Contracts Law Flashcards
Question Answer Issues in Contracts Choice of law, Formation, Modification, Defenses, Breach, Remedies Choice of Law UCC v. Common Law UCC sale of goods Common Law Services or land Formation For a contract to be valid we need an offer, acceptance, and consideration. // always define these Offer outward manifestation of an intent to enter into a contract with certain and definite terms communicated to the offeree. Advertisements Typically invitations to offer, not actual offers; BUT could be offer if specific and definite terms. Offers Revocable? Offers are revocable until and unless offeree accepts. Offers are irrevocable when: option contract, firm offer, or unilateral contract. Option Contract Promise to keep offer open for specified period of time + for additional consideration, + between two regular persons. Firm Offer A firm offer between merchants; +in writing and +signed +by merchant to keep offer open; ~similar to option contract but for Merchants~ Unilateral Contract Promise in exchange for performance; becomes irrevocable once performance starts Rejection Denying the offer, saying no. Counteroffer Changes the terms of original offer and is not acceptance; puts it back into offeror’s hands. Acceptance Acceptance occurs when the offeree communicates an intent to enter into a contract. Can accept in any reasonable manner, unless Offeror specified specific manner of acceptance Mailbox Rule Acceptance is effective when sent. Mailbox Rule Exception when multiple correspondences sent, whichever gets to the offeror first prevails CL Acceptance CL Mirror Image Rule CL Mirror Image Rule acceptance must exactly mirror the terms of the offer. UCC Acceptance different terms are okay unless it materially alters terms of offer Consideration Bargain for exchange. FL Consideration consideration needs a benefit or legal detriment. Mutuality Contracts require mutual consideration and essential elements. Modification Changing a material term of a contract (oral or written) CL Modification there must be additional consideration UCC Modification No add’l consideration needed; just good faith between parties Defenses to contract law: SOF, part performance exception (CL), Merchant confirmation exception (UCC), minor contracting, mistake, impossibility, impracticability **Statute of Frauds rule Requires certain contracts to be in writing, contain essential terms, and signed by parties (to be charged) *Statute of Frauds: writing must contain price, quantity, parties, and signed by the parties to be charged SOF contract applicability M - contract for Marriages, Y - Contracts that cannot be completed within 1 Year, L - contracts for the sale of Land, E - Executorships, G - Guarantees, S - Sale of goods over $500 CL: Part Performance exception If there’s no writing, SOF exception for land contracts… Some partial payment and made improvements or took possession **UCC: Merchant Confirmation UCC Exception. Seller sends a written confirmation signed with the quantity. - If no objection within 10 days of receipt, it constitutes a sufficient writing to satisfy the statute of frauds requirement. Minor The contract is voidable at the option of the minor. In Florida, the minor cannot use minority as a defense ONLY if they fraudulently misrepresented their age Mistake Unilateral or mutual mistake Unilateral mistake one person is mistaken; NOT a defense UNLESS the other party knew they were mistaken mutual mistake both parties were in good faith mistaken, ALWAYS a defense Impossibility Nobody could perform; objective std. Impracticability Due to unforeseen circumstances, performance becomes too impractical, even if possible. *but some changes are forseeable Breach & types party fails to perform according to the terms of the contract; material or minor ****Material Breach breach is so substantial (went to the essence of the contract) that the party did not get the benefit of the bargain; can sue for TOTAL breach Minor Breach parties still received benefit of the bargain; can only sue for particular damages. UCC Non-conforming goods Perfect Tender Rule The buyer is entitled to sue for damages for any non-conforming goods, regardless of whether they are accepted. + Seller tenders goods that fail to conform in any way to the underlying contract; buyer has 3 options: may (1) accept (2) reject or (3) accept in part and reject in part the goods. UCC, if perfect tender, Installment Contract Multiple shipments on a regular basis, one nonconforming shipment does not constitute a total breach, UNLESS impairs value of whole contract Remedies legal and equitable remedies Legal remedy (definition and types) Monetary compensation!!! - Expectation, reliance, or consequential damages Equitable remedy granted when no adequate remedy at law (money is not an adequate remedy) – specific performance, rescission, and restitution Expectation damages If a seller breaches a contract, then the buyer is entitled to expectation damages. + Default remedy. + put the non-breaching party in the position they would’ve been in had contract been performed, and to give the parties the benefit of the bargain —- **Must have reasonable certainty with respect to amt of damages. Reliance damages Awarded if expectation damages cannot be obtained. Compensates for unreimbursed expenses paid due to reliance on the contract. Examples include expenses for travel or marketing. ****Consequential damages last resort. Compensates for foreseeable damages or losses resulting directly from the breach. - Consequential damages, including lost profits, are available only if the breaching party knew or should have known about the potential losses at the time of contracting. - Special damages due to the particular circumstances of the non-breaching party. Specific Performance ordered to perform. Granted when the subject matter is unique. Recission there was no meeting of the minds [not on same page]. To put parties in the position prior to contract formation. - usually associated with mistake or misrepresentation (when this happens) Restitution Involves the return of a benefit conferred (under a contract that is canceled or rescinded) **Promissory Estoppel A contract wasn’t formed, but a promise was made which induces someone to rely to their detriment. Makes the promise enforceable. Something you wouldn’t do in the first place Third Party Beneficiary whether a third person is an incidental or intended beneficiary. Incidental beneficiaries never have rights under the contract, while intended beneficiaries have rights that must vest. Incidental beneficiaries never have rights under the contract Intended beneficiaries have rights that must vest. Anticipatory Repudiation One party unequivocally refuses to perform, constituting a total breach; no need to wait until the end of the contract. Occurs prior to the date of the contract when one party unequivocally refuses to perform. Intentional Misrepresentation Intentionally misrepresenting a material fact to induce a party’s reliance, resulting in damages. Intent to induce reliance on a material fact causing damages. Example: A seller intentionally misrepresents the condition of a property to induce a buyer to purchase it. Negligent Misrepresentation A misrepresentation, whether made or not, that induces a party to reasonably rely on it. Negligently misrepresenting a material fact that induces reasonable reliance. Typically arises in professional or business relationships where there is a duty to disclose or provide accurate information. Warranty of merchantability Warranty/Fitness for a particular purpose Noncompete clause Parol Evidence Rule partial integration final integration exceptions to parol evidence rule (always admissible) ambiguity, fraud/duress, Sale of goods contract to show custom or trade of business Warranty of Merchantability Promise that the product will act as it is supposed to Warranty/Fitness for a Particular Purpose Warranty that the product will act for a specific purpose Noncompete Clause Restriction on working for a competitor for a specified period Parol Evidence Rule Prevents the introduction of extrinsic evidence of prior negotiations if the agreement was a total integration
