K2 Rules/Proofs Flashcards
Undue Influence rule and proof & factors of improper pers.
Rule = When one party with power over another party (someone with lessened capacity) improperly exerts that power to negotiate an unfair contract
Proof =
- Improper persuasion of a party
- Special relationship (Assenting party is dominated by person persuading)
- Persuasion induces assent
Factors of improper persuasion =
- Discussion unusual or inappropriate time
- Transactions in an unusual place
- Insistent demand of immediacy
- Extreme emphasis on consequences of delay
- Multiple persuaders against single party
- Absence of 3 party advisers
- Statements like no time to consult advisers, etc
Duress Rule/Proof
when a threat is improper
Rule = Threat of force or other unlawful action to induce a party to consent
Rule Proof =
- If a party’s manifestation of assent is induced by an improper threat by the other party
- No reasonable alternative,
When a threat is improper =
- Crime or a tort or the threat itself would be a crime or tort if it resulted in obtaining property
- Criminal prosecution
- Made in bad faith or a breach of the duty of good faith and fair dealing under a contract with the recipient
Mutual Mistake rule/proof
Rule = Belief not in accord with the facts
Rule Proof =
- Both parties share same mistake
- @ the time of formation
- Nature/Subject matter is a basic assumption so fundamental parties did not expressly address, cannot be about value
- Material effect o
- Party does not bear the risk of mistake
a) The risk is allocated to him by agreement of the parties, or
b) He is aware, at the time the contract is made, that he has only limited knowledge with respect to the facts to which the mistake relates but treats his limited knowledge as sufficient, or
c) The risk is allocated to him by the court on the ground that it is reasonable in the circumstances to do so.
Unilateral Mistake Rule/Proof
Rule = Belief not in accord with the facts
Rule Proof =
- Both parties share same mistake
- @ the time of formation
- Nature/Subject matter is a basic assumption so fundamental parties did not expressly address, cannot be about value
- Material effect
- Party does not bear the risk
- Enforcement unconscionable or party knew or caused mistake
Public Policy Rule/Proof
Rule = Contracts that violate PP are voidable
Rule Proof =
- Significant PP
- Enforcement conflict with PP?
- PP concerns outweigh the public interest in enforcing contracts generally
Illegality Rule/Proof
Rule = It is against PP to enforce a contract that violates the law Proof = - Statute that makes K illegal? - SJM of a contract is illegal? - Contract conflict with the statute?
Express Warranty Rule/Proof
Rule = Warranty that addresses the quality & characteristics of a good being sold & arise through words/actions by the seller that req. goods to conform either to the fact, promise, description, model, sample, etc.
Proof =
- Affirmation of fact or promise made by the seller to a buyer relating to goods
- Description of goods
- Any model or sample
Implied Warranty of Merchantability Rule/Proof
Rule = implied as a matter of law that addresses title and the basic quality of goods unless expressly excluded, become a part of any contract for sale of goods
Proof =
- Sale of goods
- Seller is a merchant to that kind of good
- No valid exclusion or modification of I.W.M
Implied Warranty of Merchantability for a P. P Rule/Proof
Rule proof
- Contract sale of goods
- @ time of contract, seller has reason to know of any P.P for which good is required
- Buyer is relying on sellers skill or judgement
- No valid exclusion or modification of this I.W.M
Course of Performance
Rule = manner in which parties began performing the contract in question before a dispute broke out
Course of dealing
Rule = The parties previous transactions with each other
Trade custom
Rule = ways in which a contract term is customarily used in the industry of which both parties are members
Integrated Agreement Rule
A written agreement that represents a final expression of one or more terms of the agreement
Partially integrated agreement Rule
Final expression of terms contained in the agreement but not final as to all terms
Parol Evidence
Any evidence other than the written agreement itself
Ambiguity Rule/Proof
Rule = More than one plausible meaning
- If words are unambiguous then give them their plain meaning - question of law
- If words are ambiguous then EE may be offered to show meaning - then it is a question of fact
PER Common Law Rule
Rule = Bars admission of evidence for review by factfinder of prior or contemporaneous EE offered as a term of a completely integrated agreement
- Completely integrated = No contradictory or consistent terms
- Partially = No contradictory but allows consistent additional terms
PER UCC
- Allows integrations to be supplemented or explained with the course of performance/dealing, and trade usage
- Evidence of consistent additional terms is allowed if not completely integrated
Merger Clause
The written provision which expressly negates collateral or antecedent understandings
Types of Rules of Const.
a) Construe agreement as a whole and give effect to all terms versus effect that makes one part extraneous
b) If clauses conflict, specific governs
c) Exclusion of one is exclusion of others
d) Meanings of words or phrases can be determined by reference to meaning of associate words or phrases
e) Negotiated terms give more weight than standardized terms
f) Handwriting over typed over printed
g) Grammar/Punction rules apply normally
h) Ambiguous terms must be construed against the drafter
Defenses to formation
K are supposed to be voluntarily so when something undercuts that voluntary aspect to assent a K can be voidable.
Ways E.E can/cannot be introduced
- Always permitted to show a defense to formation
- If used to interpret the agreement must determine ambiguous, only allowed if ambiguous
- If being offered as a term then PER analysis
- EE is permitted to show a modification (subsequent change)
- EE is generally permitted to demonstrate trade usage/custom
- EE is permitted to show a condition to formation
Definition of a condition
Triggers to obligations that occur within a contract
Promissory Condition
Party promises a condition will occur, if it does not then there is both a breach of promise and a failure of a condition
Conditional promise
Promise that does not come due until a condition is satisfied
Condition precedent
The event that must occur before the performance of an obligation becomes due
Condition subsequent
Event of occurrence of which discharges the obligation
Constructive conditions & standard of compliance
- subset of implied conditions
- Determine order of performance, timing of promises, etc
- Substantial performance
- If performance req amount of time then it must go first
Concurrernt conditions
- Conditions precedent which are mutually dependent
- Expire eventually
Ways a court can avoid the harsh implications of conditions
- Ambiguity
- modification
- Condition did not reflect a material part of the agreed exchange
- Condition waived by voluntary words or conduct
- Breach
- Forfeiture or disproportionate
+ Look at entent of the forfeiture, importance to the obligor of the risk, and degree which protection will be lost if excused