Contracts Flashcards
(119 cards)
1
Q
What is a contract?
A
A legally enforceable promise.
2
Q
What are the three types of Contracts?
A
1) Express contracts are formed by language, oral, or written
2) Implied contracts are formed by conduct
3) Quasi-contracts are not contracts at all. But quasi-contract is the name given when an unenforceable contract results in unjust enrichment.
3
Q
How may a party accept a bilateral offer?
A
A bilateral contract offer may be accepted in any reasonable way.
4
Q
How may a party accept a unilateral contract?
A
A unilateral contract is one in which the offeror requests performance rather than a promise.
The offeror promises to pay upon the completion of the requested act.
Once the act is completed, a contract is formed.
5
Q
What are the two situations in which a unilateral contract exists?
A
1) When the offeror clearly (unambiguously) indicates that completion of performance is the only manner of acceptance; and
2) Where there is an offer to the public, such as a reward offer.
6
Q
What is a merchant under the UCC?
A
One who regularly deals in goods of the kind sold or who otherwise by their profession holds themselves out as having special knowledge or skills as to the practices or goods involved.
A merchant must be acting in their mercantile capacity in order for the merchant rules to apply.
7
Q
What are the three elements of a contract?
A
1) Offer
2) Acceptance
3) Consideration
8
Q
What is an Offer?
A
An offer must create a reasonable expectation in the offeree that the offeror is willing to enter into a contract on the basis of the offered terms
9
Q
Are advertisements considered offers?
A
No,
Advertisements are usually construed as mere invitations for offers.
10
Q
An offer must be definite and certain in its terms. The basic inquiry is whether enough of the essential terms have been provided so that a contract including them is capable of being enforced. What must be in an offer?
A
1) Identification of the offeree
2) Definiteness of Subject Matter
11
Q
What are required in an offer for real estate transactions?
A
The offer must identify the LAND and the PRICE terms.
The land must be identified with some particularity but a deed description isn’t necessary.
12
Q
What are required in an offer for sale of goods?
A
The QUANTITY must be certain or capable of being made certain.
13
Q
An offer may be indirectly revoked if the offeree receives:
A
1) correct information;
2) from a reliable source;
3) of acts of the offeror that would indicate to a reasonable person that the offeror no longer wishes to make the offer.
14
Q
When is a revocation effective?
A
A revocation is effective when received by the offeree.
15
Q
Offers can be revoked by will by the offeror, even if he has promised not to revoke for a certain period, except for the following circumstances:
A
1) Options
2) Merchant’s Firm Offer under Article 2
3) Detrimental Reliance
4) Beginning Performance in response to true Unilateral contract offer
5) Beginning Performance - offer indifferent as to manner of acceptance
16
Q
What is an option contract?
A
An option is a distinct contract in which the offeree gives consideration for a promise by the offeror not to revoke an outstanding offer.
17
Q
What is a Merchant’s Firm Offer under Article 2?
A
Under Article 2, if (1) a merchant, (2) offers to buy or sell goods in a signed writing, and (3) the writing gives assurances that it will be held open, the offer is NOT revocable for lack of consideration during the time stated, or if no time is stated, for a reasonable time (not to exceed 3 months)
18
Q
How may an offer terminate by operation of law?
A
1) Death or insanity of either party (death or insanity need NOT be communicated to the other party);
2) Destruction of the proposed contract’s subject matter; OR
3) Supervening illegality
19
Q
What is an Acceptance?
A
A manifestation of assent to the terms of an offer in any reasonable manner and by any medium reasonable under the circumstances.
20
Q
How may a party accept an offer for bilateral contract?
A
By either promising to perform or by the beginning of performance.
21
Q
How may a party accept an offer for unilateral contract?
A
If an offer provides that it may be accepted only by performance, the contract is not accepted until performance is COMPLETE.
22
Q
Under the battle of the forms, the inclusion of additional or different terms by the offeree in a definite and timely acceptance does NOT constitute a rejection and counteroffer, but rather is effective as an acceptance, unless the acceptance is:
A
Expressly made conditional on assent to the additional or different terms.
23
Q
Contracts between MERCHANTS - Additional terms usually included if both parties to the contracts are MERCHANTS, additional terms in the acceptance will be included in the contract unless:
A
1) They materially alter the original terms of the offer, such as by changing a party’s risk or the remedies available;
2) The offer expressly limits acceptance to the terms of the offer; OR
3) The offeror has already objected to the particular terms, or objects within a reasonable time after notice of them is received.
24
Q
Mailbox Rule - Acceptance by mail or similar means is effective at the moment of dispatch, unless one of these exceptions applies:
A
1) The offer stipulates that acceptance is not effective until received.
2) An option contract is involved (an acceptance under an option contract is effective only upon receipt)
3) The offeree sends a rejection and then sends an acceptance, in which case whichever arrives first is effective.
4) The offeree sends an acceptance and then a rejection, in which case the acceptance is effective (mailbox rule) UNLESS the rejection arrives first and the offeror detrimentally relies on it.
25
Courts will enforce a promise as a contract only if it is supported by consideration or a substitute for consideration. What are the two necessary elements to constitute consideration?
1) A Bargained-for exchange between the parties; and
2) Legal value, meaning that which is bargained for must be considered of legal value or it must constitute a benefit to the promisor OR a detriment to the promisee.
26
Is Preexisting Legal Duty considered as consideration?
No, performing or promising to perform an existing legal duty is insufficient consideration.
27
What are the exceptions to the Preexisting legal duty rule?
There is consideration for a pre-existing duty if:
1) New or different consideration is promised
2) The promise is to ratify a voidable obligation
3) The preexisting duty is owed to a third party rather than to the promisor;
4) There is an honest dispute as to the duty; OR
5) There are unforeseen circumstances sufficient to discharge a party (such as impracticability), or under the modern view, if the modification is fair and equitable in view of circumstances not anticipated when the contract was made.
28
Under the UCC, must there be consideration for a good faith agreement modifying a contract?
No consideration is necessary.
29
Under general common law, a contract can't be modified unless the modification is supported by new consideration. The modern view permits modification without consideration if:
1) The modification is due to circumstances that were unanticipated by the parties when the contract was made; and
2) It is fair and equitable.
30
[Promissory Estoppel] Consideration is not necessary if the facts indicate that the promisor should be estopped from not performing. A promise is enforceable if necessary to prevent injustice if:
1) A promise;
2) Enforcement is necessary for interest of justice;
3) The promisor should reasonably expect to induce action or forbearance; and
4) Such action or forbearance is in fact induced.
31
Contracts induced by duress are voidable and may be rescinded so long as they are not affirmed. Duress occurs when a party's assent is procured by an improper threat. Withholding something someone wants or needs will constitute economic duress if:
1) The party threatens to commit a wrongful act that would seriously threaten the other contracting party's property or finances; and
2) There are no adequate means available to prevent the threatened loss.
32
Contracts induced by undue influence are voidable and may be rescinded so long as they are not affirmed. Undue influence concerns often arise when the dominant party is in a confidential or caregiver relationship with the influenced party. Undue Influence elements are:
1) Undue susceptibility to pressure by one party; and
2) Excessive pressure by the other party.
33
If the contract includes a term with at least two possible meanings, the result depends on the parties' awareness of the ambiguity:
Neither party aware - no contract unless both parties intended the same meaning;
Both parties aware - no contract unless both parties intended the same meaning; or
One party aware - binding contract based on what the ignorant party reasonably believed to be the meaning of ambiguous words
34
If both parties entering into a contract are mistaken about existing facts (not future happenings) relating to the agreement, the contract may be voidable by the adversely affected party if:
1) The mistake concerns a basic assumption on which the contract is made;
2) The mistake has a material effect on the agreed-upon exchange; AND
3) The party seeking avoidance did NOT assume the risk of the mistake.
35
If only one of the parties is mistaken about facts relating to the agreement, the mistake will NOT prevent formation of a contract. But, if the nonmistaken party knew or had reason to know of the mistake made by the other party, the contract is:
Voidable by the mistaken party.
36
If the promises exchanged both lack consideration, NO CONTRACT exists. In this situation, one of the promises is always _______
illusory.
37
What agreements must be evidenced by a writing signed by the party sought to be bound under the Statute of Frauds?
Marriage
contract last longer than one Year
Land sale contracts
Executor or administrator promises personally to pay estate debts
Goods over $500
Suretyship promises
38
Part performance takes a sale of goods contract out of the SoF when:
1) The goods have been specifically manufactured; OR
2) The goods have been either paid for or accepted.
39
The SoF doesn't require a formal written contract. The Statute requires only one or more writings that:
1) Reasonably identify the subject matter of the contract;
2) Indicate that a contract has been made between the parties; and
3) State with reasonable certainty the essential terms.
40
What are the two components to determine if the writing is an "integration?"
1) Whether the writing was intended as the final expression of the agreement; and
2) Whether the integration was intended to be complete or partial.
Evidence is admissible to show the parties' intent.
41
What is the course of dealing?
The sequence of conduct concerning previous transactions between the parties to a particular transaction that may be regarded as establishing a common basis of their understanding.
42
What is a usage of trade?
A practice or method of dealing, regularly observed in a particular business setting so as to justify an expectation that it will be followed in the transaction in question.
43
What is course of performance?
If a contract involves repeated occasions for performance by either party and the other party has the opportunity to object to such performance, any course of performance accepted or acquiesced to is relevant in determining the meaning of the contract.
44
What is the hierarchy for the UCC Gap Fillers?
Express terms
Course of Performance
Course of Dealing
Usage of Trade
45
What is an Express Warranty?
Any affirmation of fact or promise made by the seller to the buyer, any description of the goods, and any sample or model creates an express warranty if the statement, description, sample or model is part of the basis of the bargain.
A statement relating merely to the value of the goods doesn't create an express warranty.
46
What is an Implied Warranty of Merchantability?
Implied in EVERY contract for sale by a merchant who deals in goods of the kind sold, there is a warranty that the goods are merchantable. To be merchantable, goods must be at least be "fit for the ordinary purpose for which such goods are used."
47
What is an Implied Warranty of Fitness for a Particular purpose?
A warranty will also be implied in a contract for the sale of goods whenever (1) any seller, merchant or not, has reason to know the particular purpose for which the goods are to be used and that the buyer is relying on the seller's skill/judgment to select suitable goods; and (2) the buyer in fact relies on the seller's skill or judgment.
48
What are the Buyer's Damages for breach of Warranty?
Generally, the measure of damages for breach of any warranty is the difference between the value of the goods accepted and the value of the goods warranted, measured at the time and place of acceptance.
49
A noncarrier case is a sale in which it appears that the parties did not intend that the goods would be moved by a common carrier.
When does the risk of loss transfer?
If the seller is a merchant, risk of loss passes to the buyer only when they take physical possession of the goods.
If the seller is not a merchant, risk of loss passes upon tender of delivery (buyer can pick up the goods).
50
Carrier case is a sale in which it appears that the parties intended the goods to be moved by a carrier. What are the two types of carrier cases?
1) Shipment contracts
2) Destination contracts
51
What is a Shipment Contract?
If the contract authorizes or requires the seller to ship the goods by carrier but does not require them to deliver the goods at a particular destination, it is a shipment contract and RISK OF LOSS transfers to the buyer when the goods are delivered to the carrier.
Article 2 presumes shipment contract unless stated otherwise.
52
What are the Seller's duties under Shipment Contract?
The seller must:
1) make a reasonable contract with the carrier on behalf of the buyer;
2) Deliver the goods to the carrier;
3) Promptly notify the buyer of the shipment; and
4) Provide the buyer with any documents needed to take possession of the goods.
53
What is a Destination Contract?
The contract requires the seller to deliver the goods at a particular destination, the risk of loss passes to the buyer when the goods are tendered to the buyer at the destination.
54
If goods were identified when the contract was made are destroyed (1) without fault by either party and (2) before the risk of loss passes to the buyer, the contract is:
Avoided! Seller's performance is excused.
If the goods were not identified until after the contract was made, the seller in this situation would have to prove impracticability.
55
What is the party's duty to performance at Common Law?
A party's basic duty at common law is to substantially perform all that is called for in the contract.
56
What is the party's duty to performance under Article 2?
Article 2 generally requires a perfect tender - the delivery and condition of the goods must be exactly as promised in the contract.
57
In order to be a valid anticipatory repudiation, what must exist?
A clear intent to breach the contract before their performance date
58
Do anticipatory repudiation statements have to be in writing?
NO
They may be in oral or in writing.
59
Upon the receival of a valid anticipatory repudiation by the counterparty, the nonrepudiating party has 4 alternatives:
1) Treat the anticipatory repudiation as a total repudiation and sue immediately;
2) Suspend their own performance and wait to sue until the performance date;
3) Treat the repudiation as an offer to rescind and treat the contract as discharged; or
4) Ignore the repudiation and urge the promisor to perform.
60
A repudiating party may at any time before their next performance is due withdraw their repudiation unless the other party has:
Canceled, materially changed their position in reliance on the repudiation, or otherwise indicated that they consider the repudiation final.
The withdrawal of the repudiation may be in any manner that clearly indicates the intention to perform, but must also include any assurances justifiably demanded.
61
If a contract is divisible and a party performs one of the units of the contract, they are entitled to the agreed-on equivalent for that unit even if they fail to perform the other units. Three tests must be concurrently satisfied to make a contract divisible:
1) The performance of each party is divided into two or more parts under the contract;
2) The number of parts due from each part is the same;
3) The performance of each part by one party is agreed on as the equivalent of the corresponding part from the other party, meaning each performance is quid pro quo of the other.
62
What is a mutual rescission?
The contract may be discharged by an express agreement between the parties to rescind. The agreement to rescind is itself a binding contract supported by consideration. (Giving up by each party of their right to counterperformance from the other).
63
A contract may be discharged by an accord and satisfaction. What is an Accord and Satisfaction?
An Accord is an agreement in which one party to an existing contract agrees to accept, in lieu of the performance they were supposed to receive from the other party, different future performance.
The accord alone doesn't discharge the existing contract, it merely suspends the right to enforce it.
Satisfaction is the performance of the accord agreement. Its effect is to discharge not only the original contract but also the accord contract as well.
64
May an accord be supported by consideration of a lesser value than the originally bargained-for consideration in the prior contract?
YES
So log as it is of a different type or the claim is to be paid to a third party
65
What is a discharge by Novation?
A novation occurs when a new contract substitutes a new party to receive benefits and assume duties that had originally belonged to one of the original parties under the terms of the old contract.
A novation discharges the old contract.
All parties must agree to the substitution. Then it is a novation. A new, written contract is not necessary.
66
What are the elements of a valid Novation?
1) A previous valid contract;
2) An agreement among all parties, including the new party (or parties) to the new contract;
3) The immediate extinguishment of contractual duties as between the original contracting parties; and
4) A valid and enforceable new contract.
67
What is a Discharge by Impossibility?
The contractual duties will be discharged if it has become impossible to perform them.
68
What is a Discharge by Impracticability?
The contractual duties will be discharged where performance has become impracticable.
The party to perform has encountered:
1) Extreme and unreasonable difficult and/or expense; AND
2) Its nonoccurrence was a basic assumption of the parties.
69
What is a Discharge by Frustration?
Frustration will exist if the purpose of the contract has become valueless by virtue of some supervening event not the fault of the party seeking discharge.
70
What are the elements necessary to establish frustration:
1) There is some supervening act or event leading to the frustration;
2) At the time of entering into the contract, the parties did not reasonably foresee the act or event occurring;
3) The purpose of the contract has been completely or almost completely destroyed by this act or event;
4) The purpose of the contract was realized by both parties at the time of the contract formation.
71
When does a breach occur?
If it is found that (1) the promisor is under an absolute duty to perform; and (2) this absolute duty of performance has not been discharged, then this failure to perform is a breach.
72
What do the courts look at to determine whether a breach is material or minor?
1) The amount of benefit received by the nonbreaching party
2) The adequacy of compensation for damages to the injured party
3) The extent of part performance by the breaching party
4) Hardship to the breaching party
5) Negligent or willful behavior of the breaching party; AND
6) The likelihood that the breaching party will perform the remainder of the contract.
73
What is a Minor Breach under the common law?
A breach is minor if the obligee gains the substantial benefit of their bargain despite the obligor's defective performance.
A minor breach does NOT relieve the aggrieved party of their duty to perform under the contract.
74
What is a Major Breach under the common law?
If the obligee does not receive the substantial benefit of their bargain, the breach is considered material.
75
What may the aggrieved party do upon a Major Breach under the common law?
The nonbreaching party:
1) May treat the contract as at an end; that is, any duty of counterperformance owed by them will be discharged; and
2) Will have an immediate right to all remedies for breach of the entire contract, including total damages.
76
A buyer's right to reject under the perfect tender doctrine generally is cut off by acceptance. Under Article 2, a buyer accepts when:
1) After a reasonable opportunity to inspect the goods, they indicate to the seller that the goods conform to requirements or that they will keep the goods even though they fail to conform;
2) They fail to reject within a reasonable time after tender or delivery of the goods or fail to seasonably notify the seller of their rejection; OR
3) They do any act inconsistent with the seller's ownership.
77
Under Article 2, a buyer may revoke an acceptance already made. A proper revocation of acceptance has the effect of a rejection.
The buyer may revoke their acceptance if the goods have a defect that substantially impairs their value to the buyer and:
1) They accepted the goods on the reasonable belief that the defect would be cured and it has not been OR
2) They accepted the goods because of the difficulty of discovering the defects or because of the seller's assurance that the goods conformed to the contract.
78
Under single delivery contracts, the Seller has a right to cure. What are the two ways a Seller may cure?
1) Seller can cure by notice and new tender within time for performance;
or
2) Seller's right to cure beyond original contract time. (If the buyer rejects a tender of nonconforming goods that the seller reasonably believed would be acceptable, the seller, upon a reasonable notification to the buyer, has a further reasonable time beyond the original contract time to make a conforming tender).
79
In addition to the standard contract defenses, an action for specific performance is subject to the equitable defenses of:
1) Laches - a claim that the plaintiff has delayed bringing the action and that the delay has prejudiced the defendant;
2) Unclean hands - a claim that the party seeking specific performance is guilty of wrongdoing in the transaction being sued upon; and
3) Sale to a bona fide purchaser - a claim that the subject matter has been sold to a person who purchased for value and in good faith.
80
What are the Buyer's measures of damages for total breach under Article 2?
Benefit of Bargain (market price - contract price)
OR
Cover (Cost of reasonable replacement goods - contract price)
PLUS
[Incidental damages + Foreseeable Consequential Damages - Expenses Saved]
81
What are the Seller's measures of damages for total breach under Article 2?
Benefit of Bargain (market price - contract price)
OR
Resale (contract price - resale price)
OR
Lost Profit if seller has lost sales volume (contract price - cost of goods)
OR
Action for price (contract price)
PLUS
[Incidental damages - Expenses saved]
82
What is the standard measure of damages in Employment Contract [Breach by Employee]
Costs of replacing employee - Amounts owed to employee for work done
83
What is the standard measure of damages in Employment Contract [Breach by Employer]
Contract price - Amount employee made or would have made by taking similar position (employer must prove position available).
84
What is the standard measure of damages in Construction Contract [Breach by Owner]
Before completion:
[Expected profit + Costs expended]
After Completion:
[Contract price]
85
What is the standard measure of damages in Construction Contract [Breach by Builder]
[Costs of completion + Damages from delay - Quasi-contract recovery for benefit conferred by builder]
86
Restitution may be available in a quasi-contract action when there is no contractual relationship between the parties if:
1) The plaintiff has conferred a benefit on the defendant by rendering services or expending properties;
2) The plaintiff conferred the benefit with the reasonable expectation of being compensated for its value;
3) The defendant knew or had reason to know of the plaintiff's expectation; AND
4) The defendant would be unjustly enriched if they were allowed to retain the benefit without compensating the plaintiff.
87
Rescission is a remedy whereby the original contract is considered voided and rescinded. The grounds for rescission must have occurred either before or at the time the contract was formed. The grounds are:
1) Mutual mistake of a material fact;
2) Unilateral mistake if the other party knew or should have known of the mistake;
3) Unilateral mistake if hardship by the mistaken party is so extreme it outweighs the other party's expectations under the contract;
4) Misrepresentation of fact or law by either party as to a material factor in the negotiations that was relied upon; AND
5) Other grounds (duress, undue influence, illegality, lack of capacity, and failure of consideration)
88
When both parties entering into a contract are mistaken about existing facts relating to the agreement, the contract may be voidable by the adversely affected party if:
1) The mistake concerns a basic assumption on which the contract is made;
2) The mistake has a material effect on the agreed-upon exchange; AND
3) The party seeking avoidance did not assume the risk of the mistake.
89
What is the Statute of Limitations for a UCC contract?
4 years
May be shortened by agreement to 1 year. However, it cannot be extended beyond 4 years.
90
When does the statutory period begin to run for a breach?
The period begins to run when the breach occurs. The period begins to run regardless of whether the aggrieved party knows about the breach.
91
When does the statutory period begin to run for a warranty action?
The period begins to run upon delivery of the goods.
92
What is an Intended Beneficiary?
The beneficiary
1) Is identified in the contract;
2) Receives performance directly from the promisor; OR
3) Has some relationship with the promisee to indicate intent to benefit
93
A third party intended beneficiary can enforce a contract only if their rights have vested. This occurs when they:
1) Manifest assent to a promise in the manner requested by the parties;
2) Bring a suit to enforce the promise; OR
3) Materially change position in justifiable reliance on the promise.
Prior to the vesting, the promisee and promisor are free to modify or rescind the beneficiary's rights under the contract.
94
What contractual rights may be assigned?
Generally, all contractual rights may be assigned.
95
What are the exceptions to the contractual rights that may be assigned?
1) An assignment that would substantially change the obligor's duty or risk;
2) An assignment of future rights to arise from future contracts; AND
3) An assignment prohibited by law.
96
An assignment is for value if it is:
1) Done for consideration, OR
2) Taken as security for or payment of a pre-existing debt.
97
Is an assignment for value revocable?
NO
98
Is an assignment not for value (a gratuitous assignment) revocable?
YES
99
A revocable gratuitous assignment may be terminated by:
1) The death or bankruptcy of the assignor;
2) Notice of revocation by the assignor to the assignee or the obligor;
3) The assignor taking performance directly from the obligor; OR
4) Subsequent assignment of the same right by the assignor to another.
100
What contractual duties may be delegated?
Generally, all duties may be delegated.
101
Must delegations or assignments be in writing?
NO. They may be in either oral or writing.
102
Must delegations or assignments be in writing?
NO. They may be in either oral or writing.
103
What are the exceptions to the duty delegations?
Exceptions:
1)The duties involve personal judgment and skill;
2) Delegation would change the obligee's expectancy;
3) A special trust was reposed in the delegator by the other party to the contract; and
4) There is a contractual restriction on delegation.
104
Do suretyships require consideration to become valid?
NO
A surety will be bound by her promise to pay another's debt as long as she makes her promise BEFORE the creditor performs or promises to perform.
105
What is the main exception to the Suretyship provision in the Statute of Frauds?
main purpose rule exception
The main purpose of the promisor (guarantor) in promising to answer the debt of another is the benefit for themselves, then the contract may be taken outside of the SoF and enforce it even if it violates the SoF.
106
Does the parol evidence rule apply to contract modifications?
NO
107
A defense to a contract may be that the contract was unconscionable. When does unconscionability usually arises?
Unconscionability usually arises where one of the parties has substantially superior bargaining power and can dictate the terms of the contract to the other party, who has inferior bargaining power.
It must shock the conscious!
108
Generally, the SoF requires that a contract for the sale of goods priced at $500 or more be evidenced by a writing signed by the party to be charged.
However, what is the exception to this general rule if the parties are merchants?
[Merchants' confirmatory memo rule]
Between merchants, if one party sends the other party a written confirmation f their oral agreement that is sufficient to bind the sender, it also will bind the recipient if he has reason to know of its contents and does not object within 10 days of receipt.
109
What is an Incidental beneficiary?
Someone who is not identified in the contract, receives performance directly from the promisor, or has a relationship with the promisee to indicate intent to benefit.
Basically the opposite of an Intended Beneficiary.
110
When may the contracting parties rescind or modify a contract without the consent of the intended third party beneficiary?
Before the intended third party beneficiary's rights vest.
If the intended third party befneficiary rights vest, the contracting parties may not cancel or modify the contract without the third party's consent.
111
In general, what is the purpose of remedies?
To place the non-breaching party in a position as if the contract had been performed.
112
If a failure to perform constitutes a material breach, what is the remedy?
The non-breaching party may cancel the contract and sue for damages.
113
If a failure to perform constitutes a minor breach, what is the remedy?
The non-breaching party may NOT cancel the contract but they may still sue for damages.
114
What is a condition precedent?
An act or event that must occur first before a party is under a duty to perform.
115
If a failure to perform occurred when the contract contained a time of the essence clause, what is the remedy?
It is a material breach and the non-breaching party may cancel the contract AND sue for damages.
116
Under the UCC, if the non-breaching buyer accepts non-conforming goods, what are the buyer's damages available?
Warranty damages.
The difference in value of the goods accepted and the goods ordered.
117
Under the UCC, if the non-breaching buyer does NOT accept non-conforming goods, what are the buyer's damages available?
Cover damages
The difference between the value of the non-conforming goods and the subsequent goods purchased from another vendor.
118
When may a buyer declare a total breach of an installment contract under the UCC?
Only if the defect substantially impairs the value of the entire contract.
119
When a condition is broken, the beneficiary of the condition has an election between two options:
1) He may terminate his liability; OR
2) He may continue under the contract.
If he continues under the contract, then he waived the condition.
