Contracts MBE Flashcards
(95 cards)
1
Q
Formation
A
1) Offer 2) Acceptance 3) Consideration
2
Q
Offer
A
Outward manifestation of intent to enter into a contract, Intent AND Specific terms
3
Q
Ads
A
Not an Offer, “Invitation to an Offer”
4
Q
Termination of an Offer
A
Death, Lapse of Time, Rejection, Counteroffer, Revocation
5
Q
Direct Revocation
A
Retraction of an Offer by the offeror
6
Q
Indirect Revocation
A
Person receiving Offer LEARNS another deal was made
7
Q
Revocable
A
Offers are revocable, only 3 instances when it is not
8
Q
Option Contract
A
1) Promise of keep offer open 2) additional consideration
9
Q
UCC Firm Offer
A
1) Merchants 2) signed by Merchant Can only stay open for 3 months
10
Q
Unilateral
A
promise for an act
11
Q
Common Law Mirror Image Rule
A
Acceptance must mirror the Offer
12
Q
How to Accept an Offer
A
Silence • Performance • Mail
13
Q
Common Law Mailbox Rule
A
Acceptance is effective when SENT
14
Q
Mailbox Exception
A
• If a Rejection is sent first, then an Acceptance is sent, whichever arrives first wins
15
Q
UCC Acceptance
A
Acceptance is construed liberally Exceptions • Material change the terms of contract • Objection to the change of a term in a reasonable amount of time • Offer limits the Acceptance
16
Q
Consideration
A
Bargained-for Exchange You will never have insufficient consideration because of the amount, even a peppercorn is enough
17
Q
Illusory Promise
A
Party making the Offer retains control
18
Q
Gifts
A
Promise to give a gift is NOT valid Consideration
19
Q
Past or Moral Consideration
A
Is NOT valid Consideration
20
Q
Promise to pay debt barred by Statute of Limitations
A
Is valid Consideration
21
Q
Promise to pay debt discharged by bankruptcy
A
Is valid Consideration
22
Q
Forbearance to sue
A
Promise not to sue • Is valid Consideration
23
Q
Promissory Estoppel
A
Detrimental Reliance
24
Q
Accord & Satisfaction
A
Must have been disputed
25
Age
A contract with a minor is VOIDABLE at option of minor
26
Mental Illness
VOID
27
Duress
Wrongful threat VOID
28
Undue influence
Uneven bargaining position
29
Unconscionability
Result itself will be unfair
30
Illegal
Unenforceable
31
Unilateral Mistake
One party is mistaken Generally, not a defense unless: 1) Other party knew of mistake 2) Clerical error
32
Mutual Mistake
Both parties mistaken about material term • Remedy: Rescission
33
Intentional Misrepresentation
Knew/should have known of falsity with intent to induce reliance
34
Negligent Misrepresentation
Causes the innocent party to detrimentally rely
35
Non-Compete Clauses
Reasonable under the circumstances To determine if a non-compete clause is reasonable, look for facts that indicate how long you can't compete and the geographic area restrictions
36
Statute of Frauds
Certain contracts must be in writing Remember MYLEGS - Marriage, Contract cannot be performed in one Year, Land, Executor, Guarantor/Surety, Sale of goods of $500 or more
37
Part Performance Exception
A showing of 2 out of 3: 1) Some payment, 2) Possession of land , 3) valuable improvements
38
Guarantor/Surety Exception
1) Look to main purpose/motive 2) If self-serving, contract does NOT need to be in writing
39
Sale of goods of $500 Exception
1) Partial Performance will take contract out of SOF ͉ 2) Merchant Confirmation: • Confirmation signed by sender • Includes the quantity • No written objection within 10 days
40
Legal Writing
1) Parties 2) Subject matter 3) Material terms 4) Signed by party to be charged
41
Final/Complete Integration
Parol Evidence is NOT admissible
42
Merger Clause
Final agreement between the parties Parol Evidence is NOT admissible
43
Exception to Final/Complete Integration
• Terms added to clear up an ambiguity
44
Partial Integration
Parol Evidence IS admissible
45
Parol Evidence IS admissible to show
Fraud • Mistake • Duress • Condition precedent • Course of dealing • Trade custom
46
Non-Carrier Case Seller is a merchant
risk on seller until buyer takes possession
47
Seller is a nonmerchant
risk on seller until goods are tendered to buyer
48
Shipment Contract
Risk of loss shifts to buyer when goods delivered to CARRIER
49
Destination Contract
Risk of loss shifts to buyer when goods delivered to DESTINATION
50
FOB SELLER
is a Shipment Contract
51
FOB "ANYTHING ELSE"
is a Destination Contract
52
Requirements Contract
Buy all the widgets • Key word: good faith
53
Common Law Modification
New consideration is needed
54
UCC Modification
No new consideration, good faith needed Clauses prohibiting oral modifications are valid
55
Mutual Modification
1) Both parties agree to modify the original terms 2) "Fair and reasonable under circumstances"
56
Condition Precedent
event happens prior to performance of K
57
Condition Concurrent
event occurs at time of performance of K
58
Condition Subsequent
event occurs after the K
59
Conditions Excused
• Waiver • Bad faith • Avoiding forfeiture
60
Time is of the Essence
Time is NOT of the Essence unless stated
61
Non-Conforming Goods Buyer's Rights
May reject May accept May reject in part & accept in part
62
Seller's Right to Cure
1) Seller had reasonable grounds to believe the goods would be acceptable 2) By notice + new tender within time for performance
63
Installment Contract
Delivering goods in several different shipments
64
Non-Conforming Installment Contract
Defective shipment cannot be rejected if the defect can be cured
65
Impracticability
Unforeseen event makes performance too difficult/expensive
66
Impossibility
No one can perform
67
Frustration of Purpose
The core reason for K is no longer present
68
Anticipatory Repudiation
1) Before contract performance 2) One party UNEQUIVOCALLY refuses to perform
69
Demand Assurances
Demand when doubtful about performance Party must respond in a reasonable amount of time
70
UCC Assurances
Demand must be in writing
71
Retraction of Repudiation
Party can retract unless • The other party has sued • The other party has accepted the repudiation • The other party has relied on the repudiation
72
Legal Remedy
Money damages
73
Expectation Damages
Put plaintiff in position if K had been performed "Foreseeable with reasonable certainty" Formula - Expectation Damages: (K price) - (Money received/saved) + (Costs)
74
Reliance Damages
Put plaintiff in position he would have been prior to K
75
Restitution
Getting back any value you already gave Contract PARTIALLY performed Measured by market value of the services
76
Consequential Damages
Foreseeable costs because of breach
77
Liquidated Damages
Determined at time of contract Enforced if reasonable Not a penalty
78
Unjust enrichment
The Breaching Party can recover: (Reasonable value of services) - (Damages incurred)
79
UCC Seller Damages
If Buyer breaches, Seller can recover: Goods Delivered & Accepted = (K price) Some/None goods Delivered = (K price) - (Market price) Goods Resold = (K price) - (Resale price) Additionally, Incidental Damages
80
Lost Volume Seller
Seller can sell as many widgets as possible
81
Lost Profits
(Expected profit) + (Costs) - (Payment for resale)
82
UCC Buyer Damages
If the Seller breaches, Buyer can recover: Purchased replacement goods = (K price) - (Cost of new goods) NO replacement goods = (K price) - (Market price at time of breach) (Incidental/Consequential Damages) - (Expenses saved)
83
Equitable Remedies
Recoverable when remedy at law is inadequate
84
Specific Performance
Court will make a party perform For UNIQUE items Land is always unique
85
Injunction
To "prevent irreparable harm"
86
Rescission
No meeting of the minds • Mistake • Misrepresentation • Duress • Lack of capacity
87
Third Party Beneficiary
Two people have a valid K Third party will benefit from K
88
Incidental Beneficiary
Third party who incidentally benefits from K NEVER has rights under K
89
Intended Beneficiary
Original parties intend to benefit a third party MAY have rights under K
90
3rd party Rights VEST When
1) Third party is informed of rights & accepts OR 2) Third party learns of rights & relies
91
If Rights Have Vested
Third party has same rights & defenses as original parties
92
Assignment & Delegation
Two people have a valid K One party transfers obligation to someone else • Assignments & Delegations are VALID require "present intent to transfer"
93
Novation
A release of the original party from the K
94
Anti-Assignment Clause
1) The Assignment is still VALID, but 2) The original party liable for money damages
95
Anti-Assignment Exceptions
1) Not valid if it would MATERIALLY ALTER RISK of performance 2) Unique or Personal Service K cannot be transferred
