Missed questions 1 Flashcards
(47 cards)
A party’s unilateral mistake is grounds for rescission only if 1)
the mistake would make enforcement of the contract unconscionable or 2) the nonmistaken party caused, or knew or had reason to know of, the mistake.
illusory promise
imposes no obligation on the promising party and therefore fails to provide the consideration needed for contract formation.
When does a misunderstanding cause a contract to not be formed?
when neither party knows or both parties know a misunderstanding has taken place.
If a party completes a divisible part of a divisible contract, says they won’t do anymore. and then sues for payment, what does the nonbreaching party have to do?
Pay for the completed portion, but they ill be able to deduct any recoverable damages stemming from the noncompleted portions from the payment for the completed portion. They do not have to bring a separate suit to recover those damages.
gratuitous assignment for payment from A to B. C pays A and A accepts without objection. Is B entitled to money?
No. Acceptance without objection served as revocation.
After a delegation, the delegating party remains liable under the contract unless
the other party agrees to a release. The other party allowing the delegatee to do the work is not enough to release the delegator from their liability.
The defense of impracticability is available when
1) an unanticipated event makes performance impracticable, 2) nonoccurance of the event was a basic assumption of the contract, and 3) the party seeking discharge is not at fault. Non-extraordinarly increases in the cost of performance do not make performance impracticable.
graduate would pay $10,000 for a “reasonable number of computers.” Contract?
No. it’s missing a quantity. Reasonable number is not an objective fact through which the quantity term can be determined. And since the court can’t supply the missing therm, the terms are too indefinite to contract.
When a buyer fails to select an assortment of goods to be shipped, the seller
may choose to proceed with the transaction in a commercially reasonable manner (e.g., by selecting the goods). But the seller is not required to do so.
When a contract for the sale of assorted goods does not specify who will choose the assortment, the UCC imposes a duty on the buyer to make that selection. If the buyer fails to specify the assortment of goods, then
the seller can treat that failure as a breach—but only if the buyer’s failure to specify the assortment materially impacts the seller’s performance.
Under the UCC, an installment contract is defined as 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.
The owner of a bed and breakfast hired an artist to paint nature-themed murals in each of the five bedrooms. The contract provided that payment was due upon the satisfactory completion of all five rooms. The owner told the artist that each mural should relate to the name of the bedroom, but she otherwise gave the artist broad discretion in designing each mural. When the owner checked the artist’s progress a few weeks later, she found that although the murals in the three completed rooms related to the theme of the rooms, the color choices clashed with the overall décor of the bed and breakfast. The owner told the artist that she would accept his performance on the first three rooms, but she asked him to incorporate a different color palette in the remaining rooms. The artist, unwilling to compromise his artistic autonomy, refused to paint the remaining two rooms and immediately terminated the contract.
What is the artist entitled to recover from the owner of the bed and breakfast?
The reasonable value of the artist’s services in painting the first three rooms, less any damages the owner may suffer from the artist’s failure to paint the last two rooms.
Contract formation under the common law requires an offer with definite terms and an acceptance with knowledge of that offer. But these requirements are relaxed by the UCC, which governs contracts for the sale of goods (e.g., a ring). Under the UCC,
a contract is formed if the parties intended to contract and there is a reasonably certain basis for giving a remedy. The contract may be made in any manner sufficient to show agreement—even if the moment of its making is undetermined.
Under the doctrine of promissory estoppel, a party’s promise to make a gift is enforceable if
(1) the promisor should reasonably expect the promisee to rely on the promise, (2) the promisee detrimentally relies on the promise, and (3) injustice can be avoided only by enforcement of the promise.
Under the UCC, a court should presume that a written contract for the sale of goods is x integrated
only 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.
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.
Under an accord and satisfaction, a party can fulfill its contractual obligation by rendering different performance than the one initially promised. This can be accomplished through a negotiable instrument (e.g., check) if three conditions are met:
the obligation is unliquidated (i.e., uncertain in amount) or otherwise in dispute
the obligor, in good faith, tenders the negotiable instrument with a conspicuous statement that the instrument is tendered as full satisfaction of the obligation and
the obligee obtains payment of the instrument (e.g., by cashing the 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. 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.
A third-party beneficiary is a nonparty to a contract who receives some advantage or benefit from that contract. There are two types of third-party beneficiaries:
intended – those who receive a direct benefit from the contract because the contracting parties so intended (e.g., the contract provides that payment will go directly to a third party)
incidental – those who receive some indirect benefit from the contract even though there was no contractual intent to benefit them (i.e., all third-party beneficiaries who are not intended beneficiaries)
Only intended beneficiaries—not incidental beneficiaries—have contractual rights and may sue to enforce them.
A new promise to pay a debt after the statute of limitations has run is
enforceable without any new consideration
Note: Not true if promise made before SoL runs.
Is substantial performance a breach/
Technically yes, but it is a minor breach.
What is breaching party entitled to for a minor breach (common law)
Under common law, if the breach is minor (i.e., the breaching party has substantially performed), then the non-breaching party must still perform under the contract. This allows a party who substantially performs to recover on the contract even though that party has not rendered full performance. Generally, the substantially performing party can recover the contract price minus the cost to the other party of obtaining the promised full performance.
restitution for material breach?
By contrast, a material breach of contract occurs when the non-breaching party does not receive the substantial benefit of the bargain. The material breach allows the non-breaching party to withhold any promised performance and to pursue remedies for the breach, including damages. The breaching party who failed to substantially perform generally cannot recover contract damages, but may be able to recover through restitution. However, most courts hold that recovery in restitution is only available if the breach was not willful. Consequently, a party who intentionally furnishes services that are materially different from what was promised cannot recover anything in restitution unless the non-breaching party has accepted or agreed to accept the substitute performance.
Example of how to prove that substantial performance has occurred
Here, in finishing the bathroom, the contractor did not supply the requested 30-inch space between the vanity and the bathtub. This failure to provide the space does not appear to have been intentional, and the bathroom is otherwise functional. There are no facts that provide the reasoning behind the request for the 30-inch space, whether it be aesthetic or of personal importance. For these reasons, it appears that the homeowner received the substantial benefit of the bargain under the bathroom contract, even with the one-inch variance from the contract. Because the contractor substantially performed, the homeowner is required to pay the remainder of the contract price.
In construction contracts, the general measure of damages for a contractor’s failure is
the difference between the contract price and the cost of construction by another builder, plus any progress payments made to the breaching builder and compensation for delay in completion of the construction. When a breach results in a defective or unfinished construction, if the award of damages based on the cost to fix or complete the construction would result in economic waste, then a court may instead award damages equal to the diminution in the market price caused by the breach. Economic waste occurs when the cost to fix or complete the construction is clearly disproportional to any economic benefit or utility gained as a result.
