Contracts and Sales Flashcards
UCC
Article 2 of the Uniform Commercial Code applies to transactions involving goods. A good is movable, tangible object. A contract under Article 2 may be made in any manner sufficient to show agreement.
Offer
A person makes an offer when the person communicates to another a statement of willingness to enter into a bargain so that the other understands that assent to the bargain will conclude it.
Acceptance
An acceptance is a manifestation of assent to the terms of the offer made in a manner invited by the offeror
Performance Obligations
Under the common law, a party must substantially perform its obligations in order to demand performance. Under the UCC, performance requires a perfect tender unless it is an installment contract.
Anticipatory Repudiation
Anticipatory repudiation occurs when there is an unequivocal manifestation by one party that they cannot or will not perform their obligations.
Statute of Frauds
A contract within the Statute of Frauds satisfies the statute and is enforceable if it is evidence by a writing signed by the party to be charged, identifies the subject matter, indicates a contract has been made, and states the essential terms.
Consequential Damages
Consequential damages consist of losses beyond those covered by the foreseeable harms measure. Often, the availability of consequential damages hinges on whether the breaching party was aware of the other party’s circumstances
Damages - Generally
Contract damages must be foreseeable to be recoverable. Damages are foreseeable if a reasonable person in the breaching party’s position would have known they would occur. Damages must be ascertainable with reasonable certainty
Option Contract
An option contract exists when the offered gives consideration for a promise by the offeror to keep an offer open for a period of time.
Merchant’s Firm Offer
If a merchant offers to sell goods in a signed writing and the writing says it will be held open, the offer isn’t revocable for lack of consideration.
Material Breach
To determine whether a breach is material courts look at the amount of benefit received, the adequacy of damages, extent of performance, hardship to breaching party, and whether the breach was willful.
Divisible Contract
If a contract is divisible, a party who has performed one or more parts is entitled to collect those even if they breached.
Consideration
Consideration is a bargained for exchange that has legal value. Legal value is usually considered to be either a benefit to the promisor of a detriment to the promisee. Past consideration is inefficient.
Promissory Estoppel
A course will enforce a promise without adequate consideration if the promisor should have expected the promisee to change position in reliance, the promisee did change position, and the change in position was to their detriment
Demand for Assurances
If a party has reasonable grounds for insecurity, they can demand assurances. It must be in writing and performance can be suspended until assurance is given. If no assurance is given within 30 days, the contract can be treated as repudiated.
