MD Distinctions - Contracts

Question 1

Means of Acceptance (POL)

Answer 1

MD adopted mod. trend to allow any reas. means of acceptance unless specifically designated by offeror

Question 2

Electronic Signature (MD)

Answer 2

Under Uniform Electronic Transaction Act , an elec. trans. can be agreed on by both parties BUT provision must be conspicuous w/in the K & agreed to seperately

Question 3

Mailbox Rule (POL)

Answer 3

Almost exclusively applies to bilateral Ks (when theres a prom. in exchange for another prom.) b/c uni. Ks req. action as acceptance

Question 4

Auction Contracts (MD)

Answer 4

Auctioneer is agent for both buyer & seller for the purpose of making & signing a memorandum for the K of sale

Question 5

Promise of Marriage - Consideration (MD)

Answer 5

Adequate consideration BUT no suit for any breach of prom. to marry will survive unless the fiancee is pregnant

Question 6

Promise to make Reciprocal Wills - Consideration (MD)

Answer 6

Where each names other as beneficiary - Sufficient Consideration

Question 7

Adequacy of Consideration - Past Consideration (POL)

Answer 7

MD adopted mod. trend to enforce promises based on past consideration to prevent injustice

Question 8

Promise Under Seal (MD)

Answer 8

Formal req. of a seal is not nec. BUT will raise SOL from 3 to 12 years

Question 9

Requested Services (POL)

Answer 9

MD courts wont enforce promise of payment to make up for lack of consideration when services were provided w/out the expectation of payment

Question 10

Promissory Estoppel (MD)

Answer 10

MD requires specific proof of reliance by clear & convincing evidence

Question 11

Unilateral Mistake - Rescission (MD)

Answer 11

Unilateral Mistake may result in rescission of K when:
(1) Mistake is so severe that enforcement of K would be unconscionable

(2) Mistake relates to material portion of the K, AND
(3) Party Seeking rescission wasn’t aware of & not the cause of the mistake

Rescission can only restore the parties to their status b/f formation of K

Question 12

Mutual Mistake - Restitution (POL)

Answer 12

Md. permits rest. to compensate one party if their is mutual mistake

Question 13

Reformation for Mistake (POL)

Answer 13

Md. permits reformation of written Ks to cure a mistake when a 3d party is not likely to suffer a detriment

Party seeking reform. must prove clearly & beyond reas. doubt the parties orig. intent & existence of the mistake

Question 14

Capacity to Contract - Disaffirmance (POL)

Answer 14

The age of majority in Md. is 18

Ks made by an infant or minor are voidable by the minor b/c she is deemed to lack the capacity to K

Question 15

Defenses to Enforcement - Illegality - Gambling Contract (POL)

Answer 15

An oblig. that arises from illegal gambling is unenforceable

A prom. note given for a gambling debt is void & unenforceable

Question 16

Defenses to Enforcement - Unconscionability (POL)

Answer 16

Md. req. both procedural and substantive unconscionability to be present in order to refuse to enforce a K

Question 17

Public Policy - Non-Competition Clause (POL)

Answer 17

Md. follows majority rule that non-competition clauses in employment Ks will be enforceable if:

1 - The restraint is confined to what’s reas. nec. for the protection of the bus. AND

2- Do not impose undue hardship on the employee AND

3 - Are not against public interest

Question 18

Imp. in Law Ks - Recovery for Ultra Vires Acts (POL)

Answer 18

Md. courts have allowed rec. for unjust enrichment under the theory of quantum meruit when a corp. commits an ultra vires act (Act outside their power)

Question 19

Imp. in Law K - Restitution (MD)

Answer 19

Courts only employ restitution when there is not an express K
A quasi-K action for rest. maintained as an unjust enrichment claim or quantum meruit claim req.:

1 - The ∏ conferred benefit on the ▵,

2 -The ▵ has knowledge of the conferred benefit,

3 - The ▵ accepted the benefit,

4 - Under the circ., equity requires that he would be unjustly enriched w/out paying the ∏ for the benefit,

5 - The ∏ had a reas. expectation of being paid, AND

6 - The ∏ had clean hands

Question 20

Warranties in Sale of Goods Ks - SOL (MD)

Answer 20

SOL for breach of imp. war. is triggered upon tender of goods (whether or not conforming)

Question 21

Warranties in Sale of Goods Ks - Warranty for Future Performance

Answer 21

A war. for future perf. exists if the war. states that goods will be free from defects in the future

No war. for future perf. if the war. is to repair or replace the goods that are defective

Question 22

Imp. War. of Merch. - Exceptions for Used Cars

Answer 22

The war. for merch. & Fit. for part. purp. can’t be excluded or modified by a seller of consumer goods BUT seller of used cars w/ more than 60,000 miles may exclude or modify the wars so long as:

1 - It’s in writing,

2 - Conspicuous,

3 - Includes the terms merchantability, AND

4 - Is separately agreed on in writing

Question 23

Imp. War. of Merch. (MD)

Answer 23

Must Prove Defective - The product must be proven defective to recover under war. of merch. claim

Question 24

Impracticability - Failure of Particular Source of Supply - Foreseeability

Answer 24

Foreseeability - Seller can’t claim impracticability due to failure of particular source of supply if failure was fores. at time K was formed

Question 25

3d Party Beneficiary K (POL)

Answer 25

Md. follows the 1st Restatement of Ks

Creditor Beneficiary - If perf. of prom. would satisfy an actual duty of the promisee to a 3d Party AND promisee didn’t intend to make a gift to the 3d party

Has the right to sue either the promisor or the promisee to enforce the K

e.g. A agrees to paint B’s house in return for B’s prom. to pay $500 to C b/c A owes C $500. C is creditor ben. & can recover $500 from B

Donee Beneficiary - If the promisee entered the K for the purp. of giving a gift to the 3d party
Right to sue the promisor
e.g. A pays B to build a house for C. C is donee ben. of the K b/w A and B

Incidental Beneficiary - Not a donee or creditor beneficiary
No right to sue enforce the K

Question 26

Assignment of Rights (MD)

Answer 26

In Md. the assignor’s duties must be expressly assumed in all land sale Ks by the assignee & can’t be implied.

Wage Assignments - Md. limits such matters to 6 months, w/ special provisions req. them to be in writing and rec. properly

Question 27

SOF Writing Requirement - Uniform Electronic Transactions Act (MD)

Answer 27

Md. permits elec. records to be used to form. a K under (UETA)

This elec. doc. also satisfies the SOF requirement of a writing

If pers. intends, any elec. symbol or process is recog. as a valid signature under the UETA

Question 28

SOF Writing Requirement - Auction Contracts

Answer 28

SOF is satis. when a buyer’s name is coupled w/ an entry in a book or memorandum by auctioneer regarding the particulars of a sale

Question 29

Damages for Breach - Consequential Damages - Third Parties (MD)

Answer 29

Md. law extends the coverage of express & imp. war. to anyone who might reas. be expected to use the goods

BUT recovery is limited to pers. injury

Question 30

To recover Damages for Breach plaintiff must prove ?

Answer 30

To recover dam., ∏ must prove dollar amt. of damages w/ reas. cert.

POL - Certainty - Md. courts are hesitant to award damages for lost profits b/c they are not easy to prove
When lost profits are too speculative, cts often limit a party’s rec. to reliance damages (i.e. reas. expenditures made in connection w/ the K)

Question 31

Damages for Breach - Consequential Damages - Other Damages (MD)

Answer 31

Attorney’s Fees - Not recoverable unless auth. by statute

Damages for Emotional Distress - Rarely Awarded

Damages for Speculative Losses - Rarely Awarded

Prejudgment Interest Rate - Int. rate of approx. 6% is ok, the permissible rate is raised to 10% post judgment

Cost Damages Resulting form Breach - Md. law allows buyer to deduct cost damages resulting from breach from a price still due, as long as buyer first informs the seller