contracts and sales Flashcards

Question

firm offer rule

Answer 1

1. only applies to the contract for the sale of goods 2. a written promise to keep the offer open 3. promise made by a merchant 4. in the absence of consideration the offer can only be irrevocable for 3 months 5. if no time is set, the offer is irrevocable for a reasonable time not to exceed 3 months 6. if the offer is oral, it is revocable

Answer 2

1. deals in goods of the kind or who otherwise holds himself out as having knowledge or skill particular to the practices or goods involved. 2. or one to whom such knowledge or skill may be attributes by the employment of an agent who holds himself out as having such knowledge or skill

Answer 3

an offer cannot be revoked if there has been reliance by the offeree that is reasonably foreseeable but reliance alone is not enough ex. contractor solicits bids from suppliers for construction project, contractor uses that bid for making a larger bid.

Answer 4

1. cannot be revoked 2. once performance has begun, it is irrevocable 3. if not begun performance, but preparation: can still be revoked 4. but if the consideration can be broken down into clear and distinct segments, then the offer can be revoked for those yet to be performed (ex. 10 houses to be painted, painter paints 3, can revoke for the remaining houses but not the 3 painted)

Answer 5

1.look at whether the offeror has benefited in any way yet if yes, then more like beginning or performance if not, more like preparation

Answer 6

1. terminated any right to accept the offer 2. rejection sent through the mail is effective when received 3. a counter offer, terminates any right to accept the offer 4. a mere inquiry does not kill the offer, (bargaining) (if in the form of a question, more of a bargain) 5. a rejection or counteroffer does not terminate the offer under an option contract (but look out for estoppel, a P may be estopped from arguing the right to exercise the option if they made it clear they would not want the option and the D relied on that)

Answer 7

1. under the common law and UCC: a conditional acceptance terminates the offer 2. proviso clause: I accept provided you agree to this: no contract at this point, a counter offer which killed the offer 3. what is the goods are delivered and paid for but the dispute above still arises: a contract implied from conduct, but no express contract. - in this case, the agreed upon terms become the K, the disputed terms are thrown out, and the code fills the gaps

Answer 8

1. common law: acceptance must be the mirror image of the offer or it operates as a rejection (the mirror image rule) 2. UCC: the additional terms become part of the contract if both parties are merchants and the additional term does not materially alter the contract and the offeror does not object within a reasonable time 3. otherwise, the additional term is a mere proposal for the addition to the contract which must be separately accepted by the other party

Answer 9

1. surprising, oppressive term | 2. arbitration clauses are generally found to materially alter the K

Answer 10

1. common law: mirror image rule applies and rejected 2. UCC: different term can be ok as long as a definite and seasonable expression of acceptance 3. if it is quantity, price or another major term, it is not ok, otherwise it is 4. some courts treat different terms like a additional term 5. most courts apply the knock out rule: the conflicting terms knock each other out and the code fills the gaps

Answer 11

1. general rule: death terminates the offer whether or not the other party knows 2. exceptions: option contract and part performance in a unilateral contract may have a defense of impossibility

Answer 12

1. generally, only the person to whom the offer is made can accept. 2. offer cannot be assigned unless an option (unless the option otherwise provides). 3. have to have knowledge of an offer to accept it (public offer: reward poster)

Answer 13

1. performance 2. promise to perform 3. acceptance through the mail 4. seller sends the wrong goods 5. offeree is silent

Answer 14

1. unilateral contract: once performance has begun, the offer is irrevocable but there is not acceptance until the performance is complete 2. bilateral contract offer: beginning to perform is acceptance

Answer 15

1. if the offer is open to the method of acceptance, then the promise to perform is a good acceptance 2. if the offer is for a unilateral contract, a promise is not enough for acceptance

Answer 16

1. acceptance if effective when posted 2. if the offer arrives by mail or if acceptance by mail is customary, it is generally reasonable to accept by mail 3. what if the acceptance never arrives?: doesn't matter

Answer 17

1. rejection mailed first then letter of acceptance, rejection was received first: the letter of acceptance operates as a counter offer 2. acceptance is mailed first, then the rejection is sent and the rejection is received first: estoppel may apply. if the rejection was relied on before they knew the acceptance was mailed then estopped from arguing that there was a contract formed 3. the offeror has control over the terms that he proposed, so he can impose limitations on the time, place or manner if the acceptance. if that is the case, the mailbox rule does not apply if the offeror says acceptance has to be in person or via phone (no acceptance until) BUT if the offeror merely suggests a way to acceptance, then the offeree can use any reasonable means and the mailbox rule applies

Answer 18

1. generally, you cannot use the mailbox rule to meet an option deadline 2. response has to be received by the option deadline unless the offer says the acceptance has to be postmarked or mailed by the date

Answer 19

1. shipping the goods is an acceptance and if it is the wrong goods, it is a breach of contract 2. exception: the seller sends the wrong thing but says i hope you accept this instead (an accomodation letter) this is a counter offer

Answer 20

1. generally the offeror cannot unilaterally turn the offeree's silence into acceptance 2. if past dealings or trade custom show that silence is reasonable acceptance, then it can be

Answer 21

elements: 1. the promisee must suffer some legal detriment 2. the detriment must induce the promise (promisor makes his promise to induce the conduct of the promisee) 3. the promise must induce the detriment (the promisee is induces to act by the promise) ASK: did the promise by the promisor induce the promisee to act AND did the conduct of the promisee induce the making of the promise by the promisor look like a bargained for exchange?

Answer 22

1. performance ie. doing something not legally obligated to do 2. forbearance i.e not doing something legally entitled to do 3. promise to perform 4. promise to forbear

Answer 23

1. conditional gift: if either of the parties intended to make a gift, she was not bargaining for something and there is no consideration. (see if the meeting of the condition benefits the promisor) 2. legal detriment: doesn't necessarily make you worse off, just giving something up that you are legally entitled to do 3. ** past consideration**: not consideration, when the promise is made is the promisor bargaining for something 4. adequacy of consideration

Answer 24

1. Moral obligation: generally is not enough to substitute for consideration BUT if acts have previously been performed by the promisee at the promisor's request and the promisee has an expectation of payment, the modern trend is to enforce a new promise ex. someone asks a man to rescue his wife and he knows that the rescuer would expect payment, and then after the rescue promises to pay the rescuer 3K, this is likely enforceable 2. material benefit rule: some courts enforced promises made by a person who received a material benefit and then promised to pay for it ex. man throwing something off building, realizes his boss is below and holds on and steers the thing away from boss, the boss later promises to pay the man per week for what he did, the court enforced it 3. promissory estoppel

Answer 25

courts do not inquire into the adequacy of consideration, BUT if gross disparity it could be a fraud or duress or capacity issue

Answer 26

1. the performance of a pre-existing legal duty (contractual or statutory) is not consideration ex. willie nelson agrees to play for 15K then later demands 20K for the same performance, the extra 5K is not enforceable unless he promises to sings longer or sign autographs 2. pre-existing duty owed to a third person: because there is no pre-existing duty to the third party, there can be an enforceable promise ex. willie nelson threatens to cancel, a local bar owner promises to pay 5K if he still plays because the bar owner will see an increase in profits, the promise is likely enforceable

Answer 27

1. something happens that you haven't foreseen the risk of 2. ex. contractor excavating a foundation and hits a lot of unforeseen rock, the owner promises to pay more money 3. it is enforceable as long as it is fair and equitable in view of circumstances not anticipated when the contract was entered into 4. basically it has to be so bad, that the party could claim impossibility as an excuse, it has to be very severe to make performance vitally different

Answer 28

1. dont need consideration to modify a sale of goods contract: no pre-existing duty rule 2. good faith is required for modification

Answer 29

the key is whether the debt is due and undisputed. if so, then part payment is not consideration ex. 3K is due and disputed. d offers to pay 2K and c promises not to sue...c can sue for the rest of the money if not due yet or disputed: payment is consideration here and C couldnt sue for the rest

Answer 30

can be consideration as long as the party giving up the claim in good faith believes that the claim is valid

Answer 31

1. Creditors rights: a written promise to pay a debt barred by the statute of limitations is enforceable, there is no need for consideration. 2. only the new promise is enforceable, not the original debt

Answer 32

is a promise in form but not in substance. such a promise is not consideration for the other promise 1. promise to buy a house if I decide i want it

Answer 33

elements: 1. promise 2. reliance that is both foreseeable and justifiable 3. enforcement necessary to avoid injustice comparison of consideration and promissory estoppel promissory estoppel: the remedy may be limited as justice requires:

Answer 34

1. have to be 18 2. mental capacity 3. intoxicated persons

Answer 35

1. a person is unable to understand in a reasonable manner the nature and consequences of the transaction or is unable to act in a reasonable manner in relation to the transaction and the other party has reason to know of this condition

Answer 36

the other party has reason to know that , by reason of intoxication, he is unable to understand in a reasonable manner the nature and consequences of the transaction or he is unable to act in a reasonable manner in relation to the transaction.

Answer 37

1. right to disaffirm: have to disaffirm while you are a minor or within a reasonable time when becoming an adult (can ratify as an adult, the other party cannot disaffirm) 2. liability for neccesaries: they need it to survive, what is a necessary is a question of fact. liable not on the contract for the necessary, but liable on a quasi contractual theory: pay for the benefit you received

Answer 38

Issues: 1. is the contract within the statute of frauds? 2. is the statute of frauds satisfied? 3. if not why?

Answer 39

1. promise in consideration of marriage: a pre-nup agreement usually, promise to marry is not within the statute 2. promise by executor or administrator to pay an obligation of the estate from his own funds 3. promises to answer for the debt of another (when third party promises to the creditor only) 1) primary benefit exception (if the party making the promises to pay the debt for the primary benefit of themselves, not within the statute) 4. contract which is not capable of being performed within one year of the date that it was entered into (key is what might have happened) 5. promise creating an interest in land: if easement for over a year, or a lease for over a year etc 6. sale of goods for $500 or more 7. modifications

Answer 40

not within the statute because you could die in a year

Answer 41

majority rule: within the statute Minority rule: not within the statute because within a year could terminate with 30 days notice, ohio potentially follows this rule

Answer 42

1. contract for the sale of land has to be in writing 2. therefore, a writing is needed to authorize someone to sign the contract for you 3. but if agent signing in your presence, no written authorization is required

Answer 43

look to the contract as modified, if within the statute of frauds, the modification must be in writing (if it involves an essential term)

Answer 44

no, but they are in the UCC

Answer 45

does it involve 500 or more? is there a provision requiring that all modifications be in writing? (unless it is waived) only the quantity really needs to be stated so the original writing might satisfy the statute

Answer 46

writing (an electronic record is ok most of the time) this is the most common way to satisfy the statute must have: 1. identify the parties 2. identify the subject matter 3. contain all the essential terms 4. signed by the party to be charged (electronic signature okay)

Answer 47

does not satisfy the statute of frauds if cannot be performed within 1 year but the P can usually recover under quasi contract

Answer 48

1. who is raising the defense | 2. statute only satisfied as to the party who signed it

Answer 49

part performance in real estate and 2 of 3 1. full or part payment 2. possession 3. improvements mere payment alone does not satisfy the statute

Answer 50

modern trend: a promise may be enforceable to avoid injustice using promissory estoppel even when the statute of frauds is not satisfied 2. only enforceable to the extent that it avoids injustice 3. what if there is an oral promise to draw up a written employment agreement? there would be reliance on the promise to put the agreement in to writing

Answer 51

promissory estoppel can be used to get around the SOF only if there has been misrepresentation that the statute has been satisfied or there is a promise to put it in writing 2. reluctant to generally apply promissory estoppel

Answer 52

1. common way to satisfy the statute is writing which has to state a quantity (can be requirement or output) 2. must indicate that a contract for sale has been made between the parties (must afford a basis for believing there is a K)..easier to satisfy than common law 3. signed by the party to be charges

Answer 53

a writing can satisfy the SOF without the signed party raising the defense if: 1. both parties are merchants 2. writing claims that there is a K 3. writing is signed and states quantity 4. failure to object in writing within 10 days of receipt

Answer 54

1. generally part performance for sale of goods satisfies the SOF to the extent of part performance 2. only enforceable to the extent of the part performed

Answer 55

specially manufactured and not suitable for sale to others (ex custom cowboy boots) 1. once the seller has made a substantial beginning of the manufacture, the contract is enforceable and the statute of frauds is satisfied

Answer 56

if a party admits under oath that you had a contract, you do not have the SOF defense 1. this is a ucc rule but some courts have extended it to other contracts too

Answer 57

1. unenforceable | it is not illegal

Answer 58

there is no contract is: 1. the parties use a material term open to at least two reasonable interpretations and 2. each party attaches different meaning to the term and 3. neither party knows or has reason to know the meaning attached by the other - usually one party attaches a more reasonable meaning to the contract which will control - rarely do both parties attach equally reasonable meanings

Answer 59

no contract if: 1. both parties are mistaken 2. basic assumption of fact 3. materially affects the agreed exchange 4. not a risk that either party bears - the key is whether the agreed upon subject matter exists ex. both party's think they are bargaining for a picasso, it turns out to be a fake: no contract -but if only a mistake as to value...no relief

Answer 60

generally: courts have been reluctant to allow a party to avoid a contract for a mistake that was not shared exceptions: 1. obvious mistake: if the other party's knows or should have known there was a mistake 2. avoidance before significant reliance by other parties: (bidder's relief if avoidance is sought before any significant reliance by the other party, especially if it is a clerical error or if it would impose a very oppressive contract on the mistaken party

Answer 61

1. party is left with no reasonable alternative but to enter into a contract - personal duress (gun to the head) - economic duress (day before wedding, caterer demands more money) 2. the preexisting duty rule usually goes along with it (a lot of time court will not allow this if the money is already given so cant get the money back but duress can get you the money back) 3. if the contract is entered into under duress, it is voidable

Answer 62

1. unfair persuasion rather than coercion 2. may exist where a person uses a position of trust or confidence or dominance to convince the other to enter into a transaction that is not in the other parties best interest 3. usually an unjust enrichment 4. makes the contract voidable

Answer 63

1. the person knows they are signing a K 2. the other party lied about the subject matter to induce the party to sign it 3. voidable

Answer 64

1. fraud in the execution 2. decieved about the mature of the document you are signing 3. do not understand that this is a contract 4. generally the courts require excusable ignorance (usually you are bound by what you sign) 5. there was no contract at all because there was no mutual assent

Answer 65

1. reasonably relied on the misrepresentation, can avoid the contract 2. has to be a material misrepresentation to be voidable, can still maybe get damages for this misrepresentation

Answer 66

generally there is no duty to disclose facts exceptions: 1. statutory disclosure rule (truth in lending act) 2. act of concealment (treated like a misrepresentation) 3. where partial disclosure is misleading 4. changing circumstances cause a previous assertion to no longer be true 5. party become aware that other party is operating under a mistake as to a vital fact 6. there is a confidential or fiduciary relationship

Answer 67

1. based on unfair surprise and oppression 2. look for both procedural (gross disparity in bargaining power, terms tucked away) and substantive unconscionability (grossly unfair terms). most court require both 3. judged at the time the contract is entered into 4. decided by a judge

Answer 68

1. contract illegal as to subject matter (never actually comes into court) 2. sometimes, the subject matter is legal but the purpose is illegal (lease a plane for transport of drugs) if one party does not know of the illegal purpose and then finds out, can recover for breach of K 3. can be illegal because a party does not have a license required by statute, the enforceability depends on the reason for the license requirement (if to raise money, generally enforceable, if a regulatory purpose a contract is unenforceable by person who violated the statute) 4. illegal if against public policy: not usually tested because no one really knows what it means or where it comes from

Answer 69

how these deals are usually done in this particular place and this particular trade ex. 50% lean might mean between 48% and 51%

Answer 70

how these people have performed their contract in the past | ex. no warranties or certain warranties

Answer 71

certain terms, like implied warranties, that become part of the K unless specifically excluded

Answer 72

1. may prevent terms from becoming part of the contract 2. nature of the rule: substantive law, not a rule of evidence 3. facts that trigger the rule: - written contract intended as final agreement totally or completely integrated - earlier or contemporaneous agreements: does not apply to oral or written agreement made after the final writing it does not apply to modifications 3. RULE: where parties have agreed to a written contract as the final expression of their agreement, a prior written or oral agreement, or a contemporaneous oral agreement, cannot be used to vary the terms of the agreement

Answer 73

1. do the parties decide even though it is not complete the written agreement is final as to the terms in that agreement (partial integration) 2. the parties intent the written agreement to be not only final as to the terms in the agreement but also their complete agreement: complete integration (merger clauses or integration clause are strong evidence that the parties intended complete integration)

Answer 74

1. merger clause 2. how complete does it look:typed? written? 3. now long were negotiations? 4. were the parties represented by lawyers?

Answer 75

1. using the earlier agreement to explain the final writing (not adding too it or contradicting) 2. using the earlier agreement to establish a defense (fraud, duress, mistake) 3. using the earlier agreement to show that the written contract would not become effective until a condition occurred 4. using earlier agreement to add to the final writing if the court concludes that the final writing was not intended as the complete agreement (partial integration) 5. note: collateral agreements are admissilbe 6. oral or written agreements after the final writing

Answer 76

1. agreed to for separate consideration OR | 2. is such an agreement as in the circumstances might naturally be omitted from the writing

Answer 77

the seller completes it delivery obligation when 1. gets the goods to the carrier (a third party carrier) and 2. makes appropriate arrangements for shipment (considering the nature of the goods) and 3. notifies the buyer that the goods are coming (and obtains and tenders any documents necessary to enable the buyer to take possession)

Answer 78

seller's delivery obligation is not complete until the goods are tendered to the buyer

Answer 79

1. course of dealing, usage of trade 2. parties words: FOB (free on board) city CIF (costs insurance and freight) city C&F cost and freight: city FAS free along side: ship or port Ex-ship-from the carrying vessel 3. general rule: most contracts are shipment K bt contracts with ex-ship and FOB and the buyers place of business...destination contract 4. if the language is unclear: the presumption if a shipment contract

Answer 80

1. if on the buyer: he has to pay the full price of the contract for the lost or damaged goods 2. if on the seller: no obligation on the buyer and there is a possible liability on the seller for nondelivery though commercial impracticability may excuse the nondelivery

Answer 81

1. after the K if formed and before the buyer gets the goods they are damaged with no fault of buyer or seller

Answer 82

1. agreement states it: it controls 2. breach: were the goods non-conforming so that the buyer would have a right to reject or revoke? or did the buyer wrongfully repudiate

Answer 83

1. risk of loss shifts from seller to buyer at the time the seller completes delivery obligations 2. so different for destination and shipment Ks

Answer 84

1. the determinative factor is whether the seller is a merchant 2. risk shifts from a merchant seller on the buyer's receipt of the goods (taking physical possession) 3. if non merchant seller: risk shifts when the seller tenders the goods, making the goods reasonably available to the buyer 4. after a commercially reasonable time has gone by (obvious buyer wont show up) seller is no longer entitled to the contract price but is limited to an action for damages

Answer 85

nothing changes regarding delivery and risk of loss, the buyer has the right to return to the seller even though they conform to the contract (goods taken on assignment)

Answer 86

1. risk of loss is on the seller until the buyer decides to accept the goods 2. the goods are delivered to the buyer primarily for the buyer to use and the buyer has a right to return the goods even though they conform to the contract (buyer using a piece of equipment on a trial basis)

Answer 87

1. given by the seller who does not have to be a merchant 2. made up of words, description affirmation that is part of the basis of the bargain, the words have a natural tendency to induce reliance and not mere puffing or sales talk 3. how do you know which is which? if in writing more likely to be a warranty, the more specific the more likely to be a warranty, depends on the industry

Answer 88

1. showing a sample or model drawn from a bulk | 2. warranty is what you deliver will conform to the sample or model

Answer 89

1. only a specific merchant can give it 2. when any person buys goods from a merchant who deals in goods of the kind 3. goods are fit for ordinary purposes 4. this term will be automatically added to the K by operation of law 5. misuse of goods does not qualify for the fit for ordinary purpose (fit for ordinary purpose means any kind of foreseeable use)

Answer 90

1. given by any seller 2. triggered by the buyer having a particular purpose 3. buyer relying on the seller to select suitable goods 4. seller has reason to know of the purpose and reliance

Answer 91

seller warrants that it has good title and that there is no undisclosed security interests, liens, or other encumbrances

Answer 92

1. disclaimer: contractual clause seeks to eliminate the warranty 2. limitation of remedies:

Answer 93

1. express warranty cannot be disclaimed 2. implied warranty of merchantability and implied warranty of fitness may be disclaimed if done in a conspicuous manner 4. as is: can be a disclaimer 5. implied warranties can be excluded or modified by course of dealing, course of performance, or usage of trade 6. where the seller has demanded the buyer examined the goods fully, there are no implied warranties with regard to defects which an examination ought to have revealed

Answer 94

so written that a reasonable person would notice

Answer 95

1. the warranty may be excluded or modified only be specific language or by circumstances which give the buyer the reason to know that the seller does not claim title in himself or is purporting to sell only an unknown or limited right

Answer 96

1. a contract provision that limits or controls a recovery for any breach of warranty (cannot eliminate the warranty) 2. rejection is hard on a seller, so more and more repair and replacement clauses 3. limitation of consequential damages: dont want to get personal property, personal injury. generally ok to do this unless it is unconscionable (any attempt to limit for personal injury in the case of consumer goods is prima facie unsconscionable) 4. these are valid as long as not unconscionable and does not fail of its essential purposes 5. does not fail of its essential purposes (where the seller is unable or unwilling to make the necessary repairs, the limited remedy fails of its essential purposes) (lemon laws)-a reasonable number of attempts to fix

Answer 97

generally 4 years which begins at the tender of delivery but when the warranty explicitly extends to future performance of the goods then the four year starts when the breach is or should have been discovered

Answer 98

1. a promise modifier, it holds up the performance of one or both of the parties. true conditions are events that are outside of the control of either party 2. some are express and some are implied

Answer 99

1. an event that affects the duty to perform that is to some extent within the control of one of the parties and creates a legal obligation on the party to use reasonable good faith efforts to cause the events to occur

Answer 100

1. must occur before an absolute duty of immediate performance arises int he other party 2. the plaintiff must normally plead and prove the condition precedent

Answer 101

capable of occurring together and the parties are bound to perform at the same time

Answer 102

occurrence of which cuts off an already existing duty of performance -the defendant must plead and prove the condition subsequent

Answer 103

1. in the contract, look for words "if, subject to, in the event that, unless, or on condition that"

Answer 104

1. read into the contract by the court, they are created by operation of law 2. done in the interest of fairness to ensure that both parties receive the performance for which they bargained 3. a party's substantial performance of the contract is said to be a constructive condition of the other party obligations to perform 4. constructive conditions are keyed to the order of performance 5. with a service contract, assume service before payment

Answer 105

look to the person who is protected by the condition. ask if that person has done anything that justifies taking away the benefit or protection leaving them unconditionally obligated to perform

Answer 106

1. even though the condition was not satisfied, but it is excused because the person we are trying to protect doesnt put in a good faith effort

Answer 107

1. estoppel: statement or conduct of a person protected by a condition before the conditioning event was to occur and requires a change of position 2. requires reliance

Answer 108

1. statement or conduct made after the conditioning even was to occur and does not require a change of position (doesnt require reliance)

Answer 109

1. strict compliance is the general standard for satisfaction of an express condition 2. this presents some special problems when the express condition is the approval of one of the contracting parties: look to the subject matter of the contract, and determine if it involves something that involves personal taste or judgement (a subjective good faith standard)

Answer 110

1. substantial performance is the general standard for satisfaction of a constructive condition 2. obligated to pay minus damages

Answer 111

1. if the goods or tender of delivery fail in respect to conform to the contract, the buyer can reject the whole, accept the whole, or accept any commercial unit or units and reject the rest 2. there are some exceptions: there is a right to cure, the de minimis requirement ( a small mistake that is really not making something not perfect)

Answer 112

1. seller fails to make a perfect tender and is given a second chance , but not every seller has the opportunity to cure and the buyer cannot compel the seller to cure 2. contractual 3. time performance has not yet expired 4. time for performance has expired (does the seller have reasonable grounds for belief that even if it wasn't perfect, they would adjust it) look to past performance

Answer 113

a buyer must affirmative action to avoid acceptance 1. notice must be timely 2. if the buyer fails to state a reason why they are rejecting, cannot rely on any unstated defect to justify rejection to establish a breach 1)if the seller could have cured the defect had he been told or 2) between merchants, when the seller has after rejection made a request in writing for a full and final written statement of all defects upon which the buyer proposes to rely (trap for the unwary)

Answer 114

1. if the goods are less than perfect, the buyers has the option to reject unless an installment sales contract 2. rejection must occur before acceptance

Answer 115

1. requires or authorize separate delivery to be separately accepted (past dealings or custom can come into play) 2. buyer cannot just turn something into an installment K 3. unless the installment is substantially impaired in that installment that cannot be cured, the buyer cannot reject (can still get damages) 4. if the breach with respect to the installment substantially impairs the value of the entire contract can you reject the rest of the contract

Answer 116

1. after the buyer has reasonable opportunity to inspect indicates to the seller that the goods conform to requirements or that she will keep them even though they fail to conform 2. when she fails to make an effective rejection or 3. when she does any act inconsistent with the seller's ownership - contract requires payment upfront: still have opportunity to inspect - buyer rejects but then uses it: this is acceptance - except in the case of a mobile home or RV or something they have to keep using because there is no alternative, then court can be sympathetic

Answer 117

if the buyer accepts, it cannot later reject

Answer 118

requirements: 1. nonconformity substantially impairs the value of the goods to him (whether it would be a substantial impairment to a reasonable person in the buyers position) 2. excusable ignorance of the grounds for revocation or you have relied on the sellers repair replacement clause and it has failed in its essential purpose 3. revocation within a reasonable time after discovery of nonconformity and before any substantial change in the condition of the goods which is not caused by their own defects (normal wear and tear ok)

Answer 119

1. a buyer who rejects or revokes generally must hold the goods for the seller using reasonable care. 2. a merchant buyer must follow any reasonable instruction form the seller if seller has no agent or place of business at the market of rejection or revocation

Answer 120

1. in the absence of an agreement for credit, the buyer must pay cash 2. the buyer can pay be check and 3. seller can refuse the check but if the seller demands cash, the buyer must be given a reasonable amount of time to get it

Answer 121

1. if goods are so defective that a buyer has a right to reject them, the risk of loss remains on the seller until the defects are cured or the buyer accepts the goods in spite of defects 2. if the goods are defective and the buyer rightfully revokes her acceptance, the risk of loss is on the seller to the extent of any deficiency in the buyer's coverage 3. where the seller has identified conforming goods to the contract and the buyer repudiates or otherwise breaches the K before the risk has passed to her, the risk of loss falls on the buyer to the extent of an deficiency in the seller's insurance

Answer 122

if a party's duty to perform is expressly conditional, failure of the condition excuses the duty to perform

Answer 123

if the tender is less than perfect, the buyer can reject the goods and withhold payment, the buyer is excused from paying

Answer 124

1. common law required only substantial performance. if one party to a K substantially performs, the other is required to perform 2. a minor breach by one party, will not excuse the other party 3. only a material breach by one party excuses the other party's performance 4. material breach is the converse of substantial performance

Answer 125

If they materially breach, you have right to not pay, but if they are willing and able to cure in a reasonable time, they have the right and you can deduct damages

Answer 126

ex. paint house for 12K, 5K for outside and 7K for inside, only does one 1. consideration can be broken down into clear and distinct segments and each segment has independent value to the buyer 2. have to pay for the part that was substantially performed but excused from paying the rest

Answer 127

1. if the contract contains an express condition, then strict compliance with that express condition is required and substantial performance is not enough BUT express condition may be excused where disproportionate forfeiture would result if the condition were not excused (the harm to the painter is way worse than to the homeowner) 2. even if a party fails to satisfy an express condition and co cannot recover on the contract that party may be able to recover in quasi contract to prevent unjust enrichment

Answer 128

1. a repudiation is an unequivocal manifestation by one party to the other that: 1. the repudiating party cannot or will not perform the obligation made prior to the time performance is due 2. expression of doubt is not enough 3. anticipatory repudiation by one party to a contract excuses the duty to perform of the other party to the K and gives the party the option to sue right away from damages

Answer 129

1.party is excused from performing and can sue for damages

Answer 130

1. so long as P has not relied on the repudiation, it may be retracted

Answer 131

1. cannot immediately sue for the money, have to wait the time required for the other parties performance

Answer 132

4 types of agreements: 1. modification agreements 2. accord and satisfaction 2. rescission 4. novation ****

Answer 133

1. agreement changing the duties under the contract (not the parties to the agreement) 2. discharge of the original obligations occurs as soon as the new agreement is entered into

Answer 134

1. agreement to accept substituted performance in future satisfaction of a contractual duty, 2. the accord is the new agreement to accept a different performance in order to discharge an existing contractual duty. 3. the satisfaction is the performance of the new agreement 4. the original duty is not discharges until performance of the new agreement, only suspended 5. what is there is accord but no satisfaction, can sue on the original contract (because only suspended0 or on the accord

Answer 135

1. cancellation of duties under the contract, discharge occurs at the time of the new agreement 2. some performance must remain to be done on each side of the contract. if either or both parties have fully performed there is no valid rescission 3. oral rescission is generally ok but what is rescinding a contract that was within the statute of frauds?-generally oral contract still ok with 2 exceptions: involves transferring an interest in land, or if the contract says all rescissions have to be in writing (UCC)

Answer 136

1. substitution of a party 2. immediate excuse 3. it requires the agreement of both parties to the original contract and the new party 4. what if the new party does not perform? the original party is still discharged because they all agreed but in a mere delegation the original party is still liable

Answer 137

triggering facts: 1. post contract occurrence 2. that was not reasonably foreseeable at the time of the contract that was not a risk assumed by a party to the contract 3. that renders performance impossible or commercially impracticable 4. without the fault of the other party seeking to be excused -because it is generally held that failure to cover a foreseeable risk in the contract deprives a party of defenses of impracticability, in real life often contained in a force majeure clause

Answer 138

1. common law: excused 2. a builders duty to construct a building generally is not discharged by destruction of the work in progress (b/c of builders risk insurance) 3. UCC: the destruction of the subject matter excused performance 1. were the goods destroyed the subject matter of the contract? 2. did the buyer have the risk of loss at the time of destruction and 3. how is destruction of some of the goods that are the subject matter to be handled

Answer 139

1. can allocate among customers, but cant force the buyer to take fewer. 2. as long as the allocation is fair and reasonable, the buyer cannot sue the seller for breach 3. if risk of loss already shifted to the buyer, then buyer is responsible for the loss

Answer 140

1. there is a contract, and one party dies, does the estate have to perform? yes if the person is not necessary to the party 2. if the party is necessary to the contract (a boxer breaks his hand, a singer cant sing) if the contract is personal to someone, then it is excused

Answer 141

both sides are generally excused

Answer 142

1. generally a party is losing money on the contract | 2. generally, increased cost alone is an assumed risk

Answer 143

temporarily suspends contractual duties but generally discharge them. 2. when performance becomes possible the duty springs back into existence 3. the duty will not spring back if the burden on either party to the K would be substantially increased or different from that originally contemplated

Answer 144

1. post contract occurrence 2. not foreseeable 3. totally destroys the purpose or value of the contract, the purpose being know to both parties 4. the subject matter is still available, but the purpose is just not there any more (ex. rent an apartment to see a coronation, which gets cancelled, dont have to pay the rest of the money)

Answer 145

1. contract can stipulate damages or method of fixing damages 2. a contract cannot provide for a penalty 3. the actual damages dont really matter, just have to be reasonable at the time that the K was entered into two general tests for determining whether a contract provision is a valid liquidated damages clause or an invalid penalty provision 1. at the time of contract, damages difficult to estimate and 2. at the time of the contract, provision is reasonable forecast of possible damages

Answer 146

generally not recoverable for breach of K

Answer 147

1. generally the injured party is entitles to recover an amount that would put him in as good a position as if the contract had been performed 2. expectation damages

Answer 148

1. land is unique so money damages are usually not enough, they want specific performance 2. if they want money damages 3. buyer: fair market value-contract price 4. the seller gets contract price-fair market value

Answer 149

1. can recover the cost incurred to date plus the profit 2. if the buyer: the amount you have to pay the new builder minus the original contract price 3. just want to put someone in the same position as they would have been if the original k was performed

Answer 150

1. can get the extra cost to replace the employment and may incidental damages 2. but employee can get the full contract price minus avoidable damages

Answer 151

1. can recover incidental damages: cost incurred in a reasonable effort to avoid loss resulting from a breach 2. ex. advertising for the job, storage fees, etc 3. consequential damages: injury to persons or property and lost profits resulting from the breach 4. generally have to be kind of foreseeable damages, have to naturally flow from the conduct or you bring to the attention of the other party 5. minus avoidable damages: an injured party cannot recover damages that could reasonably have been avoided, must make reasonable efforts to mitigate the damages but not expected to take steps that involve undue burden risk or humiliation 6. minus speculative damages: must be established to a reasonable certainty not mathematical accuracy, where plaintiff's expectation damages are too speculative to measure, reliance damages may be recovered

Answer 152

fair market value if perfect - fair market value as delivered

Answer 153

market price at time of discovery of the breach - contract price or replacement price - contract price

Answer 154

contract price

Answer 155

contract price minus market price at the time and place for tender or contract price - resale price resale has to be in good faith lost volume seller: does their supply exceed the demand? if they can get all they want, they can sell 2 instead of 1 so they get the lost profits on the 1st sale there are situations were there is a breach and no damages

Answer 156

1. unclean hands: if the plaintiff is guilty of improper conduct with respect to the same transaction involved in litigation 2. impossibility and hardship: not going to order you to do something you just cant do, or balance the hardship between the p and d 3. laches: where plaintiff has delayed bringing suit and this delay has substantially increased the cost or difficulty of performance by the defendant or it has made it much more difficult for the D to defend

Answer 157

1. generally only get is monetary damages are not adequate | 2. land and other unique goods

Answer 158

1. land contracts and other unique goods 2. you actually get what you wanted, but buyers and seller can get specific performance 3, generally no specific performance unless the goods are unique 4. negative specific performance: cant force you to perform a personal contract but can enjoin them from doing something instead of that performance (ex. cant force a singer to sing in cleveland but can enjoin them from singing elsewhere)

Answer 159

1. the remedy is available where performance duty is excused because of impossibility, impracticability or frustration of purpose. 2. it can also be used where the contract is void or voidable on ground such as mutual mistake

Answer 160

this equitable remedy is used where the agreement was incorrectly recorded and either party can seek equitable remedy

Answer 161

1. when either party to a sale of goods contract has reasonable grounds for insecurity about that other party's performance 2. it may be in writing demand adequate assurance of performance and may if commercially reasonable suspend performance until it receives such assurance 3. if such assurance is not received within a reasonable time not exceeding 30 days, it can be treated as repudiation

Answer 162

1. generally an unpaid seller has no special right in goods it has delivered to the buyer even though it has not yet been paid for the goods 2. the seller can obtain special rights by obtaining an article 9 security interest or by meeting the requirements of section 2-702 under this section: an unpaid seller has the right to reclaim its goods if 1. it is a credit sale 2. the buyer is insolvent when it receives the goods 3. demand for return is made within 10 days of buyers receipt of the goods or within a reasonable time if buyer made false representations of solvency

Answer 163

1. a contracts with b for the benefit of c | 2. insurance policies are a big area here

Answer 164

the person who is to render the performance which will benefit the third party beneficiary

Answer 165

the person bargaining with the promisor for the promisor's performance that benefits the beneificary

Answer 166

1. only the intended beneficiary have the legal rights under a contract 2. to determine you need to look at the promisee: was their purpose to benefit themselves or with the intent to benefit the 3rd party 3. was the 3rd party expressly renovated 4. was performance directly made to the third party 5. does the third party have any rights 6. does the third party have a relationship with the promisee from which one could infer that the promisee wished to make an agreement for the 3rd party benefit

Answer 167

1. a third party is a donee unless it was a creditor of the promisee when the contract was entered into between the promisee and the promisor

Answer 168

1. when the 3rd party brings suit to enforce the promise or 2. when the third party materially changes its position in justifiable reliance on the promisee or 3. when the third party manifests assent to the promise in a manner invited or requested by the parties. if the 3rd party assent to the agreement? 4. can the promisor or promisee modify? until one of the 3 above occurs, can modify exception:a contractual provision saying you can change beneficiaries, that is okay

Answer 169

1. beneficiary can sue the promisor - defenses raised: only raise defenses arising out of the contract with the promisee 2. promisee can sue promisor 3. creditor beneficiary can sue the promisee on the existing obligation between them

Answer 170

1. getting someone else to perform your duties under a K 2. delegating party: the one delegating the duty 3. the delegate: the one to whom the duty is delegated 4. the obligee: the one to whom the duty is owed * *watch out for assignment language, delegate duties, assign rights

Answer 171

1. contract provisions: contract language controls 2. is the contract says no assignments, no delegation either 3. if the contract doesnt say anything: is this the type of thing that can be delegated or not? 4. generally you can delegate unless special skills or special reputation is involved?

Answer 172

1. the obligee's consent is not required | 2. consideration is not required: if there was consideration can normally go against the delegate too

Answer 173

1. delegating party is still liable | 2. delegate is liable to obligee only if he receives consideration from the delegating party

Answer 174

1. with a 3rd party beneficiary, you are adding a person with rights 2. with assignment, you are replacing one person with rights with another person 3. assignor: assigns the rights 4. assignee: the one to whom the rights are assigned 5. obligor: one obligated to may the payment

Answer 175

1. common law rule: assignment cannot substantially change the duties of the obligor 2. assigning a right to a money payment is generally ok 3. performance of service: cannot assign the right to another obligee if it changes the duties 4. output/requirement contracts: good faith variations are ok as long as they are not unreasonably disproportionate to prior requirements so generally assignable

Answer 176

1. does the contract have a clause that merely prohibits assignments or also invalidates assignments 2. they can sue for breach either way, but sometimes it is still enforceable (it took away the right to assign but not the power to do so) 3. if it says it invalidates the assignment: there is no right or power

Answer 177

1. need present assignment language - generally not required to be in writing but wage assignments, interests in land, and assignments or choses in action worth more than 5K and assignments intended as security interests in art. 9 have to be in writing 2. consideration not required but if not given, easily revoked, if given, harder to revoke

Answer 178

1. can sue, 2. defenses raised by obligee: generally any defenses that the obligee has against the assignor can be raised against the assignee 3. modification by the obligor and the assignor, yes until the obligor has received notice of the assignment 4. can the obligor keep paying the assignor? if the obligor makes payment to the assignor before being notified of the assignment, the debt is discharged, but once notice, have to pay assignee

Answer 179

1. when an assignor assign the same rights to the same people 2. gratuitous assignment: such a gift assignment can be freely revoked, directly or indirectly 3. a later gift assignment revokes a prior one, so last in time is entitled to the right 4. not revokable if signed or under seal that is delivered by the assignor or the assignment is accompanied by the delivery of a writing of a type accepted symbol or as evidence of rights assigned 5. gratuitous is irrevocable: to the extent that before the assignee right is terminated 1. the obligator already performed or 2. the assignee has obtained a judgement against the obligor or 3 the assignee has entered into a new contract with the obligor by novation or the assignee has relied on the assignment in a way that is reasonable, foreseeable and detrimental

Answer 180

generally: the first assignee for consideration has priority over all subsequent assignees and over all creditors of assignor notice alone does not give priority exceptions: without notice of the 1st assignee 1. a judgement against the obligor 2. already received payment 3. enter into a new contract with the obligor 4. delivery of a tangible token or writing 5. sets up an estopped against the 1st assignee

Answer 181

1. in an assignment for value the assignor makes certain implied warranties to the assignee 2. the assignor warrants that the rights assigned actually existed and that he will do nothing to impair the value of the assignment 3. basically, the assignor says It wont be his fault if the assignee does not get the money 3. the assignor will not be liable to the assignee simply because the obligor is incapable of performing, the assignor does not warrant what the obligor will do

Answer 182

1. when the P entrusts good to D and the D sells the goods to a good faith purchaser 2. when someone entrusts good to a merchant who deals in goods of the kind, that merchant has the power to transfer all rights of the entrustor to a buyer in the ordinary course. 3. can sue them for conversion still, they have the power not the right