Contracts Rule Statements

Question 1

UCC Perfect Tender Rule

Answer 1

Requires perfect goods, and perfect delivery.

Question 2

Capacity Defense Guardianships

Answer 2

Individuals under guardanship lack the capacity to form a contract, and any purported contract they enter into is void.

Question 3

UCC requirement for formation

Answer 3

Quantity of Goods

Question 4

UCC requirement for Modification

Answer 4

Good faith modification

Question 5

Predominant purpose test

Answer 5

Determination of the “universe” a contract falls under depends on the primary reason for contracting

Question 6

Divisible Contracts

Answer 6

Contracts divided into two or more “mini contracts” are each governed by the universe they fall into individually.

Question 7

UCC Merchant Rules

Answer 7

Merchants Firm offer
Battle of the Forms
Implied warranty of merchantability
Statute of Frauds
Risk of Loss

Question 8

Offer

Answer 8

Manifestation of a willingness to enter a contract that creates the power of acceptance in the offeree.

Question 9

Common Law Offer

Answer 9

Must include all essential terms

Question 10

UCC Offer

Answer 10

Fills in the gaps other than the quantity of goods

Question 11

Merchant’s firm offer

Answer 11

A written, signed, and irrevocable offer that lasts until a reasonable time has passed or offer terms expire.

Question 12

Termination of a K

Answer 12

Revocation
Rejection
Lapse
Operation of Law

Question 13

Mirror Image RUle

Answer 13

Common law rule of acceptance, any conditions on acceptance create a counteroffer.

Question 14

Mailbox Rule

Answer 14

Acceptance is valid upon deliveree, unless explicitly stated otherwise.

Question 15

Battle of the Forms Between Merchants

Answer 15

New terms control if: 1) don’t alter the deal; 2) original offer didn’t limit acceptance to its term; and 3) offeror doesn’t reject.

Question 16

Consideration

Answer 16

A bargained for legal detriment.

Question 17

Common Law Modification

Answer 17

typically requires new consideration unless: 1) change in performance; 2) third party promise; or 3) excuse from performance.

Question 18

Statute of Frauds Categories of Coverage

Answer 18

Marriage, Less than a year, Real Estate, Exector, good $500+, and surety

Question 19

Statute of Frauds

Answer 19

Requirement that certain contracts be made in writing, include essential terms, and be signed.

Question 20

Defenses to Formation

Answer 20

Mistake
Unconscionability
Undue influence
Duress/Fraud/Misrepresentation
Illegality
Incapacity
Impracitability

Question 21

Mistake

Answer 21

Belief at the time of contracting that is not in accordance with a present fact.

Question 22

Undue Influence

Answer 22

arises when a party puts intense pressure on another, susceptible party.

Question 23

Categories of Incapacity

Answer 23

Minors, Mentally Ill, and Extremely Intoxicated (during formation) recission

Question 24

Discharge of Contract based on unforeseeable events

Answer 24

Frustration of purpose, Impossibility, Impracticability, Novation, Accord, and Satisfaction recission.

Question 25

Frustration of Purpose

Answer 25

Outside event undermines the purpose of the contract

Question 26

impossibility

Answer 26

outside event renders the ability to perform impossible

Question 27

impracticability

Answer 27

Available if: (1) an unforseen event occurs; (2) the non-occurrence of which was a basic assumption of the K; (3) the party seeking discharge was not at fault.

Question 28

Novation

Answer 28

Substitution of an old contract for a new one, where the original promisor is released from their promise under the original K.

Question 29

Accord and satisfaction

Answer 29

Parties to a contract agree to accept an alternate form of performance.

Question 30

Right of Reassurance - UCC

Answer 30

parties with reasonable insecurities of the other sides ability to perform may seek reassurance.

Question 31

Misrepresentation

Answer 31

An untrue representation of fact that requires proof that (1) the misrepresentation was made knowingly with intent to mislead; (2) misrepresentation induced assent to the K; and (3) the adversely affected party justifiably relied upon the misrepresentation.

Question 32

CL Substantial Performance rule

Answer 32

A party that has substantially performed on the contract may receive some payment.

Question 33

UCC Perfect Tender Rule

Answer 33

Requires perfect goods and perfect delivery

Question 34

UCC Revocation of Acceptance

Answer 34

Buyer may revoke acceptance of goods if a defect is discovered within a reasonable time.

Question 35

Sellers right to cure UCC

Answer 35

if time is left on the contract or the seller had reasonable grounds to believe that buyer would accept a replacement, then the buyer must give a chance to cure.

Question 36

Expectation Damages

Answer 36

Non-breaching party receives the benefit of the bargain.

Question 37

Expectation Damages

Answer 37

The non-breaching party receives the benefit of the bargain.

Question 38

Consequential Damages

Answer 38

Losses unique to this particular plaintiff.

Question 39

Duty to Mitigate

Answer 39

Non-breaching party has duty to mitigate potential damages

Question 40

Incidental Damages

Answer 40

Damages awarded for commercially reasonable expenses incurred because of the breach.

Question 41

Anticipatory repudiation

Answer 41

Applicable when a promisor clearly and unequivocally repudiates a promise before promise is due

Question 42

Non-Breaching Party's options during ARep

Answer 42

1. Assume Breach and Sue (unless you are only waiting on payment) 2. Wait and see

Question 43

What is required of a SOF covered writing?

Answer 43

1: signature of party to be charged 2: essential elements of the deal.

Question 44

Parol Evidence Rule

Answer 44

Generally prevents parties to a K from presenting prior or contemporaneous extrinsic evidence that contradicts or is inconsistent with the terms of the K.

Question 45

When can Parol evidence be admitted?

Answer 45

1: Clarify ambiguities 2: Prove a condition precedent 3: establish a defense to formation

Question 46

Assignment of Rights

Answer 46

COntract rights are generally assignable unless the assignment materially increases the duty or risk of the obligor or materially reduces the obligors change of obtaining performance.

Question 47

Delegation of Duty under Assignment

Answer 47

Delegator is not released from liability and recovery unless the other party agrees.

Question 48

Unconscionability

Answer 48

Requires extreme unfairness by an objective standard for both procedural and substantive unconscionability.

Question 49

Unilateral Mistake

Answer 49

A mistake made by one of the parties about a material aspect of the K, voidable if the mistaken party did not bear the risk of mistake.

Question 50

Gift Promises

Answer 50

Genearlly not a K for lack of consideration

Question 51

Failure to mitigate

Answer 51

Defendant bears the burden of proving failure, and potential mitigation must be reasonably similar to the original K.

Question 52

Lost Volume Profits Damages

Answer 52

If a buyer breaches and seller is a retailer who often sells that type of product, they can seek expectation damages even if the seller sold that product earmarked for sale under the breached K.

Question 53

Incomplete Performance Damages

Answer 53

Expectation Damages = K Price - Amount Paid - amount that would be needed to finish K.

Question 54

Diminution in value

Answer 54

difference in value between the product received and the product provided.

Question 55

Economic Waste

Answer 55

If the performing party breaches and the buyer party hires a new performing party, the breaching party must cover the difference.

Question 56

Consequential Damages

Answer 56

Relates to losses unique or special to a particular plaintiff, potential damages must be known by breaching party at outset of K.