What Is a Contract? Flashcards
What is the general definition of a contract?
A promise or set of promises which the law will enforce.
Which two bodies of law govern contracts?
Article 2 of the Uniform Commercial Code governs all sales of goods (movable things). Common law governs all other types of contract.
What law governs a contract of mixed purposes (sale of goods and a services contract)?
Courts apply the predominant purpose test, and will apply the law associated with the dominant purpose of the contract. If the contract is divisible (payment for goods clearly separated from payment for services), then those components of the the contract are treated separately.
What is the covenant of good faith and fair dealing?
All UCC contracts impose an obligation of good faith in performing the contract, defined as honesty in fact and observance of reasonable commercial standards
Common law imposes a duty of good faith and fair dealing, breach of which involves exercising discretion in a manner preventing the other party from getting the fruits of the contract
What is the distinction between merchants and non-merchants in the UCC?
Some UCC rules apply only to or are different as applied to merchants, which are those who regularly deal in goods of the kind sold or who otherwise holds themself out as having special knowledge or skills as to the practices or goods involved. Merchants must be acting in their mercantile capacity for the rules to apply.
