Contracts Supplemental Information Flashcards
When can a buyer ask for reasonable assurance and what is it?
A party with reasonable grounds for being
insecure about the other party’s performance may demand in
writing adequate assurances from the other party that it will
perform in accordance with the contract.
If a party DOES NOT give adequate assurances within a reasonable time
after it is asked to do so, the asking party may treat that
as an anticipatory repudiation. In sales of goods contracts,
the time given to respond cannot exceed 30 days.
What is the implied warranty of fitness for a particular purpose? How can it be disclaimed?
(1) a seller knows or has reason to know of the buyer’s particular purpose for
which the goods are required; AND
(2) the buyer relies on the seller’s skill or judgment to select or furnish suitable
goods. If the above elements are met, the goods MUST be fit
for the particular purpose of the buyer, otherwise there is a
breach of warranty.
It may be disclaimed in: (1) Conspicuous writing (set off in some way from the surrounding text (2) “as is” language (3) waiver of fitness defects discovered upon inspection (4) by course of dealing, performance, or usage of trade
When the SOF applies to a transaction between merchants, what is the memorandum exception?
If both parties are merchants and a memorandum sufficient against one party is sent to the other party, who has reason to know its contents, and the receiving party does not object in writing within 10 days, then the contract is enforceable against the receiving party even though she has not signed it.
What is a suretyship contract?
Suretyship is a three-party contract, wherein one party (the surety) promises a second party (the obligee) that the surety will be responsible for any debt or other obligation of a third party (the principal) resulting from the principal’s failure to pay as agreed.
When is a charitable prescription enforceable under the doctrine of promissory estoppel?
When such a promise is in writing in order to be enforceable (reliance need not be shown).
When is performance due upon a condition precedent?
The party’s performance will not become due until the condition occurs or the nonoccurrence is excused.
How is mutual mistake different from misunderstanding?
Mutual mistake occurs when both parties are mistaken as to an essential element of the contract. In such a situation, the contract may be voidable by the adversely affected party upon proof of the following: (i) mistake of fact existing at the time the contract was formed; (ii) the mistake relates to a basic assumption of the contract; (iii) the mistake has a material impact on the transaction; and (iv) the adversely affected party did not assume the risk of the mistake.
A misunderstanding occurs when both parties believe that they are agreeing to the same material terms, but in fact they agree to different terms. If the misunderstanding involves a material term, and neither party knows or has reason to know that there is a misunderstanding, then there is no contract.