K

Question 1

Essay Outline

Answer 1

1. Governing Law
2. Formation of a K
3. SOF
4. Type of K
5. Terms of a K
6. Breach
7. Defenses
8. Damages

Question 2

Offer

Answer 2

manifestation of intent to enter into an agreement

Question 3

Acceptance

Answer 3

assenting to the terms of the offer.
- Common law: mirror image rule ( To form a binding K acceptance should generally be relayed in the manner authorized requested or reasonably expected by offeror)

• UCC: adding or changing a term does not prevent acceptance (meaning included in K) if
  
  • both merchants, no material change and no objection within a reasonable time

GR: acceptance is effective when mailed (mailbox rule)

Question 4

Consideration

Answer 4

a bargained for legal detriment/benefit

• it can be a promise for a promise
• past consideration is not consideration
• adequacy of consideration irrelevant

Question 5

Divisible/Installment K

Answer 5

A K can be separated into segments for which separate performance obligations exists for each segment

Question 6

Promissory Estoppel

Answer 6

1. A promise
2. that promisor reasonably belies would result in other party’s reliance
3. other party did in fact rely on
4. that party suffered a detriment due to their detrimental reliance

Promissory Estoppel is an equitable remedy to prevent another party’s unjust enrichment. The remedy is restitution which places the party who relied back into place would have been before reliance

Question 7

Option K

Answer 7

A promise to keep an offer open for a period of time. MUST GIVE CONSIDERATION

Question 8

Firm Offer

Answer 8

UCC term for an option K except its for the sale of goods, between 2 merchants, a signed writing and irrevocable for up to 3 months

Question 9

K Modification

Answer 9

Common Law: new consideration required on both sides
UCC: consideration not required just need good faith. Meaning considered fair

If SOF is applicable any modification must also satisfy the SOF

Question 10

SOF Writing

Answer 10

MYLEGS (K in consideration of marriage, K which cannot be completed in 1 yr or less, land sale, promises by executor of an estate, sale of goods for $500 or more, suretyship, a promise to answer the debt of another)
Must contain
1. Names of parties
2. signature of parties to be charged
3. transaction subject matter
4. quantity
5. Price

FL adds, healthcare guarantees, debt barred by SOL, newspaper subscriptions, home solicitations sales, home improvement K’s and credit agreements

Question 11

Parol Evidence

Answer 11

Keeps out evidence of prior or contemporaneous agreements that contradicts a later final written agreement

Question 12

Condition Precedent

Answer 12

One that must occur or fail to occur before an absolute duty of immediate performance arise in the other party

Question 13

Lack of Capacity

Answer 13

GR: the law generally deems a minor as lacking the capacity to enter into a valid K
E: to protect the minor the law states that the K can be voidable by the minor. However the minor can elect to enforce the K

Question 14

Delegation

Answer 14

GR: all contractual duties may be delegated to a TP
E: duties involving special skill may not be delegated. This applies even if the delegate has a greater skill than delegator. The obligee is not required to accept performance from the delgagete of nondelegable duties

Question 15

Mutual Mistake

Answer 15

no meeting of the minds. There is a mutual misunderstanding. Entitled to recession

There is a mistake in the basic assumption upon which the K is premised

Question 16

Unilateral Mistake

Answer 16

1. factual mistake at formation of the K
2. mistake concerns a material aspect of K
3. mistaken party relied on mistake
4. non-mistaken party KNEW OR HAD REASON TO KNOW of others mistake but did nothing

Question 17

Misrepresentation

Answer 17

occurs when first party

• makes a statement involving a material fact to a 2nd party
• knowing the statement is false
• intending the 2nd party rely upon this statement
• 2nd party relies on false statement
• 2nd party reliance is justified and
• damages result from reliance on false statement

Question 18

Anticipatory Repudiation

Answer 18

An early statement of termination that a party will not perform their obligation under the K

when a party fails to send adequate assurances( a party with reasonable grounds for being insecure about the other party’s performance may in writing require adequate assurances that the other party will perform in accordance with the K) within 30 days the other party may considered K repudiated

Question 19

material breach

Answer 19

a failure to perform a duty the contract was created for such that it changes the economic risks of the parties

Question 20

Impracticability/impossibility

Answer 20

a defense to breach by not performing on the basis of an unforeseen change in circumstances such as an event that renders a party’s performance difficult.

Common law: impossibility (never going to happen)
UCC: Impracticability (think more can still happen usually involves more money)

Price increases are usually foreseeable so cannot generally use that as a defense

Question 21

Unconscionability

Answer 21

unfair surprise and oppressive terms that render a K unreasonable. Tested at the time the agreement was made

Can include a K that appears to be sufficiently one-sided

Question 22

Specially manufactured goods exception to SOF

Answer 22

Need all 3 in FL

1. goods specially manufactured for buyer
2. seller started work on goods or entered into a commitment by TP
3. Goods not sellable in sellers ordinary course of business

Question 23

undue influence

Answer 23

inducing someone on their own free will

Question 24

Duress

Answer 24

violence or threat of violence

Question 25

Merchant Confimatory Memo

Answer 25

one party can use its own signed writing to satisfy the SOF against another if - both parties are merchants - writing claims agreement and has quantity - no written objection within 10 days - think like a sales receipt

Question 26

Damages

Answer 26

Non Breaching Party 1. Expectation Damages- put injured party in as good as a position as full performance to compensate for lost expectation 2. Consequential- foreseeable at time enter into K and mitigate (mitigate losses) 3. Incidental- nominal expenses associated with breach 4. mitigation Breaching Party 1. Restitution- prevents breaching party from unjust enrichment 2. consequential 3. incidental 4. Promissory estoppel/detrimental reliance Specific Performance: when money damages are inadequate. Only for unique skill or property Liquidated: an amount that parties stipulate to in an agreement to pay upon an occurrence of an event such as a breach. Will be enforceable as long as reasonable under the circumstances. Punitive- governed by FL state usually not applicable in K law

Question 27

Atty Fees

Answer 27

American Rule: each side pays for own fees unless a K or statute provides otherwise FL: does have a statute allowing recovery of expenses and fees to a prevailing party if the other party acted in bad faith about their litigation

Question 28

TP Beneficiary

Answer 28

2 ppl enter into a K intending to benefit a TP 1. Intended: usually named in K, TP has rights under the K In order to have rights, they must VEST. To vest 1. aware of rights 2. materially alter position based on supposed rights or 3. commence suit 2. Incidental: no rights under the K A TP intended beneficiary may enforce promise even when promise does not specifically name/identify a specific beneficiary as long as it identifies a beneficiary class

Question 29

Breach

Answer 29

A breach of K occurs when a party fails to perform a contractual duty as required.

Question 30

Restitution

Answer 30

1. P conferred a benefit 2. Benefit not officious (volunteering ones services) or gratuitous 3. D could reject but did not Buzz word " value of services performed" not entitled to K price

Question 31

Perfect Tender

Answer 31

a seller must deliver perfect goods in the right place at the right time. If tender is not 100% perfect buyer has the right to reject the goods -Option to cure= a seller who fails to make perfect tender may have an option to cure if time has not expired or if time has expired there are reasonable grounds

Question 32

Assignment

Answer 32

Unless a K includes an explicit provision prohibiting assignment the K may be assigned and the assignment may be upheld A promisor is only obligated to render performance to assignee if promisor possess KNOWLEDGE of assignment generally for an assignee to take on assignor's liability the liability must be specifically stated. Most provisions against assignment are unenforceable. Thus even when a provision against assignment exists the promisor still must perform

Question 33

Requirements K

Answer 33

A requirements contract is a contract in which one party agrees to supply as much of a good or service as is required by the other party, and in exchange the other party expressly or implicitly promises that it will obtain its goods or services exclusively from the first party. A party may not demand any quantity that is unreasonably disproportionate to any normal or comparable prior requirements.

Question 34

Breach of K

Answer 34

A breach happens when a party does not receive the substantial benefit of the parties bargain

Question 35

Validity of a K

Answer 35

- Common law: need certain material terms such as party names, signature of party to be charged, price and quantity - UCC: gap fillers for price - UCC requires quantity of terms. The requirements K is valid to quantity terms

Question 36

unilateral K

Answer 36

an agreement where offeror promise to pay after the occurrence of a specified act

Question 37

bilateral K

Answer 37

both parties have an obligation to perform under the K

Question 38

Advertisements

Answer 38

not an offer, a mere invitation to deal E: when the invitation is specific and there is quantity

Question 39

Rejection of an Offer

Answer 39

generally occurs when the offeree receives notice of rejection or termination.

Question 40

Part Performance Exception to SOF

Answer 40

1. need payment 2. possession 3. substantial improvements

Question 41

Prompt Shipment

Answer 41

Under UCC a seller may accept an offer that seeks prompt shipment of goods by promptly shipping them - shipment of non-conforming goods is acceptance and breach - shipment of non-conforming goods with a reasonable notice of accommodation constitutes a counter offer. The buyer may reject or accept the counter offer

Question 42

Rescission

Answer 42

Restores parties to pretransaction/precontractual position innocent non-disclosure or misrepresentation of a material term give rise to rescission if all elements met for unilateral mistake, party may be entitled to rescission