Chapter 6 Bus Law: Contracts, Sales, and copyrights and patents

Question 1

3 Methods of Forming contract (Ex-If-IL)

Answer 1

Expressed - Oral or written
Implied-in-Fact - by Conduct
Implied-in-Law - Remedy for plaintiff to recover

Question 2

Executory vs Executed

Answer 2

Executory - Performance still needed

Executed - COMPLETE

Question 3

What law applies to the contract?

Answer 3

Common Law or UCC

Common Law (RISE)
R - Real Estate
I  - Insurance
S - Services
E - Employment

UCC- Sale of movable goods

Question 4

3 elements of contract (O&A,E,L)

Answer 4

Offer and Acceptance
Exchange consideration of legal value
Lack of defense

Question 5

The only contracts that need to be in writing are what?

Answer 5

ONLY Contracts under Statutes of Fraud.

Question 6

What 3 element create a contract?

Answer 6

Offer and Acceptance
Consideration exchanged
No Defenses

Question 7

What is needed to establish Fraud as a defense?

Answer 7

MAIDS

Question 8

Fraud in inducement vs Fraud in execution?

Answer 8

Inducement is Voidable defense = defrauded party is aware they are making a contract
Execution is VOID defense = defrauded party is unaware they are making a contract

BOTH: there are material misrepresentations

Question 9

Duress vs undue influence

Answer 9

Duress (unlawful use of force or harm) = VOID
Undue influence (abuse of trust) = VOIDABLE

Question 10

Statute of Frauds (MYLEGS)

Answer 10

These must be in writing
M - Marriage
Y  - Multi YEAR contracts
L  - Land
E  - Executors 
G  - Goods sold > $500
S  - Surety (Paying someone elses debt)

Question 11

Accord and satifaction vs novation

Answer 11

Novation = Same AGREEMENT, New PARTIES
Accord = Same PARTIES, New AGREEMENT

Question 12

Parol evidence rule MUST KNOW what is admissible?

Answer 12

Subsequent Modifications (Oral or written)

Question 13

Are punitive Damages available under contract law?

Answer 13

NO

Question 14

Compensatory Damages used for?

Answer 14

Personal service contracts

Question 15

Specific Performance Damages used for?

Answer 15

Land or Unique items

Question 16

Liquidating Damages are used for?

Answer 16

Damages agreed in contract BUT NOT PENALTIES

Question 17

Merchant Firm Offer THINGS TO KNOW

Answer 17

1) Was it sold by a merchant?
2) Was it a good being sold?
3) Was it in writing?
4) IRREVOCABLE

Question 18

Mirror Image Rule UCC vs Common Law?

Answer 18

UCC- Terms don’t have to be the same unless they are merchants.
Common Law: MUST BE SAME

Question 19

What is notice of accommodation’s role in shipment of nonconforming goods?

Answer 19

w/ NOA = Counteroffer!

W/out NOA = acceptance and breach

Question 20

UCC vs Common law Modifications without consideration?

Answer 20

UCC modifications to contract are enforceable without considerations

Common = modifications are NOT enforceable

Question 21

Doctrine of substantial performance (UCC vs Common Law)

Answer 21

Common Law: Non-breaching party may get minor monetary remedies BUT CAN’T CANCEL OR RESCIND CONTRACT.

UCC: Non-breaching party CAN CANCEL CONTRACT. Seller requires perfect tender

Question 22

FOur main questions I got were:

1) Will this person win or lose suit?
2) Is this person liable or not?
3) Is this contact formed or not?
4) Is this contract enforceable or not?

Answer 22

TBD

Question 23

Who is liable under most contracts?

Answer 23

Contracts are only enforceable against the person who signed the contact.

Question 24

what is LEGAL consideration?

Answer 24

It must be BARGAINED FOR!

LEGAL VALUE! (parties weren’t obligated to do that before)

Question 25

Intended beneficiary vs incidental?

Answer 25

Intended (NAME PARTY SPECIFICALLY) = Enforceable | Incidental (NOT NAMED SPECIFICALLY) = NOT Enforceable

Question 26

What offer's can't be revoked? (OMU)

Answer 26

``` Option contract (offeree buys time) Merchant firm offer Unilateral contracts (promise given for performance ```

Question 27

Sale or Return Risk of loss/title?

Answer 27

Risk on Buyer until returned

Question 28

Sale on Approval Risk of Loss/title?

Answer 28

Risk remains with Seller until Buyer approves.

Question 29

Express Warranty states?

Answer 29

``` Goods will conform to the statement of fact (made by seller), to the description, or to the sample model. MUST BE (BoB) Basis of Bargaining ```

Question 30

3 Implied Warranties are? (TMP)

Answer 30

of Title of Merchantability of Particular purpose

Question 31

Warranty of Title?

Answer 31

Every sales contract | May only be disclaimed SPECIFICALLY or specific circumstances (judicial sale) (not "as is")

Question 32

Warranty of Merchantibility

Answer 32

Applies to Merchant Sellers CAN disclaim things generally ("as is") Goods fit for ORDINARY PURPOSE

Question 33

Warranty of Fitness for a PARTICULAR purpose?

Answer 33

SELLER must select Goods Suitable for Buyer's purpose | Can be disclaimed generally ("as is")

Question 34

An action for strict liability tort will succeed if?

Answer 34

1) Product was sold in defective condition 2) Seller was in business of selling goods 3) Defect in product caused injury 4) Product was expected to and DID reach the customer without substantial change. No privity required. No Negligence required. Seller strictly liable

Question 35

Do shipping contract rules of passage of title apply EVEN when nonconforming goods?

Answer 35

YES.