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My MBE MEE > Contracts MBE > Flashcards

Contracts MBE Flashcards

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1
Q

Formation

A

1) Offer 2) Acceptance 3) Consideration

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2
Q

Offer

A

Outward manifestation of intent to enter into a contract, Intent AND Specific terms

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3
Q

Ads

A

Not an Offer, “Invitation to an Offer”

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4
Q

Termination of an Offer

A

Death, Lapse of Time, Rejection, Counteroffer, Revocation

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5
Q

Direct Revocation

A

Retraction of an Offer by the offeror

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6
Q

Indirect Revocation

A

Person receiving Offer LEARNS another deal was made

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7
Q

Revocable

A

Offers are revocable, only 3 instances when it is not

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8
Q

Option Contract

A

1) Promise of keep offer open 2) additional consideration

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9
Q

UCC Firm Offer

A

1) Merchants 2) signed by Merchant Can only stay open for 3 months

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10
Q

Unilateral

A

promise for an act

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11
Q

Common Law Mirror Image Rule

A

Acceptance must mirror the Offer

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12
Q

How to Accept an Offer

A

Silence • Performance • Mail

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13
Q

Common Law Mailbox Rule

A

Acceptance is effective when SENT

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14
Q

Mailbox Exception

A

• If a Rejection is sent first, then an Acceptance is sent, whichever arrives first wins

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15
Q

UCC Acceptance

A

Acceptance is construed liberally Exceptions • Material change the terms of contract • Objection to the change of a term in a reasonable amount of time • Offer limits the Acceptance

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16
Q

Consideration

A

Bargained-for Exchange You will never have insufficient consideration because of the amount, even a peppercorn is enough

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17
Q

Illusory Promise

A

Party making the Offer retains control

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18
Q

Gifts

A

Promise to give a gift is NOT valid Consideration

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19
Q

Past or Moral Consideration

A

Is NOT valid Consideration

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20
Q

Promise to pay debt barred by Statute of Limitations

A

Is valid Consideration

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21
Q

Promise to pay debt discharged by bankruptcy

A

Is valid Consideration

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22
Q

Forbearance to sue

A

Promise not to sue • Is valid Consideration

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23
Q

Promissory Estoppel

A

Detrimental Reliance

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24
Q

Accord & Satisfaction

A

Must have been disputed

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25
Q

Age

A

A contract with a minor is VOIDABLE at option of minor

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26
Q

Mental Illness

A

VOID

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27
Q

Duress

A

Wrongful threat VOID

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28
Q

Undue influence

A

Uneven bargaining position

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29
Q

Unconscionability

A

Result itself will be unfair

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30
Q

Illegal

A

Unenforceable

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31
Q

Unilateral Mistake

A

One party is mistaken Generally, not a defense unless: 1) Other party knew of mistake 2) Clerical error

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32
Q

Mutual Mistake

A

Both parties mistaken about material term • Remedy: Rescission

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33
Q

Intentional Misrepresentation

A

Knew/should have known of falsity with intent to induce reliance

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34
Q

Negligent Misrepresentation

A

Causes the innocent party to detrimentally rely

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35
Q

Non-Compete Clauses

A

Reasonable under the circumstances To determine if a non-compete clause is reasonable, look for facts that indicate how long you can’t compete and the geographic area restrictions

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36
Q

Statute of Frauds

A

Certain contracts must be in writing Remember MYLEGS - Marriage, Contract cannot be performed in one Year, Land, Executor, Guarantor/Surety, Sale of goods of $500 or more

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37
Q

Part Performance Exception

A

A showing of 2 out of 3: 1) Some payment, 2) Possession of land , 3) valuable improvements

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38
Q

Guarantor/Surety Exception

A

1) Look to main purpose/motive 2) If self-serving, contract does NOT need to be in writing

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39
Q

Sale of goods of $500 Exception

A

1) Partial Performance will take contract out of SOF ͉ 2) Merchant Confirmation: • Confirmation signed by sender • Includes the quantity • No written objection within 10 days

40
Q

Legal Writing

A

1) Parties 2) Subject matter 3) Material terms 4) Signed by party to be charged

41
Q

Final/Complete Integration

A

Parol Evidence is NOT admissible

42
Q

Merger Clause

A

Final agreement between the parties Parol Evidence is NOT admissible

43
Q

Exception to Final/Complete Integration

A

• Terms added to clear up an ambiguity

44
Q

Partial Integration

A

Parol Evidence IS admissible

45
Q

Parol Evidence IS admissible to show

A

Fraud • Mistake • Duress • Condition precedent • Course of dealing • Trade custom

46
Q

Non-Carrier Case Seller is a merchant

A

risk on seller until buyer takes possession

47
Q

Seller is a nonmerchant

A

risk on seller until goods are tendered to buyer

48
Q

Shipment Contract

A

Risk of loss shifts to buyer when goods delivered to CARRIER

49
Q

Destination Contract

A

Risk of loss shifts to buyer when goods delivered to DESTINATION

50
Q

FOB SELLER

A

is a Shipment Contract

51
Q

FOB “ANYTHING ELSE”

A

is a Destination Contract

52
Q

Requirements Contract

A

Buy all the widgets • Key word: good faith

53
Q

Common Law Modification

A

New consideration is needed

54
Q

UCC Modification

A

No new consideration, good faith needed Clauses prohibiting oral modifications are valid

55
Q

Mutual Modification

A

1) Both parties agree to modify the original terms 2) “Fair and reasonable under circumstances”

56
Q

Condition Precedent

A

event happens prior to performance of K

57
Q

Condition Concurrent

A

event occurs at time of performance of K

58
Q

Condition Subsequent

A

event occurs after the K

59
Q

Conditions Excused

A

• Waiver • Bad faith • Avoiding forfeiture

60
Q

Time is of the Essence

A

Time is NOT of the Essence unless stated

61
Q

Non-Conforming Goods Buyer’s Rights

A

May reject May accept May reject in part & accept in part

62
Q

Seller’s Right to Cure

A

1) Seller had reasonable grounds to believe the goods would be acceptable 2) By notice + new tender within time for performance

63
Q

Installment Contract

A

Delivering goods in several different shipments

64
Q

Non-Conforming Installment Contract

A

Defective shipment cannot be rejected if the defect can be cured

65
Q

Impracticability

A

Unforeseen event makes performance too difficult/expensive

66
Q

Impossibility

A

No one can perform

67
Q

Frustration of Purpose

A

The core reason for K is no longer present

68
Q

Anticipatory Repudiation

A

1) Before contract performance 2) One party UNEQUIVOCALLY refuses to perform

69
Q

Demand Assurances

A

Demand when doubtful about performance Party must respond in a reasonable amount of time

70
Q

UCC Assurances

A

Demand must be in writing

71
Q

Retraction of Repudiation

A

Party can retract unless • The other party has sued • The other party has accepted the repudiation • The other party has relied on the repudiation

72
Q

Legal Remedy

A

Money damages

73
Q

Expectation Damages

A

Put plaintiff in position if K had been performed “Foreseeable with reasonable certainty” Formula - Expectation Damages: (K price) - (Money received/saved) + (Costs)

74
Q

Reliance Damages

A

Put plaintiff in position he would have been prior to K

75
Q

Restitution

A

Getting back any value you already gave Contract PARTIALLY performed Measured by market value of the services

76
Q

Consequential Damages

A

Foreseeable costs because of breach

77
Q

Liquidated Damages

A

Determined at time of contract Enforced if reasonable Not a penalty

78
Q

Unjust enrichment

A

The Breaching Party can recover: (Reasonable value of services) - (Damages incurred)

79
Q

UCC Seller Damages

A

If Buyer breaches, Seller can recover: Goods Delivered & Accepted = (K price) Some/None goods Delivered = (K price) - (Market price) Goods Resold = (K price) - (Resale price) Additionally, Incidental Damages

80
Q

Lost Volume Seller

A

Seller can sell as many widgets as possible

81
Q

Lost Profits

A

(Expected profit) + (Costs) - (Payment for resale)

82
Q

UCC Buyer Damages

A

If the Seller breaches, Buyer can recover: Purchased replacement goods = (K price) - (Cost of new goods) NO replacement goods = (K price) - (Market price at time of breach) (Incidental/Consequential Damages) - (Expenses saved)

83
Q

Equitable Remedies

A

Recoverable when remedy at law is inadequate

84
Q

Specific Performance

A

Court will make a party perform For UNIQUE items Land is always unique

85
Q

Injunction

A

To “prevent irreparable harm”

86
Q

Rescission

A

No meeting of the minds • Mistake • Misrepresentation • Duress • Lack of capacity

87
Q

Third Party Beneficiary

A

Two people have a valid K Third party will benefit from K

88
Q

Incidental Beneficiary

A

Third party who incidentally benefits from K NEVER has rights under K

89
Q

Intended Beneficiary

A

Original parties intend to benefit a third party MAY have rights under K

90
Q

3rd party Rights VEST When

A

1) Third party is informed of rights & accepts OR 2) Third party learns of rights & relies

91
Q

If Rights Have Vested

A

Third party has same rights & defenses as original parties

92
Q

Assignment & Delegation

A

Two people have a valid K One party transfers obligation to someone else • Assignments & Delegations are VALID require “present intent to transfer”

93
Q

Novation

A

A release of the original party from the K

94
Q

Anti-Assignment Clause

A

1) The Assignment is still VALID, but 2) The original party liable for money damages

95
Q

Anti-Assignment Exceptions

A

1) Not valid if it would MATERIALLY ALTER RISK of performance 2) Unique or Personal Service K cannot be transferred

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