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Contracts > Writing Template > Flashcards

Writing Template Flashcards

1
Q

Applicable Law

A

A contract is a promise or set of promises for the breach of which the law provides a remedy. Generally the Common Law governs contracts, however, the UCC governs all contracts for the sale of goods. Goods are “movable tangible items” Here…

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2
Q

Predominant Factor Test

A

If a contract is for both goods and services, the court will apply the predominant factor test and apply the law that relates to the primary or prominent focus of the contract. Here…

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3
Q

Merchant

A

The UCC has special rules governing transactions between merchants. A merchant is one who regularly deals in goods of the kind or who otherwise holds himself out as having special knowledge or skills with regards to the goods involved. Here…

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4
Q

Formation

A

In order for a contract to be valid, the following elements must be present: 1) offer, 2) acceptance, and 3) consideration. Here…

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5
Q

Offer

A

An offer is a manifestation of a present intent to enter into a contract by a promise, undertaking, or commitment, stated in definite and certain terms, and communicated to an identifiable offeree. Here…

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6
Q

Real Estate Transactions

A

An offer involving real estate MUST identify the land and the price. Here…

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7
Q

Sale of Goods - UCC

A

An offer to buy or sell goods must include the QUANTITY. All other terms can be filled in using reasonable “gap fillers.” Here…

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8
Q

Merchant’s Firm Offer

A

Under the UCC, if a merchant offers to sell goods in a signed writing, and the writing gives assurances that it will be held open, the offer is irrevocable for the time stated or a reasonable time (not over 3 months), even if no consideration is given. Here…

If the offeree rejects the offer before the period is up, he may still alter accept the offer ,so long as the offeror has not detrimentally relied on the offeree’s rejections. Here…

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9
Q

Option Contracts

A

An option is a distinct contract in which the offeree gives consideration for a promise by the offeror not to revoke an outstanding offer. Here…

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10
Q

Requirement/Output Contracts

A

Requirements contracts are typically valid and may state quantity of goods in terms of the buyer’s requirements, the seller’s output, or in terms of exclusivity. However, no unreasonably disproportionate increase in quantity is allowed. Here…

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11
Q

Termination of Offer

A

An offer cannot be accepted after it has been terminated. An offer may be terminated by an act of either party or by operation of law. Here…

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12
Q

Revocation

A

A revocation is evidence by words or conduct of the offeror terminating the offer. Here…
A revocation is effective upon receipt except when it’s irrevocable due to a n option contract or merchant’s firm offer, or when there is detrimental reliance. Here…

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13
Q

Rejection

A

A rejection is words or conduct of the offeree rejecting the offer. It is effective when received. Here…

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14
Q

Rejection of an Option

A

A counter offer or a rejection of an option contract does NOT constitute a termination of the offer, because an option is a contract to keep an offer open. Thus, the offeree is still free to accept the original offer within the option period, UNLESS the offeror has detrimentally relied on the offeree’s rejections. Here…

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15
Q

Counter Offer

A

Under the Common Law counteroffer terminates the original offer and is itself a new offer. Here…

Under the UCC, additional terms become part of the contract unless: 1) one of the parties is not a merchant, 2) the offer limited to terms, 3) an objection is made within a reasonable time, or 4) the additional terms materially alters the obligations. Here…

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16
Q

Conditional Acceptance

A

A conditional acceptance to an offer terminates the original offer and acts as a counter offer with a new condition attached. (only if, so long as, etc..) Here…

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17
Q

Termination by Operation of Law

A

An offer can be terminated by the death of a party, the destruction of the subject matter, or a supervening illegality. Here…

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18
Q

Detrimental Reliance

A

When the offeror could reasonable expect that the offeree would rely to her detriment on the offer, and the offeree does so rely, the offer will be held IRREVOCABLE as an option contract for a reasonable length of time. Here…

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19
Q

Acceptance

A

An acceptance is an unequivocal assent to the terms of the offer made by one with the power of acceptance. Here…

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20
Q

Mailbox Rule

A

Acceptance by mail creates a contract at the moment of dispatch, UNLESS: 1) the offer stipulates that acceptance is not effective until received, 2) an option contract is involved, 3) the offeree sends a rejection and then sends an acceptance (whichever arrives first is effective), or 4) if the offeree sends an acceptance and then a rejection the acceptance is effective UNLESS the rejections arrive first and the offeror detrimentally relies on it. Here…

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21
Q

Acceptance by Performance

A

Most courts will hold that an offer to form a unilateral contract is not accepted until performance is completed. The beginning of performance creates an option so that the offer is no longer revocable, however, the offeree is not obligated to complete performance just because he has begun performance. Here…

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22
Q

Shipment of Nonconforming Goods

A

The shipment of nonconforming goods is an acceptance as well as a breach of the contract, unless the seller notifies the buyer that a shipment of nonconforming goods is offered only as an accommodation. Here…

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23
Q

Conditional Acceptanc

A

When an acceptance is made expressly conditional on the acceptance of new terms, it is a rejection of the offer. Here…

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24
Q

Consideration

A

Courts will enforce a promise as a contract ONLY if it is supported by consideration. Consideration is a bargained for exchange of legal detriment or legal benefit. Additionally, courts do not consider the adequacy of consideration. Here…

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25
Q

Past Consideration

A

A promise given in exchange for something already done does NOT satisfy the bargain requirement. Here…

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26
Q

Pre-existing Duty

A

Traditionally, performing or promising to perform an existing legal duty is INSUFFICIENT consideration. Here…

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27
Q

Promissory Estoppel

A

A promise is enforceable if necessary to prevent injustice if: 1) the promisor should reasonably expect to induce action or forbearance and such action or forbearance is in fact induced. Promissory Estoppel or detrimental reliance may substitute as consideration. Here…

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28
Q

Defenses to Formation SMAUDIIM

A

Even if an agreement is supported by consideration, a contract may still be unenforceable because there is a defense to formation of the contract. Here…

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29
Q

Statute of Frauds

A

In most cases, an oral contract is valid. However, certain agreements must be evidenced by a writing signed by the party sought to be bound. Here…
(MYLEGS: Marriage, (over a) Year, Land, Executor, Goods ($500 or more), and Surety (promise to pay debt))

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30
Q

Confirmatory Memo Rule - Merchants

A

In contracts between merchants, if one party sends to the other party a written confirmation of the understanding, it is sufficient under the SoF to bind the sender. It will also bind the recipient if he has reason to know of the confirmation’s content and he does not object to it in writing with 10 days. Here…

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31
Q

Mutual Mistake

A

if parties entering into a contract are mistaken about existing facts relating to the agreement, the contract may be voidable if: 1) the mistake concerns a basic assumption on which the contract was made, 2) the mistake has a material effect on the contact, and 3) the party seeking avoidance did not assume the risk of the mistake. Here…

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32
Q

Unilateral Mistake

A

If one party is mistaken about facts relating to the agreement, the mistake will NOT prevent formation of a contract, unless the nonmistaken party knew or had reason to know of the mistake. Here…

33
Q

Ambiguity

A

If a contract includes a term with at least 2 possible meanings, no binding contract exists unless ONLY one of the parties is aware of the ambiguity, at which point the contract is based on what the ignorant party reasonable believed to be the meaning of the ambiguous words. Here…

34
Q

Unconscionalbe

A

Unconscionability allows a court to refuse to enforce a contract or a provision of the contract to avoid “unfair terms” usually due to some unfairness in the bargaining process. Here…

35
Q

Duress

A

Contracts induced by duress or undo influence are voidable and may rescinded as long as it is not affirmed. Here…

36
Q

Illegality

A

Illegality of subject matter or consideration voids the contract. Here…

37
Q

Infancy/Incapacity

A

Persons under age of 18 lack capacity to contract. Binding on adult but not infant. Adult entitled to recover economic loss. If contract is for necessity of life (food/shelter/medical/transport/etc) the D is entitled to “wholesale value” of what they provided. Incapacity refers to people who do not have the mental capacity to even know they are entering into a contract (high standard). Here…

38
Q

Misrepresentation/Nondisclosure/Fraud

A

If a party induces another to enter into a contract using intentional misrepresentation, the contract is voidable. Here…

39
Q

Terms

A

Once a court determines that a valid contract exists, they will determine the validity of its terms

40
Q

Plain Meaning

A

Courts will construe terms according to their “plain meaning.” Thus, any agreements that are not in the words of the contract will not be enforceable. Here…

41
Q

Additional Terms

A

Under the Common Law, acceptance must “mirror’ the offer, any additional terms or different terms in the acceptance make the response a rejection and counter offer. Here…

Under the UCC, an acceptance which adds terms to the offer is valid, but does not become part of the contract if one of the parties is NOT a merchant. Between merchants, the additional terms become part of the contract UNLESS they materially alter the contract, the offeror objects, or the offer is limited in its terms. Here…

42
Q

Ambiguous Terms

A

Courts will apply the “ordinary meaning” of terms of a contract according to the custom and suage in the industry and the course of dealings between the parties. Here…

43
Q

Modification

A

Under the common law, a modification in the contract requires new consideration. Here…
Under the UCC, no new consideration is needed for a modification so long as it is made in GOOD FAITH. Here…

All modifications are subject to the statute of frauds.

44
Q

Parol Evidence Rule

A

Evidence of prior or contemporaneous negotiations and agreements that contradict, or vary contractual terms is inadmissible if the written contract is intended as a “complete integration” of the contract. Here…

Parol Evidence WILL be admissible to show: 1) defects in formation, 2) conditions precedent, 3) interpretation of terms, 4) collateral agreements (related to subject matter, but not part of the agreement), or 5) subsequent modifications (agreements after the contract). Here…

45
Q

Performance - Common Law

A

If one party substantially performs on the contract, the other party must perform. Here…

46
Q

Performance - UCC

A

Perfect Tender. The buyer of goods is NOT required to pay the seller unless the seller makes a perfect tender of goods. Here…

47
Q

Conditions

A

A condition is an agreed-upon limitation on performance, i.e. they make an obligation to perform contingent on the occurrence of some specific event. Failure to satisfy a condition discharges the non-breaching party from performance. Here…

48
Q

Implied Condition

A

Most courts will imply a condition of good faith and fair dealing in every contract. Thus, if a party acts in bad faith, it will release any obligation of performance by the other party. Here…

49
Q

Condition v. Promise

A

Failure of a promise leads to a breach, whereas failure of a condition relieves a part of his performance obligation. To distinguish between the two, the courts will look to the parties’ intent. Here…

50
Q

Excuse of Condition by Substantial Performance

A

The condition of complete performance may be excused if the party has rendered substantial performance. Substantial performance arises if the breach was only minor. A breach is minor if the obligee gains the substantial benefit of the bargain despite the obligor’s defective performance. Here…

51
Q

Excuse of Contition - Hinderance

A

The condition of complete performance may be excused if the party intentionally hinders the completion of the performance. Here…

52
Q

Impossibility

A

Contractual duties will be discharged if it has become impossible to perform them, however, the impossibility must be “objective,” i.e. the duties could not have been performed by ANYONE. Here…

53
Q

Partial Performance Quasi Contract Recovery

A

If a party partially performs before the impossibility arose, that party will have a right to recover in quasi contracts for a contract rate or a reasonable value of services rendered. Here…

54
Q

Impracticability

A

Courts will also excuse the duty to perform when it has become impractical to perform. Impracticability excuses performance when an unforeseeable circumstance makes it extremely difficult or expensive to render performance. Here…

55
Q

Contracts for Goods - Impossibility/Impracticability

A

If the contract is impossible or impractical, the seller of the goods will be excused to the extent of the impossibility or impracticability. A shortage of raw materials or an inability to convert them into the product will usually excuse the seller, however, a mere increase in cost is rarely sufficient for discharge. Here…

56
Q

Frustration of Purpose

A

Frustration of purpose occurs when an unforeseen event undermines a party’s principal purpose for entering into a contract and both parties knew of the principal purpose at the time the contract was made. Here…

57
Q

Modification

A

A modification is when the parties to a contract agree to accept a new agreement in satisfaction of the existing contract. Here…

58
Q

Mutual Recession

A

Recession is the mutual cancellation of a contract. The agreement to rescind is itself a new contract that excuses further performance for both parties to the original contractual obligation. Under the common law, new consideration is required, however under the UCC no new consideration is required so long as the parties are acting in good faith. Here…

59
Q

Novation

A

A novation is when the parties to a contract mutually agree to substitute a new party to perform. The original party is excused from performance and no longer has any contractual obligations. Here…

60
Q

Accord and Satisfaction

A

An accord and satisfaction is an agreement in which one party to a contract agrees to accept performance different from that originally promised. Payment of a smaller amount that is due is valid consideration if it is made in good faith and there is a “bone fide dispute” as to the claim. Here…

61
Q

Breach of Accord and Satisfaction

A

An accord and satisfaction excuses the original obligation, however, if the accord is not satisfied, the non-breaching party may sue on either the original agreement or the accord. Here…

62
Q

Breach

A

Only material breaches by the other party excuses performance, if the breach is minor, then the non-breaching party is still obligated to perform. Here…

63
Q

Anticipatory Repudiation

A

In cases where the other party’s words, actions, or circumstances make it clear that he is unwilling or unable to perform, the non-breaching party is relieved of his obligation to perform. The non-breaching party has 3 options: 1) stop performance and sue immediately, 2) suspend performance and wait until the performance date to sue, or 3) treat the repudiation as an offer to rescind and treat the contract as discharged. Here…

64
Q

Recession

A

A party may rescind his anticipatory repudiation, however the aggrieved party may request or demand adequate assurances before resuming his performance. Here…

65
Q

Compensatory Damages

A

The goal of damages for breach of K is to put the nonbreaching party where she would have been had the promise been performed

66
Q

Expectation Damages

A

In most cases, the P’s standard measure of damages will be based on his “expectation” if the breach did not occur. This is also known as the “benefit of the bargain” damages. Here,…

67
Q

Reliance Damages

A

If no expectation damages can be figured, the court will award reliance damages. Reliance Damages are awarded to put the plaintiff in the position she would have been had the K never been formed. Here,…

68
Q

Consequential Damages

A

Consequential damages, otherwise known as special damages, are damages that a party can prove occurred because of the breach of the other party, and are allowed if such damages were reasonably foreseeable by the parties at the time the contract was entered. Here,..

69
Q

Incidental Damages - Sale of Goods

A

Incidental damages are always available for breach of a sale of goods K. Incidental damages include expenses reasonably incurred by the buyer in inspection, receipt, transportation, care, and custody of goods rightfully rejected and other expenses reasonably incident to the seller’s breach such as storing, shipping, returning, and reselling the goods as a result of the breach. Here…

70
Q

Liquidated Damages

A

Liquidated damages that are stipulated to by the parties in the event of a breach. These damages must be in an amount that is reasonable in view of the actual or anticipated harm caused by the breach. Here,…

71
Q

Punitive Damages

A

Punitive or punishment damages are usually not awarded in breach of K cases. Here,…

72
Q

Nominal Damages

A

Nominal damages may be awarded when a breach is shown but no actual loss is proven. Here,…

73
Q

Duty to Mitigate

A

The non breaching party cannot recover avoidable damages. Thus, the nonbreaching party must make reasonable efforts to “mitigate” the damages, but may recover the expense of mitigation. Here,…

74
Q

Recession

A

Rescission is the mutual cancellation of a K. the agreement to rescind is itself a new K that excuses further performance for both parties on the original K obligation. Under the common law consideration is required, however under the UCC no new consideration is required so long as the party’s are acting in good faith. Here,…

75
Q

Specific Performance

A

If a legal remedy is inadequate, the nonbreaching party may seek specific performance, which orders the breaching party to perform. SP is always available for land sale contract or rare or unique goods, but is NOT available for breach of a services contract, even if the services are rare or unique. Here,…

76
Q

Injunction

A

A court may enjoin a breaching party from working for a competitor throughout the duration of a K if the services contracted for are rare or unique. Here, …

77
Q

Defenses

A

An action for SP is subject to the equitable defenses of: latches, unclean hands, and sale to a bona fide purchaser. Here,…

78
Q

Restitution - Quasi Contract

A

Where a K fails, the non-breaching party may recover in quasi-K to prevent unjust enrichment of one of the parties. Here,…

Contracts (8 decks)

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