export_mbe contracts Flashcards
Are changed terms in an acceptance a counteroffer?
Yes outside of UCC.
If you’re dealing with goods , the terms are an acceptance UNLESS 1) the offer was expressly limited to its own terms; 2) the offeror objects within a reasonable time; or 3) the new terms “materially alter” the contract.
What are liquidated damages?
Liquidated damages are damages whose amount the parties designate during the formation of a contract for the injured party to collect as compensation upon a specific breach (e.g., late performance).
For a liquidated damages provision to be upheld by a court, what two conditions must be met?
- The damages that are anticipated by a possible breach must be difficult to prove or uncertain (if damages can be anticipated with some certainty, LD provision is unenforceable)
- The amount chosen for the provision must be a reasonable estimate of losses to be expected from a breach.
Is consideration required to support modification of a sale of goods contract?
NO. The UCC does NOT require consideration to support modification of a sale of goods contract. There is NO pre-existing duty rule in the UCC because good faith modifications are enforceable without consideration.
Under unilateral contracts, when is the offeror bound?
Under unilateral contracts, the offeror is bound ONLY when the offeree completes performance.
Under unilateral contracts, when is the offeree bound?
Under unilateral contracts, the offeree is never bound to perform because she has never promised to do so. However, she will not be entitled to the benefits of the offeror’s promise unless and until she performs as required.
Are third party beneficiaries of unilateral performance entitled to enforce a unilateral K?
NO because offeree’s performance is completely optional.
When are negative injunctions available to prevent EEs from competing?
When their talents are extraordinary. Such relief is not available for all employees, but when an employee has such unusual talents, like a famous opera singer, the courts will enter negative injunctions to protect their ERs from competition that would follow a breach of their employment contract.
Can c ontracts to supply a buyer’s requirements be enforced?
YES. Under the UCC, contracts to supply a buyer’s requirements are considered to provide sufficient legal detriment and can be enforced.
When are oral promises to pay for $500+ goods enforceable ?
In cases where the seller has tendered the goods and the buyer has accepted them.
When can estates be liable for continued payments made pursuant to promises supported by moral consideration?
When all of the following criteria have been satisfied: (1) the promisor had received a material benefit during his lifetime that motivated the subsequent promise; (2) the promisor thereafter began performance according to the terms of his promise; (3) the promisor died without ever evidencing an intention to repudiate the promise; and (4) there were no superior moral claimants to the benefits of his estate.
When are promises to keep an offer open enforceable?
As long as the offeree pays separate consideration for the option. Otherwise, such offers are revocable at the will of the offeror.
When does a gratuitous assignment/promise of money stop being revocable?
Until money is actually paid or until the assignee has relied on the promise to his detriment.
What result when the performance under the contract becomes impossible because of some failure/fault/negligence on the part of the performing party?
The performance obligation is not excused and will be considered as a breach of the contract (EEs neligently destroy widgets; ER is liable for breach of K for widget delivery.) This is subjective impossibility, and is not a defense to breach.
If a construction contract is breached by a buyer during construction, what damages are the builder entitled to?
Any costs that the builder incurred AND any profit he would have received from the project.
What result if an ER assures a new EE that he will be hired for at least x months?
Oral or written assurances of job security made to an individual employee, as well as assurances contained in policy documents distributed to the workforce, suffice to take the contract out of the default rule. The default rule is the employment-at-will rule which, absent agreement to the contrary, allows an employer to dismiss, and an employee to quit, at any time for any reason.
Where a contract specifies that performance (usually payment) is conditioned upon the satisfaction of a third person, and a dispute arises over whether that third person properly withheld her “satisfaction,” what test is applied?
A subjective test; that is, it is proper for the third person to withhold approval if she is PERSONALLY honestly dissatisfied with the work, EVEN IF others in her field or other reasonable persons in her circumstances would have approved the work.
Is parol evidence of collateral agreements admissible?
YES. Watch out for separate agreements from the contract that constitute related contracts in themselves. These are collateral agreements.
When one party makes a unilateral mistake and the other party is aware of the mistake, what is the mistaken party’s best defense?
The minds of the parties had not met. Courts typically hold no K if one party knows of the other party’s mistake.
If performance is only temporarily impossible, is the obligation completely discharged?
No. The parties’ obligations are only suspended until the impossibility ends
After a buyer breaches and the seller re-sells the goods to a 3P, can the seller collect damages against the buyer?
Yes. The seller can collect the difference between the resale price and the K price AND incidental damages
When a buyer rejects goods, but then sells them because the seller does not give return instructions, how much can the seller sue the buyer for?
90% of the buyer’s final sale price (buyer gets to keep 10% for his work)
When does a unilateral mistake excuse a contractual breach?
When the non-mistaken party KNEW OR SHOULD HAVE KNOWN of the mistake (look for language like “bid was $30k lower than all other bids”)
Can a unilateral or bilateral K be formed if a P did NOT know of the offer at the time he allegedly accepted?
No. P must know about the offer in order to accept it. NO acceptance if you don’t know about an offer (e.g. someone finds a cat and returns it to the owner without knowing about a reward, then finds out about reward later. Can’t collect because didn’t know about the offer when he accepted by performance)
How does an employer most effectively prove that at-will employment exists or does not exist?
Through the terms of the employment manual
Oral conditions precedent
Be careful with these. If there is an oral condition that something must be done before money is tendered for goods, parol evidence can be used to prove the oral condition precedent (chef approving tomatoes hypo)
Do UCC firm offers require consideration to be valid?
No.
Seller contracts to sell same house with two different buyers. What damages can the first buyer recover?
An injunction preventing the sale to the second buyer and specific performance of the contract.
When does an intended third-party beneficiary’s rights vest?
When he learns of the contract and assents to it as requested by either the promisor or promisee, OR
Materially changes position in justifiable reliance on the promise, or brings suit to enforce the promise.
When there is delegation, who can be sued by the obligee for breach?
When there is delegation, the delegee AND the delegor can be sued by the obligee. (e.g. woman can sue landscaper 1 AND 2 where 1 delegated the landscaping K to 2)
When a supplier’s non-conforming tender substantially injures a business, can the business breach the K?
Yes because if the manufacturer’s business is substantially injured as a result of the supplier’s non-conforming tender, the entire value of the contract has been impaired.
What happens to a K made by a minor when the youth turns 18?
The youth can, at his option, ratify or affirm the K when he turns 18
How much work should be done to consider a job “substantially performed?”
More than 50%
Are obligors who are not informed of assignments responsible for paying assignees?
No. Only the assignor is responsible for paying the assignee when the obligor is not informed of the assignment
When the buyer has general or particular needs about which the seller has reason to know, what damages may the buyer recover if the seller breaches?
Incidental AND consequential damages
In what situation is the doctrine of frustration of purpose NOT available as a valid defense?
The fact that something had caused the same frustration somewhat recently shows that the frustration is a foreseeable occurrence. Therefore, the risk of that same frustration occurring is allocated to the party who wishes to raise the defense, and the doctrine of frustration of purpose will not operate to excuse that party from performing.
Can a party effectively retract her repudiation of a contract?
Yes. A party effectively retract her repudiation of a contract if the party gives notice that she will, after all, perform under the contract BEFORE the non-breaching party (1) takes any action in reliance on the repudiation , (2) gives notice of acceptance of the repudiation , or (3) commences an action against the breaching party .
Can a confirmation of an oral agreement for the purchase of goods be binding?
Yes if it is not objected to buy the receiving merchant within 10 days of receiving the confirmation.
If a contractor hired by a homeowner has a K with a wood supplier, and the wood supplier breaches, can the homeowner sue the wood supplier?
No because the homeowner is merely an incidental beneficiary
What is an accord?
A promise to discharge a debt in the FUTURE in exchange for something else.
What are the two main types of accords?
Discharge for performance - unilateral accord
Discharge for promise - bilateral accord
What is the only term the UCC will NOT fill in as a default?
Quantity.
Under the UCC, when is the measure for damages for non-delivery calculated? How are the damages calculated?
Difference between market price and the contract price ON the day when the buyer LEARNED of the breach
In a unilateral mistake situation, when is the only time the K is voidable?
When the non-mistaken party knows or should know of the mistake and takes advantage of the mistake
What is the standard for modification of Ks for $500+?
Such modifications must be in writing in addition to the K itself
