contracts Flashcards
mbe + distinctions
replevin vs. right of reclamation
partial payment made by buyer + seller is insolvent within 10 days
vs.
buyer is insolvent at time of purchase + seller demands return of goods within 10 days of receipt (or reasonable time) (unless misrepresent solvency in writing within 3 months before delivery) + buyer still has the goods
elements of misunderstanding (3)
*have a material term open to two or more reasonable interpretations
*each side attached a different meaning to the term
*neither party knows or should know of the confusion
types of incapacity (3)
*minors: under 18
*mentally ill: if can’t understand the nature and consequences of their actions OR if can’t act in a reasonable manner for the transaction + other side knows or should know of this
*very intoxicated: other side knows or should know
elements of mutual (3) and unilateral mistake (2)
mutual:
*mistake of fact at time contracting
*relates to a basic assumption that has a material impact
*the impacted party didn’t bear the risk of mistake
unilateral:
*same as above +
*mistake would make the contract unconscionable OR other side knew of, should have known of, or cause the mistake
under UCC 2-207, what are the rules for an additional term or different term?
an additional term is controlling when,
*both parties are merchants
*new term doesn’t materially alter the deal (surprise/hardship vs. reasonably limiting remedies)
*initial offer didn’t limit acceptance to its terms
*offeror doesn’t reject the term within a reasonable time
when an acceptance contains a different term from the offer, neither term controls (knockout rule)
when acceptance by silence is ok (4)
*unilateral reward offer/contest
*unilateral offer if geographically close
*past history of silence as acceptance
*offer requires silence + intent to accept by silence
mailbox rule applicability (rejection + acceptance sent)
*rejection then acceptance: not applicable; first received controls
*acceptance then rejection: acceptance controls unless the rejection is detrimentally relied upon
kinds of irrevocable offers (4)
*option contract: need consideration
*firm offer: written doc signed by merchant offeror, contains explicit promise not to revoke, for period stated or reasonable time not to exceed 90 days
*unilateral contract where performance has begun
*detrimental reliance: must be reasonable, detrimental, and foreseeable
ways to kill an offer (5)
*actual or constructive revocation
*offeree rejects the offer
*counteroffer provided
*offeror dies
*a reasonable time passes
requirements vs. output contract
requirements: buyer agrees to buy 100% of their needed supply from single seller
vs.
outputs: seller agrees to sell 100% of produced good to single buyer
three questions in evaluating a contracts question and components
was a contract formed?
*agreement
*consideration
*defenses: mistake, misunderstanding, misrepresentation, duress, illegality, unconconsionability
*statute of frauds
was the contract performed or excused?
*parol evidence rule
*warranties: express, merchantability, title, fitness for particular purpose
*conditions: express, implied
*excuses: impossibility/impracticability, death, modification, accord and satisfaction, frustration of purpose
what are the remedies for breach?
*money damages
*specific performance
steps to reject imperfect goods (3)
*notify of rejection within a reasonable time
*notify of particular defect
*hold onto goods for a reasonable time
how to have a security interest
rightfully reject goods + pay some or all of price
options if a seller fails to provide reasonable instructions upon rejection of goods (3)
*store goods in reasonable manner
*ship goods back
*resell the goods
what doesn’t count as consideration? (4)
*conditional gift / gift promise
*illusory promise
*past consideration
*preexisting duty
what is the preexisting duty and its exceptions (3)?
a promise to do something the offeror is already legally obligated to do
exceptions: a change in performance, 3rd party promise to pay, unforeseen difficulties (unanticipated circumstances) where modification is fair and equitable
promissory estoppel elements (3)
*a promise that reasonable induces reliance
*the party actually relies on the promise
*injustice only avoided through enforcement
quasi-contract elements (3)
*the party confers a measurable benefit
*the party could reasonably expect to get paid
*it would be unfair to let the other party keep the benefit without paying (opportunity to decline? good reason for not opportunity?)
misrepresentation elements (3)
*misrepresentation of present fact
*that is fraudulent or material
*under circumstances where justifiable to rely on the fact
when does the statute of frauds apply (5)?
*marriage
*suretyship
*one year: contract couldn’t possibly be completed within one year from its making (day after acceptance)
*UCC: goods over $500
*real property interest
how to satisfy the statute of frauds under common law
*signed writing: parties + elements
*complete performance by one party
*real property: possession, payment, improvement (need two of three)
how to satisfy the statute of frauds under UCC
*signed writing with quantity
*partial performance
*substantial beginning on custom goods
*judicial admission
*confirming memo: failure to object within 10 days
exceptions to the parol evidence rule (3)
*related to second, separate deal
*supports contract defense
*related to proving a condition precedent existed
*interpreting ambiguous term
*proving extent of integration
description of warranties
*express warranties: affirms/describes goods as part of deal
*implied warranty of merchantability: merchant says the goods are fit for ordinary commercial purposes
*implied warranty of fitness for a particular purpose: the buyer relies on the seller’s expertise that goods are fit for a special purpose
