Contracts and Sales Flashcards
(68 cards)
If a contract is unclear as to whether it is a bi-lateral or uni-lateral contract, how may acceptance occur?
Treat acceptance as bi-lateral, allowing either the offeree to either promise to perform OR begin performance.
Is a promise to pay for an unrequested benefit an enforceable contract?
Yes; when a party performs an unrequested service for another that constitutes a material benefit, person may be entitled to recover to the extent unjustfully enriched.
Even if the promise was not backed with consideration!
What is the doctrine of promissory estoppel?
A promise (even without consideration) is binding if:
1) Promisor should reasonably expect the promise to induce action or forbearance
2) Promise actually induced such
3) Injustice can only be avoided by enforcement of the promise.
When does a novation occur?
May be expressed or implied, if:
1) Original obligor repudiates liability to the original promisee (other party)
2) Obligee subsequently accepts performance of OG agreement from the delegate, without reserving rights against the obligor
When does an anticipatory breach occur?
When a party to a contract clearly and unequivocally repudiates it’s duty prior to it’s obligation to perform.
In tandem with a clear/unequival repudiation, does a party’s demand for performance for a term not contained in the contract, else demanding party will not perform constitute an anticipatory breach?
Yes!
Further, the party being demanded no longer has to perform.
Under the UCC, when additional terms between two merchants do not control, do the original terms of the contract still control?
Yes! Under the Battle of the Forms, even if the additional terms were added, even if those terms do not control the original contract still exists!
What is the knock out rule?
When there are conflicting terms in the original offer by merchants, the different terms will be nullified.
Not a reason to void a contract!
When does the doctrine of frustration of purpose apply?
Occurs when an unexpected event arises that destroys the purpose of the contract, even if performance is possible.
1) Must not be the fault of frustrated party
2) Nonoccurrence was a basic assumption of the contract
In disclaiming the implied warrant for a particular purpose, does the writing need to refer to the warranty by name?
No; just needs to be a conspicuous writing!
Does a failure to perform a condition precedent to a contract give rise to damages?
No; rather, the non-breaching party is relieved from their duty to perform.
But NEVER damages!
What is an implied in law contract or QUASI-CONTRACT and when does it apply?
Occurs when one party confers a benefit on another and has a **reasonable expectation of compensation.
1) Plaintiff gives measurable benefit
2) Plaintiff acted without gratuitous intent
3) It would be unfair to let defendant retain because either (i) defendant had opportunity to decline but did not; (ii) platinff had a reasonable excuse for not giving defendant opportunity
For modifications to a contract that satisfies the SOF, do such modifications have to be in writing?
No, unless they affect:
1: The subject matter of contract
2: Quantity of goods to be sold
REMEMBER: Ask if the modification is even valid under CL (need consideration) or UCC (need good faith!)
Can a good faith buyer obtain good title, even if they originally did not obtain good title during the transfer?
Yes, because the subsequent purchaser bought the goods in good faith and for value!
Therefore, a party cannot try to force the 3rd party to return the property back to them.
Under CL, when does a modification not violate the pre-existing duty rule?
When some sort of unexpected circumstances requires ADDITIONAL performance not previously required.
EX: I pay someone to fix my basement. Unknown to us both, my basement has mold; the contractor needs more money to get rid of the mold, and I to it. The contractor is not requesting more money to fix my basement (a pre-existing duty); rather, he is asking for more money to address the unknown issue of mold.
Under the UCC, absent a contract term to the contrary, who generally retains the risk of loss?
The seller, UNLESS the buyer is in breach of the contract.
The risk of loss then goes to the buyer to the extent of any deficiency in the seller’s insurance coverage.
What are liquidated damages and when can they be voided?
Liquidated damages are stipulated by the parties as a reasonable estimation of actual damages in the event of breach.
Can be void if the agreement is so awful, it is in the nature of a penalty.
What is an example of a rare time courts will grant specific performance/enforcement for personal service contracts?
For contracts that contain a non-compete clause.
Applies when a contract prevents a party from working for or with a competitor.
How do you determine when a misrepresentation regarding a contract can make the contract void vs voidable?
Void: When the misrepresentation prevents the party from knowing the character of the contract or the essential terms
Voidable: When the party knows there is a contract, but when violating party makes false assertion of fact or failure to disclose material fact.
May misrepresentation make a contract void, even if the misrepresentation was not fraudulent?
Yes!
This means that even if the seller did not fraudulently misrepresent anything, a buyer can still void a contract if there was some sort of misrepresentation that occurred.
What is the contract defense of impracticability and when may it NOT be successfully raised?
Applies if performance becomes “impractical”; for example, performance becomes illegal. Has to be unforeseeable!!!
However, this defense is not available to a party who has assumed the risk of an even happening that makes performance impracticable!
When does an intended beneficiary have the right to sue the promisor of a contract?
When their rights have vested. Occurs when either:
1) Intended Bene manifests asset to the contract at party’s request
2) Determinately or materially relies on the rights created
3) Files lawsuit to enforce contract]
Must occur BEFORE recession of contract.
Contracts with Minors
Such contracts are voidable by the minor only.
However, minor is still responsible for necessary expenses, and at times educational expenses as well.
Under the UCC, what is an accommodation and how does it create the formation of a contract?
Occurs when a seller makes a shipment that does not conform with the buyer’s offer, and is instead made in “Accommodation. This is not a traditional form of acceptance.
A contract is instead formed if the buyer accepts the accommodation.
