Contracts Flashcards
Goods
“Goods” are all things movable at the time they are identified as the
items to be sold under the contract.
Merchant?
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
What is needed for a communication to be an offer?
It 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. In deciding whether a communication creates this
reasonable expectation, ask:
* Was there an expression of a promise, undertaking, or commitment to enter into a contract?
* Were there certainty and definiteness in the essential terms?
* Was there communication of the above to the offeree?
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:
a. The promisor should reasonably expect to induce action or
forbearance, and
b. Such action or forbearance is in fact induced.
Statute of Frauds
In most instances, an oral contract is valid. However, certain agreements, by statute, must be evidenced by a writing signed by the
party sought to be bound.
Categories: (my legs)
- Marriage
- Year
- Land Sales
- Executors
- Goods for $500+
- Sureties
Exceptions to Parol Evidence Rule
- partially integrated writing
- defense against formation
- explain vague term
- correct clerical error
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 at least be “fit for
the ordinary purpose for which such goods are used.”
Implied Warranty of Fitness for 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 and judgment to select suitable goods; and
(2) the buyer in fact relies on the seller’s skill or
judgment.
Common Carrier - Risk of Loss
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 passes to the buyer when the goods are delivered to
the carrier. In the absence of a contrary agreement, Article 2
presumes a contract is a shipment contract
Perfect Tender Rule
Article 2 generally requires a perfect tender—the delivery and condition of the goods must be exactly as promised in the contract.
- If goods don’t conform, buyer may
1. reject entire shipment,
2. accept entire shipment, or
3. reject in part, accept in part
Agreements that excuse original parties’ obligations
- Recission (mutual agreement to cancel K)
- Modification (replaces existing K with a new one immediately)
- Accord & Satisfaction (agreement to accept different performance to satisfy existing duty) (if…. then… stmts)
- Novation (agreement to substitute new party for existing party)
Material Breach
If the obligee does not receive the substantial benefit of their
bargain, the breach is considered material. If the breach is material,
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.
Lost volume seller rule
If the seller’s supply of goods is unlimited - then they are a lost volume seller. If there is breach, then the lost profits measure is used.
