Flash Cards for Bar Courses - Contracts

Question 1

Damages

Answer 1

A damaged party is entitled to damages that will place them in the position they would have been in but for the breaching party’s breach. However, the non-breaching party has a duty to mitigate loss. The difference in the actual K offer and the offer recieved to mitigate is the amt of damages recoverable

Question 2

Illusory Promise

Answer 2

a promise that is not sufficient consideration to support a counter promise. Is a statemetn that appears to be promising something but does not actually commit the promisor to anything at all. (ex. promisor reserves the. right to change his mind.) An illusory promise may become adequate if the time during which the promisor could choose alternative performances has passed.

Question 3

Quasi K

Answer 3

name given when unenforceable contract results in unjust enrichment.

Question 4

Bilateral K

Answer 4

K that is one consisting of the exchange of mutual promises; a promise for a promise.

Can be accepted in any reasonable way.

Question 5

Unilateral K

Answer 5

Offeror requests performance rather than a promise.

Offeror promises to pay upon completion of the requested act.

Once the act is completed, K is formed.

Unilateral K is irrevocable once performance has begun.

Question 6

Merchant

Answer 6

one who regularly deals in goods of the kind sold or who otherwise by their profession holds themselves out as having special knowledge or skills as to the practices or goods involved.

Question 7

Offer

Answer 7

creates a reasonable expectation in the offeree that the offeror is willing to enter into a K on the basis of the offered terms.

Question 8

Advertisements

Answer 8

Are mere invitations for offers; unless

promise was specific and the offeree was identified.

Question 9

Offer Requirements: Land or Real Property

Answer 9

Must:
-Identify land with some particularity
-price terms

Question 10

Offer Requirements: Sale of Goods

Answer 10

Must contain QUANTITY

Question 11

Offer Requirements: Other SERVICES

Answer 11

Must contain NATURE OF WORK TO BE PERFORMED.

Question 12

UCC Missing Terms (Gap fillers)

Answer 12

Price- reasonably price at the time of delivery

Time of shipment/delivery: Within a reasonable time

Delivery: seller’s place of business

Time for payment: time and place at which the buyer is to receive the goods.

Question 13

Rejection of option

Answer 13

Offeree is still free to accept the option within the option period if the offeree has rejected the option. HOWEVER, offeree cannot accept the option if the offeror has detrimentially relied on the offeree’s rejection

Question 14

Merchant’s Firm offer

Answer 14

1) Merchant
2) signed writing
3) assurance that it will be held open w/o consideration

Must be for a reasonable time no more than 3 months.

Question 15

Detrimental Relaince

Answer 15

When the offeror could reasonably expect that the offeree would rely to their detriment on the offer, the offer will be irrevocable as an option K for a reasonable length of time.

Question 16

Silence as acceptance

Answer 16

-can be accepted b/c of prior dealings or trade practices
-or if the recipient of services knows or should have known that the services were being rendered with the expectation of compensation, and by word could have prevented the mistake.

Question 17

UCC acceptance (Shipment)

Answer 17

Acceptance by
-promise to ship OR
-prompt shipment

Question 18

UCC Battle of the Forms

Answer 18

IF NOT MERCHANTS - additional terms are considered to be mere proposals and do not become part of K unless the offeror expressly agrees,

IF MERCHANTS: additional terms become part of K unless:
-materially altrer the original terms
-offer expressly limits acceptance to the terms of the offer, OR
-offeror objects to the terms within a reasonable time

Question 19

Mailbox Rule (When rejection is also sent)

Answer 19

Rejection 1st: whichever arrives first
Acceptance then rejection: acceptance is effective, unless rejection arrives first and the offeror detrimentally relies on it.

Question 20

Consideration

Answer 20

a bargained for exchange between parties of legal value.

Question 21

When is a pre-existing duty considered consideration?

Answer 21

New or different consideration
to raatify a voidable obligation
preexisting dut is owed to a 3rd person
honest dispute
Unforeseen circumstances and the modification is fair and equitable.
GOOD FAITH FOR UCC

Question 22

K Modifications

Answer 22

Tranditionally- cannot modify w/o new consideration

Modern view (CL): can modify if
1) mod is due to unforeseen circumstances
2) and the mod is fair and equitable.

UCC
Can modify K if there is good faith by both parties

Question 23

Promissory Estoppel & Detrimental Reliance

Answer 23

1) Promisor should reasonably expect to induce action or forbearance and
2) such action or forbearance is in fact induced.

2nd restatement provides: remedy may be limited as justice requires

Question 24

Defenses based on incapacity

Answer 24

-Minors
-Mental Incapacity
-Intoxicated persons: voidable if other party had reason to know of the intoxication
- Duress & Undue Influence
1) The party threatens to commit a wrongful act that would threaten the other party’s property or finance
2) undue susceptibility to pressure one by party and excessive pressure by that party.

• Mistake
  -Misrepresentation
  -illegality
  -unconscionability

Question 25

Mistake

Answer 25

Mutual: can be voidable
Unilateral: Does not prevent K formation UNLESS the nonmistaken party knew or had reason to know of the mistake made by the other party

Question 26

K Modification Oral

Answer 26

CL: Even if written K provides that it may be modded only by wriitng, the parties can orally modfify K

UCC: if K says only written, then only written mods.

HOWEVER, if the parties agree to modify orally, then OK

Question 27

When Real estate K is excused from SOF

Answer 27

1. payment
2. possession
3. valuable improvements to the land

NEED AT LEAST 2 OF 3

Question 28

Merchants Confirmatory Memo

Answer 28

SOF req met if merchant sends written confirmation of the understanding
1. they have reason to know of the memo’s contents
2. they do not object to it in writing within 10 days of receipt.

Question 29

Exceptions to Parol Evidence

Answer 29

-Formation Defects
-Conditions precedent to effectiveness
-Interpretation
-showing of true consideration
-Reformation
-Subsequent Modifications
-Additional terms under Art. 2

Question 30

Disclaimer of Warranties

Answer 30

Warranty of merchantability: Must mention merchantability and IF written, MUST BE CONSPICUOUS

Warranty for fitness of a particular purpose: MUST BE IN WRITING AND CONSPICUOUS

Cannot disclaim express warranties – non merchants cannot be liable for the breach of a warranty

Question 31

Risk of Loss

Answer 31

Noncarrier:
Seller is a:
Merchant: risk of loss passes on PHYSICAL POSSESSION
Nonmerchant: Passes on tender of delivery

Carrier:
Shipment K: risk of loss passes to the buyer when the goods are delivered to the carrier

Destination K: risk of loss passes to buyer when the goods are tendered to the buyer at the destination; i.e. FOB & FAS

Question 32

Anticipatory Repudiation

Answer 32

4 options

-Sue immediately
-suspend performance and wait to sue
-treat the K as discharged-
-urge promisor to perform

Question 33

Divisible K

Answer 33

-performance of each party is divided into 2 or more parts under the K

-number of parts due form each party is the same

-performance of each part by one party is agreed on as the equivalent of the corresponding part from the other party

Question 34

Accord

Answer 34

is an agreement in which one party to an existing K agrees to accept, in lieu of the performance that they are supposed to receive form the other party, some other, different future, performance.

Question 35

Novation

Answer 35

1) a previous valid K
2)an agreement among all parties, including the new party to the new K
3) the immediate extinguishment of contractual dutioes as between the og contracting parties,
4) a valid and enforceable new K`

Question 36

Impracticability

Answer 36

1- extreme and unreasonable
2) its nonoccurrence was a basic assumption of the parties

Question 37

Discharge by frustration of Purpose

Answer 37

-supervening act
-parties did not reasonably foresee
-the purpose of the K has been detroyed by the act or event
-the purpose of the K was known by both parties at the time of makin the contract

Question 38

Liquidated Damages

Answer 38

Damages must be difficult to estimate and the amount agreed on is a reasonable forecast of compensatory damages in case of breach

Question 39

When do a third party’s rights vest?

Answer 39

1) manifest assent to a promise in the manner requested by the parties
2) 3rd party brings a suit to enforce the promise
3) when they materially change position in justifiable reliance on the promise

Question 40

Rule for Parol Evidence

Answer 40

Extrinsic evidence regarding any oral agreements from before the contract was signed will not be considered if it directly contracdicts the terms of the contract.

Fully integrated = extrinisic evidence only to help clarify an ambigious term

Partiall integrated = extrinisc evidence can be offrered to prove consistent or supplementary terms as long as the terms do not contradict the express terms of the contract.

Question 41

Non compete requriements

Answer 41

must be for a reasonable period and reasonably bounded geographically.