MBE Contracts Flashcards
When is a contracting party’s duty to perform discharged by impracticability?
The defense of impracticability is available when (1) an unanticipated or extraordinary event makes it impracticable for the party to perform, (2) the contract was formed under a basic assumption that the event would not occur, and (3) the party seeking discharge was not at fault in causing the event to occur.
When can goods at auction be withdrawn under the UCC?
If goods are auctioned in lots, each lot represents a separate sale. Whether the goods can be withdrawn once the auctioneer calls for bids depends on the type of auction:
At a reserve auction—which is presumed unless a no-reserve action is announced—the auctioneer may withdraw goods from auction prior to completion of the sale
At a no-reserve auction—which must be specifically announced—goods cannot be withdrawn from auction after the auctioneer calls for bids unless no bid is received with a reasonable time
In either type of auction, a bidder may retract a bid until the auctioneer announces the completion of the sale (e.g., at the fall of the auctioneer’s hammer). However, the bidder’s retraction will not revive any earlier bids.
Who dictates the manner and means by which an offer can be accepted?
The offeror. But if the offeror does not do so, then the offeree can accept the offer in any reasonable manner and by any reasonable means—e.g., delivering the acceptance by mail, which is effective upon dispatch.
Under the UCC, what happens when an acceptance contains new or revised terms?
The UCC uses the battle-of-the-forms rule, meaning an acceptance that contains new or revised terms is still an acceptance (not a counteroffer) so long as it does not require assent to new or revised terms. And if at least one party is a non-merchant, then the new or revised terms are merely treated as proposed additions to the contract.
What is a requirements contract (and when is it breached)?
Under the UCC, a requirements contract is a contract for the sale of as many goods as the buyer requires during a specified period. This creates an exclusive agreement between the buyer and the seller. As a result, the duty of good faith and fair dealing implied in every contract requires the buyer to purchase goods from the seller only. A failure to do so violates that duty and is a breach of contract.
When is a debt satisfied by payment with a check?
If a debt is disputed in good faith, then the debtor can offer to satisfy the debt by giving the creditor a check with a conspicuous “payment in full” notation. If the creditor cashes that check, the debt is satisfied. But if the debt is certain and undisputed, then it cannot be satisfied by a check for a lesser amount—even if the creditor cashes the check.
Is a new promise to pay a debt after the statute of limitations for debt collection has run enforceable?
Yes, it is enforceable without any new consideration. When the new promise is an express promise, most jurisdictions require that the new promise be in writing and signed by the debtor to be enforceable.
Under the UCC, should a court presume that a written contract for the sale of goods is partially integrated or fully integrated?
Partially integrated. As a result, evidence of additional consistent terms is admissible unless the court concludes that the parties certainly would have included those terms in the writing.
When can a seller treat a buyer’s failure to specify assortment of goods as a breach?
The UCC imposes a duty on the buyer of assorted goods to specify the assortment unless the contract states otherwise. The seller can treat the buyer’s failure to specify the assortment as a breach only if it materially impacts the seller’s performance.
How is an installment contract defined under the UCC?
An installment contract is a contract in which the goods are to be delivered in multiple shipments, and each shipment is to be separately accepted by the buyer. Payment by the buyer is due upon each delivery unless the price cannot be apportioned.
When may a winning bidder avoid an auction sale?
A winning bidder may avoid an auction sale or pay the price of the last good-faith bid if the auctioneer (1) knowingly accepted a bid by the seller or on the seller’s behalf or (2) procured the seller’s bid to drive up the price. However, the winning bidder may not do so if the seller bid at a forced sale or gave notice reserving the right to bid.
What are the requirements of the UCC firm offer rule?
Under the UCC firm-offer rule, an offer to buy or sell goods will remain open and cannot be modified if: (1) the offeror is a merchant, (2) there is an assurance that the offer is to remain open, and (3) the assurance is contained in a signed writing from the offeror.
A firm offer is irrevocable for the time stated in the offer or, if no time is stated, for a reasonable time. However, the period of irrevocability cannot exceed three months—even if a longer time period is stated or implied—unless the offeree gives consideration to validate it beyond the three-month period.
When is the implied warranty of merchantability disclaimed?
It is disclaimed for defects that an examination would have revealed if the buyer: (1) examined the goods as fully as desired before entering the contract, or (2) refused to examine the goods before entering the contract.
When may a party to an illegal contract recover restitution damages?
A party to an illegal contract may recover restitution damages if that party conferred a benefit on the other party and (1) was justifiably ignorant of the facts that made the contract illegal, (2) was less culpable than the other party, or (3) withdrew before the contract’s illegal purpose was achieved and did not engage in serious misconduct (e.g., shockingly immoral, unethical, or unjust behavior).
When is the duty to perform discharged due to impracticability?
Performance becomes impracticable when: (1) an unforeseen event occurs, (2) nonoccurrence of the event was a basic assumption on which the contract was made, and (3) the party seeking discharge is not at fault.
