Contracts Flashcards
(216 cards)
1
Q
Contract —
A
a legally enforceable promise or set of promises requiring mutual assent and consideration.
2
Q
Mutual assent —
A
offer and acceptance
3
Q
Consideration —
A
a bargained-for exchange and legal value.
4
Q
Can a gift be consideration?
A
No
5
Q
Can consideration for a past contract constitute consideration for a present contract?
A
No
6
Q
Under the common law, can something that one is obligated by law to do constitute consideration for a present contract?
A
No
7
Q
Promissory Estoppel —
A
the requiring of a party to perform their promise because the other party has acted in reliance on the promise to their detriment.
8
Q
The other name for promissory estoppel is . . .
A
detrimental reliance
9
Q
The Parole Evidence Rule —
A
other expressions (typically testimony) will not be admitted to vary a written contract if the writing is an integration; i.e. the final expression of their bargain.
10
Q
To what does the Parole Evidence Rule not apply?
A
Evidence showing lack of consideration, fraud, mistake, or duress. Basically, it does not apply to any evidence which is introduced to prove the contract was illegal or to disprove the existence of a contract. The PER only applies to evidence introduced to change the interpretation of the contract.
11
Q
Battle of Forms —
A
a contract can be formed even though the terms of acceptance do not match the terms of an offer. UCC 2-207.
12
Q
To what does the Battle of the Forms apply?
A
Exchanges between merchants.
13
Q
What is the basic duty of contract law at common law?
A
To substantially perform all that is called for in a contract.
14
Q
The Uniform Commercial Code requires two things from merchants who exchange goods:
A
1) perfect tender; and 2) good faith.
15
Q
Perfect Tender —
A
the delivery and condition of the goods must be exactly as promised by the contract.
16
Q
Good Faith [for purposes of the UCC] —
A
honesty and the observance of reasonable commercial standards of fair dealing.
17
Q
Explain legal incapacity —
A
those who are under the age of 18 cannot form a contract.
18
Q
Explain the defense of mutual mistake —
A
when both parties to a contract are mistaken about existing facts relating to the agreement, the contract may be voidable by the affected party if 1) the mistake concerns a basic assumption on which the contract is made; 2) the mistake has a material effect on the agreement; and 3) the party seeking avoidance did not assume the risk of the mistake.
19
Q
Explain the defense of unconscionability —
A
a court may refuse to enforce a provision, an entire contract, or a modification of a contract if it is in order to avoid unfair terms.
20
Q
Explain claiming the Statute of Frauds as a defense —
A
if the SoF requires certain contracts to be written, and they are not, the defendant may use that as a defense to the existence of a contract.
21
Q
Explain the defense of fraud and misrepresentation —
A
if a party induces another to enter into a contract by using fraudulent misrepresentation, the contract is voidable by the innocent party if she justifiably relied on the fraudulent misrepresentation.
22
Q
An agreement for the sale of real property requires . . .
A
a price for the land.
23
Q
For an agreement for the sale of goods to be valid, it requires a . . .
A
quantity term; i.e. how much of the goods are being sent.
24
Q
When does a unilateral contract become irrevocable?
A
When the offeree begins performance in response to the offer.
25
Option Contract —
a contract in which the offeree gives consideration for a promise by the offeror not to revoke an outstanding offer.
26
What might a court do if there appears to be a missing term in a contract?
If the contract appears to have been intended as a valid contract by the parties, a court will apply the presumption that the parties' intent was to include a reasonable term to rectify any missing term.
27
For what purpose will a court establish a quasi-contract?
To avoid unjust enrichment by one of the parties.
28
Accommodation —
a seller of goods ships non-conforming goods to a buyer and reasonably notifies the buyer that the shipment is being offered only as an accommodation.
29
When can an offeror properly revoke an offer for a unilateral contract?
Anytime before the offeree has begun performance.
30
What is the concept of a merchant who offers to buy/sell goods in a signed, written contract which gives assurance that the offer will be held open?
A merchant's firm offer.
31
Where a merchant proposes different or additional terms during their acceptance of an offer, what will the court do?
The court will apply the Battle of the Forms to determine whether the additional/different terms become part of the contract.
32
What part of the Uniform Commercial Code governs the sale of goods between merchants?
Article 2, Uniform Commercial Code.
33
A communication to another party will not be considered a definite and certain offer for the sale of goods if it is missing a __________________.
Quantity term
34
Doctrine of Substantial Performance —
a party can recover damages for the other party's incomplete performance by deducting any damages suffered due to the incomplete performance.
35
In the case of an anticipatory repudiation, when can the non-repudiating party sue?
Either immediately or on the date the performance is due.
36
When a party indicates by words or conduct that she will not insist on the performance of an ancillary condition being met by the other party, this is referred to as a ______________.
Waiver
37
Constructive Condition —
a condition that is implied by a court even though it is not explicitly stated in the contract.
38
An anticipatory repudiation must be ___________.
unequivocal
39
In the case of an anticipatory repudiation, the repudiating party has until when to retract their repudiation?
The repudiating party has until the date the performance is due to retract their repudiation UNLESS the other party has materially changed their position in reliance on the repudiation.
40
When will a duty to perform premised on a condition be excused?
When the condition on which the performance was premised is not fulfilled. Ex: If A, then B. If no A, then no B.
41
Estoppel Waiver —
the waiving of a condition before it is required to be performed, and a person detrimentally relies on the waiver.
42
Condition subsequent —
an act or event which, if it takes place, prevents something. Ex: John must go to college. If he does not, then he will be disinherited.
43
Anticipatory Repudiation —
where a party to a contract, prior to the time for their performance, indicates that he will not perform when performance is due.
44
Condition precedent —
a event or act which must occur before something else can occur.
45
What is the difference between a promise and a condition on a promise?
Promise — binds a party to perform under a contract.
Condition on a Promise — creates or extinguishes a duty to perform under a contract.
46
When might the condition of complete performance be excused by a court?
Where a party renders substantial performance of their duty to perform (the doctrine of substantial performance).
47
What is the difference between an anticipatory repudiation and a prospective failure to perform?
An anticipatory repudiation must be unequivocal that one will not do what one had previously promised, whereas a prospective failure to perform is just that — prospective. There is no guarantee that the person will retract their promise, only a possibility.
48
Election Waiver —
where a condition is not satisfied or a duty to perform is not fulfilled, and the beneficiary of the condition chooses to continue under the contract rather than claim a breach and end their performance.
Ex: A offers to paint B's apartment white if B gives A $20. B does not give A the $20, but A chooses to continue painting the apartment anyways. He has elected to waive the condition he set.
49
A court will apply the doctrine of substantial performance to excuse the condition of complete performance in the case of a _____________________ and a _____________.
constructive condition; minor breach.
50
Under the common law, what is the effect of a minor breach of the conditions of the contract?
Under the common law, there is no effect. The conditions are still in place.
51
How must a repudiating party who thereafter chooses to perform retract their repudiation?
The party must retract their repudiation in a manner which clearly indicates their intent to perform.
52
To what does the doctrine of substantial performance not apply?
Sales of goods.
53
What are the two methods by which an offer for the sale of goods can be accepted?
1) prompt shipment; or 2) a promise to ship.
54
Non-conforming goods are considered a ______________ if they are sent along with a(n) _________________.
counter-offer; accommodation.
55
The mirror image rule applies to sales of goods when the offeree accepts the offer by what method?
Promise to ship.
The mirror image rule applies to sales of goods between merchants when one merchant accepts an offer to buy goods by promising to ship the goods in question.
56
Under the UCC, the shipment of non-conforming goods with conforming goods is an ____________ and a _____________.
Acceptance; breach.
57
In response to the receipt of both conforming and non-conforming goods, the receiver may either:
1) accept the whole shipment; 2) reject the whole shipment; or 3) accept the conforming goods while rejecting the non-conforming goods AND seeking damages.
58
Where a offeree sends an acceptance via the mail, and subsequently sends a rejection . . .
the mailbox rule applies and there is a contract.
59
Where the offeree sends a rejection, and subsequently sends an acceptance . . .
the mailbox rule does not apply and there is no valid contract.
60
The Mailbox Rule —
in a bilateral contract, acceptance is effective upon dispatch; i.e. a contract is formed upon dispatch.
61
To what kind of contracts does the mailbox rule apply?
Bilateral contracts.
62
For the specifically manufactured goods exception to apply to the Statute of Frauds . . .
1) the goods must be specially manufactured for the buyer; 2) the seller must have made a substantial beginning on their manufacture or made commitments for their purchase; and 3) the goods must not be resellable in the normal course of business.
63
Contract —
a legally enforceable agreement.
64
Bilateral Contract —
a contract which leaves open the method of acceptance.
65
Unilateral Contract —
a contract which requires a particular form of acceptance.
66
Quasi-Contract —
an equitable remedy do which contract law does not apply.
67
Offer —
a manifestation of intent to contract.
68
What does a sale of real estate require that other contracts do not?
A description of the land and its price.
69
Is a price necessary for a sale of goods contract?
No
70
What are the exceptions to the rule that advertisement are not offers?
1) when the advertisement is made in the nature of a reward; and 2) if the advertisement is specific to quantity and expressly indicates who can accept.
71
What are the methods by which an offer can be terminated?
1) lapse of time; 2) revocation by offeror; and 3) rejection by offeree.
72
What are the forms of irrevocable offers?
1) option contracts; 2) merchant firm offers; 3) reliance; and 4) starting to perform a unilateral contract.
73
What are the methods by which an offer can be rejected?
1) by counteroffer; 2) by conditional performance; 3) by adding terms; or 4) by death of one of the parties.
74
What happens if one of the parties dies after the offer has been extended and it has already been accepted?
It must be performed.
75
Who can accept an offer?
Only one who 1) knows of the offer; and 2) to whom the offer was extended.
76
Can you assign an offer?
No
77
Can you assign an option?
Yes
78
What are the general methods of accepting an offer?
1) full performance; 2) beginning performance; 3) promising to perform; 4) sending the wrong goods as an accommodation; and 5) being silent when custom allows silence to be considered an acceptance.
79
Consideration —
a bargained-for legal detriment.
80
When can past consideration be considered sufficient consideration for a current contract?
Only where the past consideration is expressly requested and there is an expectation of payment.
81
A communication will not be considered to be definite and certain enough to be an offer if it is for the sale of goods and:
is missing a quantity term
82
A revocation generally is effective when __________, and an acceptance generally is effective when _____________.
received; dispatched
83
Does a merchant's firm offer require consideration?
No
84
An offer for a bilateral contract can be accepted by:
A promise to perform or the beginning of performance
85
Under Article 2, when an offeree proposes additional or different terms during acceptance, what will the court apply to determine whether the additional or different terms become part of the contract?
The battle of the forms provision
86
A vague term in a contract can be cured by:
partial performance
87
Nonperformance of a condition will excuse what?
a duty to perform that was subject to the condition
88
Constructive Condition —
A condition that is implied by a court even though it is not explicitly stated in the contract
89
Repudiation must be ____________, whereas prospective failure to perform involves _____________.
unequivocal; mere doubts.
90
What is needed for a discharge of a contract due to frustration?
An unforeseen act or event has completely or almost completely destroyed the purpose of the contract
91
Is a rescission a contract?
Yes. An agreement to rescind is itself a binding contract supported by consideration.
92
If an accord agreement is breached by the debtor . . .
the creditor may sue either on the original contract or for breach of the accord agreement
93
When should the nonbreaching party treat an otherwise minor breach as a material breach?
When the breach is coupled with an anticipatory repudiation
94
In an installment contract situation, the contract can be canceled by the buyer if:
There is a nonconformity in a shipment that substantially impairs the value of the contract and cannot be cured
95
Specific performance is not available as a remedy for a breach of a contract to provide ____________.
services
96
Either a nonbreaching buyer or a nonbreaching seller may recover _____________ damages, but only a buyer may recover ____________ damages
incidental; consequential
97
In a suit for restitution, the measure of recovery is:
the value of the benefit conferred
98
What types of evidence are prohibited from being considered by the Parol Evidence Rule?
Evidence of a contemporaneous oral agreement; Evidence of a prior oral agreement; Evidence of a condition subsequent
99
Unless properly disclaimed, this warranty is included in every contract for the sale of goods:
Warranty of title
100
What happens when, in a contract between merchants for the sale of goods, the acceptance does not match the terms of the offer?
Additional terms that do not materially alter the original terms of the offer will be included in the contract, but different terms may be knocked out of the contract.
101
In a shipment contract, when goods are destroyed en route from the seller to the buyer, the risk of loss is borne by:
The buyer because the risk of loss passed to the buyer when the goods were delivered to the carrier
102
Mutual mistake can be a defense to the formation of a contract if:
The mistake concerns a basic assumption on which the contract is made
103
The Statute of Frauds requires:
one or more writings that reflect the material terms of the contract, signed by the person sought to be held liable.
104
When two merchants enter into an oral contract for the sale of goods and one party sends to the other party a signed, written confirmation of the agreement, it:
Binds both the sender and recipient, provided the recipient had reason to know of its contents and did not object in writing within 10 days of receipt
105
The rights of a third-party beneficiary vest when he:
Manifests assent to the promise; brings suit to enforce the promise; or materially changes position in justifiable reliance on the promise
106
An intended beneficiary must be:
Identifiable at the time performance is due
107
Once an offeree begins performance in response to an offer for a true unilateral contract, __________.
The offer becomes irrevocable
108
If it reasonably appears that the parties intended to make a valid contract, a court may apply the presumption that the parties’ intent was to include a reasonable term to rectify any __________ term.
Missing
109
Under Article 2, when an offeree proposes additional or different terms during acceptance, the court will apply __________ to determine whether the additional or different terms become part of the contract.
the battle of the forms provision
110
The mirror image rule requires __________.
An absolute and unequivocal acceptance of each and every term of the offer
111
A vague term in a contract can be cured by __________.
part performance
112
What will not terminate an ordinary offer *by operation of law* if it happens after the offer is made but prior to acceptance?
An express rejection by the offeree
113
In an auction with reserve, __________.
the auctioneer may withdraw the goods at any time until he announces completion of the sale
114
When a contract for the sale of goods is missing the price term, __________.
the price will be a reasonable price at the time of delivery
115
What is required for a merchant’s firm offer under Article 2?
1) an offer to buy or sell goods; 2) which is written, signed and promises to keep the offer open; and 3) the offeror is a merchant.
116
Under Article 2, when a merchant responds to an offer to buy goods by simply shipping similar, but nonconforming, goods, that shipment is considered __________.
an acceptance and a breach of the contract
117
A seller’s catalog listing the sale price of seller’s items is usually construed as _______________.
an invitation for offers
118
Is a subjective meeting of the minds necessary for the formation of a contract?
apparent mutual assent
119
What are the elements for a Merchant's Firm Offer?
A merchant offers to buy or sell goods, in a signed writing, and that writing gives assurances that the offer will be held open
120
When a published revocation of an offer is appropriate, the published revocation becomes effective at the moment it is __________.
Published by the offeror
121
Is a deed description required for a sale of land contract?
No
122
A unilateral contract may be accepted only by _______________, whereas a bilateral contract may be accepted either by _______________ or by the _________________.
full performance; promise to perform; beginning of performance
123
When might a court utilize an Article 2 “gap filler”?
When the price is not included in a contract for the sale of goods
124
Does a grumbling acceptance satisfy the mirror image rule?
Yes, so long as whatever is being grumbled mirrors the offer.
125
An offer is terminated by the death of the offeror unless:
The offeree has paid consideration to keep the offer open
126
Under the doctrine of substantial performance, can one party recover damages for the other party’s incomplete performance?
Yes, that party will be able to deduct any damages suffered due to the incomplete performance
127
In the case of an anticipatory repudiation, the nonrepudiating party __________.
may sue immediately or wait until the date performance is due to sue
128
When a party having the benefit of an ancillary condition under a contract indicates by words or conduct (and without receiving any additional consideration) that she will not insist on that condition being met, this is called __________.
a waiver
129
Can a nonrepudiating party suspend their performance and demand assurances from the other party?
No
130
So long as the time for performance has not yet passed, a repudiating party may withdraw his repudiation __________.
unless the other party has indicated that she considers the repudiation final
131
A waiver of a condition__________.
severs the right to treat the failure of the condition as a total breach excusing counterperformance
132
The failure of a condition:
Discharges the liability of the promisor whose obligations on the conditional promise never mature
133
A prospective inability or unwillingness to perform occurs when one party has _____________ grounds to believe that the other party will be unable or unwilling to perform when performance is due.
reasonable
134
At common law, what can legally excuse a condition?
Material breach, waiver, or substantial performance
135
The doctrine of anticipatory repudiation applies to:
Only bilateral contracts with executory duties on both sides
136
A court will apply the doctrine of “substantial performance” to excuse the condition of complete performance in the case of:
A constructive condition and a minor breach
137
How can a repudiating party retract an anticipatory repudiation?
In any manner that clearly indicates an intention to perform
138
At common law, ______________ will excuse a contract condition.
an estoppel waiver
139
The doctrine of “substantial performance” generally does not apply to __________.
contracts for the sale of goods
140
When a debtor breaches an accord agreement by failing to make an immediate satisfaction, the creditor:
May sue on either the original contract or the accord agreement
141
Novation —
A new contract that substitutes a new party to receive benefits and assume duties under the terms of an old contract
142
The absolute duty to perform can be discharged by:
Full performance or a good faith tender of performance
143
The physical incapacity of a person necessary to effectuate a personal services contract:
Discharges the contract
144
An accord will not be supported by consideration that __________.
Serves as partial payment on an undisputed debt
145
If an accord agreement is breached by a debtor . . .
the creditor may sue either on the original contract or for breach of the accord agreement
146
Under Article 2, unless the contract provides otherwise, a buyer has a right to inspect the goods __________.
at the buyer’s own expense before she pays for the goods
147
When should the nonbreaching party treat an otherwise minor breach as a material breach?
When the breach is coupled with an anticipatory repudiation
148
In a noncarrier case, for proper tender of delivery, the seller must:
Put and hold the goods at the buyer’s disposition for a time sufficient for the buyer to take possession and give the buyer reasonable notice to enable the buyer to take possession of the goods
149
Under a U.C.C. Article 2 shipment contract, the seller need not ___________ but must ___________.
See that the goods reach the buyer; promptly notify the buyer of the shipment
150
Under Article 2 of the U.C.C., a buyer cannot reject a shipment of nonconforming goods if:
The nonconforming shipment is part of an installment contract and the defect can be cured
151
Under the UCC, in a single delivery contract, a seller may always cure a shipment that the buyer has rejected because of defects by delivering conforming goods within:
The time originally provided for performance
152
Under Article 2, a buyer’s right to reject is cut off by __________.
Acceptance of the goods, even if the goods are nonconforming
153
If a seller gives no instructions within a reasonable time after notification of rejection, the buyer may _________________ the goods.
Reship, store, or resell
154
Under Article 2, what would be deemed an acceptance of delivered goods?
Keeping the goods but notifying the seller of their defects
155
Under U.C.C. Article 2, when a contract provides for payment C.O.D., the buyer:
Must pay for the goods on delivery, without inspecting the goods
156
Under Article 2, a defective shipment in an installment contract cannot be rejected __________.
if the defect can be cured
157
Unless the contract provides otherwise, in a noncarrier case, payment is due __________.
In cash upon tender of delivery
158
In a single delivery contract, when a buyer rejects goods due to defects, the seller may cure within the time originally provided for performance in the contract:
by giving reasonable notice to the buyer and making a new tender of conforming goods, which the buyer must then accept.
159
After a buyer rejects a tender of nonconforming goods, the seller has a right to cure beyond the original contract time:
if the seller reasonably believed that the nonconforming goods would be acceptable to the buyer with or without a money allowance.
160
In which of the following scenarios would any delay in performance most likely be deemed a material breach?
A delay in a mercantile contract.
161
Under Article 2, in a noncarrier case, in the absence of an agreement otherwise, the place of delivery is generally__________.
The seller’s place of business
162
After a reasonable time, a buyer may resell rejected goods only if:
The buyer holds the proceeds for the seller’s account
163
The UCC gives a seller the right to cure a defective shipment within a reasonable time beyond the original time for performance in the contract if:
Prior dealings with the buyer led the seller to reasonably believe that the defective shipment would be acceptable
164
Under the U.C.C., what is required to cure a defective delivery in a single delivery contract?
Reasonable notice of the intention to cure and a new tender of delivery of conforming goods within the time for performance
165
Unless the contract provides otherwise, in a shipment contract, payment is due __________.
When the goods are put in the hands of the carrier
166
Which of the following best summarizes a buyer’s right to reject a defective shipment under Article 2 of the U.C.C.?
A buyer can always reject a defective shipment in a single delivery contract but cannot reject a defective shipment in an installment contract if the defect can be cured
167
In an installment contract situation, an installment can be rejected by the buyer __________.
if there is a nonconformity that substantially impairs the value of that installment and cannot be cured
168
Generally speaking, if a contract does not address the importance of timeliness of performance in its terms, a failure by the promisor to perform at the time stated in the contract will result in __________.
A minor breach of contract
169
In a suit for restitution, the measure of recovery is __________.
the value of the benefit conferred
170
What is generally not required for an award of liquidated damages?
Actual money or pecuniary damages
171
Under Article 2, when a seller breaches a contract by refusing to deliver identified goods to the buyer, the buyer may replevy the goods if:
the buyer, after reasonable effort, is unable to secure adequate substitute goods.
172
A court will grant an order of specific performance to enforce a covenant not to compete if
the services to be performed are unique and the covenant is reasonable
173
In a construction contract, if the property owner breaches the contract after construction has started but before it is completed, the builder is entitled to:
The profits he would have derived from the contract, plus any costs he has incurred
174
Specific performance is generally available as a remedy for breach of a contract for ___________ but not for breach of a contract for ________.
Rare goods; unique services
175
To recover full damages when an employer breaches an employment contract, the employee:
Must make a reasonable effort to find a new position of the same kind in the same locale
176
__________ damages consist of losses resulting from the plaintiff's particular circumstances that any reasonable person would have foreseen as a probable result of breach.
Consequential
177
If a plaintiff’s expectation damages will be too speculative to measure, the plaintiff may elect to recover __________ instead, to put the plaintiff in the position she would have been in had the contract never been formed.
reliance damages
178
How is the measure of damages for breach of a contract for the sale of goods?
The buyer’s damages are measured as of the time he learns of the breach, while the seller’s damages are measured as of the time for delivery.
179
Under U.C.C. Article 2, if a seller refuses to deliver goods under a contract, the buyer may replevy the goods if:
The goods have been identified to the contract and the buyer is unable to cover
180
In the case of breach of contract, which of the following does not describe a duty owed by the nonbreaching party to prevent avoidable damages?
A seller must resell the goods if possible when the buyer is in breach of a sale of goods contract
181
When a party that offers a rare or unique service has breached a service contract, the court may grant __________ to the nonbreaching party.
injunctive relief
182
In the case of breach of an employment contract, which of the following statements is true?
If the employee is the breaching party, the employer is entitled to recover the cost of replacing the employee
183
Reliance damages are appropriately awarded when:
Expectation damages are too speculative to measure
184
When, pursuant to a contract for a sale of goods, a buyer accepts nonconforming goods, he may not recover __________.
the difference between the contract price and the market price
185
Which one of the following circumstances would not give rise to a buyer’s right to replevy identified goods under Article 2?
The buyer has rightfully rejected a delivery of goods because it did not conform to the contract
186
In the event of a breach in a sale of goods contract, the buyer’s damages are measured as of ____________, while the seller’s damages are measured as of _____________.
The time he learns of the breach; the time for delivery
187
Which of the following statements is correct regarding damages for a breach of a contract for the sale of goods?
Either a nonbreaching buyer or a nonbreaching seller may recover incidental damages, but only a buyer may recover consequential damages
188
In the case of a breach of an employment contract by the employee, the employer may recover:
The cost to replace the employee regardless of whether the breach was intentional
189
In a construction contract, if the property owner breaches the contract __________.
before construction has started, the builder is entitled to the profits he would have derived from the contract
190
When a buyer, pursuant to a sale of goods contract, accepts nonconforming goods, the buyer’s measure of damages is:
The difference between the value of the goods as delivered and the value they would have had if they had been as according to contract, plus incidental and consequential damages
191
Which of the following is not an equitable *defense?*
Specific Performance
192
In a contract for the sale of goods, __________ may recover consequential damages.
only the buyer
193
Expectation damages are also known as:
Benefit of the bargain damages
194
A liquidated damages clause may be enforced even if:
No actual money damages have been suffered
195
What are the four form of irrevocable offers?
1) option contracts; 2) merchant firm offer; 3) detrimental reliance by offeree; and 4) partial performance of unilateral contract.
196
Can a promise be consideration on a contract?
Yes
197
What are the four types of consideration?
Performance; forbearance; promise to perform; promise to forbear
198
Warranty —
a guarantee
199
Implied Warranty of Merchantability —
an implied warranty that when anyone buys goods *from a merchant,* the goods will be fit for their ordinary purpose for which the goods are used.
200
Implied Warranty of Fitness for a Particular Purpose —
the buyer has a particular purpose; the buyer is relying on the seller to select suitable goods for that purpose; and the seller is relying on the seller to select goods for the buyer; and the seller knows or has reason to know of the particular purpose and reliance by the buyer on the seller.
201
What kind of warranties can be disclaimed?
Implied warranties, including warranties for a particular purpose and merchantability.
202
What are the activities which require a writing under the Statute of Frauds?
1) promises in consideration of marriage; 2) promises by executor to pay obligation from somewhere other than the estate; 3) promises to guarantee the debts of another; 4) a service contract not capable of being completed in a year; 5) transfers of interest in real estate; 6) sales of goods > $500.
203
What are the two general ways the Statute of Frauds can be satisfied?
By performance or writing, depending on the type of contract in question.
204
Under the Statute of Frauds, what does a contract for non-UCC transactions require to be valid?
1) Who; 2) What; 3) Signed by charged party
205
What is a rescission?
both parties to a contract agree not to perform, thereby voiding the contract.
206
Accord —
an agreement by the parties to an already existing obligation to accept a different performance in satisfaction of the existing obligation.
207
Modification —
an agreement by the parties to an already existing obligation to accept a different agreement in satisfaction of the existing obligation.
208
Prohibition —
language in a contract which takes away the right to assign but not the power to assign. The assignor is liable for breach, but the assignee can still sue for performance.
209
Invalidation —
language in contract which takes away both the right and the power to assign. The assignor breaches, and the assignee cannot sue to perform.
210
Where a person pays consideration for an assignment, what happens?
That person is assigned the benefits, regardless of whether others were promised the assignment.
211
Common Law Material Breach Rule —
damages can be sought in every breach; only material breaches excuse performance; and whether a breach is material is a question of fact.
212
In contracts of goods, there is no specific performance unless what?
Unless the goods are unique or there are other apprpriate circumstances.
213
Liquidated Damages —
contract provisions fixing the amount of damages one can recover. These must be 1) easy to forecast at the time the contract is made; and 2) must be reasonable.
214
Does a merchant's firm offer require consideration?
No, it only requires a promise by the offeror, a writing signed by the offeror, and that the offeror be a merchant.
215
A contracts with B to have B build a home for A. B begins construction of the house. While it is being constructed, a tornado destroys the infrastructure. Does B have a claim against A for the cost of constructing the now-destroyed infrastructure?
No. Contractors are responsible for destruction of the premises prior to finishing the work, even if the destruction is by a natural event.
216
Where a contractor partially performs his work, and before he completes it, the work is destroyed by something resulting in it being impossible to finish the work, does the contractor have a claim for the work he completed?
Yes. If either party has partially performed prior to the existence of facts resulting in impossibility, that party has a right to recover in quasi-contract for the reasonable value of his performance.
