MBE K Flashcards
(138 cards)
1
Q
Accord & Satisfaction - its impact on which duty?
A
Discharges both the original K and the accord K
2
Q
Accord agreement. What is required?
A
A party to a K agrees to accept a performance from the other party that differs from the performance that was promised in the existing K, in satisfaction of the other party’s existing duty
Generally, consideration is required
3
Q
Pre existing Duty rule at common law
A
A promise to perform a preexisting legal duty does not qualify as consideration
4
Q
UCC firm offer. Does it need consideration?
A
• Under the UCC’s firm offer rule, an offer to buy or sell goods is irrevocable if
○ the offeror is a merchant,
○ there is an assurance that the offer is to remain open, and
the assurance is contained in a signed writing from the offeror.
5
Q
Shipment of nonconforming goods + notice of accommodation
A
Counteroffer
6
Q
A covenant of —–is implied in all contracts (common law and UCC)
A
Good Faith and Fair dealing
7
Q
What can a buyer of nonconforming goods can do?
A
Right to accept or reject all or part of shipment
8
Q
Defense of Impracticability
A
An unforeseen event must occur,
the nonoccurrence of which must have been a basic assumption on which the K was made
9
Q
Parol Evidence Rule
A
The parol evidence rule generally prevents a party to a written contract from presenting prior extrinsic evidence that contradicts the terms of the contract as written.
10
Q
PER Total Integration
A
If the writing completely expresses all of the terms of the parties’ agreement, then it is a total integration, and the parties cannot introduce any extrinsic evidence (oral or written) of prior or contemporaneous understandings or negotiations
11
Q
PER Partial integration
A
on the other hand, the writing sets forth the parties’ agreement about some terms, but not all terms, then it is a partial integration.
12
Q
UCC PER
A
The UCC essentially presumes that a contract is a partial integration.
13
Q
Partial integration and supplementary evidence
A
When a writing is a partial integration, the parties are permitted to introduce supplementary extrinsic evidence (oral or written) of other terms as long as the evidence is consistent with the writing, but not if the evidence contradicts the terms of the writing.
14
Q
Permitted supplementary evidence even when UCC Terms are not ambiguous
A
Under the UCC, even if the terms of a written contract for the sale of goods appear to be unambiguous, a party may explain or supplement the terms by evidence of trade usage or course of dealings or performance. Trade usage is any practice or method of dealing in the particular business or industry that is practiced with such regularity so as to justify an expectation that it will be practiced in the instant case.
15
Q
A course of performance under PER
A
A course of performance is a sequence of conduct that is relevant to understanding an agreement between the parties if: (i) the agreement involves repeated occasions for performance by a party, and (ii) the other party accepts performance without objection and with knowledge of the course of performance.
16
Q
A party’s performance of duty + The counter party’s duty subject to an unsatisfied express condition precedent + Condition not satisfied.
Any party breach?
A
Nope
17
Q
Breach & Performance under CL
A
Under common law, a material breach of contract allows the nonbreaching party to withhold any promised performance and to pursue remedies for the breach, including damages. A breach is considered minor when the breaching party has substantially performed.
18
Q
Language for creating a condition
A
Answer choice C is incorrect because the “first week of June” start date was not an express condition. Express conditions generally contain language such as, “on condition that” or “provided that.”
19
Q
Good faith purchaser of goods
A
A good faith purchaser of goods in the ordinary course of business from a merchant takes good title to the goods if the goods have been entrusted by the owner to the merchant and the merchant deals in the same kind of goods.
20
Q
UCC + Nonconforming goods + No instruction from the seller re: acceptance within reasonable time
A
Under the UCC, if either the tender or the goods are nonconforming, then the buyer has the right to accept or reject all or part of the goods. Upon tender of nonconforming goods, a buyer must retain possession of the rejected goods for a reasonable period of time to allow the seller to reclaim them. However, a buyer’s attempts in good faith to dispose of defective goods when the seller fails to give instructions within a reasonable time are not to be regarded as an acceptance.
21
Q
Requirement for recovering consequential damages
A
Consequential damages are recoverable in a breach of contract actions only if they were reasonably foreseeable at the time that the contract was entered into.
22
Q
Anticipatory repudiation
A
Anticipatory repudiation occurs when there has been an unequivocal refusal of the buyer or seller to perform, or when reasonable grounds for insecurity arise with respect to the performance of either party, and the other party fails to provide adequate assurances within a reasonable time (not to exceed 30 days under the UCC).
23
Q
CL Breach? When is a breach minor?
A
Under common law, a material breach of contract occurs when the nonbreaching party does not receive the substantial benefit of its bargain. A material breach of contract allows the nonbreaching party to withhold any promised performance and to pursue remedies for the breach, including damages. A breach is considered minor when the breaching party has substantially performed.
24
Q
Purpose of Promissory Estoppel
A
To enforce Ks without consideration
25
Waiver of condition. How? Can a party use that waived condition as a defense?
Either by words or conducts.
Estopped from using that condition as a defense if the other party reasonably relied on the party's words or conduct that the condition has been waived.
26
When obligations are delegated, is the delegator released from liability?
N
27
When does the gratuitous assignment of contract rights terminate (automatically)?
Upon the death of the assignor.
28
Quasi Contract
When a plaintiff confers a benefit on a defendant and the plaintiff has a reasonable expectation of compensation, allowing the defendant to retain the benefit without compensating the plaintiff would be unjust.
Cabin owner vs. Contract hired by the tenant
29
When would be the bad-faith argument re: contract applied?
Fraud, other dishonest actions
30
Mistake + annuity K + Assumption of risks
A mistake is a belief that is not in accord with the facts as to a basic assumption on which the contract was made that materially affects performance. Here, the ex-husband and ex-wife both entered into this agreement without knowledge of the wife's illness, both presumably believing that the ex-wife would live for some number of years. However, not every contract based on a mistaken belief will be rescinded because of that mistake. If the adversely affected party assumed the risk of mistake, he will be unable to rescind. The purchaser of an annuity contract assumes the risk that the person on whose life the annuity is based will die before the price paid for the annuity is recouped, and the issuer of the contract assumes the risk that that person will live beyond the recoupment date. This assumption of the risk is inherent in the nature of the annuity contract.
31
Is a subcontractor's bid a binding offer?
No, just an outstanding ofer.
32
Merchants + UCC + Acceptances
hen both parties to a contract governed by the UCC are merchants, the acceptances are often default forms that contain different and additional terms from those specifically agreed upon by the parties.
33
Merchants + UCC + Acceptances + Additional terms
An additional term in the acceptance is automatically included in the contract when both parties are merchants, unless the term materially alters the original contract, the offer expressly limits acceptance to the terms of the offer, or the offeror has already objected to the additional terms, or objects within a reasonable time after notice of them was received.
34
Condition to revoke an offer
An offer is revoked when the offeror makes a manifestation of an intention not to enter into the proposed contract. If the offeree acquires reliable information that the offeror has taken definite action inconsistent with the offer, the offer is automatically revoked (i.e., a constructive revocation occurs).
35
Option contract valid only for merchants?
an option contract, in which an offeree gives consideration to limit an offeror’s power to revoke an offer, may be valid even if entered into by parties who are not merchants.
36
Option contract - Consideratin needed?
| Firm offer - consideration needed?
Option K - CL - Yes
| Firm offer -UCC and merchant - no
37
UCC definition of merchant
the definition of merchant under the firm offer rule includes not only a person who regularly deals in the type of goods that are the subject of the offer (here, artwork) or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction, but also any businessperson when the transaction is of a commercial nature.
38
Mailbox rule and Option Contract
Does not apply to option contract
| When received or within reasonable time.
39
Mailbox rule and Firm Offer
accpetance must be RECEIVED by the merchant
40
Valid option K + offeror's death of incapacity
Valid options do not terminate upon death or mental incapacity of the offeror because consideration was paid to keep the offer open during the option period; the offer is therefore made irrevocable during that period.
cf) Gratuitous assignment of K - termination upon assignor's death
41
When is the retraction(revocation) of offer effective?
“[A] retraction of an offer can have no effect until it is communicated to the person to whom the offer is made.”
42
UCC SOF Confirming memo
Under the Code, between merchants if (i) within a reasonable time, (ii) a party sends a writing in confirmation of the contract “sufficient against the sender[,]” (iii) that is received by the receiving party and read and understood by the receiving party, (iv) and not objected to within 10 days, then the writing is a confirming memo that will satisfy the writing requirement
43
2-207 (a)
A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
44
2-207(b)
(b) Effect on contract.--The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:
(1) the offer expressly limits acceptance to the terms of the offer; (2) they materially alter it; or
(3) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.
45
A promise not to bring legal action as consideration
A promise not to bring a legal action or to assert a particular claim or defense in such an action generally can serve as consideration for a settlement agreement because the party making the promise is foregoing a legal right. The legal action need not be one that is certain to succeed. Instead, the claim or defense must be in fact doubtful due to uncertainty of facts or law, or the party failing to assert the claim or defense must believe in good faith that it may be fairly determined to be valid. Here, the tourist had a good-faith belief as to the validity of the negligence claim against the guide.
46
Fraudulent misrep
A fraudulent misrepresentation can render a contract voidable by the adversely affected party if (i) the misrepresentation is fraudulent (i.e., a false assertion of fact made knowingly or recklessly without knowledge of its truth, and with the intent to mislead the other party), (ii) the misrepresentation induced assent to the contract, and (iii) the adversely affected party justifiably relied on the misrepresentation.
47
Quasi K
√=When a plaintiff confers a benefit on a defendant and the plaintiff has a reasonable expectation of compensation, allowing the defendant to retain the benefit without compensating the plaintiff would be unjust. In this case, the court can permit the plaintiff to recover the value of the benefit to prevent the unjust enrichment.
48
Subsequent assignment of contractual right
subsequent assignment of the same contractual right generally revokes any prior revocable assignment. A gratuitous assignment is generally a revocable assignment, unless it is supported by a document, and it does not appear that this one does.
49
Assignment of K - Still liable for payment?
Yes
50
Parol Evidence & Condition precedent
Parol evidence may be admitted to prove a condition precedent to the existence of the contract.
the parol evidence rule does not apply to this oral agreement because it deals with the existence of a condition precedent to the existence of the contract.
51
Deadline. Waived by the bride + Artist relied + Revocation of waiver ( reinstatement of deadline) + Failed to deliver. Claim?
Yes. A party whose duty is subject to a condition can waive the condition, either by words or by conduct. A condition that is material to the party’s primary purpose may be reinstated by the party. A condition that is not material may be reinstated if the waiving party communicates a retraction of the waiver before the condition is due to occur, and the other party has not already suffered detrimental reliance. Here, the artist detrimentally relied on the woman’s waiver of the deadline when he accepted another job in lieu of completing the postcards, and then subsequently breached the contract for that job to try to meet the July 15 deadline. Therefore, the woman cannot reinstate the July 15 deadline, and she is bound by her waiver of this condition and has a duty to pay the artist for delivery of the cards.
52
Demand for assurance re: repudiation in UCC
A party can demand assurances of performance if there are reasonable grounds for insecurity about the other party’s ability or willingness to perform. Once such assurances are requested, performance may be suspended until they are provided. Failure to give adequate assurances within a reasonable time can be treated as a repudiation. Under the UCC, the demand for assurances must be made in writing.
53
Contract of identified goods & Risk of loss
If a contract deals with identified goods (e.g., a specific painting or specifically identified items of inventory), and those goods are totally destroyed through no fault of the seller prior to the risk of loss being shifted to the buyer, neither party is required to perform and neither party has breached.
54
Party that materially breached. Damage claim?
Restitution claim
55
Attractive nuisance
Under the “attractive nuisance” doctrine, a land possessor may be liable for injuries to children trespassing on the land if (i) an artificial condition exists in a place where the land possessor knows or has reason to know that children are likely to trespass, (ii) the land possessor knows or has reason to know the condition poses an unreasonable risk of death or serious bodily injury to children, (iii) children do not discover or cannot appreciate the danger of the condition, (iv) the utility to the land possessor of maintaining the condition and the burden of eliminating the danger are slight compared to the risk of harm presented to children, and (v) the land possessor fails to exercise reasonable care.
56
Anticipatory repudiation - when can't you sue early?
completeed the entire performance and waiting for payment ( built the thing and I gotta wait)
57
Opinion or puffery - express warranty?
No
58
Right of Reclamation
When a buyer receives goods on credit, and the seller learns that the buyer is insolvent, the seller may reclaim the goods, provided a demand is made within 10 days after the buyer’s receipt of the goods.
59
Limitation of consequential damages re: implied warranty of merchantibility
With respect to a breach of the implied warranty of merchantability, while a limitation of consequential damages is permitted, the limitation of such damages for personal injury in the case of consumer goods is prima facie unconscionable.
60
Buyer wants to gain goods in possession of the seller. How?
A buyer may gain possession of goods under contract that are in the seller’s possession through an action such as replevin, but in order to do so the goods must be identified.
61
PER - extrinsic evidence of a condition precedent.
PER doesn't apply
62
UCC + Prohibition on oral modification of the contract. Enforceable?
Yes. Under the Uniform Commercial Code (UCC), a clause in a written contract that prohibits oral modification of the contract is enforceable.
63
Auction - withdrawal of a higher bid.
onsequently, the withdrawal of a higher bid does not automatically reinstate the next lower bid.
64
UCC - formation of K
Under the UCC, a contract is formed if parties intend to contract, and there is a reasonably certain basis for giving a remedy.
65
Auctioneer's right to withdraw
Unless specifically announced otherwise, an auction is with reserve, meaning that the seller has the right to withdraw an item from sale at any time before the auctioneer announces the completion of the sale.
66
Offeror's power. Mode of acceptance
The offeror can dictate the manner and means by which an offer may be accepted. Unless the offeror specifically requires the offeree to accept in a particular manner or by using a particular means, the offeree can accept in any reasonable manner and by any reasonable means. Here, the woman did not specify that the acceptance could only be mailed to her business address; she merely suggested that an acceptance could be mailed to her business address.
67
At least one non-merchant + acceptance with a modified term . Acceptance?
For a sale of goods where at least one party is a nonmerchant, an acceptance that contains a modification to the terms in the offer is nevertheless an acceptance.
68
Accord and satisfaction by a negotiable instrument
ex) Check
(1) the obligation must be unliquidated (i.e., uncertain in amount) or otherwise in dispute;
(2) the obligor must, in good faith, tender the negotiable instrument with a conspicuous statement that the instrument is tendered as full satisfaction of the obligation; and
(3) the obligee must obtain payment of the instrument (e.g., by cashing the check).
However, the buyer did not dispute the initial purchase price of the car. Absent a dispute, the check could not have been offered in good faith.
69
Dischargeability of an original debt under accord
Although the original debt is not generally discharged immediately upon entering into an accord, once the creditor accepts the lesser amount offered by the accord, the original contract is discharged.
70
A man promised his brother to give a desk as a gift. Enforceable?
Yes. a promise to make a gift in the future can be enforced if the requirements for promissory estoppel are met.
71
A new promise to pay a debt. Enforceable?
Yes. A new promise to pay a debt after the statute of limitations has run is enforceable without any new consideration.
72
Delegator's liability
When obligations are delegated, the delegator is not released from liability, and recovery can be had against the delegator if the delegate does not perform, unless the other party to the contract agrees to release that party and substitute a new one (i.e., a novation occurs). T
73
Common-law total integration test
Under the common-law four-corners rule, a court is required to look only to the wording of the document itself (i.e., within its “four corners”) in determining whether the parties intended the document to be a total integration of their agreement.
74
UCC total integration test
Under the UCC, a court, in determining whether a contract constitutes a total integration of the parties’ agreement, should generally treat a written agreement as only a partial integration of the parties’ agreement unless the court can conclude that the parties’ “certainly would” have included the term in the written agreement.
75
Standard in determining the admissiblity of extrinsic evidence despite written agreement
plain-meaning rule, which provides that the objective definitions of contract terms control the meaning of the contract, may be applicable in ascertaining whether to admit extrinsic evidence despite the written agreement being a total integration.
76
Course of performance
A course of performance is relevant to show a waiver or modification of any term inconsistent with the course of performance. Because the course of performance here has been consistent with the terms of the contract, the course of performance is irrelevant and the express terms of the contract regarding the gardener’s duty to pay will prevail.
77
Failure to specify the assortment of goods. Whose duty?
Failure breach? on what condition?
When a contract fails to specify the assortment of goods, the duty to select the assortment falls on the buyer. If the buyer fails to specify the assortment of goods, then the seller can treat the failure as a breach by failure to accept the contracted-for goods only if the buyer’s failure materially impacts the seller’s performance.
78
UCC installment K
Under the UCC, an installment contract is defined as one 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.
79
Available damages for non-breaching party
1. Exp dmg
| 2. Rel dmg
80
Standard in determining exp dmg?
Foreseeability by the breaching party
81
Seller's breach in good faith. Buyer's damages?
Out of pocket expenses
| (Regardless of the time is of the essence clause"
82
Prerequisites and duration of a firm offer
Under the UCC, an offer to buy or sell goods is irrevocable if the offeror is a merchant, there is an assurance that the offer is to remain open, and the assurance is contained in a signed writing from the offeror. However, the irrevocability of a firm offer cannot exceed three months unless the offeree gives consideration to validate it beyond the three-month period.
83
The rights of a winning bidder.
Two exceptions to this rule?
When an auctioneer knowingly accepts a bid by the seller or on her behalf, or procures such a bid to drive up the price of the goods, the winning bidder may avoid the sale or, at her option, take the goods at the price of the last good-faith bid prior to the end of the auction.
There are two exceptions to this rule, which are that
(i) a seller may bid at a forced sale and
(ii) a seller may bid if she specifically gives notice that she reserves the right to bid. I
n this case, the bank conducted a forced sale of the owner’s delivery van. As a result, the owner (seller) was permitted to bid on the van at the auction, even without first disclosing his interest in the van and reserving the right to bid.
84
Bidder's right to withdraw his bid in auction
A bidder may retract his bid until the auctioneer announces the completion of the sale. Here, the neighbor informed the auctioneer that he was withdrawing his bid before the auctioneer announced the completion of his sale.
85
Firm offer requirements + Effective period
Under the UCC, an offer to buy or sell goods is irrevocable if the offeror is a merchant, there is an assurance that the offer is to remain open, and the assurance is contained in a signed writing from the offeror. The irrevocability of a firm offer cannot exceed three months unless the offeree gives consideration to validate it beyond the three-month period.
86
Impracticability defense to contract formation?
No. Impracticability is an excuse to perform
87
An offer involving subject matter that is destroyed
is terminated.
88
UCC K modification requirement
Unlike under the common law, under Article 2, no consideration is necessary to modify a contract; however, good faith is required.
89
Settlement of debts
Settling past, unpaid debt.
While the law permits the settlement of debts, consideration is required for a settlement to be enforceable. Under the preexisting duty rule, the mechanic's promise to forbear from suing to collect was not supported by consideration from the farmer, because the amount due was liquidated and the farmer did not promise to do anything more than he was already obligated to do. The farmer did pay $1,000, but as a partial payment of an undisputed debt, that money is insufficient consideration for the mechanic's promise not to sue.
90
Court's meanto enforce charitable subscriptions
Courts often apply the doctrine of promissory estoppel to enforce charitable subscriptions. In some cases, they presume that the charity detrimentally relied on the promised contribution. A charitable subscription (i.e., a written promise) is enforceable under the doctrine of promissory estoppel without proof that the charity relied on the promise.
91
Mutual mistake
voidable by the adversely affected party upon proof of the following:
i) Mistake of fact existing at the time the contract was formed;
ii) The mistake relates to a basic assumption of the contract;
iii) The mistake has a material impact on the transaction; and
iv) The adversely affected party did not assume the risk of the mistake.
92
A fren who conspired with the organizer + withdrew from this shit. Entitlement?
Although the friend is not entitled to enforce the illegal agreement between him and the organizer, the friend is entitled to restitution with regard to the $1,000 paid to the organizer since he withdrew from the transaction before the raffle was held and did not engage in serious misconduct.
Think about policy
93
When does the implied warranty of merchantibility arise?
Under UCC Article 2, a warranty of merchantability is implied whenever the seller of goods is a merchant who deals in goods of the kind sold. To be merchantable, goods must be fit for their ordinary purpose and pass without objection in the trade. A breach of this warranty must have been present at the time of the sale.
94
Part performance requirement of land sale K
1. Possession
2. Payment
3. Part performance (if two satisfied)
95
Implied warranty of merchantibility
Merchant.
Ordinary commercial purpose
Discailiming (only when conspicouous_+ the term merchantibility)
96
Implied warranty of F F PP
1. buyer reliance
2. seller expertise
3. special type of good
4. merchantnon-merchant
5. disclaimer ( CONSPICUOUS + WRITING)
97
Instances of not finding implied warr / merch
if the buyer, before entering into the contract, has examined the goods as fully as the buyer desires, or has refused to examine the goods, there is no implied warranty with respect to defects that an examination would have revealed to the buyer.
98
Body builder hit by the frame. Excuse? Remedy?
Discharged by impracticability
No legal recovery but the equitable doctrine of restitution (quasi-K) applies to prevent unjust enrichment. A party may recover in quasi-contract for any benefit that was conferred prior to impracticability.
99
Who can donee beneficiary sue?
An intended beneficiary of a “gift promise” (a donee beneficiary) may sue only the promisor.
100
Who can creditor beneficiary sue?
creditor beneficiary. A creditor beneficiary has the right to sue either the promisor or the promisee to enforce the contract.
101
Instances where delegation is not permitted
delegation is not permitted when the other party to the contract has a substantial interest in having the delegating individual perform, such as in a personal services contract involving taste or a special skill.
102
Revocability of assignment. Exceptions.
If no consideration supports an assignment of contractual rights (a gratuitous assignment), the assignment is generally revocable, unless the obligor has already performed or promissory estoppel applies. Here, the enthusiast accepted the motorcycle without protest. His acceptance effectively revoked the gratuitous assignment.
The shop, as obligor, may be compelled to comply if the assignment is valid and enforceable by the assignee. Here, however, the assignment was gratuitous and was revoked by the enthusiast’s acceptance of the motorcycle.
103
Delegation and liability
en obligations are delegated, the delegator is not released from liability, and recovery can be had against the delegator if the delegate does not perform, unless the other party to the contract agrees to release that party and substitute a new one.
104
Suretyship
The Statute of Frauds applies to suretyship agreements. Suretyship is a three-party contract, wherein one party (the surety) promises a second party (the obligee) that the surety will be responsible for any debt or other obligation of a third party (the principal) resulting from the principal’s failure to pay as agreed. A promise to answer for the debt of another must generally be in writing to be enforceable.
105
Course of performance (current contract - same parties)/
course of dealings ( previous K - same parties)/
Trade usage
. Under the UCC, a party may explain or supplement the terms of the contract—even if the terms are unambiguous—by evidence of trade usage, course of dealing, or course of performance. Evidence of the parties’ conduct with respect to the current contract at issue is accorded priority over evidence of the past course of dealings or trade usage.
106
Condition precedent --> Nonoccurrence --> made it anyway and delivered late. Breach?
yes.
A party's duty to perform under a contract can be made contingent upon the occurrence of a condition precedent. In that case, the party's performance will not become due until the condition occurs or the nonoccurrence is excused.
One excuse for nonoccurrence is waiver, which arises when the party whose duty is subject to the condition indicates by words or conduct that the condition need not be met.
Answer choice B is incorrect. Here, the manufacturer's duty to make the sneakers was contingent upon the designer's sending the specifications by February 15 (condition precedent).
Although the designer did not send the specifications until February 27 (nonoccurrence),
the manufacturer made the sneakers anyway (waiver).
Manufacturer still required to perform as in K
107
Prerequisite to sue under the doctrine of anticipatory repudiation
The doctrine of anticipatory repudiation is applicable when a promisor repudiates a promise before the time for performance is due. The repudiation must be clear and unequivocal, as opposed to merely creating insecurity. Here, the buyer stated that he did not intend to purchase the farm unless he was legally obligated to do so. Because the buyer is still bound by the contract, he is legally obligated to purchase the farm; his concern about entering the duck market does not amount to a clear and unequivocal statement that he will not perform.
108
Brother repudiate the entire K + not paid two months worth of loan = What amount able to recover?
Two months
If at the time of a breach the only remaining duties of performance are (i) those of the party in breach and (ii) for the payment of money in installments not related to one another, then breach by nonperformance as to less than the whole, whether or not accompanied or followed by a repudiation, does not give rise to a claim for damages for total breach and is a partial breach of contract only. In this case, on August 31, the brother is only entitled to recover the amount due for July and August, as the other installments are not due yet
109
Auction.
Lot.
No reserve auction + Withdrawal?
Answer choice C is correct. In an auction, each lot is considered to be a separate sale. In a no-reserve auction, after the auctioneer calls for bids on the goods in a lot, the goods cannot be withdrawn unless no bid is received within a reasonable time. With regard to the third lot, because the auctioneer had not called for bids on that lot, the goods can be withdrawn
110
Revocation of Option K
Revocation occurs when: the offeror directly communicates the revocation to the offeree or the offeree learns information from a reliable source that reasonably indicates the offer was revoked (eg, house sold to another buyer).
111
Bid contemporaneous with hammer falling
When a bid is made contemporaneously with the falling of the hammer, the auctioneer may, at his discretion, treat the bid as continuing the bidding process or declare the sale completed at the fall of the hammer. In this case, the museum owner made his bid contemporaneously with the falling of the hammer. The auctioneer chose, at his discretion, to treat the museum owner’s bid as continuing the bidding process. The third party subsequently made a bid that was unmatched. Therefore, because the third party’s bid was accepted by the auctioneer as the winning bid, the third party is entitled to the automobile.
112
...right to cancel by Jan 10...
valid offer?
No.
The primary test of whether a communication is an offer is whether an individual receiving the communication would believe that he could enter into an enforceable deal by satisfying the condition.
113
an offer in which a creditor promises to accept a payment for less than the amount owed prior to the due date
IS sufficient consideration to support a return promise by a borrower accepting the offer.
114
Void ab initio
void from start - absolutely void
115
Void vs. Voidable K
Void contracts
It involves illegal activity
It is against public policy
It is impossible to perform
It involves a party who is not legally competent
Voidable contracts
Fraud or misrepresentation
Terms are unconscionable
Duress or undue influence
Mutual mistake
116
Ground for not enforcing a K violating a state statute
Public Policy
117
incapacity
The incapacity of a particular person to perform his or her duty under a contract renders the performance impracticable and operates as an excuse for nonperformance.
118
Impracticability
impracticability to be available, the following conditions must also be met:
i) An unforeseeable event has occurred;
ii) Nonoccurrence of the event was a basic assumption on which the contract was made; and
iii) The party seeking discharge is not at fault.
119
Patient sues the janitor service. (K between hospital and the service). Success?
No. Public policy makes the K unenforceable.
120
Delegation of duty and the implication on 3P theory
The original contract beneficiary becomes an intended benficiary.
121
Suretyship
Suretyship is a three-party contract, wherein one party (the surety) promises a second party (the obligee) that the surety will be responsible for any debt or other obligation of a third party (the principal) resulting from the principal’s failure to pay as agreed. Under the Statute of Frauds, a suretyship contract, or contract to answer for the debt of another, must be signed by the party to be charged.
122
Nonconforming tender by a seller under one segment of an installation K, buyer can reject -----
can reject only if the nonconformity substantially impairs the value of that shipment to the buyer and cannot be cured.
123
Express condition
A performance that is subject to an express condition cannot become due unless the condition occurs or its nonoccurrence is excused. The duty of good faith imposed an obligation on the buyer to make reasonable efforts to secure bank financing.
124
Rejection in installment K
UCC § 2-612(2) provides that a buyer may reject any installment that is nonconforming if the nonconformity substantially impairs the value of that installment and it cannot be cured.
125
Non breaching party entitled to recover when?
According to the Restatement (Second) of Contracts, a nonbreaching party is entitled to recover damages that the party in breach "had reason to foresee as a probable result of the breach" when the parties entered into the contract. The rancher's experience and the frequency of hailstorms in the fall combined to make the loss resulting from the rancher's breach foreseeable.
126
Damages of lost profits. standard?
Reasonable certainty
127
Damages for failing to perform a real estate sales contract
the difference between the contract price and the market value on the date of the breach.
128
mechanic service performed + car destroyed due to hurricane. Result?
The defense of impracticability (impossibility) is available if the specific subject matter of the contract is destroyed. In this case, the exotic convertible was destroyed through no fault of either party. As a result, the parties were no longer required to perform under the contract. T
129
mechanic service performed + car destroyed due to hurricane. Unjust enrichment?
No.
The car restorer can still recover in quasi-contract for any benefit that was conferred prior to impracticability, but the court would only award restitutionary recovery in order to prevent the unjust enrichment. When a defendant is unjustly enriched by the plaintiff, restitution generally allows the plaintiff to recover on the benefit conferred by the plaintiff upon the defendant, rather than on the harm suffered by the plaintiff. Here, no benefit has been conferred, and thus the car restorer cannot recover the value of his service.
130
Quasi K
A court may allow restitutionary recovery if:
i) The plaintiff has conferred a measurable benefit on the defendant;
ii) The plaintiff acted without gratuitous intent; and
iii) It would be unfair to let the defendant retain the benefit because either (i) the defendant had an opportunity to decline the benefit but knowingly accepted it, or (ii) the plaintiff had a reasonable excuse for not giving the defendant such opportunity (e.g., because of an emergency).
131
Two examples where specific performance may be allowed
When damages are an inadequate remedy, the nonbreaching party may pursue the equitable remedy of specific performance. And, when a promisor fails to pay a third-party beneficiary, the promisee, on behalf of the third-party beneficiary, can sue the promisor for specific performance of the promise.
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Consideration
1. Bargained for consideration
| 2. Legal detrimnent/benefit
133
Gift promise?
Gen not binding
134
Failure of implied conditions
1. Material Breach
| 2. Substantial Performance
135
Violation of perfect tender rule. What can buyer do?
1. accept
2. reject - notice
3. Accept part / reject part
136
Material Misrepresentation
1. Scienter (intent)
2. Reliance
3. Misrepresentation
Materiality of misrepresentation
137
Settlement of a legal claim
A promise not to assert or a release of a claim or defense that proves to be invalid does not constitute consideration, unless the claim or defense is in fact doubtful due to uncertainty of facts or law, or the party promising not to assert or releasing the claim or defense believes in good faith that it may be fairly determined to be valid. Restatement (Second) of Contracts § 74(a).
138
Assignment
with / without cnsdr
With consideration - First in time controls
Without consideration - last in time
