MBE Review_Contracts Flashcards
Merchant Firm Offer (UCC 2-205)
by Merchant
Signed Writing
Gives assurance that it will be held open
Irrevocable during time stated (90 days max) (not revocable for lack of consideration during the time stated)
Unilateral Contract
Once performance begins, can’t revoke (even upon death of offeror)
Mere preparation is not enough
Statute of Frauds - SOF
MY LEGS - K must be in writing marriage term of years land executory goods 500 or more surety - promises to answer for debt of another
Main Purpose Exception to Surety in SOF
If main purpose of guarantor in promising to answer for debt of another, was to benefit themselves, takes the K out of SOF
Unilateral Mistake
if party knows or has reason to know of mistake, then cannot take advantage of the bargain.
normally, one party’s mistake - cannot rescind K
K Modification - CL
Old Law: Need new Consideration (no pre-existing duty)
Modern law: allow for modification w/o new consideration as long as fair, equitable & need for modification was unforeseeable at time of entering into K
Modification - UCC
Allows for good faith modifications, no consideration needed
SOF - Merchants Exception 10 day rule
Both parties must be Merchants
If within reasonable time, after entering into Oral agmt,
Merchant sends Written Confirmation of agmt,
It will bind that sending Merchant immediately
If recipient Merchant does not object to contents of that writing
w/in 10 days of receipt, then they are bound as well
3rd Party Beneficiaries - Recission/Modification of K
1) K can be modified/canceled w/o consent of intended 3rd party beneficiary,
if their rights have not yet vested
2) If rights have vested, then cannot modify/cancel K,
Unless intended 3rd party beneficiary Consents
When do 3rd Party Beneficiary Rights Vest?
When the 3rd party beneficiary learns of the K AND (one of the following):
1) Accepts it
2) Rely on it
3) Sue immediately to protect their rights
3rd Party Beneficiary - Reliance (Promissory Estoppel) Elements:
Anticipate = Reliance
1) Promise
2) Reasonable expectation of reliance on promise
3) Reliance itself
4) The Interest of Justice requires enforcement of promise
Gratuitous Assignments v Assignments for Value - Revocability
All K are assignable & delegable, except unique or long term
Oral or written
Gratuitous assignments - absent any evidence of reliance are Revocable
Assignment for Value - Irrevocable
Accord & Satisfaction
Accord is a new agreement btw parties already under K to each other -
accord doesn’t discharge original agmt, but suspends performance until accord is satisfied
if Unsatisfied, can be sued either under original agmt or under the accord
Satisfaction is performance of that Accord
Purpose of K Damages/Remedies
To place non-breaching party in the position he would have been in had K been performed
Anticipatory Repudiation
Requires clear statement of Intent not to Perform - oral or written
Sue
Nonmaterial Breach of K
Minor breach - can’t cancel K, but can sue for damages
delay of performance
Material Breach of K
Can Cancel K & Sue
Condition Precedent of K
An act or event that must occur first before a party is under a duty to perform
NOT a Breach of K
Time is of the Essence Clause in K
Court will give it affect, if specifically negotiated in K, then Breach
If not negotiated in K, then Court will not uphold, No Breach
Damages - Acceptance of non-conforming goods (UCC)
If Non-breaching buyer accepts non-conforming goods, may recover warranty damages (diff in value btw goods accepted & contracted goods plus any incidental & consequential damages)
Damages Remedy - sale of goods (UCC)
cover = diff btw K price & cost of buying conforming goods
Lost Profits Remedy (UCC)
compensates lost volume buyer/seller when there’s a breach (deal in Bulk)
buyer owes seller the Expected Profit
Under Preexisting Legal Duty, any Modification to a K…
Requies new consideration
Good Faith =
there must be a legitimate commercial reason for the modification
