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318 Business Law > Exam #3 > Flashcards

Exam #3 Flashcards

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1
Q

“Discharged” via Performance(5)

A

1) Strict (Complete) Performance
2) Substantial Performance
3) Timeliness of Performance
4) Discharge by Agreement
5) Discharge by Operation of Law

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2
Q

Jacobs & Young v. Kent

A

Substantial Performance, pipes in the house they build are up to par

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3
Q

Substantial Performance

A

Good faith effort
Minor Deviation
Substantially Same Outcome

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4
Q

Timeliness of Performance

A

Minor delay = not a breach… unless
“Time of the essence” Clause (JMU building Hartman Hall)

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5
Q

Discharge by Agreement(5)

A

1) Mutual Recission
- Both parties walk away
2) Novation
- One party asks to sub someone else in
3) Settlement
- One party agrees to do a little less than originally agreed
4) Accord & Satisfaction
- New way of payment (money –> tutoring)
5) Covenant not to sue
- No $ right now, pay in 2 months

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6
Q

Discharge by Operation of Law (5)

A

1) Material Alteration
- Added extra 0 to check
2) Statue of Limitations
- 5 years from contract end
3) Bankruptcy
4) Commercial Impractiability
5) Impossibility of Performance
- Cannot be done, Kolodin V. Valenti

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7
Q

Kolodin V. Valenti

A

Discharge by Operation of Law: Impossibility of Performance
- Agent of the singer has a restraining order against him so he physically cannot perform his contractual duties

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8
Q

Meeting of Minds

A
  • Involuntary Consent
    1) Mutual Mistake of Material Fact
    • Shipment with the same name but 2 months apart
      2) Fraudulent Misrepresentation
    • Misrepresentation of material fact
    • Intent to deceive
    • Justified reliance
    • Actual harm
      3) Duress
      4) Undue Influence
    • Someone lost their free will (hard to prove)
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9
Q

Third Party Rights (3)

A

1) Assignment
- Transfer rights
- Non Assignment Clause (Can’t pass it onto another party)
2) Delegation
- Transfer duties
- Nondeligation Clause
- Personal contract
3) Third Party Beneficiaries

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10
Q

Remedies/Damages (5)

A

1) Compensatory Damages
2) Consequential Damages
(1+2: Duty to mitigate damages)
3) Punitive Damages
4) Nominal Damages
- $1, Debarment
5) Liquidation Damages
- Time of the Essence Clause

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11
Q

Equitable Damages (2)

A

1) Reformation
- Clerical Error
2) Speific Performance
- Unique goods: Art, Antiques, One of a kind memorabilia

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12
Q

UCC “Sale”

A

Passing of title = Risk of Loss
- Title passes at signing
- Nautilus Insurance v. Cheran Investments

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13
Q

Nautilus Insurance v. Cheran Investments

A
  • Passing of title/Risk of Loss
  • Guy bought a bar on a monthly payment over 2 years. After 2 months the bar burned down and he received insurance money over investors even though he only made 2 small payments
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14
Q

UCC “Goods”

A

Tangible & moveable property

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15
Q

UCC Merchant

A
  • A person who deals in specific goods
  • A Person who holds themselves out as having knowledge and skill about specific goods
    • Guy who as a hobby fixes and sells cars
  • Employer of Merchants
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16
Q

Merchant Firm Offer

A

Irrevocable until stated or within a reasonable time (~3 months)

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17
Q

UCC Offer

A

Indefinite Terms in valid offer
1) Missing price = Market price
2) Payment Timing = Default @ receipt of goods
3) Delivery = Pick up at sellers

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18
Q

UCC Acceptance

A
  • Shipping goods
  • Mirror image rule does not apply
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19
Q

Battle of the Forms

A

If the acceptance has new terms, terms are incorporated into the contract unless…
1) New terms materially alter the contract
OR
2) Offering merchant objects to new terms within a reasonable time

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20
Q

UCC Performance

A
  • General Duties & Obligations
  • Seller Specific Duties
  • Buyer Specific Duties
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21
Q

UCC General Duties & Obligations

A

Buyer + Seller = Good Faith + Observe reasonable commercial standards

22
Q

UCC Seller-Specific Duties

A
  • Perfectly Tender Goods
  • Exceptions
    1) Right to cure (fix the problem)
    - Notify intent to cure, meet original deadline
    2) Substitute Carriers
    3) Commercially Impractical
    4) Destruction of goods
23
Q

UCC Buyers Duties

A

1) Accept “PT” goods
- Absolute inspection rights
- Implied Acceptance = Failure to reject + use
2) Pay for PT goods

24
Q

UCC Statute of Frauds

A

Written contract unless…
Oral Contract is enforceable if
1) Between merchants, if one party memorializes in writing
2) Specially manufactured goods after substantial start
3) One party admits to contract
4) Partial Performance

25
Q

Seller’s Remedies for Breach (2)

A

1) Buyer accepts + Buyer doesn’t pay = Sue for damages
2) Buyer “Anticipatory Repudiation”
- Cover (try to sell somewhere else)
- Move on

26
Q

Buyer’s Remedies for Breach (4)

A

1) Seller delivers non-conforming goods
- Accept goods
- Cover
- Move on
2) Seller goes bankrupt
- Sue for Insolvency (S.O.L)
3) Seller refuses to tender unique goods
- Specific Performance
4) Seller delivers “Difficult to discover” non-conforming goods
- Discover in “reasonable time” + notify in “reasonable time”
- Fitl v. Strek

27
Q

Fitl v. Strek

A

Difficult to discover non-conforming goods
- Mikey Mantel’s rookie card, discovered 2 years after the sale it was fake, considered a reasonable time

28
Q

Title Warranties (3)

A

1) Warranty of good title
2) Warranty against Liens
3) Warranty against infringements

29
Q

Express Warranties (3)

A
  • Overt Promise = “Basis of Bargain”
    1) Statement of fact
    2) Samples and floor models (CostCo)
    3) Descriptions & Labels
30
Q

Implied Warranties (3)

A

1) I.W. of merchantability
2) I.W. of fitness for a particular use
- Known + Specific + non traditional
3) I.W. of trade custom
- The car has all its fluids when you buy it
- Warranty Disclaimer

31
Q

Cavect Emptor

A
  • 1960s
  • Buyer Beware
  • Mcfarland v. Newman
32
Q

McFarland v. Newman

A
  • Cavect Emptor, guy bought a sick horse and tried to sue but didn’t bring the horse to a vet to check before he bought
33
Q

Strict Products Liability (3)

A

1) Manufacturing defects
- Deviated from specifications
2) Design defects
- Error in specifications
- Riley v. Ford (rod doors)
3) Inadequate warnings

34
Q

Riley v. Ford

A

Design defects, Ford knew the rod doors were opening during crashes and could’ve fixed it for cheap but decided not to

35
Q

Defenses to Strict Product Liability (4)

A

1) Assumption of risk
2) Misue of product
3) Commonly known dangers
4) Comparative Neglience

36
Q

Chapter 7 Bankruptcy: Name + Steps (8)

A
  • Liquidation
  • All “Persons” except Banks + Insurance Companies
    1) Petition Court/Declare Bankruptcy
    2) Period of Court Review
    • Substantial abuse
    • Means test
      3) Order of relief
      4) Automatic Stay
    • Excluding domestic support
      5) Estate in Property
    • Homestead exception
    • Primary vehicle
    • Personal items (<$12250)
    • Trade Tools (<$2300)
      6) Constructive Control of Estate
    • Court-appointed trustee
      7) Distribute Liquidated Remainder
      8) Discharge of Remaining Debts
    • Excluding domestic support and back taxes
    • Student loans = undue hardship
37
Q

Involuntary Chapter 7

A

Owe creditors $15325 + Not paying + Actively avoid
- Petition for involuntary bankruptcy

38
Q

Chapter 11 Bankruptcy: Name + Steps (4)

A
  • Reorganization
  • Business Entities + High net worth people
    1) File petition
    2) Court review
    • Debtor-in-Possession
      3) Debtor & Creditor negotiate repayment plan
      A) Bank
      B) Bondholders
      C) Suppliers
      D) Shareholders
      - Judicial Cram down
      - Usually $.29 per $1
      4) Discharged
39
Q

Chapter 12 Bankruptcy: Name

A

Family Farm & Fisheries

40
Q

Chapter 13 Bankruptcy: Name

A
  • Fixed Income
    1) Negotiate 3-5 year repayment plan
41
Q

Contract Law

A

Legally enforceable agreement between parties
- A party who breaks the agreement will have to pay damages

42
Q

Elements of Valid Contract (5)

A

1) Offer
2) Acceptance
3) Consideration
4) Capacity
5) Legality

43
Q

Contract: Offer

A
  • A promise of commitment to do or refrain from doing some future action
  • Validity to offer
    1) Objective intent of the promisor
    2) Definite terms
    3) Communicated to a third party
    - Oral + Written
44
Q

Validity of the Offer

A

Objective Intent
- If the offer seems sincere to an objective observer, it is an offer
- Lucy v. Zehmer
- Panhandle Realty LLC v. Olins
Definite Terms
- The offer must including sufficient detail for a court to be able to enforce the contract
- Venture Associates Corp v. Zenith Data Systems Corp
Communicated to a Third Party
- Any written or oral offer delivered to another party

45
Q

Lucy v. Zehmer

A

Drinking at a bar together, Lucy ends up writing down $50,000 farm sale on Napkin, Didn’t seem like he was joking to people standing nearby
Objective intent

46
Q

Panhandle Realty LLC v. Olins

A

Attempt to back out of lease, tried to say they were still negotiating so he wouldn’t have to pay
Objective intent

47
Q

Venture Associations Corp v. Zenith Data Systems Corp

A

Letter of intent for merger, Definite terms

48
Q

Terminating an Offer Prior to Acceptance (7)

A

1) Revocation
2) Rejection
3) Counter Offer
- Any proposed change in terms = a new offer
4) Time Lapse
- Stated deadline or after “reasonable time period”
5) Subject Matter Destroyed
6) Party that made the offer dies
7) Change of law makes the offer illegal
- Surrogacy contracts

49
Q

Contract: Acceptance

A

1) Acceptance
- Recipient of the offer agrees to the terms via words of conduct (nodding + thumbs up + tossing keys)
2) Mirror Image Rule
- Acceptance must be unequivocal or it is a rejection of the offer (counter offer)
3) Mailbox Rule
- Acceptance is valid upon dispatch, not upon receipt (you have accepted the offer once you drop the letter in the mailbox or click send)
- The Regretful Seller Paradigm
4) Express Authorization
- It the offer specifies a method of acceptance, that is the only way one can accept the offer

50
Q

Bilateral Contracts

A

1) A contract that the parties form once they exchange promises to perform the contract
2) Majority of contracts

51
Q

Unilateral Contracts

A

1) A contract that one party can only accept by actually performing the terms of the offer (A future promise does not count)
2) The Smokey and the Bandit Paradigm

318 Business Law (2 decks)

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