Essay Workshop Flashcards
(93 cards)
1
Q
What are the two types of offers in contract formation?
A
Unilateral and Bilateral
2
Q
What is required for an offer to be valid?
A
A promise, terms, and communication to the offeree
3
Q
What is a unilateral contract?
A
A contract in which the offeror makes a promise and the offeree must perform; can only be accepted by complete performance
4
Q
What is a bilateral contract?
A
A contract in which parties exchange promises; can be accepted by a promise OR by beginning performance
5
Q
What is an irrevocable offer?
A
An offer that cannot be revoked under certain circumstances, such as option contracts or firm offers
6
Q
What are the circumstances under which an offer can be irrevocable?
A
- Option contracts
- Firm offers under UCC
7
Q
What terminates an offer?
A
- Revocation
- Rejection by offeree
- Counteroffer by offeree
- Lapse of time
- Death of the offeror
8
Q
What is the mailbox rule?
A
An acceptance is valid when placed in the mail, unless there is an option contract or firm offer
9
Q
What is consideration in contract law?
A
A bargained-for change in the legal position between parties, requiring legal detriment on both sides
10
Q
What is the preexisting duty rule?
A
A promise to perform a preexisting legal duty does not qualify as consideration
11
Q
What is promissory estoppel?
A
A substitute for consideration that makes a promise binding if certain conditions are met
12
Q
What are the conditions for promissory estoppel to apply?
A
- The promisor should reasonably expect the promise to induce action
- The promise actually induces action or forbearance
- Injustice can be avoided only by enforcement of the promise
13
Q
What are the types of defenses to formation of a contract?
A
- Mistake (mutual and unilateral)
- Misunderstanding
- Misrepresentation
- Undue Influence
- Duress
- Capacity
14
Q
What is mutual mistake in contract law?
A
When both parties are mistaken about an essential element of the contract
15
Q
What is the remedy for mutual mistake?
A
- Reformation
- Rescission if reformation is not available
16
Q
What does the Statute of Frauds require?
A
Certain contracts to be in writing to be enforceable
17
Q
What is the difference between material and minor breach?
A
Material breach significantly impairs the contract, while minor breach does not
18
Q
What are the legal remedies for breach of contract?
A
- Expectation damages
- Consequential damages
- Incidental damages
- Reliance damages
19
Q
What is the UCC’s ‘knock-out’ rule?
A
When a merchant’s acceptance includes different terms from a merchant’s offer, the different terms nullify each other
20
Q
What is a firm offer under UCC?
A
An offer made by a merchant that assures it will remain open in a signed writing for a time not exceeding 90 days
21
Q
What constitutes a valid acceptance?
A
The objective manifestation by the offeree to be bound by the terms of the offer
22
Q
What is required for the acceptance to mirror the offer under common law?
A
The acceptance must match the terms of the offer exactly
23
Q
Is silence generally considered acceptance?
A
No, unless the offeree has reason to believe that silence will constitute acceptance
24
Q
What are express and implied warranties in contract terms?
A
Warranties that guarantee certain qualities or performance levels in a contract
25
What is the parol evidence rule?
Prohibits the introduction of evidence outside the written contract to alter its terms
26
What is the significance of the 'battle of the forms' in UCC?
Applies only if both parties are merchants, affecting how differing terms are treated
27
What is rescission in the context of mutual mistakes?
If reformation is not available, the contract may be voidable if:
* A mistake of fact existed at the time the contract was formed
* The mistake relates to a basic assumption of the contract
* The mistake has a material impact on the transaction
* The adversely affected party did not assume the risk of the mistake
## Footnote
Rescission allows a party to void the contract due to these conditions.
28
Under what circumstances can a mistaken party void a contract?
The mistaken party can void the contract if:
* The mistake would make enforcement unconscionable
* The non-mistaken party failed to disclose the mistake or caused it
## Footnote
This applies in cases of unilateral mistakes.
29
What defines fraudulent misrepresentation?
An intentional misrepresentation of a fact that the innocent party justifiably relies on.
## Footnote
Misrepresentation can be either affirmative (a lie) or through non-disclosure.
30
What is the difference between fraud in the factum and fraud in the inducement?
Fraud in the factum prevents a party from knowing the character or essential terms of the transaction, making the contract void. Fraud in the inducement is used to induce another to enter into a contract, making it voidable if the adversely affected party relied on the misrepresentation.
## Footnote
This distinction is crucial in determining the enforceability of contracts.
31
Define undue influence.
Undue influence occurs when a party unfairly persuades the other party to assent to a contract.
## Footnote
This often happens in relationships where one party is susceptible to persuasion.
32
What constitutes duress in contract law?
Duress occurs when a party is improperly threatened and feels they have no meaningful choice but to agree to the contract.
## Footnote
Contracts can be void if physical harm is threatened or voidable with other forms of duress.
33
What are the conditions under which a party may assert the Statute of Frauds?
The Statute of Frauds applies to contracts involving:
* Marriage
* Suretyship
* Contracts that cannot be performed within one year
* Sale of goods for $500 or more
* Real property
## Footnote
This statute requires certain contracts to be in writing to be enforceable.
34
What is required for a contract to satisfy the Statute of Frauds?
There must be a writing signed by the person to be charged, containing the essential terms of the deal.
## Footnote
Multiple writings can be combined if they reference each other.
35
What exceptions exist to the Statute of Frauds?
Exceptions include:
* Full performance by either party
* UCC Sale of Goods with full performance or part performance
* Sale of Land with at least two of three acts occurring
* Estoppel if a party reasonably and detrimentally relies on a promise
## Footnote
These exceptions allow for enforcement even if the writing requirement is not met.
36
What is an express warranty?
Any promise or description that is part of the basis of the bargain, unless it is merely the seller’s opinion.
## Footnote
Disclaimers that conflict with express warranties are ignored.
37
What is the implied warranty of merchantability?
An implied warranty that goods must:
* Be fit for their ordinary purpose
* Pass without objection in the trade under the contract description
## Footnote
This warranty is always implied when the seller is a merchant.
38
What is substantial performance in contract law?
A party must substantially perform their part of the contract to recover on it, even if full performance has not been rendered.
## Footnote
A delay in performance does not necessarily constitute a failure to substantially perform.
39
What is the Parol Evidence Rule (PER)?
Under the PER, extrinsic evidence of oral or written communications prior to the written contract is generally inadmissible to contradict the contract's terms.
## Footnote
The PER applies only if the writing is integrated, meaning it is intended to be the final agreement.
40
What is an accord and satisfaction?
An accord is a new agreement where a party agrees to accept different performance than what was originally agreed upon. Satisfaction occurs when the different performance is completed, discharging original duties.
## Footnote
This concept is used in resolving disputes over contract validity or amounts owed.
41
What are the types of unconscionability in contract law?
Two types of unconscionability:
* Procedural: Unfair bargaining process
* Substantive: Actual terms of the contract are significantly unfair
## Footnote
Courts may refuse to enforce the entire contract or limit unconscionable terms.
42
What is the right to cure in UCC contracts?
If a buyer rejects goods as nonconforming and time remains to perform, the seller has the right to cure and tender conforming goods.
## Footnote
This right helps ensure that sellers can correct mistakes before a breach occurs.
43
What does the term 'installment contract' mean?
An installment contract is defined as one in which the goods are to be delivered in multiple shipments.
## Footnote
This structure allows for staggered deliveries rather than a single shipment.
44
What is the buyer's right if the tender or goods are nonconforming?
The buyer has the right to accept or reject all or part of the goods.
## Footnote
This is based on the Uniform Commercial Code (UCC) principles regarding nonconforming goods.
45
What is the 'right to cure' in contract law?
If a buyer rejects goods as nonconforming and time remains to perform, the seller has the right to cure and tender conforming goods.
## Footnote
This allows sellers to correct defects before being deemed in breach.
46
What defines an installment contract?
An installment contract is one in which goods are delivered in multiple shipments, with each shipment accepted separately by the buyer.
## Footnote
Payment is due upon each delivery unless the price cannot be apportioned.
47
Under what conditions can a buyer reject a nonconforming segment in an installment contract?
The buyer can reject if the nonconformity substantially impairs the value of that shipment to the buyer and cannot be cured.
## Footnote
If the seller assures that the nonconformity can be cured, the buyer must accept the shipment.
48
What is a condition in contract law?
A condition is a future event that must occur before a party's contractual rights or obligations are created, destroyed, or enlarged.
## Footnote
If a condition is not met, there may be no contract at all.
49
What is the difference between an express and an implied condition?
Express conditions are stated in the contract, while implied conditions exist because the nature of the contract suggests they were intended.
## Footnote
Courts may infer implied conditions based on context.
50
What is a condition precedent?
A condition precedent must occur before the other party has an obligation to perform.
## Footnote
It is essential for triggering contractual duties.
51
What is a condition subsequent?
A condition subsequent is one that, if it occurs, will excuse the duty to perform.
## Footnote
It effectively cancels the obligation if the condition is met.
52
What is the standard of performance for express conditions?
Express conditions must be met fully.
## Footnote
Failure to meet them results in breach.
53
What is the standard of performance for implied conditions?
Implied conditions require substantial performance.
## Footnote
This allows for minor deviations without breach.
54
What does waiver mean in the context of conditions?
A waiver occurs when a condition may be excused by the words or conduct of the parties involved.
## Footnote
The waiving party then has a duty to perform.
55
What is wrongful interference in contract law?
Wrongful interference occurs when one party hinders the other party's performance, excusing the condition and imposing a duty to perform on the interfering party.
## Footnote
It prevents one party from benefiting from their interference.
56
What is estoppel in relation to conditions?
Estoppel prevents a party from enforcing a condition if they indicated they would not enforce it and the other party reasonably relied on that indication.
## Footnote
This protects parties from surprise enforcement.
57
What discharges a promisor's duty to perform due to impracticability?
A duty may be discharged if an unforeseeable event occurs, making contract performance extremely difficult, and the nonoccurrence of the event was a basic assumption at the time of the contract.
## Footnote
The party seeking discharge must not be at fault.
58
What is impossibility in contract law?
Impossibility occurs when an unforeseeable event makes it objectively impossible for a party to perform.
## Footnote
This is a valid defense for not performing a contract.
59
What is frustration of purpose?
Frustration of purpose occurs when an unexpected event destroys the party's purpose for entering the contract, allowing rescission even if performance is possible.
## Footnote
The event must have been a basic assumption of the contract.
60
What is a third-party beneficiary contract?
A third-party beneficiary contract is one where the parties intend for the performance to benefit a third person not party to the contract.
## Footnote
Intended beneficiaries can enforce the contract, while incidental beneficiaries cannot.
61
What can be assigned in a contract?
Almost all contract rights can be assigned, except when they materially increase the duty or risk of the obligor or materially reduce their chance of obtaining performance.
## Footnote
This ensures the obligor's expectations are not unfairly altered.
62
What is delegation of duties in contract law?
Obligations under a contract can generally be delegated, but the delegator remains liable if the delegatee does not perform.
## Footnote
Novation is required for the delegator to be released from liability.
63
What constitutes a breach of contract?
A breach occurs if a duty to perform exists and has not been discharged.
## Footnote
It can be material or minor depending on the extent of non-performance.
64
What is anticipatory breach or repudiation?
Anticipatory breach occurs when a promisor indicates it will not perform before the performance is due.
## Footnote
The nonbreaching party has several options, including suing immediately.
65
What are the options for a nonbreaching party upon anticipatory breach?
The nonbreaching party can:
* Treat the repudiation as a breach and sue immediately
* Suspend its own performance
* Cancel the contract
* Wait for the performance date and then sue
## Footnote
These options allow flexibility in response to the breach.
66
What is the perfect tender rule under UCC?
The perfect tender rule states that a seller's goods must conform exactly to the contract specifications.
## Footnote
This rule emphasizes the importance of quality and specifications in sales contracts.
67
What are expectation damages?
Expectation damages are calculated by comparing the value of performance without the breach to the value with the breach.
## Footnote
They aim to fulfill the nonbreaching party's expected benefits.
68
What are consequential damages?
Consequential damages are reasonably foreseeable damages related to the breach, such as lost profits.
## Footnote
They require foreseeability, causation, and certainty.
69
What are reliance damages?
Reliance damages are incurred in reasonable reliance on the promise that the other party would perform.
## Footnote
A party must choose between reliance and expectation damages.
70
What are incidental damages?
Incidental damages arise when the nonbreaching party tries to remedy the breach, such as costs of finding a replacement seller.
## Footnote
They are often recoverable in breach cases.
71
What is the duty to mitigate damages?
The nonbreaching party has a duty to avoid or mitigate damages by taking reasonable steps to seek replacements or substitutes.
## Footnote
Failure to mitigate can reduce the recoverable damages.
72
What is restitution in contract law?
Restitution allows parties to recover damages under an unjust enrichment theory, based on the reasonable value of benefits conferred.
## Footnote
It applies to both nonbreaching and breaching parties under certain conditions.
73
What must the nonbreaching party seek in case of a breach?
Expectation damages
## Footnote
Expectation damages are meant to put the nonbreaching party in the position they would have been in had the contract been performed.
74
What are restitution damages based on?
The reasonable value of the benefit conferred on the other party
## Footnote
Restitution damages aim to prevent unjust enrichment.
75
What happens if a party has not substantially performed?
It will be in breach of contract and cannot recover under the contract.
76
What can a breaching party recover if the nonbreaching party has benefited from its performance?
The benefit conferred minus the damages the nonbreaching party is entitled to.
77
Under what conditions may a court award restitution damages based on quasi-contract?
If:
* The plaintiff conferred a measurable benefit on the defendant
* The plaintiff acted without gratuitous intent
* It would be unfair to let the defendant retain the benefit.
78
What is a typical fact pattern for seeking specific performance?
A seller who refuses to sell land or unique goods to the buyer.
79
What is required for a court to grant specific performance?
The following five elements must be met:
* Valid contract
* Terms must be clear
* Nonbreaching party has satisfied conditions precedent
* Money damages are inadequate
* Feasible for the court to enforce performance.
80
What types of contracts will courts not require specific performance for?
Service contracts (e.g., employment) due to enforcement issues.
81
What are the two defenses that can prevent specific performance?
Laches and unclean hands.
82
What does laches refer to in the context of specific performance?
The nonbreaching party waited an unreasonably long time to seek specific performance.
83
What is the buyer's remedy under the UCC if the seller fails to tender the goods?
Several alternative remedies including:
* Damages
* Cover
* Specific performance.
84
What does the buyer recover as damages under the UCC?
Market price minus the contract price.
85
What right does a buyer have when receiving non-conforming goods?
The right to accept or reject all or part of the goods.
86
What must a buyer do to validly reject goods?
Give notice to the seller within a reasonable time before acceptance.
87
What is the seller's right if the buyer rejects a tender?
The seller has the right to cure the defective tender.
88
How can a buyer accept goods under the UCC?
By expressly stating acceptance, using the goods, or failing to reject the goods.
89
Under what conditions can a buyer revoke acceptance of goods?
If there is a defect that substantially impairs value and the buyer accepted on reasonable belief of cure or without discovering the nonconformity.
90
What damages is a seller entitled to if the buyer wrongfully rejects a tender?
Incidental damages and one of three alternative remedies.
91
What is one remedy a seller has if the buyer wrongfully rejects a tender?
Collect damages, which is the contract price minus the market price at the time and place for tender.
92
What must a seller do if they wish to resell goods in a private sale after a wrongful rejection?
Give the buyer reasonable notice of intent to resell.
93
When can a seller recover the price after rejection?
If the seller is unable to sell the goods at a reasonable price after a reasonable effort.
