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MBE > MBE Contracts > Flashcards

MBE Contracts Flashcards

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1
Q

MBE

An offer is

A

Offer refers to a promise that one party makes in exchange for another party’s performance

Mutual assent = meeting of the minds

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2
Q

MBE

Offer is: revocable v. rejectable

A

Revocable: by the person that made it

Rejectable - by the person who recieved the offer.

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3
Q

MBE

Un-revocable offers

A

Option Contract: have the option to keep it open for certain amount of time and for extra consideration. (Non-Merchants)

Firm Offer:
1) Between merchants and
2) In writing (if not, it’s revocable) and
3) 3 months max – unless stated in offer.

After time expires, offer does not expire, just becomes revocable.

Unilateral Contract: a promise in exchange for performance - 1 way promise.

Ex. Promise to paint house for $100.
* Once performance starts, cannot revoke.
* $$ is not owed until the work is complete.

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4
Q

MBE

Types of revocation

A

Direct: effective when other party is notified.

Indirect: effective when other party learns that deal is no longer available.

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5
Q

MBE

Acceptance

A

manifestation of intent to accept an offer

Was to accept: satisfy the terms of the agreement

Can be given:
1. verbally
2. in writing
3. by action (implied)

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6
Q

MBE

Mailbox Rule

A

Acceptance: effective when mail is sent.

Rejection: effective when mail is received.

Exception: if a rejection and an acceptance is sent - whichever arrives first.

Option contracts - when recieved.

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7
Q

MBE

Consideration

A

Bargain for exchange

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8
Q

MBE

Types of consideration

A

Gifts: promise to give a gift is not enforceable consideration UNLESS they give the gift. Then cant take it back.

Past/Moral deeds: Did a good deed and someone offered you consideration/compensation.

Not enforceable if given after the deed – enforceable if given before

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9
Q

MBE

Third party beneficiary

A

Two people make a contract and someone else benefits

Types:
1. intended
2. incidental

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10
Q

MBE

Intended Beneficiary

A
  • Parties had the intent to benefit them.
  • Beneficiary may have rights against other parties but only if rights have vested.
  • Parties can change beneficiary before the rights vest.
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11
Q

MBE

Incidental Beneficiary

A
  • No intent to benefit them – no rights against the other parties.
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12
Q

MBE

Baneficiary: Vesting of rights

A
  • Rights only vest when:
    1) The beneficiary is notified of the right or
    2) Beneficiary learns of intent and relies on it.
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13
Q

MBE

Assignment

A

One party ASSIGNS away their rights in the contract.

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14
Q

MBE

Delegation

A

One party DELEGATES their duty under the contract.

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15
Q

MBE

Rule: Assignment and Delegations

A

Parties can freely assign and delegate their duties without any notice or consent.
- Even if the contract prohibits assignments/delegations, can still transfer but must pay damages.
- If contract says “no delegation” then cannot transfer.
- If contract says “void if transfer” then cannot transfer.

If the new party breaches, the non-breaching party can sue either one or both UNLESS THERE IS A NOVATION.

  • If assigned or delegated: new party cannot alter the previous contract terms.

Exception
- Cannot delegate or assign if the nature of the agreement is unique.
Ex. I am the only one in the community that can shave a plant into a heart. Can’t even transfer it to someone with same skill.

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16
Q

MBE

Statute of Frauds: MY LEGS

A

Marriage.
Year – all contracts that can’t be performed in less than 1 year.
Land.
Executor of estate.
Guarantor – debt of another person.
Sale - $500 or more.

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17
Q

MBE

Statute of Frauds: Exceptions

A

Partial performance.

  1. Land:
    when you pay portion of price and (1) take procession or (2) Improvements.
  2. Goods – (1) part delivery or (2) part payment.
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18
Q

MBE

Parole Evidence: Types

A

Final Integration:
Must have language that stated that its final – a merger clause.

Ex. “Final agreement & shall not be modified.” Parole evidence NOT admissible UNLESS it is to clear up an ambiguous term. Can’t be admitted to change anything.

Partial Integration:
If it does not say the contract is final – can assume it is partial.

Parole evidence IS admissible – any information can come but CANNOT contradict or materially alter a term.

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19
Q

MBE

Parole Evidence: always admitted

A

Parole evidence is always coming in when:
1. To prevent fraud/duress or
2. Show existence of a condition or
3. Anything that shows custom (how they’ve always done business)
4. Anything that shows trade. (what happens in the industry)

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20
Q

MBE

Conditions

A

Condition Precedent = before the contract.

Condition Subsequent = after the contract.

Condition Concurrent = at the time of the contract.

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21
Q

MBE

Legal remedies ($$$)

A

Expectation Damages
- Non breaching party put in the position they’d be in if contract had been performed.

Liquidated Damages
- Clause must be in the contract.
- Pre-determined amount of damages when the contract is entered in case of any breach.
- Usually done like this if damages would be to difficult to calculate after breach.

Enforceable as long as they are:
1) reasonable and
2) Not acting as a penalty/punishment.

10% or less is usually reasonable – look for down payment/deposits or late fines or performance.

22
Q

MBE

Equitable Remedies: (no adequate remedy at law)

A

Specific Performance
- Someone has to perform – contract is UNIQUE.
Ex. Land.

Injunction
- Stop someone from performing in order to prevent irreparable harm.

Recission
- To put parties in the position prior to the contract Usually used for mistake or misrepresentation.
- Court will grant if there was no meeting of the minds.

23
Q

MBE

Modification

A

Common Law
- Only for services or land.
- Additional consideration needed.

UCC
- Only for the sale of goods.
- No extra consideration needed – only good faith.

24
Q

MBE

Non-Conforming Goods

A

This is used when seller delivered something buyer didn’t want/order.

Does not mean the product is defective or broken.

If buyer gets non-conforming goods on the day specified on the contract, buyer may:
1) Reject or
2) Accept or
3) Accept in part or
4) Reject in part.

If before the date on the contract: buyer must give seller the right to cure if seller can show that they can fix it.

If the seller reasonably believed that the buyer would take other goods: then must give seller opportunity to cure.

if there is an installment contract (several deliveries): 1 non-conforming installment is not enough to claim material breach unless it substantially impairs the value of the whole contract.

25
Q

MBE

Anticipatory Repudiation

A

Prior to the contract date, 1 party unequivocally refuses to perform:
1) Can hold them in total breach or
2) Choose to wait to see if they actually perform on the contract date.

If given a reason to feel uneasy, can demand assurances.
- If they respond within a reasonable amount of time – then wait.
- If they do not respond within reasonable amount of time – can be held in breach.

26
Q

MBE

Promissory Estoppel

A

Promise to someone else and they detrimentally relied on the promise

Detrimental Reliance
- doing something you would not have ordinarily done without my promise. Promise made you do it.
- The promise is not a formal contract – but if the reliance is substituted for consideration and they are stopped from denying the promise.

27
Q

MBE

Contract defenses

A

Statute of Frauds
- M Y L E G S

Impossibility
- Impossible to do it.

Impracticability
- Unforeseen circumstances that make completing the contract unfair or difficult.

Unilateral Mistake
- Not a defense for performance UNLESS other party knew of their mistake.

Mutual Mistake
- Both parties are mistaken – then no need to perform.

28
Q

MBE

Adds are not offers unless:

A
  1. specific (terms certain and definite)
  2. oferee is clearly identified
29
Q

MBE

Requirement and output contract

A

Requirement: B promises to buy from S all the goods B requires

Output: S promises to sell to B all goods S produces

30
Q

MBE

Special merchant rule

A

no need for extra consideration

Must:
1. be a merchant
2. signed writing
3. assurance that it will maintain open

(if no reasonable time stated, then 3 months)

Letterhead & signed!!

31
Q

MBE

Termination of a contract by law

A

death or insanity does not terminate unless option contract

  1. destruction
  2. supervening illegality
32
Q

MBE

Battle of the forms

A

acceptance must mirror offer exackly!

article 2 does not follow the mirror image rule.

33
Q

MBE

Contracts: Merchant & Non-Merchant

A

Merchant & Non-Merchant
if any party to the contract is a non-merchant, the additional or different terms are considered to be mere proposals to modify.

Does not become part of the contract unless the offeror expressly agrees.

Merchant & Merchant
If both parties are merchants additional terms will be accepted in the contract unless:
1. material alter of the original terms
2. expressly limited acceptance
3. offeror has already objected or objects within a reasonable time.

34
Q

MBE

Consideration

A

Promise + promise
Promise + performance
Promise + Forebearance

35
Q

MBE

Contracts: Intoxication Persons

A

Intoxicated person that does not understand the nature and significance of thier promise may be held to have made only a voidable promise if the other party had reason to know or knew of the intoxication.

36
Q

MBE

Contract outside the SoF

A

Written contract can be modified orally but the new modification must be in writing if it falls within SoF.

37
Q

MBE

Land Sale: Performance

A
  1. pay full amount
  2. Move in
  3. Make improvements

must do atleast 2 of the following

38
Q

MBE

Article 2: Sale of $500 or more writing requirement

A

must show:
1. quanity term
2. defendants signature

article 2 has alot of gap fillers but not for quantity

Writing for employment must include length of employment

Writing for services must state:
1. all material terms
2. defendants signature

39
Q

MBE

Contracts: Express Warranties

A

Statement of fact/description of goods

examples:
1. “this ring in 24 carat gold”
2. Seller uses sample or model to show how the product works
3. Computer gurateed for 2 years

seller can disclaim implied warranties

Disclaimers:
“as is” , “with all faults”

Seller can limit remedies to any warranty except for personal injury!

40
Q

MBE

Contracts: Risk of loss

A

If seller bears the risk: must provide new goods for $0
If buyer bears the risk: must pay contract price. doesnt matter if damaged.

41
Q

MBE

Contracts: Delivery terms

A

FOB: Free on board

FAS: Free alongside

Shipping contract: seller delivers to cmoon carrier arranges for delivery, notifies buyer - the risk of loss passses to the buyer upon delivery to the carrier.

Destination contract: seller must deliver the goods to a specific destination. Seller keeps risk of loss.

42
Q

MBE

Discharge by rescission

A

Can’t rescind if performance complete!!

43
Q

MBE

Breach: Failure to start within specific time

A

Not a breach - unless time is of the essense.

44
Q

MBE

To determine substantial performance:

A
  1. benefit recieved by non-breaching party
  2. part performance by breaching party
  3. hardship to breaching party
45
Q

MBE

Breach: Failure to pay

A

failure to pay is a material breach

46
Q

MBE

Contract: Remedies

A
  1. Breach: expectation damages only if legal remedy is inadequate.
  2. Promissory estoppel: reliance damages
  3. Land: specific performance

firm4. Sales of goods where goods were unique or seller inability to cover (antiques, art, custom) - specific performance

47
Q

MBE

Merchant firm offer

A
  1. offeror must be merchant
  2. must be in writing and signed
  3. irrevocable during time states - if no then 90 days
48
Q

MBE

SOF: Sureity

A

main purpose rule - must show that the main purpose was to benefit themselves

49
Q

MBE

Mistakes

A

Mutual: both parties mistaken - grounds for recission
Unilateral: 1 party is mistaken - does not prevent formation UNLESS non-mistaken party knew or had reason to know of the mistake.

50
Q

MBE

Minors and contracts

A

contracts are inforceable for necessities

  1. food
  2. shelter
  3. clothing
  4. medical attention
51
Q

MBE

Material vs. non-material breach

A

Material: cancel contract and sue for damages
Non-material: cant cancel contract, but can sue for damages

52
Q

MBE

Loss profits doctrine

A

volume seller could have sold as many as they wanted - so they’d want to recover thier lost pofit.

MBE (8 decks)

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