Contract MEE rules Flashcards
(23 cards)
Statute of Frauds UCC
A contract for the sale of goods is governed by Article 2 of the Uniform Commercial Code (UCC). Under the UCC, a contract for the sale of goods for $500 or more falls within the Statute of Frauds (SOF) and is generally unenforceable unless evidenced by a writing. The writing need not be formal but must be signed by the party to be charged and contain the essential elements of the deal. The writing must indicate that a contract has been made, identify the parties, and contain a quantity term. So long as the parties intend to create a contract, the UCC “fills the gap” if any other terms are missing—e.g., the time or place for delivery, or the price.
A writing is not required (1) for specially manufactured goods, (2) to the extent that payment has been made and accepted for goods, (3) to the extent that goods are received and accepted, or (4) when a merchant fails to object to a memorandum from another merchant within 10 days of receipt of the memorandum.
Contract
The issue is what law governs the following contract analysis. The common law governs contracts related to services and real property. The Uniform Commerce Code (“UCC”), specifically UCC Article 2, governs contracts related to the sale of goods. When a contract considers two types of result (i.e., a contract for sales and services), the predominant purpose test provides the correct controlling law. The predominant purpose test looks at what the major purpose of the contract was (“the predominant purpose”) and applies the law that governs over the predominant purpose. A contract may not have two purposes.
unilateral contract
A unilateral contract is one in which a party promises to do something in return for an act by the other party. The offeror can revoke his promise at any time before the offeree begins performance. But if the offeree relies on the offeror’s promise and incurs expenses in mere preparation for performance, the offeree may be entitled to reliance damages.
public nuisance
A public nuisance suit brought by a private individual requires proof that:
(1) there was interference with a public right
(2) that interference was unreasonable—i.e., it either (1) significantly affected public health, safety, peace, or property rights or (2) violated an ordinance, statute, or administrative regulation and
(3) the plaintiff suffered harm different from that suffered by the public at large.
assurances of performance
A party can demand assurances of performance if there are reasonable grounds for insecurity about the other party’s ability or willingness to perform. Under the UCC, the demand must be made in writing, and a reasonable time within which to give adequate assurances is limited to 30 days.
accord agreement consideration
An accord agreement must be supported by new consideration. If the new consideration is worth less than what was originally promised, then it is sufficient only if (1) there is a good-faith dispute as to the amount owed or (2) it is of a different type than what was originally owed.
valid deed requirements
(1) the identity of the grantor and the grantee,
(2) in writing
(3) words of transfer,
(4) a description of the property interest being transferred, and
(5) the grantor’s signature.
deed signature requirements
To be valid, a deed must be signed by the grantor. The signature can be made by the principal-grantor’s agent if the agent had authority to sign on the principal-grantor’s behalf.
intentional misrepresentation
plaintiff must show that:
(1) the defendant knowingly or recklessly misrepresented a material fact with the intent to induce the plaintiff’s reliance and
(2) the plaintiff reasonably (i.e., justifiably) relied on the misrepresentation and suffered pecuniary loss (i.e., monetary loss) as a result.
damages are benefit of the bargain (value if D had been telling the truth)
negligence per se
defendant breaches a duty of care when
(1) a law imposes a duty on the defendant,
(2) the defendant violates that law,
(3) the plaintiff is in the class of persons that the law was intended to protect, and
(4) the plaintiff suffers the type of harm that the law was intended to prevent.
misrepresentation
can sue under misrepresentation if
(1) the misrepresentation was fraudulent or material,
(2) it induced assent to the contract, and
(3) the adversely affected party justifiably relied on it.
renders contract voidable
fixture removal and leases
Fixtures attached to leased property by tenants must generally be removed before the lease terminates, but they can be removed within a reasonable time thereafter if
(1) the termination was not due to the tenant’s breach and
(2) the tenant could not have foreseen termination early enough to permit removal before the lease terminates.
duty to disclose unreasonably dangerous natural or artificial conditions
A seller of real property has a duty to disclose to a buyer unreasonably dangerous natural or artificial conditions on the land if:
(1) the condition exists at the time of the sale
(2) the seller knows or has reason to know of the condition and its unreasonable risk to persons on the land
(3) the buyer does not know or have reason to know of the condition or risk and
(4) the seller has reason to believe that the buyer would not discover the condition or realize its risk.
quasi contract
Courts may impose a quasi-contract if
(1) the plaintiff conferred a measurable benefit on the defendant
(2) without gratuitous intent and
(3) it would be unfair to let the defendant retain that benefit.
damages for quasi contract
restitution damages in an amount equal to the value of the benefit conferred.
fraud/misrepresentation
A prima facie case of fraud is established by proof of the following elements:
(1) The defendant knowingly or recklesslymisrepresented amaterial fact with the intent to induce the plaintiff’s reliance.
(2) The plaintiff justifiably relied on the misrepresentation and suffered pecuniary (ie, financial) loss as a result.
UCC risk of loss, specifically ID’d goods
Under the UCC, when a contract deals with specifically identified goods, complete destruction of the goods excuses each party’s duty to perform if the destruction occurred
(1) without fault of either party and
(2) before the risk of loss passed to the buyer.
When the parties agree that the seller is to deliver the goods to the buyer (or the buyer is to pick up the goods from the seller), then the risk of loss passes to the buyer
(1) upon taking physical possession of the goods if the seller is a merchant or
(2) upon tender of delivery if the seller is not a merchant.
transfer of contract rights and duties
Contractual rights and duties can generally be transferred to a nonparty by assignment (transfer of rights) or delegation (transfer of duties). But an assignment is disallowed if, for example, it materially reduces the non-assigning party’s chance of obtaining performance.
cotenant fid duty
Cotenants owe each other a fiduciary duty when they
(1) jointly purchase property in reliance on each other or
(2) acquire their interests at the same time from a common source.
This duty arises when the property is sold at a foreclosure sale and purchased by a cotenant, allowing the other cotenants to reacquire their interests by paying their share of the purchase price.
Evidence of prior or contemporaneous oral or written agreement is admissible to establish
- whether writing is integrated and, if so, completely or partially
- meaning of ambiguous term
- defense to formation or enforcement (eg, fraud, duress, mistake)
- ground for granting or denying remedy (eg, rescission, reformation)
- subsequent contract modifications
- condition precedent to effectiveness
CL timing of performance
When contracting parties can perform at the same time, they must perform simultaneously. But when one party’s performance requires the passage of time, that party must completely perform before the other party must perform.
UCC installment contracts rule for nonconformity
follow the substantial-impairment rule, which allows a buyer to reject tender of nonconforming goods when the nonconformity substantially impairs the value of that shipment and cannot be cured.
UCC gap filler for delivery and payment timing
the gap filler for the place of delivery is generally the seller’s place of business if the seller has one. And unless the contract specifies otherwise, payment is due at the time and place the buyer is to receive each shipment of goods.
