Contracts Flashcards
(13 cards)
Impracticability
For impracticability to apply as an exception to performance what 3 elements must be met?
“impractical ugly ants are not my fault!”
When performance becomes impractical, an exception applies. For impracticability to apply, there must be an Unforeseeable event, not Anticipated at the time of the original contract, and the party claiming the impracticability may not be at Fault.
Modification under the UCC What does the UCC apply to? what article of the UCC? what does a modification require ? (a little good faith and fair dealing- whooo whooo!) Does it require a writing? Are there any exceptions?
Article 2 of the UCC applies to the sales of goods. The UCC does not require additional consideration to modify an agreement for the sale of goods. Instead modifications require
honesty in fact on the part of both parties and
in the case of the merchant, fair dealing in accordance with reasonable commercial standards.
UCC SOF generally requires that a modified contract be in writing when the value of goods is $500 or more. There is an exception to specially manufactured goods. But for this to apply the goods cannot be suitable for sale to others in the ordinary course of the seller’s business.
Modification under common law
What type of contract does this apply to?
What does the preexisting duty rule provide?
What is needed in order for a revised agreement to be acceptable under the common law?
At common law, a services contract can be modified if supported by additional consideration. A promise to perform a preexisting legal duty does not qualify as consideration because the promisor is already bound to perform. Absent further legal detriment, the preexisting duty rule prevents the parties to a services contract from revising the agreement.
Mutual Mistake
Does a mutual mistake make a k voidable?
What 4 things have to have occurred to show mutual mistake?
“Don’t Assume risky stuff on time or there will be material impact on your basic ass!”
Mutual mistake occurs when both parties are mistaken as to an essential element of the contract. In such a situation the contract may be voidable by the adversely affected party if
mistake relates to the a basic assumption of the contract
the mistake exists at the time of the contract
the mistake has a material impact on the transaction
and the adversely affected party did not assume the risk
Terms of contract
Under UCC
2 Merchants make what kind of k baby automatically unless it’s named M-LO?
What about different terms? (TKO!)
When both parties are merchants, a contract exists automatically under the terms of ACCEPTANCE unless the additional terms
Materially alter the agreement
the offer expressly Limits the terms, or
the offeror Objects to the new terms within a reasonable period of time after the notice of new terms are received
Most jurisdictions apply the knock out rule to under which different terms in the offer and acceptance are “knocked out” and nullify each other. UCC will gap fill the terms.
Was is the Hadley Rule?
What are consequential damages?
It provides that unforeseeable consequential damages are not recoverable unless breaching party had some reason to know about possibility of unforeseeable damages.
Consequential damages are available for losses that are unique or special to plaintiff.
Reliance Damages
These damages are meant to put party back in same economic position as if K had never been created. (groundhog day)
What remedies are used very rarely in K law?
punitive damages
special performance/injunction
Contract rule statement
A contract is a legally enforceable agreement.
Offer rule statement
What standard is offer and acceptance governed by?
What about intent?
Do opinions count?
Who does an offer have to be directed to?
An offer is a manifestation of a willingness to enter into an agreement by the offeror that creates a power of acceptance in the offeree.
Offer and acceptance are governed by an objective standard.
There must be serious intent by the offeror and expressions of opinion do not count.
An offer must be directed to a specific offeree.
An offer may be terminated by…?
6 ways
rejection by the offeree counteroffer revocation by express communication constructive revocation offeror dies a reasonable amount of time passes
Promissory Estoppel (aka detrimental reliance!!) A promise may be enforceable despite the fact that it is not supported by consideration.
Remember: the test to distinguish a gift form a valid consideration is whether the offeree could have reasonably believed that the intent of the offeror was to induce the
action. if yes= consideration. if no= the promise is unenforceable
Non contractual promises may be enforced through the doctrine of promissory estoppel.
Courts will invoke the doctrine to treat a promise as binding if
1) the promisor should reasonably expect it to induce action or forbearance on the part of the promisee or 3rd party;
2) the promise does induce such action or forbearance; and
3) injustice can be avoided only be enforcement of the promise.
The remedy may be limited or adjusted as justice requires.
Quasi Contract (implied in fact contract)
If one party requests another party to perform a service but does not indicate a price, and the service is performed, this generally creates an implied in fact contract.
A quasi or implied in law contract exists when a plaintiff confers a benefit on a defendant and the plaintiff has a reasonable expectation of compensation.
Allowing the defendant to retain the benefit without compensating the plaintiff would be unjust. In such a case, the court can permit the plaintiff to recover the reasonable value of the benefit to prevent the unjust enrichment.
An exception applies when the service is rendered without the expectation of payment.
