Contracts

Question 1

What is the Statute of Frauds?

Answer 1

barrier that some contracts must meet to become legally binding
prevent false assertions about a contract that was never really created

Question 2

what is an output contract?

Answer 2

seller is offering to sell 100% of whatever amount is produced to teh buyer

Question 3

what is a requirements contract?

Answer 3

buyer is offering to buy 100% of whatever amount is needed from seller

Question 4

how do you accept a bilateral contract?

Answer 4

promise OR starting performance

Question 5

remedies for breach

under the UCC, what is the recourse for anticipatory repudiation?

Answer 5

you can demand an adequate assurance
if party fails to respond within a reasonable time, treat this as repudiation

Question 6

what is the difference between novation and delegation?

Answer 6

novation - BOTH parties agree someone else will take over the contractual obligation

delegation - one party decides to outsource their duties under the contract

Question 7

what are the four main elements of contract formation?

Answer 7

ACDS - all contracts don’t sink
A - agreement (offer + acceptance)
C - consideration
D - defenses to formation
S - statute of frauds (enforceability)

Question 8

what is a bilateral contract?

Answer 8

contract in which parties exchange promises

Question 9

what is a unilateral contract?

Answer 9

contract in which offer makes a promise and offerree must perform

ex. rewards and contests

Question 10

For frustration of purpose to serve as an excuse for performance, an event must occur that ____________________ the reason for the contract. The event ____________________ performance of the contract impossible.

PQs Set 1

Answer 10

Undermines, does not make

Question 11

What two questions should you ask about Statute of Frauds?

Answer 11

1. Does the SOF apply to this transaction?
2. If so, has the SOF been satisifed?

Question 12

remedies for breach

with anticipatory repudiation, can a party retract its repudiation?

Answer 12

yes as long as the other side has not commenced a lawsuit OR acted in reliance on the repudiation

Question 13

how do you accept a unilateral contract?

Answer 13

only complete performance

Question 14

how do you form a unilateral contract?

Answer 14

offerree must (1) know about the offer and (2) intend to accept the offer by completing performance

Question 15

What happens if there is valid novation?

Answer 15

the original promisor will be excused from performance

Question 16

what is required for an offer under the UCC?

Answer 16

quantity is the only essential term
price does NOT need to be mentioned

Question 17

what is novation?

Answer 17

BOTH parties agree that a substitute person will take over hte contractual obligations

Question 18

When must a contract that is modified satisfy the Statute of Frauds?

Answer 18

Whenever the contract as modified is subject to the Statute of Frauds

Question 19

when does the common law apply?

Answer 19

services or real estate

Question 20

Ways to discharge contractual obligations (8)

Answer 20

FIRM SCAN

• Full performance of contractual obligations
• Impossibility, impracticability, or frustration of purpose
• Release (in writing only)
• Mutual rescission
• Substituted contract
• Contract or covenant not to sue
• Accord & satisfaction
• Novation

Question 21

tip

Three main questions to ask for a Contracts question

Answer 21

1. Has an enforceable contract been formed?
2. Has the contract been performed (or, has the performance been excused)?
3. What are the remedies for breach?

Question 22

what are the ways to terminate an offer?

Answer 22

1. revocation of offer - express communication to the offeree
2. constructive revocation - offeror takes action that is absolutely inconsistent with their continuing ability to contract
3. rejection by offeree
4. counteroffer by offeree (rejection + new offer)
5. death of offeror
6. reasonable amount of time passes

Question 23

remedies for breach

with anticipatory repudiation, what are your two options as the nonbreaching party?

Answer 23

1. treat repudiation as a breach + sue for damages now
   BUT if you completed entire performance and are just waiting to be paid, can’t sue early
2. ignore repudiation, demand performance, and see what happens

Question 24

What is the parol evidence rule for a sale of goods?

Answer 24

Evidence of an additional promise made before the written contract was entered into that does not contradict the contract may be considered unless the parties would certainly have included the term in the contract.

Question 25

An acceptance is a(n) ________________ manifestation of a willingness to enter into the agreement by the offeree. The offeree _______________ accept a unilateral offer with a promise to perform. ## Footnote PQs Set 1

Answer 25

objective, may not

Question 26

# remedies for breach What is anticipatory repudiation?

Answer 26

when the other side says they aren't going to perform on the contract before performance is due

Question 27

how do you determine if a mixed contract (goods and services) is under the UCC or common law?

Answer 27

1. predominate purpose test 2. all or nothing rule exception: divisible contracts

Question 28

what is required for an offer under the common law?

Answer 28

all essential terms must be provided (parties, subj, price, quantity)

Question 29

what do you need to have a valid contract?

Answer 29

offer, acceptance, consideration

Question 30

when is impractability a defense?

Answer 30

if * an unforeseeable event has occurred * the contract was formed under the basic assumption that the event would not occur AND * the party seeking discharge of performance is not at fault. But if a party assumed the risk of an event happening that made performance impracticable, then the party's performance will not be discharged by impracticability.

Question 31

when does the UCC (Article II) apply?

Answer 31

goods

Question 32

when does the Statute of Frauds apply?

Answer 32

M. SOUR * Marriage * Suretyship * One year (no possible way it can be performed in one year) * UCC (goods $500+) * Real property (interest in it)

Question 33

what is a substitute for consideration?

Answer 33

promissory estoppel

Question 34

what are the defenses to contract formation?

Answer 34

1. misunderstanding 2. incapacity 3. mistake 4. fraud / misrepresentation / nondisclosure 5. duress 6. illegality 7. unconscionability

Question 35

what are the major topics under whether a contract has been performed?

Answer 35

Pizza with crawling escargot P - Parol evidence rule W - warranties C - conditions E - excuse of performance obligations

Question 36

what is the parol evidence rule?

Answer 36

prevents a party to a written contract from presenting extrinsic evidence of a prior or contemporaneous agreement that contradicts the terms of the contract as written whether any of the earlier oral or written terms are part of the parties’ contract, even though they are absent from the parties’ written agreement

Question 37

if there is not a signed writing, what rule should I think about?

Answer 37

Statute of Frauds

Question 38

if there is a signed writing + earlier discussion of the deal, what rule should I think about?

Answer 38

Parol Evidence Rule

Question 39

what are the parts of an agreement in contract formation?

Answer 39

offer + acceptance

Question 40

what is the test for offer and acceptance?

Answer 40

objective test - whether the offeror displays an objectively serious intent to be bound outward appearance of words and actions

Question 41

who does an offer have to be directed at?

Answer 41

the specific offeree EXCEPTION: contest offers or reward offers

Question 42

what is needed to have a valid offer?

Answer 42

must convey the power of acceptance to the side NOTE: invitations to deal (doesn't convey power of acceptance) advertisement (understood as invitation to deal EXCEPT reward ads, ads that are very specific and leave nothing open to negotiation)

Question 43

what is a counteroffer?

Answer 43

rejection + new offer

Question 44

normally, when can an offeror revoke an offer?

Answer 44

offeror is normally free to revoke at any time prior to acceptance

Question 45

what are the four ways an irrevocable offer can arise?

Answer 45

1. option 2. firm offer 3. unilateral contract 4. detrimental reliance

Question 46

# irrevocable offers what is a firm offer?

Answer 46

merchant (UCC) can make a firm offer to buy/sell goods --> binding, free option

Question 47

# irrevocable offers what are the requirements for a firm offer?

Answer 47

firm offer must be (1) written (2) signed by the offeror and (3) contain an explicit promise not to revoke offeror has to be a merchant (Essay 4281) firm offer can include a condition

Question 48

# irrevocable offers what is the time perod for a firm offer?

Answer 48

either (1) as long as stated in the offer OR (2) reasonable time period not to exceed 90 days (UCC 2-205)

Question 49

what is a merchant (UCC)?

Answer 49

someone who regularly deals in the type of goods at issue businessperson or someone holding themselves out as having knowlege or skills particular to the goods

Question 50

what is a unilateral contract?

Answer 50

arises from a promise that requests acceptance by an action of the promise only accepted by performance

Question 51

what is a bilateral contract?

Answer 51

request for a return promise

Question 52

# irrevocable offers when can an unilateral offer be revoked?

Answer 52

can't be revoked if offeror has started to perform

Question 53

is the offeree required to complete performance if a unilteral contract is revoked?

Answer 53

they have the right to finish, but not required to

Question 54

# irrevocable offers when does detrimental reliance arise?

Answer 54

offeree reasonably and determinetally relies on te offer in some forseeable manner ## Footnote look for contractor/subcontractor part of reliance theory (promisorry estoppel)

Question 55

what is acceptance?

Answer 55

manifestation of a willingness to enter into the agreement by the offeree

Question 56

what is the test for acceptance?

Answer 56

objective test offeror is master of the offer

Question 57

who decides if an offer is unilateral or bilateral?

Answer 57

offeror

Question 58

# modern approach what happens if there is ambiguity about whether an offer is unilateral or bilateral?

Answer 58

acceptance can be by performance or return promise

Question 59

what if the seller tries to acept by shipping the wrong goods?

Answer 59

UCC treats as acceptance + breach

Question 60

how do you accept an offer that is open-to-all?

Answer 60

you must know about that offer to accept it

Question 61

do you have to communicate your acceptance to the other party for it to be effective?

Answer 61

yes

Question 62

# acceptance what is the mailbox rule?

Answer 62

acceptance sent by mail is effective when the letter is sent determines when acceptance has been legally communicated when there is a delay between sending and receiving

Question 63

# acceptance what are the exceptions to the mailbox rule?

Answer 63

* offeree sends something else first (like counteroffer or rejection) * other types of communications (revocations, rejections) * options contracts * unclear whether it applies to other media like email, fax, text aceptance of offer is effective only if received before offer expires

Question 64

# acceptance can you accept an offer without comunicaton?

Answer 64

yes, by silence

Question 65

# acceptance when can acceptance happen without communication (by silence)?

Answer 65

* unilateral reward offers or contests * unilateral offers in which the parties are geographically close * past history of silence serving as acceptance * offer says taht accpetance must come by silence and offeree intends to accept by silence

Question 66

how do you accept an implied in fact contract?

Answer 66

without writing or speaking communcation by gestures or actions

Question 67

what is the rule for counteroffers under the common law?

Answer 67

mirror image rule terms in the acceptance must match the offer exactly or it is a counteroffer (not acceptance)

Question 68

# common law what is a conditonal acceptance?

Answer 68

form of counteroffer

Question 69

# UCC / Counteroffers what is the rule for counteroffers under the UCC?

Answer 69

(1) definite and seasonable expression of acceptance (2) sent within reasonable time **is an acceptance** (3) even though additional or different terms (4) unless acceptance is expressly made conditional on the additional/different terms more forgiving of accpetnaces that don't match exactly doens't matter whether parties are merchants ## Footnote UCC 2-207

Question 70

# UCC / Counteroffers when does an additional term in a counteroffer control?

Answer 70

only if 1. both parties are merchants 2. new term doesn't materially alter the deal 3. initial offer didn't expressly limit acceptance to its terms **AND** 4. offeror doesn't reject/object the new term within a reasonable time

Question 71

# UCC / Counteroffers when does a different term in a counteroffer control? (accpetance has a different term from the initial offer)

Answer 71

knock-out rule (majority) - neither term governs, UCC gap-filling rules apply minority states - intial offer controls

Question 72

# UCC / Counteroffers when can you accept based on conduct?

Answer 72

parties fail to make a contract but act as though there is an agreement only terms in both writing agree are part of the contract, other terms are supplied through UCC default rules ## Footnote UCC 2-207(3)

Question 73

when does a confirming memo arise under UCC?

Answer 73

parties have a contract (normally verbally) and one party sends a confirming memo with additional terms ## Footnote UCC 2-207

Question 74

what are the requirements for confirming memos under UCC?

Answer 74

(1) written confirmation (2) sent within reasonable time (3) operates as an acceptance ## Footnote UCC 2-207(1)

Question 75

when should I look out for confirming memos under UCC?

Answer 75

early agreement + written confirmation with new terms

Question 76

what is bargained-for consideration?

Answer 76

consideration is a deal in which the parties exchange promises involving a legal detriment or benefit

Question 77

what is the test for consideration?

Answer 77

1. who is making the promise that needs to be supported by law? 2. is there a benefit to the promisor OR a detriment to the promisee? 3. was this bargained for / quid pro quo?

Question 78

what is a legal detriment?

Answer 78

not doing something you are legally entitled to do

Question 79

do gift promises and conditional gifts count as bargained-for consideration?

Answer 79

nope think about whether I would sue you if I didn't do this

Question 80

# consideration what is nominal consideration?

Answer 80

pretense of consideration insufficient as long as there is enough value, even subjective value ot the person receiving it, consdieration will be adequate

Question 81

# consideration what is an illusory promise?

Answer 81

promisor must clearly commit to the deal or there is no consideration there has to be a way for the promisor to breach

Question 82

# consideration are satisfication contracts illusory? | performance has to be done to my satisifcation

Answer 82

Nope, real contracts

Question 83

# consideration are output and reqirements contracts illusory?

Answer 83

nope, they're real there's a way for a party to breach --> requiring the product and purchasing from others **or** making the product and selling to others

Question 84

# consideration is past consideration valid consideration?

Answer 84

nope

Question 85

# consideration is settling a legal claim sufficient consideration? | promising not to sue

Answer 85

yes only if (1) plaintiff has a good faith beleif in the validity of the claim OR (2) reason to doubt the validity of the claim due to uncertain law

Question 86

does contract modification require new consideration under common law?

Answer 86

preexisting duty rule - promise to do something that you are already legally obligated to do is NOT consideration but exceptions

Question 87

# common law / contract modification what are the exceptions to the preexisting duty rule?

Answer 87

* change in performance * 3p promising to pay * unforseen difficuties that would excuse performance

Question 88

# common law / contract modification is a modification binding that promises partial payment for release from a debt obligation?

Answer 88

ask whether the debt is currenlty due and undisputed if so, modification is NOT binding

Question 89

what is the rule for contract modification under the UCC?

Answer 89

ask whether the modification is made in good faith if so, is it IS binding even without new consideartion

Question 90

what is a subtitute to consideration?

Answer 90

promissory liability

Question 91

what are the categories of promissory liability?

Answer 91

* promissory estoppel / reliance * quasi-contract * moral obligation + subsequent promise * seal

Question 92

# consideration substitute when does promissory estoppel arise?

Answer 92

one party makes a promise and the other party relies on that promise to take some action

Question 93

# consideration substitute what are the elements of promissory estoppel / reliance?

Answer 93

**PDI - promise made, deterimental reliance, injustice** 1. promise is made that would be reasonably expected to induce reliance 2. promsie does indeed take detrminental action in reliance on the promise AND 3. injustice can only be avoided by enforcement of the promise | don't need to prove #2 for charitable gift promise

Question 94

# consideration substitute what is a quasi-contract / contract implied in law?

Answer 94

when you would have made a contract if you could have, but you could not, OR when one party conferred a benefit on another party, and it would be fair to pay for that benefit

Question 95

# consideration substitute what are the elements of a quasi-contract?

Answer 95

1. plaintiff confers a measurable benefit on the defendant 2. plaintiff reasonably expected to get paid AND 3. it woud be unfair to let the defendant keep the benefit without paying look for oppy to decline or a good reason why there wasn't an oppy to decline

Question 96

when should a flag go up for a quasi-contract?

Answer 96

situation doesn't satisfy normal requirements for a contract but still seems unfair

Question 97

# consideration substitute is a moral obligation and subsequent promise binding?

Answer 97

yes in some jurisidictions normally past consideration (not binding)

Question 98

# consideration substitute does a seal on a doc act as a consideration substitute in most jurisidctions?

Answer 98

nope

Question 99

# defenses to contract formation what are the elements of misunderstanding?

Answer 99

each party attaches a different meaning to the same words 1. parties use a material term that is open to 2+ reasonable interpretations (objective test doesn't apply) 2. each side attaches a diff meaning to the term 3. neither party knows or should know of the confusion

Question 100

# defenses to contract formation who lacks capacity to make a contract?

Answer 100

1. minors (< 18 years old) 2. people who are mentally ill --> can't understand the nature and conseuqneces of their actions OR can't act in a reasonable manner in relation to the transaction and the other side knows/has reason to know this 3. very intoxicated person (if other side knows or has reason to know this)

Question 101

# defenses to contract formation what happens if you make a contract with a person who lacks capacity?

Answer 101

contract is voidable - incapacitated party can disaffirm party without capacity can **ratify** the deal by keeping the benefits of the contract after capacity is obtained contract for necessities - party without capcity must still pay fair value

Question 102

# defenses to contract formation what is a mistake? what are the types?

Answer 102

belief that is not in accord with a present fact mutual mistake (affecting both parties) + unilateral mistake (one party)

Question 103

# defenses to contract formation what are the elements of a mutual mistake?

Answer 103

allows the **adversly affected party** to rescind if 1. there is a mistake of fact at the time the deal was made 2. mistake relates to a basic assumption of the contract + has material impact on the deal 3. impacted party didn't bear the risk of mistake

Question 104

# defenses to contract formation what are the elements of a unilateral mistake?

Answer 104

allows the **adversly affected party** to rescind if 1. can prove all the elements of mutual mistake AND 2. either (a) mistake would make the contract unconsciousable OR (b) other side knew of/has reason to know of or caused the mistake

Question 105

# defenses to contract formation with mutual and unilateral mistakes, who can claim these defenses?

Answer 105

only the adversly affected party

Question 106

# defenses to contract formation what are the elements of misrepresentation?

Answer 106

statement at time of contracting that is not true can be intentional (fraudulent) or accidental party must show 1. misrepesentation of a present fact (not opinion) 2. that is material OR fraudlent (intentional) 3. made under the circumstances in which it is justificable to rely on the misrepresentation

Question 107

# defenses to contract formation what is fraud in the execution?

Answer 107

you trick someone into signing something that they don't even know is a contract

Question 108

# defenses to contract formation what is nondisclosure?

Answer 108

other party doesn't learn the truth about something, but now you just remain quiet EXCEPTION: special (fiduicary) relationship or active concealment | normally you don't need to tell the other side about all material facts

Question 109

# defenses to contract formation what is duress?

Answer 109

improper threat that deprives a party from making a meaningful choice to contract economic duress - one party makes threats to induce another party to contract/modify a contract

Question 110

# defenses to contract formation what is undue influence?

Answer 110

undue influence - party puts v intense sales pressure on another party, who often seems weak-minded or susceptible to high pressure sales tactics | I think this is kinda a subcategory of duress, but it seems like the questions treat it as a separate defense

Question 111

# defenses to contract formation what is illegality? when is an illegal contract enforceable?

Answer 111

unenforceable contract entered in furtherance of an illegal act (that is not itself illegal) can be enforced

Question 112

are the defenses of illegality, contracts against PBPL, and unconsciousability enforcement or formation defenses?

Answer 112

enforcement b/c don't impact the requirement that contracting parties have a meeting of the minds don't prevent formation, but impact enforcement

Question 113

# defenses to contract formation are contracts against PBPL enforceable?

Answer 113

not enforced contracting situations that are not formally illegal but present some other policy concern

Question 114

# defenses to contract formation what is unconscionability?

Answer 114

everything seems fine but ct says it's unconsciosable ultimate contract defense

Question 115

# defenses to contract formation what are the two types of unconscionability?

Answer 115

* procedural unconscionability - defect in bargaining process like hidden term or absense of meaningful choice * sustantive unconscionability - rip-off in some term of the contract some juris require both before a deal is struck down, others allow just one

Question 116

# statute of frauds what is the goal of the statute of frauds?

Answer 116

barrier that some contracts must meet in order to become legall binding prevent false assertions about a contract that was never really created

Question 117

# statute of frauds what is the main purpose exception?

Answer 117

if the main purpose in agreeing to pay the debt of another is the surety's own econ advantage, then we are NOT in SOF world

Question 118

# statute of frauds are contracts invovling real property in SOF world?

Answer 118

only those transfering **an interest** in the property

Question 119

# statute of frauds what are the two main ways to satisify the SOF?

Answer 119

performance or writing

Question 120

# statute of frauds what are the four categories for how to satisify the SOF?

Answer 120

1. service contracts that can't be performed within one year 2. writing signed by the party against whom the contract is asserted 3. real estate 4. goods (UCC)

Question 121

# statute of frauds how do you satisify the SOF for service contracts that can't be performed within one year?

Answer 121

**full** performance by **either side** satisifies SOF ## Footnote part performance doesn't

Question 122

# statute of frauds how do you satisify the SOF for a writing signed by the party against whom the contract is asserted?

Answer 122

both signatures are NOT required the writing does NOT have to be a formal contract must cover the fundamental facts 1. contract has been made 2. ID the parties 3. contain the essential elements of the deal

Question 123

# statute of frauds how do you satisify the SOF for real estate?

Answer 123

signed writing will satisify **part** performance can satisify if **2/3** apply 1. possession 2. payment 3. improvements to the land

Question 124

# statute of frauds how do you satisify the SOF for goods?

Answer 124

UCC world! * signed writing satisifes - need quantity, price not required * part performance satisifies but only for the quantity delivered and accepted * custom-made goods are EXEMPTED from SOF, can satisify SOF as soon as maker makes a substnatial beginning towards manufacturing * judicial admission (incl. statement during testimony or a pleading) satisifies * confirming memo - failure to object to a confirming memo within 10 days will satisify SOF if both parties are merchants

Question 125

# statute of frauds do you need a signed writing to authorize an agent to form a contract that is in teh SOF world?

Answer 125

yes, equal dignity rule

Question 126

# statute of frauds if you have a deal in SOF world and requirements are met. the parties want to modify the deal. does the modification have to satisify the SOF?

Answer 126

not automatically if the deal with the alleged modification would be in the SOF world if so, SOF must be met for the modification if not, no SOF requirement

Question 127

# parol evidence rule does the PER apply to later written or verbal statements about the deal?

Answer 127

nope

Question 128

# parol evidence rule does the PER apply to earlier written docs?

Answer 128

yes

Question 129

# parol evidence rule what are the two types of integrated writings?

Answer 129

complete integration - contract expresses all terms of the agreement partial integration - final writing, but some terms aren't included

Question 130

# parol evidence rule how do you tell if an agreement is integrated partially or completely?

Answer 130

merger clause is evidnce of complete integration cts might also ask whether an extrinsic term of the agreement would "naturally be omitted from the writing"

Question 131

# parol evidence rule what steps should I follow for PER?

Answer 131

1. look at what the agreement entails - have the parties reduced their contract to a comprehensive writing? if so, earlier statemetns are not part of the deal 2. have the parties created an integrated writing?

Question 132

# parol evidence rule what are exceptions to the PER? situations where the PER doesn't bar earlier evidence

Answer 132

1. will not bar evidence relevant to a defense against contract formation 2. even if a writing is completely integrated, a party can intro evidence of a second separate deal 3. even if a writing is completly integrated, party might be able to intro evidence of a prior comm that is designed to interpret an ambiguous term in the final agreement

Question 133

what is a warranty?

Answer 133

promise about a term of the contract that explicitly shifts risks to the party making the promise you can disclaim all warranties

Question 134

what is the UCC rule for integrated agreements?

Answer 134

presumes that a writing is a partial integration at most **unless** the parties would have certainly included a disputed term in the writing

Question 135

# warranties what are the three types of warranties?

Answer 135

1. express warranty 2. implied warranty of merchantability 3. implied warranty of fitness for a particular purpose

Question 136

# warranties what is an express warranty (incl the test)?

Answer 136

promise that affirms or describes goods + is part of the basis of the bargain unless it is merely the seller's opinion use of a sample or model creates an express warranty

Question 137

# warranties what is an implied warranty of merchantability?

Answer 137

triggered only when the seller is a merchant dealing in the goods at issue warrants that the goods are fit for **ordinary commercial purposes** can be disclaimed by using "as if" if (1) disclaimer uses the term "merchantability" and (2) must be conspicuous if in writing can be disclaimed orally

Question 138

# warranties what is an implied warranty of fitness for a particular purpose?

Answer 138

triggered when buyer relies on a seller's expertise to select a special type of good that will be used for a special purpose warrants that the goods will satisfy this special purpose can be disclaimed if (1) conspicuous and (2) disclaimer is in writing non merchant can extend this warranty if the buyer relies on any seller's expertise

Question 139

# warranty what type of warranty does a sample or model create?

Answer 139

express warranty

Question 140

# conditions what are the two types of conditions?

Answer 140

express or implied

Question 141

# conditions what is the most important implied condition?

Answer 141

constructive condition of exchange - one party's performance is condition on the other side's performance

Question 142

# conditions how must express conditions be satisfied?

Answer 142

must be strictly satisfied unless the condition is somehow excused

Question 143

# conditions what are the two main buckets of express conditions?

Answer 143

satisfaction conditions and waivers

Question 144

# conditions how are satisfaction conditions met?

Answer 144

depends on nature of performance preferred - use an objective standard of satisfaction subjective standard sometimes

Question 145

# conditions can a party breach for a satisfaction condition?

Answer 145

yes if they claim dissatisfaction in bad faith

Question 146

# conditions what is the rule for waivers?

Answer 146

party receiving the protection of the condition may waive the condition by **words or conduct** condition will be waived if the other party wrongfully interferes with or hinders the occurrence of the condition good faith standard

Question 147

# conditions what is the standard for implied conditions in the common law?

Answer 147

**substantial performance** if there is not a material breach only satisfied constructive condition of exchange if failure is not willful divisible contracts

Question 148

# conditions what is the standard for implied conditions in the UCC?

Answer 148

**perfect tender:** (1) perfect goods and (2) perfect delivery exceptions: contract explicitly changes default rule, installment contracts

Question 149

# implied conditions / common law if payment must be made (b/c only minor problem), can non breaching party recover damages for the deficiency?

Answer 149

yes typically measured as cost to complete the performance

Question 150

# implied conditions / common law can a breaching party who fails to satisfy the Constructive Condition of Exchange due to a material breach get paid anything?

Answer 150

not under teh contract but maybe under a quasi-contract

Question 151

# implied conditions / UCC can a buyer revoke acceptance?

Answer 151

yes if the goods seem okay when delivered but a defect is discovered within a reasonable time

Question 152

# implied conditions / UCC does the seller have a right to cure?

Answer 152

if the seller fails to tender perfect goods and time is left on the contract **OR** seller had reasonable grounds to believe that the buyer would accept a replacement, THEN the buyer must give the seller a chance to cure

Question 153

# implied conditions / UCC does the UCC allow installment contracts? what happens?

Answer 153

yes buyer can reject a specific delivery that is not perfect only when there is **substantial impairment**

Question 154

# implied conditions / UCC what is the default method of delivery?

Answer 154

one delivery of the goods assumed that goods are to be delivered in one delivery unless K says otherwise

Question 155

# implied conditions / UCC / method of tender/delivery what are the three methods of tender / delivery?

Answer 155

* tender at seller's place of biz * shipment contract (FOB seller's place of biz) * destination contract (FOB buyer's place of biz) | FOB = free on board

Question 156

# implied conditions / UCC / method of tender/delivery what happens if the tender is at the seller's place of business?

Answer 156

seller just needs to give the goods to the buyer

Question 157

# implied conditions / UCC / method of tender/delivery what happens for shipment contracts?

Answer 157

seller must take three actions to satisfy perfect delivery 1. get goods to a common carrier 2. make arrangements for delivery 3. notify the buyer

Question 158

# implied conditions / UCC / method of tender/delivery what happens for destination contracts?

Answer 158

seller must (1) get the goods to the buyer's business and (2) notify the buyer

Question 159

# implied conditions / UCC when do risk of loss problem arise?

Answer 159

goods contract followed by damage or destruction of the goods before buyer receives them

Question 160

# implied conditions / UCC who bears the risk of loss? (give the full test)

Answer 160

1. does the contract already deal wtih this problem? if so, that controls. 2. has either party breached? (typically part of contract) if so, breaching party bears risk (even if breach is totally unrelated to delivery damage) 3. if no breach and goods are being shipped, what type of delivery contract is it? shipment - buyer bears risk destination - seller 4. all other cases: is the seller a merchant? yes, risk of loss is with seller until buyer receives the goods no, risk of loss moves to the buyer when seller tenders the goods

Question 161

what are the major types of excuses?

Answer 161

* impossibility and impracticability * death after a contract * frustration of purpose * performance is excused b/c initial contract has been modified or canceled

Question 162

# excuses what is the test for impossibility and impracticability?

Answer 162

performance becomes illegal after contract is formed subj matter of contract is destroyed services contract with key person, performing party dies or becomes incapacitated hinders the ability to perform, not just the cost to perform unforeseen event in which non-occurrence of the event was a basic assumption of the contract and party seeking discharge was not at fault

Question 163

# excuses what happens if there is death after a contract?

Answer 163

normally does NOT excuse liability on a contract that has been made, estate is on teh hook ask whether there is something special about teh person performing such that it makes no sense to continue if they die

Question 164

# excuses what is frustration of purpose?

Answer 164

performance can still occur, but something has happened to undermine the entire reason for the creation of the contract

Question 165

# excuses what happens if performance is excused b/c the initial contract has been modified or canceled?

Answer 165

both parties can agree to just walk away as long as there is some performance remaining on both sides if not, no consideration for this modification --> recession / cancelation by mutual agreement

Question 166

what are accord and satisfaction?

Answer 166

parties to an earlier contract agree that performance will be satisfied instead by the completion of a different performance the new performance is the accord excusal of the initial performance obligation is the satsification

Question 167

if the accord is not performed, what happens?

Answer 167

other side can sue on **either** the original obligation or new promise

Question 168

what is the difference b/t a modification and accord + satisfaction?

Answer 168

if party to perform has an **option** to perform by doing something else, it's accord and satisfaction if parties have changed the performance obligation, it's modification

Question 169

what is the constructive condition of exchange under common law? | basically what is the standard for completion

Answer 169

failure to substantially perform means the other side may withhold their perofrmance can't withold paymetn if other side has subtantially peformed, but may be entitled to recover for the breach

Question 170

what is the constructive condition of exchange under UCC? | basically what is the standard for completion

Answer 170

perfect tender - seller must strictly perform all obligations or be in breach material breach applies to installment sales

Question 171

# remedies for breach what are the main categories of remedies for a breach?

Answer 171

* anticipatory repudiation * money damages - expectation, reliance, restitution, liquidate, punitive damages * specific performance / injunction

Question 172

# remedies for breach what is the typical remedy in contract law?

Answer 172

money damages

Question 173

# remedies for breach / money damages what are the types of money damages?

Answer 173

* expectation damages * reliance damages * restitution damages * liquidated damages * punitive damages

Question 174

# remedies for breach / money damages what are expectation damages? how are they measured?

Answer 174

put a party in teh same economic position it would be in if the contract had been performed as promised measured by comparing value of the performance w/o breach vs. value of performance w/ breach

Question 175

# remedies for breach / money damages how are expectation damages measured under Restatement?

Answer 175

Expectation Damages = loss in value + other loss – cost avoided – loss avoided

Question 176

# remedies for breach / money damages what are the 3 major limits on the calc of expectation damages?

Answer 176

1. expectation damages must be proven with **reasonable certainty** 2. unforeseeable consequential damages 3. mitigation

Question 177

# remedies for breach / money damages under expectation damages, what are thef two categories of unforeseeable consequential damages?

Answer 177

not recoverable unless breaching party had some reason to know about the possibility of these special damages at time of contracting 1. general damages - type of loss almost anyone would incur from a breach, incl. incidental damages 2. consequential damages - losses that are unique or special to this plaintiff

Question 178

# remedies for breach / money damages under expectation damages, what are the requirements for mitigation?

Answer 178

breached-against party must take **reasonable steps** to reduce damages from breach if party refuses to mitigate, law will calc damages as if they did mitigate defendant bears burden of proving a mitigation failure mitigation efforts must be **reasonably similar** to the original contract

Question 179

# remedies for breach / money damages what is loss volume profits?

Answer 179

if the paying party breaches, then normally the selling party needs to mitigate by reselling the goods or services to another person BUT if the seller is a retailer who sells this type of product all the time, seller might try to argue for loss volume profits

Question 180

# remedies for breach / money damages what happens if there is incomplete performance?

Answer 180

if paying party breaches in a partially completed building, builder can't continue working expectation damages = contract price - amount already paid - amount that would be needed to finish the job

Question 181

# remedies for breach / money damages / expectation damages what is the normal measure of expectation damages?

Answer 181

cost to complete the job

Question 182

# remedies for breach / money damages what is diminution of market value? when does it apply?

Answer 182

how much lower is the mkt value of what you got vs. what you wanted breaching party normally must have acted in an innocent and unintentional manner for these damages

Question 183

# remedies for breach / money damages what are reliance damages?

Answer 183

put the party in the same econ position if the contract had never been created in the first place

Question 184

# remedies for breach / money damages can a party recover both expectation and reliance damages?

Answer 184

generally no, need to pick one

Question 185

# remedies for breach / money damages what are restitution damages?

Answer 185

give the plaintiff an amount equal to the econ benefit that the plaintiff conferred on the defendant sometimes equal to reliance damages, but not always

Question 186

# remedies for breach / money damages what are liquidated damages?

Answer 186

stated in contract as explicitly neogtatied amount due upon breach

Question 187

# remedies for breach / money damages when will a ct award punitive liquidated damages?

Answer 187

only if 1. amount of liquidated damages was reasonable at time of contracting 2. actual damages from breach would be uncertain in amount and difficult to prove

Question 188

# remedies for breach / money damages when are punitive damages allowed?

Answer 188

rarely in contract law more of a tort thing

Question 189

# remedies for breach / equitable what type of transactions is specific performance presumptively available?

Answer 189

real estate NOT personal service

Question 190

# remedies for breach / equitable when is specific performance available under the UCC?

Answer 190

only unique goods like art or custom made items

Question 191

# remedies for breach / equitable what is the right of reclamation?

Answer 191

arises when an unpaid seller tries to reclaim goods that were sold on credit when buyer is insolvent

Question 192

# remedies for breach / equitable when does the right of reclamation apply?

Answer 192

1. buyer is insolvent at time of receipt of the goods 2. seller must demand return of goods w/in 10 days of receipt (or reasonable time if buyer misrepresented his solvency within 3 mo before delivery) 3. buyer still has the goods

Question 193

# 3p beneficiary contracts what is a 3p beneficiary contracts?

Answer 193

whether a 3p can sue to enforce a contract made by two other people

Question 194

# 3p beneficiary contracts what are the two buckets of 3p?

Answer 194

intended and incidental beneficiaries

Question 195

# 3p beneficiary contracts do intended beneficiaries have the right to sue?

Answer 195

yep

Question 196

# 3p beneficiary contracts do incidental beneficiaries have the right to sue?

Answer 196

nope

Question 197

# 3p beneficiary contracts what type of beneficiaries are creditors?

Answer 197

intended beneficiary

Question 198

# 3p beneficiary contracts when does a donee beneficiary arise?

Answer 198

when there is no preexisting obligation but the promisee clearly intends to confer a gift of enforcement on a 3p

Question 199

# 3p beneficiary contracts when can 3p rights be revoked?

Answer 199

ask whether the 3p knows abut the promise and has changed position in reasonable reliance on the promise if so, 3p may be able to make a claim under promissory estoppel

Question 200

# 3p beneficiary contracts when will a 3p NOT lose enforcement rights? | when the rights of beneficiary vests

Answer 200

if any one of the following is true 1. beneficiary determinately relies on the rights 2. beneficiary manifests assent to the contract 3. beneficiary field a lawsuit to enforce the contract

Question 201

# 3p beneficiary contracts what rights can a promisor assert as a defense against a 3p, if any?

Answer 201

any contract defense that they would be able to assert against the promisee

Question 202

what is assignment?

Answer 202

transfer of **rights** under a contract

Question 203

what is delegation?

Answer 203

transfer of **duties** under a contract

Question 204

what is the difference between assignment and delegation?

Answer 204

delegation - transfer of duties (outsourcing) assignment - transfer of rights

Question 205

how do you distinguish 3p beneficiary contract from assignment?

Answer 205

assignment has two steps 1. formation of contract 2. transfer of benefits from OG counterparty to 3p

Question 206

when can contracts be assigned?

Answer 206

almost always in whole or part unless contract explicitly prohibits

Question 207

what happens if a contract states that rights are not assignable?

Answer 207

determine whether contract **prohibits** assignments or **invalidates** assignments

Question 208

# assignment what happens if a contract prohibits assignments? can 3p recover?

Answer 208

assigning party has breached when they make the assignment, but 3p can still recover from guarantor power to assign persists even if right to assign doesn't

Question 209

# assignment what happens if a contract invalidates assignments? can 3p recover?

Answer 209

3p can't recover b/c there is no power or right to assign

Question 210

# assignment what happens if someone assigns the same rights twice?

Answer 210

if rights are assigned w/o consideration (no payment) --> assignment is removable and last assignment controls if assigned w/ consideration --> first assignment for consideration is irrevocable and holds

Question 211

when is delegation allowed?

Answer 211

generally allowed as long as contract doesn't prohibit delegation and as long as other party doesn't have some special interest in having a specific idv perform

Question 212

is a delegatee liable for breach (in general)?

Answer 212

not liable unless they receive consideration from the delegating party

Question 213

types of compensatory damages? ## Footnote PQs Set 2

Answer 213

expectation damages incidental damages consequential damages

Question 214

is the other party's consent required for delegation? ## Footnote PQs Set 2

Answer 214

no (unless otherwise stated) a lack of objection from other party does not excuse a breach by the other party

Question 215

when does acceptance need to happen for a firm or irrevocable offer? ## Footnote PQs Set 2

Answer 215

effecitve only when the offeror **receives** the acceptance before the offer expires

Question 216

# UCC What is required for the quantity term under the UCC? | MBE PQs Set 3

Answer 216

contract must therefore specify a quantity that is **certain or determinable by reference to objective facts,** such as the buyer's actual requirements or the seller's actual output in a requirements or output contract.

Question 217

for a contract specifying an assortment of goods, what happens if the assortment is not timely selected? | MBE PQs Set 3

Answer 217

* did the delay materially impact the seller's performance? * if so, seller can (1) proceed in a reasonable manner or (2) treat the nonselection as breach * if not, seller must follow selection

Question 218

when is a delegator released from liability? | MBE PQs Set 3

Answer 218

only if the other party to the contract expressly or impliedly agrees to a novation

Question 219

# UCC / default rule when is payment due for an installment contract? | MBE PQs Set 3

Answer 219

Payment is due upon each delivery unless the price cannot be apportioned each shipment is to be separately accepted by the buyer

Question 220

# UCC / auction can a good sold at auction be withdrawn once the auctioneer calls for bids? | MBE PQs Set 3

Answer 220

depends on type of auction reserve auction - may withdraw goods prior to completion of sale no-reserve auction - goods cannot be withdrawn after auctioneer calls for bids

Question 221

# UCC / auction what is the default type of auction? | MBE PQs Set 3

Answer 221

reserve auction no-reserve auction has to be specifically announced

Question 222

# common law what is a minor breach? | Practice Essays

Answer 222

breaching party substantially performed

Question 223

# common law what happens if there is a minor breach? | Practice Essays

Answer 223

non-breaching party must still perform under the contract breaching party still recovers (contract price - cost to other party to obtain full performance)

Question 224

# common law what is a material breach? | Practice Essay

Answer 224

non-breaching party doesn't receive the substantial benefit of the bargain breaching party can't recover contract damages (maybe restitution)

Question 225

# UCC when does a shipment of nonconforming goods serve as a rejection + counteroffer? | UWorld

Answer 225

if seller (1) made no prior promise to ship conforming goods AND (2) notifies buyer that nonconforming shipment is merely an accommodation

Question 226

# UCC if buyer wrongfully disposes of rejected goods, what can the seller do? | UWorld

Answer 226

seller can sue for conversion to recover FMV the converted property at time of the conversion

Question 227

up until what point can the contracting parties modify or rescind the contract when there is an intended beneficiary? | Themis PQs #4

Answer 227

until the intended beneficiary's rights are vested

Question 228

when does vesting occur for an intended beneficiary? | Themis PQs #4

Answer 228

when the beneficiary: (1) materially changes position in justifiable reliance on the rights created (2) manifests assets to the contract at a party's request OR (3) files a lawsuit to enforce the contract

Question 229

when is the implied warranty of merchantability disclaimed for defects? | Themis PQs #4

Answer 229

this warranty is disclaimed (waived) for defects that an examination would have revealed if the buyer (1) examined the goods as fully s desired before entering the contract OR (2) refused to examine the goods before entering the contract

Question 230

what is the hierarchy of evidence under the UCC? | Themis PQs #4

Answer 230

express terms > course of performance (current transaction) > course of dealing (prev transactions) > trade usage

Question 231

can a party to an illegal contract recover damages? | Themis PQs #4

Answer 231

yes, restitution damages if that party conferred a benefit on the other party and (1) was justifiably ignorant of the facts that made the contract illegal, (2) was less culpable than the other party, or (3) withdrew before the contract's illegal purpose was achieved and did not engage in serious misconduct

Question 232

# statute of frauds when is a suretyship enforceable without a writing? | Themis PQs #4

Answer 232

if it was made mainly for the surety's economic advantage (not the principal's benefit) or to indemnify the creditor | note this is outside the SOF

Question 233

does consent to a delegation create a novation? | Themis PQs #4

Answer 233

NO, mere consent to a delegation does NOT create a novation

Question 234

in a real estate contract that requires delivery of possession, what is the recourse for late delivery? | Themis PQs #4

Answer 234

it's a breach that entitles the nonbreaching party to compensatory damages for actual economic losses

Question 235

is consideration required for assignment? what happens if there is consideration vs. no consideration? | Themis PQs #4

Answer 235

not required to have consideration without consideration --> revocable by signer unless (1) obligor already performed (2) doc symbolizing the assigned right has been delivered to the assignee, (3) written assigns signed by the assignor has been delivered to the assignee OR (4) the assignee has determinately relied on the assignment

Question 236

in an auction, when can a bidder withdraw their bid? | Themis PQs #4

Answer 236

bidder has right to withdraw a bid until the auctioneer announces completion of the sale under reserve OR no-reserve auction

Question 237

# damages what is the goal of compensatory damages? what comprises compensatory damages? | Essay 5318 / Outline

Answer 237

put the nonbreaching party in as good a position as performance would have done (expectation damages) **+** consequential and incidental damages, if any, **-** possible mitigation of damages

Question 238

# damages how do you calculate expectation damages in construction if owner fails to pay? | Essay 5318 / Outline

Answer 238

profits builder would have earned **+** any costs incurred by building **-** any payments made to owner **-** any materials purchased by contractor that can be used on another job

Question 239

# damages how do you calculate expectation damages in construction if contractor failed to begin or complete the project? | Essay 5318 / Outline

Answer 239

contract price **-** cost of construction by another builder **+** any progress payments to breaching building **+** compensation for delay in completion

Question 240

# damages / common law what are the types of actual damages? | Essay 5318 / Outline

Answer 240

direct or consequential direct - necessary and usual result of D's wrongful act consequential - result naturally from the breach, but don't have to be the result of breaching party's conduct; need to be **reasonably foreseeable result** of the breach

Question 241

# damages / common law what type of damages have to be reasonably foreseeable? | Essay 5318 / Outline

Answer 241

consequential damages reasonably foreseeable by the breaching party

Question 242

# damages what type of damages are allowed when the nonbreaching party has partially performed a below-market-price contract? | PQs Set 5

Answer 242

restitution damages how much the breaching party would have to pay someone else to do the job prevents breaching party from profiting from its breach

Question 243

what is the definition / rule for unconscionability? | PQs Set 5

Answer 243

when it is so unfair to one party that no reasonable person in the position of the parties would have agreed to it must have been offensive at the time the contract was made

Question 244

Fact pattern: * contract prohibits assignments without permission * contract assigns benefit to child of original party * child assigns rights to charity without permission * no payment given for the service * charity filed suit will charity win against original party in suit? | PQs Set 5

Answer 244

charity will win b/c assignee of child's contractual rights other party fully performed their obligation so the right to receive payment can be assigned and enforced by charity through breach of contract not a donee beneficiary b/c contract was not for the purpose of benefitting the charity

Question 245

when is a revocation effective? | PQs Set 5

Answer 245

upon receipt

Question 246

what is the implied duty in all contracts (UCC + common law)? | PQs Set 5

Answer 246

duty of good faith and fair dealing

Question 247

# remedies what is the remedy when a buyer breaches or repudiates a contract for the sale of goods? | Essay 3566

Answer 247

seller may resell the goods and sue for the contract price **--** the resale price for a private sale --> seller must first give the buyer reasonable notice of his intent to resell If the resale is made in good faith + commercially reasonable manner --> the seller can recover the difference between the contract price and the resale price plus incidental and consequential damages

Question 248

# Parol Evidence Rule what type of evidence is allowed under this Rule? | Evidence Lecture Handout

Answer 248

allows evidence that might **add to the terms** but EXCLUDES evidence that would **contradict** the terms of the agreement

Question 249

# Parol Evidence Rule what type of extrinsic evidence can be admitted (these are exceptions to Rule)? | Evidence Lecture Handout

Answer 249

* clarify an ambiguity * prove a custom of trade or course of dealing * show fraud, duress, mistake, illegal purpose * show whether consideration has/hasn't been paid

Question 250

is a promise to make a gift enforceable? | UWorld

Answer 250

generally no (lacks bargained-for exchange) but may be enforceable under promissory estoppel

Question 251

what is an intended beneficiary? | UWorld

Answer 251

they receive a **direct** benefit from the contract b/c contracting parties intended that the payment will go to the 3p

Question 252

what type of damages are available for a material breach vs. minor breach? | Practice Exam #1, Q33

Answer 252

* material breach --> restitution damages; can't recover under contract * minor breach --> expectation or reliance damages

Question 253

when does a party have to respond to a demand for adequate assurance? | NCBE Simulated MBE 1

Answer 253

only if the demand is reasonable and justified --> which means that the party has reasonable grounds for the insecurity

Question 254

under parol evidence rule, what can evidence of a prior or contemporaneous communication be used for if there's a fully integrated written contract? | UWorld

Answer 254

can be admissible to determine remedies for breach --> prove foreseeability of consequential damages

Question 255

damages available for failing to perform a real estate sales contract | MBE Mixed Set #1

Answer 255

difference between contract price and FMV on date of breach

Question 256

# UCC how can a seller accept a purchase order (an offer)? | UWorld

Answer 256

1. shipping the goods terms of the offer are the contract terms effective when shipment is made OR 2. promising to ship the goods if merchants: contract terms are terms of the offer + battle of the forms if not merchants: terms of offer, new terms are proposals

Question 257

is an offer presumed to be a bilateral or unilateral contract? | UWorld

Answer 257

bilateral

Question 258

when is an acceptance effective vs. when is a revocation effective? | PQs

Answer 258

* acceptance is effective when sent * revocation is effective upon receipt

Question 259

exclusive dealing contract - what is implied in this agreement? | UWorld

Answer 259

implied obligation by seller to use best efforts to supply the goods + buyer to promote their sale

Question 260

if a condition precedent has not been met, is there a breach? | MBE Practice Exam #3

Answer 260

no, failure to meet a condition relieves the duty to perform (no breach b/c not a contract)

Question 261

major difference between implied in fact vs. implied in law contract | MBE Practice Exam #3

Answer 261

implied-in-fact contract is created ONLY when conduct indicates assent or agreement

Question 262

if someone responds to an offer with only a question (merely requesting info), what is that treated as? like is that an acceptance | NCBE Simulated #2

Answer 262

inquiry not counteroffer

Question 263

factors that allow a party to cancel when there is temporary impracticability by the other side | NCBE Simulated #2

Answer 263

degree of uncertainty relating to the nature and duration of situation extent to which a delay in making substitute arrangements would have prevented the entire contract

Question 264

when are goods in a contract identified? | UWorld Assessment #2

Answer 264

1. if goods already exist + identified - when contract is made OR 2. (future goods) - earliest of when goods are shipped, marked, or otherwise designated by the seller

Question 265

# Statute of Frauds how do you measure the one year provision? | UWorld Assessment #2

Answer 265

starts the day after the contract is made / offer accepted must be in writing if it is impossible for any party to fully perform within one year of its making

Question 266

when is a contract NOT assignable? | NCBE Essay July 2016

Answer 266

if assignment would 1. materially change duty of obligor 2. materially inc burden or risk on obligor 3. materially impair obligor's chance of obtaining return performance OR materially reduce value of that return promise 4. forbidden by statute or precluded by PBPL 5. validly precluded by contract

Question 267

does delegation remove the contractual liability of the original party? | NCBE Essay July 2016

Answer 267

nope, other contracting party can go after delegatee OR original party

Question 268

# rule statement queen! whether there is an enforceable contract | Essay 5546

Answer 268

Under Article 2 of the UCC, a contract for the sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.

Question 269

# rule statement queen! whether the contract is subject to the Statute of Frauds | Essay 5546

Answer 269

Contracts that fall within the Statute of Frauds are unenforceable unless evidenced in writing and signed by the party to be charged. A contract for the sale of goods for a price of $500 or more is subject to the SOF.

Question 270

# rule statement queen! whether the writing is sufficient under SOF | Essay 5546

Answer 270

The UCC requires a contract for the sale of goods for $500 or more be evidenced by a writing that (1) identifies the subject matter of the agreement, (2) identifies the parties, (3) contains a quantity term, and (4) is signed by the party against whom enforcement is sought—i.e., the "party to be charged." A signature includes any authentication that identifies the party to be charged (not just a handwritten signature), such as a letterhead on the memorandum. The writing need not be an actual contract. Even a series of correspondence between the parties may suffice as a writing.

Question 271

# rule statement queen! whether UCC confirming memo exception applies | Essay 5546

Answer 271

Under the UCC, an exception to the SOF applies when (1) both parties are merchants (2) a memorandum sufficient against one party is sent to the other party who has reason to know of its contents, and (3) the receiving party does not object in writing within 10 days of receipt of the memorandum. In that case, the contract is enforceable against the receiving party even though he has not signed it. A merchant includes not only a person who regularly deals in the type of goods involved in the transaction, but also any businessperson when the transaction is of a commercial nature.

Question 272

# rule statement queen! whether party can recover under theory of substantial performance | Essay 2616

Answer 272

The doctrine of substantial performance provides that a party who substantially performs can recover on the contract even though full performance has not been tendered. However, there is no substantial performance if the incomplete performance was a material breach of contract. Under the common law, a material breach of contract (i.e., when the nonbreaching party fails to receive the substantial benefit of its bargain) allows the nonbreaching party to withhold any promised performance and to pursue remedies for the breach, including damages. Substantial performance is less likely to be found when a party intentionally furnishes services that are materially different from what he promised. Such a breach is more likely to be treated as a material breach for which contract damages are recoverable.

Question 273

# rule statement queen! whether party can recover under theory that contract is divisible | Essay 2616

Answer 273

A divisible or installment contract is one in which the parties' obligations are divisible into distinct units of performance. Recovery is limited to the amount promised for the unit of the contract performed. But when parties expressly agree to a condition precedent (or a concurrent condition), they are generally held strictly to that condition, and a party must fully comply with that condition before the other party’s performance is due.

Question 274

# rule statement queen! whether party is entitled to restitutionary relief under theory of quasi-contract | Essay 2616

Answer 274

When a plaintiff confers a measurable benefit on a defendant and the plaintiff has a reasonable expectation of compensation, it would be unfair to permit the defendant to receive the benefit without compensating the plaintiff. In this case, the court can permit the plaintiff to recover the value of the benefit to prevent this unjust enrichment. Although this type of action is often characterized as based on an implied-in-law contract or a quasi-contract, quantum meruit does not depend on the existence of a contract.

Question 275

# rule statement queen! whether parol evidence rule would prevent enforcement | NCBE Essay July 2022

Answer 275

Generally, under the common law parol evidence rule, a binding integrated agreement discharges prior agreements to the extent that it is inconsistent with them. An integrated agreement is a writing constituting a final expression of one or more of the agreed terms of a contract. Evidence of prior or contemporaneous agreements or negotiations is not admissible in evidence to contradict a term of the writing that is a binding integrated agreement. If, however, the integrated agreement is consistent with the prior agreement, evidence of the prior agreement may be admitted unless the integrated agreement is also completely integrated. A written agreement is considered to be integrated if it constitutes a final expression of one or more terms of an agreement and is considered to be completely integrated if the parties adopted the writing as a complete and exclusive statement of their agreement.

Question 276

# rule statement queen! whether extrinsic evidence of a vague term may be offered | NCBE Essay July 2022

Answer 276

Generally, extrinsic evidence may be proffered for the purpose of clarifying a vague or ambiguous term in a written contract. Agreements and negotiations prior to or contemporaneous with the adoption of a writing are admissible in evidence to establish the meaning of the writing, whether or not integrated.

Question 277

# rule statement queen! whether covenant not to compete is enforceable | NCBE Essay July 2022

Answer 277

A promise that unreasonably restrains trade may be unenforceable on grounds of public policy. Whether a restrictive covenant, including a covenant not to compete, is unreasonable requires a balancing of interests. If the restraint is greater than what is needed to protect a party’s legitimate business interest, it violates public policy. In deciding whether to enforce a covenant not to compete, the courts generally consider the reasonableness of the covenant’s duration and geographic scope. Generally, covenants not to compete are disfavored.