Contracts Final Flashcards
(38 cards)
Statute of Frauds
a contract for sale of goods for price of $500 or more is not enforceable unless there is some writing sufficient to indicate that a contract for sale has been made between parties and is signed by the party against whom enforcement is sought
Parol Evidence Rule Reason
Prevents parties to a written contract from presenting evidence of terms that may contradict or modify the contract
Parol Evidence Analysis
- is there a writing?
- is it partially integrated? (parties intended for writing to represent the final expression of one term); if yes, then consistent evidence is admitted and inconsistent is excluded
- is it completely integrated? (intend for it to be exclusive and final expression); if yes, then no evidence within scope of contract is admitted
Parol Evidence Exceptions
- establish grounds for recession
- determine whether agreement is integrated
- ambiguous terms (context JDX vs. Plain meaning JDX)
- evidence of separate (collateral) agreements
- evidence after date of writing
Implied Warranty of Merchantability
unless excluded or modified, a warranty that goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind
Implied Warranty of Fitness for a Particular Purpose
where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller’s judgment to select or furnish suitable goods, there is an implied warranty that the goods shall be fit for such purpose
Express Warranties
a. an explicit promise or guarantee by the seller that goods will have certain qualities
b. any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates and express warranty that the goods shall conform to the affirmation or promise
Mutual Mistake
- mistake (of fact) of both parties
- basic assumption
- material effect (party must show that resulting imbalance in the agreed exchange is so severe that he cannot fairly be required to carry it out
- contract is voidable unless he bears the risk of mistake
Unilateral Mistake
- mistake (of fact) of one party
- basic assumption
- material effect on agreed exchange of performances
- contract voidable if he does not bear risk of the mistake under the rule and effect of mistake is such that enforcement of the contract would be unconscionable or the party had reason to know of mistake or his fault caused the mistake
When Party Bears Risk of Mistake
- Agreement of parties (risk allocated by agreement)
- Conscious ignorance (aware at time of contract that only has limited knowledge & treats it as sufficient)
- Allocation by the court (risk allocated by the court)
Misrepresentation
a. Misrepresentation of fact not opinion
b. silence when half-truths, actively conceal fact, or if there is duty to disclose
c. fraudulent or material
d. which induced assent of aggrieved party
d. aggrieved party relied on misrepresentation
e. they were justified in relying on it
Fraudulent (misrepresentation)
maker knows it is false or maker does not have a basis for the representation/opinion
Material (misrepresentation)
representation is likely to induce a reasonable person to manifest assent or maker knows the representation is likely to induce this specific person to assent, even though a reasonable person would not assent
Duress
a wrongful threat that induces a party to agree to a contract or contract modification
Can be shown by proof of threat of serious physical injury or death, or proof of threat to do something that would cause the victim to suffer financial loss
Unconscionability
a. deal seems unfair or one sided
b. deal includes rules relating to: infancy, mental incapacity, undue influence, duress, fraud, misrepresentation, bad faith & mistake
Contracts Against Public Policy
Court must find that a valuable societal interest exists and that enforcement of this contract will materially harm that interest, directly or indirectly
Conditions
Can be express or implied; precedent (gives rise to legal duties) & subsequent (extinguishes legal duties)
Express Conditions
Strict compliance for express conditions (Brown)
Excuses for Conditions: Forfeiture
occurs when party has relief on the bargain and insistence on strict compliance with the conditions cause him to fail to receive the expected benefits from the deal
Excuses for Conditions: Waiver
something does/says to indicate to a party that they no longer have to do it
Excuses for Conditions: Estoppel
someone tells party that the rule no longer applies and party relies on this
Substantial Performance/Material Breach Factors
- deprivation of benefit
- adequacy of compensation
- degree of forfeiture
- likelihood of cure
- good faith and fair dealing
Excuses from Performance: Impossibility
performance under contract become literally, objectively impossible because circumstances arise after contract formation that were beyond control of the parties
Excuses from Performance: Impracticability
where, after contract is made, party’s performance is made impracticable without his fault by occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made, his duty to render the performance is discharged, unless the language or the circumstances indicate the contrary