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Flashcards in Chapter Ten Deck (91):
1

Voluntary Consent

The knowing and voluntary agreement to the terms of a contract. If a contract is formed as a result of a mistake, misrepresentation, undue influence, or duress, voluntary consent is lacking and the contract will be voidable

2

bilateral mistake

a mistake that occurs when both parties to a contract are mistaken about the same material fact

3

unilateral mistake

a mistake that occurs when one party to a contract is mistaken as to a material of fact

4

scienter

know

5

statute of frauds

a state statute under which certain types of contracts must be in writing to be enforceable

6

assignment

the act of transferring to another all or part of one's rights arising under a contract

7

delegation

the transfer of a contractual duty to a third party. the party delegating the duty (the delegator) to the third party (the delegatee) is still being obliged to perform on the contract should the delegatee fail to perfom

8

third party beneficiary

one for whose benefit a promise is made in a contract but who is not a party to the contract

9

intended beneficiary

a third party for whose benefit a contract is formed. an inteneded beneficiary can sue the promisor if such a contract is breached.

10

incidental beneficiary

a third party who incidentally benefits from a contract but whose benefit was not the reason the contract was formed. an incidental beneficiary has no rights in a contract and cannont sue to have the contract enforce

11

discharge

the termination of an obligation. in contract law, discharge occurs when the parties have fully performed their contractual obligations or when events, conduct of the parties, or operation of law releases the parties from performance

12

performance

in contract law, the fulfillment of one's duties arising under a contract with another; the normal way of discharging one's contractual obligations.

13

condition

a qualification, provision or clause in a contractual agreement, the occurrence or nonoccurence of which creates, suspends, or terminates the obligations of the contracting parties

14

condition precedent

in a contractual agreement, a condition that must be met before a party's promise becomes absoulte

15

tender

an unconditional offer to perform an obligation by a person who is ready, willing, and able to do so

16

anticipatory repudiation

an assertion or action by a party indicating that he or she will not perform an obligation that the party is contractually obligated to perform at a future time

17

Mutual rescission

an agreement between the parties to cancel their contract, releasing the parties from further obligations under the contract. The object of the agreement is to restore the parties to the position they would have occupied had no contract ever been formed.

18

novation

the substitution, by agreement, of a new contract for an old one, with the rights under the old one being terminated. typically, novation involves the substitution of a new party for one of the original parties to the contract

19

impossibility of performance

a doctrine under which a party to a contract is relieved of his or her duty to perform when performance becomes objectively impossible or totally impractical (through no fault of either party)

20

commercial impracticability

a doctrine under which a court may excuse the parties from performing a contract when the performance becomes much more difficult or costly due to an event that the parties did not foresee or anticipate at the time the contract was made.

21

Frustration of purpose

a court-created doctrine under which a party to a contract will be relieved of his or her duty to perform when the objective purpose for performance no longer exists due to reasons beyond that party's control

22

consequential damages

special damages that compensate for a loss that does not directly or immediately result form the breach (for example, lost profits). For the plaintiff to collect consequential damages, they must have been reasonably foreseeable

23

Mitigation of damages

a rule requiring a plaintiff to do whatever is reasonable to minimize the damages caused by the defendant

24

liquidated damages

an amount, stipulated in a contract, that the parties to the contract believe to be a reasonable estimate of the damages that will occur in the event of a breach

25

penalty

a contractual clause that states that a certain amount of monetary damages will be paid in the event of a future default or breach of contract. the damages are a punishment for a default and not an accurate measure of compensation for the contract's breach. The agreement as to the penalty amount will not be enforced, and recovery will be limited to actual damages

26

restitution

an equitable remedy under which a person is restored to his or her original position prior to loss or injury, or placed in the position he or she would have been in had the breach not occured

27

specific performance

an equitable remedy requiring exactly the perfomance that was specified in a contract; usually granted only when money damages would be an inadequate remedy and the subject matter of the contract is unique (for example, real property)

28

reformation

a court-ordered correction of a written contract so that it reflects the true intentions of the parties

29

Quasi contract

a fictional contract imposed on parties by a court in the interests of fairness and justice; usually imposed to avoid the unjust enrichment of one party at the expense of another

30

UCC

is a statutory law; article of the UCC governs the sale of goods and article 2A cover the lease of goods

31

Merchants

deals in the kind involved in the contract. holds himself or herself out as "having knowledge, and skills unique to the practices or goods involved," or employs a merchant as a broker or agent.

32

Goods

the item involved is tangible and movable

33

goods don't cover

services or real estate, money, copy rights, patents, stocks, or bonds.

34

goods may cover

things that can be "separated" from real property. -minerals, crops, ect.

35

sale of goods

means title passes from the seller to the buyer for a price

36

UCC article 2

covers the sale of goods

37

UCC article 2A

covers the "lease of goods or a sublease of goods.

38

UCC article 2a covers

lease of a company car, equipment ect

39

ucc article 2a does not cover

lease/retal of real property like land or buildings

40

statute of frauds under Article 2 and 2a of UCC

the basic rule is that contract for the sale of goods for $500 or more [and lease agreements of 1,000 or more] is not enforceable unless it is in writing and signed by the party against whom enforcement is sought

41

types of warranties

-warranty of title
-express warranties

42

warranty of title

a seller warrants that good title is being transferred to the buyer and that goods will be delivered free of any claims against them, such as liens, unless those have been revealed to the buyer

43

express warranties

created by the seller's promise or guarantee to the quality, safety, performance or durability of goods being sold

44

express warranties include

A statement that the goods conform to any affirmation of fact or promise [made] about the goods.'
-a statement that the goods conform to any description of them
-a statement "that the goods conform to any sample or model of the goods shown to the buyer or lessee

45

Conforming Goods

goods that comply with the contract. Seller/lessor must deliver (or tender) the conforming goods to the buyer/ lessee

46

Tender of delivery

occurs when the seller or lessor makes conforming goods available to the buyer or less and gives the buyer or lessee whatever notification is reasonably necessary to enable the buyer or lessee to take delivery

47

battle of the forms

occurs when two merchants exchange seperate standard forms containing different contract terms

48

Merchants have additional terms automatically to the sales contract unless

-the original offer expressly limited acceptance to its terms
-the new or changed terms materially alter the contract
-the offeror objects to the new or changed terms within a reasonable time period.

49

Seller/ Lessor remedies for breach

the purpose of contract remedies under Article 2/2A of the UCC is to place the nonbreaching party in the same position as if the contract had been performed according to its terms

50

Seller/ Lessor remedies for breach list

-the right to cancel (rescind) the contract
-the right to withhold delivery
- the right to resell or dispose of the goods
-the right to recover the purchase price or the lease payment
-the right to recover compensatory and incidental damages.

51

Conforming Goods

goods that comply with the contract. Seller/lessor must deliver (or tender) the conforming goods to the buyer/ lessee

52

Tender of delivery

occurs when the seller or lessor makes conforming goods available to the buyer or less and gives the buyer or lessee whatever notification is reasonably necessary to enable the buyer or lessee to take delivery

53

battle of the forms

occurs when two merchants exchange seperate standard forms containing different contract terms

54

Merchants have additional terms automatically to the sales contract unless

-the original offer expressly limited acceptance to its terms
-the new or changed terms materially alter the contract
-the offeror objects to the new or changed terms within a reasonable time period.

55

Seller/ Lessor remedies for breach

the purpose of contract remedies under Article 2/2A of the UCC is to place the nonbreaching party in the same position as if the contract had been performed according to its terms

56

Seller/ Lessor remedies for breach list

-the right to cancel (rescind) the contract
-the right to withhold delivery
- the right to resell or dispose of the goods
-the right to recover the purchase price or the lease payment
-the right to recover compensatory and incidental damages.

57

Buyer/ Lessee remedies for breach list

-the right to cancel (rescind) the contract
-the right to obtain the goods on insolvency
-the right to obtain specific peformance
-the right of cover (Purchase substitute goods)
-the right to recover compensatory and incidental damages
-the right to replevy goods

58

replevin

is a legal action "to recover specific goods in the hands of a party who is wrongfully withholding them from the other party.

59

implied warranties

an implied warranty is a quality and safety standard that is imposed by article 2

60

implied warranties types

-implied warranty of merchantability
-implied warranty of fitness for a particular purposeq

61

implied warranty of merchantability

applies to merchants, means goods mst be of a quality comparable to that generally acceptable in that line or trade

62

implied warranty of fitness for a particular purpose

where seller knows of buyer's specific need or purpose in mind for the prouct

63

disclaimers

limited ability to disclaim express warranties

64

disclaimers of implied warranties

of merchantability and fitness for a particular purpose are permitted if the disclaimer uses the word "merchantability" and the disclaimer is "conspicuous"

65

Disclaimers of implied warranties written

in a way that a reasonable person would notice it, such as written in all caps or in different color

66

disclaimers of implied warranties written example

a car sold "as is"

67

is the purchase of a cocktail at the cheese cake factory a UCC article 2 sales of goods?

A restaurant meal is a ‘sale of goods’ under Article 2 of the Uniform Commercial Code. The UCC provides that where the buyer and seller have agreed to a contract but have not agreed on the price, the price is not what the seller subsequently demands. It’s a reasonable price for the goods at issue. Thus a customer has no obligation to pay for anything more than the reasonable price of a pasta meal at a trendy restaurant.”

68

The formation of sales contracts under the UCC

The UCC reduces the formality of contract law (compared to common law) and creates rules that “fill in the gaps” when a contract is silent on basic terms. Quantity is the only term that must specifically be included

68

The formation of sales contracts under the UCC

The UCC reduces the formality of contract law (compared to common law) and creates rules that “fill in the gaps” when a contract is silent on basic terms. Quantity is the only term that must specifically be included

69

The formation of slaes contract under UCC example

a “reasonable” price based on the market price; payment due at the time of delivery unless specified in the contract; and delivery at the seller’s place of business if no delivery term in contract.

69

The formation of slaes contract under UCC example

a “reasonable” price based on the market price; payment due at the time of delivery unless specified in the contract; and delivery at the seller’s place of business if no delivery term in contract.

70

The formation of sales contracts under the UCC under article 2

Under Article 2, and unlike the common law of contract, a contract can be formed “in any manner sufficient to show agreement” between the parties

70

The formation of sales contracts under the UCC under article 2

Under Article 2, and unlike the common law of contract, a contract can be formed “in any manner sufficient to show agreement” between the parties

71

The formation of sales contracts under the UCC common law

common law provides that an offer can be revoked any time before acceptance; under the UCC, a merchant's "firm offer" on writing is irrevocable for a reasonable time

71

The formation of sales contracts under the UCC common law

common law provides that an offer can be revoked any time before acceptance; under the UCC, a merchant's "firm offer" on writing is irrevocable for a reasonable time

72

Acceptance article 2

article 2 of the UCC allows an offer to be accepted "in any reasonable manner under the circumstantces

72

Acceptance article 2

article 2 of the UCC allows an offer to be accepted "in any reasonable manner under the circumstantces

73

Acceptance unlike common law

unlike common law, article 2 requires notification when a party begins performance in response to a unilateral contract offer

73

Acceptance unlike common law

unlike common law, article 2 requires notification when a party begins performance in response to a unilateral contract offer

74

Acceptance changes the common law

Mirror image rule

74

Acceptance changes the common law

Mirror image rule

75

mirror image rule

an acceptance may be valid even if the offeree includes additional terms or exchanges existing terms in an offer

75

mirror image rule

an acceptance may be valid even if the offeree includes additional terms or exchanges existing terms in an offer

76

The formation of sales contracts under the UCC

The UCC reduces the formality of contract law (compared to common law) and creates rules that “fill in the gaps” when a contract is silent on basic terms. Quantity is the only term that must specifically be included

77

The formation of slaes contract under UCC example

a “reasonable” price based on the market price; payment due at the time of delivery unless specified in the contract; and delivery at the seller’s place of business if no delivery term in contract.

78

The formation of sales contracts under the UCC under article 2

Under Article 2, and unlike the common law of contract, a contract can be formed “in any manner sufficient to show agreement” between the parties

79

The formation of sales contracts under the UCC common law

common law provides that an offer can be revoked any time before acceptance; under the UCC, a merchant's "firm offer" on writing is irrevocable for a reasonable time

80

Acceptance article 2

article 2 of the UCC allows an offer to be accepted "in any reasonable manner under the circumstantces

81

Acceptance unlike common law

unlike common law, article 2 requires notification when a party begins performance in response to a unilateral contract offer

82

Acceptance changes the common law

Mirror image rule

83

mirror image rule

an acceptance may be valid even if the offeree includes additional terms or exchanges existing terms in an offer