Contracts Flashcards
(17 cards)
What are the four requirements for a valid contract?
1) Capacity;
2) Consent;
3) Cause; and
4) Object.
What are the four steps of analysis for CONTRACT problems?
1) Whether the offer was REVOCABLE or IRREVOCABLE?
2) If revocable, was the offer REVOKED? When?
3) If the offer was not revoked or if it was irrevocable, did it EXPIRE? When?
4) If the offer was neither revoked nor expired, was it timely ACCEPTED?
When will recission NOT be granted for unilateral error?
When the error is about the VALUE of the thing sold.
What is FRAUD?
Fraud is the misinterpretation or suppression of the truth with the INTENT to obtain an UNJUST advantage or cause a loss or inconvenience to the other party.
Raise FRAUD every time you raise ERROR!!
What are the requirements for UNILATERAL ERROR?
1) The error must concern a cause without which the obligation would not have been incurred; AND
2) the cause must have been known or should have been known by the other party.
How can a party recover for FRAUD?
A party whose consent is vitiated by fraud may obtain RESCISSION of the contract.
What is the recovery for ERROR?
When unilateral error vitiates a party’s consent, that party may generally obtain recission of the contract.
Rule of SEVERABILITY
Nullity of a provision does not render the whole K null UNLESS, from the nature of the provision or the intention of the parties, it can be presumed that the K would not have been made without the null provision.
When is SPECIFIC PERFORMANCE impracticable?
Specific performance is IMPRACTICABLE when:
1) it is IMPOSSIBLE;
2) it is GREATLY DISPROPORTIONATE in cost to the actual damage caused;
3) it is no longer in the CREDITOR’S INTEREST; or
4) it will have SUBSTANTIAL NEGATIVE EFFECT on the interest of third parties.
How can an obligor be put in DEFAULT for MORATORY DAMAGES?
1) When a term for performance is fixed or can be clearly determined, the obligor is put in default by the ARRIVAL OF THE TERM;
2) by WRITTEN DEMAND;
3) by ORAL DEMAND made before TWO WITNESSES;
4) by filing suit for SPECIFIC PERFORMANCE; or
5) by a specific PROVISION in the contract.
What is the difference between DISSOLUTION and RECISSION?
Upon DISSOLUTION, parties are restored to the situation that existed BEFORE THE CONTRACT WAS MADE.
Upon RECISSION, parties [FINISH THIS].
When is EXTRAJUDICIAL DISSOLUTION allowed?
1) There is an EXPRESS DISSOLUTION clause;
2) after NOTICE to perform (must be written or verbal and in front of 2 witnesses);
3) if it is evident the obligor will not perform or if delayed performance would be of no value.
What factors does the court consider for JUDICIAL DISSOLUTION?
1) The EXTENT and GRAVITY of the failure to perform alleged by the complaining party,
2) the NATURE of the obligor’s fault;
3) the GOOD or BAD FAITH of the parties involved; and
4) the surrounding ECONOMIC CIRCUMSTANCES that may make the dissolution opportune or not.
When can an obligee bring a REVOCATORY action against an obligee?
An obligee may annul an ONEROUS contract made by the obligor with a person who KNEW or SHOULD HAVE KNOWN that the contract would cause or increase the obligor’s INSOLVENCY.
An obligee may attack a GRATUITOUS contract made by the obligor whether or not the other party knew that the contract would cause or increase the obligor’s insolvency.
When can an obligee bring an OBLIQUE action?
When the obligor causes or increases his INSOLVENCY by failing to exercise a HERITABLE right.
When may a party NOT avail himself of his own ERROR?
1) If the other party is willing to perform the contract as intended by the party in error;
2) when protection of the other party’s interest requires that the contract be upheld (damages will be awarded instead); AND
3) when the error was INEXCUSABLE (i.e., failure to read the contract or error about the value of the thing sold).
