Contracts Quicksheets Flashcards
1
Q
What is the primary question to ask FIRST when analyzing a contract problem?
A
Governing Law: Is the contract governed by Common Law or the Uniform Commercial Code (UCC)?
2
Q
When does the UCC govern a contract?
A
The UCC governs ‘sales of goods.’
Sale: Transaction where seller transfers title of goods to buyer. Goods: Any movable item at the time of identification to the contract. Excludes intangibles (IP, goodwill), money, legal claims, services, real property.
3
Q
How is the governing law determined for hybrid contracts (involving both goods and services)?
A
Apply the Predominant Purpose Test (Majority Rule):
* Contract Language: Was it described as a goods K?
* Nature of Supplier’s Business: Do they primarily sell goods? (e.g., Best Buy)
* Value: What is the relative value of the goods vs. services?
4
Q
If a contract is governed by the UCC, does common law still have any relevance?
A
Yes. Common law principles still apply unless the UCC specifically contradicts them.
5
Q
What are the two essential elements of a valid Offer?
A
- Outward Manifestation: An objective indication of present intent to contract (oral, written, or conduct).
- Power of Acceptance: Signals that acceptance by the offeree will conclude the deal.
6
Q
Are commercial advertisements generally considered offers? What is the American Rule?
A
No. Generally, ads, catalogs, and price lists are considered invitations for offers.
American Rule: Treat ads as invitations.
7
Q
What is the exception to the general rule that advertisements are not offers?
A
Ads can be offers if the language identifies who gets the limited supply, even with excess demand.
Examples: ‘First come, first served,’ ‘First 10 customers get the deal.’
8
Q
Are Reward Offers considered offers?
A
Yes. They are offers because they promise compensation ($) in exchange for the performance of specific tasks.
9
Q
How can the Power of Acceptance created by an offer be terminated? (List the 4 main ways)
A
- Lapse of time
- Death or Incapacity of either party (before acceptance)
- Revocation by the Offeror
- Rejection by the Offeree
10
Q
How does Lapse terminate an offer?
A
The offer terminates:
* After the time explicitly stated in the offer; OR
* If no time is stated, after a reasonable time.
11
Q
How does Revocation by the Offeror terminate an offer? What are the requirements?
A
The Offeror can revoke an offer at any time before acceptance.
Requirements:
* Revocation must occur before acceptance.
* Revocation must be communicated to the offeree (directly or indirectly).
12
Q
What is Direct Revocation?
A
The offeror directly communicates to the offeree an intent to withdraw the offer.
13
Q
What is Indirect Revocation? What are its two requirements?
A
Occurs when the offeree learns the offeror may no longer be willing or able to proceed.
Requirements:
* Offeror takes an action inconsistent with the intent to go through with the offer (e.g., sells the item to someone else).
* Offeree learns about this inconsistent action from a reliable source.
14
Q
How can an offer be made irrevocable under Common Law? (2 ways)
A
- Option Contract: Requires (a) an Offer, (b) a separate Promise to keep it open, AND (c) Valid consideration for the promise to keep it open.
- Detrimental Reliance (Construction Bids): Offer held open if offeree (e.g., general contractor) detrimentally relied on it (e.g., using a subcontractor’s bid).
15
Q
How can an offer be made irrevocable under the UCC? What is a Firm Offer?
A
UCC Firm Offer Rule (UCC 2-205): An offer by a merchant to buy or sell goods is irrevocable without consideration if:
* Offer made by a merchant;
* In a writing signed by the merchant; AND
* Expressly states it will be held open.
16
Q
How long does a UCC Firm Offer remain irrevocable?
A
For the time stated in the offer, OR a reasonable time if no time is stated, BUT irrevocability cannot exceed 3 months, even if stated otherwise.
17
Q
How can an Offeree’s Rejection terminate an offer? (3 ways)
A
- Outright Rejection: Offeree clearly communicates rejection.
- Rejection via Counteroffer: A counteroffer acts as both a rejection of the original offer and a new offer.
- Rejection via Non-Conforming Acceptance (Common Law): The Mirror Image Rule applies.
18
Q
What is the difference between a counteroffer and a mere inquiry?
A
- Counteroffer: Rejects original offer and proposes new terms (‘I’ll pay $9k instead of $10k’).
- Mere Inquiry: Explores possibility of different terms without rejecting the original offer (‘Is $10k your best price? Would you consider lower?’).
19
Q
What is the Mirror Image Rule (Common Law)?
A
Acceptance must exactly mirror the terms of the offer. Any variation, addition, or omission constitutes a counteroffer (which is a rejection of the original offer).
20
Q
What is a Bilateral Contract? How is acceptance achieved?
A
An offer seeking acceptance via a promise. A promise is exchanged for a promise.
Acceptance: Offeree makes the requested promise.
21
Q
What is a Unilateral Contract? How is acceptance achieved?
A
An offer seeking acceptance via performance. A promise is exchanged for an act. (e.g., reward offers).
Acceptance: Offeree completes the requested performance.
22
Q
In a Unilateral Contract, when can the offeror revoke under (a) Common Law and (b) Modern/Majority Rule?
A
(a) Common Law: Offeror free to revoke any time until offeree has fully completed performance.
(b) Modern/Majority Rule: Once the offeree begins performance, an option contract is created, and the offeror cannot revoke.
23
Q
What are the two general requirements for Acceptance under Common Law?
A
- Acceptance must mirror the terms of the offer (Mirror Image Rule).
- Acceptance must be communicated to the offeror.
24
Q
If an offer is silent on the means of acceptance, how can the offeree accept?
A
The offeree can use any reasonable means of transmission to communicate acceptance.
25
What are the two main exceptions to the requirement that acceptance must be communicated?
1. Unilateral Contracts: Acceptance is effective upon completion of performance.
2. Mailbox Rule (for acceptance by mail/email - Default Rule):
26
What is the Mailbox Rule (Common Law)? When is acceptance effective?
Acceptance by mail (or analogous medium) is effective upon dispatch (when sent), provided it is properly addressed and stamped/sent.
27
What does the Mailbox Rule apply to? What does it NOT apply to?
* Applies ONLY to ACCEPTANCES.
Does NOT apply to: Offers, Revocations, Rejections, Counteroffers, Option Contracts.
28
Can parties contract around the Mailbox Rule?
Yes. The Mailbox Rule is a default rule. The offer can state that acceptance is only effective upon receipt.
29
What happens if an offeree mails a rejection, then mails an acceptance? (Mailbox Rule Hard Case)
The Mailbox Rule does NOT apply. Whichever communication (rejection or acceptance) reaches the offeror first controls.
30
Under the UCC, how can a seller accept a buyer's offer to purchase goods for prompt shipment? (3 ways)
1. Promise to ship goods in conformity.
2. Prompt or current shipment of conforming goods.
3. Shipment of non-conforming goods.
31
Under the UCC, what is the legal effect of shipping non-conforming goods in response to an order?
Shipment of non-conforming goods is simultaneously:
* An Acceptance of the offer (forming a contract), AND
* A Breach of that contract.
32
What is the exception to the UCC rule that shipping non-conforming goods is both acceptance and breach? (The 'Accommodation' Shipment)
If the seller ships non-conforming goods and seasonably notifies the buyer that the shipment is offered only as an accommodation, the shipment is treated as a counteroffer, NOT an acceptance/breach.
33
What is the purpose of UCC § 2-207 (Battle of the Forms)?
To deal with situations where an acceptance contains terms that are additional to or different from those in the offer, often seen in exchanges of pre-printed business forms.
34
UCC 2-207: If an acceptance contains additional/different terms but is not expressly conditional on assent to them, is a contract formed?
Yes. A non-conforming acceptance acts as an effective acceptance, forming a contract based on the terms where the forms agree.
35
UCC 2-207: If at least one party is NOT a merchant, what is the effect of additional or different terms in the acceptance?
The new terms are treated as mere proposals for addition to the contract. They are not part of the K unless the original offeror expressly agrees to them.
36
UCC 2-207: If BOTH parties ARE merchants, what is the effect of ADDITIONAL terms in the acceptance?
The additional terms automatically become part of the contract UNLESS:
* The offer expressly limits acceptance to the terms of the offer; OR
* The offeror objects to the additional terms within a reasonable time; OR
* The additional terms materially alter the contract.
37
UCC 2-207: If BOTH parties ARE merchants, what is the effect of DIFFERENT (contradictory) terms in the acceptance? (Majority Rule)
Knock-Out Rule (Majority): The conflicting terms in the offer and acceptance are both 'knocked out' of the contract. The UCC's gap-filler provisions are used instead if necessary.
38
UCC 2-207: What happens if an acceptance is made expressly conditional on the offeror's assent to the additional or different terms?
The non-conforming acceptance is NOT an acceptance. It is a counteroffer.
39
What is the general rule regarding Consideration?
A promise is unenforceable unless it is supported by consideration.
40
What is Consideration? (Majority/Restatement definition)
Consideration requires a bargained-for exchange.
This means there was something (goods, services, a promise, forbearance) that was sought by the promisor in exchange for their promise and given by the promisee in exchange for that promise.
41
What are the alternative (minority) tests for consideration?
1. Benefit/Detriment Test: Was there a benefit to the promisor OR a detriment to the promisee?
2. Legal Detriment Test: Did the promisee do something they had a legal right not to do, or forgo something they had a legal right to do?
42
Does the adequacy of consideration matter? (Is the exchange fair?)
No. Courts generally do not police the fairness or equivalence of the exchange if consideration is present.
43
What is insufficient consideration?
When there is no consideration at all for a promise; there was no bargain.
44
What is an Illusory Promise? Is it consideration?
A promise where performance is left solely to the discretion of the promising party. It is NOT consideration.
45
Are Gratuitous Promises (promises to make a gift) enforceable?
Generally No, due to lack of consideration (no bargained-for exchange).
46
What is the exception for Gratuitous Transfers?
An executed gift (a completed transfer) is legally binding and cannot be taken back, even if not supported by consideration.
47
What is the effect of a mere recital of consideration (e.g., 'for value received') if no value was actually given?
Generally, the recital doesn't create consideration if none actually existed.
48
What is Past Consideration? Is it valid consideration?
A promise made in exchange for something already given or performed before the promise was made. General Rule: Past consideration is NOT valid consideration.
49
What are the main exceptions where a promise based on a past benefit IS enforceable? (3 common law exceptions)
1. A written promise to pay a debt barred by the statute of limitations.
2. A written promise to pay a debt discharged by bankruptcy.
3. Material Benefit Rule.
50
What is Past Consideration?
A promise made in exchange for something already given or performed before the promise was made.
51
Is Past Consideration valid consideration?
NO, because it wasn't bargained for in exchange for the current promise.
52
What are the main exceptions where a promise based on a past benefit IS enforceable?
* A written promise to pay a debt barred by the statute of limitations.
* A written promise to pay a debt discharged by bankruptcy.
* Material Benefit Rule: Promise made based on a past material benefit conferred by the promisee on the promisor is enforceable if:
* benefit conferred on promisor (not 3rd party)
* benefit is material
* enforcement needed to prevent injustice.
53
What is Promissory Estoppel?
A doctrine allowing enforcement of a promise if the promisee reasonably and foreseeably relied on it to their detriment.
54
What are the 4 requirements for Promissory Estoppel?
* A promise was made.
* Foreseeable reliance.
* Actual reliance.
* Injustice would result if the promise is not enforced.
55
What is the Statute of Frauds (SOF) general principle?
Certain specific types of contracts are unenforceable UNLESS they are memorialized in a writing signed by the party against whom enforcement is sought.
56
What are the 6 categories of contracts that typically fall within the Statute of Frauds?
* M - Promises in consideration of Marriage
* Y - Promises that cannot be fully performed within one Year
* L - Promises creating an interest in Land
* E - Promises by an Executor or administrator to pay estate debts
* G - Promises to pay the debt of another
* S - Contracts for the Sale of goods for a price of $500 or more
57
How is the 'one year' measured under the SOF?
Measured from the date the contract is made, not the date performance begins.
58
What types of contracts does the SOF Land Provision cover?
* Promises involving the transfer of an interest in real property.
* Excludes: Leases of 1 year or less; constructing a building; brokerage agreements.
59
When does a promise to answer for the debt of another fall within the SOF?
When a third party promises a creditor to pay a debtor's debt if the debtor defaults.
60
What are the 2 main exceptions where a guarantee agreement is NOT governed by the SOF?
* Novation: Creditor discharges the original debtor in reliance on the guarantor's promise.
* Main Purpose Rule: If the guarantor's main purpose is to protect their own economic interests.
61
What are the requirements for the Writing under Common Law to satisfy the SOF?
* Identify the parties to the transaction.
* Identify the nature and subject matter of the K.
* State the essential terms.
62
What constitutes a valid Signature under the SOF?
Any symbol made or adopted with the intention to authenticate the writing.
63
Can multiple documents be Tacked together to satisfy the SOF writing requirement?
Yes, if one signed document incorporates unsigned documents by reference.
64
Can Performance satisfy the SOF as an alternative to a writing for Land Sale Ks?
Yes, if the party seeking enforcement has performed at least 2 out of 3: paid all or part of the purchase price, taken possession of the land, or made substantial improvements.
65
What are the 5 ways to satisfy the UCC Statute of Frauds for sale of goods $500+?
* Signed Writing
* Merchant's Confirmation
* Judicial Admission
* Partial Performance
* Specially Manufactured Goods
66
What are the requirements for a Signed Writing under UCC SOF?
* A writing sufficient to indicate a K for sale has been made.
* Signed by the party against whom enforcement is sought.
* States the QUANTITY term.
67
What is the Merchant's Confirmation exception under UCC 2-201(2)?
If one merchant sends a written confirmation of an oral agreement within a reasonable time, it satisfies the SOF against the recipient.
68
What is the Judicial Admission exception to the UCC SOF?
If the party against whom enforcement is sought admits in court that a contract for sale was made, the SOF is satisfied.
69
How does Partial Performance satisfy the UCC SOF?
An oral contract for goods $500+ is enforceable with respect to goods for which payment has been made and accepted or goods which have been received and accepted.
70
What is the Specially Manufactured Goods exception under UCC SOF?
An oral contract is enforceable if goods are specially manufactured for the buyer and are not suitable for sale to others.
71
What are the alternative ways to seek enforcement if a contract falls within the SOF but isn't satisfied by writing or performance?
* Restitution
* Promissory Estoppel
72
What are Gap Fillers?
Default rules used to fill in missing terms when a contract doesn't address a specific matter.
73
What are the 3 main Implied Warranties under UCC Article 2?
* Warranty of Title
* Warranty of Merchantability
* Warranty of Fitness for a Particular Purpose
74
What does the implied Warranty of Title guarantee?
Guarantees seller has good title to the goods and transfer is rightful.
75
How can the implied Warranty of Merchantability be disclaimed?
* By using the specific word 'merchantability'.
* By general disclaimer language like 'as is'.
* By buyer's inspection regarding patent defects.
76
What does the implied Warranty of Fitness for a Particular Purpose guarantee?
Guarantees goods are fit for the buyer's specific purpose.
77
How can the implied Warranty of Fitness for a Particular Purpose be disclaimed?
* By a written, clear, and conspicuous disclaimer.
* No reliance by buyer.
* Patent defects easily detectable upon inspection.
78
What are Express Warranties under the UCC?
An affirmation about the goods made by the seller that becomes part of the basis of the bargain.
79
Can Express Warranties be disclaimed?
Very difficult; disclaimers are often read narrowly.
80
What are the UCC default rules for missing terms like Price, Time, and Place of Delivery?
* Price: Reasonable price at the time established by the K for delivery.
* Time: Reasonable time.
* Place of Delivery: Seller's place of business.
81
What is the Obligation of Good Faith and Fair Dealing?
An obligation imposed on both parties in the performance and enforcement of every contract.
82
When interpreting ambiguous contract language, does objective or subjective meaning control?
Objective meaning generally trumps subjective meaning.
83
What is the doctrine of Contra Proferentem?
If an ambiguous term is included in a contract, it will be interpreted against the party who drafted the term.
84
What is the Doctrine of Reasonable Expectations?
Unambiguous boilerplate terms may be interpreted against the drafting party if they conflict with reasonable expectations.
85
What types of extrinsic evidence can be used to fill gaps and resolve ambiguities in contracts?
* Course of Performance
* Course of Dealing
* Trade Usage
86
Can Course of Performance, Course of Dealing, or Trade Usage be used to contradict express terms?
Cannot contradict clear express terms; can only explain or supplement.
87
What is the Parol Evidence Rule (PER)?
Governs the admissibility of extrinsic evidence of negotiations or agreements prior to or contemporaneously with the execution of a written contract.
88
What is the difference between a Partial Integration and a Complete Integration?
* Partial Integration: Writing is the final expression of specific terms.
* Complete Integration: Writing is the complete and exclusive statement of all terms.
89
What is a Merger Clause?
A clause stating that the writing constitutes the entire agreement between the parties.
90
Can extrinsic evidence be introduced to Explain or Interpret terms in a written K?
Yes, parol evidence is generally admissible to explain or interpret ambiguous terms.
91
What is a clause within a written contract stating that the writing constitutes the entire agreement between the parties?
A clause stating that the writing is a complete integration.
## Footnote
Example: "This agreement contains the entire understanding..."
92
Can extrinsic evidence be introduced to explain or interpret terms in a written contract?
Yes, parol evidence is generally admissible to explain or interpret ambiguous terms in the writing (Majority view).
93
Can extrinsic evidence be introduced to supplement terms in a written contract if it is a complete integration?
No, extrinsic evidence cannot add terms in a complete integration.
94
Can extrinsic evidence be introduced to supplement terms in a written contract if it is a partial integration?
Yes, consistent additional terms can be introduced but cannot contradict existing terms.
95
What is the UCC distinction regarding extrinsic evidence?
Trade usage, course of dealing, course of performance can supplement, even a complete integration (unless carefully negated).
96
Can extrinsic evidence be introduced to contradict terms in a written contract?
No, extrinsic evidence cannot contradict terms in a writing intended as final.
97
When does the Parol Evidence Rule NOT apply? List 4 main situations.
* Subsequent Agreements
* Collateral Agreements
* Attacks on Validity
* Reformation
98
What are the seller's basic obligations under the UCC?
Seller: Transfer and deliver conforming goods.
Buyer: Accept and pay for conforming goods.
99
What is a Shipment Contract?
Seller promises to turn goods over to a common carrier. Seller's obligation ends there.
100
When does Risk of Loss (ROL) pass to the buyer in a Shipment Contract?
ROL passes to buyer when goods are delivered to the carrier.
101
What is the default assumption regarding contracts if the contract is silent?
It is presumed to be a shipment contract.
102
What is a Destination Contract?
Seller promises to tender delivery at a specific destination.
103
When does Risk of Loss (ROL) pass to the buyer in a Destination Contract?
ROL passes to buyer when goods are tendered at the specified destination.
104
In Non-Carrier Cases, when does ROL pass to the buyer if the seller IS a merchant?
ROL passes to buyer only when buyer takes physical possession of the goods.
105
In Non-Carrier Cases, when does ROL pass to the buyer if the seller is NOT a merchant?
ROL passes to buyer upon tender of delivery.
106
What is the Pre-Existing Duty Rule (Common Law)?
A promise to perform a duty that one is already legally obligated to perform is not valid consideration for a modification.
107
What are the 2 main exceptions to the Common Law Pre-Existing Duty Rule?
* Mutual Modification
* Unforeseen Circumstances
108
Under the UCC, is consideration required to modify a contract for the sale of goods?
No, no consideration is needed for a modification to be binding.
109
What is required for Mistake to excuse performance?
The mistake must relate to a material fact that existed at the time the contract was formed.
110
When can a Unilateral Mistake excuse performance?
When the other party knew or had reason to know of the mistake or it involves a serious clerical error.
111
What are the 3 elements required for a Mutual Mistake to excuse performance?
* Mistake relates to material facts
* Mistake made by both parties
* Disadvantaged party did not bear the risk of the mistake
112
What is Impossibility?
Performance is excused if it has become objectively impossible due to events occurring after contract formation.
113
What is Impracticability?
Performance excused if unforeseen difficulties make performance prohibitively expensive or extremely burdensome.
114
What is Frustration of Purpose?
Excuses performance when an unforeseen event undermines the principal purpose of entering the contract.
115
What is Rescission?
A mutual agreement by both parties to cancel the contract and discharge remaining duties.
116
What is Accord and Satisfaction?
* Accord: An agreement to accept a substituted performance.
* Satisfaction: The actual performance of the accord agreement.
117
What is Anticipatory Repudiation (AR)?
Occurs when one party makes a clear statement indicating they will commit a material breach.
118
What can the insecure party do if reasonable grounds for insecurity arise?
Demand adequate assurance of performance in writing or orally.
119
What happens if a party fails to provide adequate assurance after a justified demand?
Failure constitutes repudiation.
120
What are the options for the aggrieved party upon anticipatory repudiation?
* Cancel the contract
* Sue for damages or specific performance
* Ignore the repudiation and wait for performance date
121
Can a repudiating party retract their repudiation?
Yes, unless the aggrieved party has acted in reliance or accepted the repudiation.
122
What is a Condition in a contract?
An event, not certain to occur, which must occur before performance becomes due.
123
What is the effect of the Failure of an Express Condition under Common Law?
Requires strict compliance; if the condition does not occur exactly as stated, the party is discharged from performing.
124
What are 3 ways the harshness of strict compliance with Express Conditions can be excused?
* Waiver
* Bad Faith
* Gross Forfeiture
125
What are Implied Conditions?
Court-imposed conditions requiring parties to perform concurrently or sequentially.
126
What is the difference between Material Breach and Substantial Performance?
* Material Breach: Serious breach undermining contract's purpose.
* Substantial Performance: Minor breach; contract purpose largely fulfilled.
127
If a contract is found to be Divisible, how does that affect breach analysis?
Breach of one part doesn't discharge duties for other parts.
128
What is Quantum Meruit?
Recovery for the reasonable value of benefits conferred.
129
What is the Perfect Tender Rule under UCC § 2-601?
Seller must deliver goods that conform perfectly to the contract terms.
130
Under the UCC Perfect Tender Rule, what are the buyer's 3 main options if the seller fails to make perfect tender?
* Reject the Goods
* Accept the Goods
* Accept Part and Reject Part
131
When can a buyer revoke acceptance of goods under the UCC?
If non-conformity substantially impairs the value of the goods.
132
What is the seller's Right to Cure under UCC § 2-508 when time for performance has not yet expired?
Seller can notify buyer of intent to cure and make a conforming delivery within the deadline.
133
What is the seller's Right to Cure under UCC § 2-508 when time for performance has expired?
Seller may have a further reasonable time to substitute conforming tender if they had reasonable grounds.
134
How does the Perfect Tender Rule apply to Installment Contracts under the UCC?
Buyer can reject an installment only if the non-conformity substantially impairs the value of THAT installment.
135
What are the 6 main Defenses to Contract formation or enforcement?
* Incapacity
* Misrepresentation
* Duress
* Undue Influence
* Unconscionability
* Public Policy / Illegality
136
What is the general rule regarding contracts entered into by minors?
Contracts are voidable at the option of the minor.
137
What is the minor's obligation upon disaffirmance?
Minor must return any goods received if still in possession.
138
What is Ratification in the context of minors?
Minor can choose to ratify the contract after reaching the age of majority.
139
What is the Necessaries Doctrine?
Minor can disaffirm contracts for necessaries, but merchant can recover the reasonable value of goods or services.
140
What is the general rule regarding contracts entered into by a mentally incompetent person?
Contracts are voidable if the person is unable to understand the nature and consequences of the transaction.
141
What is the Necessaries Doctrine in relation to minors?
Minor can still disaffirm Ks for necessaries (food, clothing, shelter, medical care), BUT merchant has a quasi-contract right to recover the reasonable value (not K price) of the goods or services provided.
142
What is the general rule regarding contracts entered into by mentally incompetent persons?
Contracts entered into by a mentally incompetent person (unable to understand nature/consequences of transaction) are voidable by the incompetent person.
143
What obligations does an incompetent person have upon disaffirmance of a contract?
Must return goods received, AND IS liable for damages or reasonable value for use of goods/services, UNLESS the other party was aware of the incompetence.
144
Can a mentally incompetent person ratify a contract?
Yes, can ratify expressly or impliedly if person regains competency. Necessaries doctrine applies similarly to infancy.
145
What are the four elements of Fraudulent Misrepresentation?
* Misrepresentation
* State of Mind
* Materiality
* Reasonable Reliance
146
What are the elements of Non-Fraudulent Misrepresentation?
* Misrepresentation
* State of Mind (Negligent or Innocent)
* Materiality
* Reasonable Reliance
147
When does silence constitute misrepresentation under Fraudulent Nondisclosure?
Occurs when D's silence creates misrepresentation AND:
* D had a duty to disclose
* Nondisclosed fact was material
* P reasonably relied on the nondisclosure.
148
What are the primary remedies for misrepresentation?
* Avoidance/Rescission
* Rescission + Restitution
* Keep K + Sue for Damages
* Punitive Damages
149
What are the three elements of Duress?
* A Threat
* Wrongful in Nature
* No Reasonable Choice
150
What are the legal consequences of Duress in contracts?
Contracts under physical compulsion are VOID; other forms of duress are VOIDABLE at option of victim.
151
What are the two elements of Undue Influence?
* Unfair Persuasion
* Vulnerable Party
152
What are the legal consequences of Undue Influence?
Contract is VOIDABLE at the option of the aggrieved party.
153
What are the two required types of Unconscionability?
* Procedural Unconscionability
* Substantive Unconscionability
154
What can a court do if it finds a contract to be unconscionable?
The court can:
* Refuse to enforce the entire contract
* Excise the unconscionable clause
* Limit the application of the offending clause.
155
When is a contract unenforceable due to Public Policy or Illegality?
When:
* The subject matter is specifically prohibited by law
* K formed for the purpose of committing a crime
* K performance would violate designated values/freedoms.
156
What is the consequence if a contract violates Public Policy or Illegality?
If K is illegal, it is VOID; if it violates public policy but isn't strictly illegal, it is often VOIDABLE.
157
What are the three main types of Monetary Damages at Common Law?
* Expectation Damages
* Reliance Damages
* Restitutionary Damages
158
What is the goal of Expectation Damages?
To put the non-breaching party in the position they would have been in had the contract been fully performed.
159
What are the four limitations on recovering full Expectation Damages?
* Cost of Performance vs. Diminution in Value
* Reasonable Certainty
* Foreseeability
* Mitigation
160
What is the goal of Reliance Damages?
To restore the aggrieved party to the position they were in before the contract was made.
161
What is the goal of Restitutionary Damages?
To prevent unjust enrichment by returning the value of benefits conferred on the other party.
162
What is the main limitation on Restitutionary Damages?
Generally NOT available if the aggrieved party has fully performed their K obligations.
163
What are Liquidated Damages Provisions (LDP)?
Contract clause specifying the amount of damages to be paid in the event of a breach.
164
What are the Seller's Remedies if a buyer breaches under the UCC?
* If Goods Accepted: Remedy is the Contract Price.
* If Goods NOT Accepted: Seller chooses to Resell or Not Resell.
165
Who is a Lost Volume Seller (LVS) under the UCC?
Seller whose supply of goods exceeds demand; entitled to recover profit from breached sale plus incidental damages.
166
What are the Buyer's Remedies if a seller breaches under the UCC?
* If Buyer Covers: Damages = (Cover Price - K Price)
* If Buyer Does NOT Cover: Damages = (Market Price - K Price).
167
What are Incidental Damages under the UCC?
Expenses reasonably incurred after the breach in dealing with the goods or arranging substitute transactions.
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What are Consequential Damages under the UCC?
Damages resulting from the breach that were reasonably foreseeable to the seller at the time of contracting.
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What is Specific Performance?
Equitable remedy ordering breaching party to perform the K, available when monetary damages are inadequate.
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What is a Negative Injunction?
Equitable remedy ordering a party not to do something, often used in employment settings.
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How are damages awarded under Promissory Estoppel?
Varies by jurisdiction; may award full expectation damages, reliance damages, or tailor remedy to prevent injustice.
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When can Restitution be awarded outside of breach?
1. Benefits conferred under a Failed K
2. Benefits conferred by a Breaching Party
3. General Unjust Enrichment.
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Can parties specify their own Agreed-To Remedies in the contract?
Yes, parties can contract out of default legal/equitable remedies.
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What is a Third-Party Beneficiary (TPB) situation?
A contract where two parties intend for their performance to benefit a third person who is not a party to the contract.
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What is the difference between an Intended Beneficiary and an Incidental Beneficiary?
* Intended Beneficiary: Intended to benefit and has enforcement rights.
* Incidental Beneficiary: Benefits by happenstance and has no enforcement rights.
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What are the two types of Intended Beneficiaries?
* Creditor Beneficiary
* Donee Beneficiary
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Who can an Intended Beneficiary sue to enforce the contract?
Can sue the Promisor; cannot sue the Promisee based on the TPB contract itself.
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When do an Intended Beneficiary's rights Vest?
Rights Vest when the TPB:
* Brings suit
* Changes position in reliance
* Manifests assent to the K.
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What are the conditions under which rights vest when the TPB?
Rights vest when the TPB:
* Brings suit on the matter
* Changes position in justifiable reliance on the K
* Manifests assent to the K at request of promisor/promisee
* Rights vest under express terms of the K
## Footnote
TPB refers to a Third Party Beneficiary.
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What is an Assignment of Rights?
A present transfer of a party's rights under a contract to a third party (assignee). The original party (assignor) gives up the right to receive performance.
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Are contract rights generally assignable? What are the exceptions?
Yes, generally all rights are assignable. Exceptions (Rights NOT assignable if):
* Assignment would materially alter the duties of the other party (obligor)
* Obligor has a personal interest in rendering performance specifically to the obligee (assignor)
* Assignment would violate applicable law or public policy
* Assignment is prohibited by the contract itself (though anti-assignment clauses construed narrowly).
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What is the difference between an Assignment for Value and a Gratuitous Assignment regarding revocability?
* Assignment for Value: Given for consideration. Is irrevocable. Valid against obligor and assignor.
* Gratuitous Assignment: Made as a gift. Is generally revocable by assignor UNLESS executed (intention + delivery shown, e.g., delivering symbolic token or written assignment). Valid against obligor (who can't claim lack of consideration).
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What rights does the Assignee receive?
Assignee Rights: 'Steps into the shoes' of the assignor; gets whatever rights the assignor had.
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What defenses can the Obligor raise against the Assignee?
Obligor Defenses: Assignee takes subject to any defenses the obligor could have raised against the assignor (e.g., breach by assignor, failure of condition). Obligor's payment to assignor is a defense unless obligor notified of assignment.
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What is a Delegation of Duties?
When a party to a contract (delegator) arranges for a third party (delegatee) to perform the delegator's duties under the contract.
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Does delegation relieve the Delegator of liability under the contract?
No. Absent a novation (agreement by all parties, including obligee, to substitute delegatee for delegator), the delegator remains liable if the delegatee fails to perform. Obligee can still sue the delegator.
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Can the Obligee sue the Delegatee if the delegatee fails to perform?
Yes, if the delegation was for consideration. The obligee can sue the delegatee as an intended third-party beneficiary of the delegation agreement between the delegator and delegatee.
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Are contract duties generally delegable? What are the exceptions?
Yes, generally all duties are delegable. Exceptions (Duties NOT delegable if):
* Performance involves personal services (based on unique skill/judgment/trust)
* The contract prohibits delegation.
