R5 - Contracts & Sales Flashcards
Elements of a contract
- offer&acceptance
- consideration
- lack of defenses
termination of offer
- revocation by offeror
- rejection by offeree
- Law (death or illegality)
elements of Offer
- intent to offer
- definite terms
- comm with offeree
necessary terms UCC & RISE
UCC- only qty is required OR output/reqs contracts
RISE- offeree, price, time, qty, type of work
RISE revocation exception.
irrevocable offers
- option contracts - consid give to keep open
- unilateral cntcts- did something to keep open
- merch firm offers
RISE acceptance
- when sent
- mirror image required
element of consideration
- legal value - benefit & detriment
- —not something u alread have to do
- —fairness not reqed
- bargained for exch - influenced decision
- —-gifts not count —moral/past Not count
RISE Defenses against breach of contract
FRAUD-Maids innocent misrep duress undue influence mutual mistake illegality minor intoxication - not know nature&sig of cntct mental incap stat of FRAUD- MYLEGS-written Stat of limits- 4-6 yrs after breach -impossibility -accord and satisf -novation -conds to perf -prevention of perf -parole evid rule -unconscionability
FRAUD - must prove MAIDS
Material fact Actual reliance Intent to have party rely Damages Scienter - knew of falsity
Duress
phys-void
econ/social-voidable
unilateral mistake
defense for you if the other party knew or shouldve known of ur mistake
Statute of frauds- MYLEGS
Marriage
Year longer contracts (>1)-except if party partially perf
Land - except if lease for one yr or pty partially perf
Executors paying estate debts
Goods >500
Surety - pay debt of another
accord & satisfaction
accord- agmt to subs one cntct for another
satisfaction - execution of accord
discharge the original duty
Novation
change one of the parties for another one. all must agree.
prevention of perf
they dont let you perform-> you’re discharged from having to
parole evidence rule
no prior or concurrent oral statements (of whenn contract was made)
only future stuff allowed
Remedies for when someone breached
mat breach- discharged; minor breach: damages$
anticip repud - wait & sue later OR sue now
Damages to recover
compensatory- $ costs to substitute
consequential - damages reas forseeable
spec perf- special manuf goods&land NOT svces
liquidated - clause on contract -only if reas and not penalty
punitive - only for FRAUD
rescission- get back to original position
–RISE- cant cancel if susbt perf- only $damages
—UCC- CAN cancel- perfect tender requried
Limits on damages
Foreseeable and mitigated
3rd party beneficiaries
must be intended NOT incidental
intended- donee or creditor
assignment of all rights
=assignment of contract= assignment of rights and delegation of duties
warranties of ASSIGNOR
- have rights to assign
- will not interfere
- no knowl that impacts value
Merchant firm offer (irrevocable;UCC)
- by merchant
- written& signed
- asssurances given tokeep open
cant last >3mths
UCC acceptance
mirror image NOT required (unless bet merch)
promise to ship or actual shipment=acceptance
nonconforming goods & promise to ship
if you reas notify = accommodation = counteroffer
nonconf goods & shipment
acceptance & breach of cntct - can sue
UCC Defenses against breach
FRAUD- MAIDS
St of Limits - 4 yrs
St of Fraud - myleGs
impossibility & IMPRACTICABILITY
exceptions to St of Fraud - UCC - myleGs
not need to be in writing to be enforceable
- Special manuf goods
- written conf bet merch
- Admitted contcts in court
- Performed contracts
ROL passing NO agmt
Carrier - depends on type of delivery (shipment or destination) NONcarrier- depends on MERCH (@actual del)) or NONMERCH (@tender of del
ROL sale on approval
ROL on seller until buyer approves
Nonconf goods ROL & Title
title passes to buyer at delivery but ROL stays with seller.
title goes back to seller when buyer rejects
Warranties
Express- fits facts and descriptions
Title
Merchantibility - orig purpose - ONLY by merch
fitness- special purpose - trust they will select appropr good
Disclaiming warranties
Express- cant disclaim
Title- only by specific Lang NOT general
Merch- gen discl or use word “merch”
fitness- gen discl or “as is”
Tort Liab - Negligence - must prove
duty of care owed
failed to care
damages happened
caused by negligence
Tort Liab- Strict Product Liab - must prove
Defective prod caused injury unreas dangerous merchant in bus of selling this stuff no subst change to prod
Remedies UCC Buyer & Seller
- Anticip repud- wait or sue
- demand assurances
- punitive damages- only fraud
- duty to mitigate- cant recover if could’ve avoided
Remedies UCC- Seller
- cancel & sue for damages
- stop goods in transit OR Reclaim from buyer(within 10 days)
- resell to someone else and sue for diff
- full contract + incidental
- liquidated damages- if reas & no penalty
Remedies UCC- Buyer
- Reject for nonconf (right to inspect BEFORE pmt)
- cancel/rescind
- sue for damages
- —-acceptnonconf&sue for diff
- —-rejected/undelivered
- ———–COVER-buy subst & sue seller for diff
- specif performance-unique goods & cant cover
- replevin- get them from seller if wrongfully in hands
- seller insolvency- if have paid then u recover goods
Entrusting & Voidable title
GR: cant give better title than u have EXCEPT:
entrusting: entrusted to seller and he sells in ordinary course-> that buyer has legit ownership
voidable title: tricked into giving title to someone and that person sells it -> buyer has legit ownership
