Contracts and Sales Flashcards
(65 cards)
1
Q
A contract is a
A
Legally enforcable agreement
2
Q
When a contract deals with services we are in?
A
Common Law
3
Q
When a contract deals with goods we are in?
A
Article 2 of the UCC
4
Q
You cannot be in both the Common Law and the UCC at the same time
A
The All or Nothing Rule
5
Q
Agreement can be divided into mini contracts?
A
Divisible contracts
6
Q
Does the good or service play a bigger role?
A
The Predominant Purpose Rule
7
Q
Four Big Topics: Has a contract been formed?
A
- Agreement 2. Consideration 3. Defenses 4. Statute of Frauds
8
Q
Elements of the Agreement
A
Offer and Acceptance (or counter offer)
9
Q
an offer is a manifestation of a willingness to enter an agreement that creates
A
The power of acceptance in the offeree
10
Q
Offer and acceptance are governed by the _______ test
A
Objective Test
11
Q
Key question of a valid offer is whether it objectively displays
A
intent to be bound
12
Q
An offer must be directed to a specific offeree except
A
contest offers or rewards offers
13
Q
Under UCC, only essential terms are
A
The quantity of the goods
14
Q
Under common law, the essential terms are
A
parties, subject, price, and quantity
15
Q
A contract to buy all (but not necessarily a specific amount) of a certain good needed from a supplier is
A
requirements contract
16
Q
A contract to sell all that is produced of something is
A
An output contract
17
Q
Six ways to Terminate an Offer
A
- Offeror Revokes
- Constructive Revocation. Offeree learns that offeror has taken action absolutely inconsistent with continuing the contract.
- Offeree rejects the offer
- Counter-offer
- Offeror dies
- A reasonable amount of time passes
18
Q
Four types of irrevocable offer
A
- Option
- Firm Offer
- Unilateral Contract - Offeree has started performance
- Detrimental reliance
19
Q
Can only be accepted through performance
A
Unilateral offer
20
Q
Exceptions to Mailbox Rule
A
- Offeree sends rejection, counter first
- To other types of communications
- To option contracts
- unclear whether applies to email, etc.
21
Q
Exceptions that acceptance must be communicated
A
- Unilateral reward contents
- unilateral offer where parties are geographically close
- A past history of silence serving as acceptance
- Offer says that acceptance must come by silence and offeree intends to accept by silence
22
Q
Communication of acceptance by gestures or actions
A
Implied-in-fact Contract
23
Q
At common law, an acceptance must be
A
The Mirror Image (rule) of the offer. Anything else is a counter-offer
24
Q
A conditional acceptance is another form of
A
counter-offer
25
Acceptance under the UCC is
Definite, seasonable expression of acceptance, or written confirmation, that may state different or additional terms, unless expressly made conditional upon assent of new terms.
26
If both parties are Merchants, additional terms in an acceptance apply if
1. They do not materially alter the deal
2. The initial offer did not expressly limit acceptance to its terms
3. The offeror does not object within a reasonable time frame.
27
Battle of Forms, if both parties are merchants and there are different terms in an acceptance:
Knock out Rule applies;
1. Majority: both terms are knocked out and gap filling UCC provision apply
2. Minority: If the different term does not govern under 207(2), the original offer controls.
28
When parties have a verbal agreement and one party sends a confirming memo with additional terms (within a reasonable time)
Operates as an acceptance anyway, apply battle of the forms.
29
Consideration is
bargained for promises involving a legal benefit or detriment.
30
Illusory promise
A promisor must commit to the deal or there is no consideration.
31
Settling a legal claim is sufficient consideration, only if
1. Good faith belief in the validity of the claim OR
| 2. reason to doubt the validity of the claim due to uncertain law.
32
A modification is valid in the UCC if:
made in Good faith, even without additional consideration
33
Promissory Estoppel
1. A promise was made
2. The promisee does take detrimental action in reliance on the promise
3. injustice could only be avoided by enforcing the promise
34
Quasi-Contract
1. Plaintiff confers a benefit on person
2. Plaintiff reasonably expected to get paid
3. It would be unfair to let the person keep benefit without paying
(look for a good reason why there was no opportunity to decline)
Damages generally limited to fair value of benefit conferred
35
Moral Obligation plus Promise (Half Theory)
Moral obligation plus a subsequent promise can be binding.
36
Seven Defenses to K Formation
1. Misunderstanding
2. incapacity
3. Mistake
4. Fraud/Misrepresentation
5. Duress
6. Illegality
7. Unconscionability
37
Misunderstanding;
1. Material term (open to multiple reasonable interp.)
2. Each side attaches a different meaning to the term
3. Neither party knows or should have known of the confusion.
38
Incapacity:
1. Infants/Minors
2. People who are mentally ill
a. Cannot understand nature and consequences OR
b. Cannot act in a reasonable manner
3. Very intoxicated
39
Mutual Mistake
1. mistake of fact
2. mistake realties to basic assumption of K
3. Impacted party did not bear the risk of mistake
40
Unilateral Mistake
1. All elements of mutual mistake AND
2. mistake makes k unconconsionable OR
3. other side knew or had reason to know of mistake.
41
Misrepresentation
1. Misrepresentation of present fact
2. Materiality
3. Made in which it is justifiable to rely on misreport.
42
Fraud in the Execution
Trick somebody into signing something that they don't even know is a contract
43
Nondisclsoure
Generally no duty to tell about material facts. EXCEPT, active concealment.
44
Duress
Improper threat that deprives party of meaningful choice
45
Illegality
Illegal contracts are unenforceable
| But a contract in furtherance of an illegal act may still be enforced
46
Procedural Unconsionabiliy
Defect in bargaining process itself (note some jurisdictions require both Proc. & Subst.)
47
Substantive Unconsionability
rip-off in some terms of the contract
48
Does the statute of Frauds Apply
1. Marriage
2. Suretyship
3. One Year
4. UCC goods over $500
5. Sale or interest in Real property
49
Main-purpose exception to SOF
If main purpose is for surety's own benefit, then not in SOF
50
Two ways to satisfy the SOF
By performance or by writing
51
Also exempted from SOF
1. Custom goods
2. Through judicial admission
3. Confirming memo (failure to object within 10 days)
52
Has a contract been formed?
1. Parol-evidence rule
2. Warranties
3. Conditions
4. Excuse of performance obligations
53
Parol Evidence Rule
Bars prior statements or writings
Partial or Full integration
54
Parol Evidence rule does not bar
1. Info relevant to defenses of K formation
| 2. Second, separate deal
55
Warranty
a promise that explicitly shifts risk to party making the promise
56
Express warranty
promise that affirms or describes goods and is part of basis of bargain
57
Implied warranty of Merchantability
1. Requires a merchant
2. Warrants that goods are fit for ordinary commercial use
3. Can be disclaimed
4. None if given opportunity to inspect in full
58
Implied warranty of fitness for a particular purpose
Triggered when a buyer relies on seller's expertise to select a special type of good for specific purpose
59
Express Conditions
Created by language in the contract
Must be strictly satisfied unless the condition is somehow and excused
Generally, objective standard of satisfaction
60
Waiver of conditions
Can be done through words or conduct
61
Constructive conditions of Exchange
Implied condition; One party's performance is conditioned on the other's performance
62
Performance under the UCC requires
Perfect Tender
Perfect goods and perfect delivery
63
FOB Seller's place of business
Shipment k, must get to common carrier, then no longer responsible
64
FOB Buyer's place of business
Destination K. Must get to buyer.
65
Risk of Loss
1. Has it been dealt with in the K
2. Has either party breached?
3. Was it a destination or shipment K?
4. Was the seller a Merchant?
if so, stays with seller until received by buyer, if not, moves to buyer when tendered.
