Formation of Contracts - Implied in Fact and Quasi Contracts & Warranties in Sale of Goods

Question 1

Implied in Fact Contract

Answer 1

When conduct indicates assent or agreement

Question 2

Implied in Law (Quasi) Contract

Answer 2

Where a plaintiff confers a benefit on a defendant and the plaintiff has a reasonable expectation of compensation

• The court implies K to prevent unjust enrichment

A court may allow restitutionary recovery if:

1. P conferrred measurable benefit on the D
2. P acted without gratuitous intent, AND
3. It would be unfair to let the D keep the benefit b/c
   
   1. The D had an opp. to decline the benefit but knowingly accepted it OR
   2. The plaintiff had a reas. excuse for not giving the D such opp.

Question 3

Sale of Goods Warranties

Answer 3

UCC Art. 2 allows for:

• express warranties
• imp. war. of merchantability AND
• fitness for a particular purp.

Question 4

What are the default UCC warranties ?

Answer 4

1. Warranty of Title
2. Warranty of Merchantability
3. Warranty of fitness for a particular purpose

Question 5

What is the warranty of title?

Answer 5

1. Good title to the goods
2. The rightful transf. of the goods
3. No liens are attached to the goods

Question 6

How do you modify the warranty of title?

Answer 6

Warranty can be excluded or modified by specific lang. or circ. showing the absence of good title

Question 7

What is an Express Warranty ?

Answer 7

1. Any promise, affirmation, description or sample/model
2. that is part of the basis of the bargain
3. unless it is merely the sellers opinion or commondation of the value of the goods

Question 8

Express Warranty Disclaimers

Answer 8

Disclaimers that unreas. negate or limit express warranties are inoperative

• Disclaimers that grossly conflict w/ the exp. war. such as “all warranties, express or implied, are disclaimed” are ignored

Question 9

What is the implied warranty of Merchantability?

Answer 9

Guarantees that the goods are fit for the ord. purposes for which they would be used

Question 10

When does the warranty of Merchantability apply?

Answer 10

When the seller is a merchant

Question 11

How can the warranty of merchantability be disclaimed?

Answer 11

• By use of lang. that is reas. understood to exclude imp. warranties
  
  • “As is”, “with all faults”
• MUST use the word “merchantability” (can be oral)
• Must be conspicuous if in writing (bold font)

Question 12

When does the warranty for fitness for a particular purpose apply?

Answer 12

Only applies where, at the time of contracting, the seller has good reason to know (from any source):

1. The Buyer’s particular purpose for which the goods are required AND
2. That the buyer is relying on the seller’s skill to select reas. goods for that purpose

Seller does NOT need to be a merchant

Question 13

How do you disclaim the warranty of fitness?

Answer 13

By general language (including by the use of “as is”)

• BUT disclaimer must be inwriting and conspicuous