Contracts and Sales Flashcards
1
Q
Love For Dogs, Treat Every Rover Terrifically
A
Law Applied Formation Defenses Terms Excuse for Nonperformance Remedies Third Party Problem
2
Q
Which Law Applies
A
- Common law is default
- UCC - Sales of goods; goods are anything moveable (tangible personal property)
- Mixed contracts - All-or-nothing rule based on “Predominant Purpose” test
3
Q
Overview/Types of Ks
A
- Default - Legally enforceable agreement created either expressly (in words, oral or written) or implied in fact (by parties’ conduct)
- Quasi-contract/restitution - Protects against unjust enrichment when contract law yields unfair result; reasonable market value of benefit conferred
- Bilateral vs. unilateral contract:
(a) Bilateral - Offer can be accepted in any reasonable way
(b) Unilateral - Offer expressly seeks performance as ONLY method of acceptance (also rewards/prizes)
4
Q
Steps of K Formation
A
- Offer
- Termination of offer
- Acceptance
- Consideration
5
Q
K Formation - Offer
A
- Manifestation of intent to be bound judged by objective reasonable person standard
- Advertisements - NOT offers unless contains Q and exactly what you have to do
- Definiteness of terms:
(a) Common law - ALL terms must be defined
(b) UCC - Need Q, can leave out price - Requirements K - UCC allows buying all of supplier’s output, BUT buyer can’t unreasonably dramatically change Q
6
Q
K Formation - Termination - Overview
A
(1) Lapse of time
(2) Revocation
(3) Rejection
(4) Death
7
Q
K Formation - Termination - Lapse of Time
A
- Lapses after time stated
* If no time, after reasonable time (>1 month is fishy)
8
Q
K Formation - Termination - Revocation
A
- Offeror can revoke at ANY time before acceptance
- Direct - Communicates w offeree
- Indirect - Offeree is aware of conduct indicating revocation
- Exceptions:
(a) Option K - Offeree pays to keep offer open for a specific time
(b) UCC Merchant Firm Offer - Merchant promises in signed writing to keep offer open; 3 month max
(c) Foreseeable detrimental reliance (e.g. general and sub-contractors)
(d) Starting performance under unilateral K offer (doesn’t include mere preparation to perform) - Revocations effective upon receipt
9
Q
K Formation - Termination - Rejection
A
- Offeree rejects offer
- Counteroffer (NOT just bargaining/questioning) = rejection
- Conditional acceptance = Rejection + new offer
- Purported acceptance adding/changing terms:
(a) Common law - Rejection bc “mirror image” rule
(b) UCC - Acceptance if seasonal expression of acceptance, BUT changed terms aren’t incorporated into K; applies if (1) both parties are merchants, (2) no material changes, causing hardship/surprise, (3) no objection in reasonable time
10
Q
K Formation - Termination - Death
A
- Death of either party before acceptance terminates REVOCABLE offer, NOT (1) formed K, and (2) irrevocable offer
11
Q
K Formation - Acceptance - Method
A
- Offer language controls method
- Starting performance OK for bilateral, NOT for unilateral (must be complete performance)
- Improper performance = Acceptance+breach
- Improper performance + offer of accommodations = Counteroffer
- Silence NOT= acceptance, UNLESS custom
12
Q
K Formation - Acceptance - Timing
A
- Mailbox rule - Effective when mailed
- Exceptions:
(a) Offer states otherwise
(b) Irrevocable offers - effective when received by deadline
(c) Rejection sent first, then acceptance - Race; if acceptance arrives first, effective on that date
13
Q
K Formation - Consideration
A
Bargained-for legal benefit or detriment
- Past consideration is no consideration
- Courts don’t examine adequacy of consideration; peppercorn
- Consideration for modifications?:
(a) Common law - Require new consideration (pre-existing duty rule) UNLESS (1) unanticipated changed circumstances, OR (2) third party enters
(b) UCC - No consideration needed, just good faith - Partial payment of debt NOT= consideration
- Payment of time-barred debts = consideration
- Promissory estoppel - (1) Promise made, (2) foreseeable detrimental reliance, AND (3) justice requires enforcement
14
Q
K Defenses - Overview/Categories
A
Lack of capacity Material ambiguity/misunderstanding Mistake Unconscionability Duress Statute of Frauds
15
Q
K Defenses - Lack of Capacity
A
- Minors - Belief of age irrelevant; can still enforce Ks; implied affirmation after turning 18
- Intoxicated ppl - Includes voluntarily if other party knew and took advantage
- Mentally incompetent ppl
- Exception - Necessities - Incapacitated D still liable for necessities; must pay restitution
16
Q
K Defenses - Material Ambiguity/Misunderstanding
A
No K where no meeting of the minds
- Exception - 1 party knew or should’ve known
17
Q
K Defenses - Mistake
A
- Mutual mistake - Unenforceable if mistake about existence of K subject matter, NOT just value
- Unilateral mistake - Likely enforceable UNLESS non-mistaken party knew/should’ve known about mistake
18
Q
K Defenses - Unconscionability
A
At time of K formation, need (1) unfair surprise, AND (2) oppressive terms
19
Q
K Defenses - Duress
A
- Economic - Improper/wrongful threat + other party has no reasonable alternative
- Physical
20
Q
K Defenses - Statute of Frauds - Applicability
A
MYLEGS:
- Marriage - Promise made in consideration of marriage
- Year - Ks not theoretically completable within 1 year
- Land - Transfer of interest in real property OR leases/easements/etc if >1 year
- Executors - Promise to pay estate’s debts from funds other than the estate’s debt
- Goods >= $500
- Suretyship - Promise to guaranty debt of other person
- Equal dignity rule - SoF applies to K authorizing someone to act on your behalf if underlying act would be subject to SoF
- Modifications - Writing required if SoF would apply to K as modified
(a) UCC - Parties can put writing requirement in original K
(b) Common law - Parties CAN’T put writing requirement in original K
