Wrong Answer Rules Flashcards
What is consideration?
To constitute consideration, a performance or a return promise must be bargained-for.
Consideration can consist of forbearing from doing something, or doing something one is not already required to do.
A performance or return promise is bargained-for if
- it is sought by the promisor in exchange for his promise
AND - and is given by the promisee in exchange for that promise.
With respect to the requirement for consideration, the performance may consist of:
- an act other than the promise;
- a forbearance; or
- the creation, modification, or destruction of a legal relation.
What is a delegation?
A delegation occurs when a third party agrees to satisfy a performance obligation owed by one of the parties to the contract.
True or False: A delegation does not relieve the delegator from their obligations under the contract.
True. Despite the delegator’s delegation to the delegatee of the performance obligation owed to the obligee, the delegator remains liable for the performance, UNLESS there is a novation.
Liability of the Delegatee
When is a delegatee liable to a delegator?
When the delegatee has agreed to perform the delegator’s contract obligations and does not fulfill those obligations.
Liability of the Delegatee
When is a delegatee liable to a obligee?
Under the third-party beneficiary theory, the delegate is also liable to the obligee, because the obligee is an intended beneficiary of the promise made to the delegator.
Can a Delegatee recover from obligor?
Yes. for unjust enrichment if they fail to pay delegatee.
If the obligor pays the assignor, this defense can be raised against the assignee, provided that payment was made ___________
before notice of the assignment was given to the obligor.
Once notice of the assignment is given, payment to the assignor is no defense.
What is UCC 2-207
a definite and seasonable expression of acceptance operates an an acceptance ven though it states terms additional to or different from those offered..unless acceptable is made expressly conditional on assent to the additional or different terms.
Between merchants, additional terms are to be construed as proposals for addition to the contract. They become part of the contract UNLESS:
- The offer expressly limits acceptance to the terms of the offer;
- they materially alter it; or
- notification of objection to them has already been given or is given within a reasonable time after notice of them is received.
True or False: Modification or recission of a third-party contract is possible up to the time the third-party’s rights vest.
True.
A third-party beneficiary’s rights vest when he learns of the contract and:
(1) manifests assents to it at the request of one of the parties;
(2) materially changes position in reliance on the contract; or
(3) files suit to enforce rights under the contract.
What is the pre-existing duty rule?
a duty already obligated to be performed on the basis of the original contract CANNOT serve as consideration for a new promise, as it lacks the novelty required for valid consideration.
under the pre-existing duty rule, if parties to an existing contract agree to modify the contract for the sole benefit of one of them, the modification will usually be
unenforceable at common law for lack of consideration.
True or False: Employment contracts are regarded as divisible for the purpose of permitting the employee to recover the agreed price for the number of months of service he has put in.
True.
If a buyer repudiates a contract for unfinished goods, the seller may in the exercise of reasonable commercial judgment proceed in any reasonable manner, including finishing the goods for resale.
The seller’s damages in this situation are:
the difference between the contract price and the resale price RATHER THAN seeking costs and anticipated profit.
True or False: An intended beneficiary can enforce a contract to which it is not a party because the parties intended the contract to benefit that beneficiary.
True.
Divisible Contract
When performance under a contract can be divided into multiple tasks, each with a corresponding price that the other party must pay when the task is completed, one party’s performance of a task triggers:
the other party’s duty to pay for it, even if the performing party breaches another part of the contract.
When a seller’s demand for a modification is a repudiation, and the buyer refuses the modification and purchases goods elsewhere, the remedy for the seller’s breach is:
the difference between the cost of cover and the contract price.
What is the principle of reasonable expectations?
This applies to insurance law. It posits that parties should not be bound by term that they would not expect to find a contract unless those terms were called to their attention and that ambiguities are to be resolved in favor of the insured.
True or False: A party may avoid a contract if their asent was induced by either a FRAUDULENT or MATERIAL misrepresentation.
True.
Under UCC 2-501, Goods are identified to the contract when the seller:
ships, marks, or otherwise designates them as goods to which the contract refers.
What is a constructive condition precedent?
Where the contract contains no provision relating to the order of the respective performance, and performance on one side will necessarily take time, while the other can be performed in an instant, the former is a constructive condition precedent to the latter.
In other words, the performance that takes time must be substantially completed bore the other party needs to render his performance.