Contract Definitions Flashcards

Question

Counter Offer

Answer 1

(making a change to the contract) R.2d § 39 The making of a counter offer is the rejection of the original offer - there for you now cannot accept unless it is brought up and offered again

Answer 2

(offerree declines offer) Manifestation of intention not to enter into contract (or implying you don’t want to)

Answer 3

physically cannot perform anymore

Answer 4

§69 silence means no, unless they have a reason or they were told that will be considered acceptance ("if I haven't heard from you by...")

Answer 5

Modifications require new mutual assent and conisderation

Answer 6

§ 2-207 Contract is still formed, but additional terms are deemed as proposals to contract - second form would act as acceptance - does not require additional consideration Battle of the forms - contractual disputes where different written instruments are exchanged in forming contract. boilerplate language.

Answer 7

acceptance by a return promise default is always bilateral UCC always bilateral

Answer 8

Offer is accepted the moment performance begins, offeror cannot revoke the offer after performance begins §45 - think reward system - only offeror is making a promise

Answer 9

an option contract can form after some of the performance has been done and then offeree has a reasonable time to complete performance, or the offer is revoked

Answer 10

Consideration is a bargained for exchange. Both parties must acquire something of value in which they desire from the agreement in exchange. (fairness and predictability) - forbearance is consideration (not doing something you have a legal right to do) - at will employment is consideration (staying employed is the consideration)

Answer 11

1. nominal consideration - Insignificant consideration that benefits one pty too much or is too small for value of deal 2. Past consideration (pre-existing duty, CL) 3. moral consideration 4. illusory promises 5. gratuitous gifts

Answer 12

- Usually occurs when ptys have an existing contract and make a second - When a pty tries to bargain for something they’re already obligated to do

Answer 13

When language leaves the promisor entirely free to perform or not to perform at their discretion/unfettered discretion (“if I feel like it”) - promise to potentially do something - too indefinite to be enforced in court - no breach if they don't perform Elements: 1. unfettered discretion to promisor 2. doesn't restrict promisor's autonomy 3. doesn't restrict promisors right to take future action

Answer 14

(only if contract has not been made) NO consideration - almost replacement for it Elements: 1. a promise made to a promise 2. a promisor reasonably expects their promise to induce action or forbearance by promisee and actually does 3. detrimental reliance by promisee 4. injustice can only be avoided if enforced - fairness

Answer 15

Can be binding if made in (1) good faith and (2) claim has reasonable basis

Answer 16

1. Misrepresentation 2. Non-Disclosure 3. Concealment 4. Mistake (biat or unilat) 5. Duress (traditional or economic) 6. Illegality 7. Incapacity 8. Unconscionability (procedural or substantive) 9. Statute of Frauds

Answer 17

1. False statement 2. Material to contract (what pty would regard as important in deciding to make contract, most cts use objective) 3. Made with state of mind (intentional, negligent, innocent) 4. Actually and justifiably relied on by pty 5. Damage to other party

Answer 18

1. Intentional - pty knew or believed representation to be false 2. Negligent - pty unreasonably believed representation to be false 3. Innocent - pty actually believed rep to be true

Answer 19

1. Failure to disclose fact 2. Duty to disclose fact 3. Non-disclosed fact was material 4. other party actually and justifiably relied on absence of fact 5. damage to other pty (failure to disclose important facts)

Answer 20

1. active efforts to hide fact 2. fact was material 3. other pty actually and justifiably relied on absence of fact 4. damage to other pty

Answer 21

a belief that doesn't line up with the facts, on the basic assumption of the contract

Answer 22

1. Mistake by both ptys about a fact at the time contract was made 2. concerning a basic assumption on which the contract was made 3. has a material effect on ptys transaction

Answer 23

1. mistake by one pty about a fact at the time contract was made 2. concerning a basic assumption on which the contract was made 3. has a material effect on ptys transaction 4. either: - non-mistaking party knew, should've known, or caused mistake - mistake makes contract grossly unfair

Answer 24

1. one pty commits wrongful act 2. precludes other pty from exercising free will or induces action 3. must be no choice but to agree - traditional: pty uses violence or threats to preclude free will - ecocomic: pty uses economic threats to force to do something, defense to pre-existing duty rule

Answer 25

1. minor (under 18) 2. mental illness 3. intoxication (HIGH level of drunk)

Answer 26

if a contract is so unfair, the court may choose not to enforce the whole contract, the unconscionable clause, or limit the unconscionable clause - Egregiously unfair - check of unfettered power 1. Procedural: absence of meaningful ability to bargain, gross inequality of bargaining power 2. Substantive: terms that shock the conscience

Answer 27

certain agreements need to be in writing to be enforceable - goods over $500 (UCC) - land sales - contracts that CANNOT be performed within a year Elements: 1. Contract has following in writing (subject, sufficient to indicate contract has been made, essential terms) 2. Signature by ptys (can be in digital form)

Answer 28

1. What kind of breach did D commit? (non-performance or defective performance) 2. To what damages may P be entitled? (general, special) 3. Do any limitations justify reducing P's recovery? (availability, foreseeability, certainty)

Answer 29

pty doesn't render any performance. look to the world rather than the average. 1. if SELLER breaches: FMV-K price 2. if BUYER breaches: K price-FMV

Answer 30

pty doesn't render perfect performance. loss of value caused by breach, cost of repair, diminution of value. FMV as promised - FMV as received

Answer 31

BoB + Special + Consequential - Expenses Saved

Answer 32

Benefit of the bargain - to put you in the position you would've been had the contract been performed

Answer 33

1. Reliance (what you actually spent trying to make the contract happen) - essential: expenses made while preparing to perform & required - incidental: not required but reasonably indirectly related, wasted expenses buyer made when seller didn't perform, additional expenses caused by breach

Answer 34

Indirect loss caused from breach - lost use profits - lost resale profits - property damage - personal injury

Answer 35

§ 2-708 if its a completely unique good that cannot be resold can sometimes get complete value

Answer 36

R.2d § 350 (efficiency) 1. party cannot recover for costs that could've been reasonably avoided 2. cannot recover if full extent of damages could have been avoided without undue risk, burden, or humiliation 3. If pty makes reasonable effort to avoid loss, but is unsuccessful, they can still recover

Answer 37

R.2d § 351 (predictability and efficiency) Pty can only recover damages that were reasonably foreseeable - Damages that would arise in ordinary course of events - Damages that would arise from P’s special circumstances that D knew about

Answer 38

R.2d § 352 (predictability) P can only recover for reasonably certain damages - P has burden of proving damage occurred and actual damage

Answer 39

NOT damages Restores to P the value of a benefit that was unjustly conferred to D Elements: 1. Benefit to D at P's expense 2. D keeping benefit would be unjust - available when there is no contract - measured by gain to D - D cannot gain from breach (fairness)

Answer 40

R.2d § 356 & UCC § 2-718 "agreed damages" Term defined at formation of K that specifies damages due in event of a breach (if liquidated damages clause is deemed valid) - incentive to keep K but penalty would be striked down by ct ELEMENTS FOR ENFORCEABILITY: 1. Damages are difficult to calculate - Or at least seemed so when the contract was made 2. The amount of damages is reasonable in light of either: - Estimated damages are formation OR Actual damages after breach (efficiency & freedom)

Answer 41

- Courts can make pty do something/perform their end of the contract - Only given when damages wouldn’t make P whole (damages are uncertain, K subject is irreplaceable, D is broke and cannot pay damages) - Injunctive Relief: (Courts can make pty NOT do something, prevents pty from breaching)

Answer 42

R.2d §215 Evidence of alleged terms not written into a contract - What’s at stake in deciding in a written contract when we will look outside of the written agreement for evidence of what the parties promised each other APPLIES ONLY WHEN: 1. The term was oral or written, agreed upon before making the contract OR 2. The term was (contemporaneous) oral, was agreed at the time the contract was made AND 3. There is no separate consideration

Answer 43

1. Does PE apply? - yes (Prior written or oral term, contemporaneous oral term, no separate consideration) - no (written contemporaneous term) STOP PE INADMISSABLE 2. Is extrinsic evidence consistent or inconsistent? - consistent (terms explain/supplement K) - inconsistent STOP PE INADMISSABLE 3. Is parties agreement integrated? - if not integrated at all, evidence is admissible - if merger clause, default integrated 4. Determine degree of integration - Fully (written agreement says everything ptys agreed to - NOT ADMISSABLE) - partially (written agreement has some but not all agreements - cts WILL admit extrinsic evidence ONLY consistent) - not integrated (K leaves out many terms & not final agreement - PE ALWAYS admissible)

Answer 44

(stricter) - If there's a merger clause, STOP! PER DOES NOT APPLY - no extrinsic evidence permitted - If document is complete within 4 corners of K, aka within text of the document - Exception: terms that would naturally be omitted.

Answer 45

(more lenient) - All evidence is permitted to help ct decide if K is integrated - If not fully integrated, extrinsic evidence used to complete the terms - Looks at the context in which K was formed - UCC is more of a Corbin approach (UCC § 2-202)

Answer 46

If there is ambiguity in a term trying to be resolved, court will admit extrinsic evidence - Parol evidence is always admissible to establish the meaning of the writing, whether or not it was integrated R2d § 214(C) - patent or latent

Answer 47

focuses on the text of the agreement - Contract is ambiguous only if you could see ambiguity on its face (within the 4 corners of the doc)

Answer 48

focuses more on what they meant - Even when K appears unambiguous on its face, extrinsic evidence may be allowed if it’s relevant to prove the meaning

Answer 49

leans more toward formulation of K - As long as the evidence does not contradict the language it can be permitted if it serves the 3 requirements

Answer 50

ambiguity that appears on the face of the document - ambiguous words or phrases - grammatical errors - conflicting terms

Answer 51

arises only when factual circumstances reveal a lack of clarity in the initial drafting - only revealed after learning new info - resolved by applying PE

Answer 52

contract is silent in addressing issues arising while performing - “Gap filling” is when ct’s try to fill the gap - by ascertaining what the parties must have meant aka good faith and reasonable effort - UCC provisions permit gap fillers to interpret 1. Price, time, or place (UNDER CL) would be a lack of certainty = no mutual assent 2. Shipment - all at once rather than in lots 3. Warranty of title 4. Warranty of merchantability 5. Warranties per trade usage and course of performance 6. (Maybe) Fitness for buyer’s purpose - if seller has reason to know

Answer 53

1. Course Performance - The best evidence of a contract’s meaning is how the contract was actually performed 2. Course of Dealing - How parties performed prior contracts of same subject/issue 3. Evidence of parties statements/admissions - Significant statements/admissions made during negotiations - Treated equal or more significant than course of dealing 4. Trade Usage - what word usually means in standard practice/field 5. Public Policy (absent all the above) - courts interpret contracts by public policy and to fix inconsistent terms 6. Contra profentum (last resort) - interpret contract against party who drafted

Answer 54

If parties include conditions in their contract, conditions must perfectly occur for the dependant duty to arise; an event that will not auto occur but must occur before performance by other pty is req - Made by parties or can be read into K - Purpose: postpones an obligation - If occurs, creates an obligation - If it doesn’t occur, excuses obligation to perform - If there are conditions and condition doesn’t occur = dissolution of K

Answer 55

if we can’t tell if it’s a condition, default to promise - Made by parties in K - Purpose: creates an obligation - If occurs, discharges obligation - If it doesn’t occur, then breach - If promise and promise is not performed, breach but parties have to perform other duties - If condition and promise and condition doesn’t occur, breach and dissolution of K

Answer 56

- Conditions parties create found within the contract itself - “Subject to” or “if” language in clause - Time is of the essence clauses: Only when included a conclusion date to K - Ct has to really look into whether pty is reasonably trying - Satisfaction clauses: Ct would treat as subject to reasonableness test (sort of objective) - Community judgment about whether unreasonably withholding satisfaction - A subjective test is used if performance is so customized and personal that the only way to be satisfied is to gear towards individual person - Pay when paid clauses - Require express performance (aka perfect performance)

Answer 57

conditions that don’t explicitly say the order of performance - only substantial performance is required - Constructive Conditions Precedent: DEPENDANT When one pty MUST perform first - Constructive Conditions Concurrent: MUTUALLY DEPENDANT When pty’s can perform simultaneously Mostly UCC - Independant: Promisor goes first regardless of whether other pty has performed

Answer 58

1. Default is to find constructive conditions in contracts 2. First give effect to parties’ dates/language (“before” “when”) - Promotes freedom of contract/predictability 3. If parties duties can be performed simultaneously, default is concurrent constructive - efficiency 4. If one pty’s contractual duty takes time to perform and the other does not, default is pty who takes time goes first - fairness & predictability 5. If order of performance is unclear, cts should create constructive conditions that will best give effect to the deal the parties were trying to create - efficiency/predictability/freedom of contract

Answer 59

for constructive conditions, only substantial performance is required - for non-breaching pty: Extent non-breaching pty didn’t receive an essential contract benefit Extent non-breaching pty can get damages to substitute for loss of the contract benefit - for breaching pty: Extent breaching pty will have wasted time/money Likelihood breaching pty will cure deficiencies Extent breaching pty acted in good faith

Answer 60

1. Establish Concurrent Conditions between buyer & seller - Obligation of buyer is to transfer and deliver and obligation of buyer is to accept and pay (UCC § 2-301) - Tender of delivery by seller = buyer accepts and pays (UCC § 2-507) - Buyers duty is to accept and pay for the goods - constructively conditioned upon tender of the goods 2. Establishes Payment Methods § 2-511 - Payment is due before completion of any delivery - Payment will be given in any reasonable means ordinary to course of business unless seller requires legal payment, then he must give buyer reasonable time to obtain it - A check is conditional and faulty check is dishonor? - Sellers duty is to provide what they asked conditioned on the availability 3. Delivery of Goods § 2-503 - Buyer has to give seller reasonable notification to accept delivery of goods - Tender must be at reasonable hour/must give buyer reasonable time to get goods - Buyer must furnish conditions suited for receipt of goods 4. Buyer has right to inspect goods upon delivery § 2-513 5. Perfect Tender Rule § 2-601 - If goods fail to conform to what was agreed in K, buyer may… - Reject entire delivery - Accept entire delivery - Accept some and reject the rest - Non-conforming goods could include different item, wrong item, or wrong timing of delivery - Must give you EXACTLY what they ask for - you can accept if not but that’s on you 6. Seller can notify buyer of intent to fix nonconforming goods and must fix within reasonable time without penalty § 2-508 - If time for performance has not yet expired, seller has until end of K to fix problem - If seller rejects delivery that buyer believes to be acceptable condition, seller may have additional reasonable time to sub for conforming goods - If buyer rejects and seller has time they could fix it

Answer 61

R.2d § 240 - If a contract is divisible, then it can be separated into segments and performed at diff times - If not divisible, can’t be separated into segments/all performance has to be around the same time - In a divisible contract, if there’s breach of one part, then breach only applies to that part and rest of K stays intact - Factual determination based on what the parties meant in their deal

Answer 62

even though pty is not released from contractual duty, they’re allowed to not perform obligations - Happens when pty waives a condition and when pty makes it seem like they’re going to waive and other pty relies on that waiver - You didn’t do what you were supposed to do but it’s okay we understand

Answer 63

liberation of pty’s contractual duties - Happens when a pty has fully performed their duties or when something out of pty’s control makes it impossible to perform duties - You did it but we released you of the obligation to do it (cancelled bc of severe weather and not possible)

Contract Definitions Flashcards

(87 cards)