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CA Bar Prep > Contracts > Flashcards

Contracts Flashcards

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1
Q

Contract

A

A contract is a bargained for exchange between two people

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2
Q

UCC

A 
Goods = (movable tangible property)
Merchants = regularly deal in goods of that kind
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3
Q

Contract Formation

A

Offer
Acceptance
Consideration

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4
Q

Offer

A
  • Intent to enter into contract
  • definite terms (quantity, parties, UCC =price)
  • communicated to the offeree
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5
Q

Irrevocable offers

A
  1. UCC firm offer rule
  2. Option Contract
  3. Detrimental Reliance
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6
Q

UCC firm offer

A
  • merchant
  • signed writing
  • 3 months max to keep offer open
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7
Q

Option Contract

A

Common law contracts that an offer will be held open . Consideration is required and offer will be irrevocable during the stated option period

When a general contractor submits a bid on a construction project and secures a bid from a subcontractor for a part of the work, the subcontractor is binded to the contract and there is now a option contract

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8
Q

Detrimental Reliance

A

Offer will be irrevocable if offeree has detrimentally relied on the offer or performed in part

Unilateral contract = once performance has begun the offer is temporarily irrevocable

Bilateral Contract = detrimental reliance

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9
Q

Acceptance

A

-must be within a reasonable time
-mirror image rule (acceptance must be the precise image of the offer otherwise its a rejection and a counteroffer)
-UCC added term
*if not a marchant, proposal only
*if both merchants; then the term is added
except if material or objection within a
reasonable time

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10
Q

Acceptance Terminated

A
  • rejection
  • counteroffer
  • revocation
  • lapse of time
  • death or incapacity
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11
Q

Consideration

A

A bargained for exchange of legal detriment or benefit. Can be a promise to do something or not to do something

A promise to not sue is sufficient consideration even if the claim turns out to be invalid, so long as the person promising not to sue has a good faith belief its valid

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12
Q

Inadequate Consideration

A
  1. gifts
  2. past consideration
  3. pre-exisiting duty rule
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13
Q

Defenses to Formation

A
  1. SOF
  2. Misrepresentation
  3. Unconscionability (unfair)
  4. Mistake (mutual mistake)
  5. Capacity
  6. Duress
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14
Q

Contract Terms

A
  1. Conditions
  2. Parol Evidence
  3. Modification
  4. 3rd Party Beneficiaries
  5. Assignment
  6. Delegation
  7. Novation
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15
Q

Conditions

A

Must occur before performance is due

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16
Q

Parol Evidence

A

Limits what evidence made before the signed written contract is considered part of the agreement.

Partial integration = not allowed to contradict terms but can be used

Final Integration = all statements made before agreement cannot be admitted a evidence except

a. fraud
b. mistake
c. illegality
d. duress
e. partial integration
f. conditions precedent
h. ambiguous terms
i. usage of trade

Parol evidence is admissible to attack a contract on the grounds of fraud

Even if a agreement is completely integrated the contract can still be reformed for mutual mistake. Parol evidence does not apply if a party to a valid agreement alleges facts that entitle him to reformation of the agreement

17
Q

Modification/Reformation

A

Common Law = need mutual assent and consideration

UCC= need only good faith

SOF = if modification falls within SOF, it must be in writing

If there is a difference between the original agreement and the writing, the writing can be reformed to reflect the intent of the parties. A plaintiff who wants to obtain reformation of a contract must show that the agreement does not correctly reflect the contract because of a mistake.

18
Q

3rd Party Beneficiaries

A

A person who is suppose to benefit from the contract but who is not already a party to the contract

Intended (can sue) = rights vest (1) accept promise (2) files suit to enforce (3) materially changes position in reliance

Incidental (cant sue) = incidentally benefits from the contract but not the intent of the promisor

19
Q

Assignment

A

A party to a contract transfers her rights under the contract to a 3rd party

  • no consideration is required
  • a gift is allowed
  • assignee stands in the shoes
20
Q

Delegation

A

When a party to an existing contract appoints a 3rd person the duties owed under the contract

  • transfers duties
  • delegator remains liable
  • cant delegate if special skill
21
Q

Novation

A

Obligee (person recieving performance) agrees to accept performance from a new person. A novation terminates the liability of the delegator. Need assent by all parties

22
Q

Breach

A
  1. Material v. Minor
  2. UCC perfect Tender Rule
  3. Anticipatory Repudiation
  4. Request for Assurances
  5. Warranties
  6. Accord & Satisfaction
23
Q

Material v. Minor

A

Material = party doesn’t get substantial benefit of bargain. Not substantial performance on the contract

Minor = Non-breaching party gets the substantial benefit of the bargain despite the other party’s defective performance. A minor breach does not relive the nonbreaching party of her duty to perform under the contract, but will be entitled to remedial damages for the breach.

24
Q

UCC Perfect Tender Rule

A
  • can reject of accept
  • sellers have the right to cure any time before performance is due or had a reasonable belief that it would be acceptable
25
Q

Anticipatory Repudiation

A
  • unequivocal statement
  • wont perform before perfomance date
  • non repudiating party can:

i. sue immediately
ii. suspend performance
iii. treat as rescinded
iv. urge performance

26
Q

Request for Assurances

A
  • reasonable grounds for insecurity
  • in writing can demand adequate assurance of performance
  • they must respond
27
Q

Warranties

A
  1. Express
  2. Implies Warranty of merchantability (goods fit for ordinary purpose of the goods)
  3. Fitness for a particular purpose
  4. implied good faith & fair dealing (in every contract)
28
Q

Accord & Satisfaction

A
  • agree to substitute performance
  • accept the substitute in discharge of existing duty
  • doesn’t discharge original k until performance is met
  • performance discharges both k
  • need new consideration
  • if lesser value, consideration has to be a different type
29
Q

Performance Excused (Defenses)

A
  1. Misrepresentation/Fruad/Duress
  2. Condition Precedent not met
    3 .Impossibility
  3. Impractiability
  4. Frustration of Purpose
  5. Mututality
  6. Unconscionability
  7. Lack of Capacity
  8. Illegality
30
Q

Remedies

A
  1. Expection Damges
  2. Consequential Damages
  3. Reliance Damages
  4. Liquidated Damages
  5. Nominal Damages
  6. Quasi Contract
  7. Replevin
  8. Ejectment
  9. Reformation
  10. Rescission
  11. Specific Performance
31
Q

Expectation Damages

A

Put the non-breaching party in the position as if the if the contract was performed

32
Q

Consequential Damages

A
  • Foreseeable consequences
  • unique to the plaintiff
  • compensate for damages that are foreseeable consequences of nonperformance (lost profits)
33
Q

Reliance Damages

A

As if K was never made

34
Q

Liquidated Damages

A

Difficult to calculate and must be reasonable

35
Q

Quasi contract

A

D derived a benefit and it is unfair to allow D to keep it

36
Q

Specific Performance

A
  1. Valid Contract
  2. Legal remedies inadequate
  3. Mutuality (both bound)
  4. Feasible to enforce
  5. No defenses (laches or unclean hands)
37
Q

Damages for Non-delivery or Repudiation of Contract

A

The difference between the market price at the time the non-breaching party learned of the breach and the contract price together with incidental and consequential damages. The date of the contract isnt the date to determine damages

38
Q

Accomodation

A

By sending a prompt shipment of non conforming goods, a seller is accepting the offer and breaching the contract at the same time. The buyer can then accept them or reject them. If the buyer rejects the non-conforming good, the buyer can then sue for breach. BUT if its an accomodation, the shipment of non-conforming goods will not result in a breach of contract. The buyer can choose to accept the accommodation which will be considered a counteroffer and a new contract is formed. If the buyer rejects the accommodation, a contract does not exist and the buyer can sue for breach

39
Q

Pre-existing duty Rule

A

Absent unanticipated circumstances, a modification solely for the benefit of one of the parties is generally enforceable in contracts not governed by the UCC

EX: Contractor asks $1500 more because he would lose money from a clerical error. Paying the additional $1500 would benefit the contractor only

CA Bar Prep (11 decks)

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