Contracts Rule Statements Flashcards
UCC Perfect Tender Rule
Requires perfect goods, and perfect delivery.
Capacity Defense Guardianships
Individuals under guardanship lack the capacity to form a contract, and any purported contract they enter into is void.
UCC requirement for formation
Quantity of Goods
UCC requirement for Modification
Good faith modification
Predominant purpose test
Determination of the “universe” a contract falls under depends on the primary reason for contracting
Divisible Contracts
Contracts divided into two or more “mini contracts” are each governed by the universe they fall into individually.
UCC Merchant Rules
Merchants Firm offer
Battle of the Forms
Implied warranty of merchantability
Statute of Frauds
Risk of Loss
Offer
Manifestation of a willingness to enter a contract that creates the power of acceptance in the offeree.
Common Law Offer
Must include all essential terms
UCC Offer
Fills in the gaps other than the quantity of goods
Merchant’s firm offer
A written, signed, and irrevocable offer that lasts until a reasonable time has passed or offer terms expire.
Termination of a K
Revocation
Rejection
Lapse
Operation of Law
Mirror Image RUle
Common law rule of acceptance, any conditions on acceptance create a counteroffer.
Mailbox Rule
Acceptance is valid upon deliveree, unless explicitly stated otherwise.
Battle of the Forms Between Merchants
New terms control if: 1) don’t alter the deal; 2) original offer didn’t limit acceptance to its term; and 3) offeror doesn’t reject.
Consideration
A bargained for legal detriment.
Common Law Modification
typically requires new consideration unless: 1) change in performance; 2) third party promise; or 3) excuse from performance.
Statute of Frauds Categories of Coverage
Marriage, Less than a year, Real Estate, Exector, good $500+, and surety
Statute of Frauds
Requirement that certain contracts be made in writing, include essential terms, and be signed.
Defenses to Formation
Mistake
Unconscionability
Undue influence
Duress/Fraud/Misrepresentation
Illegality
Incapacity
Impracitability
Mistake
Belief at the time of contracting that is not in accordance with a present fact.
Undue Influence
arises when a party puts intense pressure on another, susceptible party.
Categories of Incapacity
Minors, Mentally Ill, and Extremely Intoxicated (during formation) recission
Discharge of Contract based on unforeseeable events
Frustration of purpose, Impossibility, Impracticability, Novation, Accord, and Satisfaction recission.
Frustration of Purpose
Outside event undermines the purpose of the contract
impossibility
outside event renders the ability to perform impossible
impracticability
Available if: (1) an unforseen event occurs; (2) the non-occurrence of which was a basic assumption of the K; (3) the party seeking discharge was not at fault.
Novation
Substitution of an old contract for a new one, where the original promisor is released from their promise under the original K.
Accord and satisfaction
Parties to a contract agree to accept an alternate form of performance.
Right of Reassurance - UCC
parties with reasonable insecurities of the other sides ability to perform may seek reassurance.
Misrepresentation
An untrue representation of fact that requires proof that (1) the misrepresentation was made knowingly with intent to mislead; (2) misrepresentation induced assent to the K; and (3) the adversely affected party justifiably relied upon the misrepresentation.
CL Substantial Performance rule
A party that has substantially performed on the contract may receive some payment.
UCC Perfect Tender Rule
Requires perfect goods and perfect delivery
UCC Revocation of Acceptance
Buyer may revoke acceptance of goods if a defect is discovered within a reasonable time.
Sellers right to cure UCC
if time is left on the contract or the seller had reasonable grounds to believe that buyer would accept a replacement, then the buyer must give a chance to cure.
Expectation Damages
Non-breaching party receives the benefit of the bargain.
Expectation Damages
The non-breaching party receives the benefit of the bargain.
Consequential Damages
Losses unique to this particular plaintiff.
Duty to Mitigate
Non-breaching party has duty to mitigate potential damages
Incidental Damages
Damages awarded for commercially reasonable expenses incurred because of the breach.
Anticipatory repudiation
Applicable when a promisor clearly and unequivocally repudiates a promise before promise is due
Non-Breaching Party’s options during ARep
- Assume Breach and Sue (unless you are only waiting on payment)
- Wait and see
What is required of a SOF covered writing?
1: signature of party to be charged
2: essential elements of the deal.
Parol Evidence Rule
Generally prevents parties to a K from presenting prior or contemporaneous extrinsic evidence that contradicts or is inconsistent with the terms of the K.
When can Parol evidence be admitted?
1: Clarify ambiguities
2: Prove a condition precedent
3: establish a defense to formation
Assignment of Rights
COntract rights are generally assignable unless the assignment materially increases the duty or risk of the obligor or materially reduces the obligors change of obtaining performance.
Delegation of Duty under Assignment
Delegator is not released from liability and recovery unless the other party agrees.
Unconscionability
Requires extreme unfairness by an objective standard for both procedural and substantive unconscionability.
Unilateral Mistake
A mistake made by one of the parties about a material aspect of the K, voidable if the mistaken party did not bear the risk of mistake.
Gift Promises
Genearlly not a K for lack of consideration
Failure to mitigate
Defendant bears the burden of proving failure, and potential mitigation must be reasonably similar to the original K.
Lost Volume Profits Damages
If a buyer breaches and seller is a retailer who often sells that type of product, they can seek expectation damages even if the seller sold that product earmarked for sale under the breached K.
Incomplete Performance Damages
Expectation Damages = K Price - Amount Paid - amount that would be needed to finish K.
Diminution in value
difference in value between the product received and the product provided.
Economic Waste
If the performing party breaches and the buyer party hires a new performing party, the breaching party must cover the difference.
Consequential Damages
Relates to losses unique or special to a particular plaintiff, potential damages must be known by breaching party at outset of K.
