Contracts Add ons Flashcards
Implied in fact vs. implied in law Ks
Implied-in-fact: inferred from party’s conduct or failure to act (e.g. not stopping someone who begins painting their house)
Implied-in-law: Court constructs K when parties did not contract (e.g. unconscious person treated by doctor)
Do courts try to interpret Ks as divisible?
Yes, this is their preference, but will NOT do so if violates express terms of K
When does misrepresentation make contract voidable?
Regardless of whether it was intentional, can be voidable if
1) was fraudulent or material
2) induced assent
3) created justifiable reliance
Under common law, is consideration required to modify K?
YES
If someone provides care for a person’s pet/child/property without the owner’s permission, may they be reimbursed?
YES, bc a quasi-contract has been formed, the party that has been enriched must pay reasonable expenses undertaken due to emergency
Can a merchant disclaim warranty of fitness for particular purpose, warranty of merchantibility, or both?
May disclaim EITHER or BOTH through express conspicuous writing
When must contract modifications under Statute of Frauds be in writing under UCC?
If they affect SUBJECT MATTER or QUANTITY of goods in writing, NOT price
If a writing is not fully integrated, may parole evidence rule apply to introduce contradictory terms?
NO, regardless of whether writing is fully or partially integrated, parol evidence rule prohibits introduction of contradictory terms
If a party commits anticipatory repudiation, may he repudiate it and comply?
YES, so long as other party does not cancel K or take any action in reliance on failure to provide assurances, anticipatory repudiation may be retracted
Good faith purchaser protections
A buyer who does NOT obtain title can still TRANSFER good title to a subsequent purchaser who buys item in good faith and for value
Constructive revocation
When offeree acquires reliable information that offeror has taken definite action inconsistent with offer, offer is automatically revoked by constructive revocation
If a non-merchant promises not to revoke, does this create a firm offer?
NO, only merchants can create firm offer under UCC rule.
When buyer places order and seller ships goods as accommodation, is this acceptance?
NO, and no K is formed if buyer rejects goods
If buyer relies on seller’s unintentional misrepresentation, does that render K voidable?
YES, even when misrepresentation NOT fraudulent
If K is rendered impracticable, but subcontractor unaware of conditions, is he responsible?
NO, party that hired subcontractor has assumed the risk
Under what conditions can a promise to make a gift with no consideration be enforceable?
1) if collateral estoppel applies
OR
2) exchange of promise to make gifts constitutes valid consideration (e.g. two parties BOTH promise to make gifts if the other does)
Does parol evidence rule apply to statements made after K executed?
NO, only to those BEFORE or CONTEMPORANEOUS
Will courts enforce Ks for personal services?
Rarely–but will often restrain breaching parties from working ELSEWHERE when non-compete clause applies
In effort to cure defective tender, must seller provide conforming goods within K time?
Yes, UNLESS seller had REASONABLE GROUNDS to believe buyer WOULD accept imperfect tender
In this case, seller has REASONABLE TIME to correct breach
WHEN may parol evidence be introduced in spite of fully integrated K that would otherwise be inadmissible?
To show that K was subject to CONDITION PRECEDENT
Do implied-in-fact Ks require proof of agreement?
YES, mutual assent required
Can K be reformed on basis of mutual mistake if one party seeks to benefit from that mistake?
YES, based on original agreement prior to writing
If K is valid, may reliance damages be awarded?
NO, this is usually just for PROMISSORY ESTOPPEL when K is not valid.
When does nondisclosure constitute misrepresentation?
When non-disclosing party KNOWS that disclosure is NECESSARY to prevent PREVIOUS assertion from being misrepresentation
When does identification of goods occur?
For existing goods: when K made
For goods not already existing: EARLIEST of marked, shipped, or designated by seller
If a party is prohibited from assigning K but assigns anyway, can assigned party recover?
YES, from the party who assigned it, even if the assignment was in breach
When does economic threat give rise to duress?
When the threat is IMPROPER and threatened party is DEPRIVED OF MEANINGFUL CHOICE
Is threat of litigation to settle K dispute improper?
NO, only if done in bad faith
Under UCC, if a delivery of non-perfect tender is made, and the buyer uses some of the goods, may he reject the rest?
YES, he may reject all OR part of the goods
Is a small amount of consideration (e.g. $50) for a major K (e.g. sale of house) significant enough to keep K open?
YES, generally, a party cannot challenge adequacy of consideration
Does offer terminate on the death of 1) offeror or 2) offeree
offeror: YES, UNLESS option K, which does not terminate at death and is irrevocable for prescribed period
Offeree: YES
Does mirror image rule apply to sale of goods?
NO, common law
Will an offer fail for being vague or indefinite?
NO, so long as it represents objective manifestation of willingness by offeror to enter into agreement creating power of acceptance in offeree
When K is NOT fully integrated, may extrinsic evidence be introduced to supplement terms?
ONLY IF consistent with writing
NOT if contradictory
Must a third party be named in a contract to have rights vest as intended beneficiary?
NO, even if intended beneficiary not identified, if he receives a benefit or advantage from K, he can enforce it
If a K exists, can promissory estoppel be awarded?
NO, only in absence of valid K
If SOL has run on debt payment, is new promise to pay debt enforceable without consideration?
YES
Undue influence defense elements
1) lack of CAPACITY/EXPERTISE
2) unfair PERSUADED by STRONGER party
3) hindered FREE WILL of WEAKER party
Are land sale Ks governed by UCC or common law?
COMMON LAW
Can breaching party recover anticipated profits?
NO, only NONBREACHING party
Usually, breaching party can recover reasonable value of work performed before breach
Under UCC, when must modification of K that falls under statute of frauds be in writing?
ONLY WHEN they affect SUBJECT MATTER of K or QUANTITY of goods to be sold
When is K for specifically identified goods excused for both parties?
when destruction occurred 1) without fault of either party 2) before risk of loss passed to BUYER
When may option K be revoked?
BEFORE ACCEPTED
when offeror either COMMUNICATES revocation to offerree or
offerree obtains RELIABLE INFORMATION that reasonably indicates offer revoked
When is unilateral option K CREATED? When is it ACCEPTED?
Created: when offeree BEGINS performance
Accepted: when offeree FULLY PERFORMS
Can an incidental beneficiary sue to enforce K?
NO, only intended beneficiary after 1) reliance 2) assent or 3) suit to enforce
How long is merchant’s firm offer irrevocable for?
For period STATED or reasonable time/3 months MAX
Afterward, MAY be revoked, or will LAPSE if not accepted in reasonable time
Does promising not to sue in exchange for payment constitute consideration?
YES, forms agreement
Does buyer have obligation to allow seller to cure?
NO, unless still time remaining before K is up
K sale of goods: defaulting buyer remedy if no liquidated damages clause?
EITHER 20% of performance OWED OR $500, whichever is LESS
If lifeguard gives assurance that body of water is safe, does it generate duty?
YES, when person undertakes risk based on assurance, duty is generated IF lifeguard knew person took on risk
If K subject to condition, and party does not attempt to perform condition, is condition met?
NO, must make REASONABLE EFFORTS to meet condition
If a lender promises to allow a debtor in default to pay later, must that party adhere to its promise?
NO, UNLESS there is additional consideration because of PREEXISTING DUTY RULE
Does subcontractor offering lower price than other subcontractors in exchange for acceptance of bid constitute consideration?
YES, be he is making bid lower than he could, this is consideration
When a party receives nonconforming goods without accommodation, must party mitigate losses?
YES, by making reasonable efforts to RESELL goods on market
When can trade usage be used in UCC K?
Whenever usage explains or supplements terms rather than NEGATING terms of K
Under UCC K, if a party accepts imperfect tender, may he still sue the other party for breach?
YES, can still recover under perfect tender rule
Must a firm offer be signed by offeror or offeree?
Offeror–if PREPARED by offerree, must be SEPARATELY AUTHENTICATED by offeror to ensure no coercion
In MEE, if it doesn’t seem like a K has been formed, what is final option to be discussed?
PROMISSORY ESTOPPEL
SOF: UCC Merchant exception
For goods exceeding value of $500, when written K usually required, transactinos between merchants do NOT need to be written so long as 1) a memorandum is sent between parties and 2) receiving party does not object
Can intended beneficiary who has not relies on K sue for breach?
YES, because the suit ITSELF vests rights in K
Can mailbox rule be modified by K
YES, mailbox rule applies UNLESS K specifies that acceptance must be RECEIVED by particular date
If merchant makes valid firm offer, and contacts offeree before period terminates to inform of price increase, can price increase be enforced?
NO, required to keep offer open AS IS for period identified
Can offeree rescind K upon learning of misrepresentation by offeror if misrepresentation has been corrected to conform to expectations before execution of K
NO, so long as appropriately remedied to conform to expectations, buyer must perform
If K prohibits assignment, may assigned party still recover?
YES
UCC Perfect Tender rule exception?
SUBSTANTIAL PERFORMANCE for INSTALLMENT K
Does quantum meriut apply to breach of K?
NO, only for quasi-contract, NOT express K
Do incidental beneficiaries have contractual rights?
NO, may not sue to enforce
ONLY intended beneficiaries
Plain meaning rule: when meaning not ambiguous
must rely on ORDINARY MEANING of words if language is clear and unambiguous
E.g. cannot interpret K to add additional terms
only interpret terms against drafter when terms ARE ambiguous
When police have PC to stop a person with suspicion of a crime, may they search locked portions of vehicle?
YES, automobile exception applies
