Term
| List the 7 main areas of contracts through the acronym: AFTPRET |
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Definition
Armadillos from Texas play rap eating tacos.
Applicable law
Formation of contracts
Terms of contract
Performance
Remedies for unexcused nonperformance
Excuse of nonperformance
Third-party problems |
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Term
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Definition
| Results from an offer that expressly requires performance as the only possible method of acceptance. |
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Term
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Definition
all other offers, usually offer that is silent as to acceptance.
It will be a BILATERAL K unless: (1) reward, prize, contest, (2) offer expressly requires performance for acceptance. |
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Term
| NBC offers Aslee Simpson 25K to sing on SNL. Ms. Simpson agrees to sing. Is there a K? |
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Definition
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Term
| List the elements of QUASI K. |
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Definition
P has conferred a benefit on D, AND
P has reasonably expected to be paid, AND
D realized unjust enrichment if P not compensated. |
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Term
| Quasi K is an EQUITABLE REMEDY, meaning ________. |
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Definition
| Anytime the application of K law produces a fair result, we look to answer in quasi K. |
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Term
| What is the measury of recovery for quasi K? |
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Definition
| The contract price is NOT the measure of recovery. Focus on value of benefit conferred. the K price is a ceiling if P is in default. |
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Term
| When does the common law v. the UCC apply to contracts? |
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Definition
When anything other than the sale of goods is involved.
Ex: real estate, services K |
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Term
| What are the factors that determine whether UCC Art 2 applies? |
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Definition
(1) Type of transaction = SALE
(2) Subject matter of transaction = GOODS (i.e., personal, tangible property. |
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Term
| What is the MIXED DEAL EXCEPTION to the UCC v. common law application? |
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Definition
In general, UCC Art 2 is an all or nothing rule/more important part.
ex: Under C's agreement with E to buy E's car, E is also obligated to provide C with two lessons in parallel parking a 73 Cadillac. Does Art 2 UCC apply if there is a disagreement about the parking lessons? YES--apply Art 2. |
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Term
| What is the MIXED DEAL EXCEPTION? |
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Definition
If the K divides payment, then apply UCC to sale of goods part and common law to the rest.
Apply the UCC to any dispute involving the goods where divided payment is involved. |
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Term
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Definition
An agreement that is legally enforceable.
Accordingly, look first for an agreement. Then, second, determine whether the agreement is legally enforceable.
In looking for an agreement, watch for info in the question about:
(i) the initial communication ("offer") and
(ii) what happens after the initial communication ("termination of the offer") and
(iii) who responds and how she responds ("acceptance") |
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Term
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Definition
| A manifestation of an intention to contract -- words or conduct showing a commitment. |
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Term
| What is the basic test to determine whether an offer has been made? |
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Definition
| Whether a reasonable person in the position of the offeree would believe that his or her assent creates a K. |
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Term
| If there is a missing price term in a sales contract, is the content still valid as an offer? |
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Definition
NO under the common law-- the price and description are required, therefore this missing information renders the offer NOT an offer.
However, under the UCC for the sale of goods, there is no price requirement. |
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Term
| Vague or ambiguous material terms are or are not an offer under either common law or UCC? |
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Definition
ARE NOT an offer.
examples of such vague terms = "appropriate", "fair", "reasonable" |
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Term
| REQUIREMENTS K/ OUTPUT Ks |
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Definition
A K for the sale of goods can state the quantity of goods to be delivered under the contract in terms of the buyer's requirements or seller's output.
Examples of such content terms:
"All"
"only"
"exclusively"
"solely" |
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Term
| Under a requirements K, may there be an increase in requirements? |
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Definition
| YES- The buyer can increase requirements so long as the increase is in line with prior demands. Not unreasonably disproportionate limitation on increases. |
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Term
| An advertisement IS/IS NOT an offer. |
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Definition
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Term
| What are the 2 exceptions to the general rule that an advertisement is not an offer? |
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Definition
(1) An advertisement can be an offer if it is in the nature of a reward.
ex: Carbolic promises 100 pound reward to anyone who catches the flu after using its smoke ball as directed.
(2) An advertisement can be an offer if it specifies quantity and expressly indicates who can accept.
ex: 1 fur coat $10- first come, first served. |
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Term
| What are the 4 ways to TERMINATE AN OFFER? |
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Definition
(1) LAPSE
(2) DEATH
(3) REVOCATION
(4) REJECTION |
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Term
| What time is sufficient to constitute a lapse to terminate the offer? |
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Definition
| time stated or reasonable time (as a rule of thumb: 1 month or more. |
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Term
| How does the death of a party terminate an offer? |
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Definition
| As a general rule, death or incapacity of either party after the offer but before acceptance terminates offer. |
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Term
| Will an irrevocable offer continue after the death of either party? |
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Definition
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Term
| RULE: Only the person who made the offer can revoke it. |
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Definition
| Note: the offeree may "reject" not "revoke." |
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Term
| What are the two ways the offeror can revoke an offer? |
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Definition
(1) by an unambiguous statement by offeror to offeree of unwillingness or inability to contract OR
(2) unambiguous conduct by offeror indicating an unwillingness or inability to contract that oferee is aware of.
*offeree must be aware of revocation |
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Term
| What are the four different situations in which an offer CANNOT BE REVOKED, i.e., is irrevocable. |
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Definition
(1) OPTION
(2) FIRM OFFER RULE
(3) An offer cannot be revoked if there has been: reliance that is reasonably foreseeable and detrimental.
(4) The start of performance pursuant to an offer to enter into a unilateral K makes that offer irrevocable for a reasonable time to complete performance. |
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Term
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Definition
| An offer cannot be revoked if the offeror has not only made an offer but also: (i) promised to not revoke (promised to keep offer open) and (ii) this promise is supported by payment or other consideration. |
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Term
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Definition
| An offer cannot be revoked for up to 3 months if: (i) offer to buy or sell goods, (ii) signed, written promise to keep the offer open, and (iii) party is a merchant. |
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Term
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Definition
| generally a person in business |
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Term
| O offers P $1K to paint O's house. O's offer states that it can be accepted only by performance. P starts painting. Can O still revoke? |
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Definition
| NO b/c if we have an offer to enter into unilateral K, the start of performance makes the K irrevocable. |
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Term
| O offers P $1K to paint O's house. O's offer states that it can be accepted only by performance. P buys paint. Does this trigger the start of performance so that O cannot revoke? |
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Definition
| NO- merely buying paint is mere preparation v. performance, which can esstop the offeror from revoking. |
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Term
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Definition
| Words or conduct of the offeree that evince rejection (either direct or indirect). |
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Term
| List the 3 forms of INDIRECT REJECTION. |
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Definition
(1) COUNTEROFFER- counteroffer generally terminates the offer and becomes a new offer. Thus generally, where a counteroffer has been made there is no express K unless that counteroffer has itself been accepted. Vounteroffers need to be distinguished from bargaining. Bargaining does not terminate the offer. And, counteroffers to not terminate options.
(2) CONDITIONAL ACCEPTANCE- terminates the offer. Look for a response to an offer with the word "ACCEPT" followed by one of the following: "if" "only if" "provided" "so long as" "but" or "on condition that" --> indirect rejection.
(3) MIRROR IMAGE RULE: under common law, a response to an offer that adds new terms is treated like a counteroffer rather than an acceptance. |
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Term
| On Jan 15, S offers Blackacre to B for $10K. B pays S $2 for S's promise not to revoke the offer until April 5. On March 3, B makes a counteroffer to S of $9K. Can B still accept S's offer? |
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Definition
| YES- general counteroffers kill EXCEPT where it is an option K. |
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Term
| Under the UCC when is an additional term part of the K? |
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Definition
ONLY IF:
(1) both parties are merchants AND
(2) additional term is not "material" AND
(3) additional term is not objected to by the offeror. |
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Term
| How do you determine the method of acceptance of the K? |
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Definition
(1) The offer can control the method of acceptance, the time that a distance acceptance is effective, or whether the offeree must give notice that it has accepted by performance.
OR
(2) where the offer is silent as to the method of acceptance the following can create acceptance:
(a) the offeree starts to perform- general rule: start of performance is acceptance. Starting to perform is treated as an implied promise to perform and so there is a bilateral K. However, start of performance is not acceptance of unilateral K offers.
(b) distance and delay in communications "Mailbox rule"
(c) the seller of goods sends the wrong goods. |
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Term
| MAILBOX RULE(s). List and describe all 4. |
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Definition
(1) all communications other than acceptance are effective only when received.
(2) acceptance is generally only when mailed.
(3) if a rejection is mailed before an acceptance is mailed, then neither is effective until received.
(4) you cannot use the mailbox rule to meet an option deadline. |
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Term
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Definition
Generally, an offer can be accepted only by:
(1) a person who knows about the offer at the time she accepts
(2) who is the person to whom it was made.
Offers CANNOT be assigned; options can be assigned unless the option provides otherwise. |
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Term
| List the 11 legal reasons for NOT enforcing an agreement. |
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Definition
(1) lack of consideration or a consideration substitute for the promise at issue
(2) lack of capacity of the person who made that promise
(3) Statute of Frauds
(4) existing laws that prohibit the performance of the agreement
(5) unconscionability
(6) misrepresentations
(7) nondisclosure
(8) duress
(9) public policy
(10) ambiguity in words of agreement AND
(11) mistakes at the time of the agreement as to the material facts affecting the agreement. |
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Term
CONSIDERATION
List the 3 steps of dealing with consideration for BAR purposes. |
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Definition
(1) Identify the promise breaker
i.e., the person who is not doing what she promised
(2) Ask whether that person asked for something in return for her promise.
i.e., bargained for something.
(3) Look at the person who is trying to enforce the prmise and ask what requested legal detriment that person sustained.
In sum, look for BARGAINED FOR LEGAL DETRIMENT |
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Term
| Described "BARGAINED FOR" |
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Definition
Asked for by the promisor in exchange for her promises.
Consideration fact patters have people doing stuff that they were asked to do. |
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Term
| Describe LEGAL DETRIMENT. |
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Definition
| To refrain from doing something you have a legal right to do in exchange for some promise. |
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Term
| Can one promise be consideration for another? |
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Definition
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Term
As a general rule, past consideration is not consideration.
What is the exception to this general rule? |
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Definition
| When the past consideration is EXPRESSLY requested by promisor and expectation of payment by promisee. |
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Term
| Apu saves Lisa's life. Homer is so grateful that he promises to pay Apu $3K. Homer later changes his mind. Is there consideration for Homer's promise so it is legally enforceable? |
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Definition
| NO- stuff that has happened can not be exchanged for a promise. It can never be consideration. |
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Term
| Is there consideration when there is a PREEXISTING CONTRACTUAL OR STATUTORY DUTY? |
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Definition
Common law general rule: doing what you are already legally obligated to do is not new consideration for a new promise to pay you more to do merely that. Under common law, new consideration is required for contract modification.
UCC Art 2: does not have a pre-existing duty legal duty rule. New consideration is not required to modify a sale of goods contract. Good faith is the test for changes to an existing sale of goods K. |
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Term
| What are the 3 exceptions to the common law general rule that K modification requires consideration? |
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Definition
(1) Addition to or change in performance
(2) Unforeseen difficulty so severe as to excuse performance.
(3) Third party promise to pay |
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Term
Another possible consideration issue = PART PAYMENT as consideration for release, i.e., promise to forgive balance of debt.
What is the DUE and DISPUTED rule? |
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Definition
If the debt is due and undisputed, then part payment is not consideration for release.
Early payment (even if by one day) is new consideration. |
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Term
A promise is legally enforceable even though there is no consideration if there is one of the following consideration substitutes:
(1) ___________
(2) ___________
(3) ___________ |
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Definition
(1) Seals: majority rule now is that seal is not a consideration substitute.
(2) A written promise to satisfy an obligation for which there is a legal defense is enforceable without consideration.
*But note: a writing is required.
(3) Promissory Estoppel (detrimental reliance) |
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Term
| What are the elements for PROMISSORY ESTOPPEL (detrimental reliance)? |
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Definition
(1) Promise
(2) Reliance that is reasonable, detrimental and foreseeable
(3) Enforcement necessary to avoid injustice. |
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Term
Another reason for not enforcing an agreement: D promissor lacks capacity to contract.
Those lacking capacity are of 3 types: |
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Definition
(1) infant (under 18)
(2) mental incompetencies (lacks ability to understand agreement)
(3) intoxicated persons if other party has reason to know |
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Term
| What are the 3 consequences of incapacity? |
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Definition
(1) Right to disaffirm by person without capacity
(2) Implied affirmation by retaining benefits after gaining capacity (ratification)
(3) Quasi-K liability for necessaries |
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Term
| QUASI K LIABILITY FOR NECESSARIES |
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Definition
| A person who does not have capacity is legally obligated to pay for things that are necessary such as: food, clothing, medical care or shelter but that liability is based on quasi-K law, not contract law. |
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Term
| Is the age capacity of the Plaintiff relevant? |
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Definition
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Term
| The next set of cards will consider the STATUTE OF FRAUDS defense for not enforcing agreements. |
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Definition
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Term
| What is a STATUTE OF FRAUD? |
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Definition
A statute designed to prevent fraudulent laims of the existence of a K. SOF makes it harder to make such a false or fraudulent claim by requiring the claimant have proof that a K exists before the claimant gets it day in court. The proof required to satisfy the SOF is generally proof of either:
(1) performance
(2) or a writing signed by the person who is asserting that there was no such agreement.
SOF is considered in essence a barrier between a litigant's asserting a contract claim and a trial on that claim. If a contract claim is "WITHIN THE SOF" then the SOF's requirement of "special proof" (performance or a writing) must be satisfied to get through that SOF barrier to have a trial. |
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Term
| What are contracts WITHIN THE SOF? |
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Definition
(1) promises to answer for the debts of another
(2) service K not capable of being performed within a year from the time of the K
(a) specific time period, more than a year --> SOF applies
(b) specific time, more than a year from the date of K --> SOF applies
(c) task- SOF does NOT APPLY.
(d) life- SOF does NOT APPLY.
(3) Transfers of interest in real estate (with the exception for leases of a year or less)
(4) Sale of goods for $500 or more |
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Term
| What does "CAPABLE OF BEING PERFORMED" mean? |
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Definition
| theoretically possible with unlimited resources; ignore what actually happens; key is what might have happened with unlimited resources. |
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Term
| Kenny G sues Club Putz for breach of an alleged Jan 15, 2010 K to perform on Dec. 24, 2011. Club Putz files a motion to dimiss based on the SOF. Is this within the SOF? |
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Definition
| YES- there is no way the K can be performed within a year. |
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Term
The transfer of an interest in REAL PROPERTY is within the statute of frauds.
Name the main exception to this general rule. |
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Definition
| Leases of ONE YEAR or less are not within the statute of frauds. |
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Term
| P claims D agreed to lease Blackacre for one year. Is this within the statute of frauds? |
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Definition
| NO b/c there is an exception to the main rule that transfers of interest in real estate are within the statute of frauds UNLESS the transfer is a lease for one year or less. |
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Term
The Sale of Goods for $500 or more is WITHIN the STATUTE OF FRAUDS.
Answer the following regarding the rule above:
(1) C sues E, claiming that E agreed to sell him his 1973 Cadillac for $500. E files a motion to dismiss based on the SOF. Is this within the SOF?
(2) Same facts but C claims that the agreed upon price was $400. |
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Definition
(1) YES
(2) NO- it is not within the SOF, but note that the rest of the UCC contract law rules will apply to the transaction. |
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Term
| How is the STATUTE OF FRAUDS satisfied? |
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Definition
| If the SOF is applicable, then requirements of the SOF must be met ("satisfied") in order for the agreement to be enforceable. If the requirements are not satisfied, there is a SOF defense. And, if there is an SOF defense asserted and established, there is no legally enforceable agreement (i.e., no K liability). |
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Term
| List and describe the 2 ways the SOF can be satisfied. |
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Definition
(1) WRITING: In order for a writing to satisfy a non-UCC SoF, that writing must satisfy the all material terms test: who and what? Look also to who signed the writing (b/c the person asserting SOF defense must have signed the writing).
The UCC requires that the writing indicate that there is a K for the sale of goods and contain the quantity term. Generally, the writing must be signed by the person asserting the SoF defense, however, the UCC provides: based on that person's failure to respond to a signed writing where both parties are merchants and the person who receives a signed writing with a quantity term that claims there is a K fails to respond within 10 days of receipt.
(2) PERFORMANCE: the SOF can be satisfied by performance, and the 6 rules re: performance vary depending on whether the K is a real estate transfer K, services K, or a sale of goods K. |
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Term
| Answer the following: "Your offer of Jan 15th is hereby accepted" s/ Dana Scully. Does this writing satisfy the SOF? |
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Definition
| NO- the who and what terms do not satisfy the common law all material terms test. |
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Term
| Answer the following: S sues B for breach of an alleged K to buy hominy grits for $500. The only writing is the following: "I agree to buy 100 pounds of grits" S/B. Does this writing satisfy the SOF? |
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Definition
| YES- the writing satisfies the SOF and must simply contain the quantity term. |
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Term
| Answer the following: S, a grits distributor, receives the following fax from B, a grits store: "As we agreed during our phone convo today, you will be sending me 200 sacks of grits." s/B. S does not respond. S never sends the grits. B sues S for breach of K. S asserts a SOF defense. Has the SOF been satisfied even though S did not sign anything? |
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Definition
YES
this is the ANSWER THE DAMN LETTER RULE |
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Term
| What is the JUDICIAL ADMISSIONS TEST? |
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Definition
Admissions of the agreement in a pleading, discovery, or testimony.
This is based on the common-sense notion that if the defendant asserting a SOF defense admits in a pleading or testimony or discovery that he had entered into an agreement with the P, the purpose of the SOF (protection against fraudulent or otherwise false claims of an agreement) is fulfilled and so the SOF is satisfied--no SOF defense. |
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Term
| What is the EQUAL DIGNITY RULE? |
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Definition
| Authorization to enter into a K for someone else. Issue is when do rules of law require that a person have written authorization in order to execute a K for someone else. Rules of law require that the authorization must be in writing that contract only if the contract to be signed is within the SOF, i.e., the authorization must be of "equal dignity" with the K. |
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Term
| Answer the following: L sues S for breach of a one year apartment lease that E entered into on her behalf. Does contract law require that L have written evidence of E's authority to act on behalf of S? |
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Definition
| NO- it is a 1 year lease, so it is not within the SOF and therefore there is no legal requirement that E have written authorization. |
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Term
| When do rules of law require written evidence of modification of a written contract? |
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Definition
Sometimes there is no legal requirement of written evidence of an alleged modification of a written K. Resolve any legal issue of whether such written evidence of the modification is needed by:
(1) looking at the deal with the alleged change, and
(2) determining whether the deal with the alleged change would be within the SOF.
IF the deal with the alleged change would be within the SOF, then the alleged modification agreement must be in writing. |
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Term
| Answer the following: T leases a building from L for one year. L claims they later agreed to increase the term to 3 years. Does contract law require written evidence of the alleged modification? |
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Definition
| YES- the alleged modification is a 3 year lease, which is within the SOF so we need written evidence of SOF. |
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Term
| Answer the following: T leases a building from L for 3 years. T later claims that they agreed to reduce the duration of the lease from 3 years to one year. Does contract law require written evidence of the alleged modification? |
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Definition
| NO- the alleged modification is a 1 year lease and doesn't have to be in writing (i.e., there is no legal requirement for a writing). |
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Term
| Answer the following: C contracts to buy 600 bottles of Thunderbird wine from Epstein for $600. C later claims that they agreed to modify the K to reduce the price to $3. Does contract law require written evidence of the alleged modification agreement? |
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Definition
| NO- because the alleged modification reduces the price to $3. |
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Term
| Re: CONTRACT MODIFICATION, what if the agreement is in writing and requires that ALL modifications be in writing? |
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Definition
Under common law, contract provisions requiring that all modifications be in writing are not effective -- ignore K language (i.e., weird rule ignore what the K says, apply K modification law).
Under the UCC contract provisions requiring written modifications are effective unless waived. |
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Term
| Answer the following: R employs E for 11 months. They sign a contact. It provides that all modifications have to be in writing. E claims that they later agreed to reduce the employment term to 7 months. R alleges that there was no such later agreement. Is a writing required as a matter of law? |
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Definition
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Term
| Answer the following: R employs E for 11 months. They sign a contact. It provides that all modifications have to be in writing. E claims that they later agreed to reduce the employment term to 7 years. R alleges that there was no such later agreement. Is a writing required? |
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Definition
| YES- b/c the alleged modification is to a term of 7 years and requires a writing. |
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Term
| Answer the following: E contracts to sell his Cadillac to C for $400. They sign a contract providing that all modifications must be in writing. E claims that they later agreed to raise the price to $499. C refuses to pay $499. Is a writing required as a matter of law? |
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Definition
YES UNLESS WAIVED
Note: this is so even though the price is 499 not 500. |
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Term
| List the other main reasons for NOT ENFORCING AN AGREEMENT (5). |
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Definition
(1) Illegality
(2) Public Policy
(3) Misrepresentation
(4) Non Disclosure
(5) Duress |
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Term
ILLEGAL SUBJECT MATTER/ILLEGAL PURPOSE
(reason for not enforcing an agreement) |
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Definition
| If the subject matter is illegal, the agreement is not enforceable. If the subject matter is legal but the purpose is illegal, the agreement is enforceable only by the person who did not know of the illegal purpose. |
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Term
| Answer the following: E agrees to pay $7,000 to S to injure C. If S does not injure C, can E recover from S for breach of contract? |
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Definition
| NO- b/c the subject matter is illegal, so the contract is not enforceable. |
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Term
| Answer the following: S contracts with Delta for a non-refundable ticket to fly from LA to Chicago where C is (and she is going to injure him). If S does not pay for the ticket, can Delta recover from S for breach of K? |
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Definition
| YES- the subject matter is legal but her purpose is illegal, the agreement is enforceable only by Delta who did not know of S's illegal purpose. |
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Term
PUBLIC POLICY
(reason for not enforcing an agreement) |
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Definition
Courts can refuse to enforce an agreement b/c of public policy. Look for an exculpatory agreement that exempts intentional or reckless conduct from liability or a covenant not to compete without a reasonable need or reasonable time and place limit.
It will be invalid/unenforceable/not a K b/c of public policy. |
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Term
MISREPRESENTATION
(reason for not enforcing an agreement) |
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Definition
| False statement of fact that induces the contract by one of the parties of her agent. No wrongdoing required for material misrepresentations. |
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Term
| Answer the following: S tells B that the house had no termites. B agrees to buy the house in reliance on S's representation. S honestly believes that the house has no termites, but the house has termites. Can B rescind the agreement to buy the house? |
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Definition
YES- under contract law, even honest and innocent misrepresentations matter.
In tort, however, the wrongdoer must be negligent.
Note: to RESCIND is contract law, to seek damages = tort law. |
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Term
NONDISCLOSURE
(reason for not enforcing an agreement) |
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Definition
Generally, a person making a K has no duty to disclose what she knows.
E.g., B is contracting to buy land for a new Walmart but does not have to disclose that fact to sellers. Wrongdoing requirement for nondisclosure. On the exam, look for fiduciary-like relationship or concealment b/c only wrongful non-disclosure is actionable. |
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Term
| Answer the following: In selling her house to B S puts carpets and heavy furniture over the termite damage and does not tell B about the termites. Can B rescind? |
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Definition
| YES- b/c of S's wrongful non-disclosure. |
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Term
DURESS
(reason to not enforce an agreement) |
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Definition
Physical OR economic
Elements:
Bad guy and vulnerable guy |
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Term
| Answer the following: D has a contract to supply 1,000 pounds of kosher grits to P for Chanukah sales in 2011. D refuses to perform this contract until P agrees to buy 4,000 pounds of cheese grits in 2012. P has no other source of kosher grits and so agrees. D delivers the kosher grits. Can P get out of the agreement to buy 4,000 pounds of cheese grits in 2012? |
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Definition
| YES- under the theory of duress for not enforcing an agreement. |
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Term
UNCONSCIONABILITY
(another reason for not enforcing a K) |
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Definition
| This doctrine is now a part of K law generally and it empowers a court to refuse to enforce all or part of an agreement. |
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Term
| What are the 2 basic tests for UNCONSCIONABILITY as a reason for not enforcing an agreement? |
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Definition
(1) Unfair surprise (procedural unconscionability)
(2) Oppressive terms (substantive unconscionability)
AT THE TIME THE AGREEMENT WAS MADE. |
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Term
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Definition
| trouble in the agreement process |
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Term
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Definition
| facts that indicate one-sidedness |
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Term
Another reson not to enforce an agreement:
AMBIGUITY in words of agreement.
Describe the rule for when there will be no contract. |
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Definition
There will be no contract IF:
(1) the parties use a material term that is open to at least reasonable interpretations AND
(2) each party attaches different meaning to the term AND
(3) Neither party knows or has reason to know the term is open to at least 2 reasonable interpretations. |
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Term
Answer the following: B and S contract for cotton to be delivered on the Peerless. B intends the October Peerless, S intends the December Peerless. Neither B nor S knows that there are 2 ships named Peerless. Can S enforce an agreement to buy the cotton on the Dec. Peerless?
What result if B (but not S) knows that there are 2 ships named Peerless? |
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Definition
NO- the agreement is unenforceable b/c of ambiguity.
YES- there is a K under the terms as understood by S. |
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Term
Final reason for not enforcing an agreement:
MISTAKE OF FACT EXISTING AT TIME OF CONTRACT |
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Definition
Mutual mistake of material fact and not assumed risk.
Unilateral mistake of material fat: generally, courts have been reluctant to allow a party tio avoid a contract for a mistake made by only one party. Look for situations in which the other party had a reason to know of the mistake |
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Term
| The next cards will consider: PAROL EVIDENCE RULE |
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Definition
For purposes of the bar exam, the parol evidence rule is like an evidence rule in that the (1) issue is whether evidence is admissible and (2) purpose for which the evidence is to be introduced is often determinative.
The underlying premise is that the final written version of a deal is more reliable than anything said or written earlier. The essence of the parol evidence rule is the exclusionary effect of written contract on earlier (or contemporaneous) agreements as a possible source of terms of the K. |
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Term
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Definition
| Written agreement that court finds in the final agreement, and it triggers the parol evidence rule. |
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Term
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Definition
| Written and final but not complete |
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Term
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Definition
| Written and final and complete. |
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Term
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Definition
| Contract clause such as "This is the complete and final agreement." Merger clauses are persuasive but not conclusive. |
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Term
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Definition
| Words of one or both party(ies) before integration that are ORAL or WRITTEN. |
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Term
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Definition
| Equitable action to modify written contract to reflect actual agreement. |
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Term
| What are the 2 triggering facts for PAROL EVIDENCE RULE? |
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Definition
(1) written contract that court finds is the final agreement AND
(2) Oral statement made at the time the contract was signed or earlier oral or written statements by the parties to the contract.
Note: Parole evidence rule is all about the admissibility and admissibility is all about purpose. |
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Term
| What are the 5 parol evidence rules? |
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Definition
(1) Generally, cannot use parol evidence to change/contradict
(2) Mistake in integration: a court may consider evidence of such terms for the limited purpose of determining whether there was a mistake in integration (reducing the agreement to writing)
(3) Parol evidence rule does not prevent a court from admitting evidence of earlier words of the parties for the limited purpose of determining whether there is a defense to the enforcement of the agreement such as misrepresentation, fraud, duress.
(4) Parol evidence is admitted to explain a term in the written deal (regardless of whether the writing is complete or partial)
(5) parol evidence rule prevents a court from admitting evidence of earlier agreements as a source of consistent additional terms unless the court finds:
(i) that the written agreement was only a partial integration OR
(ii) that the additional terms would ordinarily be in a separate agreement. |
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Term
| The next set of cards considers CONDUCT AND COURSE OF PERFORMANCE as a source for contract law. |
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Definition
The words of the parties are not the only source of contract terms. Conduct can also be a source of contract terms. On the bar, such conduct takes one of three forms:
(1) courts look first to performance
(2) course of dealing
(3) custom and usage. |
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Term
COURSE OF PERFORMANCE
(and give an example) |
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Definition
same people, same contract
ex: S contracts to sell 1,000 chickens a month to B for 12 months. The first 3 shipments are boiling hens, and B does not complaint. |
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Term
COURSE OF DEALING
(and give an example) |
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Definition
same people, different but similar contracts
Ex: S contracts to sell 1,000 chickens a month to B for 12 months. Under prior chicken contracts, S sent B boiling hens, and B complained. |
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Term
CUSTOM AND USAGE
(and give an example) |
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Definition
different but similar people, different but similar contract
Ex: S contracts to sell 1,000 chickens a month to B for 12 months. It is customary in the chicken industry to use the word "chicken" when the deal covers chickens up to six pounds including boiling hens. |
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Term
| If there is an agreement as to place of delivery by a common carrier, then the question is what does the seller have to do to complete its delivery obligation. What are the 2 possible UCC answers to that question? |
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Definition
(1) SHIPMENT CONTRACTS
(2) DESTINATION CONTRACTS |
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Term
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Definition
| A contract which means that the seller completes its delivery obligation when it gets the goods to a common carrier, makes reasonable arrangements for delivery & notifies the buyer. |
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Term
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Definition
| means that the seller does not complete its delivery obligation until the goods arrive where the buyer is |
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Term
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Definition
Freight on Board.
When it is FOB followed by a city where the seller is or where goods are means shipment contract; FOB followed by any other city means destination contract. |
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Term
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Definition
| arises where: (i) after the contract has been formed but before the buyer receives the goods (ii) the goods are damaged or destroyed and (iii) neither the buyer nor the seller is to blame. |
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Term
| List the 4 risk of loss rules (in order of steps 1-4) in determining who bears the risk of loss. |
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Definition
(1) Agreement of the parties controls
(2) Breaching party is liable for any uninsured loss even though breach is unrelated to problem
(3) Delivery by common carrier other than seller: risk of loss shifts from S to B at the time that the seller completes its delivery obligations
(4) The determining factor is whether the seller is a merchant. Whether the buyer is a merchant is irrelevant. Risk of loss shifts from a merchant-seller to the buyer on the buyer's receipt of the goods. Risk of loss shifts from a non-merchant seller when he or she "tenders" the goods. |
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Term
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Definition
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Term
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Definition
| make available (where goods are and how to get them) |
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Term
Which of the following is/are express warranty:
(a) "all steel"
(b) "top quality"
(c) guaranteed to operate for two years
(d) seller's showing buyer a sample |
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Definition
(b)
A is a fact and thus a W.
C is a promise and thus a W.
D is a W. |
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Term
| What are the 3 WARRANTIES of quality? |
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Definition
(1) EXPRESS: words that promise, describe or state facts or for use of sample or model. Distinguish from sales talk which is more generally an opinion.
(2) Implied W of Merchantability: when any person buys any goods from any merchant, a term is automatically added to the contract by operation of law: that the goods are fit for the ordinary purpose for which such goods are used.
(3) Implied W of fitness for a particular purpose: the buyer has a particular purpose and relies on the seller to select suitable goods and the seller has reason to know of purpose and reliance. |
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Term
| What are the 2 contractual limitations on Warranty Liability? |
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Definition
(1) DISCLAIMER: a K provision which eliminates implied warranties
(2) LIMITATIONS ON REMEDIES: a provision which simply limits or sets recovery for any breach of warranty. |
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Term
| Choose the correct answer: Express Warranties generally CAN/CANNOT be disclaimed. |
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Definition
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Term
Choose the correct answer: Implied Warranties of merchantability and fitness CAN/CANNOT be disclaimed in either of the following ways:
(1) conspicuous language of disclaimer, mentioning merchantability OR
(2) "as is" or "with all faults" |
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Definition
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Term
| Answer the following: B buys a big screen TV "as is" from S TV store. Shortly after B turns the TV on in her home, it explodes. Can B sue S for breach of the implied W of merchantability? |
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Definition
| NO- S disclaimed the implied W of merchantability. |
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Term
| What is the general test for limitation of remedies? |
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Definition
UNCONSCIONABILITY
It will be prima facie unconscionable if breach of warranty on consumer goods causes personal injury. |
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Term
| Is it possible to limit remedies even for express warranties? |
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Definition
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Term
| Answer the following: B buys an oven from S. The contract provides that "All operating parts are guaranteed for two years" and "Warranty liability shall be limited to replacement parts." A defective heating element causes a fire which causes $100 of property damages. If B sues S for breach of contract, what can B recover? |
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Definition
| The replacement part b/c it is possible to limit remedies, even for express warranties. |
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Term
The next set of cards concerns the SALE OF GOODS PERFORMANCE concepts
*Note this idea is limited to the "sale of goods" |
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Definition
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Term
| List the 6 concepts of sale of goods performance. |
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Definition
(1) Perfect Tender
(2) Rejection of the Goods
(3) Cure
(4) Installment Contracts
(5) Acceptance of the Goods
(6) Revocation of Acceptance of the Goods
(6.5) payment: another performance of sale of goods contract. |
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Term
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Definition
| the seller's performance must be perfect: perfect goods, perfect delivery. A less than perfect tender by the seller generally gives the buyer the option of rejection of the delivered goods. |
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Term
| Answer the following: B and S enter into a K for 200 green widgets. S delivers 199 green widgets and 1 yellow widget. Is that a perfect tender? |
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Definition
| NO- the goods are not perfect. Therefore, B can reject the goods either in whole or in part. |
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Term
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Definition
| If the seller does not meet the perfect tender standard, the buyer has the option to retain and sue for damages or reject "all or any commercial unit" and sue for damages. This rejection alternative is LIMITED by Cure "Installment contract and acceptance." |
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Term
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Definition
| In some instances, a seller who fails to make a perfect tender will be given a second chance, or an option to cure. Note that a seller does not always have the opportunity to cure, and that the buyer cannot compel the seller to cure. |
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Term
| What are the two ways that grant the seller an option to cure? |
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Definition
(1) Seller has reasonable grounds to believe that the improper tender would be acceptable, perhaps with a money allowance.
(2) Time for performance has not yet expired |
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Term
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Definition
requires or authorizes delivery of the goods in separate lots to be separately accepted.
The buyer has the right to reject an installment only where here is a substantial impairment in that installment that can't be cured ("a really bad wrong"). |
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Term
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Definition
If the buyer accepts the goods, he cannot later reject them.
Payment without opportunity for inspection = NOT acceptance. |
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Term
| Answer the following: E buys a "hair replacement system" from Hair Direct by calling Hair Direct's 800 number and using his credit card. Obviously, E's new hair has not arrived. Has E accepted the goods? |
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Definition
| NO- even though E has paid for the goods, where there has been payment before opportunity to inspect the goods, there has NOT been acceptance. |
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Term
| What is the effect of the buyer's keeping goods tendered without an objection? |
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Definition
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Term
| REVOCATION OF ACCEPTANCE OF GOODS |
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Definition
| In limited circumstances, a buyer can effect a cancellation of the contract by revoking its acceptance of the goods. |
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Term
| List the 3 requirements for REVOCATION OF ACCEPTANCE OF THE GOODS. |
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Definition
(1) nonconformity substantially impairs the value of the goods
(3) excusable ignorance of grounds for revocation or reasonable reliance on seller's assurance of satisfaction (rule of thumb = 1 month or less) |
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Term
| PAYMENT as a form of performance of sale of goods K. List the 2 rules. |
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Definition
(1) Open price term means reasonable price at time of delivery
(2) price to be fixed by buyer or seller means that price must be so fixed in good faith |
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Term
| The next set of cards concerns the common law performance concepts. |
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Definition
| The common law counterpart to perfect tender is SUBSTANTIAL PERFORMANCE. In a sale of goods contract, if the seller makes a perfect tender the the buyer must perform by paying the contract price. In common law contract, if one party substantially performs, then the other party must pay or otherwise perform. More on this LATER |
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Term
| List the 2 REMEDIES for an unexcused non-performance. |
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Definition
(1) specific performance/injunction
(2) Reclamation |
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Term
| SPECIFIC PERFORMANCE/INJUNCTION* |
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Definition
Rule of thumb: can't get specific performance in Ks.
If the remedy for damages are not adequate at law, or one party does not have clean hands, or other parties' equities are involved, then specific performance is possible as a remedy. |
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Term
| Answer the following: S contracts to sell Blackacre to B. S breaches. Can B get specific performance? |
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Definition
| YES- b/c "nothing is a substitute for land" |
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Term
| Answer the following: S contracts to sell Blackacre to B. S breaches and sells it to X, a BFP. Can B still get specific performance? |
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Definition
| NO- b/c X is in possession of land so no specific performance remedy. |
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Term
| What are the 3 main examples of EQUITABLE REMEDIES in contract breach cases? |
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Definition
(1) contracts for sale of real estate
(2) contact for sale of unique goods (antiques, art, custom made or other appropriate circumstances)
(3) contract for services: no specific performance, possible injunctive relief |
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Term
RECLAMATION
(and list its requirements) |
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Definition
right of an unpaid seller to get its goods back so long as he meets the following requirements:
(1) the buyer must have been insolvent at the time that it received the goods
(2) the seller demands return of the goods within 10 days of receipt
(3) buyer still has the goods at time of demand. |
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