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Contracts > Day 3 > Flashcards

Day 3 Flashcards

1
Q

When is anticipatory repudiation applicable?

A

Applicable when a promisor repudiates a promise before the time for performance arises or elapses

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2
Q

What must the repudiation be?

A

The repudiation must be clear and unequivocal

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3
Q

Under the UCC, when does anticipatory repudiation occur?

A

Occurs when there has been an unequivocal refusal of the buyer or seller to perform, or when a party creating reasonable grounds for insecurity fails to provide adequate assurances within 30 days of demand for assurances

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4
Q

What are expectation damages?

A

They are intended to put the injured party in the same position as if the contract had been performed

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5
Q

How do you calculate expectation damages?

A

Subtract the contract price from the market value of performance

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6
Q

Must expectation damages be foreseeable?

A

Yes, expectation damages must be foreseeable and the non-breaching party must be able to prove them with reasonable certainty

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7
Q

What are consequential damages?

A

Consequential damages are reasonably foreseeable losses to a non-breaching party that go beyond expectations damages such as loss of profits

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8
Q

What are liquidated damages?

A

Liquidated damages are an amount contractually stipulated as a reasonable estimation of actual damages to be recovered by one party if the other party breaches

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9
Q

What is the test for liquidated damages?

A

The parties intended to agree in advance to the settlement of damages that might arise from the breach; the amount of liquidated damages was reasonable at the time of contracting, bearing some relation to the damages that be sustained; and actual damages would be uncertain in amount and difficult to prove

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10
Q

When can incidental damages be awarded?

A

Incidental damages may be awarded to the non-breaching party as compensation for commercially reasonable expenses incurred as a result of the other party’s breach.

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11
Q

When can one recover punitive damages?

A

Rarely in the contract context……punitive damages are not recoverable unless the conduct constituting the breach is also a tort for which punitive damages can be recovered.

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12
Q

What is restitution?

A

When a defendant is unjustly enrich by the plaintiff, restitution generally allows the plaintiff to recover on the benefit conferred by the plaintiff upon the defendant

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13
Q

What are reliance damages?

A

Reliance damages may be recovered if a non-breaching party incurs expenses in reasonable reliance upon the promise that the other party would perform

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14
Q

Under the UCC, how does a seller breach?

A

Do nothing; make a non-conforming tender; or make a conforming tender

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15
Q

What are the buyers remedies?

A

Damages, Cover, Specific Performance, Replevin, Rejection, Acceptance, Right to Cure

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16
Q

Misunderstanding Elements

A

The parties use a material term that is open to two or more reasonable interpretations; each side attaches a different meaning to the term; neither party knows, or should know, of the confusion

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17
Q

Who lacks the capacity to make a contract?

A

Minors(under 18); The mentally ill

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18
Q

What are the standards for the mentally ill?

A

The person cannot understand the nature and consequences of his action or the person cannot act in a reasonable manner in relation to the transaction

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19
Q

What is mistake?

A

Mistake is a belief that is not in accord with a present fact

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20
Q

What are the elements of mutual mistake?

A

The party’s can rescind if: there is a mistake of fact, existing at the time the deal is made; the mistake relates to a basic assumption of the contract and has a material impact on the deal; the impacted party did not assume the risk of mistake

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21
Q

What are the elements of unilateral mistake?

A

All of the elements of mutual mistake plus the mistake would either make the contract unconscionable or the other side knew of, had reason to know of, or caused the mistake

22
Q

What are the defenses to contract formation?

A

Misunderstanding, Mistake, Incapacity, Duress, Misrepresentation, Unconscionability, Illegality

23
Q

What is misrepresentation?

A

A statement that at the time of contracting that is not true

24
Q

What are the elements of misrepresentation?

A

A party must show: misrepresentation of a present fact; that is material or fraudulent and that is made under circumstances in which it is justifiable to rely on the representation

25
Q

What is fraud in the execution?

A

Fraud in the execution is when you trick someone into signing something that she doesn’t even know is a contract

26
Q

What is nondisclosure?

A

Active concealment or a fiduciary duty is owed in regards to a material fact

27
Q

What is duress?

A

An improper thereat that deprives a party from making a meaningful choice to contract

28
Q

What is economic duress?

A

Arises when on party makes threats to induce another party to contract

29
Q

What is undue influence?

A

Arises when a party puts very intense sales pressure on another party–who often seems weak minded or susceptible to high pressure sales tactics

30
Q

What is procedural unconscionability?

A

A defect in the bargaining process itself

31
Q

What is substantive unconscionability?

A

A rip in some term of the contract

32
Q

Can you disclaim all warranties?

A

Yes

33
Q

What is an express warranty?

A

A promise that affirms or describes the goods and that itself is part of the basis of the bargain is an express warranty unless it is merely the sellers opinion

34
Q

What is the implied warranty of merchantability and who does it apply to?

A

It only applies to merchants.

The merchant makes an implied warranty unless disclaimed that the goods are fit for a ordinary particular purpose

35
Q

What is the implied warranty of fitness for a particular purpose? Who does it apply to?

A

It applies to anybody if the buyer relies on their expertise.

Triggered when a buyer relies on seller’s expertise to select a special type of good that will be used for a special purpose–the warranty is that the goods will satisfy this special purpose

36
Q

What is an express condition?

A

Conditions created in the language of the contract

37
Q

Must express conditions be strictly satisified?

A

Yes, unless the condition is somehow excused

38
Q

Can express conditions be waived?

A

Yes if the party receiving protection waives the condition by words or conduct; It is also waived if the other party wrongfully interferes or hinders the occurrence of the condition

39
Q

What is the constructive condition of exchange? (CCE)

A

One party’s performance is conditioned on the other side’s performance

40
Q

Under common law, does CCE need to be satisfied perfectly?

A

No the doctrine of substantial performance states that a party will satisfy the CCE if there is not a material breach

41
Q

What does the UCC require in terms of performance?

A

Perfect Tender

42
Q

What does perfect tender mean?

A

Perfect goods and perfect delivery

43
Q

What is the exception to perfect tender?

A

Installment contracts do not have to satisfy perfect tender

44
Q

If the seller fails to tender perfect goods what must the buyer do?

A

If there is time left on the contract the buyer must give the seller a chance to cure

45
Q

What are the requirements under a shipment contract?

A

The seller must get the goods to a common carrier; make arrangements for delivery; and notify the buyer [FOB sellers place of business]

46
Q

What are the requirements under a destination contract?

A

The seller must get the goods to the buyers business and notify the buyer [FOB buyers place of business]

47
Q

How do you determine who bares the risk of loss?

A
  1. Does the contract say who bares the risk; 2. If not, has either party breached?; 3. If not then if its a shipment contract the risk of loss is on the buyer during delivery; if its a destination contract the risk of loss is on the seller during delivery; in all other cases if the seller is a merchant the risk of loss is on the buyer when he receives the goods and if not a merchant then on the buyer when the seller tenders the goods
48
Q

What are the excuses to a contract?

A

Impossibility, Impracticability, Death, Frustration of Purpose, Excused for cancellation or modification, Accord and Satisfaction, Novation

49
Q

What is impossibility?

A

The contract can’t be performed at all

50
Q

What is impracticability?

A

The contract can be performed, but with great difficulty

51
Q

What is the “knock out” rule?

A

Under the UCC, different terms in offer/acceptance nullify each other, and court uses article 2’s gap filling provisions to patch holes in the K

52
Q

What is the “last shot” rule?

A

Under the UCC, additional terms are automatically included in the K unless the term materially alters the contract; the offer expressly limits acceptance to terms of the offer; the offeror objects to new terms within a reasonable time after notice of new term is received

Contracts (5 decks)

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