Contracts & Sales Flashcards
Arbitration clauses are enforceable, except when …
Contractual provisions limiting the place or court where potential actions between the parties may be brought are ___ unless
… a consumer might be waiving an important substantive right.
… prima facie valid and should be enforced … the party challenging enforcement establishes that such provisions are (1) unfair, (2) unreasonable, (3) affected by fraud, or (4) unequal bargaining power.
A contract is unconscionable when …
The contract at issue must have been…
Boilerplate contract provisions that are ___, ___, or ___ have been held unconscionable.
The question of whether a contract is unconscionable is a question of ___ for the ___ to decide …
… it is so unfair to one party that no reasonable person in the position of the parties would have agreed to it.
… offensive at the time it was made.
… inconspicuous, hidden, or difficult for a party to understand …
… a question of law … the judge … and the issue does not go to the jury.
Any ___ that is ___ is an express warranty, unless ___.
… promise, affirmation, description, or sample … part of the basis of the bargain … it is merely the seller’s opinion or commendation of the value of the goods.
A manufacturer might be liable for a product not purchased directly from them if …
… it is reasonable to expect that such injured persons would use consume, or be affected by the goods being warranted.
A warranty that the goods are merchantable is implied in a contract for their sale whenever …
To be merchantable, the goods must …
A breach of this warranty must have been …
A seller can exclude the implied warranty of merchantability by …
… the seller is a merchant with respect to goods of that kind.
… pass without objection in the trade and be fit for the ordinary purposes for which the good is used.
… present at the time of the sale.
… demanding the buyer inspect the goods before purchasing them. If the buyer refuses to do so and is later injured by a defect that the buyer would have discovered during an inspection, the buyer will not be able to assert a breach of warranty.
A warranty that the goods are fit for a particular purpose is implied in a contract for their sale whenever …
… the seller, at the time of contracting, has reason to know of any particular purpose for which the goods are required, and that the buyer is relying on the seller’s skill or judgment to select or furnish suitable goods.
A plaintiff must show this by a preponderance of the evidence.
The UCC Article 2 governs transactions in ….
Article 2 applies to the sale of ___, but it does not apply to the sale of ___.
When a transaction involves both the sale of goods and the rendering of services, the ___ test applies to determine whether the UCC or common law governs the entire transaction.
… goods which are defined as all things movable at the time they are identified as the to be sold in the contract between the buyer and the seller.
… tangible things … real property, services, or intangibles.
… predominant purpose test …
The remedy for conversion is …
… the fair market value of the goods at the time of conversion.
If the goods or tender of delivery fail in any respect to conform to the contract, then …
If, before rejection, ___, then the buyer is obligated to ___ the rejected goods with ___ until ___.
After rejection, the UCC does not allow the buyer to …
To properly reject the goods, the buyer must …
… the buyer may reject the goods or choose to accept the goods despite the nonconformity.
… the buyer has taken physical possession of goods in which he does not have a security interest … hold … reasonable care … he receives instructions from the seller.
… continue to use the goods until the seller gives the buyer instructions. If the seller does not give instructions, the buyer must either (1) store the goods for the seller, (2) reship the goods to the seller, or (3) resell the goods for the seller.
… notify the seller of the rejection and of the particular defect within a reasonable time.
When ___ and ___, the terms of the contract depend on whether the acceptance had additional or different terms.
When a party includes different terms in an acceptance, the court will likely apply ___, under which the …
The court would then apply the UCC rules for ___.
Under the UCC, an ___ terms is automatically included in the final contract between merchants so long as ___.
A ___ is typically viewed as a term that materially alters the original contract because it results in hardship/surprise if incorporated in the contract without the awareness of the other party.
…both parties are merchants … acceptance does not mirror the offer …
… the ‘knock-out
rule … different terms in the offer and the acceptance between merchants nullify each other and are knocked out of the contract.
… revocation which must occur before any substantial change in the condition of the goods not caused by the defect.
… additional … the terms do not materially alter the original contract, the offer expressly limits acceptance to the terms of the offer, or the offeror objects to the additional term within a reasonable time after notice was received.
… disclaimer of warranty …
Generally, when a buyer accepts goods, …
However, when a buyer accepts the goods only to discover later that they are nonconforming, …
A buyer may only revoke acceptance of the goods if the ___ to the buyer and the buyer ___ before ___ or because the seller ___.
To revoke, the buyer must also ___ after ___ or ___.
If the buyer fails to exercise ___ in discovering a defect, …
… he must pay the seller the contract price and relinquish any right to reject the goods.
… he may revoke the original acceptance of the goods.
… defect substantially impairs their value … accepted them without discovery of the non-conformity … acceptance … gave assurances that the goods were conforming.
… inform the seller of any defect within a reasonable time … it was discovered … should have been discovered by the buyer.
… due diligence … his notice to the seller may be untimely, and revocation will be barred.
To disclaim an express warranty …
To disclaim the implied warranty of merchantability, …
To disclaim the implied warranty of fitness for particular purpose, …
To disclaim all warranties, …
Finally, the UCC allows any implied warranty to be disclaimed by ___
… there needs to be words or conduct tending to negate warranty and they must be reasonable.
… the party must use the term “merchantability” orally or in writing. If in writing, it must be conspicuous.
… the disclaimer must be in writing and use conspicuous language.
… the party must state that the goods are sold “as is,” “with all faults,” or by using similar language that makes plain that there is no implied warranty.
… the course of normal dealing, performance, or usage of trade.
Generally, Virginia ___the award of attorney’s fees to a successful litigant in the absence ___.
However, Virginia ___, the award of attorney’s fees to a successful litigant when ___.
… prohibits … of a specific law authorizing the recovery of such fees or an agreement of the parties.
… does permit, at the discretion of the court …a breach of contract action is coupled with a fraud action.
To determine who bears the risk of loss, we …
An agent can only act …
An entrustment occurs when ___ and ___.
When property is ___ to a merchant who deals in goods of that kind, the merchant has the power to ___.
Where an individual in ___ buys a good in ___ and ___, that buyer obtains good title to the good and does not ___.
… must first each party’s interest (who’s the owner, is there an agent? employee?)
… within the scope of her agency.
… an owner (or agent) delivers property to another party … acquiesces to that party retaining possession for a period of time. (a/k/a the jewelry and engagement ring story).
… entrusted … transfer all rights of the entruster to a buyer in the ordinary course of business.
… good faith … the ordinary course of business … without knowledge of any title defect … bear the risk of loss.
The implied warranty of fitness for a particular purpose arises when …
… the seller knows or has to reason to know about the buyer’s particular purpose, and the buyer relies on the seller’s skill or judgment to select or furnish suitable goods.
When there has been non-delivery, proper rejection, or proper revocation of acceptance, the buyer is entitled to …
Damages may be measured by calculating the ___ in the contract ___ and ___ at the ___.
Damages may also be measured by ___, or more specifically, the ___ between the ___ and ___.
… either benefit of the bargain damages or cover, as well as any incidental and consequential damages that may be applicable.
… difference … price … the market price … time and place the seller fails to perform.
… cover … difference … contract price … the price of replacing the goods.
The buyer’s cover must be …
… reasonable, in good faith, and made without unreasonable delay.
Incidental damages are damages that are ___, such as the costs of ___.
Consequential damages are ___ and ___. Consequential damages must have been ___.
… incidental to seller’s failure to perform … warehousing, transportation, inspection, etc.
… any loss resulting from general or particular requirements … needs of which the seller, at the time of contracting, had reason to know and which could not be reasonably prevented by purchasing substitute goods or otherwise.
… foreseeable to the seller.
