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1
Q

What are the requirements for an Option Contract under common law?

A

Must be in writing, signed by the offeror, have consideration, and be left open for a reasonable amount of time.

These are essential elements for the formation of an Option Contract in common law.

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2
Q

What constitutes a Firm Offer under the UCC for the sale of goods?

A

Must be between merchants, signed and in writing, and open for a reasonable time of no more than 3 months.

This is a specific requirement under the Uniform Commercial Code.

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3
Q

What are the elements required for Promissory Estoppel?

A
  • A promise was made
  • The promisor expected to induce action
  • The promisee was induced into performance
  • Injustice avoided only by enforcement of the promise

This legal doctrine prevents the promisor from arguing that an underlying promise should not be legally upheld.

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4
Q

What must be proven in an Unjust Enrichment claim?

A
  • There must be an injustice
  • There must be enrichment

Injustice cannot be gratuitous or officious, and enrichment is the benefit conferred to the other party.

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5
Q

What does the Material Benefit Rule state?

A

When someone does something helpful and promises compensation, the promise can be legally binding.

This applies even if there was no prior contractual obligation.

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6
Q

What is the Moral Obligation Doctrine?

A

Allows courts to enforce a promise based on a moral obligation to perform, which must include a bargain for exchange between parties.

This doctrine recognizes moral considerations in contract enforcement.

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7
Q

What is Misrepresentation in contract law?

A

Occurs when one party makes an assertion that is not in accord with the facts.

This can lead to legal consequences if the misrepresentation is material.

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8
Q

Define Fraudulent Misrepresentation.

A

A false statement made knowingly, recklessly, or with intent to deceive.

The plaintiff must show that the misrepresentation was relied upon to their detriment.

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9
Q

What are the three types of fraud?

A
  • Affirmative Fraud
  • Concealment
  • Nondisclosure

Each type involves different methods of misrepresentation.

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10
Q

What constitutes a Material Misrepresentation?

A

A false statement of a material fact that influences a reasonable person’s decision to enter a contract.

Material facts are crucial for contract formation.

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11
Q

What is Duress in contract law?

A

Occurs when one party is forced into an agreement through unlawful pressures or threats.

The threat can be physical or economic.

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12
Q

What is Economic Duress?

A

When one party commits a wrongful act that deprives the plaintiff of their ‘unfettered will’.

This does not include normal market pressures.

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13
Q

When can duress come from third parties?

A

When the other party of the contract allows a third party to threaten the plaintiff.

This can lead to finding that duress was caused by a third party.

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14
Q

What is a Contract Modification?

A

The change of terms for an existing contract.

Modifications often require new consideration under common law.

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15
Q

What is the requirement for contract modifications under the UCC?

A

Only requires a general good faith of both parties.

This is a more lenient standard compared to common law.

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16
Q

What is Undue Influence?

A

When the outcome of a contract is unfair due to power imbalances.

This often involves fiduciary relationships.

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17
Q

What are the two main relationships that can lead to Undue Influence?

A
  • Fiduciary relationships
  • Relationships of trust or power

These relationships create vulnerabilities for one party.

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18
Q

What is Unconscionability?

A

When there is unfair bargaining power in the making of the contract or its terms.

This can lead to a contract being deemed unenforceable.

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19
Q

What is Procedural Unconscionability?

A

Occurs in the process of forming the contract, focusing on unfair bargaining tactics.

Courts assess the disparity in bargaining power.

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20
Q

What is Substantive Unconscionability?

A

Refers to terms of the contract that unreasonably favor one party over another.

Courts evaluate the plain meaning of contract terms.

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21
Q

What is the Sliding Scale Approach in Unconscionability?

A

Allows a plaintiff to win on a claim of unconscionability even if they are stronger in one category than the other.

This provides flexibility in evaluating cases.

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22
Q

What is the Minority Approach to Unconscionability?

A

Requires only procedural or substantive unconscionability to be shown.

This approach emphasizes fairness and aims to enforce the doctrine in more cases.

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23
Q

What does Illegality under the policing doctrine involve?

A

Contracts about something that is illegal.

Such contracts are generally unenforceable.

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24
Q

What is the rule of In Parti Delicto?

A

If parties are equally at fault, the court will not intervene in the contract.

However, if one party is more at fault, the court may enforce the contract.

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25
What does Incapacity refer to in contract law?
The legal inability of a party to enter into a legally binding contract. ## Footnote This can apply to minors and individuals with mental incapacity.
26
What are the rights of minors in contract law?
Minors can enter contracts but disaffirm them until reaching the age of majority or a reasonable time after. ## Footnote Necessities cannot be disaffirmed.
27
What is the Cognitive Test in evaluating Mental Incapacity?
Evaluates if the party understood the nature and consequences of the contract at the time of agreement. ## Footnote This is an older standard for determining mental capacity.
28
What is the Motivational Test in evaluating Mental Incapacity?
Evaluates the mental condition's effect on a party's ability to think rationally. ## Footnote This test considers the party's overall mental state.
29
What is the Volitional Test in evaluating Mental Incapacity?
Evaluates the party's voluntariness in choosing to enter into the contract given their mental state. ## Footnote This assesses whether the party acted freely.
30
What is Contract Interpretation used for?
To determine the meaning of language within a contract and understand the parties' intent. ## Footnote Courts may use various approaches to interpret contracts.
31
What is the old Plain Meaning Approach?
Determines if contract language is ambiguous, allowing extrinsic evidence only if it is. ## Footnote This is a traditional method of contract interpretation.
32
What is the modern Contextual Approach to Contract Interpretation?
Determines ambiguity by considering outside extrinsic evidence. ## Footnote This approach is more flexible than the old Plain Meaning Approach.
33
What are the standards of preference for extrinsic evidence in contract interpretation?
* Express terms * Course of performance * Course of dealings * Usage of trade ## Footnote Express terms have the highest priority in determining intent.
34
What is Contract Construction?
Applies terms intended by the parties and can use gap fillers for missing terms. ## Footnote Courts aim to make contracts enforceable despite missing details.
35
What happens under Common Law if too many terms are missing in a contract?
The contract will fail for indefiniteness and not be legally enforceable. ## Footnote Courts require a reasonable basis to assess parties' rights and duties.
36
What is a Misunderstanding in contract law?
When parties attach materially different meanings to contract terms and neither knew of the misunderstanding. ## Footnote This can lead to the contract being void.
37
What is a Mistake in contract law?
An erroneous belief about a fundamental aspect of the contract at its formation. ## Footnote Courts evaluate the merits of a claim based on specific factors.
38
What is a Mutual Mistake?
Both parties share an error of fact that materially affects the agreed exchange of performance. ## Footnote The risk of the mistake must be borne by the adversely affected party.
39
What is a Unilateral Mistake?
An error of fact made by one party that materially affects the exchange of performances. ## Footnote The mistaken party must not bear the risk of the mistake.
40
What is a Mistake of Reformation?
A contract that doesn’t accurately reflect the true agreement of the parties. ## Footnote This often requires judicial correction.
41
What is a Mistake of Expression?
A contract that expresses a meaning different from what the parties intended. ## Footnote This can lead to disputes over contract interpretation.
42
What does Parol Evidence control?
The evidence a party can introduce at trial. ## Footnote This governs the admissibility of extrinsic evidence.
43
What is the Traditional Rule under common law regarding Parol Evidence?
Bars all extrinsic evidence to contract or supplement terms of the contract. ## Footnote This is a strict interpretation of contract terms.
44
What is the Modern Rule regarding Parol Evidence?
Bars extrinsic evidence if the writing is fully integrated unless there is fraud. ## Footnote Partial integration allows for supplementary evidence.
45
What is a Merger & Integration Clause?
A statement within a contract stating that the agreement is fully integrated and bars all parol evidence. ## Footnote This clause is intended to prevent disputes over prior negotiations.
46
What is the traditional 4 Corners Approach?
States that if the writing appears fully integrated, it should be treated as complete with no parol evidence admissible. ## Footnote This approach focuses solely on the written document.
47
What is the Legal Realism Approach under the UCC?
Allows parol evidence to explain or supplement even fully integrated contracts based on business relationships. ## Footnote This approach emphasizes the practicalities of contract performance.
48
What is Impracticability under the Modern Approach?
Changed circumstances that dramatically increase the burden on a party, making performance impractical. ## Footnote This can include difficulty, expense, or impossibility.
49
What is Frustration of Purpose?
An event that makes it impossible to achieve the contract's original purpose. ## Footnote This can lead to contract termination.
50
What is Impossibility in contract law?
A party cannot fulfill their contractual obligation due to an unforeseen event rendering performance literally impossible. ## Footnote The party seeking relief must show specific criteria.
51
What are Conditions in contract law?
Stipulations or requirements determining when parties are obligated to perform their promises. ## Footnote Conditions can be precedent, subsequent, express, or implied.
52
What is a Condition Precedent?
Gives rise to the duty to perform under contractual obligations. ## Footnote The plaintiff bears the burden of proof for violation.
53
What is a Condition Subsequence?
Removes the duty to perform once something happens. ## Footnote The defendant bears the burden of proof in this case.
54
What are Express Conditions?
Conditions clearly stated in an obvious manner that must be enforced by courts. ## Footnote These conditions are explicitly agreed upon by the parties.
55
What are Implied Conditions?
Conditions not directly stated but understood as necessary for the contract to make sense. ## Footnote Courts recognize these based on the nature of the agreement.
56
What are Construed Conditions?
Conditions created by the court after interpreting a contract. ## Footnote Courts apply reasonableness and fairness in these cases.
57
What is a Condition of Satisfaction?
A party’s obligation depending on the satisfaction with the performance of another party. ## Footnote This can relate to subjective or objective standards.
58
What is the Subjective Good Faith Standard?
Relates to satisfaction concerning matters of taste or artistic judgment. ## Footnote This standard is more lenient.
59
What is the Objective Reasonableness Standard?
Relates to satisfaction concerning technical or commercial matters. ## Footnote This standard is more rigorous.
60
What are Excuse Conditions?
Allow a party to not fulfill contractual obligations due to waiver or estoppel. ## Footnote These conditions provide legal defenses against claims.
61
What is Waiver in contract law?
The knowing and voluntary abandonment of a right to have conditions met. ## Footnote The non-waiving party cannot enforce a waiver of material conditions without modification.
62
What is Estoppel?
Prevents a party from denying what someone reasonably relied on that they said they would do under the contract. ## Footnote The plaintiff must show reliance to their detriment.
63
What is Anticipatory Repudiation?
When one party indicates they will not perform when their time of performance arises. ## Footnote This creates an immediate breach of contract claim under common law.
64
What is a Breach of Contract?
Occurs when one or more parties fail to fulfill their obligations under a contract. ## Footnote This can result in various legal remedies.
65
What is a Material Breach?
A substantial failure in performance that undermines the entire agreement. ## Footnote Non-breaching parties have specific remedies available.
66
What is the Concept of Cure in breach of contract?
Gives the breaching party an opportunity to fix their mistake before the non-breaching party can cancel the contract or sue. ## Footnote This promotes fairness and allows for rectification.
67
What is a Non-Material Breach?
When the performance of the breaching party is not significant enough to release the non-breaching party from the contract. ## Footnote This allows the contract to remain enforceable despite minor issues.
68
What is the Concept of Cure in contract law?
The breaching party is given an opportunity to fix their mistake before the non-breaching party can cancel the contract or sue for breach.
69
Define a Non-Material Breach.
When the performance of the breaching party is not significant enough to fully release the non-breaching party from the contract.
70
What does Substantial Performance refer to?
When a party almost fully performs their contractual obligations but messes up in something that they did.
71
What is a Total Breach?
When one party completely fails to do what they promised or messed up so badly that they essentially ruined the whole point of the contract.
72
What is a Partial Breach?
When one party fails in a small way but the mistake doesn’t destroy the purpose of the contract.
73
What does the Effective Breach Theory state?
Even if a party doesn’t actually breach, their behavior can be treated as a breach of contract if it ruins the contract.
74
What is a Breach of Contract?
When one or more parties fail to fulfill their obligations under a contract.
75
What is the Perfect Tender Rule?
A buyer has the right to reject goods if they fail to match the contract.
76
What are some examples of Seller Breaches?
* Delivery of the wrong goods * Late delivery * Delivering damaged or nonconforming goods
77
What are Buyer Breaches?
* Wrongfully rejecting goods * Not paying for goods * Refusing to accept goods without a valid reason
78
What is an Installment Contract?
The delivery of goods in separate lots that are to be accepted separately.
79
Under what condition can a Buyer reject an installment?
If the non-conformity substantially impairs the value of the installment to the buyer.
80
What are Expectation Damages?
Damages aimed to provide the injured party the benefit of the bargain that they would have received if the contract had been performed.
81
What must the non-breaching party prove to claim Expectation Damages?
* Damages with reasonable certainty * Foreseeability of the damages * Reasonable contemplations of both parties at the time of the contract
82
What are Direct Damages?
Losses that come directly from the contract itself.
83
What are Indirect Losses?
Losses caused by the loss of value of the contract either through consequential or incidental losses.
84
What are Consequential Losses?
Losses that arise as a consequence of the breach but do not relate to the value of the contract.
85
What does Cover allow in contract law?
Payment from the breaching party to obtain the needed goods after the failure to get them under the contract.
86
What is the Hadley Test in contract law?
A test that determines losses that arise naturally from the breach or were reasonably within the contemplations of both parties.
87
What are Incidental Losses?
The plaintiff’s cost of coping with the breach.
88
What are Reliance Damages aimed at?
Reimbursing for the loss caused by reliance on the contract.
89
What are Restitution Damages designed to do?
Restore any benefit the aggrieved party conferred to the breaching party, preventing unjust enrichment.
90
What are Punitive Damages?
Damages aimed to punish the breaching party for conduct that is also a tort.
91
What are Non-Economic Damages?
Damages that compensate for a loss that is unquantifiable, often related to bodily harm or emotional distress.
92
What are Agreed Remedies?
Remedies expressly agreed to by both parties of the contract in the event of loss.
93
What are Liquidated Damages?
A pre-set amount of money agreed upon by the parties to be paid in case of a breach.
94
What is Specific Performance?
A court requirement for the breaching party to perform their contractual obligation.
95
What factors determine the fairness of granting Specific Performance?
* Equitable discretion * Equitable Maxims * Uniqueness of contract performance * Avoiding excessive loss or hardship on the defendant
96
What is the Efficient Breach Theory?
Sometimes breaking a contract is better for everyone and is economically smarter.
97
Who are Third Party Beneficiaries?
3rd parties who benefit from a contract but are not directly a part of it.
98
What are Intended Beneficiaries?
3rd parties that the contracting parties intended to benefit from their contract.
99
What are Incidental Beneficiaries?
3rd parties who benefit from a contract but were not intended to by the contracting parties.
100
What is Assignment in contract law?
When one of the original parties of a contract wishes to transfer their contractual rights to someone else.
101
What is the general acceptance of Assignment under Common Law?
Generally accepted unless it materially changes the other party’s duties or risks.
102
What is the stance of the UCC on Assignment?
It is freely allowed through the assignment of rights or duties.
103
What does Assignment of Rights involve?
The payment; allowed unless the contract states otherwise.
104
What does Assignment of Duties entail?
Allowed but may need consent if it would materially change the contract.

Contracts 2 (1 decks)

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