Contracts and Sales

Question 1

Three big questions

Answer 1

1. Has an enforceable contract been formed?
2. Has the contract been performed?
3. What are the remedies for breach?

Question 2

Can party retract its repudiation?

Answer 2

Yea, as long as the non-breaching party has not commenced a lawsuit OR acted in reliance on the repudiation (materially changing its position)

Question 3

If a party is insecure about other side’s performance, what can they do under UCC?

Answer 3

Demand adequate assurance of performance (other party must respond within reasonable time of treated as repudiation)

Question 4

Goal of Expectation Damages

Answer 4

Try to put party in same economic position it would’ve been in had the breaching party performed as promised.

Compare value of performance without breach v. value with breach.

Question 5

What are the limits on Expectation damages? (Three)

Answer 5

1. Must be proven with reasonable certainty
2. Unforeseeable consequential damages no recoverable unless breaching party has reason to know about the possibility of these special damages at the time of contracting
3. Non-breaching party must taken reasonable steps to mitigate damages from breach

Question 6

Most typical kind of damages for breach?

Answer 6

Money Damages

Question 7

What happens if party fails to mitigate damages?

Answer 7

Court will calculate damages as if party did mitigate?

Question 8

When is diminution in value the appropriate damages?

Answer 8

When non-breaching party would otherwise be overcompensated for breach. Only used when breaching party acted in innocent and unintentional manner

Question 9

Types of money damages

Answer 9

1. Expectation damages
2. Consequential damages
3. Reliance damages
4. Restitution damages
5. Liquidated damages
6. Punitive damages (almost never allowed)

Question 10

Non-money damages

Answer 10

Specific performance/injunction. Not typically used in contract law.

Presumptively available in real estate transactions.

Presumptively not available for contracts of personal service.

Question 11

When is specific performance available under UCC?

Answer 11

Only when it’s for unique goods like art or custom made items

Question 12

Which type of 3rd party beneficiary can sue to enforce contract?

Answer 12

Intended beneficiary.

Incidental beneficiary cannot sue.

Question 13

Creditor Beneficiary

Answer 13

When promisee strikes deal with promisor to repay some earlier debt to the third party

Question 14

Donee Beneficiary

Answer 14

When there is no preexisting obligation, but promisee clearly intends to confer gift a enforcement to third party

A names B as life insurance beneficiary. B can sue insurance company if they refuse to pay.

Question 15

Ways to terminate offer

Answer 15

Revocation
Rejection by offeree
Counter-offer by offeree
Lapse of time
Death

Question 16

Delegation v. Novation

Answer 16

Delegation doesn’t release the delegator from potential liability

Novation is where the other party agrees to release the initial party and substitute a new one

Question 17

Merchant Firm Offer Rule

Answer 17

-buyer doesn’t have to be merchant
-max amount of days is 90
-irrevocable offer
…..

Question 18

Accord & Satisfaction

Answer 18

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Question 19

Requirements Contract

Answer 19

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Question 20

Condition Precedent

Answer 20

the condition must occur before the other party has an obligation to perform

Question 21

Condition Subsequent

Answer 21

If the condition occurs, the duty to perform will then be excused