Contracts and sales Flashcards
how do you determine if a contract is for sales if the contract has goods and services?
determine which aspect is dominant
what are the elements of a contract
mutual assent: offer and acceptance
consideration: bargained for exchange OR substitute ( PE, good faith UCC, DR)
No defense: mutual mistake, lack of capacity, illegality, statute of frauds
the broader the comm….
the more likely the comm was a solicitation instead of offer
to constitute an offer
expression of a promise, undertaking, or commitment to enter contract
certain and definite terms
comm to offeree
what is req for definite sale of goods contract
quantity
what are some indicators of a vague contract term
reasonable, fair, appropriate
when an offeree gives a counter offer
the original offer is rejected and unenforceable, a new offer is proposed, the offeree becomes the offeror and vice versa
when an acceptance is made expressly conditional…
it is a rejection that reqs acceptance. if the parties perform the contract as originally stipulated the contract is implied through their conduct and the new terms are not apart of it
what happens when an option is rejected
does not terminate the offer, the offer stays open during the agreed upon option period
how can an offer be revoked impliedly
- offeree receives correct info of acts by offeror that would indicate to a reasonable person that offeror no longer wishes to offer
when is an offer irrevocable
- option contract
- firm offer under UCC (merchant, signed writing, writing assures offer held open)
- detrimental reliance
- beginning perfomrance under a true unilateral contract
what terminates an offer by operation of law
- death/insanity (no comm to other party req)
- destruction of proposed contact subject matter OR
- supervieinig illegality
when can the power to accept be assigned
when an option contract for consideratino
how to accept a bilateral contract
- a promise to perform
2. part performance
what is the common law rule for additional/different terms in an acceptance
rejection and counter offer
what is the UCC rule for additioanl/different terms
acceptance
additional terms (non merchant): not included in contract
additonal terms (merchant): in contract UNLESS: materially alter terms OR the contract expressly limits accpetance to terms OR offeror objected to new terms in reasonable time
different terms: either the test above or the knockout rule; conflicting terms knock each other out, gaps filled by UCC
mailbox rule
acceptance is effective at dispatch UNLESS
offer stipulates otherwise
option contract involved
offeree sends rejection then acceptance (whichever is first)
offeree send acceptance then rejection AND rejection arrives first AND offeror DR’s
consideration
bargained for exchange for
legal value
preexisting legal duty
no sufficient for consideration
modification of a contract
modern rule: only if the mod is due to unforseeable circumstances AND fair and equitable.
old rule: not unless new conisderation
UCC: CAN modify if modification is given in good faith
Modification: changing a contract AFTER performance begins
promissory estoppel
promisor reasonably expects to induce action AND action is induced
lack of capacity defenses
intoxication
minor
duress (econ duress: threat to seriously impact victim finances AND no means to prevent impact) undue influence (susceptiblity to influence, influence)
All are VOIDABLE, not void
misunderstnading for ambiguity
neither party aware: no contract
both aware: no contract
one aware: contract based on what ignorant party believed
mutual mistake
may be voidable to the adversly affected party if
mistake conserns a basic assumption of the contrract
mistke has a material effect on the exchange
party seeking avoidance did not assuem risk of mistake
is mistake in value a defense for contract formation
no
unilateral mistake
no, unless nonmistaken party knew or had reason to know mistake made by other party
examples of unconciousnable contract provisions
adhesion, exculpatory clause for intentional acts, inconspicuous risk shifting provisions
court remedy for unconscionable contract provisions
no contract
enforce without provision
limit app of provision to reasonable amount
statute of frauds
marriage one year or more land sale (mortgage, easement, leases, fixtures) executory interests goods 500 or more surety of a debt
when is a contract removed from s of F
modified out of s of f
land sale: part performance and oral contract
services: full performance
goods: specifically manu goods OR goods paid for or accepted
writing req for statute of fraud
not formal
signing can be electronic, initials
writing can be receipt a letter, written offer accepted orally
parol evidence rule
an express agreement in a writing that embodies the final expression of the bargain, the writing is an integration. any other writings prior to integration are inadmissible to vary the terms of the writing
how do you determine an integration
is writing final expression
is it partial or complete
what is outside the scope of the parol evidence rule
validity of a contract
conditions precedent to effectiveness
intepretation
collateral agreements
what are the general rules of contract construction (theres alot)
contracts constured as a whole ordinary meaning courts favor and presume contract valid the parties course of dealing usage of trade parties course of performance
what are the UCC gap filler provisions
price: reasonable price determined at time of delivery
place of delivery: sellers place of business
time: reasonable time
payment time: time and place the buyer receives the goods
assortment: at buyers option
implied warranties under UCC
merchantability: only merchants who deal with good “fit for the ordinary purpose for which such good is used”
title: any seller, title is good
against infringement: merchant seller reg dealing in good, free of patent,copyright claims
fitness to a particualr purpose:
can implied warratines be waived
yes, merchantability and fitness of purpose can be waived in disclaimer or “as is” general disclaimer
when does risk of loss shift for defective goods
when seller has cured the defect OR buyer accepts goods anyway
risk of loss for non-carrier cases
seller is merchant: risk of loss shifts when buyer takes physical possession
seller is nonmerchant: when tender of delivery
risk of loss for carrier
shipment contract (default): shifts to buyer upon transfer of good to carrier. seller must
make reasonable contract with carrier
deliver goods to carrier
notify buyer of shipment
provide buyer with docs needed to take shipment
destination (req FOB or express risk of loss): shifts to buyer when gets to destination
performance rules under UCC and common law
common law: substantial performance
UCC: perfect tender
failure to meet a contract condition…
is not a breach; discharges nonbreaching party from liability of nonperformance
what are implied conditions
notice
performance
cooperation
what can the party to a contract do when a condition is not met
terminate laiblity OR
continue under contract (thereby waiving condition)
anticipatory repudiation
when a proimsor, prior to the time set for performance, indicates thy wont perform when the time comes
when does anticipatory repudiation excuse conditions
- bilateral executory contract
2. unequivocal
effect of anit repudi
treat as total and sue
suspend and wait to sue until performance date
treat contract as discharged
ignore and urge performance (not waivor)
test for divisible contract
the perofnamce of each party is divided into two or more parts
the number of parts due to each party is the same
the performance of each part by one party is agreed on as the equivalent of the corresponding part from the other party
when has the duty to perform been discharged
- performance
- occurance of condition subsequent
- illegality
- recission
- partial discharge by mod of contract
- cancellation
- release
- substituted contract
- accord and satisfaction
- novation
- impossiblity, impractiability frustration
accord and satisfaction
an agreement in whcih one party to an existgin contract agrees to accept some other different future performance. Then performance of the accord.
must an accord be supported by consideration
yes
breach of an accord agreement
by debtor: enforce original or accord
by creditor: raise accord as equitible D OR wait until damage and sue for breach of accord
novation
an agreement to sub new party and new contract to assume duties of a party to old contract. you need
- valid contract
- agreement of all parties
- immediate extinguishment of original contract
- valid new contract
what are the elements of frustration for discharge of contract
supervening events
no reasoanbly foreseeable
purpose of contract destroyed
purpose of contract realized by both parties when contract made
what factors are used to determine materialiaty of breach
amount of benefit received adquacy of compensation extent of part performance hardship to breaching party negliegnece of breahing party lilihood breaching party will perform rest of contract
options of nonbreahcing party in material breach
terminate duty to counterperform
AND imediate right to remedy
when can a buyer revoke acceptance given after receipt of goods with perfect tender rule
accepted goods with reasoanble beleif the defect would be cured and it wasnt OR
they accepted goods bc defect detection difficult
grounds for rejection in an installment contract under UCC
buyer may reject any installment that is nonconforming only if it substantially impairs the value of that installment and cannot be cured.
if nonconforming goods received by buyer in installment contract under UCC…
still must accept if
-seller says theyll fix AND defects can be cured
does a superveing illegality revoke an offer
yes, if offfer made before acceptance, then revokes offer
illusroy contract
when a party promises to do something that doesn’t give value to the other party
does a warranty disclamer for good (merchantability and fitness for part use) work if after offer and acceptance
no
