Contracts and Sales

Question 1

6 Ways to terminate/revoke offers

1. Express revocation by offeror’s words or conduct
2. Implied revocation by offeror’s conduct
3. Offeror’s death
4. Rejection by Offeree
5. Counteroffer by Offeree
6. Lapse of time (time stated or reasonable amount of time)

Answer 1

Offeror revocation - express revocation or implied by taking an action absolutely inconsistent with continuing ability to contract

Offeror’s death

Offeree rejection - express or implied by counteroffer

Lapse of time - either duration time stated in offer or “reasonable amount of time”

Question 2

IMPORTANT EXCEPTIONS to the parol evidence rule

Answer 2

1. whether writing is integrated and, if so, completely or partially
2. meaning of ambiguous term
3. defense to formation or enforcement (eg, fraud, duress, mistake)
4. ground for granting or denying remedy (eg, rescission, reformation)
5. subsequent contract modifications
6. condition precedent to triggering contract duties

Question 3

Buyer’s duty of good faith & fair dealing under a requirements contract: 4 factors to argue

Answer 3

1. Buyer must purchase goods in question EXCLUSIVELY from the seller
2. Requirements must approximate a reasonably foreseeable figure
3. Reasonable elasticity in requirements is permitted, so long as any variations in requirements are requested in good faith
4. Both parties must act in good faith and deal fairly (implied in all UCC contracts)

Question 4

Requirements for contractual duty to be discharged under the excuse of impracticability/impossibility

Answer 4

(1) an unanticipated or extraordinary event makes it impracticable for the party seeking discharge to perform,

(2) the contract was formed under a basic assumption that the event would not occur, and

(3) the party seeking discharge was not at fault in causing the event to occur

Also, implicitly, the party seeking discharge hasn’t already breached in another way.

Question 5

Reserve Auction Rules

Answer 5

All UCC auctions are presumed reserve, unless a no-reserve action is announced.

Auctioneer - At a reserve auction, the auctioneer may withdraw goods from auction prior to completion of the sale.

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Bidders - In either reserve or no reserve actions, a bidder may retract a bid until the auctioneer announces the completion of the sale (e.g., at the fall of the auctioneer’s hammer). ** However, the bidder’s retraction will not revive any earlier bids.

Question 6

No-Reserve Auction Rules

Answer 6

A no-reserve auction must be specifically announced.

At a no-reserve auction, goods cannot be withdrawn from auction AFTER the auctioneer calls for bids, unless no bid is received with a reasonable time.

Question 7

Acceptance of a delegation by a delegatee constitutes a PROMISE to perform those duties. THAT promise is enforceable against the delegatee if:

Answer 7

1. the delegatee has received consideration OR
2. there is a consideration substitute that makes the promise enforceable.

**But note: delegator is not released from liability unless the other party to the contract expressly or impliedly agrees to a novation.

Question 8

Under the UCC, an installment contract is defined as a contract in which:

Answer 8

(1) the goods are to be delivered in multiple shipments, AND

(2) each shipment is to be separately accepted by the buyer.

**Payment is due upon each accepted delivery.

Question 9

Can a breaching party recover anything following their breach?

Answer 9

A party who breaches a contract CAN recover in restitution, regardless of whether payment is due at the time of breach.

Recovery will be in the amount of:

(1) the reasonable value of the work performed before the breach, less (2) any damages suffered by the nonbreaching party due to the breach.

Question 10

A contract can be interpreted as divisible if:

Answer 10

(1) the parties’ duties can be broken down into at least two corresponding pairs of performances AND

(2) those pairs of performances can fairly be regarded as agreed (i.e., bargained-for) equivalents