Term
| Identify the situations in which a contract must be in writing under the statute of frauds. |
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Definition
The situations in which a contract must be in writing under the statute of frauds are the following:- Contracts for the sale of land or any interest in land
- Contracts that cannot be performed within one year
- Promises to pay another's debt
- Promises in consideration of marriage
- Promises by executors of decedents' estates to pay estate debts from executors' own funds
- Contracts involving the sale of personal property for $500 or more
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Term
| Under what circumstances, if any, will an oral executory contract to sell a house and land be legally enforceable? |
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Definition
| When the purchaser of real property has taken possession of the property and made substantial improvements in reliance with an oral contract to sell, most courts enforce the oral contract. |
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Term
| How have courts interpreted the statute of frauds with regard to contracts that cannot be performed in a year? |
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Definition
| Courts have not favored the one-year requirement and generally hold the provision requiring written contracts inapplicable if it is possible to perform the contract within one year. |
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Term
| For sale of personal property under the UCC, what terms must a contract contain to satisfy the statute of frauds? |
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Definition
| A contract for the sale of personal property must contain terms relating to the quantity of goods for sale to satisfy the statute of frauds. |
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Term
| What type of writing is sufficient to satisfy the statute of frauds? |
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Definition
| To satisfy the statute of frauds, a written note or memorandum is sufficient. |
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Term
| What insurance contracts, if any, are subject to the statute of frauds? |
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Definition
| Of the six situations to which the statute of frauds applies, courts have considered applying only two to insurance contracts: (1) policies that are contracts that cannot be performed within one year and (2) policies that are promises to answer for another's debt. |
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Term
| What is the purpose and effect of the parol evidence rule? |
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Definition
| The parol evidence rule, which limits the terms of a contract to those expressed in writing, has the following three purposes: (1) to carry out the parties' presumed intentions, (2) to achieve certainty and finality as to the parties' rights and duties, and (3) to exclude fraudulent and perjured claims. |
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Term
| Describe the exceptions to the parol evidence rule. |
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Definition
Parol evidence is allowed under the following circumstances: - To prove terms of incomplete contracts
- To clarify amiguity in a contract
- To support an allegation of fraud, accident, illegality, or mistake relating to a contract
- To prove failure of a condition precedent
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Term
| What is a court's goal in interpreting a contract? |
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Definition
| A court's goal in interpreting a contract is to determine the intentions of the parties. |
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Term
| Describe the effects of treating contracts as divisible. |
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Definition
| The effect of treating contracts as divisible is that the performance of a portion of the contract entitles the performing party to immediate payment. |
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Term
| Under the UCC, how will a court enforce a contract for the sale of goods when the contract does not contain the price of goods sold? |
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Definition
| If the parties fail to state a price for the goods, a court will assume that the contract implies a reasonable price. |
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Term
| What guidelines do courts use to resolve contradictory terms? |
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Definition
To resolve contradictory terms, the courts apply a system of priorities:- Handwriting prevails over typewriting
- Typewriting prevails over printing
- Words prevail over figures
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Term
| How do courts resolve ambiguous contractual terms? |
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Definition
| If a provision can have more than one reasonable meaning, the courts adopt the interpretation least favorable to the party who put the provision into the contract and most favorable for the party who assented to it. If a provision is so amibiguous that its meaning cannot be determined with the usual tools of interpretation, the court can admit evidence from outside the contract. |
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Term
How does the UCC reconcile conflicts among the following:a. The express terms of an agreement c. Course of dealing between parties d. Course of performance between the parties |
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Definition
| The UCC reconciles conflicts by establishing the following priorities when these considerations are in conflict: (a) express terms of the contract, (b) course of performance, (c) course of dealings, and (d) trade usage. |
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Term
| State the types of situations in which rights may not be assigned. |
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Definition
The following are the most common situations in which contract rights are not assignable:- Legal restrictions
- Contract restrictions
- Personal contracts
- Alteration of performance
- Personal satisfaction contracts
- Damages for personal injury
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Term
| Explain why an assignee of a debt should immediately notify the obligor of the assignment. |
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Definition
| The assignee should notify the obligor of the assignment to ensure that the obligor pays the assignee rather than the assignor, thus defeating the original assignor's right to demand the obligor's payment or performance. |
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Term
| In the absence of a provision in the contract to the contrary, may the original parties to a contract cut off the rights of a third-party beneficiary without the consent of the beneficiary? |
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Definition
| The modern legal trend is to permit the original parites in all cases to cut off the beneficiaries' rights unless beneficiaries can prove that their positions have changed materially in reasonable reliance on the contracts. |
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Term
| Why do courts recognize substantial performance that falls short of actual performance? |
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Definition
| Rather than permit the promisee to escape liability completely on the ground of nonperformance, courts consider whether the performance actually given was substantial performance and whether the party performed in good faith. |
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Term
| What is the effect of a contract provision that requires performance by a certain date and states that time is "of the essence" in this agreement? |
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Definition
| If a contract provision requires performance by a certain date and states that "time is of the essence in this agreement," then a court will enforce that provision. |
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Term
| Explain how one agreement can discharge contractual obligations under another agreement. |
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Definition
| Contractual obligations can be discharged by another agreement in accord and satisfaction, the substitution of a different performance for the performance required in a contract. |
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Term
| Identify four changes in circumstances that make performance of a contract impossible. |
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Definition
The following are four changes in circumstance that make performance of a contract impossible:(3) Destruction of subject matter |
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Term
| Discuss the relationship of increased cost to commercial impracticability. |
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Definition
| Increased cost can constitute commercial impracticability if the increase is drastic. However, even in this case, the seller must take commercially reasonable precautions to protect the source of supply. |
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Term
| What is the purpose of the doctrine of anticipatory breach? |
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Definition
| The concept of anticipatory breach developed to avoid "enforced idleness" on the part of the aggrieved party, who must wait until the time of performance to sue for breach, and to make it unnecessary for that party to tender performance at the time stated in the contract to prove the other party's breach. |
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Term
| What are the effects of a minor breach of contract? |
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Definition
The effects of a "minor" breach of contract include the following:- It temporarily suspends any duty of performance by the nonbreaching party that would have arisen in proper performance.
- It gives the aggrieved party a basis to sue for damages for the breach - usually an offset to the agreed price - but not for remedies for breach of the entire contract.
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Term
| When does a court award consequential damages for breach of contract? |
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Definition
| Consequential damages are awarded to the plaintiff only when the defendant was aware of the probably occurrence of the damages. |
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Term
| When does a court award extracontractual damages against insurers? |
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Definition
Courts award extracontractual damages against insurers on the following grounds:- Breach of the insurer's duty of good faith and fair dealing in insurance contracts
- Intentional infliction of emotional duress on the insured by the insurer's extreme and outrageous conduct
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Term
| Under what circumstances do courts order equitable remedies? |
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Definition
Courts order equitable remedies under the following circumstances:- When the buyer has accepted the goods
- When a carrier has tendered the goods to the buyer if the contract requires the seller to ship them to the buyer
- When the seller has delivered the goods to the carrier if the contract provides only for delivery to the carrier and not to the destination
- When a third party holds the goods for delivery without moving them
- When the buyer has received a document indicating the buyer's right to the goods
- When the third party acknowledges the buyer's right to possession
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