Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Contracts > MBE > Flashcards

MBE Flashcards

1
Q

When do the rights of a donee beneficiary vest?

A

When the beneficiary materially changes position in justifiable reliance on the promise.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Can personal services contracts be delegated?

A

Not when the person performing has special skill.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What if a party knows about the delegation of a personal services contract and doesn’t object?

A

Party will have waived the nondelegability.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is an accommodation?

A

It is a counteroffer by the seller. It is when the seller includes some conforming and some uncomforming goods along with a note explaining the noncomforming goods.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What if a merchant seller simply shipped noncomforming goods with no note?

A

Acceptance and breach of contract.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What if there is an agreement between merchants and no delivery term?

A

The UCC will “gap fill” with a delivery within a reasonable time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Unilateral offer: what happens once performance has begun?

A

The offer cannot be revoked as to that performer. (woman buying groceries example)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What happens if a contract is written and contains an ambiguity, and one person knows of the ambiguity and the other person does not know about it?

A

The contract will be enforced according to the intent of the party who did NOT know about the ambiguity.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What if neither party knows of the ambiguity when the contract is formed?

A

No contract unless both parties meant the same thing.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Expectation damages:

A

putting the non breaching party in the position he would have been in had the contract been performed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Firm Offer requirements:

A
  1. offer for sale of goods
  2. merchant signs a written offer
  3. offer promises to leave open an offer for a stated time period
    * irrevocable for stated period (max 3 months)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

If there is a valid option contract, will a rejection by an offeree terminate the option?

A

NO. The offer only terminates at the end of the option period regardless of offeree’s conduct. (unless reliance by offeror)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What if there is a valid option contract and the offeree rejects the offer before the end of the option and the offeror detrimentally relies on this rejection?

A

This will extinguish the option.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

When does Art. 2 of the UCC apply?

A

Applies: sale of goods

Does NOT apply: services, real estate, construction contracts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Who is a merchant?

A

One who REGULARLY deals in goods of the kind sold

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Implied contracts

A

Formed by conduct

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Quasi contracts or implied in law contracts

A

NOT contracts at all.

Construed by courts to avoid UNJUST ENRICHMENT

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

When will a contract be unilateral (2 situations)

A
  1. offer UNAMBIGUOUSLY indicates that completion of performance is the only manner of acceptance OR
  2. offer to the public (reward offer)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Creation of a contract: what three elements must be present?

A
  1. mutual assent
  2. consideration
  3. any defenses?
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

When is a contract void? What is the effect of a contract that is void?

A

A void contract is one that is totally WITHOUT ANY LEGAL EFFECT from the beginning.

Ex: an agreement to commit a crime

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What to look for in an offer:

A
  1. intent to enter into a contract
  2. certainty and definiteness
  3. communication of the offer to the offeree
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Offer must be definite: what is the key inquiry?

A

Whether the contract has enough terms to be capable of being enforced.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Standard for requirements contracts

A

good faith - not unreasonably disproportionate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

How can an offer be terminated?

A
  1. lapse of time
  2. offeror revokes either by acting inconsistently with the offer or by expressly revoking
  3. offeree states that he will not accept
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

When does revocation become effective?

A

Upon receipt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

When can an offer not be revoked?

A
  • Reliance by the offeree that is reasonably foreseeable
  • Valid options contract
  • Unilateral contract and person has started performing
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Common law: acceptance with additional terms

A

NO CONTRACT (mirror image rule)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

UCC: acceptance with additional terms when one is a nonmerchant

A

Contract, but additional terms do not become part of it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

UCC: acceptance with additional terms when both are merchants

A

Becomes part of the contract UNLESS

  • material term
  • nonmaterial and merchant objects w/in reasonable time
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

What if there are DIFFERENT terms with the acceptance?

A

Common law: this is a rejection (violates mirror image rule)

UCC: courts are split

  • some courts: treat it like additional terms
  • other courts: conflicting terms “knock out” each other out and UCC fills the gaps
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

When will death not terminate an offer?

A
  • option contract

- part performance of offer to enter into a unilateral contract

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Who can accept an offer?

A

Generally only the person to whom the offer is made.

Exception: an option contract can be assigned

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

General rule: when is acceptance effective?

A

When posted (mailbox rule)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Exceptions to the mailbox rule: what happens if rejection is mailed first, then letter of acceptance and rejection received first?

A

Letter of acceptance is a counteroffer

NO mailbox rule here

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Exceptions to the mailbox rule: what happens if acceptance is mailed first, then rejection is sent and rejection is received first?

A

If offeror relied on letter of rejection before acceptance is received, estoppel may apply.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

When must acceptance be received for an option contract?

A

Acceptance is when received (NO mailbox rule with option contracts)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Elements of consideration

A
  1. promisee must suffer some legal detriment
  2. detriment must induce reliance
  3. the promise must induce the detriment

*bargained for exchange

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Moral obligation

A

Generally not a substitute for consideration.

2 possible exceptions:

  • performed acts at the promisor’s request
  • material benefit rule: promisor received a benefit and then promised to pay for it
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Preexisting duty rule:common law

A

performance of a preexisting duty is NOT consideration

There must be consideration to modify

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

What if a promisor makes a promise and you owe the preexisting duty to a third person?

A

No preexisting duty, the new promise is enforceable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

UCC rule for modifications

A

No consideration is required - good faith is required for modification

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

What happens if a debtor makes a partial payment in exchange for a promise to forgive balance of debt: is there consideration to make this an enforceable promise?

A

If debt is due and undisputed: part payment is NOT consideration

If debt is not yet due OR is disputed: part payment is consideration

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

When can a promise to dismiss a lawsuit or not bring a lawsuit be consideration?

A

When the party giving up the claim believes in GOOD FAITH that it is a valid claim.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

What if debtor owed a debt but it is now barred by statute of frauds, but he again promises to pay?

A

A WRITTEN promise to pay a debt barred by the statute of limitations is enforceable.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

Promissory estoppel elements

A
  1. promise
  2. reliance that is both foreseeable and justifiable
  3. enforcement necessary to avoid injustice
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

Who lacks capacity to contract (3 categories)

A
  1. infants
  2. mental incompetents
  3. intoxicated persons

*other party must have had REASON TO KNOW person was incompetent or intoxicated

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

What types of contracts are within the Statute of Frauds?

A

Marriage: promise in consideration of marriage
Year: can’t be performed within a year
Land contracts: leases or easements over a year, property
Executor promises to pay an obligation
Goods over $500
Surety

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

Modifications: what should you look at to determine whether the modification is within the statute of frauds

A

Look at the modified contract - if the contract as modified, is within the statute of frauds, it must be in writing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

What happens if at common law there is a contract that says all modifications have to be in writing?

A

This won’t be enforced. Modifications at common law can be oral if they are not within statute of frauds.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

UCC: what happens if the contract provides that all modifications must be in writing?

A

Under the UCC, these clauses are effective.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

What contents must be in a contract other than the sale of goods?

A
  1. identify the parties
  2. identify the contract subject matter
  3. contain all essential terms
  4. signed by party to be charged
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

Part performance of an oral agreement to buy real estate

A

Possession + full or part payment

Improvements + possession

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

Sale of goods for $500 or more: what must the contract contain

A
  1. quantity
  2. contract for sale has been made
  3. signed by the party raising defense
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
54
Q

Confirmatory memo: exception to statute of frauds

A

Use when there is an initial oral agreement.

  1. both parties are merchants
  2. writing claims that there is a contract
  3. writing signed and states quantity

ALSO binds recipient BUYER if:
- he has reason to KNOW of the confirmation’s contents AND failure to object in writing within 10 days of receipt

make sure it was sent within a reasonable time after the oral agreement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
55
Q

What if there is part performance of contract for sale of goods?

A

Part performance of a contract for the sale of goods satisfies the statute of frauds to the extent of part performance.
(can’t get the other part that fails statute of frauds)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
56
Q

Exception to statute of frauds: specially manufactured goods

A

If there has been a substantial beginning for specially manufactured goods

57
Q

What if there is an ambiguity that neither party is aware of and they have different definitions of that term?

A

No contract.

58
Q

Mutual mistake of material fact

A

No contract if:

  • both parties are mistaken
  • materially affects the agreed exchange
  • neither party assumed the risk
59
Q

Unilateral mistake: will it allow mistaken party to avoid the contract?

A

NO unless other party knows or had reason to know of the mistake.

60
Q

Undue influence elements

A

unfair persuasion

61
Q

Fraud in the inducement: what happens to the contract?

A

Voidable

62
Q

Fraud in the factum: what happens to the contract

A

Void

63
Q

What does fraud in the inducement mean?

A

It means you understood the nature of the contract but someone lied to get you to sign

64
Q

What does fraud in the factum mean?

A

It means you were actually deceived as to the nature of the document you were signing.

65
Q

What happens if there is an innocent misrepresentation?

A

Even though innocent, you can still void the contract if you reasonably rely on that misrepresentation (must be material)

66
Q

Unconscionability: who decides (judge or jury?)

A

Judge

67
Q

Unconscionability: what should you look for

A
  • oppression

- procedural (gross disparity of bargaining power) and substantive (grossly unfair terms) unconscionability

68
Q

What happens if the contract is illegal?

A

It is void

69
Q

Other sources of contract terms

A
  • custom and usage
  • prior dealings b/w parties
  • UCC terms implied
70
Q

Exceptions to the parol evidence rule

A
  • condition precedent
  • using an earlier agreement to show fraud, duress, mistake
  • subsequent agreements after the contract
71
Q

What is the presumption if the contractual language is unclear regarding the type of delivery?

A

presumption is a shipment contract

72
Q

When does a risk of loss shift from seller to buyer?

A

When the seller completes its delivery obligations

73
Q

Non carrier: seller is a merchant

A

risk of loss shifts when the buyer has possession

74
Q

Non carrier: seller is a non merchant

A

risk of loss shifts when the goods are tendered

75
Q

What if there is a sale on approval (buyer gets goods on trial basis): who bears risk

A

Seller bears risk of loss until the buyer accepts the goods.

76
Q

Express warranties : who can give them

A

any seller

77
Q

What is an express warranty?

A

Promise, description, affirmation of fact

*must be part of the basis of the bargain

78
Q

Implied warranty of merchantability: who gives it? what is it?

A

Seller is a MERCHANT who deals in goods of the kind.

Warranty: goods are fit for ordinary purposes

79
Q

Implied warranty of fitness: who can give it? what is it?

A

Any seller can give this warranty.

Warranty: goods fit for particular purpose

80
Q

What are the elements for an implied warranty of fitness

A
  1. seller must know about the particular purpose and reliance
  2. buyer must have relied on the seller’s expertise
81
Q

Implied warranty of title

A

Seller warrants that he has good title (not stolen)

*no other encumbrances

82
Q

General disclaimers to warranties

A

as is, with all faults

*these are valid

83
Q

Specific disclaimers: how can you disclaim?

A

It must be conspicuous and

Merchantibility: mention merchantibility
Fitness: use specific language which give buyer reason to know

84
Q

What is a “limitation of remedies clause”

A

contract provision that limits or controls the recovery for any breach of warranty

85
Q

When are remedy limitations valid?

A
  1. not unconscionable

2. limited remedy does not fail of its essential purpose

86
Q

UCC: With consumer goods, what happens if personal injury damages are limited?

A

Per se unconscionable

87
Q

What is a condition precedent?

A

Must occur before an absolute duty of performance arises

88
Q

Conditions concurrent

A

Capable of occurring together - parties are bound to perform at the same time

89
Q

Condition subsequent

A

Occurrence of this type of condition cuts off an already existing duty of performance

90
Q

Estoppel/waiver difference

A

Estoppel: statement or conduct by the person prtoected by a condition BEFORE the conditioning event was to occur + change of position

Waiver: statement or conduct made AFTER the conditioning event + NO change of position needed

91
Q

When can seller cure when he fails to provide perfect tender?

A
  1. contractual right to cure
  2. time for performance has not yet expired
  3. in limited situations: seller has option to cure after time for performance has not yet expired
92
Q

When will seller have a chance to cure when time for performance has expired?

A

Whether seller has reasonable grounds for believing improper tender would be acceptable (maybe with a money allowance)
- prior dealings

93
Q

What are installment contracts?

A
  • requires or authorizes delivery in separate lots to be separately accepted
94
Q

When can buyer REJECT an installment?

A

Only where there is substantial impairment in that installment that cannot be cured.

95
Q

When can buyer REJECT the entire installment contract?

A

Only where breach w/ respect to installment impairs the value of the whole contract.

96
Q

When has buyer accepted goods?

A
  1. Reasonable opportunity to inspect + indicates goods conform and will keep them OR
  2. Fails to make an effective rejection OR
  3. Does any act inconsistent with seller’s ownership
97
Q

What if a buyer pays before she has a chance to inspect, when is there acceptance?

A

No acceptance until she has a reasonable opportunity to inspect.

98
Q

When can you later revoke your acceptance of goods?

A
  1. noncomformity substantially impairs the value of the goods
  2. there are excusable grounds for revocation (reasonable reliance)
  3. revocation within a reasonable time after discovery and before any substantial change in the condition of the goods

Ex: sleeping bag example

99
Q

Buyer’s payment obligation

A

If no agreement for credit – buyer can pay by check, but if seller refuses and demands cash, buyer must be given reasonable amount of time to get it

100
Q

What happens if there is a defective good shipment, who bears risk?

A

Seller bears risk the whole time.

101
Q

What happens if a seller has identified conforming goods to the contract and the buyer breaches: who does the risk of loss fall to? (before shipment they are destroyed?)

A

Buyer bears risk to the extent of any deficiency in the seller’s insurance coverage

102
Q

Common law: what is required

A

Substantial performance

103
Q

At common law, what excuses the other party’s performance?

A

Material breach

104
Q

What if a contract contains an express condition?

A

Strict compliance with the express condition is required or else other party is excused from performing.

but note: if there is disproportionate forfeiture it may be excused

105
Q

Anticipatory repudiation

A

indication of an unwillingness to perform obligations under the contract before performance is due

106
Q

What happens if a person anticipatory repudiates because he thinks the other party has materially breached?

A

Wrongful repudiation and other side can sue for damages

107
Q

What happens if a party repudiates and then later changes its mind and says it will perform?

A

So long as the other party hasn’t relied on the repudiation, the repudiation may be retracted.

108
Q

Rescission: effect

A

avoiding a contract

*some performance must remain on both sides in order to rescind

109
Q

Is an oral rescission okay if the original contract was required to be in writing?

A

Generally, oral rescission is okay except:

  • rescission involves transfer of land
  • contract says it must be in writing
110
Q

What happens if the subject matter of the contract is destroyed?

A

Excuses performance

111
Q

Frustration of purpose elements

A
  1. post-contract occurrence
  2. not reasonably foreseeable at the time that the contract was entered into
  3. totally or nearly totally destroys the purpose of the contract
  4. purpose of the contract WAS KNOWN to both parties at the time of the contract
112
Q

Liquidated damages: what is it?

A

When contract stipulates damages

113
Q

Test for validity of liquidated damages

A
  1. at the time the contract was made, it would be difficult to estimate damages
    AND
  2. at the time of contract, it was a reasonable forecast of possible damages
114
Q

What damages are usually recovered in contract cases?

A

expectation damages

115
Q

What other damages can be recovered?

A
  1. incidental damages
  2. foreseeable consequential damages
  3. minus avoidable damages (duty to mitigate)
  4. minus speculative damages
116
Q

Incidental damages: what are they?

A

Costs incurred in a reasonable effort to avoid loss resulting from the breach

117
Q

Consequential damages: what are they?

A

Injury to person or property and lost profits resulting from the breach

118
Q

What if expectation damages are too speculative?

A

Reliance damages

119
Q

equitable defenses in contract cases

A
  1. unclean hands
  2. lache
  3. impossibility and hardship
120
Q

Reformation

A

changing the contract to reflect the original intent of the parties

Ex: improper recording

121
Q

What if adequate assurances are not received after party has requested them?

A

If such assurances are not received within a reasonable time not exceeding 30 days, it can be treated as repudiation of the contract.

122
Q

When can a seller reclaim goods if the buyer is insolvent?

A
  1. credit sale
  2. buyer is insolvent WHEN he receives goods
  3. demand for return is made w/in 10 days
123
Q

When is breach of warranty available (what type of sale?)

A

Must be sale of goods

Construction contracts: at common law there are NO implied warranties

124
Q

Who do warranties run to? (Who can assert a breach of warranty claim?)

A

Generally only people who are in privity of contract (or their family members or invitees)

Warranty liability may be extended if the defect in goods results in personal injury, but NOT purely economic injury.

125
Q

Does the parol evidence rule apply when a plaintiff is trying to prove fraud?

A

No. Extrinsic evidence can be entered into to attack the agreement’s validity.

126
Q

Covenant not to compete

A
  1. reasonable in length
  2. reasonable in geographic scope
  3. can’t harm the public
  4. reasonably necessary to protect buyer/employer’s interest

*Courts can blue pencil overly broad provisions and keep the rest of the contract intact.

127
Q

When can you recover the goods when the other party breaches?

A

If the goods have been identified as for that contract (example: planting crops that are identified as for P’s contract)

128
Q

Damages if a D anticipatory breaches?

A

cancel the contract and cover by buying from another person and getting the difference in the price you have to pay OR recover damages for nondelivery by suing for the market price - the contract price when buyer learned of the breach

129
Q

Who does a merchant include?

A
  1. people who deal in goods of the kind sold OR
  2. people who otherwise by their occupations hold themselves out as having knowledge or skill peculiar to the practices or goods involved in the transaction

*as distinguished from a casual seller

130
Q

What happens if there is a contract that falls within the statute of frauds but wasn’t in writing: but there is part performance?

A

Only full performance would take the contract out of the Statute.

131
Q

Who can a creditor beneficiary sue?

A

Creditor beneficiary can sue the promisee on the existing obligation b/w them OR she may sue the promisor for failing to render performance.

(can only get satisfaction from one)

132
Q

Who can a donee beneficiary sue?

A

Donee beneficiary CANNOT sue promisee unless donee has grounds for a detrimental reliance remedy.

Donee can sue promisor to enforce the contract.

133
Q

What happens if a contract provision prohibits assignments, but an assignment is made?

A

Other party can sue for damages, but this language does not bar assignments.

134
Q

What happens if a contract provision says any assignment will be void?

A

Other party can stop assignment - the “void” language bars assignments.

135
Q

What is needed to have an effective assignment?

A

No writing is required

Need INTENT to immediately and completely transfer her rights.

136
Q

Assignment vs. delegation: who is liable?

A

Assignor will no longer be liable - gave up all rights

Delegation: delegator will still be liable if delegate doesn’t perform his duties

137
Q

When an assignor has assigned FOR VALUE, what does he warrant?

A
  1. he has not made a prior assignment of the same right
  2. the rights exists and is not subject to any undisclosed defenses
  3. assignor will do NOTHING to interfere with the assigned right
138
Q

What happens if the first assignment is irrevocable but assignor tries to assign again?

A

First assignment will usually prevail (except assignee who takes for value without notice of previous assignment)

139
Q

Commercial impracticability: elements

A
  1. Becomes much more difficult than expected due to the occurrence of a circumstance, the nonoccurrence of which was a basic assumption of the parties
  2. Both parties assumed the circumstance would not occur and the occurrence of the circumstance would have a MATERIAL EFFECT on a party’s ability to perform

Contracts (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions