Flashcards in Contracts Deck (56)
What are the 3 methods for satisfying SOF?
-services: full performance only
-goods: pt performance ok, SOF still applies to undelivered goods
-services: all material terms, signed by party
-goods: quantity, signed b/w merchants (memp fr 1 ok)
3. judicial admission (in pleadings)
When will a breach excuse an injured part from performance?
if there is material breach
What is the parol evidence rule?
evidence of oral/ written statements made prior to or contemporaneously with a contract are excluded
-evidence of subsequent contract modification are ok
What are the 5 exceptions to the parole evidence rule?
evidence admitted to...
1. correct a cerical error
2. establish defense to enforceability (formation challenge)
3. explain vague or ambiguous term
4. supplement partially integrated writing
5. show existence of a merger clause- everything before agreement merged into later writing
What is a constructive trust?
equitable remedy similar to a trust imposed by court to benefit a party that has been wrongfully deprived due to unjust enrichment
What 2 factors make liquidated damages permissible?
1. damages are difficult to estimate at time of contract
2. liquidated amount is a reasonable forecast of damages
What is accord?
agreement to substitute a different act or performance for an original act or performance
What is satisfaction?
when an accord agreement successfully carried out
Who can 3rd party beneficiary to a contract sue? (2)
1. promisor (can assert any defense he would have if sued by promissee)
2) promissee (3rd party bene. cant sue unless 3rd party was a creditor bene (ex promisee owed 3rd party $)
How does mitigation relate to damages?
P cannot recover for losses she could've avoided by taking appropriate steps
-For goods and construction contracts, completion may equal mitigation
What is a material breach?
breach that goes to the essence of the contract
-- substantial performance is not material breach
What is anticipatory repudiation (A.R.)?
When a party indicates they will not perform contractual obligation (repudiates)
-excuses non-repudiating party from performance and creates immediate right to sue if contract executory (both sides still have obligations to perform)
When can a party to a contract demand assurances?
when the conduct of other party to the contract appears to be approaching breach
-other party may demand assurance that other will comply
-reasonable time must be given 4 assurances to be met, if not met, can treat as A.R.
When is specific performance available?
1. monetary damages inadequate
2. subject matter of contract must be...
-good (if rare/ unique)
(SP not available for service K's)
What is a novation?
Agreement by all parties to an existing contract to substitute a new party w/ the same performance
-party that was replaced is excused of all liability : compare to delegation
What are the 4 contract damages?
1. expectation (parties left in position as if parties fully performed)
2. reliance (place parties as if contract never existed)
3. consequential (occurred as consequence of breach)
4. incidental (storage, shipping fees)
When is an illusory promise a consideration?
when what appears to be an illusion creates a new obligation
What 3 conditions must exist together for no contract to be made due to ambiguity?
1. contract uses a material term open to 2 or more reasonable interpretations AND
2. each party to the contract attaches a different meaning to term
3. neither knows/ has reason to know the meaning of the other
What is the general test of an offer?
reasonable person in position of offer would believe his assent creates contract
What are the 4 risk of loss (ROL) rules?
3. delivery by common carrier (not seller)
4. no agreement, no breach, no delivery by a carrier
What are the 3 key elements of reclamation?
1. buyer insolvent at time goods received
2. seller demand return goods w/in 10 days of receipt
3. buyer still has goods at time of demand
What is the measure of damages when buyer breaches & buyer keeps goods?
seller gets contract price
What is the measure of damages when buyer breaches & seller keeps goods?
seller gets contract price (resale price) OR if volume seller (ex car dealer) get lost profits
In sale of goods, what is measure of damages when seller breaches & seller keeps goods?
buyers gets contract price (value of goods at discovery of defect) OR replacement price (contract price)
In sales of goods, what is the measure of damages when seller breaches & buyer keeps goods?
buyers gets fair market value of perfect goods minus value of goods as received
What is a suretyship?
promise to answer for the debts of another (ex co-signer)
What 5 contracts require compliance w/ SOF?
1. marriage (pre-nup)
2. take over 1 yr to perform
3. sale of goods $500> (UCC2)
4. land transfers/ leases > 1 yr
What are the 6 components of contract formation?
1. valid offer
4. legal capacity
5. legal subject matter
6. compliance w/ SOF
When are Ads not invitations to offer?
IF AD specifies quantity & who can accept (ex 1 BMW for $40,000 1st come 1st serve)