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K Course TOTAL Flashcards

1
Q

Elements of K Formation

A

Offer, acceptance, AND consideration

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2
Q

Steps to analyzing K formation

A
  1. Formation of contract with all elements
  2. What were the terms exactly?
  3. Did a party break a promise from the K?
  4. Was there a good excuse (legally recognized excuses)?
  5. What will make the party whole again?
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3
Q

What is a K?

A

A contract is a promise or set of promises, for the breach of which the law gives a remedy, or the
performance of which the law in some way recognizes as a duty.

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4
Q

Subject Matter of the Contract

A

Sale of goods? UCC Art. 2

Everything else? Common Law

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5
Q

What are goods?

A

Moveable things

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6
Q

In a mixed K, how does a person figure out which law to apply; CL or UCC?

A

Predominate purpose of the K

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7
Q

Offer; General

A

A communication that creates a reasonable expectation in the offeree that the offeror is willing to enter into a K on the offered terms
–> DOES NOT REQUIRE WORDS
* K formation follows OBJECTIVE intent
MUST MANIFEST A COMMITMENT TO DO SOMETHING. It must contain a promise to undertake a promise to do or refrain from doing something in exchange for something else.
* Have enough of the essential terms been provided so that a K including them would be capable of being enforced

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8
Q

Negotiations

A

If the parties to a K discuss details BUT MAKE NO COMMITTMENT, they are negotiating

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9
Q

Advertisements and Offers

A

Advertisements are not offers because it can be accepted by EVERYONE THAT SEES IT
–> THEREFORE Unreasonable
EXCEPTION: An Ad that LIMITS the number of people that can accept.

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10
Q

What is an advertisement?

A

An invitation to make an offer

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11
Q

Statements made in Jest

A

Would a reasonable person interpret the statement as a genuine offer? Look at the objective intent

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12
Q

UCC; Offer

A

In an offer for the sale of goods, there must be a QUANTITY TERM for the offer to be certain
* if quantity is omitted, there is not a legally valid offer

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13
Q

UCC; Offer (Quantity)

A

The quantity in a K under UCC can be stated as:
* The Seller’s Output (crops)
OR
* The Buyer’s Requirement (buy all I need)
–> “ALL” works for this

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14
Q

Land; Offer

A

Must have:
* Price
AND
* Description

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15
Q

Offer; Services

A

Description of the type of work being committed required

* Does not need to have a timeframe, courts will infer a reasonable time

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16
Q

Revocation

A

A person that made the offer can try to take it back

  • At any time BEFORE the offer is accepted
  • Via –> Direct Revocation: Offeror tells offeree the offer is rescinded
    - -> Indirect Revocation: where a reliable 3rd party indicates to the offeree that the offeror is no longer willing -OR- isn’t able to K
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17
Q

Types of Offers that CANNOT BE Revoked

A

4 Specific Situations: IRREVOCABLE OFFERS

  1. Option K: Promise to hold the offer open for certain period of time PLUS CONSIDERATION
  2. Merchant’s Firm Offer Rule: Applies ONLY to UCC Art. 2 (SOG)
  3. Detrimental Reliance
  4. Beginning of Performance under a UNILATERAL K
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18
Q

Merchant

A

Anyone who either regularly deals in goods of the kind being sold -OR- has knowledge or skill peculiar to the practices or goods involved

  • Almost anyone in business IF acting on behalf of their business
  • OR *
  • Dealer of goods of kind sold
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19
Q

What is the merchant firm offer rule?

A
  • -> UCC Art. 2: A type of Irrevocable Offer
  • If a merchant promises in writing to keep an offer open and signs the promise, the offer CANNOT be terminated for the time stated
    • If not time is stated, for reasonable time BUT NO LONGER THAN 3 MONTHS
      - Do NOT NEED CONSIDERATION
  • If longer than 6 months, still irrevocable for ONLY 3 months
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20
Q

K: Detrimental Reliance

A

An offer will be irrevocable for a reasonable time by way of detrimental reliance if the offeror makes a promise in the offer and should expect the offeree will rely on that offer to his detriment
–> Subcontractor Bid: b/c the contractor detrimentally relied on the offer to make their bid

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21
Q

Unilateral K

A

A K that can be accepted ONLY BY PERFORMANCE

  • Cannot be revoked once the party begins performance
  • Become irrevocable in order to finish performance ONCE THE PERFORMANCE HAS BEGUN
  • The person performing can stop at any time
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22
Q

Rejection of Offer

A

Offeree terminates the offer

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23
Q

Types of Rejections

A
  1. Basic –> “No.”
  2. Counteroffer
  3. Conditional Acceptance
  4. Acceptances that contain NEW OR ADDITIONAL TERMS
  5. Termination through LAPSE OF TIME
  6. Termination by OPERATION OF LAW
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24
Q

Counteroffer

A

A response to an offer that rejects the offer BUT proposes a NEW OFFER

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25
Q

Mere Inquiry AFTER an Offer

A

The offeree does not effectively say, “no” and is just putting out feelers to see whether the offeror has any interest in changing the deal

  • -> NOT A COUNTEROFFER
  • -> Original offer is NOT KILLED
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26
Q

Conditional Acceptance

A

Has the same effect as a COUNTEROFFER

* Rejects the original offer AND proposes NEW OFFER

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27
Q

Acceptances Containing NEW OR ADDITIONAL TERMS

A

UNDER CL:
* Count as rejections and counteroffers; LIKE CONDITIONAL ACCEPTANCE
–> Mirror Image Rule
UNDER UCC
* Acceptance can contain new or different terms
–> NO Mirror Image Rule
–> UNLESS the acceptance is expressly made conditional on consent to the additional or different terms (“BUT ONLY IF…”)

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28
Q

Mirror Image Rule

A

K under CL:

  • The acceptance MUST MATCH (or mirror) each and every term of the offer
  • Cannot add any new terms
  • If there are additional terms, the offer is dead
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29
Q

UCC Art. 2 §2-207

A

A seasonable expression of acceptance operates as an acceptance
–> UNLESS acceptance is made EXPRESSLY CONDITIONAL on assent to additional or different terms

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30
Q

Termination Through Lapse in Time

A

Offeree MUST ACCEPT offer within time period specified
* OR *
If no time specified, Offeree must accept offer within a REASONABLE AMOUNT OF TIME
–> Reasonable is fact dependent

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31
Q

Termination by Operation of Law

A
  • Death or incapacity OF EITHER of the offeror -OR- the offeree
  • -> INSTANTLY KILLS THE OFFER
  • -> EXCEPTION
    • Irrevocable offers DO NOT TERMINATE with the death or incapacity of one of the parties
      * The offer survives through the term of the IRREVOBLE offer
  • Subject Matter of the K has become ILLEGAL
  • Subject Matter of the K is DESTROYED
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32
Q

K: Acceptance

A

An acceptance is a timely manifestation of assent to the terms of the offer.

  • -> Terms MAY INCLUDE terms of how to accept
  • -> Only the person to whom the offer was addressed can accept
    • BUT offers are not limited to a singe offeree THEREFORE can be made to more than one person
  • -> Only a person who IS AWARE of the offer can accept the offer.
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33
Q

K: Acceptance: How to Accept an Offer

A

RULE OF THUMB: The offeror is the master of their offer.

  • -> Therefore, the offeror gets to dictate how the offeree is accepted.
  • -> When not set in terms
    • No method specified THEREFORE by any reasonable means
  • -> GENERALLY, offers may be accepted EITHER BY:
    • A promise
    • OR *
    • Performance
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34
Q

K: Acceptance: Silence

A

Silence: Saying nothing in response to the offer typically cannot be considered acceptance
–> EXCEPTION: If the recipient of an offer knows services are being rendered with the expectation of compensation AND BY A WORD could prevent the mistake AND DOES NOT, silence can be an acceptance
–> EXCEPTION: If the parties agree that silence will constitute an acceptance, OR if they have been dealing with each other for a while and it is their custom that acceptance is through silence
=====> THERE IS AN ACCEPTANCE

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35
Q

K: Acceptance: UCC

A

An offer to buy goods for CURRENT OR PROMPT shipment can be accepted:

  • By a promise to ship
  • OR *
  • Through actual prompt shipment
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36
Q

K: UCC: Non-Conforming Goods

A

Goods that do not conform to the description under the K (buyer is entitled to “perfect tender” which is the product exactly as described)
* The shipment is both an acceptance AND breach
–> UNLESS the buyer notified that nonconforming goods offered as an accommodation
=====> If they do this, it is considered a COUNTEROFFER, which the buyer may reject

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37
Q

K: UCC: Battle of the Forms (§2-207)

A

The terms of the acceptance DO NOT have to match the terms of the offer.
* When the terms of the acceptance DO NOT MATCH:
–> If BOTH parties are merchants
=====> Additional terms become part of the K UNLESS:
* They materially alter the original terms
* The offer expressly limits acceptance to the original terms
* OR *
* The offeror has already objected to that particular term OR objects in a REAONSABLE time
–> If one party is NOT a merchant: The K consists of the terms offered. If the offeree changes a terms in the acceptance, the terms in the OFFER apply.

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38
Q

UCC: Battle of the Forms: What constitutes a MATERIAL ALTERATION

A
  • Something that changes a party’s risk OR the remedies available (FOR EXAMPLE: Adding a clause DISCLAIMING a warranty)
  • -> An additional material term DOES NOT automatically become part of the K b/c the offeror MUST AGREE to add it
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39
Q

Battle of the Forms; Knock-Out Rule

A

The conflicting terms knock each other out of the K and the UCC will substitute a reasonable term in its place

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40
Q

When is Acceptance Effective: The Mailbox Rule

A

Rejections and revocations are effective WHEN THEY ARE RECEIVED.
FOR ACCEPTANCE: Mailbox Rule
* Acceptances are effective UPON DISPATCH when PROPERLY POSTED
–> When there is a rejection AFTER acceptance, the acceptance is EFFECTIVE
–> When there is an acceptance AFTER a rejection, NO MAILBOX RULE
=====> Whichever the offeror receives first is effective
* Mailbox rule DOES NOT APPLY
–> If the offeror OPTS OUT of the mailbox rule (FOR EXAMPLE: must be received to be accepted)
–> Option K: An acceptance under an option K is effective ONLY upon receipt.
–> If the offeree uses UNAUTHORIZED means to accept
=====> Acceptance upon receipt

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41
Q

K: Consideration

A

Bargained for exchange of something of legal value

* Benefit to the promisor OR determinant to the promisee

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42
Q

K: Consideration: LEGAL V

A

A promise to do something OR the actual doing of something one is NOT ALREADY LEGALLY OBLIGATED TO DO
- OR-
A promise to refrain from doing something OR refraining from doing something that ONE IS LEGALLY ALLOWED TO DO
* Does NOT need to have FINANCIAL V

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43
Q

K: Sham Consideration

A

AS A POLICY: Courts will not police the adequacy of consideration
Sham Consideration: Something that’s not really intended to serve as consideration –> THERFORE, is NOT CONSIDERATION
* $1 for a car –> SHAM Consideration
* BUT the real possibility that something COULD have V is SUFFICIENT

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44
Q

K; Past Consideration

A

Past Consideration is considered NO CONSIDERATION.

* It would have been considered consideration IF IT HAD BEEN BARGAINED FOR –> THEREFORE, it will not support a K

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45
Q

K: Preexisting Duty Rule

A

A promise to perform something a party is ALREADY LEGALLY OBLIGATED TO DO –> NOT CONSIDERATION

  • A K CANNOT be modified WITHOUT consideration
  • There are EXCEPTIONS (See card)
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46
Q

K; Preexisting Duty Rule: EXCEPTIONS

A
  1. If there is a promise to do anything NEW OR DIFFERENT from the original promise, no matter how slight the change, there needs to be consideration
  2. If a party wants to pay off an existing debt for less than the amount they actually owe, there needs to be new consideration (can be something of V, rather than actual tender).
  3. Unanticipated Circumstances (See card)
    4.
47
Q

K: Preexisting Duty Rule: Exceptions; UNANTICIPATED CIRCUMSTANCES

A

Circumstances arise that were not anticipated at the time the K was made

  • -> Modification MUST BE fair and equitable
  • This exception ONLY works if NEITHER PARTY HAS FULLY PERFORMED
  • -> No consideration is needed to modify a K that has not been fully performed on both sides if the modification is FAIR AND EQUITABLE in view of circumstances NOT ANTICIPATED when the K was made
48
Q

Does Art. 2 of UCC follow the preexisting duty rule?

A

No. A K can be modified w/o consideration AS LONG AS the modification is sought in GOOD FAITH

49
Q

K: Illusory Promises

A

An empty promise manifesting no commitment

  • -> Satisfactions Clauses is not illusory because people must act in GOOD FAITH ==> THEREFORE, do not make promises illusory
  • -> Exclusive Agents must use BEST EFFORS to represent a brand ==> THEREFORE, do not make promises illusory
  • -> Conditional promises ARE ENFORCEABLE UNLESS the condition is ENTIRELY within the promisor’s control
  • -> A promise to choose one of several alternative means of performance IS ILLUSORY UNLESS EVERY ALTERNATIVE INVOLVES SOME LEGAL DETRIMENT to the promisor.
50
Q

K: Defense: General Definition

A

A defense is a legal argument claiming that the agreement is NOT enforceable as a K

51
Q

K: Defenses: Types

A
  1. Missing Formation Element
  2. Lack of Capacity (K formed but negated)
  3. Mistake (K formed but negated)
  4. Illegality (public policy D, K formed)
  5. SOF (public policy D, K formed)
  6. Absence of Mutual Assent
  7. Lack of Capacity
  8. Illegality
  9. Duress and Undue Influence
  10. Unconscionability
52
Q

K: Defenses: SOF

A

A K within the statute is NOT ENFORCEABLE UNLESS it is evidenced by a WRITING that is SIGNED by the party to be bound.

53
Q

K: Defenses: SOF: Types of K

A

==> MYLEGS
Marriage: K in which the consideration is marriage (pre-nup)
Year: K that cannot be performed within a year
Land: K for land
Executor: K by executors or administrators to personally pay the debt of the estate
Goods: K for the sale of goods $500 or more
Suretyship: K to answer for the debt of another

54
Q

K: Defenses: SOF: EXCEPTIONS: Goods

A

UCC Art. 2 has 4 exceptions to the SOF: SWAP Exception

  1. S: Specialty Manufactured Goods
  2. W: Written Confirmation by Merchant
  3. A: Admissions
  4. P: Performance
55
Q

K: Defenses: SOF: EXCEPTIONS: Goods: SPECIALTY MANUFACTURED GOODS

A

A K for the SOG for $500 or more CAN BE ENFORCED WTIHOUT WRITING if the goods are specialty manufactured goods

  • Custom or made to order goods
  • Not suitable for sale to anyone but this single buyer
56
Q

Merchant’s Confirmatory Memo Rule

A

A defense under the SOF for goods.

  • Applies only in K b/w merchants
  • RULE: In K b/w merchants, if one party, within a reasonable time after an oral agreement has been made, sends the other party a written confirmation of the deal –> SUFFICIENT under the SOF to bind the sender
  • -> Also binds the recipient AS LONG AS the recipient does NOT OBJECT to it IN WRITING within 10 days of receiving it
57
Q

Merchant’s Confirmatory Memo Rule: Who is a MERCHANT?

A

A merchant is anyone in business who deals in goods of the kind being sold.

58
Q

K: Defenses: SOF: EXCEPTIONS: Goods: ADMISSIONS

A

If you admit to having a K in court, you are bound.

* could be a pleading, a deposition, a response

59
Q

K: Defenses: SOF: EXCEPTIONS: Goods: PERFORMANCE

A

Performance takes the K out of the SOF to the extent of the performance accepted
* If you take it, you owe it

60
Q

K: Defenses: SOF: EXCEPTIONS: Year

A

A K that by its terms cannot possibly be performed within one year from the date the K is made

  • TRIPS AND TRAPS
  • -> an oral K of relatively short duration BUT WHICH, by the terms of the K, cannot be completed within one year
  • -> K “For Life”: Anyone could die at anytime, THEREFORE does not fall into SOF
  • -> K with No Set Date to Perform: Does not fall into SOF because if you had unlimited resources, you may accomplish it within a year
61
Q

K: Defenses: SOF: Exceptions: Land: PART PERFORMANCE

A

Partial performance on a land K will take it out of the SOF

  • Can be accomplished by either (MUST BE TWO out of the 3):
    1. Payment in whole or in part
    2. Possession
    3. Improvements
62
Q

K: Defenses: SOF: Exceptions: Suretyship K

A

A surety is a guarantor of the debt of another person

  • Co-Signer on a loan
  • Make sure NOT a primary promise that sounds like a suretyship
63
Q

Writing Requirement: SOF

A

A writing containing the essential terms that is signed by the party being sued

  • An attempted cancellation MAY BE the very thing that makes the oral K enforceable
  • SOG –> QUANTITY IS REQUIRED
  • Sale of Land –> Price AND Description IS REQUIRED
  • Service –> Description of work IS REQUIRED
64
Q

K: Defenses: ABSENCE OF MUTAL ASSENT

A

The 3 Ms…

  1. Mistake
  2. Misunderstanding
  3. Misrepresentation
65
Q

K: Defenses: Absence of Mutual Assent: MISTAKE

A

A mistake is a factual error regarding a fundamental matter that has a material effect on the agreed exchange
* A mistake that goes to the heart of the matter

66
Q

K: Defenses: Absence of Mutual Assent: Mistake: TYPES OF MISTAKE

A
  1. Unilateral Mistake: Only one party mistaken about a material fact
  2. Mutual Mistake: Both parties mistaken about the same material fact
67
Q

K: Defenses: Absence of Mutual Assent: Mistake: UNILATERAL MISTAKE

A

Generally, unilateral mistake is NOT a D to enforcement of a K

  • Usually arises when one party makes a mechanical error in computation
  • -> If only ONE of the parties is mistaken, the mistake won’t prevent the formation of the K
68
Q

K: Defenses: Absence of Mutual Assent: Mistake: MUTUAL MISTAKE

A

Generally, mutual mistake is a D to enforcement of a K

69
Q

K: Defenses: Absence of Mutual Assent: Mistake: Mutual Mistake: EFFECT OF ASSUMPTION OF RISK

A

Situations where one party might have assumed the risk of being wrong about a material fact

  • The party that assumed the risk of the mistake CANNOT then use ‘mistake’ as a D to enforce the K
  • A party assumes the risk of a mistake when
  • -> The party KNOWS they do not know a fact
  • -> OR When the party is in a superior position to know a fact
70
Q

K: Defenses: Absence of Mutual Assent: MISUNDERSTANDING

A

Involves K where the language is AMBIGUOUS (words that can be interpreted in a different way by different people)

  • If neither party was aware of the ambiguity -OR- if BOTH parties were aware of the ambiguity
  • -> No K UNLESS BOTH parties meant the SAME THING
  • If one of the parties knew about the ambiguity AND the other party did NOT
  • -> K based on the understanding of the party UNAWARE of the ambiguity
71
Q

K: Defenses: Absence of Mutual Assent: MISREPRESENTATION

A

Assertion of a fact that is UNTRUE -OR- the NONDISCLOSURE of a fact

  • Misrepresentation is a D when:
  • -> That assertion is MATERIAL
  • -> AND Induces the other party to justifiably rely on it
    • Must be something that can be measured or quantifiable
    • -> Cannot be a subjective quality
  • *AND**
  • **Cannot be about the future
72
Q

K: Defenses: Absence of Mutual Assent: Misrepresentation: FRAUD

A

An intentional misrepresentation
* Damages recoverable in addition to rescission

–> Makes the K VOIDABLE

73
Q

K: Defenses: Absence of Mutual Assent: Misrepresentation: Fraud: VOIDABLE K

A

CAN BE enforced IF the aggrieved party wants it to be

74
Q

K: Defenses: Lack of Capacity: TYPES

A
  1. Infancy
  2. Lack of Mental Capacity
  3. Intoxication
75
Q

K: Defenses: Lack of Capacity: INFANCY

A

A K made by someone under the age of majority, is VOIDABLE by the minor.

  • Anytime PRIOR to turning 18 and for a REASONABLE TIME AFTER
  • -> DISAFFIRMANCE
  • -> BUT the minor MUST PAY for the V of the benefits received
    • NOT THE K PRICE
  • There are EXCEPTIONS (See Card)
  • If the minor does NOT disaffirm within a reasonable time after reaching majority, the minor is bound
  • -> NO LONGER VOIDABLE
76
Q

K: Defenses: Lack of Capacity: Infancy: EXCEPTIONS

A
  • K for necessaries or necessities

- -> There are things that the minor needs to survive

77
Q

K: Defenses: Lack of Capacity: LACK OF MENTAL CAPACITY

A

K are voidable if a person’s mental capacity is SO DEFICIENT that they cannot understand the nature or significance of the agreement
–> May void when lucid OR a guardian can do so

78
Q

K: Defenses: Lack of Capacity: VOLUNTARY INTOXICATION

A

K are voidable IF the other party had reason to know of the intoxication

79
Q

K: Defenses: Lack of Capacity: INVOLUNTARY INTOXICATION

A

K are voidable IF the person could not understand the nature or significance of the agreement
–> does NOT matter if the other party knew of the intoxication

80
Q

K: Defenses: ILLEGALITY

A

Subject matter or consideration is ILLEGAL

81
Q

K: Defenses: Duress and Undue Influence: TYPES OF DURESS

A
  • Physical Duress
  • -> Involves threatening to physical harm to the contracting party
  • -> Renders the K VOID
  • Economic Duress
  • -> Involves taking advantage of the other party’s economic needs
  • -> IN MOST CASES, NOT A D
  • -> EXCEPTION (See card)
82
Q

K: Defenses: Duress and Undue Influence: EXCEPTIONS TO D OF ECONOMIC DURESS

A
  1. When the other party threatens to commit a wrongful act that SERIOUSLY THREATENS the other party’s property or finances
    AND
  2. When the other party has no adequate means available to prevent the threatened loss OTHER than agreeing to the K
83
Q

K: Defenses: Duress and Undue Influence: UNDUE INFLUENCE

A

Arises when there’s a person susceptible to pressure by a party and is pressured by that person to enter into an unfair K
* Usually someone confidential or a caregiver relationship

84
Q

K; Defenses; UNCONSCIONABILITY

A

Allows the court to refuse to enforce unfair Ks OR even unfair TERMS within a K.

  • Determined by the circumstances at the time the K was formed
  • *IMPORTANT NOTE: Most courts will NOT find a K unconscionable based on PRICE ALONE
85
Q

K: Defenses: Unconscionability: TYPES

A
  1. Unfair Surprise:
    * One of the parties slips something into the K
  2. Unequal Bargaining Power
    * One party holds all the cards and forces the other party into a bad deal
    - -> K of ADHESION
86
Q

K: Defenses: Condition Precedent

A

A provision that states that a duty is to be performed “when” an event occurs raises an issue of whether the event is a condition or is intended to merely mark the passage of time

  • Courts prefer the time interpretation b/c reduces the obligee’s risk of forfeiture
  • -> UNLESS the event is within the obligee’s control (“On condition that…”)
87
Q

K: Breach of K

A

Much harder to breach K in UCC than CL

  • UCC REQUIRES PERFECT TENDER (Perfect Performance)
  • -> If the performance varies at all from the terms of the K, there is a BREACH
88
Q

K: Breach of K: WARRANTY

A

If goods don’t live up to the warranties on the K, you’ve got a BREACH

89
Q

K: Remedy

A

To put the NONBREACHING PARTY in the position he/she would have been in had there been no breach.
–> The goal of contractual remedies is to put the non-breaching party in the position they would have been in had there been no breach.

90
Q

K: Remedies: COMPENSATORY DAMAGES

A

Try to compensate a party - make up what is missing from the performance of the K

  • Types of Compensatory Damages
  • -> Expectation Damages
  • -> Incidental Damages
  • -> Consequential Damages
  • -> Reliance Damages
  • -> Liquidated Damages
91
Q

K: Remedies: Compensatory Damages: EXPECTATION DAMAGES

A

Damages based on what the non-breaching party expected to get from the K

  • Measured by:
  • -> Substitute Performance
92
Q

K: Remedies: Compensatory Damages: Expectation Damages: SUBSTITUTE PERFORMANCE

A

The difference b/w the K PRICE and COST OF SUBSTITUTE

93
Q

K: Remedies: Compensatory Damages: INCIDENTAL DAMAGES

A

Costs reasonably incurred as a natural consequence of any breach

94
Q

K: Remedies: Compensatory Damages: CONSEQUENTIAL DAMAGES

A

Allows you to recover consequential damages that are reasonably foreseeable at the time the K was made
* To recover: MUST SHOW breaching party KNEW OR SHOULD HAVE KNOWN about the circumstances at the time the K was made

95
Q

K: Remedies: Compensatory Damages: RELIANCE DAMAGES

A

Losses suffered in reasonable reliance on the K

  • A form of compensatory damages when expectation damages are too speculative.
  • Costs based on reliance on the K
  • THE GOAL: To put the person back in the position they were in PRIOR to the K being formed.
  • -> BECAUSE figuring out the position had the K performed is too speculative
96
Q

K: Remedies: Compensatory Damages: LIQUIDATED DAMAGES CLAUSES

A

Damages set out in advance in K

  • Are permitted in K IF TWO CONDITIONS ARE MET:
    1. Actual Damages that will result from a breach MUST BE difficult to predict at the time the K was formed
    2. The amount MUST HAVE BEEN a reasonable forecast of the actual damages that will result
  • -> Punitive damages not allowed in K THEREFORE do NOT want a PENALTY CLAUSE
97
Q

K: Remedies: COVER

A

Buying replacement goods (UCC)

  • The difference b/w K price and the cost of substitute goods
  • There is no requirement to buy another boat
98
Q

K: Remedies: UCC: LOST VOLUME SELLER

A

Although the seller is able to resell the good, he still lost VOLUME of business

  • BUT FOR the buyer’s breach, the seller would have sold TWO, rather than one
  • -> Allowed to collect any PROFIT that the seller would have made from the second sale
99
Q

K: WARRANTIES

A

Promises by the seller about the goods sold

* Can be EXPRESS or IMPLIED

100
Q

K: Warranties: DAMAGES

A

The buyer can recover the difference b/w V of goods (as is) AND V of goods if they had been AS PROMISED.

101
Q

K: Warranties: CURE

A

When the good is not up to what it was described in the warranty, you may send it back and get what had been described.

102
Q

K: Damages: LIMITATIONS ON RECOVERY

A

Three limitations on Recovery:

  1. Reasonably Certain
  2. Foreseeable
  3. Unavoidable
103
Q

K; Damages; Limitations on Recovery; CERTAIN

A

Damages cannot be speculative.

* Must prove damages with REASONABLE CERTAINTY

104
Q

K; Damages; Limitations on Recovery; FORESEEABLE

A

Damages that arise and occur in the natural course of events from any breach

105
Q

K; Damages; Limitations on Recovery; UNAVOIDABLE

A

The non-breaching party CANNOT recover damages that could have been AVOIDED with REASONABLE effort
–> DUTY TO MITIGATE

106
Q

K; Damages; Limitations on Recovery; UCC; DUTY TO MITIGATE

A
  • There is NO obligation for an injured buyer to “cover” or buy substitute goods
  • There is no obligation of an injured seller to resell the goods
  • -> The non-breaching party is entitled to damages whether they try to mitigate the damages by covering or not
107
Q

K: Damages: NON-MONETARY REMEDIES

A

In situations where no amount of money will put the aggrieved person in the position they would have been in if the K were not breached.

  1. Specific Performance
  2. Reformation
108
Q

K: Damages: Non-Monetary Remedies: SPECIFC PERFORMANCE

A

When money will not put the aggrieved person in the position they would have been in had the K not been breach, the court may order the terms of the K to be completed.

  • Because the courts are reluctant to do this, the breaching party MUST SHOW:
  • -> the legal remedy is INADEQUATE
  • -> P must show that administration of the specific performance remedy is not unduly burdensome to courts
  • -> K terms MUST BE CERTAIN & DEFINITE
  • *Available to remedy:
  • -> Land Sale
  • -> Unique Goods
  • -> Sentimental V
  • -> NOT AVAILABLE for PERSONAL SERVICE K
109
Q

K: Damages: Non-Monetary Remedies: Specific Performance: ORDINARY GOODS

A

Specific performance is NOT AVAILABLE for the sale of ordinary goods
* ONLY unique/specialty goods

110
Q

K: Damages: Non-Monetary Remedies: REFORMATION

A

Reformation is a remedy that is available when a written K does not accurately reflect the agreement to which the parties agreed.

  • Court will change (reform) the K to get the K to say what the parties thought the K was going to say
  • A likely remedy for the courts when:
  • -> Mistake
  • -> Fraudulent Misrepresentation
111
Q

K: Damages: Non-Monetary Remedies: Reformation: MISTAKE

A

MUST BE:

  1. An oral agreement
  2. Followed by a written memorandum of that oral agreement
  3. With a mistake in the writing
112
Q

K: Damages: Non-Monetary Remedies: Reformation: FRAUDULENT MISREPRESENTATION

A

A party misrepresents contents of K and the other party relies
* Courts may reform the K

113
Q

K: Remedies: RESTITUTION

A

Although separate from K law, restitution is available in K situations WHEN THE K REMEDY IS NOT AVAILABLE
Main Goal: To prevent UNJUST ENRICHMENT
* Looks at how much the D has WRONGFULLY GAINED
–> ALSO APPROPRIATE when there is NO K b/w parties => QUASI-K (see card)

114
Q

K: Remedies: Restitution: QUASI-K

A

Implied K in law

  • Used to describe the basis of the claim
  • P MUST SHOW;
  • -> P conferred a BENEFIT from the D
  • -> P had a reasonable expectation of being compensated
  • -> D had REASON TO KNOW of the expectation
  • -> AND D would be UNJUSTLY ENRICHED if he were allowed to keep the benefit w/o paying for it.

K Law (1 decks)

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