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Flashcards in Contracts Deck (37)
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1
Q

The ingredients for a valid contract are _____

A
TACO:   
T –  Definite TERMS, express or implied 
A – ACCEPTANCE of terms 
C – CONSIDERATION 
O – OFFER inviting acceptance
2
Q

When asserting a strict products liability claim, P must prove that a ____ dangerous defect in the product proximately caused a physical injury:

A

DIM
D – DESIGN defect
I – INADEQUATE warning
M – Mistake in the MANUFACTURING process

3
Q

Strict products liability is imposed on a regular seller of a _____ product:

A

DUD
D – DEFECTIVE, and an
U – UNREASONABLY
D – DANGEROUS product

4
Q

_____ can use the following defenses against a breach of warranty claim:

A
G.P.S. LAMP
G – GOVERNMENT military contract defense
P – Federal PREEMPTION
S – STATUTE OF LIMITATIONS
L – LACK of timely notice to a seller
A – ASSUMPTION of risk (can be asserted against any PINE claim) 
M – Unforeseen MISUSE of a product
P – Lack of PRIVITY of contract
5
Q

A P’s claim against a seller for a defective good can be based on one or more overlapping but different ____ theories of liability:

A

PINE
P – Torts theory of strict PRODUCTS liability
I – Contract theory for breach of IMPLIED warranty
N – Torts theory of NEGLIGENCE
E – Contract theory for breach of an EXPRESS warranty

6
Q

Express warranties are _____

A

SAD:
S – SAMPLE or model, which is the basis of the bargain
A – Written or oral AFFIRMATION of fact or promise made by the seller relating
to the goods
D – DESCRIPTION of the goods in advertisements, brochures, or catalogs

7
Q

A sales contract contains_____ warranties:

A
M FEET
M – Warranty of MERCHANTABILITY
F – Warranty of FITNESS for a particular purpose 
E – Warranty against ENCUMBRANCES
E – EXPRESS warranties
T – Warranty of TITLE
8
Q

Remedies available to a buyer are _____

A

CID’S WAR:
C – COVER
I – INCIDENTAL & consequential damages
D – DAMAGES for lost benefit of the bargain, or for the price paid S – SPECIFIC PERFORMANCE on a contract for unique goods
W – Breach of WARRANTY
A – ACCEPTANCE revocation
R – REJECTING non–conforming goods

9
Q

Remedies available to a seller are _____

A
SPARKLE: 
S – STOPPING goods in transit
P – Suing for the entire contract PRICE
A – Demanding ASSURANCES
R – RE–SELLING goods to another buyer
K – KEEPING part of a breaching buyer’s deposit, never more than $500
L – Suing for LOST Profit
E – EXERCISING the right to reclaim goods delivered to the insolvent buyer
10
Q

_____ and _____ affect risk of loss:

A

SOAL–V and SORE–V affect the risk of loss:
SOAL V – SALE ON APPROVAL LATE VESTING (goods held by the buyer are not subject to claims of the buyer’s creditors)
SORE V – SALE OR RETURN EARLY VESTING (title and ROL vest immediately in the buyer, even though the buyer has a right to rescind the K)

11
Q

If a sales contract is silent on a topic, the UCC implies the following ____ rules:

A

CIDER
C – Seller is not obligated to extend CREDIT to the buyer
I – Buyer has the right to INSPECT the seller’s tendered goods (except no right
to inspect when the transaction involves a bill of lading)
D – Seller’s tender of DELIVERY is implied to be at seller’s place of business,
unless both parties know that the goods are located elsewhere
E – Buyer and seller must EXCHANGE performance concurrently
R – RISK OF LOSS is on the party in the best position to bear that risk

12
Q

Exceptions to the Statute of Frauds requirement are _____

A
SWAMP: 
S – Contracts for SPECIALLY manufactured goods
W – WAIVER
A – Judicial ADMISSION of contract
M – “MERCHANT MEMORANDUM” 
P – PART PERFORMANCE
13
Q

A _____ clause materially alters an offer if it would cause surprise or hardship to the offeror if the offeror was not made aware of its existence:

A

J STRAW
J – Bestowing JURISDICTION on a particular court, or requiring offeror to
consent to jurisdiction in particular state
S – Shortening the STATUTE OF LIMITATIONS to sue for non–conforming
goods
T – Limiting TORT liability or limiting a buyer’s right to sue for consequential
damages
R – Altering UCC rules for RISK OF LOSS
A – Adding an ARBITRATION CLAUSE (unless customary to do so in the
trade)
W – Adding a clause negating a WARRANTY (e.g., one of merchantability or
fitness)

14
Q

Additional terms will not be added to the contract when _____

A

OCAN:
O – The offeror OBJECTS to additional terms within a reasonable time
C – The offer expressly CONDITIONS the agreement on accepting the terms in
the offer as they are
A – The additional terms materially ALTER the offer N – Either or both parties are NON–MERCHANTS

15
Q

____ limits the Perfect Tender Rule:

A

ICOP
I – INSTALLMENT contracts
C – Timely delivery was COMMERCIALLY IMPRACTIBLE by an event not
contemplated by the parties.
O – Delivery in good faith, OBJECTIVELY and reasonably believing the goods
would be acceptable to the buyer
P – PRIOR TO DELIVERY DATE set forth in the contract, conforming goods
are delivered to replace the nonconforming goods

16
Q

Eat a ______to recover in quasi contract

A

PEAR:
P – Plaintiff’s good faith PERFORMANCE of services
E – Plaintiff’s EXPECTATION of compensation;
A – ACCEPTENCE of the services performed; and
R – For the recovery of REASONABLE value of the services performed

17
Q

An offer expires when it gets______

A

TIRED:
T – Reasonable TIME after an offer is made, or after expiration date expressly stated in an offer
I – Mental INCAPACITY or death of offeror or offeree
R – REVOCATION of an offer communicated to an offeree before acceptance
E – EXPRESS or implied rejection communicated to offeror
D – DESTRUCTION of the subject matter of the offer or intervening illegality terminates an offer by operation of law

18
Q

Options can _____ by:

A

DIE:
D – DESTRUCTION of subject matter
I – Intervening ILLEGALITY
E – EXPIRATION of a stated option time extinguishes the option

19
Q

Generally, contracting parties are free to modify a 3rd party beneficiary (3PB) K, unless, prior to receiving notice of the K modification, the 3PB got _______

A

MAD:
M – MANIFESTED an assent called for in the 3PB K, at the request of one of the contracting parties (i.e., accepted a K offer arising from the 3PB K) A – Commenced a breach of K ACTION against the promisor, or
D – DETRIMENTALLY relied on the K

20
Q

Contract assignments may involve the ________

A

ADA
A – ASSIGNMENT of a contractual right to collect money owed under the K
D – DELEGATION of the performance required under the K
A – ASSUMPTION of liability for performing the K

21
Q

A gratuitous assignment becomes irrevocable, and a second assignee prevails over a prior assignee of the contract when ________

A

J.P.N.C.
J – Recovers a JUDGMENT
P – Gets PAID, or
NC – Enters a NEW CONTRACT with the obligator

22
Q

Absent express language in a K prohibiting assignment, K rights are freely assignable, except those of ________

A

SIR
S – Where a STATUTE expressly prohibits the assignment of a K right (but if that claim is reduced to judgment, it is assignable)
I – Where the assignment is coupled with an IMPROPER delegation of a duty under the K to a person unqualified to fulfill that duty
R – Where the assignment increased the RISK to the other contracting party

23
Q

Statues prohibit assignment of a _________

A
WASP
W – WORKER’S COMPENSATION payments 
A – ALIMONY or child support payments 
S – SPENDTHRIFT TRUSTS income 
P – PERSONAL INJURY or wrongful death clamp
24
Q

Look at _______ to determine whether a breach is material or immaterial:

A

HAIL
H – HARDSHIP on breaching party if total material breach is declared
A – AMOUNT of benefit bestowed on non–breaching party
I – Whether breach was INNOCENT
L – LIKELIHOOD of full performance being achieved

25
Q

Breach of contract defenses are ____________

A
I3 FU2MED & I S2IP:
 I – INFANCY 
I – INSANITY & INCOMPETENCY 
I – INTOXICATION 
F – FRAUD 
U – UNCONSCIONABILITY  
U – UNDUE INFLUENCE  
M – MISTAKE 
E – EQUITABLE DEFENSES 
D – DURESS 
I – IMPOSSIBILITY of performance 
S – STATUTE OF FRAUDS 
S – STATUTE OF LIMITATIONS 
I – ILLEGALITY  
P – PAROLE EVIDENCE RULE
26
Q

Lack of contractual capacity arises from the _________

A

3 I’s:
I – INFANCY
I – INTOXICATION
I – Mental INCOMPETENCY

27
Q

_______ is a fraud:

A

S – SCIENTER
I – D lied with an INTENT to defraud the P
I – P suffered an economic INJURY
R – P justifiably RELIED on D’s misrepresentation
M – D misrepresented a MATERIAL fact, which induced P to enter the K

28
Q

Badges of constructive fraud ________

A

SHIRTS
S – SECRETLY done H – HASTILY done I – INADEQUACY of consideration R – A close RELATIONSHIP between the transferor and transferee T – TRANSFEROR continues to the control property S – SCIENTIFIC (knowledge) of the creditor’s claim, an inability to pay it after the transfer.

29
Q

A unilateral mistake in calculating figures may allow the mistaken party the remedy of equity of rescission, if he calls the _______

A

COPS
C – The computational mistake was COMMUNICATED to the other party before that person changed his/her position in reliance on those mistaken figures
O – The mistake involved was one of ORDINARY negligence
P – The mistaken party gave PROMPT notice of the mistake
S – The mistake will impose SUBSTANTIAL hardship on the party if not corrected

30
Q

The following _________ contracts must be in writing, subscribed by the party to be charged with the breach (i.e., must contain defendant’s signature):

A

MRS SLY
M – MARRIAGE contracts
R – REAL ESTATE contracts
S – SURETY contracts
S – UCC Article 2 SALES CONTRACTS for $500 or more
L – LEASES longer than 1 year
Y – Contracts not capable of complete performance within 1 YEAR

31
Q

There are 4 ______elements for a constructive trust:

A

T CUP
T – TRANSFER of property in reliance on promise
C – Existence of CONFIDENTIAL or fiduciary relationship
U – UNJUST enrichment to transferee of property or to some third party, AND
P – PROMISE, express or implied, to hold property for plaintiff’s benefit, which promise has been breached

32
Q

A ________ may render an illegal contract enforceable, based on:

A

THUG
T – TYPE of illegality & extent to which the public is harmed
H – HARM that forfeiture would cause if contract was declared unenforceable due to illegality; ct looks to see whether contract has been substantially performed
U – UNJUST enrichment (a windfall) to party asserting illegality defense
G – Relative GUILT of each party

33
Q

The theory of impossibility frequently involves the _____

A

4D’S
D – DEATH
D – DANGER to life/ill health
D – DESTRUCTION of the subject matter of the lawsuit D D – DELAYS, temporarily causing performance to become impracticable or impossible

34
Q

________ permits parole evidence:

A

OF MICE2
O – To establish an ORAL condition precedent to legal effectiveness of contract, provided it doesn’t contradict express term(s) of the contract
F – A party cannot invoke the Parole Evidence Rule to shield that party from allegations of FRAUD or Misrepresentation
M – To establish MUTUAL Mistake or claim for reformation of contract
I – To establish ILLEGALITY
C – To establish failure of CONSIDERATION
E – To EXPLAIN ambiguous or missing terms
E – To show that no ENFORCEABLE agreement was ever intended

35
Q

Contract law does not allow damages recovery for _______

A

CAPS
C – To recover consequential damages, unless they were within the CONTEMPLATION OF BOTH PARTIES when the contract was executed
A – Damages that party could have AVOIDED
P – Damages for PAIN & suffering or emotional distress resulting from a breached contract, even if such damages were foreseeable
S – SPECULATIVE damages aren’t recoverable (all damages must be proven within a reasonable certainty)

36
Q

Generally, parties can put whatever terms they’d like into a K, except for ___________

A

PLUS
P – Terms that violate PUBLIC POLICY
L – Terms providing for an excessive amount of LIQUIDATED DAMAGES
U – Terms that are UNCONSCIONABLE
S – Clauses providing that one party can seek SPECIFIC PERFORMANCE in the event of a breach (the contract does NOT have to enforce these clauses)

37
Q

Apply a ________ to a covenant restricting a former employee from competing:

A

TISSUE
T – TIME restriction must be reasonable (usually two years or fewer)
I – INABILITY of the employee to gain work elsewhere
S – The geographic SPACE/SCOPE of the restriction must be as narrow as possible (must only be to the extent necessary to protect the employer’s interest)
SUE – The employee services must be SPECIAL, UNIQUE, or EXTRAORDINARY