MBE Questions Flashcards
(23 cards)
Contract formation– consideration
past consideration OR moral obligation is not consideration
requirement contracts
under UCC, a requirement contract does not require a set quantity.
the quantity is measured by the buyers needs.
option contracts
common law– options must be supported by consideration
UCC– merchant’s firm offer rule– an offer by a merchant in a signed writing, which by its terms gives assurance that it will be held open is irrevocable during the time stated. if no time is stated, then the period of irrevocability can exceed 90days.
quasi contract
only pick these answers if two items are present
1) no formal agreement between the parties
2) evidence of unjust enrichment
battle of the forms (UCC)
they tell you in the fact pattern that the buyer accepts the sellers offer, but changes one of the facts of the offer:
Rules:
1) if the seller/offerree accepts the offer and at the same time makes a material alteration to the offer, the terms of the offer control, the alteration is out
2) if the offerree accepts and makes a non-material change to the offer, then that non-material change is included in the contract, unless the offerror timely objects
3) what is a material alteration?
one that significantly affects money liability or remedies.
they changed the remedy
Perfect tender rule (UCC)
seller has to deliver perfect tender to a buyer.
if seller fails, options are:
1) the buyer can accept the goods and pay contract price
2) timely reject the goods and sue for damages
3) buyer can accept in part and reject in part
if the delivery of non-conforming tender is accompanied by a notice of accommodation. treat the delivery of the non-conforming order, the buyer can accept or reject, but cannot sue.
on receipt of the shipment and accommodation– the buyer can accept or reject, not sue
surety agreement
agreement to serve as a guaranty for payment MUST BE IN WRITING
main purpose exception:
if we can establish that the promisor, in promising to answer someone’s debt does so because they can benefit, it doesn’t have to be in writing.
unilateral mistake (one person is making a mistake)
this will not prevent a contract from forming
with unilateral mistake, such a mistake will not prevent contract formation
if the non-mistaken party knows of the mistake, or should know and is trying to take advantage of the mistake, they are not permitted to snap up the benefits of the bargain.
modification
common law v. UCC
common law– to be valid, needs evidence of additional consideration
UCC– doesn’t care about additional consideration, it just cares about good faith
parol evidence
you may not include extrinsic evidence to a complete and totally integrated agreement
parole evidence
trade usage
cours of dealing
industry practice
ten day rule for statute of frauds provision under the UCC
Both parties must be merchants:
if one merchant sends the writing is bound immediately by that writing. and if the merchant who receives the writing doesn’t object to the terms of the written memorialization within ten days of the receipt.
when does a third party beneficiary’s rights vest?
1) when they learn of the contract and assent to it
2) learn of contract and rely on it
3) learn of contract and sue to enforce their rights
promissory estoppel
1) a promise
2) expectation of reliance on the promise
3) reliance
4) interests of justice requires enforcement of the process
FOB
FOB, sellers place of business– once the goods leave the seller’s place of business, the buyer bares the loss
FOB, buyers place–seller bears risk of loss if goods damaged in transit
FOB, railroad depo– once the goods arrive at the railroad depo, the risk of loss shifts to the buyer.
assignments and delegations
all contracts are assignable and delegable EXCEPT:
Long-term requirement contracts
unique personal service contracts
furthermore assignments and delegations that are gratuitous are revocable
assignments for value are irrevocable
accord
an agreement between parties that are already in agreement with each other. an accord is a new agreement that SUSPENDS performance of the old agreement until the new agreement is satisfied.
if you do not satisfy the accord, then the other party can sue on either the old or new agreement
anticipatory breach of contract
for something to qualify as an anticipatory breach, you need a clear statement that you will not be able to perform.
this only works when it is crystal clear that a breach is about to take place.
question 107
in a personal service contract, if you are too sick/injured to to the job, you will be excused for that period of time, and you will not be liable for damages, unless the contract provides otherwise.
condition precedent
an act or event that must occur first before a party is under a duty to perform
liquidated damages
we allow for a liquidated damages provision if two factors are met:
1) at the time of entering into the contract, damages are difficult to ascertain
2) the liquidated damage itself must be a reasonable forecast of compensatory damages
time is of the essence clause
most of the time, a time is of the essence clause is boilerplate. virtually every court
contract damages
basic principle– place the non-breaching party in the situation she would have been in, had there been no breach.
lost profits doctrine
you must be dealing with a volume seller, if there is a large volume, they can recover lost profits from the buyer.
volume seller– the retailer can get as many of the items as it required
under the UCC, the standard remedy for a non-breaching seller is
contract price- the resale price= standard remedy
