New York Contracts Distinctions

Question 0

Firm Offers: Merchant can make a firm offer to buy or sell goods without consideration as long as the offer is in writing signed by the merchant which explicitly states that it will be held open.

Answer 0

Firm offers are not limited to the sale of goods.

Consideration is not required for a firm offer that is in a signed writing. Such an offer, if it does not explicitly state a period of time it will be held open, is irrevocable for a reasonable period of time.

Question 1

Offer-Unilateral Contract

MBE Rule: Once offeree begins performance, an option contract is created and the offeror may not revoke

Answer 1

An offer may be revoked at any time prior to the completion of performance

Question 2

Statute of Frauds: Option to terminate within one year renders defeasance, not performance, possible within one year therefore the contract still falls within the statute of frauds.

Answer 2

Contract not performable within one year may be taken out of the statute of frauds if either party has an option to terminate the contract within one year.

Question 3

Waiver of Warranties: MBE - words or conduct relevant to the creation of an express warranty or tending to negate a warranty or limit it, shall be construed wherever reasonable as consistent with each other.

Negation of an express warranty is inoperative if such construction is unreasonable.

Answer 3

NY follows the MBE rule on waiver of warranties both express and implied.

Question 4

Statute of Limitations for Breach of Contract

Answer 4

6 years

Question 5

Implied Contract

Answer 5

Implied contracts for the division of property or income between an unmarried couple living together will not be recognized

Question 6

Unsolicited Goods: MBE: UCC 2-606 - there is an acceptance of goods when a buyer does any act inconsistent with the sellers ownership.

Answer 6

Retention of unsolicited shipment of goods does not constitute acceptance, but the goods become an unconditional gift.

Where an offeree accepts the benefit of services with reasonable opportunity to reject them, and circumstances indicate that payment is expected, he has accepted the offer.

Question 7

Accord and Satisfaction: MBE Rule - Accepting payment of less than the full amount of a disputed claim which is marked “paid in full” the creditor accepts that there is consideration for an accord and satisfaction, and forgives the balance of the claim.

Answer 7

A creditor may preserve his right to the balance of a disputed claim and avoid an accord and satisfaction by explicit reservation in his endorsement of a check tendered by a debtor as full payment.

Question 8

Assignments: MBE Rule - An assignment is irrevocable if the assignee has paid value (or incurred a bargained for legal detriment) for the assignment.

Answer 8

An assignment is irrevocable, even in the absence of consideration, if it is in writing and signed by the assignor or his agent.

NY prohibits the assignment of any claim to recover damages for personal injury.

Question 9

Employment Contracts

Answer 9

Employment is presumed at will unless otherwise agreed by the parties.

Employment coupled with a managerial or ownership interest may be terminated only for cause.

Question 10

Agreements not to Compete:MBE Rule - Agreements not to compete for a certain period of time or in a certain area generally are enforceable if reasonable.

Answer 10

Agreements not to compete are disfavored and will be strictly construed.

It will be enforced only if the employee’s services are unique, the clause is reasonable as to time and scope, it is necessary to protect the employer, and does not harm the public.

Question 11

Infancy

Answer 11

A husband and wife may not disaffirm on the basis of infancy with respect to loans, mortgages, contracts, or deeds on real property that they occupy or are about to occupy as a home.

Question 12

Illegality

Answer 12

NY invalidates contract clauses that attempt to exempt contractors, caterers, lessors, and owners of parking garages, amusement parks, and gymnasiums from liability for negligence.

Question 13

Statute of Frauds: Contracts concerning an interest in land falls under the statute of frauds, which includes lease agreements

Answer 13

Lease agreements for a term not exceeding one year do not fall under the statute of frauds.

Question 14

Statute of Frauds: Partnerships

Answer 14

SoF does not apply to an agreement to form a partnership to conduct real estate transactions. Such a partnership is an interest in personalty.

Question 15

Statute of Frauds: Assignment of Insurance

Answer 15

A contract to assign a life, health, or accident insurance policy, or the promise to name a beneficiary of such a policy must be in writing.

Question 16

Statute of Frauds: Payment of commissions for negotiation of a loan

Answer 16

Promise to pay a commission for the negotiation of a loan or for the sale of real estate or a business must be in writing unless the party to be paid is an auctioneer, a licensed real estate broker, or an attorney

Question 17

Statute of Frauds: Establishment of a trust testamentary disposition

Answer 17

A writing is required for the promise to establish a trust or make or refrain from making a testamentary disposition.

Question 18

Statute of Frauds: Authority of an Agent

Answer 18

Must be in writing and signed by the person to be charged if the contract made by the agent falls under the SoF

Question 19

Statute of Frauds: Modifications or terminations without a signed writing.

Answer 19

NY will enforce written agreements that prohibit modification or termination without a signed writing.

Question 20

Signed Writings as Substitute for Consideration: MBE - A promise to increase compensation under an existing contract is an unenforceable modification because no consideration is offered for the modification

Answer 20

A promise based on past consideration is binding if in writing and signed by the party to be charged, and is proved to have been given or performed.

Question 21

Signed writing as substitute for consideration: promise to pay a debt discharged in BK

Answer 21

Is enforceable if in writing and signed by the party to be charged.

Part payment will not substitute for a signed writing, but part payment of a contractual debt or written acknowledgement thereof will restart the SoL

Question 22

Consideration necessary to modify or discharge a contract

Answer 22

None is necessary if the agreement is contained in a signed writing.

Question 23

Enforceability of assignments without consideration

Answer 23

Assignments are enforceable without consideration if in writing and signed by the the assignor.