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Becker REG > R6 > Flashcards

R6 Flashcards

1
Q

Methods of Contract Formation

A
  1. express (oral or written)
  2. implied-in-fact (conduct)
  3. quasi-contract (prevents unjust enrichment)
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2
Q

Unilateral Contract

A

one promise; contract is not formed until the other party has performed

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3
Q

Bilateral Contract

A

two promises

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4
Q

Executory vs. Executed Contracts

A

Executory - remain to be performed

Executed - performed all of the duties

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5
Q

Items to which common law pertains

A

R eal estate
I nsurance
S ervices
E mployment

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6
Q

Three Common Elements in a Contract

A
  1. agreement made up of offer and acceptance
  2. consideration
  3. no defenses
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7
Q

Offer Requirements

A
  1. intent
  2. definiteness and certainty
  3. communication to the offeree
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8
Q

Which theory does contract law follow?

A

Objective theory

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9
Q

Are advertisements considered offers?

A

Generally, they are considered invitations to make offers; exception when the number of offerees is explicitly mentioned

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10
Q

Terms must be definite and certain. What does this mean for UCC and for Common Law?

A

UCC - only quantity needs to be definite

Common - all aspects must be definite

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11
Q

If the offeree has no knowledge of the offer, can he/she accept?

A

no knowledge, no acceptance

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12
Q

Three Methods to Terminate Offer

A
  1. rejection
  2. revocation
  3. automatic (process of law)
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13
Q

When can an offeror revoke an offer?

A

any time before acceptance by communicating to the offeree

!*can even revoke an offer when a promise was made to keep it open (unless it is an option)

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14
Q

Limitations on Offeror’s Power to Revoke an Offer

A
  1. option contract
  2. unilateral contracts
  3. Merchant Firm Offers (rain checks)
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15
Q

Methods to Reject Offer

A
  1. express

2. counteroffer

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16
Q

Counteroffer vs. Mere Inquiry

A

Counteroffer = rejection

Mere inquiry = no rejection and valid offer remains

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17
Q

When is a rejection effective?

A

when it is received

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18
Q

Is silence taken as acceptance or rejection?

A

rejection

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19
Q

Termination by Operation of the Law

A
  1. death or incompetency
  2. destruction of subject matter
  3. illegality
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20
Q

What happens to an acceptance if it is invalid?

A

it becomes a counteroffer

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21
Q

Does Common Law or the UCC use the Mirror Image Rule?

A

Common Law

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22
Q

Mailbox Rule

will be on exam

A

*generally, acceptances are effective when dispatched

EXCEPTION: offeror can opt-out by saying acceptances must be received on a certain date

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23
Q

The Mailbox Rules makes what effective on dispatch?

A

acceptances ONLY

*revocations, rejections, and counteroffers are effective on receipt

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24
Q

Consideration Elements

A
  1. something of legal value given by each party

2. bargained for exchange

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25
Q

Elements of Legal Value

A
  1. need not have monetary value
  2. need not flow to party
  3. courts will generally not inquire into adequacy
  4. preexisting legal duties generally do not suffice
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26
Q

When will courts consider adequacy in contracts?

A

unconscionable and is at arm’s length

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27
Q

How to make modifications enforceable under Common Law and UCC?

A

Common - give consideration

UCC - good faith and both sides agree

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28
Q

Do gifts count as consideration?

A

No

EXCEPTION: promissory estoppel

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29
Q

Promissory Estoppel

A
  • promise must be
    1. reasonably relied upon
    2. detrimental
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30
Q

Are most contracts with defenses void or voidable?

A

voidable

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31
Q

What type of damages are unique to fraud?

A

punitive damages

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32
Q

Do opinions count as material facts?

A

No

*statements of value are usually opinions

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33
Q

Fraud in the Execution vs. Fraud in the Inducement

A 
Execution = void
Inducement = voidable
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34
Q

Innocent Misrepresentation

A

lacks only scienter in comparison to fraud

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35
Q

Duress

A 
Physical = void
Economic/Social = voidable
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36
Q

Undue Influence

A

abuse a position of trust or confidence

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37
Q

Mutual Mistake

A

voidable

Nonexistence of Subject Matter = void

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38
Q

Unilateral Mistake

A

*usually is not a defense UNLESS it is a material fact and the other party knew or should have known it was a mistake

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39
Q

Illegality

A

void

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40
Q

Illegality - Licensing and Non-compete

A

Licensing

  • protect the public = void
  • revenue = voidable

Non-compete

  • reasonably needed for business purpose
  • geographically limited
  • limited in duration
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41
Q

Two Actions Minors can Do with Contracts

A

disaffirm and ratify

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42
Q

Minors and Contract Disaffirmation

A
  • generally must return the items

* cannot disaffirm necessities

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43
Q

Mental Incapacity

A 
incapable = voidable 
adjudicated = void
44
Q

Statute of Limitations under Common Law

A

4-6 years starting from the date of the breach

45
Q

Statute of Frauds

A 
M arriage 
Y ear (CANNOT be performed in one year)
L and and leases 
E xecutor to pay estate debts out of personal funds 
G oods over $500
S urety (pay someone else's debts)
46
Q

Exceptions to Statute of Frauds

A
  • contracts possible to complete in one year

* full performance by one party

47
Q

What writing suffices for statute of frauds?

A

multiple written documents will suffice

48
Q

Impossibility as a Defense

A

*destruction of subject matter

49
Q

Accord & Satisfaction vs. Novation

A

Accord & Satisfaction = new contract, same parties

Novation - old contract, substituted party

50
Q

3 Types of Conditions that Can Affect a Party’s Duty to Perform

A
  1. conditions precedent
  2. conditions concurrent
  3. conditions subsequent
51
Q

Prevention of Performance is a Breach

A

*nonbreaching party is excused from performance

52
Q

Parol Evidence Rule

A
  • prohibits any oral or written statements that are prior or contemporaneous to the written contract and contradict the writing
  • subsequent is okay
  • fraud, duress, or mistake is okay for all types of evidence (EXCEPTION)
53
Q

What determines whether or not a contract is subject to the Statute of Frauds?

A

*the contract as it stands with modifications

54
Q

Unconscionability as Defense

A

*substantially superior bargaining power

55
Q

Type of Breach to Allow Remedies under Common Law

A

must be material or substantial

56
Q

Anticipatory Repudiation

A
  1. sue immediately
  2. wait and sue
  3. cancel the contract
57
Q

Damages under Common Law

A
  1. Compensatory Damages (money to obtain substitute performance)
    * *Consequential Damages (reasonably foreseeable)
  2. Specific Performance
    * *used with land or unique items
  3. Liquidated Damages
    * *must be reasonable and not punitive

Specific Performance OR Compensatory Damages

58
Q

Are punitive damages available for breach of contract?

A

No

59
Q

Rescission or Cancellation

A

*returns parties to their original positions

60
Q

Quasi-Contract Damages

A

*avoids unfair enrichment

61
Q

Limitations on Monetary Damages

A
  1. foreseeability

2. mitigation

62
Q

Third-Party Rights

A
  1. Intended beneficiaries have privity while incidental beneficiaries do not
63
Q

Examples of Intended Beneficiaries

A
  1. Donee Beneficiaries

2. Creditor Beneficiaries

64
Q

Assignment of Rights and Delegation of Duties

A
  • assignment or rights
  • delegation of duties
  • assignment of contract (includes both)
65
Q

Exceptions to what cannot be assigned or delegated

A
  1. changes the obligor’s risk or involves specialized personal services
  2. cannot assign offers but can assign option contracts
66
Q

Delegation Effects

A

*both parties are liable unless there is novation

67
Q

Assumed Mortgages vs Property Subject to Mortgage

A
  • assumed = both parties liable

* subject to = person who too subject to the mortgage is not personally liable

68
Q

Assignment of a Creditor’s Right for A/R

A
  • can assign even if the contract says you can’t

* not effective unless the debtor receives notice

69
Q

Implied Warranties of Assignor

A

*assignor has these rights

70
Q

Defenses for Assignment & Delegation

A

*obligor can use defenses they could have used against the assingor

71
Q

Merchants

A

*deals in goods or has special knowledge of the goods

72
Q

Obligation of Good Faith

A
  • everyone = good faith

* merchants = reasonable standards of fair dealing in the trade

73
Q

Firm Offer Requirements

A 
(rain check)
1. seller must be merchant
2. offer must be in writing and signed
3. offer must give assurances it will be kept open 
(3 months or 90 days)
74
Q

Promise to Ship vs Prompt Shipment

A

Promise - bilateral

Prompt - unilateral

75
Q

Shipment of Nonconforming Goods

A

*acceptance AND breach

76
Q

Notice of Accommodation

A

*counteroffer

77
Q

Promise to Ship and Ships Nonconforming Goods

A

*breach, not an accommodation

78
Q

Auctions

A
  1. bid is the offer
  2. with reserve
  3. without reserve
79
Q

Exception to Rule Requiring only the Specific Quantity

A
  1. output and requirements contracts
80
Q

Modifications to UCC Contracts

A

*only requires good faith

81
Q

Statute of Limitations for UCC

A

4 years from date of breach

82
Q

Statute of Frauds Exceptions for UCC

A

S pecially manufactured goods
W ritten confirmation (10 days limitation)
A dmitted to the court
P erformed contracts

83
Q

Delivery and Risk of Loss are NOT Dependent on

A

title

84
Q

How to Determine Risk of Loss

A
  1. goods must be identified
  2. contract states when title transfers
  3. If not….
    * *Noncarrier
    * **non-merchant - tender of goods
    * **merchant - delivery of goods
    * *Carrier
    * **Shipment Contract
    * **Destination Contract
85
Q

Types of Shipment Contracts

A
  • FAS - free along side

* CIF - cost, insurance, and freight

86
Q

Breach and Effect on Risk of Loss

A

breach = risk remains with the seller

87
Q

Risk in Sale on Approval

A

*risk on seller until approval

88
Q

Risk in Sale or Return

A
  • buyer has risk until returned

* also known as sale on consignment

89
Q

Insurable Interest

A
  • seller = as long as he owns the goods

* buyer = goods are identified

90
Q

Title Passing

A
  1. pass as parties agree
  2. upon delivery
  3. Buyer rejects goods and title revests with seller
91
Q

Warranties

A
  1. express warranties
  2. implied warranty of title (must SPECIFICALLY disclaim)
  3. implied warranty of merchantability (easy to disclaim)
  4. implied warranty of fitness for a particular purpose (easy to disclaim)
92
Q

Are warranties breach of contract or tort liability?

A

breach of contract

93
Q

Warranty protection is/is not limited by privity?

A

is not limited by privity; anyone injured can sue

94
Q

Tort Liability under UCC

A

Negligence

  1. duty of care
  2. breach
  3. causation
  4. damages

Strict Products Liability

  1. product was defective
  2. product was dangerous
  3. product caused
  4. damages
95
Q

Strict Liability Additional Conditions

A
  • privity not required

* negligence no necessary

96
Q

Remedies under UCC

A

Anticipatory Repudiation
*sue, wait and sue, cancel contract

Demand Assurances
*refusal = anticipatory repudiation

Duty to mitigate still exists

97
Q

Seller’s Remedies under UCC

A
  1. cancel and sue for damages
  2. withhold delivery and stop goods in transit (reclaim after 10 days)
  3. right to resell and sue for damages
  4. full contract price (special items)
  5. liquidated damages ($500 or 20%)
98
Q

Buyer’s Remedies under UCC

A
  1. reject any nonconformity (perfect tender rule)
    * *seller’s right to cure
    * *right to inspect before payment (unless it is Cash On Delivery)
  2. cancel or rescind
  3. sue for damages
    * *for accepted nonconforming goods
    * *for rejected or undelivered goods
  4. specific performance
  5. insolvency of seller: deposit + identified = pay and take goods
99
Q

Entrusting and Voidable Title

A

GR: true owner can recover stolen goods from third parties
EXCEPTIONS:
1. Entrusting: watch for repair and accidentally sold
2. Voidable title: accepting a bad check

100
Q

Copyrights

A
  • author’s life + 70 years

* reproduce, prepare derivative works, distribute copies, perform or display the work publicly

101
Q

Copyrights and Fair Use Doctrine

A
  1. criticism and comments
  2. news reporting
  3. teaching
102
Q

Copyrights and Transferring Rights

A

must be in writing

103
Q

Copyrights and Protection

A

*need not prove fault (can be unintentional) or have used entire work

104
Q

Copyright Remedies

A

*civil and criminal

105
Q

Patents

A

*20 years

  1. useful
  2. not obvious to a person skilled in the area
  3. novel
106
Q

Patents and Transferring Rights

A

must be in writing

107
Q

Patent Remedies

A

*only civil

Becker REG (9 decks)

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