MBE-Ks Flashcards
(31 cards)
K – Req’ts of an Offer (3 Cs)
- Commitment to be bound; communicated to offeree; certain + definite terms
- Test = would rsnble person in offeree’s position interpret as offer, as opposed to invitation to deal
K – Essential Terms
- CL: all essential terms must be covered (parties, subject matter, price + quantity)
- UCC: only essential term is Q (req’ts/output good enough b/c implied duty of good faith )
Termination of Offer (K)
- Lapse of time (if not stated, rsnble period, as judged by nature of K, course of dealings, + custom in trade)
- Death or mental incapacity (unless option)
- Destruction or illegality
- Revocation (can occur constructively; effective upon receipt)
- Rejection (including counter-offer, unless option)
Contract Acceptance
- Objective manifestation of intent to be bound by terms of offer that is communicated to offeror
- Offeror can specify manner of acceptance
Unilateral Ks
- No K until complete performance, but gets rsnble time to complete once performance begins + can get reliance damages if offer revoked before performance began, but after $ spent preparing
- Rewards and employee bonus offers
Acceptance of K by Shipment of Goods
If seller ships nonconforming goods = acceptance + breach unless seller “seasonably” notifies buyer goods are tendered as accommodation, in which case, shipment = counteroffer
Gift v. Bargained-For Consideration
- Could offeree have reasonably believed that intent of offeror was to induce action on part of offeree?
- If no, always consider promissory estoppel
What Doesn’t Count as Consideration?
- Pre-existing duty; Past consideration; Illusory promise
- Modification at CL, unless unforeseen difficulties that would make performance impracticable (UCC only good faith)
- Lesser amt as full satisfaction of debt, unless there was dispute or payment is of different type/early
Promises Binding Even Absent Consideration
- Promise to pay debt barred by SOL or bankruptcy
- Promise to perform voidable duty
- Promise to pay benefits received where benefits material + not intended as gift, but only to extent necessary to avoid injustice
- Promissory estoppel (P reasonably relied + reliance was foreseeable; only reliance)
Unilateral Mistake as Defense to K
Only if mistake “essential element” and: 1. mistake would make enforcement of K unconscionable; or 2. non-mistaken party at fault (ie: acceptance of bid way lower than others)
Mutual Mistake as Defense to K
K, voidable if: 1. mistake existed at time K formed, 2. basic assumption of K, 3. material impact, 4. voiding party dn assume risk of mistake + 5. K cn be reformed to cure
Effect of Fraudulent Misrepresentation/ Nondisclosure on K
Fraud in factum: K void
Fraud in inducement: K voidable
Non-fraudulent Misrepresentation as Defense to K
Innocent or negligent misrep can still render K voidable if: material, induced assent to K, and justifiable reliance
Undue Influence as Defense to K
Question = whether influence has prevented party from exercising free + competent judgment
Duress as Defense to K
- Subjective test: did an improper threat induce assent to K
- Void if physical threat; otherwise voidable
Intoxication as Defense to K
Voidable if unable to understand nature + consequences of transaction + other party had reason to know; must be disaffirmed promptly, return any value received, + may be liable in quasi-K for benefit conferred
Express Warranty under UCC Art. 2
- Any promise, affirmation, description, sample, model that is part of basis of bargain; but not seller’s opinion
- Disclaimers ignored; can only disclaim implied warranties
Implied Warranty of Merchantability
- If seller is merchant, goods must be fit for ordinary purpose; can be disclaimed w/ conspicuous “as is” language
- DN apply if buyer examined goods or refused opp to do so prior to K and would have discovered
Implied Warranty of Fitness for Particular Purpose
Seller must have reason to know buyer has particular use for goods + buyer is relying on seller’s skill to select; can be disclaimed *in writing only*
Written Release from K: CL + UCC Rules
CL: consideration req’d
UCC: no consideration if written waiver
SOF Exceptions for Sales of Goods $500 or More
- Specially manufactured, not suitable for sale to another + S has begun performance
- Part payment (but only for that portion of K)
- Receipt + acceptance of goods (but only for that portion of K)
- Failure to object to writing w/in 10 days if both parties merchants
Effect of substantial performance on damages
If SP, can recover K price minus cost to obtain full performance
if no SP, breaching party may still recover through restitution
UCC Perfect Tender Rule
- S has right to cure as long as time remains to perform under K or if reasonably thought B would accept non-conforming
- Installment K: can only cancel entire K if nonconformity *substantially impairs* value of entire K
UCC: Request for Assurances
Reasonable grounds for insecurity >> written demand for adequate assurance of performance + suspend performance
-if not provided w/in rsnble time (30 days max), may pursue remedy, but breacher may retract if no detrimental reliance
