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Contracts Flashcards

1
Q

Bilateral Contracts

A

Exchange of Mutual Promises

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2
Q

Unilateral Contracts

A

Acceptance by Performance

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3
Q

Void Contract

A

A void contract is one that is totally without any legal effect from the beginning. Can’t be enforced by any party

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4
Q

Voidable Contract

A

is one that one or both parties may elect to avoid.

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5
Q

Unenforceable Contract

A

an agreement that is otherwise valid but which may not be enforceable due to a defense to contract formation. ex. SOF

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6
Q

Mutual Assent

A

Offer and Acceptance

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7
Q

Offer

A

A communication that includes:

  1. a promise, undertaking, or commitment to enter into a contract;
  2. Definite and Certain Terms
  3. communicated to the offeree
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8
Q

Revocation

A

Retraction of an offer by the offeror

must be communicated to offeree

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9
Q

Option

A

A distinct contract in which the offeree gives consideration for a promise by the offeror not to revoke an outstanding offer

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10
Q

Merchant’s Firm Offer Rule

A

An offer cannot be revoked for up to three months if
1. made by a merchant (one dealing in goods of the kind),
2. signed, written promise to keep the offer open;
AND
3. Party is a merchant

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11
Q

Detrimental Reliance

A

An offer cannot be revoked if there has been

  1. reliance that is
  2. reasonably foreseeable and
  3. detrimental.
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12
Q

Quasi Contract

A

No contract- equitable remedy

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13
Q

Methods of terminating offer

A
  1. Lapse of Time
  2. Death of a party prior to acceptance
  3. Revocation
  4. Rejection
  5. counteroffer
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14
Q

3 methods of indirect rejection

A
  1. counter offer
  2. conditional acceptance
  3. additional terms
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15
Q

Acceptance

A

The manifestation of of assent to the terms of the offer.

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16
Q

Mirror Image Rule

A

An acceptance must be a precise mirror image of the offer. if the response conflicts at all with the terms of the offer, or adds new terms it is treated as a rejection and counter offer.

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17
Q

Consideration

A

Bargained for exchange of legal detriment and an be a promise to do an act or forbearance from doing an act one is otherwise entitled to do.

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18
Q

Illusory Promise

A

A promise not supported by consideration thus not not enforceable.

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19
Q

Requirement Contract

A

the parties agree the seller will be the exclusive source of all of the buyer’s requirements for a particular item for a specified period of time.

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20
Q

Output contract

A

the buyer agrees to buy all of the seller’s output of a particular item for a specified period of time.

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21
Q

Preexisting duty rule

A

provides that a promise to do something that one is already legally obligated to do will not provide consideration for a new bargain.

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22
Q

Promissory Estoppel

A

A promise that foreseeably induces reliance, and is actually relied upon, may be enforceable to prevent injustice, even without consideration.

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23
Q

Statute of Frauds

A 
Defense to Enforceability of Contract: 
Contracts that need to be in writing to be enforceable (my legs) 
1. Marriage
2. Year- contracts more than a year to complete
3. Land- Sale of interest of land 
4.  Executory contracts 
5.  Goods of $500 or more 
6.  Sureties
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24
Q

Merchant’s confirming Memo

A

(satisfied SOF)
Allows a writing to be enforced against both the signer and recipient where it is
1. Between two merchants
2. one party receives signed confirmation
3. Both parties will be bound
4. Except if the recipient objects within 10 days.

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25
Misrepresentation
Defense to Enforceability of Contract: | May serve as a defense where one party makes a misrepresentation prior to the other signing the contract.
26
Unconscionability
Defense to Enforceability of Contract: | If the court finds a contract term so unfavorable it is unconscionable, the court may decline to enforce the contract.
27
Mistake
Defense to Enforceability of contract: | A belief not accord with the facts and can be a mutual or unilateral.
28
Condition
An event that must occur before performance of the other party is due.
29
Parol Evidence Rule
Limits the discussions or writings made prior to, or contemporaneous with, the signed written contract can be admitted or considered as part of the agreement. if partial integration: can allowed to supplement term if total integration: inadmissible
30
Requirements of Contract Modification | UCC
1. Mutual Assent | 2. Good Faith
31
Requirements of Contract Modification | Common Law
1. Mutual Assent | 2. New consideration
32
Third party beneficiary
a person whom the promisor intends to benefit by the contract but who is not already a party to the contract
33
Assignment
When a party to an existing contract transfers her rights under the contract to a third person
34
Delegation
when a party to an existing contract appoints to a third person the duties owed under the contract.
35
Perfect Tender Rule
(UCC) Provides that if the goods tendered fail to conform to the contract in any respect, the buyer has three choices: 1. Reject the whole within a reasonable time; or 2. accept the whole; or 3. accept any commercial unit and reject the rest.
36
Divisible Contract
one where the parties have divided up their performance into agreed equivalents, which means that each corresponding part performance is roughly equal to the corresponding part compensation. (Ex. A and B agree that B will paint 15 identical cars of A for $500 each)
37
Anticipatory Repudiation
An unequivocal expression by a party, occurring before the time for performance is due, that she will not perform.
38
Implied Warranty of Merchantability
Warrant that goods will be fit for the ordinary purpose for which such goods are used.
39
Warranty of fitness for particular purpose
applies where the buyer relies on the seller's judgment to select appropriate goods for a stated purpose.
40
Implied Covenant of Good Faith and Fair Dealing
inherent in every contract
41
Accord
An agreement where one party promises to render substitute performance and the other promises to accept that substitute in discharge of the existing duty.
42
Satisfaction
the performance of the accord, which then discharges both the original agreement and the accord.
43
Impossibility
occurs when a supervening, unforeseeable event makes performance impossible and thus discharges performance. (destruction of subject matter, death or incapacity of person required to perform or supervening illegality)
44
Impracticability
occurs when the occurrence of an event the parties assumed would not occur make performance extremely and unreasonably difficult. (both parties took risk)
45
Frustration of Purpose
occurs when the party's purpose for entering the contract is destroyed by supervening events. Both parties must know the purpose of the contract; the even must not be reasonably foreseeable; and frustration is total.
46
Expectation Damages or Compensatory Damages
Compensate a plaintiff for the value of the benefit plaintiff expected to receive from the contract. (puts the plaintiff in the position he would have been in if the contract was performed)
47
Consequential Damages
compensate for damages that are a direct and foreseeable consequence of the contract nonperformance and are unique to each plaintiff.
48
Reliance Damages
put the plaintiff in the position he would have been in had the contract never been made.
49
Liquidated Damages
damages in the amount stipulated to in the contract. Allowed when actual damages are difficult to calculate, and the amount agreed is a reasonable approximation of the anticipated loss from a breach.
50
Nominal Damages
awarded where the plaintiff's rights have been violated but no financial loss has been sustained.
51
Punitive Damages
not awarded for a standard breach of contract.
52
Replevin
applies when the plaintiff wants her property back
53
Ejectment
applies when the plaintiff wants her real property back
54
Reformation
rewrites a contract to accurately reflect the agreement of the parties where the writing is in error, such as a scrivener's error.
55
Rescission
permits a party to undo a bargain.
56
Grounds for Rescission
allowed where a contract has resulted from fraud, misrepresentation, duress or mistake.
57
Specific Performance
where a party is ordered by the court to render the promised performance under the contract.
58
Specific Performance Requirements | Chocolate Cheesecake is my favorite desert
1. contract 2. conditions satisfied 3. inadequate legal remedy 4. mutuality of performance 5. Feasibility of enforcement 6. Defenses- None.
59
Third Party Vesting Requirements
Vesting occurs when the beneficiary: 1. Manifests assent to the promise in a manner invited or requested by the parties; 2. brings suit to enforce promise; or 3. materially changes position in justifiable reliance of the promise.
60
Surety
A promise to answer for a debt or default of another where the promise is collateral rather than primary. (However, where the main purpose or leading object of the promisor is to secure an advantage or pecuniary benefit for himself, the contract is not within the SOF)
61
F.O.B. DESTINATION
When a contract has an FOB delivery term, the seller is obligated to get the goods to the destination indicated and make a reasonable contract for freight if the destination indicated is not the buyer's place of business. the seller has the risk of loss until the goods make it to the F.O.B destination, and thereafter the buyer has the risk.
62
contract
A bargained for exchange for which the law provides a remedy if it is breached.
63
UCC
Governs contracts for the Sale of Goods
64
Common Law
Governs all other contracts except those for the sale of goods
65
Goods
moveable tangible property
66
Merchant
one who deals in goods of the kind or one holding oneself out as having special knowledge or skills regarding the practices or goods involved in the contract.
67
Predominance Test
Where a contract includes both goods and the provision of services, the predominance test determines if the UCC or common law governs the contract.
68
Contract Formation Requirements
A valid contract requires mutual assent, which consists of an offer and acceptance and consideration.
69
Definite and Certain Terms for an Offer
Must contain: 1. Quantity 2. Time of Performance 3. Identity of the parties 4. price (However, the UCC provides "reasonable price at the time of delivery" if missing) 5. Subject matter
70
Mailbox Rule
provides an acceptance is effective upon proper dispatch, if both an acceptance and a rejection are sent, if rejection is dispatched first, the acceptance will only become effective if it is received first.
71
Battle of the Forms
In a UCC contract, acceptance will determine if additional terms are valid. If one party or more is not a merchant, any additional terms is a proposal and will not be part of the contract unless the other parties assent, if both parties are merchants the additional term will become part of the contract.
72
Exceptions to the Battle of the Forms Rule
Additional terms will not be added to a contract if: 1. offer expressly limits acceptance to its terms, 2. material alteration with added term or 3. objection
73
Knock out Rule
Conflicting Terms cancel each other out and neither enter the contract.
74
UCC Gap Fillers
1. Price is reasonable price at the time of delivery 2. Place of delivery: buyer must pick up the goods from the seller 3. Time for Shipment is a reasonable time 4. Time for payment: payment is due upon receipt.
75
SOF writing requirement
there must be one or more writing that when combined include the essential terms of the contract and that is signed by the party to be charged.
76
Elements for avoidance for mutual mistake
1. Basic Assumption 2. Material Effect 3. Risk
77
Intended Beneficiary
An intended beneficiary is one intended by the promisor to benefit from the contract and can sue for enforcement.
78
Incidental Beneficiary
One who indirectly benefits from the contract, but that result is not intended of the promisor. May not sue for enforcement.
79
Novation
occurs when the obligee expressly agrees to accept the performance of the delegatee instead of the delegator. Terminates the liability of the delegator.
80
UCC 2-207
Permits a seller to reclaim goods upon demand within 10 days after the buyer receives them if the seller discovers that the buyer received goods on credit while insolvent.
81
Contract Defenses
1. no mutual assent 2. lack of consideration 3. No writing, when required by the SOF 4. Misrepresentation/Fraud/Undue Influence 5. Unconscionability 6. Lack of Capacity 7. Illegality of contract 8. Condition Precedent not met.

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