Contracts Flashcards
When does an assignment arise?
When the holder of a right, an obligee, manifests intent to make a present transfer of that right to another, the assignee.
Can I present evidence about course of dealing if there is a complete and exclusive agreement of the parties?
under the UCC’s parol evidence rule, course-of-dealing evidence is admissible to explain or supplement a final written agreement even if the parties intended the agreement to be complete and exclusive.
What happens in a installment contract for the sale of goods if one of the deliveries is not perfect?
UCC § 2-612 adopts a “substantial impairment” standard for determining whether a buyer can reject a particular installment or cancel the entire contract.
A buyer can reject an installment if a nonconformity substantially impairs that installment and the nonconformity cannot be cured.
Here the mill’s tender of less than the contracted-for quantity did not amount to a nonconformity that substantially impaired either the value of the 16th installment or the whole contract.
The mill’s proposed cure, the delivery of the remaining 200 pounds on the following Monday, is sufficient given that the late delivery and the shortage will not significantly disrupt the bakery’s business.
Accordingly, the bakery must accept the delivery of the tendered 800 pounds of flour but may deduct from the price any damages for losses resulting from the late delivery.
When does a buyer acquire an insurable interest in goods?
Upon the identification of the goods.
Where the contract is for future goods (i.e., goods that are not both existing and identified), the buyer does not acquire an insurable interest until the seller designates goods as those to which the contract refers, unless the parties have explicitly agreed otherwise.
How much a buyer of non-conforming goods must pay for it?
UCC § 2-601 allows a buyer to accept the whole, reject the whole, or partially accept or reject commercial units. A buyer who accepts a tender of goods, whether conforming or nonconforming, becomes obligated to pay the seller the contract (list) price of the goods.
In a rewards case, will the offeror remain liable despite the fact that the object of the reward is no longer active?
Yes, even when another party accepts and performs a contractual duty, if the offer was made to multiple parties, that offer remains open until it is either terminated or revoked. Because the university did not effectively revoke the offer as discussed above, the offer remained outstanding and the student could still accept it after the rival college coach had returned the hog.
Does SOF re $500 applies to service contracts?
No, only to contracts.
How is SOF applicable to service contracts?
If service cannot be performed under a year (from the date of signature), SOF will apply.
How is SOF triggered?
SOF is triggered by Mr. Sour: M-arriage, S-urety, O-ne year longer service contracts, UCC goods, R-eal property.
Will a service provider be liable for warranty of merchantability or implied warranty of fitness when choosing and installing an appliance sold by a third party?
No, only if the service provider is also the seller of the applience.
Can a warranty of fitness be disclaimed by “as is” clauses?
Yes, it can. The implied warranty of fitness for a particular purpose can be disclaimed by use of language such as “as is,” which calls the buyer’s attention to the exclusion of warranties and makes plain that there is no implied warranty.
Can express warranties be disclaimed by “as is” clauses?
No, it cannot. Any promise, affirmation, description, or sample that is part of the basis of the bargain is an express warranty, unless it is merely the seller’s opinion or commendation of the value of the goods.
Disclaimer clauses that conflict with express warranties are ignored
Who has the burden to prove a condition precedent?
If a defendant’s duty is subject to a condition precedent, then the plaintiff (here, the life coach) has the burden of proving that the condition occurred in order to recover.
How can an intended beneficiary be differentiated from a creditor beneficiary?
The creditor beneficiary should have a credit in his favor with the promisee while the intended beneficiary is basically receiving a gift.
Will disconnected (not offer/acceptance) letters sent by two negotiating parties be enforceable?
Yes, as long as they were signed by the party against whom enforcement is sought.
Will substantial performance overrides the need for a party to satisfy an express condition?
No, failure to satisfy an express condition is enough for the other party to refuse her performance.
Does a UCC sale of goods require consideration for a good faith contract change?
No.
When can a seller bid in an auction of his own good?
(i) a seller may bid at a forced sale, and
(ii) a seller may bid if she specifically gives notice that she reserves the right to bid.
Outside these two cases, when an auctioneer knowingly accepts a bid by the seller or on her behalf, or procures such a bid to drive up the price of the goods, the winning bidder may avoid the sale or, at her option, take the goods at the price of the last good-faith bid prior to the end of the auction.
How is the mailbox rule applied if the offeree mails a rejection and right afterwards an acceptance?
If a communication is sent rejecting the offer, and a later communication is sent accepting the contract, then the mailbox rule will not apply, and the first one to be received by the offeror will prevail.
When can an offer be irrevocable without consideration?
Under the UCC, an offer to buy or sell goods is irrevocable for up to THREE months if:
a) offeror is a merchant
b) there is an assurance that the offer is to remain open
c) assurance is contained in signed writing from the offeror.
What happens to an offer if the involving subject matter is destroyed?
An offer involving subject matter that is destroyed is terminated.
Does the actual intent (subjective) of the parties matter for contract formation?
No, subjective (actual) intent of the parties is not relevant.
How is contract formation determined from a objective theory perspective?
(a) whether reasonable people in the parties’ position,
(b) given the facts and circumstances,
(c) would conclude that a contract had been made based on objective manifestations of intent (regardless of actual subjective intent).
