K II - Essential Provisions Flashcards
(95 cards)
1
Q
UCC 2-204 - K formation
A
- ANY MANNER of agreement is sufficient to form a K.
- A K can be formed even if the moment of its making is undetermined
- A K won’t be disqualified because there are open terms provided the parties have intended to enter a K and there is a reasonably certain basis for giving an appropriate remedy
2
Q
UCC 2-206 - Acceptance
A
- Acceptance can be furnished in ANY REASONABLE manner unless otherwise specified
- An order to buy goods can be accepted through either promise to ship or the shipment of goods (if they’re non-conforming that is a breach w/o a note explaining that the goods are merely an accommodation)
3
Q
UCC 2-205 - Firm Offers
A
A written, signed offer by a MERCHANT to buy/sell goods which states that it will be held open is not revocable for lack of consideration, but it won’t be enforced for more than three months.
4
Q
UCC 2-207(1) - Additional terms/Acceptance
A
- A K can be accepted even if it adds additional or different terms, but those changes are merely proposals, UNLESS the acceptance is conditioned on the additional terms.
5
Q
UCC 2-207(2) - Additional Terms for Merchants
A
- If the K is between MERCHANTS, then additional or different terms are accepted UNLESS they materially alter the K, the K expressly limits acceptance to the original terms, or the offeree has already objected to the different terms or notifies offeror in a reasonable time that they don’t accept the terms
6
Q
UCC 2-207(3) - Additional terms and performance
A
Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for salealthough the writings of the parties do not otherwise establish a contract. The K exists of the agreed upon terms in the writings and any gap fillers.
7
Q
UCC 2-204(3) - Indefiniteness
A
Even though there are open terms, a contract for the sale of goods doesn’t fail for indefiniteness if the parties intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy
8
Q
UCC 2-305 - Open Price in a K
A
intent to conclude a contract may create a contract even if the price isn’t specified because it can be determined by the market price at the time of delivery
9
Q
UCC 2-306 - Output requirement of good faith
A
If a K sets the quantity as the output of a seller or as the buyer’s requirements, the parties must act in good faith to produce or purchase accordingly. Best efforts must be used to supply or to buy.
10
Q
UCC 2-307 - Deliver in single or several lots
A
Unless otherwise agreed all goods called for by a contract for sale must be tendered in a single delivery and payment is only due when delivered.
Where the K gives the right to delivery in lots, the price can be apportioned as such.
11
Q
UCC 2-201(1) - Statute of Frauds
A
- Any sale for goods at $500 or more must be in writing. The writing must state the quantity, indicate the presence of a K, and be signed by the party against whom enforcement is sought.
Reliance and part performance are exceptions to the SoF requirement
12
Q
UCC 2-201(2) - Statute of Frauds (Merchant provision)
A
A contract may be enforceable even though it doesn’t satisfy the SoF if it is between merchants and a K signed by one party is sent to the other followed by a lapse of 10 days operates as a signature of the receiving party IF both parties are merchants.
(there’s no analogue in the restatements)
13
Q
UCC 2-201(3) - Statute of Frauds (Exceptions)
A
- if the goods are specially manufactured, not suitable for sale to others in the course of ordinary business and the seller, under circumstances indicating the goods are for the buyer, has substantially begun manufacturing or procurement before repudiation is received (this is a reliance measure)
- if the party against whom enforcement is sought admits to the K
- if the goods have been paid for and accepted
Additionally, some cases uphold enforcement based on reliance outside the type of reliance noted in subsection 3 through UCC 1-103(b)
14
Q
UCC 1-103(b) - Explicit displacement of K Principles
A
(b) Unless displaced by the particular provisions of the Uniform Commercial Code, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, and other validating or invalidating cause supplement its provisions.
Effectively these general principles can be displaced but it must be expressly so
15
Q
UCC 2-202 - K Interpretation
A
- A K is interpreted in light of the circumstances
- The writing (and any related writings) are interpreted as a whole.
- Unless specified, the default definition is the general meaning. Technical terms will be relied upon when used in their field.
- Course of performance is given great weight
- The K will be interpreted not to clash with the course of performance, course of dealing, or usage of trade
16
Q
UCC 2-314 - Implied Warranty of merchantability
A
If the seller is a merchant, there is a warranty that the goods are of “fair and average quality” (aka good enough)
17
Q
UCC 2-315 - Implied Warranty of Fitness for a Particular Purpose
A
If the seller is a MERCHANT, the merchant knows that you are buying the goods for a PARTICULAR purpose, and the seller knows that the BUYER is relying on their expertise, then this warranty exists.
18
Q
UCC 2-302 - Unconscionability
A
If a K or term is unconscionable at the TIME OF CONTRACTING a court may refuse to enforce it or it may enforce the remainder of the K without the unconscionable term or may limit the application of any unconscionable term as to avoid an unconscionable result.
If a K or term appears unconscionable, then the parties will be given the chance to evidence.
19
Q
UCC 2-209(2) - Modification
A
An agreement modifying a contract for the sale of goods needs no consideration to be binding. The ability to modify can be excluded expressly in the contract, but if it is a form between merchants, it has to be signed separately.
The modern trend is toward recognition of promises as long as the sincerity of the obligation is clear and the commitment freely made, even if that same agreement would have been unenforceable under the strict consideration doctrine
20
Q
RS 1 - K Defined
A
A K 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
21
Q
RS 2 - K Roles
A
A promise is a manifestation of intention to act or refrain from acting in a specified way, made to justify a promisee in understanding that a commitment has been made
The person manifesting the intention is the promisor
The person accepting the manifestation is the promisee
Where performance will benefit a person other than the promisee, that person is a beneficiary
22
Q
RS 3 - Agreement and Bargain
A
An agreement is a manifestation of mutual assent on the part of two or more persons
A bargain is an agreement to exchange promises or a promise for performance or performances
23
Q
RS 90 - Promissory Estoppel
A
A promise which the promisor should reasonably expect to induce action or forbearance by the promise or a third party and which does induce such action is binding if injustice be avoided only by enforcement of the promise.
24
Q
RS 17 - Requirement of a Bargain
A
A K requires a bargain with a manifestation of mutual assent to the exchange and consideration.
25
RS 71 - Requirement of Exchange
To be consideration, a performance or a return promise must be bargained for
To be bargained for, it must be sought by the promisor in exchange for his promise and given in exchange for that promise.
Performance can be an act other than a promise, forbearance, creation modification or destruction of a legal relation
26
RS 24 - Offer
An offer is a manifestation of willingness to enter into a bargain, made to justify another person in understanding that his assent to the bargain is invited and will conclude it.
27
RS 25 - Option K
An option K is a promise which meets the requirements for the formation of a K and limits the promisor's power to revoke
28
RS 26 - Preliminary Negotiations
A manifestation of a willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.
29
RS 27 - Written Memorialization
Manifestations of assent are enough to create a K. An intent to memorialize the K in a writing does not prevent a K from being formed, but circumstances may show that the agreements are preliminary negotiations.
30
RS 30 - Form of acceptance
Unless otherwise indicated, an offer invites acceptance in any manner and by any medium reasonable in the circumstances
31
RS 32 - Invitation of promise or performance
If there is any doubt, an offer is interpreted as inviting the offeree to accept by promise to perform or by performance, it's up to the offeree
32
RS 50 - Acceptance
Acceptance is the manifestation of assent
Acceptance by performance requires that at least part of what the offer requests be performed or tendered
Acceptance by a promise requires that the offeree complete every act essential to the making of the promise
33
RS 51 - Part performance w/o knowledge of the offer
Unless the offeror manifests a contrary intention, an offeree who learns of an offer after he has rendered part of the performance requested by the offer may accept by completing the requested performance
34
RS 52 - Wo can accept the offer
Only the person whom it invites to furnish the consideration
35
RS 53 - Acceptance by performance
An offer can be accepted by performance only if the offer invites such an acceptance
Beginning to render the performance does not constitute acceptance if within a reasonable time the offeree exercises reasonable diligence to notify the offeror of non-acceptance
36
RS 54 - Acceptance by performance and the necessity of notification to offeror
No notice is necessary to make an acceptance of performance effective unless the offer requests such a notification
However, if the offeree has reason to know that the offeror has no adequate means of learning of the performance with reasonable promptness and certainty, then there must be notice.
To be a valid K, the offeree must exercise reasonable diligence to notify the offeror of the acceptance or the offeror must learn of the performance within a reasonable time or the offeror indicates that notification of acceptance is not required.
37
RS 56 - Acceptance by Promise + Notification
Acceptance by promise requires that the offeree either exercise reasonable diligence to notify the offeror of acceptance or that the offeror receive the acceptance seasonably (except as stated in § 69)
38
RS 57 - Effect of equivocal acceptance
Acceptance in ambiguous terms is not binding unless reasonably understood by the offeror to be acceptance
39
RS 58 - Necessity of acceptance complying with terms of offer
An acceptance must comply with the requirements of the offer as to the promise to be made or the performance to be rendered
40
RS 59 - Purported acceptance that adds qualifications
A reply to an offer which purports to accept it but is conditional on the offeror's assent to additional or different terms from the original offer is a counter-offer not acceptance
41
RS 60 - Acceptance of an offer that states time, place, or manner of acceptance
If an offer prescribes the place, time, or manner of acceptance must be complied with in order to create a K. However, mere suggestion of a place, time, or manner of acceptance does not bar deviation.
42
RS 61 - Acceptance which requests change of terms
Acceptance that requests a change is not invalidated unless the acceptance depends on assent to the changed or added terms.
43
RS 62 - Acceptance by performance
Beginning the performance is acceptance.
Such an acceptance acts as a promise to render complete performance.
44
RS 63 - Mailbox rule
An acceptance made in a medium invited by an offer is operative and completes the manifestation of mutual assent as soon as it is out of the offeree's possession, regardless of whether it reaches the offeror BUT an acceptance under an option contract is not operative until received by the offeror.
45
RS 64 - Acceptance remotely
Acceptance by phone or other instantaneous communication is governed by principles applicable to acceptances where the parties are in the presence of each other.
46
RS 65- Reasonableness of medium of acceptance
A medium of acceptance is reasonable if it is the one used by the offeror or one customary in similar transactions at the time and place the offer is received
47
RS 66 - Acceptance by dispatch
An acceptance by mail or other dispatch is only operative if it is properly dispatched
48
RS 67 - Effect of receipt of acceptance of improperly dispatched
An acceptance seasonably dispatched but through means not invited by the offer or through faulty dispatch is operative upon dispatch if received within the time in which a properly dispatched acceptance would normally have arrived.
49
RS 68 - Receipt of revocation, rejection, or acceptance
Revocation, rejection, or acceptance is received when the party takes possession of the transmission or by his agent, or deposited somewhere the offeror has access to for such transmissions.
50
RS 69 - Acceptance by silence
Silence only acts as acceptance where:
- The offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation
- The offeror has stated or given the offeree reason to understand that assent may be manifested by sielece or inaction and the offeree intends acceptance by such means
- per prior course of dealing, it is reasonable that the offeree should notify the offeror if he does not intend to accept
An offeree who treats the property as their own will have accepted the offer unless the terms are manifestly unreasonable.
51
RS 70 - Late or defective acceptance
A late or defective acceptance may be effective as an offer to the original offeror, but his silence only operates as acceptance per RS 69
52
RS 36 - Methods of termination of the power of acceptance
1. Rejection or counter offer by the offeree
2. Lapse of time
3. Revocation by the offeror
4. Death or incapacity of the offeror or offeree
An offeree's power of acceptance is also terminated by the non-occurrence of any condition of acceptance under the terms of the offer
53
RS 37 - Termination of power of acceptance under an option contract
Notwithstanding 38-49, the power of acceptance under an option contract is not terminated by rejection or counter-offer, by revocation, or by death or incapacity of the offer, unless requirements are met for the discharge of a contractual duty
54
RS 38 - Rejection
An offeree's power of acceptance is terminated by his rejection of the offer, unless the offeror has manifested a contrary intention
A manifestation of intention not to accept an offer is a rejection unless the offeree manifests an intention to take it under further advisement
55
RS 39 - Counter offers
Terminates the power of acceptance unless the offeree manifests a contrary intention or unless the counter-offer manifests a contrary intention of the offeree
56
RS 40 - Time that rejection or counter offer terminates the power of acceptance
When it is received by the offeror.
A letter of acceptance sent after an otherwise effective rejection or counter offer is only a counter-offer itself unless the acceptance is received by the offeror before he receives the rejection or counter-offer
57
RS 41 - Lapse of Time
Power of acceptance is terminated after a time specified in K or after a reasonable time if no time is stated.
A reasonable time is a question of fact depending on all the circumstances
Except as stated in 49, an offer is accepted if it acceptance is mailed before midnight on the day on which the offer is received.
58
RS 42 - When revocation becomes effective
When the offeror receives from the offeror a manifestation of an intention not to enter into the proposed contract
59
RS 43 - Indirect revocation
Power of Acceptance is terminated when the offeror takes definite action that is inconsistent with an intention to enter into the proposed K and the offeree acquires reliable info to that effect.
60
RS 44 - Effect of a deposit
An offeror's power of revocation is not limited by the deposit of money or other property to be forfeited in the event of revocation, but the deposit may be forfeited to the extent that it is not a penalty
61
RS 45 - Option K by part perfromance
An offer that invites acceptance by performance, not by promise, creates an option K when the offeree begins the performance
The offeror's duty is conditional on completion of the performance per the terms of the offer
62
RS 46 - Revocation of a general offer
The ability to accept an offer in an ad or newspaper to the general public is terminated when a notice of termination is given publicly by advertisement or other general notification equal to that given to the offer and no better means of notification is reasonably available
63
RS 47 - Revocation of a divisible offer
An offer contemplating a series of independent contracts by separate acceptances may be effectively revoked so as to terminate the power to create future contracts though one or more of the proposed Ks have been formed by the offeree's acceptance
64
RS 48 - Death or incapacity
An offeree's power of acceptance is terminated when the offeree or orfferor dies or is deprived of legal capacity to enter into the proposed contract
65
RS 87 - Option K
An offer is binding as an option K if it is in writing, signed by the offeror, supported by consideration, and proposes an exchange on fair terms within a reasonable time
Consideration is sufficient even as small as $1 unless it is grossly disproportional to the value of the option
66
RS 116 - Main purpose rule, Surety
A K creating a surety does not satisfy the SoF if the main purpose is to benefit the promisor rather than to benefit the third person, unless it is for to an insurance premium
67
RS 131 - General requisites of a Memo
SoF requires:
- signature by the party against whom enforcement is sought
- reasonably identifies the subject matter of the K
- evidences a K
- states w/ reasonable certainty the essential terms of the unperformed promises in the K
68
RS 139 - enforcement by reliance
Reasonable reliance may make a K enforceable even if it does not satisfy the SoF if injustice can only be avoided by enforcement.
69
RS 14 - Infants
Unless a statute provides otherwise, a natural person has the capacity to incur only voidable contractual duties until the beginning of the day before the person's 18th birthday
70
RS 15 - Mental illness or defect
A person only incurs voidable contractual duties if they are unable to understand in a reasonable manner the nature and consequences of the transaction or unable to act in a reasonable manner in relation to the transaction and the other party has reason to know of his condition.
If a K is made on fair terms w/o the other party knowing of the mental incapacity, the power of avoidance is terminated to the extent the K has been performed or the circumstances have changed so that avoidance would be unjust.
71
RS 159 - Misrepresentation
An assertion that is not in accord with the facts
72
RS 160 - Concealment
Occurs when an action is intended or known to be likely to prevent another from learning a fact. This is equivalent to an assertion that the fact doesn't exist.
73
161 - Non-disclosure
A person's non-disclosure is equivalent to an misrepresentation where:
- he knows that disclosure is necessary to prevent a previous assertion from being a misrepresentation
- Where he knows that disclosure of the fact would correct a misconception of the other party, here non-disclosure is a failure to act in good faith
- Where he knows disclosure would correct a misconception about a writing
- Where the other party is entitled to know the fact because of a relation of trust and confidence between them
74
RS 162 - When a misrepresentation is fraudulent or material
when a party intends his assertion to induce a party to manifest the assent and the one making the assertion knows or believes that the assertion is untrue, doesn't actually have the level of confidence he implies in the truth of the assertion, or knows he doesn't have the basis he founds the assertion on.
A misrepresentation is material if it would be likely to induce a reasonable person to manifest his assent
75
RS 163 - Misrepresentation preventing a K
A K is not formed if a misrep of the character or essential terms of a K induces a manifestation of assent by one who doesn't know or have reason to know of the actual character or terms of a K
76
RS 73 - Performance of a Legal Duty
Pre-existing duty cannot be consideration, but a similar performance is consideration if it differs from what was required by the duty in a way which reflects more than a pretense of a bargain
77
RS 209 - Integrated agreements (PER)
An integrated agreement is a writing(s) that constitute a final expression of one or more terms of an agreement
The court determines if the agreement is integrated prior to applying the PER
An agreement reduced to writing and seemingly complete is assumed to be integrated unless other evidence establishes that it was not a final expression
78
RS 210 - Complete/Partial Integration (PER)
A complete integration is an exclusive statement of the terms of the agreement
A partial integration is any other integrated agreement
The court determines whether an agreement is partial or completely integrated
79
RS 211 - Standardized Agreements (PER)
A regularly used form is an integrated agreement if the signer has reason to know of similar forms being used.
The terms are interpreted to apply consistently to any parties
However, if the other party has reason to believe that the party manifesting assent wouldn't do so if they knew of a particular term included, then the term is not part of the agreement
80
RS 212 - Interp of an integrated agreement (PER)
Interpretation is based on the meaning of the terms in light of the circumstances
Interpretation is a fact question if it depends on the credibility of evidence, otherwise it is a question of law
81
RS 213 - PER
A binding integrated agreement discharges PRIOR agreements that are INCONSISTENT with its terms
A binding COMPLETELY integrated agreement discharges prior agreements that are within its scope
82
RS 214 - Evidence (PER)
Any agreements or negotiations prior to or contemporaneous (but NOT after) the adoption of a writing are admissible as evidence tO:
1. Show that the writing is not an integrated agreement
2. That the integrated agreement is either complete or partial
3. The meaning of the writing, whether integrated or not
4. Invalidation of the writing for illegality, fraud, duress, mistake, lack of consideration, etc
5. Grounds for granting or denying rescission, reformation, specific performance, or other remedy
83
RS 200 - Interpretation of a promise or agreement
To ascertain its meaning
84
RS 201 - Whose meaning prevails
Every K should be interpreted in accordance with the jointly assigned meaning and intent of the parties
If there are different meanings attached, if one party knew about the discrepancy, it will be interpreted against them
Separate meanings attached good faith (without notice) prevents mutual assent and therefore precludes a K from forming
85
RS 202 - Rules in aid of interpretation
Words have their normal meaning
A writing is interpreted as a whole
Technical terms are defined accordingly IF used in their field
Course of performance is given great weight
86
RS 203 - Standards of preference in interpretation
A K will be interpreted to be lawful wherever possible
express terms, then course of performance, then course of dealing, then usage of trade
Specific and exact terms are given greater weight than general language
Separately negotiated or added terms are given greater weight than standardized terms or other terms not separately negotiated
87
RS 178 - Unenforceability for Public Policy reasons
Enforcement will be precluded where it is statutorily prohibited or the benefit of enforcement is clearly outweighed by public policy
Considerations:
- Party's expectations
- Forfeiture
- Any special public interest
- the strength of the policy in legislative or judicial decisions
- the likelihood that the refusal will further that policy
- the seriousness and intentional quality of any misconduct
- the directness of the connection between that misconduct and the term
88
RS 208 - Unconscionable K or Term
If a K is unconscionable at the time of contracting, a court may refuse to enforce all or part of the K or limit the application of the term.
Traditionally, the test was no man in his senses and not under delusion would make the K and no man in good conscience would accept the agreement.
89
RS 205 - Good faith and fair dealing
Every K imposes this on each party
90
RS 206 - Interpretation against the draftsman
Ambiguity in the K will be interpreted against the drafter
91
RS 207 - Interpretation favoring the public
A meaning that serves the public interest is generally preferred
92
RS 302 - Intended and incidental beneficiaries
A party is an intended beneficiary if the parties intended them to have a right to performance and EITHER:
1. The performance will satisfy an obligation of the promisee to pay money to the beneficiary OR
2. The circumstances indicate the promisee intends to give the beneficiary the benefit of the promised performance
Anyone who benefits from the performance but was not expressly intended to is an incidental beneficiary and has no right to performance
93
RS 309(1) - Voidable K and a Third Party Beneficiary
A contract must be formed to give the third party a right to performance. If the K is voidable or unenforceable, then the third party has no right.
94
R 317 - Assignment of a Right
Assignment of a right is the manifestation of the assignor's intention to transfer it, which extinguishes the assignor's right to performance and the assignee acquires that right.
A contractual right can be assigned unless:
1. it would materially change the duty, increase the burden, or reduce the value
2. The assignment is forbidden by law or public policy
The assignment is validly precluded by contract
95
UCC 2-308 - Absence of Specified Place of Delivery
Defaults to the seller's place of business or, if he has none, his residence
In a K where both parties know the goods are in some other place, that is the place for their delivery
Documents of title may be delivered through customary banking channels
