K Flashcards
Does SOF apply?
A entered into an employment K “for A’s lifetime”
NO
SOF requires a K that cannot be performed w/in 1 year to be in writing
Here, an agreement for lifetime employment is not subject to SOF bc it could be performed in a year if A dies or retires
Essential K Terms
CL v. UCC
CL: parties, subject matter, price, quantity
UCC: parties, subject matter, quantity
Implied in Fact K
- Party’s assent
- to enter K
- Is inferred
- From party’s conduct or failure to act
Implied in fact can be established by conduct alone!
When is Reform a remedy
Court reform a written K that fails to capture parties’ initial intent due to mistake by both parties when:
- parties had prior agreement (oral or written)
- Parties put that agreement into writing; and
- Diff btw K1 and written K
Unilateral Offer
Accepted only by completing performance
EX: reward offer, contest prize
Bilateral Offer
Offer presumed to be bilateral
Accepted by:
1. return promise; or
2. starting performance –> operates as implied promise to render complete performance
Mutual Mistake
Defense to Formation
Both parties are mistaken as to material term of K
K can be voidable if:
1. mistake relates to basic assumption
2. mistake materially affects K
3. adversely affected party did not bear the risk
How to bear risk?
Party can assume a risk of a K by proceeding with conscious ignorance, aka knowing their knowledge is limited and not trying to change that
Mutual Mistake
Defense to Formation
Both parties are mistaken as to material term of K
K can be voidable if:
1. mistake relates to basic assumption
2. mistake materially affects K
3. adversely affected party did not bear the risk
Condition Precedent
Uncertain future event that, if it occurs, CREATES party’s obligation to perform
ie, A agrees to hire B, if B graduates college
Look for: “on condition that” “ provided that”
Condition Subsequent
Uncertain future event, that if it occurs, EXCUSES party’s existing obligation to perform
ie, B agrees to work for C until B graduates college
Expectation Damages
$ arising naturally from breach of K
Goal: put parties in position as if K happened
Measure: (K price) - (market price or cost of substitute performance)
Construction K: (K price) - (cost of construction by another builder)
TIP: if you have a contractor & subcontractor, and subcontractor backs out, look for…
Promissory Estoppel – Contractor’s detrimental reliance
C can recover expectation damages bc that was an irrevocable offer for a reasonable time
Reliance Damages
Goal: put party in same posititon as if K never happened
Measured: out of pocket expenses incurred
cannot recover both reliance & expectation
Promissory Estoppel –Offer
offer is irrevocable for a reasonbale period of time if:
- offeror reasonably expected to induce reliance of offeree
- offeree reasonably relied on the offer
- reliance caused offeree to suffer substantial detriment
Misrepresentation
Untrue assertion of fact that makes a K voidable and rescindable by the adversely affected party when all elements met:
- misrep was fraudulent or material
- misrep induced assent to K
- OP justifiably relied on the misrep
Includes nondisclosure of known fact
Nondisclosure of known fact is treated as
untrue assertion of fact, aka misrepresentation if party knows that disclosure is necessary to prevent previous assertion from being a misrep
Anticipatory Repudiation
- Contracting party
- Clearly and unequivocally 3. communicates (via words or conduct) 3. To OP
- That it will not perform
Note: mere insecurity ≠ AR
Do K modifications need both parties consent?
YES, true for CL and UCC
Promise to surrender a claim or defense is valid when?
Valid consideration if:
- Claim/defense is valid or subject to a good-faith dispute; or
- Surrendering party honestly believes that the claim/defense may be valid.
When are goods identified?
Per UCC, identified when:
- stated in K
- absence of explicit mention, when they are marked/shipped/designated by the seller for buyer
How will UCC supply missing terms? Favor one party over the other?
NO, it will find a term that is reasonable to both parties
will not construe term negatively against drafter
FRIM SCAN
Ways to discharge K obligations
- Full performance
- Impossibility/ Impracticability/ Frustration of Purpose
- Release (writing only)
- Mutual Rescission
- Substituted K
- Contract or Covenant not to sue
- Accord & Satisfaction
- Novation
Ways to discharge K obligations –8 types
FIRM SCAN
- Full performance
- Impossibility/ Impracticability/ Frustration of Purpose
- Release (writing only)
- Mutual Rescission
- Substituted K
- Contract or Covenant not to sue
- Accord & Satisfaction
- Novation
