Contracts
Terms
undefined, object
copy deck
- Foreseeable reliance before acceptance
- (ALMOST NEVER) Good example is Kor relying on subkor's price quote
- Promise in consideration of marriage
- Prenup and postnup agreements are w/n SOF - Promises given in consideration of marriage. NOT promise to marry - no consideration.
- Delegation of duties
- Transfer of burdens under a K. GENERAL RULE: K duties may be delegated w/o consent of person to who performance is owed (obligee). EXCEPTIONS: 1) K language controls: a) K prohibits delegation - contrary language in K controls; b) MBE: K says no assignment = no delegation either; 2) Special skills or reputation - NO delegation b/c chosen for special skills
- Unconscionability
- (Rarely tested on own, almost always w/ other issues) Measured at time of the agreement, not time of breach. Types of unconscionability: 1) substantive - Terms of the agreement are unfair, shock the conscious (like selling yourself into salvery); 2) Procedural - Process by which agreement reached was unfair (Fine print, legalese, unequal bargaining power)
- Divisible Ks
- MBE: Where payment made on a per unit basis, breaching party can recover K price for any unit on which he substantially performed
- Intended/incidental beneficiary
- person intended to benefit frm K made by others is the intended beneficiary, person who happens to benefit is incidental. ONLY intended B has legal rights.
- Quasi-K
- protects against unjust enrichment when K law yields unfair result, remedy of last resort. Equitable doctrine → not a K at all. NY essay - when all else fails, look for remedy in quasi-K
- Satisfactory writing for SOF
- Depends entirely on the nature of the writing: (A) SALE OF GOODS - ARTICLE 2: Must contain a quantity term and be signed by a party to be charged w/ breach (i.e. D). Can only use against party who signed. (B) LEASE OF GOODS - ARTICLE 2A **NY ONLY: Writing must (1) state that it is a lease, include (2) quantity, duration and rental payments, and be (3) signed by the part to be charged w/ the breach. (C) Other Ks w/n SOF - writing must contain all material terms (who & what), and be signed by the party to be charged with the breach.
- Avoidable damages
- NO recovery to injured party for damages he could have avoided or mitigated. Almost always firing - Employee could have gotten another job, subtract value of job from damages.
- Installment sales Ks
- requires or authorizes seller to deliver the goods in separate installments. PTR DOES NOT APPLY: 1) Buyer may reject an installment only if there is substantial impairment in the installment that cannot be cure; 2) Buyer's right to reject the entire K, only if a defect in an installment, substantially impairs the value of the whole K.
- Bilateral K
- exchange a promise for a promise, offer can be accepted in any reasonable way, extremely flexible, open-ended
- Later agreement btn parties as excuse
- may provide an excuse for non-performance. Four types: 1) Rescission - an agreement to cancel the K → Needs consideration: To be effective, EACH party must have some performance remaining; 2) Modification - agreement to replace existing K w/ new K; 3) Accord and satisfaction - to accept performance in future satisfaction of an existing duty: a) satisfaction = performance of the accord; b) Original debt not extinguished until accord is satisfied - accord takes effect in the future; 4) Novation - agreement to substitute a new party for an existing one (Need consent of party)
- Express warranties
- seller is liable for breach of an express warranty. Express warranty = Statements of fact, promises, descriptions of the goods, use of sample or model - No need for words. NOT opinion - vague, general, subjective statements. Must be basis of the bargain - If the buyer could have relied on the express warranty.
- Failure of an express condition (**)
- MOST IMPORTANT excuse. Express condition = limit on obligations created by other K language, DOES NOT create an independent obligation. Strict compliance required - express condition must be COMPLETELY fulfilled or excuse for non-performance, even $1/300,000. Don't have to use - just an option.
- Lease of goods warranty
- **NY ONLY - ARTICLE 2A: Lessor's warranties of quality in a lease of goods. GENERAL RULE: Same warranties exist for 2A lease of goods, as for Art. 2 sale of goods. EXCEPTION: Finance lease - lease computer from bank, which buys from company → Bank does not make an implied warranty, they are only in the banking business.
- Types of express conditions
- 1) condition precedent - not obligated now, event occurs before performance due; 2) condition concurrent - runs alongside obligation, continues as long as condition remains; 3) condition subsequent - Performance occurs first, occurrence of the condition cuts it off.
- Indefiniteness
- ASK are any of the terms to indefinite to be enforced? Requirements Ks - Definite enough, even though there is no specific quantity mentioned. SOME uncertainty is ok - quantity can be measured by buyer's needs or requirements. Even if good faith - cannot take by surprise, unfair to bout of line w/ prior requirements.
- Promisor/promisee
- Party promising to perform for TP/Party who secures the promise
- Buyer's payment obligations
- Buyer may pay by check - BUT seller can refuse it, then B has additional reasonable time to find cash
- TPB
- Person not a party to a K, but has rights under K b/c K was intended to benefit him
- EXCEPTIONS TO THE MAILBOX RULE
- Default rule - only applies when the offer is silent, Offeror can state other and exclusive mode of acceptance. Irrevocable offer - offeree doesn't need protection of the MBR. Offeror relies on overtaking rejection - MBR still applies unless there is reliance. Rejection sent first - MBR does not apply, don't need protection, race to see who gets there first.
- Rejection
- Terminates on offeree rejection ("inappropriate response"). Offeror revokes, offeree rejects. Counteroffer - operates as a rejection. Asking a question = mere bargaining, not a rejection. Conditional acceptance - operates as a rejection, just like saying no
- Goods accepted or paid for by buyer
- applies only to goods accepted or paid for, not for the whole K: Custom-made goods - if Seller started to make them.
- Multiple assignments
- ON BAR: Analyze each assignment in order it was given
- Silence
- offeree's silence generally not acceptance, unfair if offeror tries to single-handedly make it so
- Offer
- manifestation of intent to be bound. On bar: Usually advertisement or indefiniteness offer problems.
- Merchant's confirmatory memo (**)
- One party can use its own signed writing to satisfy SOF against other party, if: 1) BOTH PARTIES are merchants; 2) Writing claims a prior oral agreement and has a quantity; AND 3) Recipient doesn't object w/n 10 days. ARTICLE 2 lets merchant use own confirmatory memo to satisfy SOF against another merchant/
- Formation analysis
- Look for an agreement - offer that has been accepted, then see if the agreement is legally-enforceable - are there any defenses against formation. Three step process to agreement: 1) Was an offer made?; 2) Was the offer terminated before acceptance?; 3) Was the offer accepted?
- Duress
- threat of physical harm to K makes agreement unenforceable. ALSO: economic duress arises when: 1) Threat to break existing K; 2) V agrees only to get K done; and, 3) Where there is no reasonable alternative
- ARTICLE 2: Performance of K for sale of goods PERFECT TENDER RULE
- Seller must deliver perfect goods in the right place at the right time. If tender is NOT PERFECT → buyer may reject the goods. Option to cure - seller failing PTR may have option to cure: 1) ASK: Has time for performance expired?; 2) NO: Seller has the option to cure; 3) YES: GENERAL RULE that seller does not have the option to cure - EXCEPTION: Look to course of performance and dealing
- Buyer's revocation of acceptance of goods
- GENERAL RULE: Buyer cannot revoke acceptance of goods. EXCEPTION: Buyer can revoke his acceptance if non-conformity substantially impairs the value of the goods and is difficult to discover: Like - hairline cracks in mobile home discover 2 mos. after acceptance. much harder than rejecting in the first place. CONSEQUENCES of revocation/rejection of acceptance - Buyer can: 1) return the goods to seller at seller expense; 2) sget back money already paid; AND 3) sue seller for damages for breach.
- Starting to perform a unilateral K
- mere preparation is not enough. MBE: Once performance starts, no revocation. **NY DISTINCTION: AN offer to enter uni K can be revoked until performance has been completed.
- UCC Buyer's damages
- 1) Cover damages = cover price - K price if buyer covers in good faith: Usual measure; 2) Market damages = market price - K price if buyer DOES NOT cover in good faith or at all; 3) Loss in value = value as promised - value delivered if buyer keeps non-conforming goods
- Rescission and modification for TPB
- GENERAL RULE: Promisor and promisee can rescind or modify K until the rights of TP have vested (term of art, seems to mean reliance). EXCEPTION: Contrary language in K controls.
- TPB's Rights
- 1) Against the promisor - TPB can sue breaching promisor, subject to same defenses that promisor could have raised against promisee; 2) Against the promisee - Only creditor B can sue promisee; 3) Rights of promisee against promisor - K between the them, but damages probably not that big
- Step 3: Has the offer been accepted?
- Language of the offer controls
- Restrictions on assignment
- (1) K language controls - distinguish prohibition from complete invalidation: a) "Rights under this K are not assignable": Mere prohibition of assignment - Liable for breach, but assignment is still valid; b) "All assignments under thus K are void": Invalidates assignment - don't do it, not valid if you do. (2) Cannot substantially change duties of obligor - CURRENT RULE: Requirement Ks are assignable as long as assignee's rights are not out of line w/ assignor's. (3) Payment by obligor - payment by obligor to assignor is effective UNLESS obligor is aware of assignment.
- Parol evidence rule
- keeps out evidence of a prior agreement that contradicts a later written one (Shows up on MBE and **NY). Theory: prior agreement subsumed into the later written instrument. PER assumes that a later writing is more valuable than anything that came before. ON EXAM: If fact pattern has oral agreement, SOF, NOT PER.
- Gratuitous/gift assignments
- extremely fragile, last gratuitous assignee in time prevails over earlier gift assignees. **NY RULE: Gift assignment is irrevocable if it is in writing, signed by assignor.
- Sale of goods exception to SOF
- SWAP: Specially made goods; Written confirmation by a merchant; Admission in court; Performance
- Creditor/donee beneficiary
- Performance will satisfy a debt promisee owes a TP creditor B, otherwise Donee B
- K Formation Analysis
- Offer, acceptance, consideration
- Improper performance
- COMMON LAW: Operates as acceptance AND breach. ARTICLE 2: Operates as acceptance AND breach UNLESS seller sending goods as an accommodation to the buyer. Becomes a counteroffer that buyer can accept or reject.
- Termination of the offer
- Four ways to terminate an offer: 1) Lapse; 2) revocation; 3) rejection; 4) Death before acceptance
- Suretyship
- MAIN PURPOSE EXCEPTION: Main purpose is to secure own benefit. MBE: If surety's main purpose was self-benefit, no writing required. **NY NO MAIN PURPOSE EXCEPTION: still need a writing.
- Firm offer
- ARTICLE 2: In a (a) sale of goods, if a (b) merchant promises, in a (c) signed writing, to keep a (d) offer open, then the offer is irrevocable. LIMIT: 3 mos. vs. Option can last longer - ASK: 1) Option? NO: 2) Firm offer? ARTICLE 2: Definition of a merchant is very broad - almost every person. Letterhead = signed writing. No stated time period = Firm for a reasonable time that is less than three months.
- Right to return goods
- K gives buyer right to return goods, key is to ask whether buying for resale or own use: 1) Sale or return - Buyer buys for resale, same rules apply; 2) Sale on approval - Buyer buying for his own use, risk of loss remains on the seller until buyer has accepted the goods
- Monetary damages (damages)
- Non-monetary is the exception. 1) NOT Punitive damages; 2) Liquidated damages; 3) expectation damages; 4) Incidental damages; 5) consequential damages; 6) avoidable damages
- Excuse ARTICLE 2: SALE OF GOODS
- Failure to make perfect tender excuses buyer's obligation to pay → BUT - Buyer has three options: 1) accept all the goods; 2) reject all the goods; 3) accept any commercial units and reject the rest. DAMAGES: Buyer can get damages under any option.
- Modification of Contract
- Common law: Need consideration; UCC: just good faith
- Frustration of buyer's primary purpose
- analog to seller's excuse of impossibility/impractability: Renting apt to view parade hypo - Reduction in profits not enough.
- Misrepresentation/disclosure of material fact
- even honest non-disclosure can be fatal flaw in the agreement process as long as to material facts. EXACT SAME RULE: Non-disclosure - defense against enforcement.
- Third-party beneficiaries
- two people enter K intending to benefit a third party
- Who bears the risk of loss w/ Destination K
- Seller's responsibilities: Seller must get the goods to a specific destination (Usually buyer's location). FOB followed by the name of any other city = destination K - seller bears loss until it gets all the way to destination.
- Who bears the risk of loss w/ Shipment K
- Seller's responsibilities: 1) get the goods to a common carrier, make delivery arrangements, and notify the buyer: 2) Buyer bears risk of loss long before it reaches him. FOB = "free on board", followed by the name of city. If location of buyer = shipment K.
- Non-monetary (In rem) remedies
- Specific performance; unpaid seller's right to reclaim goods;
- Consideration
- bargained for legal detriment/benefit. Form can be promise, performance, forebearance. Real world: often, promise/promise cxchange.
- Express/Implied Contract
- Legally enforceable agreement; Express K = Created by words, oral or written; Implied K = Crated by parties conduct
- Partial debt payment
- depends on whether the debt is in dispute, law favors settlement of disputes. **NY DISTINCTION: Don't need consideration if the promise to forgive the balance of the debt is in a signed writing.
- PRE-EXISTING DUTY RULE
- New consideration is required to modify a K. ANY addition work makes it enforceable. 1) PEDR is only available to parties to original K; 2) **NY DISTINCTION: PEDR does not apply if modification is in a signed writing; 3) SALE OF GOODS/ARTICLE 2: No need for consideration to modify, BUT you must show good faith
- **NY RULES - ARTICLE 2A: Risk of loss in a lease of goods
- GENERAL RULE: Lessor bears the risk of loss. EXCEPTION: Finance lease, the lessee bears the risk of loss.
- EXCEPTIONS TO PER
- 1) To correct a clerical error/typo - always ok; 2) To establish a defense against formation - if saying there was a flaw in the process that led to this deal; 3) To interpret a vague or ambiguous term - always ok/Not ok if clear plain meaning to a term; 4) To supplement a partially-integrated writing - Writing is a final statement but it is not complete: a) Complete statement = statement of all the terms agreed to; b) ASK: Does the writing appear complete on its face?
- Expectation damages
- the GENERAL RULE, put injured party in as good a position as full performance. AKA Benefit of the bargain clause. **NY TERMINOLOGY: "In as good a position as full performance." COMMON LAW: Usually just running the numbers: 1) Paint for $10,000, breach and have to find another painter who charges $13,000; 2) 13,000 - 10,000 = $3,000 damages for additional cost. SALE OF GOODS - ART 2: Same GENERAL RULE of expectation.
- Impossibility/impracticability
- later unforeseen event that makes seller performance impracticable/impossible may provide S w/ excuse for non-performance. COMMON LAW: Impossible. ARTICLE 2: impracticable (much harder or more expensive). MBE: Rarely excuses seller performance.
- Article 2A and SOF
- **NY ONLY - ARTICLE 2A: Lease of goods for $1,000 or more. Don't forget to check the rent - monthly rent of $300 w/ 1 year lease = >$1000.
- EXCEPTIONS to SOF
- Carved out where there is less chance of fraud 1) Real property: a) Leases of One yr. or less - ensures that short-term leases not invalidated by SOF; b) Part Performance - requirements 2 out of 3 of the following; performance, improvements, possession (One is NOT ENOUGH); 2) One year prong - EXCEPTION for full performance: a) Work two yr. K - Very little chance of fraud; b) Part performance NOT ENOUGH - look to quasi-K; 3) ARTICLE 2: Sale of goods for $500 or more; 4) Goods accepted and paid for by buyer; 5) Merchant's confirmatory memo; 6) Suretyship: Main purpose to secure own benefit
- Open price terms
- COMMON LAW: Too indefinite; ARTICLE 2: Not too indefinite. E.g. - offer for real property must contain a price term, sale of a painting, will fill gap w/ price term.
- Advertisements
- GENERAL RULE: Advertisement is not an offer. EXCEPTION: When the ad specifies quantity term and who can accept.
- UCC Seller's damages
- 1) Resale damages = K price - resale price if seller resells the goods; 2) Market damages = K price - market price if seller does not resell in good faith or at all; 3) Lost profit = lost profit if seller is a lost volume dealer (Shows up a lot on MBE - want you to say $0 damages); 4) Contract price = entire K price if seller cannot resell (Very rare - usually when there is no market, seller's analog to specific performance)
- Past consideration
- NOT consideration. You cannot bargain for something that has already been done. **NY DISTINCTION: Past consideration is binding if expressly stated in a signed writing and can be proven. MBE: Writing does not matter
- Lack of capacity
- minors, intoxicated, mentally incapacitated. GENERAL RULE: Incapacitated D has the right to disaffirm K if he wants to avoid it, does not have to use. Relevant at time of agreement; P's capacity is irrelevant. Implied affirmation - incapacitated party impliedly affirms K by retaining benefit w/o complaint after gaining capacity - Look for; 1) D lacked capacity at time of agreement; 2) D gained capacity later; 3) D keeps the benefit of the K w/o complaint = Affirmation. EXCEPTION: Incapacitated party is liable for necessities - ONLY on quasi-K basis. Like lease for apt - only pay reasonable value.
- Adequacy of consideration
- irrelevant - law does not care about this as long as there is a bargain
- Lapse
- offer lapses after stated term, or after reasonable time has passed, does not last forever
- Exculpatory clause
- can eliminate liability for negligence, not for gross negligence or intentional tort.
- Promissory estoppel as a substitute for consideration
- (NEVER 1st choice) ASK: 1) is there consideration? NO: 2) Is there foreseeable reliance?
- assignments for consideration
- 1st assignee prevails, assignments for consideration are much more durable. EXCEPTION: Later assignee for consideration prevails if 1) he does not know of earlier assignments and 2) is the first to get payment from or judgment against obligor.
- COMMON LAW Ks: Performance
- only substantial performance, NOT perfect. Flipside: Party cannot commit a material breach. No substantial performance = material breach.
- Destruction of something necessary for performance SALE OF GOODS - ART 2
- same general rule + couple of issues: 1) Unidentified goods - if damaged, destroyed goods were not "identified by the K", seller is not excused (Set-aside or labeling needed); 2) risk of loss - Seller who bore the risk is excused, buyer IS NOT excused (Money is still there, so buyer can still perform)
- Acceptance varying offer
- COMMON LAW: Rejection MIRROR IMAGE RULE: Acceptance must mirror offer. Adding or changing a term, even a minor one, operates as a rejection.
- Other party's breach
- may provide an excuse for non-performance
- Covenant not-to-compete
- PUBLIC POLICY: Court will invalidate or narrow non-compete K that operates as a restraint to trade (Repeatedly tested). Look at two issues: 1) Scope of the covenant - duration and geography, ask if they are reasonable (Balance freedom of K against restraint of trade); 2) Need for covenant - look at uniqueness of services → ASK: Was there a need for protection? Like chef vs. busboy.
- Performance cannot be completed w/n a year
- SOF As long as theoretically possible under K, no writing is required - what actually happened is not important. Lifetime employment K: MBE: Not w/n SOF, could die w/n year and complete - Contrast: 3yr K would require a writing; **NY DISTINCTION: Lifetime Ks w/n NY's SOF. Clock starts when agreement WAS MADE, not when it begins. Duration of performance is irrelevant.
- Timing of acceptance
- GENERAL RULE: Mailbox rule - acceptance is effective when it is mailed. Revocation only effective on receipt. Lost in mail - burden of loss is on offeror, only significant fact is whether mailed.
- Supervening gov regulation
- acts as an excuse
- Mixed K
- look at what type of sale predominates
- punitive damages
- NOT awarded for breach of K. PURPOSE OF K DAMAGES: Compensation, NOT punishment.
- Death/incapacity of essential person
- E.g. - artist who has unique skills. Painting a portrait: 1) Artist dies = excuse; 2) Person who sat for portrait = no excuse, estate can still pay.
- Assignment of rights
- transfer of benefit under K. Two people make K - later, assignor transfers his rights under K to TP (assignee), party who owes duty is the obligor: BAR EXAM: Assignment of rights transfers only rights; assignment of entire K → both rights AND obligations. Assignment vs. delegation: 1) Assignment: two parties enter into K, Tp assignee appears later; 2) TPB Situation: All three parties are present from the outset. REQUIRES language of present assignment - NOT a promise of assignment, need a present transfer of rights. Consideration NOT needed.
- Contract Modifications and SOF
- Modification in writing only if contract as modified is w/n SOF - Even if original K is not w/n SOF; If original K w/n SOF w/ modification is not → NO NEED for writing. COMMON LAW: Clauses prohibiting oral modifications are unenforceable.
- When is revocation of offer effective
- only on receipt (MBE Loves timing issues). Once accepted → no revocation.
- Estate representative
- Promise by estate rep to use own funds to pay estate expenses is w/n SOF
- Satisfaction clauses
- measured by a reasonable person standard, unless dealing w/ art or matters of personal taste
- Destruction of something necessary for performance COMMON LAW
- Destruction provides an excuse for non-performance. Performance hall burns down → There was a K, but destruction makes performance impossible.
- Implied warranties
- 1) Implied warranties of merchantability - goods are fit for their ordinary purpose → TRIGGER: Seller is a special kind of merchant who deals in goods of the kind - anywhere seller is a dealer. Special knowledge of particular goods involved in the K. 2) Implied warranty of fitness for buyer's particular purpose → TRIGGER: Buyer has a special purpose in mind, relying on seller to select suitable goods; seller knows it.
- Revocation
- offer terminates when the offeror revokes the offer. GENERAL RULE: Offer can be revoked any time before acceptance?: Direct revocation - offeror indicates directly to offeree that he has changed his mind about the deal; Indirect revocation - offeror engages in conduct that indicates that he has changed his mind, and offeree is aware of the conduct; Offeror conduct + offeree awareness = indirect revocation. Death of either party terminates a revocable offer EXCEPTIONS: Four situations where an offer cannot be revoked
- Excusing the occurrence of a condition
- May be excused by a later action or inaction of person protected by the condition. * every condition protects someone. Failure to cooperate - like a mortgage clause, if you fail to TRY to get mortgage clause → no excuse. Waiver - protected party voluntarily relinquishes protection of condition: If you waive condition once, and other party acts in reliance on waiver - no more condition. Retract waiver for the future.
- Conduct
- can be used to explain terms or to fill in gaps: 1) Course of performance - what parties did under this K (the one in dispute) → BEST EVIDENCE of what parties intended; 2) Course of dealing - What the parties did under prior Ks w/ each other → Removed from this K - prior deals; 3) Usage of trade - what do people is the trade do in similar Ks → FARTHEST REMOVED
- Ambiguity-misunderstanding
- Think Peerless → no K results. If Buyer knew or had reason to know about the source of confusion - K on seller's terms.
- ARTICLE 2: Seller's warranties of quality in a sale of goods
- 1) Express; 2) Implied warranties of fitness and merchantability; 3) Lessor's warranty of quality in lease of goods.
- Anticipatory repudiation
- excuse for non-performance unless repudiation is retracted. Can repudiate by conduct. Breach happens AT time of performance - can retract until then if no reliance. Anticipatory rejection acts like breach.
- Four irrevocable offers
- 1) Option K; 2) Foreseeable reliance before acceptance; 3) starting to perform a unilateral K; 3) Firm offer
- Acceptance varying from offer w/ SALE OF GOODS
- (ART 2) 2-207 - No mirror image rule, adding or changing a term does not prevent acceptance. Only part of K IF: 1) BOTH parties are merchants; 2) The term is not a material change - i.e. likely to cause hardship or surprise; 3) Offeror does not object w/n a reasonable time - Offeree's terms very rarely become part of the K
- ARTICLE 2: Unpaid seller's right to reclaim goods
- GENERAL RULE: Unpaid seller has no rights under ARTICLE 2 in goods it has delivered to the buyer - May be rights under Fed. Bankruptcy law. EXCEPTIONS: 1) Seller may reclaim if B was insolvent when received goods AND S demands return w/n ten days of B's receipt, BUT S has NO RIGHT to demand goods from 3rd party; 2) Entrustment of goods - Owner who entrusts goods to a merchant dealing in goods of the kind has NO RIGHTS against a BFP of goods (On exam: Usually car or jewelry to merchant of the kind); 3) Right to request assurance on sale of goods - Party w/ reasonable grounds for insecurity, may request (in writing) adequate assurance that other party will perform in accordance w/ K: a) B can treat failure to give adequate assurance as an anticipatory repudiation; b) NOT a chance to rewrite K or demand particular kind of assurance
- Consequential damages (**)
- special to P and were reasonably foreseeable by breaching party at time of K. ARTICLE 2: NOT available to seller. Miller sends out shaft but doesn't tell UPS - foreseeability is the key → More than just causation - no recovery w/o foreseeability. Total damages = consequential + expectation.
- Excuse COMMON LAW Ks
- Damages for any breach whether material or not. ONLY material breach excuses performance by injured party. Injured party may then recover in quasi-K for reasonable value of work perfored.
- Merger clause
- means writing is complete on face and cannot be supplemented
- Starting performance as acceptance
- ASK: Is it Bi or Uni? 1) Bilateral K - starting performance is acceptance of an offer to enter into a bi K and carries an implied promise to finish the job; 2) Unilateral K - only completing performance is acceptance of uni K. MBE: After performance starts, offeree can no longer revoke - Offeree chose this kind of performance, must deal with the consequences. **NY DISTINCTION: Can still revoke until performance completed.
- Liquidated damages
- upheld if damages were difficult to estimate in advance and are a reasonable forecast of probable damages, but cannot operate as a penalty. Issue on bar: Is the LD clause valid, or should it be struck down as a penalty. Common in construction as incentive - graduated to go with length of delay. LD clause struck down → still entitled to damages.
- Judicial Admission
- Judicial admission - must be in the testimony, depo, interrogatory: If you are willing to admit in testimony, no need for writing.
- When a writing is required (W/n the SOF)
- 1) Interest in real property; 2) Performance cannot be completed w/n a year; 3) Article 2: Sale of goods for ≥$500; 4) **NY ONLY: lease of goods for ≥$1,000; 5) Suretyship; 6) Estate representative; 7) Promise in consideration of marriage; 8) K modification; 9) **NY SOF - Miscellaneous provision
- Buyer's acceptance of the goods
- (Must distinguish from accepting an offer) 1) Implied acceptance - when buyer keeps the goods w/o objection after having opportunity to inspect: a) NOT merely paying for goods, need time to inspect; b) Not fair to let sit and then complain; 2) Consequences of acceptance: a) After acceptance - NO rejection; b) Buyer accepting non-conforming goods - can still get damages
- Interest in real property
- SOF - formality required. Sale, lease, easement, etc. EQUAL DIGNITIES RULE: Authorization of agent to sell must be in writing.
- Rights of obligee
- 1) Against delegating parties (**EVERY MBE) - delegating party remains liable to obligee: NOT a novation; 2) Against the delegate - delegate is liable to obligee ONLY if delegate received consideration for its services
- UCC
- Art. 2 - Sale of goods (moveable, personal property); Art 2A - lease of good
- Incidental damages
- involve cost of transporting or caring for goods after breach and costs associated w/ arranging a substitute transaction. Available for BOTH B and S.
- Limitations on warranty liability in SALES AND LEASES OF GOODS
- Disclaimers: Seller can disclaim implied warranties, but NOT express warranties; 1) As is - disclaims all implied warranties; 2) "NO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS" = Limitation of buyer's remedies. GENERAL RULE: Seller can limit buyer's remedies for breach of any warranty if limitation is not unconscionable. EXCEPTION: Limiting buyer's remedies for personal injury for consumer goods is presumed unconscionable - Consumer protection clause.
- Supplemental developments and PER
- PER has nothing to do w/ what happens after an agreement is reduced to writing. PER looks backwards - Forwards → go to modification rules.
- Defenses against formation
- Lack of capacity; duress; misrepresentation/disclosure of material fact; ambiguity-misunderstanding; Mistake
- Unilateral K
- Promise in exchange for performance. More rigid, offer can be accepted only through performance. Look for offer expressly saying - can only accepted by performing. Reward, contest or a prize.
- STATUTE OF FRAUDS OVERVIEW OF ANALYSIS
- Overview: 1) Do you need a writing to satisfy?; 2) Do you have a satisfactory writing?; 3) Do you fall w/n an exception to the statute of frauds?.
- Option
- option is a promise to keep the offer open that is paid for, i.e. bargain away or sell your right to revoke. **NY DISTINCTION: Signed written promise not to revoke is enforceable even w/o payment.
- Suretyship and SOF
- promise to answer for the debt of another. Look for this language: "If he doesn't pay you, I will."