for material misrepresentations.
Contract not enforced.
**Misrep matters

Answer 124

A

Generally, a person making a contract has no duty to disclose what she knows. . Wrongdoing requirement for nondisclosure as a defense Look for fiduciary-like relationship or concealment.

Answer 125

A

The two basic tests, (i) unfair surprise (procedural) and oppressive terms (substantive) are, (ii) tested as of the time the agreement was made (iii) by the court.

Court won’t enforce contract.

2 critical phrases are the terms : unfair surprise to describe the agreement process (ex. undue time pressure or print too small) AND oppressive terms

Answer 126

A

There will be no contract if (i) parties use a material term that is open to at least two reasonable interpretations, and (ii) each party attaches different meaning to the term, and (iii) neither party knows or has reason to know the term is open to at least two reasonable interpretations.

Answer 127

A

Distinguish misrepresentation fact patterns from mistake fact patterns. Generally, relief for the former but not the latter. Relief for mutual mistake only if both parties are mistaken (not just uncertain) about existing facts (mistake is different from uncertainty). Even then, no relief for mistake if the person seeking relief bears the risk of mistake.

Answer 128

A

Generally, courts have been even more reluctant to allow a party to avoid a contract for a mistake made by only one party. There will be relief for situations in which the other party had reason to know of the mistake, i.e., palpable mistake.

Answer 129

A

Written agreement that court finds is the final agreement, triggers the parol evidence rule.

Answer 130

A

Contract clause such as, “This is the complete and final agreement.” Persuasive but not conclusive.

Answer 131

A

Evidence of earlier agreements cannot be considered for the purpose of contradicting the terms in the written contract BUT
A court may, however, consider evidence of such terms for the limited purpose of determining whether there was a mistake in integration, i.e., a mistake in reducing the agreement to writing.
The parol evidence rule does not prevent a court from considering evidence of earlier words of the parties for the limited purpose of determining whether there is a defense to the enforcement of the agreement, such as misrepresentation, fraud, or duress.
The parol evidence rule does not prevent a court from considering evidence of earlier agreements to resolve ambiguities in the written contract.
The parol evidence rule prevents a court from considering
evidence of earlier agreements as a source of consistent, additional terms unless the court finds (i) that the written agreement was only a partial integration or (ii) that the additional terms would ordinarily be in a separate agreement.

Answer 132

A

IN THIS ORDER > > >

Course of performance – same people, same contract:
S contracts to sell 1,000 chickens a month to B for 12 months. The first three shipments are boiling hens, and B does not complain.
Course of dealing – same people, different but similar contract: S contracts to sell 1,000 chickens a month to B for 12 months. Under prior chicken contracts, S sent B boiling hens, and B complained.
Custom and usage – different but similar people, different but similar contract:
S contracts to sell 1,000 chickens a month to B for 12 months. It is customary in the chicken industry to use the word “chicken” when the deal covers chickens up to six pounds including boiling hens.

Answer 133

A

Shipment contracts:
which means that the seller completes its delivery obligation when it (i) gets the goods to a common carrier, and (ii) makes reasonable arrangements for delivery, and (iii) notifies the buyer. In a shipment contract, the seller completes its delivery obligation before delivery is completed.
Destination contracts:
The other possibility is that the contract is a destination contract, which means that the seller does not complete its delivery obligation until the goods arrive at the destination.

Answer 134

A

Most contracts with delivery obligations are shipment contracts. Watch for the use of FOB – free on board (city) – as source for determining whether the contract is a shipment contract or a destination contract. FOB followed by city where the seller is or where goods are means shipment contract; FOB followed by any other city means destination contract.

Answer 135

A

Risk of loss issues arise where (i) after the contract has been formed, but before the buyer receives the goods, (ii) the goods are damaged or destroyed, and (iii) neither the buyer nor the seller is to blame.
For example, a grocer in New Ulm, Minnesota ordered coffee from a New York seller. Even though the coffee was shipped in the best available containers, rats “infiltrated” the coffee while it was in transit. The coffee was delivered; the grocer paid for the coffee. The grocer then opened the packages of coffee and wrote the following letter of complaint:

Answer 136

A

If the risk of loss is on the buyer, he has to pay the full contract price for the lost or damaged goods. If the seller has the risk of loss, no obligation on the buyer and possible liability on the seller for nondelivery.

Answer 137

A

#1 Agreement: agreement of the parties controls.
#2 Breach: breaching party is liable for any uninsured loss even though breach is unrelated to problem.
#3 Common carrier delivery: risk of loss shifts from seller to buyer at the time the seller completes its delivery obligations.
#4 “Catch-all” (no agreement, no breach, no delivery by a carrier): the determining factor is whether the seller is a merchant. WHETHER THE BUYER IS A MERCHANT IS IRRELEVANT. Risk of loss shifts from a merchant-seller to the buyer on the buyer’s “receipt” of the goods; risk of loss shifts from a nonmerchant seller when he or she “tenders” (tender=make available) the goods.

Answer 138

A

Express:
Look for words that promise, describe or state facts. Distinguish from sales talk which is more general, an opinion. Or, look for sample or model.
Implied warranty of merchantability:
When any person buys any goods from any merchant, a term is automatically added to the contract by operation of law – that the goods are fit for the ordinary purpose for which such goods are used.
(a) Triggering fact: seller is a merchant WHICH HERE MEANS IT DEALS IN GOODS OF THAT KIND.
(b) Warranty: goods are fit for ordinary purposes.
Implied warranty of fitness for a particular purpose:
(a) Triggering facts: buyer has particular purpose; buyer is relying on seller to select suitable goods; seller has reason to know of purpose and reliance.
(b) Warranty: goods fit for particular purpose.

Answer 139

A

Statute of limitations:
There is a four-year statute of limitations, and generally the statute starts running on possible warranty actions when the “tender of delivery is made,” not when the buyer learns that the product is defective.
Privity:
Privity of contract means that the plaintiff contracted with the defendant. If the plaintiff did not buy the goods from the defendant, there is a possible lack of privity issue. There is a division among states as to how to resolve lack of privity issues. Your state materials will explain the privity law in your state if lack of privity is a possible state essay issue.
Buyer’s examination of the goods:
Look for a fact pattern that tells you that the buyer has examined the goods. There are no implied warranties as to defects which would be obvious on examination.
Disclaimer – e.g., “there are no warranties:”
(a) Express warranties generally cannot be disclaimed.
(b) Implied warranties of merchantability and fitness can be disclaimed in EITHER of the following ways:
(i) CONSPICUOUS language of disclaimer, mentioning merchantability, OR
(ii) “as is” or “with all faults.”
Limitation of remedies: does not eliminate warranties, simply limits or sets recovery for any breach of warranty:
(a) possible to limit remedies even for express warranties.
(b) general test is unconscionability.
(c) prima facie unconscionable if breach of warranty on consumer goods causes personal injury.

Answer 140

A

First, “perfect tender” only applies to sales of goods. Second, “perfect tender” does not mean that the seller’s performance must be perfect; rather, the goods and the delivery must conform to the contract terms. Third, a less than “perfect tender” by the seller generally gives the buyer the option of rejection of the delivered goods, so long as the buyer acts in good faith.

Answer 141

A

UCC2 only

There are only four things you need to know about rejection of goods for the bar exam. First, you need to be able to distinguish rejection of an offer from rejection of the goods. Second, if the seller does not meet the perfect tender standard, the buyer has the option to retain and sue for damages or reject “all or any commercial unit” and sue for damages. Third, the buyer must take reasonable care of the rejected goods and should not continue to use rejected goods. Fourth, this rejection alternative is limited by cure, installment contracts and acceptance.

Answer 142

A

UCC2 only

A. Seller’s reasonable ground to believe would be acceptable, perhaps with a money allowance. In very limited situations, a seller has the option of curing even after the contract delivery date. “Reasonable grounds” is the statutory test. Look for information in the question about prior deals between that buyer and seller. (ex. took green widgets on 20 prior deals)

B. Time for performance has not yet expired

Answer 143

A

An installment contract REQUIRES or AUTHORIIZES (i) delivery of the goods in separate lots (ii) to be separately accepted. (ongoing relationship; not just one delivery)
Be sure that you see the differences between (1) entering into an installment sales contract that provided for multiple deliveries and acceptances and (2) buying something on credit and paying for it in monthly installments.

Answer 144

A

The buyer has the right to reject an installment only where there is a substantial impairment in that installment that can’t be cured. (not worried about minor stuff)

Answer 145

A

A. Importance of acceptance:
If the buyer accepts the goods, it cannot later reject them.
B. Payment and acceptance:
Payment without opportunity for inspection is not acceptance.
C. Failing to reject:
Rejection must be timely. Failure to reject after the buyer had reasonable time to reject is acceptance.
D. Retention as acceptance:
Effect of buyer’s keeping goods is implied acceptance – LOOK FOR THE BUYER’S KEEPING THE GOODS WITHOUT OBJECTION: more specifically look for a fact pattern that states when buyer first received goods and when buyer first complained to seller.

Answer 146

A

Same as rejection of the goods: buyer returns the goods and the seller returns payments made. Remember that if a buyer accepts the goods, it can NOT later reject the goods. In limited circumstances, a buyer can effect a cancellation of the contract by revoking its acceptance of the goods.

Answer 147

A

nonconformity substantially impairs the value of the goods, and
excusable ignorance of grounds for revocation or reasonable reliance on seller’s assurance of satisfaction, and
revocation within a reasonable time after discovery of nonconformity.
(ex. sleeping bag)

Answer 148

A

A. Specific performance/injunction
B. Seller’s reclamation from an insolvent buyer of goods
C. Entrustment
ex. O takes her watch to J for repair. J both repairs watches and sells new and used watches. J wrongfully sells O’s watch to B, a bona fide purchaser. Can O recover her watch from B? No. The later bona fide purchaser is more deserving. Shouldn’t have trusted the person you
gave it to.

Answer 149

A

The various FL damages rules are
all based on the principle of compensating
the P by protecting its expectation interest. (not rewarding; not compensating
Expectation is simply expecting no breach.
Expectation damages should put P in same dollar position as no breach.

Answer 150

A

Part 7 UCC 2
(a) Damages for seller’s breach:
(i) Seller breaches, buyer keeps the goods
[Fair market value if perfect – fair market value as delivered] or [cost of repair].
(ii) Seller breaches, seller has the goods:
[market price at time of discovery of the breach – contract price] or [reasonable replacement price – contract price] whichever is greater.
(b) Damages for buyer’s breach:
(i) Buyer breaches, buyer keeps the goods [contract price].
(ii) Buyer breaches, seller has the goods:
[contract price – resale unless seller cannot resell in which case the seller can recover the contract price and in some situations provable lost profits].

(c) Volume Seller (look for regular inventory)
Gets provable lost profit.

Answer 151

A

Costs incurred in dealing with the breach such as costs of storing rejected goods in a sale of goods or finding a replacement in a services contract

Answer 152

A

Consequential damages does not mean all damages caused as a consequence of the breach. Rather think of damages as being either (1) general damages, i.e., kind of loss that any person would sustain or (2) consequential damages, i.e., kind of loss that is special to this plaintiff. Consequential damages are limited to damages arising from P’s special circumstances and recovery of consequential damages is limited to situations in which D had reason to know of these special circumstances at the time of the contract. (Need special info about P).

Answer 153

A

avoidable damages (continuing to perform or turning down comparable opportunity)
damages that cannot be established w/ reasonable certainty (first time; but look for reliance damages)

Answer 154

A

Tests are (1) damages were difficult to forecast at time contract was made and (2) provision is a reasonable forecast.

Answer 155

A

(1) EXCUSE OF PERFORMANCE BECAUSE OF THE OTHER GUY’S NONPERFORMANCE
E.g., P contracts to paint O’s house on Saturday for $1,000. P does not paint the house. Obviously, O does not have to pay P, i.e., O is excused from performing (paying) because of P’s nonperformance.
(2) EXCUSE OF PERFORMANCE BECAUSE OF THE OTHER GUY’S SAYING IT IS NOT GOING TO PERFORM (ANTICIPATORY REPUDIATION)
(4) EXCUSE BECAUSE OF INSECURITY ABOUT WHETHER THE OTHER GUY IS GOING TO PERFORM
(5) EXCUSE BECAUSE OF IMPROPER PERFORMANCE
(6) EXCUSE BECAUSE OF NONOCCURRENCE OF AN EXPRESS CONDITION
(7) EXCUSE BY REASON OF A LATER CONTRACT
(8) EXCUSE OF PERFORMANCE BY REASON OF A LATER, UNANTICIPATED EVENT

Answer 156

A

A. Unambiguous:
Anticipatory repudiation is an unambiguous statement or conduct (i) that the repudiating party will not perform (ii) made prior to the time that performance was due.
B. Excuse:
Anticipatory repudiation by one party excuses the other party’s duty to perform.
C. Time of recovery:
Anticipatory repudiation generally gives rise to an immediate claim for damages for breach unless the claimant has already finished her performance.
D. Unless anticipatory repudiation is retracted.

Answer 157

A

Anticipatory repudiation can be withdrawn (retracted) so long as there has not been a material change in position by the other party. If the repudiation is timely retracted, the duty to perform is reimposed but performance can be delayed until adequate assurance is provided.

Answer 158

A

f the words or conduct of one party give “reasonable grounds for insecurity,” then the other party can, in writing, demand adequate assurance and if it is “commercially reasonable,” can suspend performance until it gets adequate assurance. The three concepts again are (1) reasonable grounds for insecurity, and (2) written demand for adequate assurance, and (3) commercially reasonable to stop performance.

Answer 159

A

A. Article 2 and perfect tender rule:
B. Common law and material breach rule:
First, damages can be recovered for any breach. Second, only a material breach by one guy excuses the other guy from performing a contract governed by common law. Third, whether a breach is material is a fact question (and so whether a breach is material is not likely to be a bar exam question). Fourth, if there is substantial performance then the breach is not material. If the breach is material, then the performance was not substantial.

see pg. 56

Answer 160

A

General rule – strict compliance is required for “satisfaction” of a condition

Exception: Condition of personal satisfaction of one of the
parties – honest and good faith dissatisfaction:
A promise by X to pay Y for her work only if X is satisfied with the work is not an illusory promise. X is excused from paying Y only if X’s not being satisfied is honest and good faith. In other words, conditions of personal satisfaction of one of the contracting parties do not have to be strictly complied with. While the contract language is “only if X is satisfied with the work,” courts simply look to whether a reasonable person would be satisfied.

Answer 161

A

[Conditional acceptance]. S offers to sell B his house for $100,000. B responds that she accepts “on condition that a mortgage at no more than 4% can be obtained.” Is there a contract?
No. Joe Biden story.

[Express condition]. S and B enter into an agreement that states that B will buy and S will sell S’s house for $100,000 “on the condition that a mortgage at no more than 4% can be obtained.” Is there a contract?
Yes. If it is simply the words of an offeree in response (one person), no agreement. But as here, both people consented, then yes we have a contact with an express condition.

Same facts as (H172). If B is unable to obtain a mortgage for less than 5%, is B liable for breach of contract?
No. Excuse b/c of the non-occurance of a condition.

NOTE: Exception: Condition of personal satisfaction of one of the
parties – honest and good faith dissatisfaction:
A promise by X to pay Y for her work only if X is satisfied with the work is not an illusory promise. X is excused from paying Y only if X’s not being satisfied is honest and good faith. In other words, conditions of personal satisfaction of one of the contracting parties do not have to be strictly complied with. While the contract language is “only if X is satisfied with the work,” courts simply look to whether a reasonable person would be satisfied.

Answer 162

A

Waiver:
Identify the person who benefits from or is protected by the express condition. Then look for a statement by that person giving up the benefits and protection of the express condition.
Prevention:
Look for the person protected by the express condition hindering or preventing the occurrence of the express condition.

Answer 163

A

A. Rescission (cancellation):
The key is whether performance is still remaining from each of the contract parties. (executory) - if performance is done; can’t rescind.
B. Accord and satisfaction (substituted performance):
C. Modification (substituted agreement)
D. Novation

Answer 164

A

The key is whether performance is still remaining from each of the contract parties. (executory) - if performance is done; can’t rescind.

Answer 165

A

Meaning of “accord,” “satisfaction”:
On bar exam, accord questions will have an agreement by the parties to an already existing obligation to accept a different performance in satisfaction of the existing obligation.
Effect of accord AND SATISFACTION:
(a) If the new agreement (“the accord”) is performed (satisfaction), then performance of the original obligation is excused.
DIFFERENT FROM MODIFICATION - agree to let you not pay for agreement to provide vs. actually having to perform (i.e. satisfaction)

Answer 166

A

A novation is an agreement between BOTH parties to an existing contract to the substitution of a new party, i.e., same performance, different party.

Answer 167

A

Novation excuses the contracted for performance of the party who is substituted for or replaced.

Answer 168

A

Novation requires the agreement of BOTH parties to the original contract, and excuses the person replaced from any liability for nonperformance. Delegation does not require the agreement of both parties and does not excuse.

Answer 169

A

A. Damage or destruction of subject matter of contract (CL vs. UCC2)
B. Death AFTER contract:
1. General effect of death on contract obligations:
Death does not make a person’s contract obligations disappear.
2. Exception:
Death of party to contract who is “special” person excuses performance.
C. Subsequent law or regulation:
1. Later law makes performance of contract illegal – excuse by impossibility. (ex. stripping outlawed)
2. Later law makes mutually understood purpose of contract illegal – excuse by frustration of purpose. (lypo to strip)

Answer 170

A

third-party beneficiaries, assignments of contract rights, and delegations of contract duties.

Answer 171

A

Only intended beneficiaries have contract law rights. Intent of the two parties to contract determines whether intended or incidental.

Answer 172

A

Creditor/donee:
Intended beneficiaries are either donees or creditors. Usually donees. Look at whether third-party beneficiary was a creditor of the promisee before the contract.

Answer 173

A

The test is whether the third party knows of and has relied on or assented as requested. If so, her rights have vested and the contract cannot be canceled or modified without her consent unless the contract otherwise provides.

Answer 174

A

Who can sue whom? (Four bar exam important rules):

Beneficiary can recover from promisor
Promisee can recover from promisor
General rule: Beneficiary cannot recover from promisee
Limited exception: Creditor beneficiary can recover from promisee BUT ONLY on pre-existing debt

Answer 175

A

If the third-party beneficiary sues the promisor, the promisor can assert any defense that he would have had if sued by the promisee.

Answer 176

A

Assignment is a transfer of rights under a contract. Assignment involves two separate steps: first step – contract between only two parties; and second step – one of the parties later transfers rights under that contract to a third party. Need to see the difference between assignment of an offer and assignment of a contract. Need to see the difference between assignment of a contract and third-party beneficiary.

Answer 177

A

If there is a contract provision regarding assignment:
If the fact pattern includes language of contract regarding assignability, determine whether the contract (a) prohibits assignments or (b) invalidates assignments.
(a) Prohibition: Language of prohibition takes away the right to assign but not the power to assign, which means that the assignor is liable for breach of contract, but an assignee who does not know of the prohibition can still enforce the assignment.
(b) Invalidation: Language of invalidation takes away both the right to assign and the power to assign so that there is a breach by the assignor and no rights in the assignee.
If there is nothing in fact pattern about contract language regarding assignability:
Even if a contract does not in any way limit the right to assign, common law bars an assignment that substantially changes the duties of the obligor.
(a) Assignment of right to payment (never substantial change) (ex. pay Robin instead of Batman)
(b) Assignment of right to contract performance other than right to payment (usually substantial change on bar)
(ex. Batman defend Miami instead of Gotham)

Answer 178

A

General rule is that consideration is not required, but gratuitous assignments (and only gratuitous assignments) can be revoked.

Answer 179

A

Who can sue whom?

Assignee can recover from the obligor.
Assignor for consideration cannot recover from obligor
Obligor has same defenses against assignee as it would have against assignor
Payment by obligor to assignor is effective until obligor knows of assignment. Similarly, modification agreements between obligor and assignor are effective if the obligor did not know of the assignment.

Answer 180

A

In an assignment FOR CONSIDERATION, the assignor warrants (1) the right assigned actually exists, and (2) the right assigned is not subject to any then existing defenses by the obligor, and (3) the assignor will do nothing after the assignment to impair the value of the assignment. Assignor, however, does not warrant what the obligor will do after the assignment.

Answer 181

A

All gratuitous assignments:
General rule: Last assignee generally wins (LAST IN TIME)
Multiple assignments for consideration:
(a) General rule: First assignee for consideration wins (FIRST IN TIME)

Answer 182

A

Party to a contract transferring work under that contract to third party. For example, P contracts to paint O’s house for $1,000. P (delegating party) and X (delegatee) agree that X will paint O’s (obligee) house.

Answer 183

A

Relationship of assignment and delegation:
A contract creates both rights and duties. For example, if P contracts to paint O’s house for $1,000, then P has a duty to paint and a right to payment, and O has a duty to pay and a right to the painting of her house. Assignment is the transfer by a party to a contract of his rights or benefits under the contract to a third party who was not a party to the contract. Delegation is the transfer by a party to a contract of his duties or burdens under the contract to a third party who was not a party to the contract.
Often a contracting party makes both an assignment and a delegation of his rights and duties under the contract to a third party. Often multistate examiners use the term “assignment” in a problem involving an assignment and a delegation and even in a problem involving only a delegation.

Answer 184

A

Which duties are delegable?
Generally, contractual duties are delegable. The limitations on delegation are very limited. Delegations are permitted unless either (1) contract prohibits delegations or prohibits assignments or (2) “personal services contract” that calls for VERY SPECIAL skills.

Answer 185

A

Delegating party always remains liable.

2. Delegatee liable only if she receives consideration from delegating party.

Answer 186

A

implied affirmation.

Answer 187

A

(a) Performance and transfer of real estate. (performance rule #1):
Part performance satisfies the Statute of Frauds in transfers of real estate. Part performance requires any two of the three: (i) improvements to the land, (ii) payment, and (iii) possession.

a. oral + land = SOF
the objective evidence is possession of the land and makes improvement.
No. No SOF defense. Requires 2 of the three. They have them. Improvement and possession.

b. Yes. Doesn’t have any of the 3 needed for performance.

Answer 188

A

(b) Performance and services contracts:
(i) Full performance by either party satisfies the Statute of Frauds.
(performance rule #2):

5 years. No way Conviser can perform in 1 year. So in SOF. Any objective evidence that there is such an agreement?
Yes. Look judge, I wrote all this material. So yes, the SOF has been satisfied.

Answer 189

A

(ii) Part performance of a services contract does not satisfy the Statute of Frauds.
(performance rule #3):

a. No.
b. No. In order to recover under contract law, there must be a contract. There is no legally
enforceable agreement b/c of the SOF defense.
c. Yes. MOST COMMON QUASI CONTRACT QUESTION ON BAR

Answer 190

A

(c) Part performance and sale of goods contracts:
(i) Seller’s part performance – ordinary goods
General rule is that part performance of a contract for the sale of goods satisfies the Statute of Frauds, but only to the extent of the part performance. More specifically, look to see if question is about delivered goods or undelivered goods.
(performance rule #4):

a. delivered goods . . . B/c its about delivered goods, no SOF defense. Sale of goods+part performance+suit about part performed, we have necessary objective proof.

b. undelivered goods . . . If undelivered goods, no objective proof. No objective proof you are supposed to get 1400 more sacks.
No defense.

Answer 191

A

Seller’s part performance – specially manufactured goods:
If the contract is for the sale of goods that are to be specially manufactured, then the Statute of Frauds is
satisfied as soon as the seller makes a “substantial beginning.” This means that the seller has done enough work that it is clear that what she is working on is specially manufactured, i.e., custom made or made to order.
(performance rule #5):

Assume that he has a size of 21E and are aqua, maroon, lime green, and Buba in bold.
No.

Answer 192

A

(a) Statutes of Frauds other than Article 2:
Look at the contents of the writing OR WRITINGS – all material terms test [who and what]. Look also at who signed the writing. The writing satisfies the Statute of Frauds so that there is no Statute of Frauds defense if the writing has been signed only by the defendant, i.e., person who is asserting the Statute of Frauds defense.

No. Doesn’t have all the material terms. Don’t know who
making agreement with or what she’s agreed to do.

Answer 193

A

(a) Statutes of Frauds other than Article 2:
Look at the contents of the writing OR WRITINGS – all material terms test [who and what]. Look also at who signed the writing. The writing satisfies the Statute of Frauds so that there is no Statute of Frauds defense if the writing has been signed only by the defendant, i.e., person who is asserting the Statute of Frauds defense.

a. Yes. Meets all material terms test . . . who and what AND writing is signed by the D (NOTE: How tested on bar:
s/Willie Robertson . . . doesn’t say whether Jase signed. Any time they tell me one signed, it means the other didn’t.

b. No. Writing must be signed the defendant.

Answer 194

A

Article 2 Statute of Frauds:
Again, look to the contents of the writing and who signed the writing. The Article 2 Statute of Frauds’ requirements for contents of a writing are different from the common law “material terms test.” The writing must simply indicate that there is a contract for the sale of goods and contain the quantity term [how many]. Generally, the writing must be signed by the defendant with a limited exception for transactions between two merchants where there is a delay in responding.

Yes. Because 100 lbs only essential term for UCC 2 . . . no material terms test; qty. only.
HOW THEY WILL TEST: Fact pattern that is similar and the answer they will try to get you to choose
is “this writing does not satisfy b/c does not state that the price is $500 . . . IT DOESN’T HAVE TO
SET OUT THE PRICE IN TEH WRITING.

Answer 195

A

Merchant to merchant delay in responding exception
The writing must simply indicate that there is a contract for the sale of goods and contain the quantity term [how many]. Generally, the writing must be signed by the defendant with a limited exception for transactions between two merchants where there is a delay in responding.

Both are merchants. 200 sacks of grits the essential term. We have a writing with a qty term. But who signed? The P. We
usually need a writing signed by the D. Yes, SOF satisfied in this case. Thinking from 50’s: if you send me a letter like that, I’m going to respond. So the objective proof is that you didn’t respond. ONLY TIME SIGNED BY P WILL SUFFICE IS WHEN BOTH ARE MERCHANTS

Answer 196

A

Written proof of authorization to enter into contract for someone else:
Issue is when do RULES OF LAW REQUIRE that a person have written authorization in order to execute a contract for someone else. RULES OF LAW REQUIRE that the authorization must be in writing only if the contract to be signed is within the Statute of Frauds, i.e., the authorization must be of “equal dignity” with the contract.

No. Equal dignity rule. 1 year lease not w/in the SOF. Lease deal doesn’t need
to be in writing and neither does the authorization. NOTE: Not question about who wins or loses. Variation: if change facts to 3 year lease, SS would win.

Answer 197

A

Written proof of contract modification:
Sometime there is no LEGAL requirement of written evidence of an alleged modification of a written contract. Resolve any LEGAL issue of whether such written evidence of the modification is needed by (1) looking at the deal with the alleged change and (2) determining whether the deal with the alleged change would be within the Statute of Frauds. If the deal with the alleged change would be within the Statute of Frauds, then the alleged modification agreement must be in writing.

Yes. look at the deal with the alleged change. with the change its a 3 year lease.

Answer 198

A

Written proof of contract modification:
Sometime there is no LEGAL requirement of written evidence of an alleged modification of a written contract. Resolve any LEGAL issue of whether such written evidence of the modification is needed by (1) looking at the deal with the alleged change and (2) determining whether the deal with the alleged change would be within the Statute of Frauds. If the deal with the alleged change would be within the Statute of Frauds, then the alleged modification agreement must be in writing.

“to one year” - No, does not require written evidence. 1 year lease not w/in SOF. Is there any way
T wins the lawsuit? No, but that’s not what was asked.

Answer 199

A

Written proof of contract modification:
Sometime there is no LEGAL requirement of written evidence of an alleged modification of a written contract. Resolve any LEGAL issue of whether such written evidence of the modification is needed by (1) looking at the deal with the alleged change and (2) determining whether the deal with the alleged change would be within the Statute of Frauds. If the deal with the alleged change would be within the Statute of Frauds, then the alleged modification agreement must be in writing.

No.

Answer 200

A

Under common law, contract provisions requiring that all modifications be in writing are not effective – ignore contract language.

a. No. Rule: In CL contracts, clauses that modifications must be in writing are ignored.
b. Yes. Because the agreement as modified is within the SOF.

Answer 201

A

Under UCC, contract provisions requiring written modifications are effective unless waived.

Yes, because such contract clauses are effective under UCC 2 - “all modifications must be in
writing” (whereas in CL, it is ignored.)

Answer 202

A

If the subject matter is illegal, the agreement is not enforceable.

a. No. Illegal subject matter.

b. Illegal purpose:
If the subject matter is legal, the agreement is enforceable if the plaintiff did have reason to know of the defendant’s illegal purpose.

Yes. Subject matter is simply flying. As long as Delta didn’t have reason to know of illegal purpose.

Answer 203

A

Look for (1) a statement of “fact” before the contract, (2) by one of the contracting parties or her agent, (3) that is false, and (4) induces the contract. No wrongdoing required for material misrepresentations.

Yes. No wrong doing required. If contracts question will have rescind. If for damages, then
it will be a torts problem.

Answer 204

A

No. misrep = matters
failure to disclose =
generally does not
matter

Answer 205

A

Yes. Economic duress.

Answer 206

A

Look for (1) special relationship between the parties and (2) improper persuasion of the weaker by the stronger.

Answer 207

A

There will be no contract if (i) parties use a material term that is open to at least two reasonable interpretations, and (ii) each party attaches different meaning to the term, and (iii) neither party knows or has reason to know the term is open to at least two reasonable interpretations.

a. No. Ambiguity. - - - not going to be on bar.

b. We don’t have element number 2, so answer is yes, there is a contract under the terms as understood
by S.

Answer 208

A

Distinguish misrepresentation fact patterns from mistake fact patterns. Generally, relief for the former but not the latter. Relief for mutual mistake only if both parties are mistaken (not just uncertain) about existing facts (mistake is different from uncertainty). Even then, no relief for mistake if the person seeking relief bears the risk of mistake.

No relief for mistake if person seeking the relief bears the risk. In virtually every situation, both bear
the risk. Correct answer is (b)

Answer 209

A

B. Unilateral mistake of material fact:
Generally, courts have been even more reluctant to allow a party to avoid a contract for a mistake made by only one party. There will be relief for situations in which the other party had reason to know of the mistake, i.e., palpable mistake.

Yes. Palpable mistake.

Answer 210

A

Changing/contradicting terms in the written deal:
Evidence of earlier agreements cannot be considered for the purpose of contradicting the terms in the written contract.

a. No.
b. Parol evidence rule is limited to stuff said or written before the contract. So no parol evidence rule affecting admissibility

Answer 211

A

Mistake in integration, i.e., clerical mistake:
A court may, however, consider evidence of such terms for the limited purpose of determining whether there was a mistake in integration, i.e., a mistake in reducing the agreement to writing.

It is admissible . . . mistake in integration.

Answer 212

A

Defenses, i.e., getting out of a written deal:
The parol evidence rule does not prevent a court from considering evidence of earlier words of the parties for the limited purpose of determining whether there is a defense to the enforcement of the agreement, such as misrepresentation, fraud, or duress.

Yes.

Answer 213

A

Yes.

Ambiguity, i.e., explaining term in the written deal:
The parol evidence rule does not prevent a court from considering evidence of earlier agreements to resolve ambiguities in the written contract.

Answer 214

A

Adding to the written deal:
The parol evidence rule prevents a court from considering
evidence of earlier agreements as a source of consistent, additional terms unless the court finds (i) that the written agreement was only a partial integration or (ii) that the additional terms would ordinarily be in a separate agreement.

Yes, if the court concludes that it was only a partial integration. Whether complete or partial
is a question of fact.

Answer 215

A

Shipment contracts:
One possibility is that the contract is a shipment contract which means that the seller completes its delivery obligation when it (i) gets the goods to a common carrier, and (ii) makes reasonable arrangements for delivery, and (iii) notifies the buyer. In a shipment contract, the seller completes its delivery obligation before delivery is completed.

Get the goods to a common carrier + make reasonable delivery arrangements+ notify the buyer (Greyhound bus full of armadillos; MOST IMPORTANT PART: bus is sitting in station in TX, and even though not started the trip, the seller completed its delivery obligation

Answer 216

A

Determining whether contract is a shipment or destination contract: Most contracts with delivery obligations are shipment contracts. Watch for the use of FOB – free on board (city) – as source for determining whether the contract is a shipment contract or a destination contract. FOB followed by city where the seller is or where goods are means shipment contract; FOB followed by any other city means destination contract.

FOB Chicago - destination contract.

Answer 217

A

a. S has risk of loss for any uninsured loss. 2 weeks late is unrelated to rats in the coffee.
ABCD: agreement, breach, common carrier, default rule

b. Seller is NY. FOB (seller’s city) = shipment contract

Answer 218

A

“Catch-all” (no agreement, no breach, no delivery by a carrier): the determining factor is whether the seller is a merchant. WHETHER THE BUYER IS A MERCHANT IS IRRELEVANT. Risk of loss shifts from a merchant-seller to the buyer on the buyer’s “receipt” of the goods; risk of loss shifts from a nonmerchant seller when he or she “tenders” the goods.

No. Merchant seller.

Answer 219

A

“Catch-all” (no agreement, no breach, no delivery by a carrier): the determining factor is whether the seller is a merchant. WHETHER THE BUYER IS A MERCHANT IS IRRELEVANT. Risk of loss shifts from a merchant-seller to the buyer on the buyer’s “receipt” of the goods; risk of loss shifts from a nonmerchant seller when he or she “tenders” the goods.

If not told S is a none merchant, don’t assume he is. tender=make available
Yes, has to pay for damaged stove b/c risk of loss in none merchant seller deal shifts on tender.

Answer 220

A

Implied warranty of merchantability:
When any person buys any goods from any merchant, a term is automatically added to the contract by operation of law – that the goods are fit for the ordinary purpose for which such goods are used.
(a) Triggering fact: seller is a merchant WHICH HERE MEANS IT DEALS IN GOODS OF THAT KIND.
(b) Warranty: goods are fit for ordinary purposes.

everywhere else on bar, merchant means you sell THIS kind of stuff; ANSWER: Yes. See (a) and (b) above. Policy: When you buy stuff from someone in the business of selling, you should have min expectation that fit for ordinary purposes.

Answer 221

A

No implied warranty b/c not in the business of selling cars.

Answer 222

A

Implied warranty of fitness for a particular purpose:

(a) Triggering facts: buyer has particular purpose; buyer is relying on seller to select suitable goods; seller has reason to know of purpose and reliance.
(b) Warranty: goods fit for particular purpose.

a. We’re told what the buyers purpose is. Yes. There is an implied warranty of fitness.

b. Yes.
c. Yes.
d. No.

Answer 223

A

Disclaimer – e.g., “there are no warranties:”

(a) Express warranties generally cannot be disclaimed.
(b) Implied warranties of merchantability and fitness can be disclaimed in EITHER of the following ways:
(i) CONSPICUOUS language of disclaimer, mentioning merchantability, OR
(ii) “as is” or “with all faults.”

No. It has been effectively disclaimed (see above (ii))
2 THINGS THAT WILL BE ON:
1. “as is” DOES NOT HAVE TO BE CONSPICUOUS
2. “as is” ONLY eliminates implied warranty

Answer 224

A

Limitation of remedies: does not eliminate warranties, simply limits or sets recovery for any breach of warranty:

a) possible to limit remedies even for express warranties.
(b) general test is unconscionability.
(c) prima facie unconscionable if breach of warranty on consumer goods causes personal injury.

First clause: “All operating parts . . . “ is an express warranty.
Second clause: limitation of remedy

Yes, but only the replacement part. See (a)

Answer 225

A

There are only four things you need to know about rejection of goods for the bar exam. First, you need to be able to distinguish rejection of an offer from rejection of the goods. Second, if the seller does not meet the perfect tender standard, the buyer has the option to retain and sue for damages or reject “all or any commercial unit” and sue for damages. Third, the buyer must take reasonable care of the rejected goods and should not continue to use rejected goods. Fourth, this rejection alternative is limited by cure, installment contracts and acceptance.

No.

Answer 226

A

There are only four things you need to know about rejection of goods for the bar exam. First, you need to be able to distinguish rejection of an offer from rejection of the goods. Second, if the seller does not meet the perfect tender standard, the buyer has the option to retain and sue for damages or reject “all or any commercial unit” and sue for damages. Third, the buyer must take reasonable care of the rejected goods and should not continue to use rejected goods. Fourth, this rejection alternative is limited by cure, installment contracts and acceptance.

Yes.

Answer 227

A

In very limited situations, a seller has the option of curing even after the contract delivery date. “Reasonable grounds” is the statutory test. Look for information in the question about prior deals between that buyer and seller.
Yes.

Answer 228

A

Yes. Time for performance has not yet expired, but only by delivering the green widgets by the June 6 express deadline.

Answer 229

A

Payment without opportunity for inspection is not acceptance.

Even though paid for them, didn’t have opportunity to inspect.

Answer 230

A

Specific performance/injunction:
Equitable remedy: Look for adequacy of remedy at law or unclean hands, or other parties’ equities.

Yes

Answer 231

A

Specific performance/injunction:
Equitable remedy: Look for adequacy of remedy at law or unclean hands, or other parties’ equities.

No. X has equities as strong as B.

Answer 232

A

Yes.

Contract for sale of goods: Unique goods: antiques, art, custom- made or other appropriate circumstances.

Answer 233

A

a. No. contracts for service = no specific performance

Contract for services: No specific performance, possible injunctive relief.

b. Yes. Does have the power to issue injunctive relief.

Answer 234

A

Seller’s reclamation from an insolvent buyer of goods:
Right of an unpaid seller to get its goods back. Key facts are that (i) the buyer must have been insolvent at the time that it received the goods, and (ii) the seller demands return of goods within 10 days of receipt (this “10- day rule” becomes a “reasonable time rule” if, before delivery, there had been an express representation of solvency by the buyer), and (iii) the buyer still has goods at time of demand.

Yes. NOTE: two issues bar exam likes to do. 1. Jan. 22nd is the essential date. Bar likes to tell you the buyer is insolvent at time of demand. You can’t assume that he was insolvent earlier. 2. They like to play with the 10 day rule. 15-27 is fine, but the law is that the calendar starts turning from the time of the buyer receipt of the goods. (i.e. 22)

Answer 235

A

No. The later bona fide purchaser is more deserving. Shouldn’t have trusted the person you
gave it to.

Answer 236

A

ANSWER IS (C) -

Answer 237

A

Seller breaches, buyer keeps the goods
[Fair market value if perfect – fair market value as delivered] or [cost of repair].

14,000; doesn’t matter that contract price was $30k . . . benefit of the bargain.

Answer 238

A

Seller breaches, seller has the goods:
[market price at time of discovery of the breach – contract price] or [reasonable replacement price – contract price] whichever is greater.

$2,000

Answer 239

A

Buyer breaches, buyer keeps the goods [contract price].

$800

Answer 240

A

Buyer breaches, seller has the goods:
[contract price – resale unless seller cannot resell in which case the seller can recover the contract price and in some situations provable lost profits].

a. 200
b. 0

Answer 241

A

Lost profits for lost volume seller

Yes. Expectation damages are about no breach. What would have happened if no breach?
1 set sold to Conviser on day 1 AND another to CC on day 2. LOOK FOR THE PHRASE:
“regular inventory”

Answer 242

A

Plus INCIDENTAL damages:
Costs incurred in dealing with the breach such as costs of storing rejected goods in a sale of goods or finding a replacement in a services contract – always recoverable.
$20

Answer 243

A

Plus foreseeable CONSEQUENTIAL (special) damages:
The term “consequential damages” is very important. And very confusing. Consequential damages does not mean all damages caused as a consequence of the breach. Rather think of damages as being either (1) general damages, i.e., kind of loss that any person would sustain or (2) consequential damages, i.e., kind of loss that is special to this plaintiff. Consequential damages are limited to damages arising from P’s special circumstances and recovery of consequential damages is limited to situations in which D had reason to know of these special circumstances at the time of the contract.

a. No. Our non-breaching party is M. We don’t know anything special about M. Need special
facts for consequential damages.

b. Expectation damages are $50. But $0 consequential.

c. Consequential damages – not recoverable
Yes. (but not recoverable)

d. $50 of general expectation damages.

e. Consequential damages – recoverable
NOTE: “M told C before the contract”

Answer 244

A

Less AVOIDABLE damages: No recovery for damages that could have been avoided without undue burden on plaintiff. Burdens of pleading and proof on defendant.

Continuing to perform after the other party’s breach

$300

Answer 245

A

Turning down other, comparable opportunities

Less AVOIDABLE damages: No recovery for damages that could have been avoided without undue burden on plaintiff. Burdens of pleading and proof on defendant.

Answer 246

A

Less damages that cannot be established with reasonable certainty:
Look for fact pattern involving a services contract and plaintiff engaged in new business or a new business activity. Consider reliance recovery as an alternative to expectation.

a. There’s never been an activity like this so we don’t know what the dollar consequences
would be, so we can’t award expectation. But if he spent $2000 in reliance, then can get
recovery for that.

b. Yes. In reliance.

Answer 247

A

D. Contract provisions regarding damages, i.e., LIQUIDATED damages:
Look for contract provision fixing amount of damages. Issue will be validity: concern is whether provision is too high – a penalty. Tests are (1) damages were difficult to forecast at time contract was made and (2) provision is a reasonable forecast.

a. Yes. Contract provision controlling amount of damages.
b. No. When you see a contract provision that has a single number and not a range, it is probably not a reasonable forecast. In other words, $10,000 for 1 day late and for 2 mths late is not a forecast.

The concern is whether it is to high so that it is a penalty. Apply
2 part test.

Answer 248

A

Excuse:
Anticipatory repudiation by one party excuses the other party’s duty to perform.

Yes. NOTE: “Time are tough, it’s going to be hard to come up with the money to pay you.” is NOT enough. Must be unambig.

Answer 249

A

Anticipatory repudiation generally gives rise to an immediate claim for damages for breach unless the claimant has already finished her performance.

Yes.

Answer 250

A

Anticipatory repudiation generally gives rise to an immediate claim for damages for breach unless the claimant has already finished her performance.

No.

Answer 251

A

Anticipatory repudiation can be withdrawn (retracted) so long as there has not been a material change in position by the other party. If the repudiation is timely retracted, the duty to perform is reimposed but performance can be delayed until adequate assurance is provided.

Answer 252

A

Look for this in sale of goods problems. If the words or conduct of one party give “reasonable grounds for insecurity,” then the other party can, in writing, demand adequate assurance and if it is “commercially reasonable,” can suspend performance until it gets adequate assurance. The three concepts again are (1) reasonable grounds for insecurity, and (2) written demand for adequate assurance, and (3) commercially reasonable to stop performance.

reasonable grounds for insecurity; yes

Answer 253

A

Yes

COMMON LAW ONLY!!
Common law and material breach rule:
First, damages can be recovered for any breach. Second, only a material breach by one guy excuses the other guy from performing a contract governed by common law. Third, whether a breach is material is a fact question (and so whether a breach is material is not likely to be a bar exam question). Fourth, if there is substantial performance then the breach is not material. If the breach is material, then the performance was not substantial.

Answer 254

A

COMMON LAW ONLY!!
Common law and material breach rule:
First, damages can be recovered for any breach. Second, only a material breach by one guy excuses the other guy from performing a contract governed by common law. Third, whether a breach is material is a fact question (and so whether a breach is material is not likely to be a bar exam question). Fourth, if there is substantial performance then the breach is not material. If the breach is material, then the performance was not substantial.

No.

Yes.

Answer 255

A

COMMON LAW ONLY!!
Common law and material breach rule:
First, damages can be recovered for any breach. Second, only a material breach by one guy excuses the other guy from performing a contract governed by common law. Third, whether a breach is material is a fact question (and so whether a breach is material is not likely to be a bar exam question). Fourth, if there is substantial performance then the breach is not material. If the breach is material, then the performance was not substantial.

a. No
b. Yes.

Answer 256

A

Material breach because of the quantity (amount) of performance:

a. Less than half. Yes. Material breach.
b. No. Because post-contract occurrence. Eating tacos.
Any further performance is excused b/c of the material breach.
c. Yes. Discretionary with the court.
d. Divisible contract corollary:
Divisible contract exception. In a “divisible contract” there can be a contract law recovery for substantial performance of a divisible part even though there has been a material breach of entire contract. On the bar, look at whether price is stated as a lump sum or on a per performance basis.

Has a right to be paid for each apartment.

Answer 257

A

a. Conditional acceptance
No. Joe Biden story.

b. Express condition
Yes. If it is simply the words of an offeree in response (one person), no agreement. But as here,
both people consented, then yes we have a contact with an express condition.

No. Excuse b/c of the non-occurance of a condition.

Answer 258

A

Surprisingly, yes. (compare with 168) . . . . the language of condition makes the difference
flagging that it’s really important to you.

Answer 259

A

Waiver:
Identify the person who benefits from or is protected by the express condition. Then look for a statement by that person giving up the benefits and protection of the express condition.

a. Yes. Because O was the one protected and is the one that can waive it.
b. No

Answer 260

A

Rescission (cancellation):
The key is whether performance is still remaining from each of the contract parties. (executory).

a. Yes. Not even a contract obligation to pay for the work that has been done.
b. No. (Reason: is about consideration. No gain to P to cancel the deal)

Answer 261

A

Meaning of “accord,” “satisfaction”:
On bar exam, accord questions will have an agreement by the parties to an already existing obligation to accept a different performance in satisfaction of the existing obligation.
Effect of accord AND SATISFACTION:
(a) If the new agreement (“the accord”) is performed (satisfaction), then performance of the original obligation is excused.

No. The new agreement is called the “accord.” Delivery is satisfaction.

Answer 262

A

If the accord is not performed, then the other party can recover on either the original obligation or the accord:

a. No satisfaction, therefore yes, can recover on the original loan agreement.

b. Yes, but not both.
Either existing obligation OR accord.

Answer 263

A

Modification is an agreement by parties to an existing obligation to accept a different agreement in satisfaction of the existing obligation.

No. Excuse b/c of modification. NOTE: different than accord and satisfaction is IF performance. Modification is a new agreement.

Answer 264

A

Yes. All 3 have to agree.

a. A novation is an agreement between BOTH parties to an existing contract to the substitution of a new party, i.e., same performance, different party.

b. Who is liable after a novation?
Novation excuses the contracted for performance of the party who is substituted for or replaced.

No. P is excused by novation.

Answer 265

A

How is delegation different from novation?
Novation requires the agreement of BOTH parties to the original contract, and excuses the person replaced from any liability for nonperformance. Delegation does not require the agreement of both parties and does not excuse.

This is not a novation b/c not consulting O. This is delegation, therefore yes, can recover damages
from P for breach of contract.

Answer 266

A

Damage or destruction of subject matter of contract:
Recall Taylor v. Caldwell where a concert promoter sued the owner of Surrey Gardens for breach of a contract to use Surrey Gardens for three concerts. After the contract but before the concerts, fire destroyed Surrey Gardens. The court excused the owner’s nonperformance, reasoning that the continued existence of the concert was an implied condition.
1. Common law:

Yes.

Answer 267

A

Damage or destruction of subject matter of contract:
Recall Taylor v. Caldwell where a concert promoter sued the owner of Surrey Gardens for breach of a contract to use Surrey Gardens for three concerts. After the contract but before the concerts, fire destroyed Surrey Gardens. The court excused the owner’s nonperformance, reasoning that the continued existence of the concert was an implied condition.
1. Common law:

No. B still has the ability to build the house. It may be more expensive, but still possible.

Answer 268

A

187

Article 2:
If sale of goods [like Karl and his coffee] do risk of loss first.
(a) Risk of loss on the buyer:
If risk of loss is on the buyer, then the buyer pays.

Buyer’s risk of loss and destruction

Conviser has the risk of loss so the buyer has to pay the $700.

Answer 269

A

offers cannot be assigned; options can be assigned unless otherwise specified

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