Contracts Flashcards
Public Offers
An offer of reward is an offer to enter into a unilateral contract and if made to the public generally, it may be accepted by anyone to whom it becomes known
Mailbox Rule: What happens if the post office losses the letter?
The acceptance is still effective as of the day it was properly posted
Can an offer be terminated by information from a third party?
Yes, if the offeree receives correct information from a reliable source of acts of the offeror that would indicate to a reasonable person that the offeror no longer wishes to make the offer
Requirements Contracts: Quantities
Quantities may not be unreasonably disproportionate to any stated estimate or (if none) to any normal or otherwise comparable prior requirements
Are promises to make future gifts enforceable?
No
Gratuitous Assignments
Generally revocable until the obligor has performed; Only require a manifestation of intent to transfer rights
Can a defaulting party recover the deposit?
Yes, to the extent the amount of the deposit exceeds the contract damages to which a non-defaulting party is entitled
Is a change in delivery date a material alteration?
No
Is an option contract irrevocable as to both parties?
Yes, therefore a counteroffer during the option period will not terminate the original offer
If a building is destroyed by an act of nature while still a work in progress, is the contractor discharged of their duty to perform?
No but the date of performance will be extended
When will a contractual duty be discharged by impossibility?
When there is objective impossibility (no one could perform) but no when there is subjective impossibility
When is a duty a preexisting duty?
If it is owed to the same promisee
How can the seller cure nonconforming goods if there is still time left for performance?
The seller must give reasonable notice and make a new tender of conforming goods, which the buyer must accept
Can a party seek specific performance for a service contract?
No; If the breaching party offers a rare or unique service, the court may instead grant injunctive relief
Are punitive damages recoverable for breach?
Generally no unless the conduct is also a tort for which punitive damages are recoverable
Does the mailbox rule apply to insurance premiums?
If the insurer invites premiums to be made by mail
When there is acceptance of a benefit of the transaction, is there accept as to all obligations?
Yes, acceptance of a benefit is the same as an assent to all of the obligations arising from it; The acceptance of consideration offered with a proposal is an acceptance of the proposal
Do verbal modifications become part of a subsequent assignment?
Yes, the assignment will include the modification because the party can only assign the rights they had at the time of the assignment
Breach of Good Faith
Bad faith characterized by some conduct which violates the standards of decency, fairness, or reasonableness
How must a suretyship be accepted?
By performance; The promisor must be given seasonable notice that the debt has actually been created
Can an employer put a non-compete agreement on an at-will employee?
Majority Rule: Yes if the employer has provided continued employment for a substantial period
Can a contract be cancelled by a person based on aesthetic taste?
Yes, if the aesthetic taste of the individual is a condition of satisfaction and that individual determines the work is not satisfactory in good faith
Liquidated Damages
Damages whose amount the parties designate during the formation of a contract for collection upon a specified breach; They must be reasonably related to actual damages and will be reduced or eliminated if not
Insurance: Conditional Receipt
Constitutes a temporary formation of contract until the company decides whether to issue a policy
This generally requires an application, a down payment, and an interim or conditional receipt
When does promissory estoppel apply?
To enforce a promise in lieu of an actual contract
If the issue turns on making an offer irrevocable based on the offeree’s reliance, it’s not PE
Can a minor be liable for damages in a contract?
Yes for restitution only, not additional damages as long as it’s for the reasonable value of necessities they can obtain even though they cannot disaffirm the contract itself
Does a conditional promise require consideration?
Yes or it isn’t enforceable
Does a merger clause preclude extrinsic evidence?
No, evidence can be used to explain the terms of the agreement
Revocation of a general offer (ex. reward, newspaper ad)
Must be in the same manner as made or by a comparable medium and frequency of publication
What does the prohibition on assignments in a contract apply to?
Only to duties that may not be delegated; Rights in the contract remain assignable unless specifically stated otherwise
Concurrent Conditions: Conditions precedent or subsequent?
ONLY characterized as mutual conditions precedent NOT subsequent
What does an agreement for exclusive dealing impose on the parties?
Buyer: To use the best efforts to promote their sales
Seller: To use best efforts to supply the goods
When a party is entitled to monthly payments, are they entitled to the payments when not made?
No, if they don’t demand the payments, they are considered a under waiver of delay; A demand will terminate the delay but only for that payment forward
If a party waives a condition, can the condition be reinstated?
Yes by communicating a retraction of the waiver before the condition is due to occur and if the other party hasn’t already suffered detrimental reliance
Non-conforming goods: Damages arising from repair costs
The repair costs are usually used to determine damages; If the repairs fail to restore the goods to their value as warranted the buyer can recover the repair costs plus the difference between the value of the goods if it had been as warranted and its value after repairs
Implied in Law Contract
Plaintiff confers a benefit on defendant, plaintiff has a reasonable expectation of compensation, and allowing the defendant to retain the benefit without compensation would be unjust enrichment
Good faith cessation of production
Terminates any further obligations thereunder and excuses further performance by the party discontinuing
Damages when a contract is divisible
The victim of the breach can reduce any payments by damages caused by the other party’s breach
Does the third party beneficiary have to be specifically named?
No as long as the third party is identifiable when performance is due
Is there a contract formed if the offeree has the right to cancel at any time?
No because there is a lack of consideration
Free on Board
Title to the property passes from the seller to the buyer at the designated free on board/delivery point
Condition clearly intended to benefit one party
The benefited/protected party can waive the condition and the other party is still obligated to perform
When is a writing for a suretyship sufficient?
Anytime, even if made at a later date and the writing does not need to be addressed to the promisee
Reserve Auction
The highest bid is only an offer and can be rejected by the auctioneer or seller
Who is entitled to restitution?
Only the party not in breach
Merchant’s Confirmatory Memorandum
Can overcome the statute of frauds if the action is between merchants, the memo is timely, the recipient has reason to know what it says, and there is no objection within 10 days
Accommodation Shipment
A seller can ship non-conforming goods as an accommodation if they “seasonably” notify the buyer that the shipment is offered only as an accommodation; It isn’t considered an acceptance, just a counter offer, so the buyer has the choice of accepting the nonconforming goods or rejecting in which case there is no further K
Under the UCC, can a buyer sell non-conforming goods?
Yes, if they give notice to the original seller, so that the original seller has a chance to bid on the goods
What type of contract is created regarding unjust enrichment?
A quasi/implied-in-law contract
If a buyer is insolvent, does the seller have to tender the goods?
No, unless the buyer tenders cash for their payment
When will a contract be voided due to ambiguity?
Only if both parties were unaware of the ambiguity
When is accord and satisfaction allowed?
When there is a bona fide dispute on the claim
