Contracts Spring Flashcards
Implied Warranty of Fitness for a Particular Purpose
Where the seller has reason to know any particular purpose for which the goods are required and the buyer is relying on the sellers skill to select or furnish suitable goods there is an implied purpose
Disclaiming Warranties
to exclude or modify the implied warranty of merchantability the language must mention merchantability and in the case of writing must be conspicuous
Implied Covent of “Good Faith”
Neither party shall do anything to injure the right of the other party to receive the benefits of the contract
Express Warranty
Any affirmation of fact or promise made by the seller to the buyer which related to the goods and becomes part of the bargain
Implied Warranty of Merchantability
A warranty that the goods shall be merchantable is implied in a contract for their sale of the seller is a merchant with respect to the goods of that kind
Remedies for Breach
Specific or Substitutionary
Rather than ordering breaching party to perform they can substitute for monetary compensation
UCC 2-716
provides specific performance BUYERS right to specific performance or replevin:
Specific performance may be decreed where the goods are unique or in other proper circumstances.
(permits a disappointed buyer goods to seek specific performance of the contract if goods are unique)
Specific Performance
Specific remedy
Goods must be unique
Monetary damages inadequate
UCC 2-709
provides that a SELLER may recover the price of goods if:
They are unable after reasonable effort to resell them at a reasonable price or,
The circumstances reasonably indicate that such effort will be unavailable
Specific Performance for Personal Property
Is an appropriate remedy when considering items like heirlooms, pets or items that have sentimental value or property because no two parcels are the same (it is unique) because monetary damages won’t adequately compensate aggrieved party
Personal Service Contract
Courts are reluctant to enforce, it calls for one person to tender their performance to another. Courts won’t order or force people to perform against their will.
Legal Remedy
It is only where the injured party can show that remedy of monetary damages is inadequate to put them in as good a position as they would have been had the contract been completely performed can be awarded equitable remedy or specific performance
Effect of Enforcement or Supervision (R.366)
A promise will not be enforced if the magnitude and character of the performance would impose on the court burdens in enforcement or supervision
Difference between UCC 2-709 and UCC 2-716
Specific performance for the SELLER and not the buyer falls under UCC 2-709
Specific performance for the BUYER and not seller is UCC 2-716
Injunction
An injunction is an order commanding. party to do or not do a certain thing. Specific performance is a type of injunction.
Measure of Damages
Damages= loss in value+ other loss-cost and - loss avoided
Expectation Interest
Prospect of Gain
Intended to give them benefit of their bargain awarding money to put them in as good of a position had the contract been fully performed
Reliance Interest
Detriment incurred by changing ones position
Seeks to put non breaching party in the position they would have been had they never entered into the contract
Restitution Interest
Return of Benefit
Interest in the benefits they have conferred upon the breaching party
Damages for Incomplete Defective Construction
Lesser of difference between loss in value or cost of remedying the defect
Damages for Wrongfully terminated Employee
Amount of the contract less any amount the employee could have earned through comparable employment
Lost Volume Seller
One that has predictable and finite number of customers and that has capacity to sell to all new buyers or to make the one additional sale represented by the resale after the breach
Effect of difficulty in enforcement or supervision
a promise will not be specifically enforced if the character and magnitude of the performance would impose on the court burdens in enforcement or supervision
SELLERS damages for: Buyers breach of contract for sale of goods
Difference between contract price and resale price + any incidental damages or the difference between the unpaid contract price and the market price
UCC 2-712
“real cover”
represents a real transaction a buyer actually went in market and made purchase of substitute goods
UCC 2-713
“hypothetical cover”
Represents a hypothetical transaction recovering money between contract price and market price HAD they gone out and bought a substitute
BUYERS damages for: Sellers breach of contract for the sale of goods
Difference between contract price and price of cover (goods bought in substitution) + Any incidental or consequential damages OR Difference between the contract price and the market price
Rescission
Cancellation of a contract by mutual agreement of the parties. Most typical grounds for recession is mistake or fraud
Damages for breach
Plaintiff in a breach of contract action is entitled to the benefits they would have obtained if both parties had fully performed, but no more. Generally measured by plaintiff’s actual loss
“Cover”
Gives the buyer the right to recover the cost of a good faith purchase of substitute goods made without unreasonable delay
Duty to mitigate
a party cannot recover for loss which they could have avoided or mitigated through reasonable efforts
non-breaching party is not under an affirmative obligation to mitigate they just can’t recover any damages they could have reasonably avoided.
