Contracts Flashcards
When is revocation considered received?
When enters into physical possession of offeree.
Does not have to have actual knowledge of the contents, does not have to open the letter, as long as in physical possession.
- or if someone authorized by him to receive it
- or when it is deposited in some place authorized as the place for this or similar communications to be deposited.
Is Option K revocable? Does Mailbox rule apply?
Option k is NOT revocable!
Mailbox rule does not apply!
What is in a UCC K a non-merchant adds term in the acceptance?
Different terms are considered to be mere proposals to modify the contract. They do not become part of the contract unless the offeror expressly agrees.
If both parties are merchants, additional terms in the acceptance become part of the contract unless they materially alter the terms of the offer, the offer expressly limits acceptance to the terms of the offer, or the offeror has already objected to the terms (or objects within a reasonable time after notice of them is received).
UCC k between merchants acceptance with DIFFERENT (not additional) terms, what are the terms?
Between merchants, some courts treat different terms in an acceptance the same as additional terms;
Other courts apply the knockout rule (i.e., conflicting terms are knocked out and replaced by gap-filling terms under the UCC).
What is the knockout rule?
UCC between merchants
Under the knockout rule, conflicting terms are knocked out of the contract and gaps are filled by the UCC gap-filler provisions.
When there is a K for performance, how can you tell if it is unilateral or bilateral?
If there was a signed K to do something (fly a plane), it is BILATERAL => has already been accepted by signing.
unilateral if, I will pay you in you fly and you start flying
SOF Definition
Certain Ks must be created in writing signed by the party against whom you are enforcing it.
Common law - material terms + signed + price
UCC - indicate that K is made + quantity
Does Mortgage K have to be in writing?
YES, promise creating an interest in land must be evidenced by a writing.
This includes not only agreements for the sale of real property, but also other agreements pertaining to land, such as a mortgage contract.
note: does not apply to
- getting a broker to buy house
- k to build a house
To to calculate 1 year term for statute of frauds Ks?
The 1 year starts running form the date of K is signed, not from the beginning of performance.
ex: bill build a room within a month in 2 years => SOF!
Is a K enforceable against a drunk person? 🍺
depends how drunk:
generally, drinking and entering K is OK, unless:
The party is so intoxicated that the party does not understand the nature and significance of his promise.
What must merchant memo confirming sale contain to get around SOF problems?
must be 2 merchants, and
(i) quantity,
(ii) the signature of the party to be charged, and
(iii) a writing sufficient to indicate that a contract was formed
What degree of specificity does SOF require
- requires to reasonably describe the subject matter, no need to specifically describe the property etc.
When does a K HAVE TO have price to be valid?
- common law issue (no good/UCC)
- subject to statute of frauds (property, marriage, 1+ year, executor, surety)
CHECK THIS - HOW ABOUT CL ORAL K NOT SUBJECT TO SOF
UCC - no price ok - gap fillers.
Does getting around fo parol evidence rule automatically make you a winner int he action?
Not, at all, only admissible evidence.
How can you avoid pre-existing duty rule?
Modifying the original deal, even a tiny bit.
What is and what is not enough consideration to discharge an existing debt with creditor?
CONSIDERATION
- payment in another medium (work instead of cash)
- payment before maturity or
- payment to to one other than the creditor
- partial payment when there is a dispute if/how much is owed
NOT CONSIDERATION
- paying less money than is due
- unforeseen difficulty to be able to pay
Can an unforeseen extreme difficulty to perform serve as a consideration for modification of K?
Yes, (ex: asking for more money if find out the job is 3 times harder and that was not anticipated).
Modern view permits modification without consideration if the modification is fair and equitable in view of circumstances not anticipated when the contract was made
applies only if the contract has not been fully performed on either side
Pre-existing duty to third parties.
A duty is a preexisting duty only if you try to use it against the same person whom you already owe the duty.
Otherwise, can use the same performance to contract with a number of different people as long as you get something from them in return (obtain a consideration 🤓)
Promissory Estoppel
> the promisor must reasonably expect that its promise will induce reliance,
> P does rely
> promise will be enforceable only to the extent necessary to prevent injustice.
(check only if no consideration)
Parol Evidence rule
Bars stuff before the K that 1) contradicts the terms of K, 2) wants to add new extrinsic stuff to a completely integrated K - one that shows that parties intended for it to be a final and exclusive manifestation of parties’ understanding.
When is restitution not available?
Usually, when there is a valid K signed. To decide if there is unconscionability, we look at the K at the time it was formed, not that it became unjust later.
Impracticability due to necessity
Serves as an excuse not to perform => if a person is necessary for you to perform our duties, their incapacity to work with you may excuse your performances (photograph).
Note: if delay from incapacity is mot material, may not fully excuse, but may serve to suspend, not discharge parties duties to perform (if person you wanted to take pictures of is sick, may get more time to finish the job).
The TEST for a finding of impracticability is that the party to perform has encountered:
(i) extreme and unreasonable difficulty and/or expense; and
(ii) its nonoccurrence was a basic assumption of the parties. (NOTE - CAN BE AN EXTREME HEALTH ISSUE)
when can trade-usage (industry standard) get looked at to interpret K terms?
Priority when interpreting K terms:
- how parties behaved previously in the same transaction.
- parties previous dealings
- how industry deal with such situations usually => courts almost always allow this.
> will be admitted even if there is a completely integrated k
> UNELSS it cannot be reasonably reconciled with K express terms.
when is it reasonable to ask for written reassurance of K performance?
There must be an insecurity related to other party’s
- unwillingness
- inability to pay
Note: skyrocketing market price is not in itself enough to ask for assurance.