MEE Practice Question Rules Flashcards
The UCC controls contracts for:
the sale of goods
The common law controls contracts for:
services or real estate
Anticipatory repudiation occurs when (UCC):
there has been an unequivocal refusal of the buyer or seller to perform, OR when a party creating reasonable grounds for insecurity fails to provide adequate assurances within 30 days of the demand for such assurances
Repudiation allows:
the nonrepudiating party to resort to any remedy given by contract or code
Repudiation may be retracted:
Until the repudiating party’s next performance is due, UNLESS the aggrieved party: (1) has since accepted the repudiation, acted in reliance on the repudiation, or brought an action for breach
Proper retraction of repudiation:
includes any assurances of performances that the other party has justifiably demanded about whether the retracting party will perform, and reinstates the repudiating party’s contract rights
If a transaction includes both goods and services:
the predominant purpose test is applied to resolve whether the common law or UCC applies to the entire transaction
Material breach under the common law occurs when:
the non-breaching party does not receive the substantial benefit of the bargain
A material breach allows:
the non-breaching party to withhold any promised performance and to pursue remedies for the breach, including damages
A minor breach allows:
the non-breaching party to any remedies that would apply to the non-material breach
Substantial performance occurs when:
a party substantially complies with an implied or constructive condition, which triggers the obligation of the other party to perform
A party that substantially performs their contractual obligations can:
can recover the contract price minus any amount that it will cost the other party to obtain the promised full performance
A party that has non substantially performed:
generally cannot recover damages based on the contract, but may be able to recover through restitution (restitution requires willful breach)
If a party intentionally furnishes services that are materially different that what was promised:
they cannot recover anything in restitution unless the non-breaching party has accepted or agreed to accept the substitute performance
The general measure of damages in construction contracts is:
the difference between the contract price and the cost of construciton by another builder, PLUS any progress payments made to the breaching builder and compensation for delay in completion of the construction
When a breach results in unfinished constrction:
if the award of damages based on the cost to fix or complete the construction would result in economic waste, thena a court may instead, at its discretion, award damages equal to dimunition in market price caused by the breach.
Economic waste occurs when:
the cost to fix or complete the construction is clearly disproportional to any economic benefit or utility gained as a result
Compensatory damages are:
meant to compensate the non-breaching party for actual economic losses
Expectation damages are:
intended to put the non-breaching party in the same position as if the contract had been performed; they must be calculated with reasonable certainty
Consequential damages:
are damages that arise out of special circumstances unique to the parties to the contract, rather than arising necessarily from the contract itself.
Consequential damages still result directly from the breach, but:
may not be foreseeable to one of the parties unless the special circumstances are known; they must be reasonably foreseeable by the breaching party in order to be recoverable
Unforeseeable consequential damages are not:
recoverable unless the breaching party had some reason to know about the possibility of these unforeseeable consequential damages
Damages are considered foreseeable and thus consequential if:
they were the natural and probable consequences of breach, or if they were “in the contemplation of the parties at the time the contract was made, or they were otherwise foreseeable
There must be a causal link between the consequential damages and:
the breach for damages to be recoverable
Can consequential damages be speculative?
No. Consequential damages must be proven with reasonable certainty
To what extent must a party to a contract mitigate damages?
To the extent possible by taking steps that do not involve undue risk, expense, or inconvenience
A non-breaching party’s failure to mitigate:
only reduces the damages that may be recovered by the non-breaching party; the non-breaching party is held to a high standard in preventing loss.
Under the UCC, a contract is formed if:
both parties intend to contract and there is a reasonably certain basis for giving a remedy
What is the only essential term in a UCC contract?
Quantity - as long as the parties intended to create a contract, the UCC “fills the gap” if other terms are missing
Contracts for the sale of goods over $500:
must be in writing and signed by the party to be charged (or her agent) to satisfy the Statute of Frauds; otherwise, the contract is not enforceable against the party who did not sign
For writing to satisfy the Statute of Frauds:
it need only be sufficient to indicate that the parties entered into a contract
A contract is outside the UCC statute of frauds:
to the extent that goods are received and accepted, and to the extent that payment has been made and accepted
When the price of goods is at least $500, the UCC requires:
a memorandum of the sale that must (I) indicate that a contract has been made, (II) identify the parties, (III) contain a quantity term, and (IV) be signed by the party to be charged.
A signature, for purposes of the Statute of Frauds, includes:
any authentication that identifies the party to be charged, such as a letterhead on the memorandum
For purposes of the UCC statute of frauds, a mistake in the memorandum or the omission of terms:
does not destroy the memorandum’s validity - an omitted term can be proved by parol evidence - however, enforcement is limited to the quantity term actually stated in the memorandum
When the UCC statute of frauds writing requirement is not met, consider:
whether a merchant’s confirmatory memo exists to enforce the agreement
What is a merchant?
A person who regularly deals in the type of goods involved in the transaction or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved
In contracts of $500 or more between merchants:
if a memorandum sufficient against one party is sent to the other party, who has reason to know its contents, and the receiving party does not object in writing within 10 days, then the contract is enforceable against the receiving party, even though he has not signed it.
