Contract Law Framework Flashcards
(10 cards)
MBE Contract Q Breakdown
28 K Questions Total
14 covering formation, performance, breach, and discharge
14 covering defenses, parol evidence, remedies, and third-party rights
25% covering Article 2
Step-by-Step Analysis
1: Read call fo question to determine what subject is being tested and the narrow topic being tested.
- Look for key contract facts in hypo: Dates, Dollar Amounts, Contract Formation Words, Words of Condition. Tip: Notate reminders in margins.
- Five fundamental contract questions:
(1) is the contract for goods, land, or services? If it is for goods, are there any merchants involved?
(2) Is the K written or oral?
(3) Does hypo involve 3rd Party rights?
(4) Are there any Applicable Defenses?
(5) What is the Appropriate Remedy?
(1) is the contract for goods, land, or services? If it is for goods, are there any merchants involved?
Determine if UCC or CL applies.
Common Law vs. UCC
(1) Mirror Image Rule and UCC Approach:
- Common law acceptance must be identical to the terms of the offer. Any additional terms added would constitute a rejection and counteroffer.
- Under UCC, acceptance to terms may differ from the offer (i.e., Battle of Forms)
(2) Bilateral v. Unilateral Contracts
Ucc: all contracts - acceptance by promise to ship or shipment
Common law: unilaterla contracts are accepted by performance only. bilateral contracts are accepted by promise only.
(3) Modification of K
CL: Modification needs consideration to be enforceable
UCC: modification d/n need consideration as long as in good faith
(4) Merchants: special rules for merchants inmerchant firm offers, BoF, confrmtry memos and implied warranties
Merchants in the K?
UCC: Merchant is one who regularly deals in kind of goods sold or otherwise holds himself out by profession as having special knowledge of goods involved.
Special merchant rules for firm offers, battle of the forms, confirmatory memos and implied warranties.
Written vs Oral K
Indicate written or oral in margin.
Statute of Frauds and Parol Evidence Rule
SoF: signed writing required for MY LEGS
Parol Evidence Rule: Terms of a fully integrated K cannot be modified by evidence of prior or contemporaneous oral statement or a prior written statement. Exceptions allowed for partially integrated Ks, to prevent fraud
Third-party rights?
- Third party beneficiary: at least three parties, and performance owed to an intended (named) non-party. Can third party beneficiary sue, and can defenses be raised. A creditor can sue, a donee cannot sue.
Can contract be modified or cancelled w/o third-party beneficiary permission? Third parties rights vest if (1) the third party assents to K, (2) detrimentally relies on K, OR (3) brings a lawsuit to enforce K. Tip: Third party interest d/n vest simply because third party knows about K.
- Assignment of Rights
- Delegation of Duties. Allowed unless K provides otherwise, or performance involves special skill.
Any applicable defenses
SoF and exceptions (part performance, specially mnufctrd goods, admission, merchants conf memo, promissory estoppel)
Mistake or misunderstanding: mutual mistake = no k (bc no meeting of mind). unilateral mistake = not defense unless non-mistaken party knew/shldve known of mistake (test tip: likely to occur in hypo with gross mistake of price where one party should know its a mistake– rationaledon’t want ppl taking advantage of clear mistake).
Incapacity to contract: minority = only minor can enforce k w adult, adult c/n enforce K with minor, but minor can confirm K after majority.
Other defenses: Duress, undue influence, fraud, misrep, nondisclosure, illegality, unconscionability, violation of pub policy.
Discharge of obligations
- impracticabilty or frustration of purpose.
- breach by anticipatory of reputation. repudiation needs to be clear and unequivocal. if AR, can treat as material breach. if not AR, then can ask for adequate assurances.
- Accord and satisfaction: agrmt where 1 party accepts different performance instead of OG performance. look for bona fide dispute to claim if partial performance situation.
What is the Remedy?
Is remedy at law (money damages) or equity (specific performance)
Must have valid K.
Calculating damages: Prefer expectation.
Legal Damages: 1 damages for nonperformance a. give non-breaching party benefit of the bargain. b. calculate the cost for cover. 2 warranty damages a. diff in value bw goods as delivered and as promised.
TEst tip: eliminate wrong answers using common sense.
Lost Volume Seller: seller can obtain as many goods as he can sell. archetype is car dealer. Dmgs = contract price - wholesale price + cost of breach.
Equitable REmedy: (scenario 1) remedy at law is insufficient. usually get specific performance. (Scenario 2) quasi contract. p conferred benefit on d, p had reasonable expectation of being paid, and d knew/shldve known of expectation. test tip: keep quasi contract remedy in mind when k isn’t formed or isn’t enforceable.
