Page 2 Flashcards
What is an entire contract?
Performance has to be substantially complete to avoid breach
What’s an example of an entire contract?
Contracting for a house to be built. Even though there are individual tasks, the contract is for the entire completion of the house
Are construction contracts usually entire or divisible?
Entire
What is a divisible contract?
Separate divisible performances for separate, divisible considerations
What is an example of a divisible contract?
Paying $500 to paint 10 houses. Each paint job is a divisible performance
Are employment contracts usually entire or divisible contracts?
Divisible, because you go from pay period to pay period.
The restatement of contracts is issued by whom?
A private organization that doesn’t have the force of law, but is highly persuasive authority
If it isn’t clear how to accept an offer, it can be done in what two ways?
Performance or promise
What does UCC stand for?
Uniform commercial code
What does UCC cover?
Contracts for the sale of goods
What are considered goods under the UCC?
Tangible/movable items at the time of sale
Where is the UCC enacted?
Every state except Louisiana
If the UCC is silent on an issue, what happens?
Common law governs
What article of the UCC primarily deals with the sale of goods?
2
How does the UCC define merchant?
One who deals in goods of the kind involved in the sale or:
- holds himself out as having knowledge/skill particular to the practices/goods in the transaction
- employs an intermediary that holds himself out as having the required knowledge or skill
What are the three levels of merchants under the UCC?
- in business GENERALLY
- deal in goods of a particular KIND
- specialists in the kinds of PROCEDURES involved in a particular situation
Do indefinite terms cause a contract to fail?
Not if the parties intended to contract and there’s a reasonably certain basis for a remedy like a gap filler
Unless otherwise stated, an offer and acceptance are allowed in what ways?
Any way by any medium reasonable under the circumstances
If prompt notice of performance has not been given by the offeree to the offeror, what can happen?
The offeror can consider that offer lapsed after a reasonable time
Can an acceptance vary from an offer?
Yes, but only in immaterial details
What are the major different kinds of contracts?
- sale of goods
- service
- hybrid
What is a hybrid contract?
Contracts that involve both goods and services
What are the two tests to figure out which type of contract a hybrid contract actually is?
- predominant factor test
- gravamen of the harm test
What is the predominant factor test?
Courts look at transactions as a whole to figure out the predominant purpose, if it was to render services with goods incidentally involved, or transaction of sale with labor incidentally involved
What is the gravamen of the harm test to determine what type of contract a hybrid contract is?
Courts look at the specific part of the contract that was the cause of the harm, like if the contract was for an oil change and defective oil ruined the car, it would be a goods case because of the harm involved goods
What are the factors that you should look at when deciding what type of contract a hybrid contract really is?
- contract language
- nature of business
- reason for contracting
- amounts for goods and services
How can contract language give you a hint about whether it is a service or goods contract?
If it is for goods it will use language like buyer, seller, transaction, equipment, customer, purchase, purchaser, etc.
How can the amount of the goods or services or the manner that they are charged give you an indication of what type of contract a hybrid contract is?
If the price doesn’t include a service cost, or the goods are more than the services, it is a goods contract
How do you determine someone’s intent to contract?
The reasonable person test
What is the reasonable person test to determine intent to contract?
Manifestations of assent are interpreted from the viewpoint of a reasonable person in the position of the other party
If a reasonable person in the other’s position knew or should’ve known that the other person didn’t intend to be bound by contract, was a contract formed?
Not until a formal agreement is executed
Does the meaning of the words that were used help you determine intent to contract?
No, focus on what should have been understood in the context of the transaction
Is a subjective standard relevant to determine intent to contract?
No, actual intent is not relevant, only outward conduct, words, demeanor, etc.
If a person appears to indicate assent, but doesn’t actually intend to agree, can that prove that he didn’t intend to contract?
No, that is irrelevant because the court looks at the outward manifestation, not a secret or unexpressed intention
What does indefiniteness show?
An intent not to contract
What is indefiniteness?
Agreements that are unduly uncertain, have lots of missing terms, absent material terms, etc.
What are some examples of material terms that would count for indefiniteness if they were missing?
- subject matter
- price
- payment terms
- quantity
- quality
- duration
If an agreement fails for indefiniteness, what happens?
It is void
If there is only some ambiguity, will an agreement fail for indefiniteness?
Usually not, usually the contract is enforced
What are three types of indefiniteness?
- material term is indefinite
- silent about material term
- time
If a phrase is included that says something like “fair share of the profits,” will that fail for indefiniteness?
No, it will probably be changed to allow for recovery of reasonable value, otherwise that phrase alone would be too indefinite to be enforced
What are two ways you can cure a material term being indefinite?
- cured by CONDUCT
- cured by AGREEMENT
How can you cure a material term being indefinite by conduct?
When an offeror accepts the offeree’s accommodation on a material term. Ie: if a tailor makes a suit from his own fabric choice because you didn’t specify one, and you like it so you accept it
How can you cure a material term that is indefinite by an agreement?
The offeree can accept what he is given. Ie: if you were promised a pension that will be well and enough, and then you’re given $20 a week and you accept it
Does the law like to destruct contacts for uncertainty?
No, especially when part or full performance has occurred
What are the three different types of contracts?
- entire
- divisible
- series
