Fl Contracts Flashcards
Contracts Acronym
Love for dogs treat every rover terrifically
LA formation defenses terms excuse remedies 3rd parties
what are goods
Under the UCC 2 goods are tangible movable Property as identified to the contract
When is the UCC to not used and common law is applied
Any time when it is not at the sale of goods such as a service contract or sale of property Or employment contract or construction contract
In the sale of goods UCC to applies what happens if the parties are not merchants though
How about if the sale is for goods at $500
UCC to will still apply but the merchant rules will not
Only the sale for goods is more than $500 will the statute of frauds kick in and thus require a writing
What law applies
common law v. UCC 2
Formation of contract issues
OTAC - offer, termination, acceptance, and consideration
an agreement is not a contract. a contract must have the latter.
first look for an agreement formed, then see if it’s legally enforceable
Defenses of contract issues
capacity, ambiguity, mistake, unconscionable, duress, Statute of Frauds, etc.
Terms of contract issues
parol evidence rule, UCC terms - warranties, perfect tender
Excuse for nonperformance issues
material breach, impossibility, impracticability, frustration, and conditions
Remedies for contract issues
specific performance (not popular), expectation interest, and liquidated damages
Third Party contracts issues
beneficiaries, assignments and delegations
Define a merchant
one who regularly deals in goods of the kind sold or who otherwise by his profession holds himself out as having special knowledge or skills as to the practice or the goods involved
Name the UCC 2 Merchant Rules
firm offer, battle of the forms, confirmatory memo, and implied warranty
Contract v. Restitution (Quasi-Contract)
protects against unjust enrichment whenever contract law yields an unfair result (or reasonable value of work performed).
Check this: if work done is by act of nature
Restitution is the remedy of last resort.
define contract
a legally-enforceable agreement
express contract
implied contract
express - created by the parties’ words (oral or written)
implied - is created by their conduct i.e. sitting in the barber seat to get a haircut implies payment upon completion.
bilateral contract
unilateral contract
bilateral - offer can be accepted in any reasonable way; ie an offer is OPEN as to method of acceptance;
offeree choice of method through return promise or performance
unilateral - an offer can be accepted ONLY by performance NOT return promise; ie. look for 3 magic words… “offer…only by”; or a reward offer; if no words like this assume it is bilateral
common law v UCC in bilateral contracts
CL: unilateral is accepted by performance; bilateral acceptance by promise
UCC: all contracts; acceptance is by promise to ship or shipment ONLY
FIRST STEP of formation - OFFER
what is an offer
a manifestation of an intention to be bound (as judged by a “reasonable person”/objective standard).
This standard is NOT subjectively based on what is happening in someone’s head. Rem Zimmerman case who wrote contract on a napkin to sell farm but he was joking. However, a reasonable person would think there was an offer and court enforced.
Offer v advertisements
an ad is not an offer; it is a mere invitation to deal; UNLESS there’s a quantity
when MUST a reward be paid and when it is an issue of past performance
a reward is paid on performance with knowledge of an offer
not paid if knowledge of an offer comes after performance
EXCEPTIONS to rewards/ads: Mink Stole and Carbolic Smokeball
when an ad is specific to quantity and how to accept it IS an offer
indefinite offers in CL - Open price terms
indefinite offers in UCC - Open price terms
CL - see if any of the terms are too indefinite to be enforced. Watch for: open price terms in sale contract; EXCEPTION: not an offer for land sale when offer is indefinite because NO material terms (court will not impose price for the sale of land if the offer is missing such a material term)
UCC - court will read in a “reasonable” price for sale of goods even if the price is omitted BUT this will not happen in common law; ie if sale price of a car is missing, court will read in a reas price)
indefinite offers - gifts for the future
promises to make gifts in the future are unenforceable even if they are in writing and are intended by the promisor to be enforced
requirement contracts - offers under UCC 2
these apply when a company contracts to purchase “all its requirements” of widgets for five years for 4100k per battery. This is valid because even though we do not know # of batteries to be bought based on the buyers needs so long as it is “exercised in good faith.”
EXCEPTION: unreasonable or disproportionate increase in the buyer’s demand even though we do allow quantity to be measured by the buyer’s needs and in good faith the quantity cannot be an “unfair surprise” to seller; we simply cannot hold the seller to this demand.
SECOND STEP OF FORMATION - name the methods of __________
termination
1- lapse of time
2- revocation
3- rejection
4- death
termination - lapse of time
an offer lapses after a stated term or after a reasonable time has passed (WATCH DATES CLOSELY)
termination - lapse of time #1 of 4
if not stated, what is a reasonable time?
if they give you more than one month it is not reasonable; however, it depends on the offer; steel is different than selling bananas which are perishable and expire in a week
watch out for dates separated for more than 1 month
termination terminology who revokes and who rejects
offeror revokes
offeree rejects offer
termination - Revocation #2 or 4
an offer terminates when an offeror revokes an offer; an offer can be revoked at ANY TIME before acceptance UNLESS any of these 4 expections exist where an offer cannot be revoked:
(1) option contract
(2) firm offer
(3) foreseeable reliance
(4) starting performance of unilateral k
termination - Revocation #2 or 4
direct v indirect revocation
direct - the offeror indicates directly to the offeree that he has changed his mind about entering the deal
indirect - (1) the offeror engages in conduct that indicates she’s changed her mind and (2) the offeree is aware if the conduct; (watch for an offeror saying something but the offeree is unaware of the statement therefore the offeror has not effectively revoked; however, if the offeree is told by someone else then now they are aware and thus cannot accept the offer (check out the 4 exceptions where an offer cannot be revoked)
termination - Revocation #2 or 4
4 exceptions where an offer cannot be revoked
(1) option contract
(2) firm offer
(3) foreseeable reliance
(4) starting performance of unilateral k
termination - Revocation #2 or 4
_______ is 1 of 4 exceptions where an offer cannot be revoked)
(1) option contract - a promise to keep an offer open that is paid for with consideration (if no consideration then revocation is at will);
1- no writing required;
2- acceptance effective when received by offeror
3- the mailbox rule does NOT apply for options contracts
4- option is irrevocable for the period stated - not even the offeror could revoke the offer within a 30 day period (watch for an offeree that gives a counteroffer and then accepts. this does NOT kill the original offer because option is open for 30 days
OTHER EXCEPTIONS
(1) option
(2) firm offer
(3) foreseeable reliance
(4) starting performance of unilateral k
termination - Revocation #2 or 4
_______ is 2 of 4 exceptions where an offer cannot be revoked
firm offer - UCC 2
(1) In a sale of goods, (2) a merchant promises in a signed writing to keep an offer open, (3) then the offer is irrevocable even WITHOUT CONSIDERATION (as opposed to options contracts)
NOTICE ONLY IF THE OFFEROR IS A MERCHANT; applies to buying or selling
Note: Under the UCC 2, the terms “merchant” and “signed” are broadly defined; a merchant is a seller operating the business and a signed writing can be on a letterhead or a fax
FOUR EXCEPTIONS
(1) option
(2) firm offer
(3) foreseeable reliance
(4) starting performance of unilateral k
termination - Revocation #2 or 4
FIRM OFFER is 2 of 4 exceptions where an offer cannot be revoked
assurance in writing may be held as irrevocable as an option k if the offeror could reasonably expect offeree would rely to her detriment and the offeree does rely; period of irrevocability cannot exceed 3 months (90 days) unless stated
termination - Revocation #2 or 4
FIRM OFFER is 2 of 4 exceptions where an offer cannot be revoked
what if you want more than 3 months on the option?
under the firm offer, exception, if you want to go beyond 3 months pay consideration to be protected by options contract exception
if a time period is not stated, the court will place a reasonable time period but not beyond 3 months
ASK:
Termination - Revocation #2 or 4
FIRM OFFER is 2 of 4 exceptions where an offer cannot be revoked
What if CarMax promises not to revoke its offer, but does not state a time period?
2- CarMax makes a signed, written offer to sell a 2011 Tesla. Can CarMax still revoke?
1- This is irrevocable. The court places a reasonable time period but not beyond 3 months
2- yes, it is missing a time frame that the offeree is willing to keep the offer open; language must be explicit. It is revocable if communicated prior to acceptance
Termination - Revocation #2 or 4
1 of 4 Option
v.
2 of 4 Firm Offer
option - consideration req, if no consideration then revocation at will, acceptance effective when received by offeror, usually 30 days max (with consideration), mailbox rule does not apply
firm offer - goods, merchant, promise to keep open, signed writing, irrevocable, no consideration req, usually 3 months max, if wants more than 3 months then consideration is needed, if promise not to revoke and no time period stated, the court palces a reasonable time period BUT not for more than 3 months (90 days), if merchant makes a signed written offer but not language about keeping the offer open then can revoke if communicated prior to acceptance
Termination - Revocation #2 or 4
1 of 4 Option v. 2 of 4 Firm Offer
In a sale of goods, look first for an ____ (no limits). If you do not have an option, look for a ____ ____ (subject to several limitations)
In a sale of goods, look first for an option (no limits). If you do not have an option, look for a firm offer (subject to several limitations).
Termination - Revocation #2 or 4
FORESEEABLE RELIANCE BEFORE V AFTER ACCEPTANCE
is 3 of 4 exceptions where an offer cannot be revoked
very rare
Foreseeable reliance before makes the offer irrevocable
Therefore, unforeseeable reliance does not even if offeree relied; the offeror could not reasonable foresee when an offeree makes an expensive foundation for a machine
People expect the offeree to accept the offer before the offeror accepts the offeree would rely
EXCEPTION BIDS:
a subcontractor cannot revoke because he knows upfront that the general contractor will rely on SC offer to bid which was incorporated to compute the GC bid; the SC must give reasonable time for the bid to be reviewed
OTHER EXCEPTIONS
(1) option
(2) firm offer
(3) foreseeable reliance
(4) starting performance of unilateral k
Termination - Revocation #2 or 4
STARTING TO PERFORM A UNILATERAL CONTRACT
is 4 of 4 exceptions where an offer cannot be revoked
under a unilateral k, offer is accepted by starting performance even if a small start but NOT mere preparation; once performance is started the offer is irrevocable by offeror for reasonable time it takes to perform the work (for example, reasonable time to paint the house)
mere preparation to perform - offeree not performed so offeree not protected; anything before performance is not start of performance BUT EXCEPTION #3 applies foreseeable reliance
OTHER EXCEPTIONS
(1) option
(2) firm offer
(3) foreseeable reliance
(4) starting performance of unilateral k
Termination - Revocation #2 or 4
Timing of Revocation
common law v UCC
CL: a revocation is effective on receipt [no mailbox rule]; once an offer has been accepted it is too late to revoke. Revocations are NOT effective when sent but upon receipt. Offeree can sue for breach.
(CL only?) receipt of revocation by offeree or person authorized to receive or deposited in an authorized place
UCC: notice is rec’d when it comes to their attention, delivered to a place of business where communication was made or another communication was held out by that person as a place of receipt of such communication. Rec’d when brought to offeree’s attention or should’ve been brought to attention
Remember the big picture: Formation Step 1 Offer - define 1- \_\_\_\_ 2- \_\_\_\_ 3- \_\_\_\_ 4- \_\_\_\_
Remember the big picture: Formation Step 1 Offer - define 1- Ads 2- Indefiniteness 3- Open Price Terms in Sales K UCC 2 v. Common Law 4- Requirements Contracts UCC 2
Remember the big picture:
Formation Step 2 Termination
4 Methods of Termination
1- ____
2- \_\_\_\_ a- Option b- Firm Offer c- Foreseeable Reliance Before v. After Acceptance d- Starting to Perform a Unilateral k
3- ____
a. Counteroffer
b. Conditional Acceptance
c. Accepting Adding Terms/Varying Offer (CL v. UCC Mirror Image Rule)
4- ____
Remember the big picture:
Formation Step 2 Termination
4 Methods of Termination
1- Lapse of Time
2- Revocation a- Option b- Firm Offer c- Foreseeable Reliance Before v. After Acceptance d- Starting to Perform a Unilateral k
3- Rejection*
a. Counteroffer
b. Conditional Acceptance
c. Accepting Adding Terms/Varying Offer (CL v. UCC Mirror Image Rule)
4- Death
Remember the big picture:
Formation Step 2 Termination
4 Methods of Termination
1- ____
2- \_\_\_\_ a- \_\_\_\_ b- \_\_\_\_ c- \_\_\_\_ d- \_\_\_\_
3- ____
a. ____
b. ____
c. ____
4- ____
Remember the big picture:
Formation Step 2 Termination
4 Methods of Termination
1- Lapse of Time
2- Revocation a- Option b- Firm Offer c- Foreseeable Reliance Before v. After Acceptance d- Starting to Perform a Unilateral k
3- Rejection*
a. Counteroffer
b. Conditional Acceptance
c. Accepting Adding Terms/Varying Offer (CL v. UCC Mirror Image Rule)
4- Death
Step 2 Termination - #3 of 4 Rejection of Offers*
Define rejection and its three parts to remember…
an offer terminates when the offeree rejects it (an “inappropriate response”)
WATCH OUT for offeree responses that look like acceptance but are actually rejections: counteroffers, conditional acceptances, and additional terms
3- Rejection*
a. Counteroffer
b. Conditional Acceptance
c. Accepting Adding Terms/Varying Offer (CL v. UCC Mirror Image Rule)
Step 2 Termination - #3 of 4 Rejection of Offers* #1 of 3 Counteroffer
#1 of 3 Counteroffer Operates as a rejection, but "mere" bargaining" does not EXAM TIP: Look for punctuation at the end of the offeree's response. If offeree ends response with a period that is a counter offer. If it ends with a question mark, it is mere bargaining.
Step 2 Termination - #3 of 4 Rejection of Offers* #2 of 3 Conditional Acceptance
#2 of 3 Conditional Acceptance Operates as a rejection AND counteroffer NOT AN ACCEPTANCE because it is conditional
WATCH FOR words like “on the condition that”
Step 2 Termination - #3 of 4 Rejection of Offers*
#3 of 3 Accepting Adding Terms/Varying Offer (CL v. UCC Mirror Image Rule)
aka BATTLE OF THE FORMS in UCC 2
Explain Basic Info
#3 of 3 Accepting Adding Terms/Varying Offer (CL v. UCC Mirror Image Rule) aka BATTLE OF THE FORMS CL differs from UCC 2
CL - acceptance MUST mirror the offer. Known as the Mirror Image Rule. If the offeree adds terms it is a rejection
UCC - NO Mirror Image Rule! The offeree adding or changing a term does not prevent acceptance under UCC 2. However… Offeree’s term is included ONLY IF:
1- both parties are merchants
2- addition is NOT a material change
3- offeree does not object to the change within a reasonable time
EXAM TIP: The offeree’s term sometimes does not make it into the contract.
EXAM TIP: If the added term is CUSTOMARY in the industry, it’s not material
Step 2 Termination - #3 of 4 Rejection of Offers*
#3 of 3 Accepting Adding Terms/Varying Offer (CL v. UCC Mirror Image Rule)
aka BATTLE OF THE FORMS in UCC 2
Explain the sub-issues between the CL and UCC regarding mirror image rule
CL - a conditional acceptance is still rejection under CL; mere proposal is not a part of the k UNLESS offeror accepts
UCC - court may add gap fillers (terms that do not materially change the original term of offer) but NEVER quantity;
when both parties are merchants an acceptance with additional terms does not constitute a rejection and counteroffer, but rather is an effective acceptance UNLESS offer expressly limits acceptance to the terms of the offer, OR the offeror has already objected to the term OR objects in reasonable time.
Step 2 Termination - #3 of 4 Rejection of Offers*
#3 of 3 Accepting Adding Terms/Varying Offer (CL v. UCC Mirror Image Rule)
aka BATTLE OF THE FORMS in UCC 2
Explain what happens if one party is a merchant but the other is NOT…
when one party is a merchant and the other is not and an acceptance proposes additional terms, a contract is formed under the terms of the offer UNLESS BOTH parties are merchants. The additional term are mere proposals to modify the contract. They are not a part of the K unless offeror expressly agrees.
ASK - SO THIS MEANS THAT THE TERMS OF THE OFFER REMAIN WITHOUT THE ADDITIONAL TERMS?
UCC Contracts that do NOT require quantity
Requirements and output contracts do not requires a quantity because
(1) requirements - based on buyer’s good faith needs
(2) requirements k - quantity measured by seller’s ability to k
UCC: What is a material change to the terms of a k?
a material change is the type where adding the change would cause unfair surprise or hardship affecting money, risk, or remedy.
example: disclaimer of warranties
What is NOT a material change: a term that is CUSTOMARY IN THE INDUSTRY or a small change like delivery date
Step 2 Termination - #4 of 4 Death Operates to Terminate an Offer
Death of either part BEFORE acceptance terminates a REVOCABLE offer.
BUT: death does NOT automatically terminate a CONTRACT (think mortgage with offer, acceptance, and consideration), NOR an IRREVOCABLE offer
Step 3 Acceptance of Formation
Name the 5 Categories
Step 3 Acceptance of Formation
1- language of the Offer controls the Manner of Acceptance
2- Starting Performance as Acceptance: Need to Distinguish Between Bilateral v. Unilateral K Offers
3- Improper Performance as Acceptance
4- Offeree’s Silence as Acceptance
5- Timing of an Acceptance
Step 3 Acceptance of Formation
1 of 5
1- language of the Offer controls the Manner of Acceptance
When the offeror controls the method of acceptance, most offers can be accepted by return promise to perform but not when offeror controls in a manner of acceptance (example_ acceptance by reporting to work on MondaY)
Step 3 Acceptance of Formation
2 of 5
2- Starting Performance as Acceptance: Need to Distinguish Between Bilateral v. Unilateral K Offers
Bilateral K
Starting performance is acceptance and carries with it an implied promise to finish the job; these K’s leave open to accept in any reasonable manner
Unilateral K
Starting performance is NOT acceptance; only COMPLETING PERFORMANCE is acceptance; irrevocable (by offeror) when offeree starts performing, BUT offeree need not finish because completion is acceptance (think Brooklyn Bridge Hypo)
Step 3 Acceptance of Formation
3 of 5
3- Improper Performance as Acceptance
3- Improper Performance as Acceptance
CL: Simultaneous acceptance and breach (offeror says to paint house green but you paint the house purple)
UCC: accommodation sent with a note are counteroffers NOT acceptance (getting Gaga CD instead of Beyonce as ordered)
Step 3 Acceptance of Formation
4 of 5
4- Offeree’s Silence as Acceptance
4- Offeree’s Silence as Acceptance
general rule: silence is NOT acceptance
exception: CUSTOM creates a duty to speak when merchants have been dealing in a certain was and accepting any change requires speak. (eel skin case)
Step 3 Acceptance of Formation
5 of 5
5- Timing of an Acceptance
5- Timing of an Acceptance
Gen rule: acceptance is effective when MAILED even if letter is lost in mail (must have stamp and addressed correctly (Mailbox rule)
Mailbox rule is effective UNLESS: (1) offer stipulates that acceptance is not effective until received OR (2) and OPTION K is involved (because offeree is already protected by the option to accept within the timeframe)
When a revocation is sent first and then an acceptance… whatever letter arrives first dictates
Policy: Protects the offeree against revocation once she has mailed an acceptance;
Rem: a rejection is upon receipt BUT an acceptance is upon dispatch; if an acceptance is mailed and then offeror revokes by phone that is still a K because offeree accepted when he dispatched the letter.
Step 4: Consideration
Defined
past consideration adequacy irrelevant contract modifications partial pmt of debt due and undisputed exception: time-barred debt promissory estoppel
bargained for legal detriment or benefit. Can be a promise in exchange for a promise (dog), performance or even forbearance. illusory means no considerations on either side.
forbearance - if you give up the right to do something you could do legally that is consideration
Step 4: Consideration
Past Consideration = NO consideration
an act that occurs in the past that is now being recognized with an unenforceable gift promise lacking consideration; you cannot bargain for what has been done in the past
Adequacy of Consideration is irrelevant even if nominal (even a mere peppercorn will suffice
example - new consideration could be a minor ratifying a voidable K upon reaching the age of majority
Step 4: Consideration
Adequacy of Consideration
courts say irrelevant BUT nominal is a sham and unenforceable (selling 100k home for $1 to son)
even a mere peppercorn will suffice for consideration
Step 4: Consideration
Defined
past consideration adequacy irrelevant - contract modifications partial pmt of debt due and undisputed exception: time-barred debt promissory estoppel
Common Law: requires NEW consideration because of the preexisting duty is not enough; can modify original consideration even if slightly.
EXCEPTION: modification is fair and equitable in light of unanticipated circumstances, Example: Beyonce is pregnant but scheduled for a contract;
HOWEVER, a 3rd party who promised to pay may not use the preexisting duty rule as a defense. Example: Kanye says he will pay Beyonce the extra $5K to perform at concert. This is a new K so preexisting rule not a defense for him.
UCC - consideration is a mere technicality and not needed to modify a contract for the sale of goods if the modification is done in good faith
Step 4: Consideration
Defined
past consideration adequacy irrelevant contract modifications - partial pmt of debt due and undisputed exception: time-barred debt promissory estoppel
- partial pmt of debt due and undisputed
no new consideration needed because you owe $3K and agree to pay less; however, if she agrees to pay the debt early or there is a good faith dispute that she owed less could agree to liquidate less.
Step 4: Consideration
Defined
past consideration adequacy irrelevant contract modifications partial pmt of debt due and undisputed - exception: time-barred debt promissory estoppel
- exception: time-barred debt
A promise to pay a debt collection of which is barred by the SOL is enforceable even without consideration
the creditor cannot enforce the original debt because SOL, it can enforce a later written promise to pay even though there’s no consideration.
Step 4: Consideration
Defined
past consideration adequacy irrelevant contract modifications partial pmt of debt due and undisputed exception: time-barred debt - promissory estoppel as a substitute for consideration
- promissory estoppel as a substitute for consideration
Foreseeable reliance may make a promise enforceable even without consideration
1- promise made
2- reasonable foreseeable detrimental reliance
3- justice requires enforcement of the promise
ONLY THE RIGHT ANSWER WHEN THERE IS NO CONSIDERAITON
DEFENSES
- Lack of capacity (implied affirmation after gaining capacity; exception is necessaries)
- Ambiguity/Misunderstanding
- Mistake (bilateral or unilateral)
- unconscionability
- duress
- statute of frauds (contract modifications and adequate writing CL/UCC)
SOF exceptions:
lease <1yr
part performance of RE,
full performance of services
goods $500 or more that are accepted or paid for by the buyer, custom goods, judicial admission, merchant’s confirmatory memo
suretyship “main purpose”
- Lack of capacity (implied affirmation after gaining capacity; exception is necessaries)
minors under 18, mentally incompetent, and voluntary intoxication where the party must be so intoxicated that party does not understand the nature or significance of the promise.
an incapacitated defendant has the right to disaffirm the contract if she wants to.
only a MINOR is able to enforce contract with adult, adult cannot enforce against a minor. minor is able to ratify k upon reaching the age of majority
implied affirmation after gaining capacity - minor retains the benefit after gaining capacity
exception is necessaries - the incapacitated person is liable for necessaries but only for their reasonable value, not the contract price
FL SPECIFIC - minor incapacity removed when:
- minor marries although spouse dies or divorce
- 16+ may borrow money for their education
- eligible minors participate in the Home Farm & Business Loans Act
- minor to k for medical services of her child or her pregnancy
DEFENSES
- Lack of capacity (implied affirmation after gaining capacity; exception is necessaries)
- Ambiguity/Misunderstanding
- Mistake (bilateral or unilateral)
- unconscionability
- duress
- statute of frauds (contract modifications and adequate writing CL/UCC)
SOF exceptions:
lease <1yr
part performance of RE,
full performance of services
goods $500 or more that are accepted or paid for by the buyer, custom goods, judicial admission, merchant’s confirmatory memo
suretyship “main purpose”
Ambiguity/Misunderstanding
there is a mutual misunderstanding because there is NO meeting of the minds regarding a material ambiguity
*If one party knew of should have known there is ambiguity argue there is a contract based on the innocent party’s terms.
Subjective intention controls
DEFENSES
- Lack of capacity (implied affirmation after gaining capacity; exception is necessaries)
- Ambiguity/Misunderstanding
*Mistake (bilateral or unilateral)
- unconscionability
- duress
- statute of frauds (contract modifications and adequate writing CL/UCC)
SOF exceptions:
lease <1yr
part performance of RE,
full performance of services
goods $500 or more that are accepted or paid for by the buyer, custom goods, judicial admission, merchant’s confirmatory memo
suretyship “main purpose”
*Mistake (bilateral or unilateral)
bilateral - mutual mistake about the subject matter allows cancellation or modification of the contract but mutual mistake of VALUE is not a mistake of material fact so contract is enforceable
unilateral - employs the caveat buyer beware and usually not a defense UNLESS non-mistaken party knew or should have known of the mistake. If so, relief is granted to the non mistaken party to avoid taking advantage of buyer
An error in judgment by one of the parties at work the value or quantity of the work done or goods contacted four will not resolve any voidable contract even if the mistaken party knows or has reason to know of the mistake made by the other party
DEFENSES
- Lack of capacity (implied affirmation after gaining capacity; exception is necessaries)
- Ambiguity/Misunderstanding
- Mistake (bilateral or unilateral)
*unconscionability
- duress
- statute of frauds (contract modifications and adequate writing CL/UCC)
SOF exceptions:
lease <1yr
part performance of RE,
full performance of services
goods $500 or more that are accepted or paid for by the buyer, custom goods, judicial admission, merchant’s confirmatory memo
suretyship “main purpose”
*unconscionability
Allows the court to refuse to enforce all or part of a contract by applying TWO test tested at the TIME the agreement is made NOT after:
1- unfair surprise and
2- oppressive terms when
HOWEVER, long-term contracts that now looks one-sided is NOT unconscionable
DEFENSES
- Lack of capacity (implied affirmation after gaining capacity; exception is necessaries)
- Ambiguity/Misunderstanding
- Mistake (bilateral or unilateral)
- unconscionability
*duress
- statute of frauds (contract modifications and adequate writing CL/UCC)
SOF exceptions:
lease <1yr
part performance of RE,
full performance of services
goods $500 or more that are accepted or paid for by the buyer, custom goods, judicial admission, merchant’s confirmatory memo
suretyship “main purpose”
economic duress
one party to the contract makes an improper threat and the other party has no reasonable alternative
DEFENSES
- Lack of capacity (implied affirmation after gaining capacity; exception is necessaries)
- Ambiguity/Misunderstanding
- Mistake (bilateral or unilateral)
- unconscionability
- duress
*statute of frauds (contract modifications and adequate writing CL/UCC)
SOF exceptions:
lease <1yr
part performance of RE,
full performance of services
goods $500 or more that are accepted or paid for by the buyer, custom goods, judicial admission, merchant’s confirmatory memo
suretyship “main purpose”
TIP: Look for an oral agreement to trigger defense
The purpose of the SOF is to prevent fraud. While most oral contracts are enforceable, only certain kinds that fall within the SOF need to be in writing to be enforced (MYLEGS). Contracts…
M- in consideration of MARRIAGE (but not a promise to marry) example: prenuptial agreements
Y- which CANNOT POSSIBLY be completed in ONE YEAR OR LESS from the date of contract formation (look for dates); it does not matter if performance actually takes more than 1 year as long as full performance within 1 year was theoretically possible then no writing is required)
Example issues: providing care for life, employment for life okay because person can get better or die before 1 year.
L- LAND SALE/TRANSFER of an INTEREST in real property. (like mortgage or lease more than 1 year).
To be enforceable, a contract for the sale of land must be in writing signed by the party sought to be charged (D), reasonable describe the land, and the price.
If owner authorizes an agent to sell the property, a writing is required under the EQUAL DIGNITY RULE because the underlying contract is a sale of real estate subject to the SOF Therefore, the authorization MUST be as well.
E- promises by Executor of an estate to pay the estate’s debts from his personal funds
G- for the sale of GOODS $500 or more must be in writing, specify the quantity, and signed by the party to be charged (the defendant)
S- that give a promise to ANSWER FOR (guarantee) the debt of another BUT not a mere promise to pay (which is not subject to SOF)
EXTRA FLORIDA Ks SUBJECT TO SOF - 6
- healthcare guarantees
- newspaper subscriptions
- debts barred by the SOL
- home solicitations
- home improvement k
- credit agreements
DEFENSES
- Lack of capacity (implied affirmation after gaining capacity; exception is necessaries)
- Ambiguity/Misunderstanding
- Mistake (bilateral or unilateral)
- unconscionability
- duress
- statute of frauds (contract modifications and adequate writing CL/UCC)
*SOF exceptions: lease <1yr part performance of RE, full performance of services goods $500 or more that are accepted or paid for by the buyer, custom goods, judicial admission, merchant's confirmatory memo suretyship "main purpose"
SOF exceptions exist because there is a chance of LESS FRAUD
- lease 1yr OR less
- part performance of requires ALL THREE: full or partial payment of property, possession, AND improvements
- full performance of services (NOT partial performance but when you reach an unfair result argue restitution quasi-contract to fashion a remedy for reasonable value or work rendered not based on the k price but on the fmv of the partial work completed.)
- suretyship if the “main purpose” in making promise is benefitting self no writing is required because their is less chance of fraud when a person ensuring the payment is also the one receiving the benefit
UCC 2
- goods $500 or more that are accepted or paid for by the buyer (example brady footballs versus boat)
- when making custom goods seller must show a SUBSTANTIAL BEGINNING to satisfy the SOF and that the goods are custom-made/not suitable for sale to others
- judicial admission - if a D admits under oath that she had a deal then she will lose the SOF defense
- Merchants’ Confirmatory Memo is used to confirm an oral agreement. One party can use its OWN signed writing to satisfy the SOF AGAINST the other party binding himself and the recipient IF: (1) BOTH parties are merchants (2) writing claims an AGREEMENT and has QUANTITY AND (3) there is no WRITTEN objection within 10 DAYS
EXTRA DEFENSES;
misrepresentation
A misrepresentation is a false assertion of facts. It is a fraudulent if it is intended to induce a party to enter into a contract and the maker knows or believes the assertion is false or knows that he does not have a basis for what he states or implies with the assertion
a fraudulent assertion can be inferred from conduct like concealment or sometimes even non disclosure may be considered a misrepresentation.
fraud in the inducement - If a party induces another to enter into a contract by using fraudulent misrepresentation such as asserting information she knows is untrue, the contract is voidable by the innocent party if she justifiably relied on the fraudulent misrepresentation.
fraud in the factum - if one of the parties was tricked into giving assent to the agreement under circumstances prevented her from appreciating the significance of her action agreement cannot be enforced it is void
SOL begins when person learns of the fraud
DEFENSE
concealment
nondisclosure
An act of concealment intended to prevent another from learning a fact is the equivalent of asserting that the fact does not exist. If a party frustrates an investigation by the other party or falsely denies knowledge of the fact it can be considered a misrepresentation.
Nondisclosure without concealment usually is not considered a misrepresentation UNLESS the nondisclosure is either material or fraudulent. Note however that a party has a duty to disclose any facts necessary to correct any prior assertions that he made when necessary to prevent those statements from becoming misrepresentations
Defenses
Undue influence
Undue influences unfair persuasion of a party who is under the domination of the person exercising the persuasion or who by virtue of the relationship between them is justified in assuming that the person will not act in a manner inconsistent with his welfare.
elements
Undue susceptibility to pressure by one party and excessive pressure by the other.
Consider also: unfairness of the resulting bargain and the availability of independent advice
TERMS
- WORDS- (parol evidence unless typo, establish a defense, interpret a vague or ambiguous term, added to a partially integrated document UNLESS k has a merger clause/4 corners); no later events
- CONDUCT- (in order of importance: course of performance, course of dealing, customary in trade
- SELLER WARRANTIES- express, implied (warranty of merchantability, fitness for a particular purpose)
- LIMITATIONS ON WARRANTIES FOR GOODS- disclaimers versus limitations of buyer’s remedies with exception of personal injury and consumer goods is said to be unconscionable
- RISK OF LOSS IN A SALE OF GOODS- seller bears risk versus buyer bears risk (hierarchy of where to find risk allocation: agreement, breach, delivery by common carrier (shipment v. destination contract), non-carrier cases (merchant-seller v. nonmerchant-seller
- PERFORMANCE OF COMMON LAW CONTRACTS- (substantial performance
- PERFORMANCE IN THE SALE OF GOODS- perfect tender, option to cure as a second chance if time has not expired or when time does expire, installment contracts substantial impairment not perfect tender rule (rejection under installment k), buyer’s acceptance of goods (implied and consequences of acceptance), buyer’s revocation of acceptance of the goods (exception non-conformity substantially impairs the value of the goods and was difficult to discover a latent defect), consequences of rejection/revocation of acceptance (return, refund, damages), buyer’s obligation to pay)
-words (parol evidence unless typo, establish a defense, interpret a vague or ambiguous term, added to a partially integrated document UNLESS k has a merger clause/4 corners); no later events
