Contracts FOCUSED TOPICS Flashcards
Additional terms in a UCC contract
Battle of the Forms
1. If one party is not a merchant: Term is a proposal and will not become part of K unless assents
2. If both parties merchants: Automatically becomes part of K unless material alteration or objection within reasonable time.
What happens under the UCC when a nonconforming good is shipped?
Depends on whether seller acknowledges the nonconformity.
* If Seller does NOT acknowledge: Offer accepted and breached at the same time
* If seller DOES acknowledge: This is an accomodation and will not serve as an acceptance. Buyer can accept or reject.
What is the “KSN” in a output contract?
Implied obligation of good faith requires both parties to use their best efforts to supply the goods and promote the sale.
A promise to settle a claim may be consideration if there is what?
If there is a** good faith dispute** over the validity of the claim.
What happens if there is a cashed check that said “payment in full”, but it is for less than the amount owed?
If there is a good faith dispute and the statement is conspicuous, then it’ll settle it.
If no good faith, then there is no KSN.
Ex: Contractor and owner enter into K where owner paints the home of owner for $2,000. Owner really thinks it is not painted properly. Owner mails check for $1,800 instead marked “payment in full for painting house” and contractor cashes. If Contractor sues for additional $200, he will not succeed.
Do you need KSN for a UCC modification?
No, only good faith.
Promissory Estoppel
A promise that foreseeably induces reliance, intent to cause reliance, necessary to prevent injustice.
Promissory estoppel is a substitute for KSN.
Recovery will be limited to reliance damages.
Are general provisions like, “This K may not be assigned” a valid non assignment clause?
No. These general clauses are construed to allow assignment of rights and bar delegation of duties.
Can a nonintentional misrepresentation based on a mistake be grounds to avoid a K?
If it is material, yes.
Anticipatory Repudiation
- Unequivocal Expression
- Before time of performane
- That party will not perform
Repudiating party can retract unless
* Nonrepudiator sues for breach
* Changes position in reliance
* States the repudiation is final
Right to demand adequate assurances
Where conduct of a party is not an unequivocal repudiation but does cause reasonable grounds for insecurity, insecure parrty can
* Demand adequate assurances
* This must be done in writing
* The insecure party may suspend their performance until assurances received
* If D fails to respond with a reasonable time, not to exceed 30 days, it is deemed repudiated.
