II-2 Contracts 2 Flashcards Preview

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Flashcards in II-2 Contracts 2 Deck (36)
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1
Q

Performance: What are 3 types of performance due?

A
  • Never if conditions precedent is not met.
  • Same time as receiving consideration: conditions concurrent.
  • Never if conditions subsequent passes Statute of limitations.
2
Q

What is the requirement for completeness of performance under CL?

A

Substantial performance:

  1. Is is for practical purpose just as good?
  2. Was it done in good faith?
  3. Can party be compensated?
3
Q

What are 4 buyer’s rights for goods?

A
  • Inspection before payment (unless COD:cash on delivery, CF: cash and freight, CIF: cash, ins, and freight).
  • Rejection.
  • Acceptance.
  • Revocation of acceptance (only for those items that requires the use for a while).
4
Q

UCC: who has the right to demand assurance? Who has the right to cure?

A

Both parties.

Seller.

5
Q

UCC: If seller does not provide cure (assurance), what happens?

A

Other party can take it as breach (Anticipatory Repudiation) and sue, substitute the seller, or wait.

6
Q

UCC: will it be a breach if seller sends a non-conforming item before the due date?

A

No, if the seller sends the right one before the due date.

7
Q

UCC: Right to cure: what must seller do to exercise this right?

A

Notify the buyer prior to the performance date.

8
Q

When is performance discharged?

A
  • When conditions fail.
  • When both parties agree and sign release, waiver, or rescission (accord and satisfaction).
  • The Novation thing: all parties agree and bring in the third party to replace one.
  • Statute of limitations.
  • Impossibility (Object test) under CL.
  • Impracticability under UCC.
  • Illegality.
  • Breach.
  • Bankruptcy.
9
Q

What are types of damages and remedies?

A
  • Nominal damage (technical breach, no financial loss) - award nominal amount of $1 or so.
  • Compensatory damage - return parties to same position as if there had been no breach.
  • Incidental damage - costs, lawyers’ fees
  • Consequential damage (damages to third party).
  • Liquidated damage (agreed-on-in-advance damages. alternative to compensatory damages) - court will look if it is a reasonable amount and not penalty.
  • Punitive damage - available only in fraud cases.
10
Q

What are types of remedies?

A
  • Specific performance - require breaching party to perform; used against seller in land contracts. Can happen under UCC if goods are rare.
  • Rescission and restitution - used in misrepresentation; returns parties to original position.
  • Reformation - court uses it to correct often clerical error in contracts.
  • Quasi-contract recovery - given when there is no contract.
11
Q

What is prerequisite for passage of title and risk of loss?

A

Identification of goods: for fungible goods. they are shipped, marked or otherwise designated for the buyer.

12
Q

When does identification occur for existing goods?

A

At the time of contracting.

13
Q

Non-shipment: When does the title pass when there is document of title and there is no document of title?

A

Doc: upon delivery of title document.

No doc: At the time of contracting.

14
Q

When does the title pass when the seller is a merchant and non merchant?

A

M: Upon receipt.

Non m: Upon tender actual purchase.

15
Q

When does the title pass when there is Bailment: warehouse (third party)?

A

When there is doc of title or other doc, upon receipt of the doc.
No doc: when buyer is notified goods are available.

16
Q

When does the title pass: sale on approval?

A

When the buyer accepts the goods.

17
Q

When does insurable interest exist?

A

When identification occurs.

18
Q

What is BFP? What is its right?

A

Bona fide purchaser - who purchase goods without knowing the seller did not have valid contract.
Its voidable or no title can be made into valid title by court.

19
Q

What happens when BFP purchases void contracted item?

A

Item must be returned.

20
Q

What are 3 cases a common carrier can avoid strict reliability?

A

Act of God, act of shipper, act of enemy.

21
Q

What are 5 remedies for seller under UCC Article 2?

A
  1. Stop delivery.
  2. Resale Price.
  3. Market Price.
  4. Action for Price.
  5. Lost Profit.
22
Q

Which seller’s remedy is applicable when the buyer fails to take goods and how is the compensation calculated?

A

Resale price or Market price.
Resale: K price - resale price + incidental damages - expenses saved.
Market: K price - market price + incidental damages - expenses saved.

23
Q

Which seller’s remedy is applicable when specially manufactured goods are involved and how is the compensation calculated?

A

Action for price.

K price + incidental damages - expenses saved.

24
Q

How is lost profit calculated?

A

Profits + incidental damages - salvage value.

25
Q

What are buyers’ remedies?

A

Specific performance (Replevin, identification) - buyer gets the goods + incidental damages.
Cover.
Market.

26
Q

Which remedies available when seller fails to deliver? How are compensations calculated?

A

Cover and Market.
C: Cover price - K price + incidentals + consequential damages - expenses saved.
M: Market price - K price + incidentals + consequential damages - expenses saved.

27
Q

If there is no liquidated damage clause and the buyer has made a deposit or payment, what amount can the seller keep or can he at all?

A

the seller may keep $500 or 20% of the purchase price, whichever is less.

28
Q

When does a party generally has enforceable rights re: contracts? Exceptions?

A

When it is a privity (a party thereto).

When rights and/or duties are assigned.

29
Q

Can personal rights be assigned such as credit rights?

A

No.

30
Q

When an assignor assigns a right to an assignee, when does an obligation to pay to the assignee occur for the promisor?

A

When the promisor is notified by the assignee. He will not be liable to the assignee for the pmt made to the assignor before being notified.

31
Q

How much rights does an assignee have?

A

As much as the assignor has.

32
Q

When the delegator delegates his duties to a delegater, is he relieved of his duty?

A

No.

33
Q

What does “the rights under contract” mean?

A

Generally, it means assignment of rights and delegation of duties.

34
Q

Donee beneficiary: does he have a right to promisor? To ins company?

A

No because it was a gift.

Yes, because he is entitled to the benefit.

35
Q

What is an example of creditor beneficiary?

A

Paying for health care insurance.

36
Q

Does incidental beneficiaries have rights for recovery?

A

No.