Contracts

Question 1

if the facts involve a transaction in goods– do you apply common law or the UCC?

Answer 1

UCC

only applies to a transaction in goods

without a transaction in goods the common law of contracts governs

Question 2

what are two examples of topics that are covered by common law?

Answer 2

real estate and services

ESSAY:
because this is a services contract, the common law of contracts governs instead of the UCC

Question 3

what is a transaction in goods?

Answer 3

a sale of tangible personal property

Question 4

what is a merchant

Answer 4

one who regularly deals in goods of the kind sold or who otherwise by their profession hold themselves out as having special knowledge or skills as to the practices or goods involved

Question 5

formation of a contract consists of…

Answer 5

offer
mutual assent
consideration

REMEMBER: ALWAYS STATE absent of any defense to enforcement

Question 6

bilateral contract

Answer 6

formed by an exchange of promises

Question 7

unilateral contract

Answer 7

formed by a promise in exchange for performance

Question 8

what is mutual assent?

Answer 8

whether there was an offer and acceptance of that offer

Question 9

what is an offer?

Answer 9

when there is intent to enter a contract through a promise or undertaking

terms must be:
definite and certain
communicated to the offeree
giving the offeree actual knowledge

creates a power of acceptance in the person to whom the offer was made

can not be accepted if it wad terminated

Question 10

termination of the offer by the offeror…

Answer 10

revocation

Question 11

termination of the offer by the offeree..

Answer 11

rejection

counteroffer

Question 12

what is a counter offer?

Answer 12

terminates the offer and creates a new offer

REMEMBER: mere bargaining is not a counter offer

conditional acceptance terminates the offer

LOOK FOR: “provided” or “so long as”

Question 13

mirror image rule

Answer 13

if the acceptance does not contain the exact same terms as the offer, then the new terms are treated like a revocation of the original offer and a counteroffer under common law

Question 14

under the UCC is a change of terms a counter offer?

Answer 14

NO and can constitute acceptance unless stated otherwise in one of the forms.

EX: when a buyer places an order and the seller’s acceptance form contains different terms or the terms are not addresses in the order at all.

Question 15

battle of the forms

Answer 15

unless acceptance is expressly made conditional to the additional terms the nonconforming acceptance creates a valid and binding contract

Question 16

battle of the forms:

if the buyer is a consumer….

Answer 16

then the additional terms are treated as proposals.

Question 17

battle of the forms

if the buyer is a merchant….

Answer 17

then the additional terms become part of the contract unless the offer expressly limits acceptance to its terms

the offeror objects within a reasonable time
or
the additional terms would materially alter the contract.

Question 18

battle of the form…

knockout rule

Answer 18

if the terms are different, then the knockout rule applies and omits the offeror’s original provision and the offeree’s differing provision from the resulting contract

Question 19

can the offeror control the method of acceptance?

Answer 19

yes!

both in common law and UCC

by stating the conditions

Question 20

if the offer is silent as to the method of acceptance then…..

Answer 20

the offeree can indicate acceptance by starting performance

in a unilateral contract– the offeree must complete performance

Question 21

when is acceptance by letter valid?

Answer 21

upon dispatch

AKA when placed in the mail

Question 22

what happens when the offeree changes their mind and after mailing the acceptance letter mails another letter?

What letter controls?

Answer 22

whichever letter is received first is what controls

Question 23

what is consideration

Answer 23

a bargained for exchange

REMEMBER: the promise must induce the detriment and the detriment must induce the promise

Question 24

does an act of restraint count as consideration?

Answer 24

Yes, if it gives the offeror a benefit

Question 25

does a pre-existing contractual or statutory duty count as consideration under common law?

Answer 25

NOT for a new promise New consideration is always required

Question 26

does a pre-existing contractual or statutory duty count as consideration under the UCC? or is new consideration required?

Answer 26

New consideration is not required. good faith is the test for changes to an existing sale of goods contract

Question 27

what is promissory estoppel? AKA detrimental reliance

Answer 27

substitute for consideration requires: promise reliance that is reasonable enforcement

Question 28

what are the defenses to the enforcement of a contract?

Answer 28

lack of capacity SOF illegality misrepresentation nondisclosure duress unconscionability mistake of fact

Question 29

defenses: lack of capacity

Answer 29

individuals who lack capacity to contract include: intoxicated persons if the other person has reason to know under the age of 18 mental incompetents that lack the ability to understand

Question 30

defenses: SOF what kind of contracts do SOF apply to?

Answer 30

applies to: contracts that are in writing that are one of the following: SURETYSHIP (promise to pay someone else's debt) promise in consideration of MARRIAGE service contract not capable of being performed within ONE YEAR REAL ESTATE SALE OF GOODS ($500 or more)

Question 31

what is the UCC's writing requirement?

Answer 31

that the writing states that it is a contract for the sale of goods and contains the quantity of goods

Question 32

mistake of fact

Answer 32

when both parties to a contract are mistaken about the material fact, then the contract is voidable by the adversely affected party

Question 33

what happens when only one party is mistaken about the facts of the contract?

Answer 33

the mistake does no prevent the enforcement of the contract BUT if the other party knew or had reason to know then the contract is voidable

Question 34

what are the different types of warranties?

Answer 34

express implied warranty of merchantability implied warranty of fitness for a particular purpose

Question 35

express warranties

Answer 35

created by the seller become apart of the agreement if they are the basis of the bargain

Question 36

implied warranty of merchantability

Answer 36

included with every sale of goods goods must be fit for their ordinary purposes

Question 37

implied warranty of fitness

Answer 37

direct representation by the seller or the seller's representative that the product fits what the buyer wants

Question 38

how can a seller alter the implied warranties?

Answer 38

language like "as is" or "with all faults"

Question 39

parol evidence rule 2 questions to ask

Answer 39

what is the purpose that the evidence is being used for does the evidence relate to a term or contract that is integrated?

Question 40

when is parol evidence allowed?

Answer 40

when it is being used tot explain or interpret the terms of a written contract

Question 41

parol evidence rule when does the UCC allow for parol evidence to be used?

Answer 41

usage of trade course of dealing course of performance to supplement terms of the written contract

Question 42

when is a duty to perform discharged?

Answer 42

performance tender of performance completed condition subsequent if performance is: - illegal - impossible - impractical - rescinded

Question 43

breach

Answer 43

occurs when there is a failure to perform when under a duty to perform

Question 44

minor breach

Answer 44

does no relieve the non-breaching party from performance but that party is entitled to damages

Question 45

material breach

Answer 45

excuses the non-breaching party from performance and he is entitled to all available remedies

Question 46

under the UCC what happens if the goods or the delivery fail to conform in any way with the contract?

Answer 46

the buyer may reject them, accept them or just accept certain ones

Question 47

under the UCC what happens if the goods or the delivery fail to conform in any way with the contract... when can the buyer NOT reject the goods?

Answer 47

buyers cannot reject them after already accepting by inspecting and indicating the goods do confirm or by failing to inspect

Question 48

under the UCC what happens if the goods or the delivery fail to conform in any way with the contract... when can the buyer revoke acceptance?

Answer 48

if the goods are so defective that their value is substantially impaired.

Question 49

under common law: what are the buyer's remedies?

Answer 49

monetary damages: expectation damages reliance damages restitution liquidated damages

Question 50

under the UCC what are the buyer's remedies? AND what do they rely on?

Answer 50

FIRST: depends on if the goods have been delivered REMEDIES: damages or specific performance REMEMBER: key factor is if the buyer has recovered is loss by purchasing replacement goods

Question 51

what are equitable remedies?

Answer 51

specific performance restitution unjust enrichment negative injunctive relief

Question 52

what is specific performance and when is it available?

Answer 52

only available when a monetary reward would not be adequate available: unique objects real property NOT available: for personal services

Question 53

what type of 3rd parties are involved in contract disputes?

Answer 53

beneficiary - intended - incidental assignment delegation

Question 54

incidental beneficiary

Answer 54

those that benefit from a promisor's performance but are not intended to benefit. has no standing to enforce the contract

Question 55

intended beneficiaries

Answer 55

when the promisor's performance was intended to benefit that third party has standing against the promisor BUT can not sue the promisee there must be an independent obligation for the promisee to be liable

Question 56

assignment

Answer 56

transfer of a right to receive a performance under a contract

Question 57

what rights are unassignable?

Answer 57

substantially change the contract's risks/duties are for future rights to arise under future contracts those that are illegal

Question 58

delegation

Answer 58

when a third party agrees to satisfy a performance obligation owed by one of the parties to the contract

Question 59

novation

Answer 59

when the obligee agrees to release the delegator in return for the liability of the delagatee AKA substitute the person who entered the contract with another

Question 60

what rights are not delegable?

Answer 60

personal performance contracts when the recipient relies on the qualities of someone who is to render performance THINK: world-famous artist

Question 61

federal statute: certain airports can regulate how much limos charge for rides to that airport redville is one of the airports listed. redville is next to greenville and share the airport in redville. redville city council sets the limo price a limo company in greenville charges cheaper rates than the rates city council allows must the limo company comply with the council rules?

Answer 61

yes because congress has authorized this form of regulation by redville and removed any constitutional impediments to it that may have otherwise existed supremacy clause- federal law governs commerce clause- states cannot pass regulations of local aspects of interstate commerce that discriminate against out-of-state parties to benefit local interests

Question 62

Defendant was on trial for murdering his father. Defendant's defense was that it was an accident prosecutor calls cop to testify that on several different occasions they were called to the defendant's home for beating his father. the evidence is....

Answer 62

admissible to show that the defendant killed his father intentionally evidence of prior fights and beatings are admissible for the purpose of establishing the defendant's intent or absence of mistake REMEMBER: state can not initiate evidence of bad character of the defendant to show they are more likely to have committed the crime

Question 63

state law made it a criminal offense for any state employee to knowingly provide educational services to an undocumented person. principal being charged under state law. what constitutional proviion would be the most helpful for the principal?

Answer 63

the ex post factor clause of article I, section 10 ex post factor laws punish conduct that occured before the law becomes effective