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Contracts > Restatements and UCCs > Flashcards

Restatements and UCCs Flashcards

1
Q

Offer Defined

A

Rest 24
manifestation of willingness to enter bargain justifying another in understanding that their assent = invited and will conclude bargain

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2
Q

Preliminary Negotiations: Manifestation of Willingness

A

Rest 26
not an offer if person it’s addressed to knows/has reason to know that person making it DOESN’T intend to conclude bargain UNTIL he’s made FURTHER manifestation of assent

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3
Q

Preliminary Negotiations: Written Memorial

A

Rest 27
If manifest assent itself = sufficient to form K, won’t be voided by manifest intent to prepare + adopt written memorial of it, BUT circumstances might show that the agreement = PRELIMINARY NEGOTIATIONS

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4
Q

Ways to Terminate Power of Acceptance

A

Rest 36
- rejection/counter-offer by offeree
- lapse of time
- offeror’s revocation
- death/incapacity
- non-occurrence of any condition of acceptance under terms

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5
Q

Offeror’s Revocation of Offer

A

Rest 38
offeree’s power of acceptance = terminated when receive offeror’s manifest intent to NOT enter proposed K

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6
Q

Implied Notice of Revocation of Offer

A

Rest 43
offeree’s power of acceptance = terminated when:
(1) offeror takes definite action inconsistent w intent to enter proposed K, AND
(2) offeree acquires reliable info of this

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7
Q

Acceptance

A

Rest 30
Forms of Acceptance:
- affirmative answer in words
- performance
- refraining from performing specified act
OR
- may allow offeree to select terms

unless indicated otherwise, offer invites acceptance in ANY MANNER + by ANY MEDIUM reasonable in circumstances

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8
Q

Default modes of acceptance

A

Rest 32
offer = interpreted as inviting acceptance by:
(1) promise to perform, OR
(2) rendering performance

choice = up to OFFEREE

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9
Q

Mirror Image Rule

A

Rest 61
acceptance requesting change/addition to terms of offer = not invalidated UNLESS acceptance = made to depend on assent to such terms

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10
Q

UCC Acceptance

A

2-207
NO LAST SHOT, NO MIRROR IMAGE, BATTLE OF THE FORMS

even if add/diff terms from offer, still valid acceptance UNLESS acceptance expressly made conditional on assent to new terms (which would then be PROPOSALS for addition to K)

Ks Between Merchants: terms automatically part of K unless (1) offer expressly limits acceptance to terms, (2) new terms materially alter K, OR (3) counterparty objects w/ reasonable time

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11
Q

Firm Offers

A

UCC 2-205
offer by merchant to buy/sell goods in signed writing that (by its terms) can’t be revoked for pd of time (max = 3 months)
ONLY MERCHANTS

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12
Q

Merchants

A

UCC 2-104
(1) person who deals in goods of that kind
(2) holds self out as having knowledge/skill peculiar to practices/goods involved

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13
Q

Option K Definition

A

Rest 25
promise that (1) meets K formation requirements AND (2) takes away promisor’s ability to revoke offer

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14
Q

Option K Termination of Power of Acceptance

A

Rest 37
CAN’T terminate option K power of acceptance by rejection/counteroffer, revocation, or death/incapacity UNLESS requirements for discharge of K duty = mety

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15
Q

Option K

A

Rest 45
if promise ONLY in exchange for performance, option K created when offeree tenders/begins performing

Offeror’s duty to perform = CONDITIONAL on completing/tendering invited performance in accordance w terms of offer

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16
Q

Acceptance by Performance

A

Rest 62
if offer invites choice between acceptance by promise or performance, tendering/starting performance = acceptance

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17
Q

Acceptance by Silence

A

Rest 69
acceptance by silence ONLY when:
(1) take benefit w reas. opp to reject + w reason to know offer was made w expectation of compensation, OR
(2) knew/had reason to know that assent may be manifested by silence, OR
- prior dealings make it reasonable that notice required if don’t intend to accept

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18
Q

Memorandum: General Requirements

A

Rest 131
- signed writing
- reasonably ID K subject matter
- sufficiently indicate K = made, AND
- states w reasonable certainty the essential terms of unenforced promises in K

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19
Q

SOF writing not made as memorandum of K

A

Rest 133
unless K for consideration of marriage, SOF may be satisfied by signed writing NOT made as memorandum of K

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20
Q

Form Ks

A

Rest 211
standardized agreements

interpreted wherever reasonable to treat all those similarly situated as alike, w/o regard to their knowledge/understanding of standard terms of writing

generally enforceable UNLESS absurd term

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21
Q

Rest Consideration

A

71
requires bargain for performance/promise

Performance may consist of:
- act other than promise,
- forebearance, OR
- creation/modification/destruction of legal relation

consideration may be given TO promisor/3rd person
- may be given BY promisee/3rd person

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22
Q

Pre-Existing Duty Rule

A

Rest 86
promise = binding to extent necessary to prevent injustice IF made in recognition of benefit promisor previously received from promisee

NOT binding if (1) conferred benefit as gift/no unjust enrichment, OR (2) to extent that its value = disproportionate to benefit

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23
Q

Modification

A

Rest 89
modification = binding if:
(1) fair and equitable in view of unanticipated circumstances at time K made

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24
Q

UCC Consideration

A

2-209
no consideration req’d for agreement to be binding, BUT must meet test of “GOOD FAITH”

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25
Q

Adequacy of Consideration

A

Rest 79
cts won’t look into adequacy of consideration (equal values/bad bargains)

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26
Q

Forbearance as Consideration

A

Rest 74
generally not consideration UNLESS:
(a) claim/defense = doubtful bc of uncertainty as to facts/law, OR
(b) forbearing/surrendering party believes claim/defense may be fairly determined to be valid (good faith req)

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27
Q

Promissory Estoppel

A

Rest 90
promise which promisor should reasonably expect to induce action/forbearance on part of promisee/3rd person and which DOES induce such action = BINDING if can only avoid injustice by enforcing promise

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28
Q

When Misrepresentation is Fraudulent/Material

A

Rest 162
FRAUDULENT
if assertion intended to induce manifest assent + maker:
(1) knows/believes assertion isn’t factual, OR
(2) lacks stated/implied confidence in truth, OR
(3) knows he lacks basis he states/implies for assertion

MATERIAL if:
(1) likely to induce reasonable person to manifest assent, OR
(2) maker knows it would likely induce recipient to manifest assent

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29
Q

When Misrepresentation Makes K Voidable

A

Rest 164
voidable if manifest assent = induced by fraud/material misrep by other party upon which recipient is justified in relying

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30
Q

Misrepresentation as Inducing Cause

A

Rest 167
misrep induces party’s manifest assent IF substantially contributes to decision to manifest assent

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31
Q

Assertion of Opinion

A

Rest 169
justified in relying on it IF:
- relationship of trust + confidence with other
- reasonable belief that other (compared to self) has special skill/judgment/objectivity abt subject matter
- some other special reason they’re particularly susceptible to the type of misrep involved

32
Q

Duress

A

Rest 175
no reasonable alternative
- if assent induced by improper threat by other party, K = VOIDABLE by vic
- if assent induced by improper threat by NON-PARTY, K = VOIDABLE by vic UNLESS other party in good faith + w/o reason to know of duress either gives value/relies materially on transaction

33
Q

Improper Threats

A

Rest 176
THREAT = IMPROPER IF:
- threat = crime/tort, or threat itself would be crime/tort
- threat = criminal prosecution
- threat of use of civil process + threat made in bad faith
- threat = breach of duty of good faith and fair dealing under K w recipient

THREAT = IMPROPER IF resulting exchange isn’t on fair terms AND:
- threatened act would harm recipient + not significantly benefit other,
- effectiveness of threat in inducing manifest assent = significantly increased by prior unfair dealing by party making threat, OR
- what’s threatened = otherwise use of power for illegitimate ends

34
Q

Unconscionability

A

Rest 208 + UCC 2-302
if K/term = unconsc. at time K made, ct may:
(1) refuse to enforce K,
(2) enforce remainder w/o unconscionable clause, OR
(3) limit application of unconsc. clause to avoid any unconsc. result

35
Q

Implied Duty of Good Faith and Fair Dealing

A

Rest 205
every K imposes upon each party a duty of good faith and fair dealing in its performance + enforcement

36
Q

Implied Duty of Good Faith

A

UCC 1-304
every K/duty w/in UCC imposes obligation of good faith in performance + enforcement

37
Q

Ambiguity: Whose Meaning Prevails

A

Rest 201
(1) if SAME meaning, then that meaning
(3) if DIFF meanings, then neither party bound (no assent)

EXCEPTION
(2) if DIFF meanings, A prevails IF when K made:
- A didn’t know B’s diff meaning AND B had reason to know A’s meaning, OR
- A had no reason to know of B’s meaning AND B had reason to know A’s meaning

38
Q

Tools of Interpretation

A

Rest 202 + UCC 1-303
(1) terms of K
(2) course of negotiation
(3) course of performance
(4) course of dealing
(5) trade usage/custom

39
Q

Rest Agreements to Agree

A

204
if essential term of K = omitted by parties, courts may supply term reasonable in the circumstances

40
Q

UCC Agreements to Agree

A

2-305
parties can conclude K EVEN IF price unsettled IF both intend

price = reasonable at time for delivery if:
(1) nothing = said as to price,
(2) price left for parties to agree on + fail to agree, OR
(3) price to be set by market/3rd party + not set/recorded

good faith requirement

if 1 party at fault for failure to fix price, other party may (1) treat K as cancelled, OR (2) fix at reasonable price themself

41
Q

K Term Requirements

A

Rest 33
- if 1/more terms left open/uncertain, MIGHT show NO intent to understand it as offer/acceptance

42
Q

Illusory Promise

A

Rest 77
promise = illusory if:
(1) party purports to make promise, AND
(2) reserve choice of alternative performances

43
Q

UCC gap fillers

A

2-305: price (good faith req)
2-306: quantity
2-308: delivery (at business/known other place)
2-309: time (reasonable )

44
Q

Parol Evidence Rule

A

UCC 2-202
if evidence conflicts w writing in K, NOT admitted UNLESS explain/supplement K:
(a) by course of dealing, usage of trade, or course of performance, AND
(b) by evidence of consistent additional terms UNLESS court finds writing = intended as COMPLETE and EXCLUSIVE statement of terms

45
Q

Express Warranty

A

UCC 2-313
affirmation of fact/promise, description, or sample/model
- provided by seller to buyer
- becomes part of basis for bargain

46
Q

Implied Warranty of Merchantability

A

UCC 2-314
if seller = merchant who deals in goods of this kind
must be fit for ordinary uses of such goods

47
Q

Implied Warranty of Fitness for a Particular Purpose

A

UCC 2-315
when at time of K formation seller has reason to know:
(1) any particular purpose for which goods are required, AND
(2) buyer relies on seller’s skill/judgment to select/furnish suitable goods

48
Q

Warranty Exceptions

A

UCC 2-316
can exclude/modify warranties if done so CLEARLY and CONSPICUOUSLY

49
Q

Voidability

A

Rest 214
PER admissible IF evidence of fraud, mistake, duress, or other voidability

50
Q

Mistake of Fact Risk Allocation

A

Rest 154
party = allowed to void K if party didn’t bear risk

party can bear risk IF:
(1) K allocates risk,
(2) conscious ignorance, OR
(3) court determines it’s reasonable to allocate risk

51
Q

Bilateral Mistake

A

Rest 152
mutual mistake at time of K that goes to a basic assumption underlying the K and materially affects the exchange

Elements to Rescind:
(1) both parties = mistaken at time K made,
(2) mistake goes to basic assumption underlying the K,
(3) mistake materially affects the exchange, AND
(4) said party doesn’t bear risk of mistake

52
Q

Unilateral Mistake

A

Rest 153
ELEMENTS TO RESCIND:
(1) both parties mistaken at time K made,
(2) mistake goes to basic assumption underlying K,
mistake materially affects exchange, AND
(4) said party doesn’t bear risk of mistake

PLUS:
- effect of mistake makes enforcement unconscionable, OR
- other party had reason to know of mistake OR other party’s fault caused mistake

53
Q

Impracticability

A

Rest 261
(1) after K formation
(2) supervening event occurs w/o fault of party seeking relief
(3) event causes party’s performance to become impracticable
(4) non-occurrence of supervening event was a basic assumption on which the K was made (explicit/implicit)
(5) party doesn’t bear risk of changed circumstances (risk allocation)

54
Q

CL Breach

A

Rest 241
PERFORMANCE FACTORS
(1) extent to which non-breacher got expected benefit
(2) chance that breacher will cure breach

JUSTICE/EQUITY FACTORS
(1) hardship to breacher/non-breacher from rescinding K
(2) whether damages will adequately compensate the non-breacher
(3) breacher’s culpability

55
Q

Perfect Tender Rule

A

UCC 2-601
If goods/tender of delivery fail in ANY RESPECT to conform to K, BUYER MAY:
(1) REJECT the whole,
(2) ACCEPT the whole, OR
(3) ACCEPT any commercial unit(s) and REJECT the rest

56
Q

Cure by Seller

A

UCC 2-508
If at delivery, buyer rejects goods as non-conforming, seller may have right to cure

REJECTION BEFORE DATE REQUIRED IN K: right to cure = UNCONDITIONAL

AFTER DATE REQUIRED IN K: seller has right to cure within further reasonable time IF seller reasonably believed goods would be acceptable w/ or w/o a $ allowance

57
Q

Anticipatory Repudiation

A

UCC 2-610
aggrieved party may:
(1) for commercially reasonable time, wait for repudiating party to perform, OR
(2) sue before performance has arrived

58
Q

Adequate Assurances of Performance

A

Rest 251 + UCC 2-609
one party has reasonable grounds for believing other party will breach K
- may demand adequate assurance of performance AND suspend own performance
(UCC: demand must be in writing)

  • if assurances are sent, party making demand MUST perform
  • if assurances NOT sent in reasonable time, then party making demand can treat K as being anticipatorily repudiated
59
Q

Expectation Damages

A

Rest 347
[loss in value + I/C loss] - [avoided $]

60
Q

buyer’s right to cover

A

UCC 2-712
good faith + w/o unreasonable delay can make reasonable purchase/K to purchase sub goods
[cover $ + K $ + I/C damages] - [$ saved bc of breach]
if don’t cover, not barred from other remedies

61
Q

buyer’s damages

A

UCC 2-713
[market price at time learn of breach + K $ + I/C damages] - [$ saved bc of breach]

62
Q

Economic Waste Doctrine

A

Rest 348
can measure expectation damages either by:
(1) Cost of Completion (subjective) OR
(2) Diminution in Market Value (objective)

63
Q

Foreseeability

A

Rest 351
follows from breach in ordinary course of events OR reason to know of special circumstances

if damages = disproportionate, can limit by (1) excluding lost profits, (2) only allowing reliance, or (3) limit if justice so requires

64
Q

Certainty

A

Rest 352
can only recover damages for $ loss proved with reasonable certainty

65
Q

Reliance Damages Measure

A

Rest 349
[$ spent in reliance on K (prep/performance)] - [avoided $ breacher can prove w reasonable certainty]

66
Q

Avoidability

A

Rest 350
can’t recover if could’ve avoided loss w/o undue risk, burden, or humiliation

can still recover if didn’t avoid BUT made reasonable (but unsuccessful) efforts to avoid

67
Q

seller’s right to resell

A

UCC 2-706
resell in good faith + in commercially reasonable manner
[resale $] - [K $ and incidental - avoided $ bc of breach]

68
Q

seller’s damages

A

UCC 2-708
[market price at time+place for tender] - [unpaid K $ and incidental - avoided $ bc of breach]

69
Q

Punitive Damages

A

Rest 355
not recoverable for breach unless conduct = also a TORT for which punitive damages = reasonable

70
Q

LDC

A

Rest 356 + UCC 2-718
LDC allowed if (1) at reasonable amt + (2) difficult to prove loss
unreasonably large LDC = void as penalty

71
Q

Modification

A

UCC 2-719
can add/sub, limit/alter damages
modified remedy = optional, but if expressly agreed to be exclusive remedy, then it’s the SOLE remedy
consequential damages can be limited/excluded UNLESS unconscionable

72
Q

specific performance

A

UCC 2-716
when goods = unique/other proper circumstances

73
Q

Restitution for Injured Party

A

Rest 373
entitled to damages for any benefit conferred onto breacher by part performance/reliance
NO restitution if only breach = $ owed

74
Q

Restitution for Breaching Party

A

Rest 374
if justified refusal to perform bc of other’s breach, RESTITUTION:
[any benefit conferred] - [loss caused by their own breach]
NO damages if value of performance as liquidated damages = reas. in light of anticipated/actual breach + difficult to prove loss

75
Q

Restitution Measure

A

Rest 371
measure by breaching party’s:
(1) reas. value of what they received, OR
(2) extent of increased value/advancement of interests

76
Q

Tortious Interference w Performance of K by 3rd Party

A

Rest 2 of TORTS 766
liable to injured party for loss resulting from 3rd person’s failure to perform K

77
Q

Mailbox Rule

A

Rest 63
non-instantaneous communication
unless otherwise indicated, acceptance upon DISPATCH w/o regard to whether it reaches offeror

Option Ks: acceptance upon RECEIPT

Contracts (3 decks)

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