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Flashcards in Contracts - Wrongs Deck (40):

When is acceptance of an option contract effective?

(1) Upon receipt of the acceptance.
(2) The normal mailbox rule does NOT apply


Under the UCC, is an acceptance with additional or different terms effective?

Yes, unless the offeree expressly makes his acceptance conditional on assent by the offeror. If acceptance is truly conditional, then this is a rejection and counteroffer.


How doe the preexisting duty rule apply to UCC contracts?

Under UCC contracts, all that is needed for a modification to an existing contract is good faith and fair dealing. (no consideration required)


How is the Statute of Frauds satisfied for goods priced at $500?

(1) Through written contract, or
(2) If both parties are merchants, a confirming memo sent without objections for 10 days satisfies as well


What is the result of a request for "prompt shipment" of goods? (3)

(1) Acceptance by shipment of either conforming or nonconforming goods
(2) Buyer may reject nonconforming goods and sue for damages, or
(3) Buyer may accept nonconforming goods, notify seller of breach, pay contract price, and seek damages.


When do a 3rd Party beneficiary's rights vest?

(1) 3rd party manifests assent in a manner invited or requested by the parties, or
(2) it learns of contract and detrimentally relies on it, or
(3) it brings suit to enforce its rights


How does the Parol Evidence Rule apply to an alleged condition precedent to contract formation?

(1) Parol evidence is admissible to show a condition precedent to the existence of a contract.


What are the rules regarding revoking assignments?

(1) Gift assignments are freely revocable
(2) assignments for consideration are not freely revocable


What is the recovery for breach following partial performance in a service contract?

(1) Value conferred minus damages from breach.


Are price quotations in response to a specific inquiry typically deemed offers?

Yes, price quotations may be considered as offers if given in response to a specific inquiry.


When does an acceptance of an option contract become effective?

(1) upon receipt
(2) the mailbox rule does not apply to option contracts


What are a buyers options when nonconforming goods are delivered?

(1) accept all
(2) Reject all
(3) accept some and reject the rest


May a seller of goods refuse to deliver except for cash?

Yes. If a buyer is insolvent, the UCC permits the seller to refuse to deliver except for cash, including payment for all goods previously delivered under the contract.


What is required for a one-sided modification of a sale of goods contract?

No consideration. Just good faith.


What effect does rescission have on the parties?

Puts the parties in the position they would have been if the contract never happened.


Are subcontractors submitting bids to a contractor allowed to withdraw their offer (bid)?

A bid like this is binding as an option contract when the contractor reasonably relies to form his own bid.


In a unilateral contract case, what must a rescission promise be supported by?

(1) an offer of new consideration,
(2) elements of promissory estoppel, or
(3) the offeree's manifestation f an intent to make a gift of the obligation owed her.


Is the right to receive goods under a requirements contract assignable?

(1) Generally no, because the obligor's duties could change significantly.
(2) But, the UCC allows assignment of requirement contracts if the assignee acts in good faith not to alter the terms of the contract.


What types of contractual duties are nondelegable?

(1) Duties involving personal judgment, or
(2) special skills


What can take a real estate sales contract out of the realm of the Statute of Frauds?

Under the partial performance doctrine, conduct that unequivocally indicates that the parties have contracted for the sale of land will take the contract out of the Statute of Frauds.


What is required for a disclaimer of implied warranties to be effective?

(1) The disclaimer must be part of the offer and acceptance process or must be agreed to by the buyer as a modification.


What is the rule of a rejection is mailed first, then an acceptance?

Mailbox rule does not apply - whichever is received first controls.


What is the modern view regarding contract modifications without additional consideration following unanticipated circumstances?

The modern view is that a modification is enforceable without consideration if it is fair and equitable in view of the unanticipated circumstances.


In MBE fact patterns, what should "payment in full" on a check for less than the contract price tip you off to?

An accord and satisfaction situation.


If there is a bona fide dispute as to the amount owed, and one party cashes a check marked "payment in full," what is the likely effect?

Accord and satisfaction of the contract obligations.


Does payment of a smaller sum than do be sufficient consideration for a promise by the creditor to discharge the debt?

Generally no, unless there is a bona fide dispute as to the amount owed, then a smaller payment may constitute accord, and accepting the payment may constitute satisfaction.


If there is an option agreement made without consideration, what is it really?

A revocable (or acceptable) offer. Look for acceptance prior to the expiration of the offer or revocation by the offeror.


What is the effect of notice to the obligor of an effective assignment?

(1) Assignee alone is entitled to performance under the contract
(2) Obligor is bound to render performance to the assignee


What must a buyer do to properly reject some delivered nonconforming goods?

(1) Pay for those that he accepts
(2) seasonably notify the seller of any rejection due to defects


What is the acceptance of an option contract effective?

(1) Upon receipt
(2) Mailbox rule does not apply


Under the Statute of Frauds, what are the essential terms for sale of land (must be included)?

(1) Price
(2) identification of the land


What is an implied contract in fact?

Contract formed by manifestations of assent other than oral or written language (i.e. conduct)


When does an option contract not need consideration to be enforceable?

Under Article 2:
(1) if a merchant
(2) offers to buy or sell goods in a signed writing, and
(3) the writing gives assurances that it will e held open (for up to three months)


When does the mailbox rule not apply? (4)

(1) Option contracts (acceptance upon receipt)
(2) Offer states that acceptance effective upon receipt
(3) Offeree sends rejection first, then sends acceptance (whichever arrives first controls)
(4) Offeree sends acceptance, then rejection, and rejection arrives first and offeror detrimentally relies on it


When is a revocation of an offer effective?

Upon receipt.


What is the effect of unforeseen circumstances that create impracticability?

Modern view is that the contract can be modified without consideration, or parties may be discharged from performance.


What are the exceptions to the Statute of Frauds writing requirement for sale of goods at $500 or more?

(1) Specially manufactured goods that have been substantially started
(2) Admissions in pleadings or court
(3) Payment or delivery (and acceptance) of goods
(4) Written conformation memo


What is the timing requirement for a proper disclaimer of warranty for sale of goods?

To be effective, a disclaimer of warranty or limitation on remedies must be agreed to during the bargaining process.


What is the most common rule on whom warranties extend to?

Most states extend seller's warranty to any natural person who is in the family or household of the buyer or who is a guest in the buyer's home if it is reasonable to expect that the person may be affected by the goods and that person suffers personal injury because of the breach of warranty.


In the modern view (and on MBE) what are the requirements for binding modification without consideration?

(1) modification due to unanticipated circumstances, and
(2) modification is fair and equitable