export_mbe contracts

Question 1

Are changed terms in an acceptance a counteroffer?

Answer 1

Yes outside of UCC.
If you’re dealing with goods , the terms are an acceptance UNLESS 1) the offer was expressly limited to its own terms; 2) the offeror objects within a reasonable time; or 3) the new terms “materially alter” the contract.

Question 2

What are liquidated damages?

Answer 2

Liquidated damages are damages whose amount the parties designate during the formation of a contract for the injured party to collect as compensation upon a specific breach (e.g., late performance).

Question 3

For a liquidated damages provision to be upheld by a court, what two conditions must be met?

Answer 3

1. The damages that are anticipated by a possible breach must be difficult to prove or uncertain (if damages can be anticipated with some certainty, LD provision is unenforceable)
2. The amount chosen for the provision must be a reasonable estimate of losses to be expected from a breach.

Question 4

Is consideration required to support modification of a sale of goods contract?

Answer 4

NO. The UCC does NOT require consideration to support modification of a sale of goods contract. There is NO pre-existing duty rule in the UCC because good faith modifications are enforceable without consideration.

Question 5

Under unilateral contracts, when is the offeror bound?

Answer 5

Under unilateral contracts, the offeror is bound ONLY when the offeree completes performance.

Question 6

Under unilateral contracts, when is the offeree bound?

Answer 6

Under unilateral contracts, the offeree is never bound to perform because she has never promised to do so. However, she will not be entitled to the benefits of the offeror’s promise unless and until she performs as required.

Question 7

Are third party beneficiaries of unilateral performance entitled to enforce a unilateral K?

Answer 7

NO because offeree’s performance is completely optional.

Question 8

When are negative injunctions available to prevent EEs from competing?

Answer 8

When their talents are extraordinary. Such relief is not available for all employees, but when an employee has such unusual talents, like a famous opera singer, the courts will enter negative injunctions to protect their ERs from competition that would follow a breach of their employment contract.

Question 9

Can c ontracts to supply a buyer’s requirements be enforced?

Answer 9

YES. Under the UCC, contracts to supply a buyer’s requirements are considered to provide sufficient legal detriment and can be enforced.

Question 10

When are oral promises to pay for $500+ goods enforceable ?

Answer 10

In cases where the seller has tendered the goods and the buyer has accepted them.

Question 11

When can estates be liable for continued payments made pursuant to promises supported by moral consideration?

Answer 11

When all of the following criteria have been satisfied: (1) the promisor had received a material benefit during his lifetime that motivated the subsequent promise; (2) the promisor thereafter began performance according to the terms of his promise; (3) the promisor died without ever evidencing an intention to repudiate the promise; and (4) there were no superior moral claimants to the benefits of his estate.

Question 12

When are promises to keep an offer open enforceable?

Answer 12

As long as the offeree pays separate consideration for the option. Otherwise, such offers are revocable at the will of the offeror.

Question 13

When does a gratuitous assignment/promise of money stop being revocable?

Answer 13

Until money is actually paid or until the assignee has relied on the promise to his detriment.

Question 14

What result when the performance under the contract becomes impossible because of some failure/fault/negligence on the part of the performing party?

Answer 14

The performance obligation is not excused and will be considered as a breach of the contract (EEs neligently destroy widgets; ER is liable for breach of K for widget delivery.) This is subjective impossibility, and is not a defense to breach.

Question 15

If a construction contract is breached by a buyer during construction, what damages are the builder entitled to?

Answer 15

Any costs that the builder incurred AND any profit he would have received from the project.

Question 16

What result if an ER assures a new EE that he will be hired for at least x months?

Answer 16

Oral or written assurances of job security made to an individual employee, as well as assurances contained in policy documents distributed to the workforce, suffice to take the contract out of the default rule. The default rule is the employment-at-will rule which, absent agreement to the contrary, allows an employer to dismiss, and an employee to quit, at any time for any reason.

Question 17

Where a contract specifies that performance (usually payment) is conditioned upon the satisfaction of a third person, and a dispute arises over whether that third person properly withheld her “satisfaction,” what test is applied?

Answer 17

A subjective test; that is, it is proper for the third person to withhold approval if she is PERSONALLY honestly dissatisfied with the work, EVEN IF others in her field or other reasonable persons in her circumstances would have approved the work.

Question 18

Is parol evidence of collateral agreements admissible?

Answer 18

YES. Watch out for separate agreements from the contract that constitute related contracts in themselves. These are collateral agreements.

Question 19

When one party makes a unilateral mistake and the other party is aware of the mistake, what is the mistaken party’s best defense?

Answer 19

The minds of the parties had not met. Courts typically hold no K if one party knows of the other party’s mistake.

Question 20

If performance is only temporarily impossible, is the obligation completely discharged?

Answer 20

No. The parties’ obligations are only suspended until the impossibility ends

Question 21

After a buyer breaches and the seller re-sells the goods to a 3P, can the seller collect damages against the buyer?

Answer 21

Yes. The seller can collect the difference between the resale price and the K price AND incidental damages

Question 22

When a buyer rejects goods, but then sells them because the seller does not give return instructions, how much can the seller sue the buyer for?

Answer 22

90% of the buyer’s final sale price (buyer gets to keep 10% for his work)

Question 23

When does a unilateral mistake excuse a contractual breach?

Answer 23

When the non-mistaken party KNEW OR SHOULD HAVE KNOWN of the mistake (look for language like “bid was $30k lower than all other bids”)

Question 24

Can a unilateral or bilateral K be formed if a P did NOT know of the offer at the time he allegedly accepted?

Answer 24

No. P must know about the offer in order to accept it. NO acceptance if you don’t know about an offer (e.g. someone finds a cat and returns it to the owner without knowing about a reward, then finds out about reward later. Can’t collect because didn’t know about the offer when he accepted by performance)

Question 25

How does an employer most effectively prove that at-will employment exists or does not exist?

Answer 25

Through the terms of the employment manual

Question 26

Oral conditions precedent

Answer 26

Be careful with these. If there is an oral condition that something must be done before money is tendered for goods, parol evidence can be used to prove the oral condition precedent (chef approving tomatoes hypo)

Question 27

Do UCC firm offers require consideration to be valid?

Answer 27

No.

Question 28

Seller contracts to sell same house with two different buyers. What damages can the first buyer recover?

Answer 28

An injunction preventing the sale to the second buyer and specific performance of the contract.

Question 29

When does an intended third-party beneficiary's rights vest?

Answer 29

When he learns of the contract and assents to it as requested by either the promisor or promisee, OR Materially changes position in justifiable reliance on the promise, or brings suit to enforce the promise.

Question 30

When there is delegation, who can be sued by the obligee for breach?

Answer 30

When there is delegation, the delegee AND the delegor can be sued by the obligee. (e.g. woman can sue landscaper 1 AND 2 where 1 delegated the landscaping K to 2)

Question 31

When a supplier's non-conforming tender substantially injures a business, can the business breach the K?

Answer 31

Yes because if the manufacturer's business is substantially injured as a result of the supplier's non-conforming tender, the entire value of the contract has been impaired.

Question 32

What happens to a K made by a minor when the youth turns 18?

Answer 32

The youth can, at his option, ratify or affirm the K when he turns 18

Question 33

How much work should be done to consider a job "substantially performed?"

Answer 33

More than 50%

Question 34

Are obligors who are not informed of assignments responsible for paying assignees?

Answer 34

No. Only the assignor is responsible for paying the assignee when the obligor is not informed of the assignment

Question 35

When the buyer has general or particular needs about which the seller has reason to know, what damages may the buyer recover if the seller breaches?

Answer 35

Incidental AND consequential damages

Question 36

In what situation is the doctrine of frustration of purpose NOT available as a valid defense?

Answer 36

The fact that something had caused the same frustration somewhat recently shows that the frustration is a foreseeable occurrence. Therefore, the risk of that same frustration occurring is allocated to the party who wishes to raise the defense, and the doctrine of frustration of purpose will not operate to excuse that party from performing.

Question 37

Can a party effectively retract her repudiation of a contract?

Answer 37

Yes. A party effectively retract her repudiation of a contract if the party gives notice that she will, after all, perform under the contract BEFORE the non-breaching party (1) takes any action in reliance on the repudiation , (2) gives notice of acceptance of the repudiation , or (3) commences an action against the breaching party .

Question 38

Can a confirmation of an oral agreement for the purchase of goods be binding?

Answer 38

Yes if it is not objected to buy the receiving merchant within 10 days of receiving the confirmation.

Question 39

If a contractor hired by a homeowner has a K with a wood supplier, and the wood supplier breaches, can the homeowner sue the wood supplier?

Answer 39

No because the homeowner is merely an incidental beneficiary

Question 40

What is an accord?

Answer 40

A promise to discharge a debt in the FUTURE in exchange for something else.

Question 41

What are the two main types of accords?

Answer 41

Discharge for performance - unilateral accord | Discharge for promise - bilateral accord

Question 42

What is the only term the UCC will NOT fill in as a default?

Answer 42

Quantity.

Question 43

Under the UCC, when is the measure for damages for non-delivery calculated? How are the damages calculated?

Answer 43

Difference between market price and the contract price ON the day when the buyer LEARNED of the breach

Question 44

In a unilateral mistake situation, when is the only time the K is voidable?

Answer 44

When the non-mistaken party knows or should know of the mistake and takes advantage of the mistake

Question 45

What is the standard for modification of Ks for $500+?

Answer 45

Such modifications must be in writing in addition to the K itself

Question 46

What is the major requirement for a promise to pay a contractual debt that is barred by the statute of limitations?

Answer 46

It must be in a SIGNED WRITING

Question 47

Can parol evidence be admitted to show that there was NO agreement reached at all?

Answer 47

Yes, as an exception to the PER

Question 48

In what types of cases does the doctrine of substantial performance apply?

Answer 48

ONLY in services cases; NEVER in UCC goods cases | S ervices --> S ubstantial Performance

Question 49

Under the UCC, can a mere promise to ship goods constitute an acceptance?

Answer 49

Yes (when combined with actual shipment)

Question 50

Is a non-assignment clause effective where the beneficiary of the assignment has learned of the assignment?

Answer 50

No. The non-assignment clause will be invalid and the assignment will be valid because when the beneficiary learns about the assignment, it vests and the non-assignment clause is invalid

Question 51

Can an ER reduce an EE's salary mid-term? Why or why not?

Answer 51

Not without a change in consideration. e.g. ER cannot decide business is down and modify the terms of an EE's K to pay them less due to slumping business

Question 52

Are discretionary bonus provisions in employment Ks enforceable?

Answer 52

No. These are illusory and not guaranteed

Question 53

What is the legal effect of an offer by a sub which causes a contractor to rely on that offer in making a bid?

Answer 53

The offer becomes an option K if the contractor relies on the sub's bid when it submits its own bid

Question 54

When there is unjust enrichment, what is the appropriate remedy?

Answer 54

Quasi-contractual relief

Question 55

If a builder has to compromise and build a room slightly smaller because of zoning regulations, how much should the builder be paid for that room?

Answer 55

The full amount, less the construction company's cost and profit allocable to the "missing" space.

Question 56

Does cover provides for lost profits between merchants?

Answer 56

No. The concept of cover allows a merchant to attempt to mitigate its losses. It does not provide a remedy for the recovery of lost profits.

Question 57

Can Ks be modified without consideration?

Answer 57

Yes. Ks can be modified in good faith under the UCC and do not need consideration to be binding.

Question 58

Is a buyer's right to inspect and reject affected by a provision in the contract requiring payment on delivery?

Answer 58

No. Advance payment does not "impair the buyer's right to inspect or any of his remedies." Even if there is a contract clause requiring prepayment, any buyer retains a right to inspect the goods purchased

Question 59

Attorney agreed to pay for medical services related to the man's injury from any settlement or judgment obtained. The man then went to a medical clinic and received treatment valued at $2,500 from a physician. If the physician takes an action against the man to recover the $2,500, will she prevail?

Answer 59

Yes under implied-in-fact contract. The man sought treatment at the medical clinic by the physician. This indicated his present intent to enter into a contract with her and implied a promise made by the man to pay for the medical services he received. There was a bargained-for exchange, and the man received a legal benefit. Thus, consideration exists for a contract that is implied.

Question 60

A local hotel agreed to donate a weekend stay for two to be sold at an auction held by museum. At the auction, a man purchased the weekend at the hotel for $500. If the hotel repudiates the contract, whom may the man sue?

Answer 60

The museum or the hotel.

Question 61

If one of a manufacturer's machines has overheated and exploded, is the manufacturer still expected to perform according to the schedule agreed upon in the K?

Answer 61

Yes, because the manufacturer's duty to perform would not be excused. A seller is still expected to fulfill the contract to the extent possible given the supervening contingency. In the situation presented by the facts, the destruction of one machine is likely to have destroyed only part of the manufacturer's capacity to perform. Thus, it must allocate production and deliveries among its customers in a manner that is fair and reasonable.

Question 62

If a seller tenders nonconforming goods, must the seller be given the opportunity to cure the nonconformity before the buyer can reject?

Answer 62

No, because the buyer may always reject nonconforming goods unless the seller gives reasonable notice of intention to substitute and makes conforming delivery within a reasonable time .   The right to cure nonconforming goods is NOT an absolute right and is not guaranteed to sellers.

Question 63

Where one merchant confirms a contract with a memorandum, the contract is valid unless what event occurs?

Answer 63

Unless notification of objection is given within 10 days. NB: This only applies in transactions between TWO MERCHANTS in which an oral contract is made and then confirmed with a memorandum which satisfies the statute of frauds

Question 64

A contracts to provide services to B; B delegates duty to pay to C. C accepts. Can C rescind if A is never notified of the delegation?

Answer 64

No. C is bound regardless because C accepted the delegation. A does NOT need to be informed.

Question 65

To what quantity is a buyer limited to order in a UCC sale of goods?

Answer 65

A quantity limited to a good faith amount the buyer requires

Question 66

Can conditions precedent to a written K be admitted or are they barred by PER?

Answer 66

These can be admitted as an exception to PER, especially if the condition precedent is not met

Question 67

What are the default methods of payment allowed if no payment method is specified in the K?

Answer 67

Cash and check are both acceptable

Question 68

What are the standards for modification under the UCC?

Answer 68

Requires good faith only; does not require consideration

Question 69

What are the standards for modification under common law?

Answer 69

Consideration is required based on the pre-existing duty rule

Question 70

How much must a buyer pay for UCC goods if the goods are non-conforming?

Answer 70

He must pay the contract rate IF he accepts the non-conforming goods (this is to keep sellers honest and to prevent them from gouging)

Question 71

What is a major way to get around the PER?

Answer 71

Any contract defense (e.g. if there is a mistake in the drafting, courts will reform the K once proven by PER)

Question 72

Is a promise not to pursue a valid debt legally sufficient consideration IF the debt is objectively unreasonable but claimed in good faith?

Answer 72

Yes

Question 73

What is the default UCC place of delivery in a gap-filler situation?

Answer 73

The seller's place of business

Question 74

If the offeree mails a rejection, changes her mind, and then sends an acceptance, what exception to the rules is made?

Answer 74

The mailbox rule does not apply

Question 75

Does destruction of a building during renovation or remodeling excuse builder's duty to perform?

Answer 75

Yes as long as the destruction is not the fault of either party . NB: this is renovation of an EXISTING structure, as opposed to a new structure for which the builder bears the risk of loss

Question 76

When a partially constructed new building or structure is destroyed by a fire or act of God without fault of either party, to whom should the risk be allocated?

Answer 76

The builder

Question 77

Does a telegram sent by Buyer to Seller confirming the deal with Buyer's name typed by the telegraph company satisfy the signature requirement of the statute of frauds?

Answer 77

No

Question 78

Does an order form on Buyer's pre-printed order form with Buyer's letterhead but with NO signature by an employee of Buyer satisfy the signature requirement of the statute of frauds?

Answer 78

Yes

Question 79

May evidence of trade usage be introduced if the contract is a complete integration?

Answer 79

Yes

Question 80

Is intoxication is a valid defense to the formation of a contract where the opposing party does not know or have reason to know of the other party's impaired capacity?

Answer 80

No; intoxication is a valid defense to the formation of a contract only where the opposing party knows or has reason to know of the other party's impaired capacity and knowingly takes advantage of it .

Question 81

If a customer receives and subsequent sells the first shipments soap products in an installment contract, is she liable for the rest of the proposed shipments?

Answer 81

Yes, unless they are nonconforming. If they are nonconforming, she may reject them and send them back.

Question 82

When is an oral contract for the purchase of real property enforceable?

Answer 82

Only where there has been at least partial performance of the contract or circumstances justifying an assertion of promissory or equitable estoppel (e.g. taking possession of the property or making improvements to the property.)

Question 83

In order to exercise an option, may the offeree accept by mailing a check or notice and relying on mailbox rule?

Answer 83

No, because the mailbox rule does not apply in cases involving options under the majority view, which states that the exercise of an option requires the offeree to give notice of acceptance to the offeror within the time optioned .

Question 84

Between a merchant and non-merchant, when the contract violates the SOF, but the merchant delivers and the non-merchant accepts, who prevails?

Answer 84

The merchant according to the doctrine of partial performance. Any act inconsistent with the seller's continued ownership of the goods constitutes acceptance of the goods.

Question 85

What is the "main purpose" rule?

Answer 85

Under the "main purpose" rule, if the main purpose of the guarantor's promise is to protect or promote his own economic interests, rather than the interest of the debtor, the agreement is NOT within the Statute of Frauds and NO signed writing is required.

Question 86

What result where aparty to an oral contract within the statute of frauds promises the other party that he has created or will create a signed writing evidencing the parties' agreement, and the other party relies on that assurance by failing to take other steps to satisfy the statute of frauds?

Answer 86

Most courts will find promissory estoppel against the party whose assurances of a signed writing turn out to be false.

Question 87

If part of a gift is delivered, can the donee enforce the delivery of the rest of the gift?

Answer 87

No

Question 88

Is a promise to pay a debt despite the expiration of the statute of limitations binding?

Answer 88

Yes

Question 89

What is the significance of language similar to "the contract was intended by the parties as a final expression of their agreement with respect to such terms as are included therein and may not be contradicted?"

Answer 89

This language means that there is a COMPLETE integration, therefore, NO parol evidence is allowed

Question 90

Is a "no oral modification" binding? Does it prohibit admission of parol evidence?

Answer 90

Yes on both counts. While the parol evidence rule generally does NOT apply to subsequent agreements, the inclusion of a "no oral modification" clause may bar the introduction of such evidence.

Question 91

Regarding consideration in the form of withholding the filing of a lawsuit, what must the potential P believe?

Answer 91

The potential P must merely honestly believe that he had a claim against a potential D

Question 92

Does someone waive his right to damages by accepting goods AND USING THEM IN PRODUCTION if the goods do not meet the contract specifications?

Answer 92

No; he retains the right to damages for non-conforming goods

Question 93

To comply with the SOF, what elements must be present in a land sale K?

Answer 93

To comply, the contract must be in writing, signed by the party to be charged, and must contain all essential terms: a description of the property; a description of the parties; the price; and any conditions of price or payment, if agreed upon.

Question 94

To what extent is an oral contract for the sale of goods priced at $500 or more enforceable?

Answer 94

The goods received and accepted takes an unwritten agreement out of the Statute of Frauds. However, this exception only applies to the extent of the goods received and accepted and does NOT apply to unaccepted goods.

Question 95

With respect to natural catastrophes (e.g., floods, tornadoes), are seller-farmers usually liable for such occurrences?

Answer 95

Yes, because they are foreseeable; however, under the UCC, there is an exception in the case of a farmer "who has contracted to sell crops to be grown on a designated/specific tract of land ." He may be excused when there is a failure of a specific crop either on the basis of the destruction of identified goods or because of the failure of a basic assumption of the contract.

Question 96

Is a contractor's statement that "he didn't think he could perform the remodeling work" enough for anticipatory repudiation?

Answer 96

No, because anticipatory repudiation must be positive and unequivocal

Question 97

In a situation involving a payment plan upon some condition (e.g. profitability of an entity), when if the payment due if the event does not occur?

Answer 97

The obligation is due within a reasonable time because the plan does not create an express condition, but rather is intended merely to set a convenient time for payment

Question 98

When a contract calls for construction of a new building, and the building is destroyed before completion through no fault of the parties, is the builder still obligated to construct the building?

Answer 98

Yes; her obligation is not discharged by the destruction

Question 99

May a right expected to arise under a contract that is not then existing be assigned?

Answer 99

No

Question 100

Is a down-payment provision for 50% of the purchase price a reasonable amount of liquidated damages?

Answer 100

Probably not; this is more likely a penalty than an attempt to find an amount that would fairly compensate the non-breaching party

Question 101

May a contract leave the price term to be fixed by the seller?

Answer 101

Yes, but the seller must do so in good faith. If the seller acts in bad faith in fixing a price, the buyer may himself set a reasonable price.

Question 102

Under the UCC, are sellers in requirements contract situations required to provide supplies which are disproportionate to the parties' past practices?

Answer 102

No, and even if it COULD do so, it is not required to provide supplies in such a way which would deviate from the parties' past dealings.

Question 103

In what types of cases may impracticability succeed as a defense?

Answer 103

Severe shortages of raw materials caused by something like an embargo or a war which cause the seller to be unable to get the materials, OR an extremely increased price.

Question 104

How much does anticipatory repudiation allow to be collected for breach?

Answer 104

Anticipatory repudiation allows the full amount to be collected for breach

Question 105

When can Anticipatory repudiation occur?

Answer 105

Anticipatory repudiation can only occur when NEITHER party has performed. If one party has performed, the amount of damages will depend on the K.

Question 106

If there is a payment schedule, what payments are due at the time of the breach?

Answer 106

If there is a payment schedule, then only the payments due at the time of the breach are actually owed. Future payments will not be deemed to be breached until the date on which they are to actually be paid.

Question 107

Will the shipment of nonconforming goods operate as an acceptance if the seller "seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer?"

Answer 107

No; in such a case, the shipment of nonconforming goods is considered a counteroffer, which the buyer may either accept (and pay contract price) or reject. Otherwise, with no notice of accommodation, a shipment of nonconforming goods operates as a simultaneous acceptance and breach.

Question 108

Is an arbitration clause a material alteration of contract terms under the UCC?

Answer 108

Yes

Question 109

If someone repeatedly states that she has no expectation of being compensated for her services, is she still owed compensation for work done?

Answer 109

No; g iven that her words and actions do not indicate an expectation of being compensated, she cannot recover on a quasi-contract theory.

Question 110

Is a demand for cash on delivery sanctioned by the UCC where the buyer is rumored to be going bankrupt?

Answer 110

Yes; notice of such a demand by the seller is a justifiable suspension of performance

Question 111

When do an intended third-party beneficiary's rights vest?

Answer 111

Once they have notice of and assent to the contract OR once they demonstrate reliance on the benefit

Question 112

A man signs a K stating that he will buy products on the condition that he receives a business loan from the bank. He forgets to apply for the loan. Is the K still valid?

Answer 112

Yes; the contract is valid and the man must pay for the groceries, because he conducted himself in bad faith.

Question 113

Is a labor strike enough to claim impracticability?

Answer 113

Yes; u nder the UCC, the following are listed as examples of contingencies that would trigger impracticability. All involve a severe shortage of raw materials or supplies: a) where a severe shortage of raw materials or supplies is caused by: 1) war or embargo, 2) local crop failure, 3) unforeseen shutdown of major sources of supply, or 4) labor strike; AND (b) the shortage either caused a marked increase in cost or prevented the seller from securing the supplies necessary for his performance.

Question 114

After a beneficiaries rights vest, can a K still be modified?

Answer 114

No