MA Contract Distinctions
Terms
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- What is the definition of sufficient consideration in MA?
- Either a legal detriment to one party or a benefit received by the other party is sufficient consideration.
- Does MA allow a preexisting legal duty to count for consideration?
- Generally, a preexisting duty is not sufficient consideration.
- What are the exceptions to the rule that pre-existing duty cannot be sufficient consideration?
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1. P promises to do more than she believes she is required to do.
- Many other exceptions - Mutual Rescission – Does MA require additional consideration to rescind an executory bilateral contract?
- No – an executory bilateral contract may be rescinded by mutual assent with no further consideration.
- Can a promise to pay a legal obligation barred by law be enforceable?
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Yes –
1. Debtor promising to pay a bankruptcy discharged debt - check only - revives whole debt
2. A Promise by a debtor to pay a debt barred by the SOL - detailed writing - Is a signed check enough to revive a legal obligation barred by the running of the statute of limitations?
- No – in a statute of limitations situation, a detailed writing is required.
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Can part performance of an old debt revive it?
How much of the old debt is revived? -
Yes
Only the amount promised, not the original obligation - Debtor Dan defaulted on a bank loan for $10,000 from Creditor Cari. The statute of limitations ran on the debt this last week. Dan called up Cari and told her he’d pay her $1,000 out of the goodness of his heart. Cari agreed and the two wrote up the pa
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No – A new promise to pay a legal obligation barred by law is only enforceable as to its terms, not the terms of the original agreement.
Note: If Dan had instead sent her a check for $1,000 that would not have been sufficient under the Statute of Frauds to be enforceable.
But: If the debt had been discharged because of bankruptcy, a check for $1,000 would have been sufficient and it would have revived the entire debt. - Can a seal substitute for consideration with an option contract?
- No, MA has adopted the Restatement of Contracts, 2d with respect to option contracts, so they need consideration regardless of whether it is executed under seal.
- Can a seal substitute for consideration?
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Yes - conclusive presumption of consideration
Only need LS after signature.
Doesn't change liability of an undisclosed agent.
In MA a seal can substitute for consideration. It is a conclusive presumption of adequate consideration. They must be signed, sealed and delivered to be effective. They do not need a wax seal, they only need to recite that they are sealed and have an “L.S.†after the signature. There is no distinction b/w sealed and unsealed instruments with regard to the liability of an undisclosed principal. Option contracts need consideration regardless of whether sealed. - Does a seal change the obligation of an undisclosed agent?
- No
- What happens if the writing does not have a time limitation in it?
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Reasonable time
Under MA law, a reasonable time restriction is imposed on rights exercisable under a written contract, when no express time limitation for exercise of those rights appears in the contract. - What happens when a contract is made on a Sunday? Is it illegal?
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Maybe - There's a Sunday Defense.
You can negotiate on Sundays, and if the contract is subsequently performed, it will be presumed to be effective from the first secular day.
There are tons of exceptions in statute for things like groceries. - Can you contract with a corporate fiduciary in such a way as to breach her fiduciary duty?
- No, a contract for personal gain which could cause a corporate fiduciary to breach his or her fiduciary duty of loyalty to the company is generally unenforceable as against public policy.
- Is it a crime to finance a litigation in consideration for receiving a portion of the proceeds?
- The crime of champerty (the unlawful maintenance of a suit) where a person without an interest in the suit agrees to finance it, in whole or in part, in consideration for receiving a portion of the proceeds is no longer recognized in MA.
- What is the age of majority in Massachusetts? Are younger children competent to enter into some contracts?
- The age of majority is 18. Children who are 15 years or older are competent to enter into life insurance contracts, and children 16 years of age or older are competent to enter into auto insurance contracts.
- Can part performance substitute for a writing in the sale of land?
- Yes, but MA requires all three elements (Payment, possession and valuable improvement) of part performance to render an oral contract for the sale of land enforceable.
- Dave agrees orally to sell Blackacre to Paula. She tenders the a tenth of the asking price of $10,000, with the remainder to be paid over a period of 5 years, and moves into Blackacre. She pitches a tent and lives there for a period of one year at which
- Dave. The agreement between Dave and Paula does not qualify under the statute of frauds as enforceable. MA requires payment, possession and valuable improvement of the land in order for partial performance to substitute for a writing. Here, Paula has not valuably improved the land, so there is no valid substitute for a writing.
- Do you need a writing for a promise to make or revoke a will or codicil?
- In MA, a promise to make or revoke a will or codicil must be evidenced by a writing to be enforceable.
- Can I orally promise a broker to pay him for negotiating a sale of my business?
- No, a promise to compensate a broker or finder for negotiating a loan or for the purchase, sale or exchange of a business must be evidenced by a writing to be enforceable. This statute does not apply to the services of attorneys, real estate brokers, or real estate sales people.
- Can I orally promise to pay a real estate broker for negotiating a loan?
- Yes, the rule that a promise to compensate a broker or finder for negotiating a loan or for the purchase, sale or exchange of a business must be evidenced by a writing to be enforceable does not apply to the services of attorneys, real estate brokers, or real estate sales people.
- In the case of Paula v. Dan, Dan and Paula come to an amicable settlement. Dan tells the judge, “Your honor, we’ve decided that the sale of Blackacre should be conveyed to Paula today with her remitting $8,000.†Does this need to be reduced to a wr
- No. The admission exception to the Statute of Frauds extends to oral settlement agreements made in open court. Such agreements are binding even though not in writing.
- What are the key differences between the Multistate and MA statute of frauds?
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- All three elements required for part performance of land contract.
- Promise to make/revoke a will must be in writing
- Brokers and finders fees in sale of business must be in writing. (except lawyers, real estate brokers, or real estate salespeople)
- Admission exception extends to oral settlement agreements made in open court.
LAW-B (Land, Admission, Wills, Broker) - Is a clause requiring a bench trial enforceable? Arbitration?
- Absent fraud or overreaching, a clause requiring a party to relinquish their right to a jury trial or committing the party to arbitration is enforceable.
- Are adhesion contracts okay?
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Adhesion contracts are enforceable unless the contract itself is:
1. unconscionable,
2. offensive to public policy,
3.unfair under the circumstances.
UOU - Unconscionable, Offensive, Unfair - Does MA look at price in determining unconscionability?
- Yes – a gross disparity of consideration accompanied by other factors can make a contract unconscionable.
- What are the requirements for a wage assignment for a loan under $3,000?
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It must be (1) in writing, (2) approved in writing by the employer and (3) the spouse of the employee, and (4) the employer’s acceptance must be filed and recorded with the clerk of the city where the person making the assignment resides or where he is employed. It can last no more than one year, and must state that $10/week is exempt from assignment.
Mnemonic: We Approve Every Silly Fling Each Time. (writing, approved by employer & spouse, filed. Exempt and Time restricted) - How long can a wage assignment for a loan under $3,000 last? How much is exempt from each week’s pay?
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* No more than one year.
* $10/week is exempt. - What are the requirements for a wage assignment for a loan over $3,000?
- It must be (1) in writing, (2) approved in writing by the employer and (3) the spouse of the employee, and (4) the employer’s acceptance must be filed and recorded with the clerk of the city where the person making the assignment resides or where he is employed. It can last no more than two years, and must state that three-quarters of wages are exempt from assignment.
- How long can a wage assignment for a loan over $3,000 last? How much is exempt from assignment?
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* No more than 2 years
* Three-quarters of income is exempt from assignment. - In a contract for services, do I have to wait for the date of performance to sue for breach?
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Yes – MA is alone in not recognizing anticipatory repudiation in non-UCC contracts.
So, you must continue to perform under a non-UCC contract until the other party actually breaches. - If a condition is not satisfied, is the contract void? Can one still recover something?
- MA requires conditions to be perfectly performed. However, recovery in quasi-contract is allowed if the failure is not of substantial performance of the contract. Parties may introduce contract price as evidence in action for quantum meruit.
- What happens when an employee breaches a contract?
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Employee brings an action for wages due for the period actually worked.
Employer proves mitigation
No recovery if employee's breach = intentional - How does MA calculate interest on damages?
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At contract rate if established
12% if no contract rate
From date of breach or demand
OR date action commenced if date of breach not established - What happens when you terminate a sales person?
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14 days to pay commissions due
Later commissions paid 14 days after date on which they become due
Willful failure = liable for commission + 3X commission + costs + atty fees - I’ve got a liquidated damages clause in my real estate contract, how can I tell if it is valid?
- Liquidated damages in real estate sales will be enforced if the sum agreed upon represents a reasonable estimate of the actual damages at the time of contract formation.
- What is a charitable pledge and when are charitable pledges enforceable?
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It's a promise (oral/written) to give stuff to a charity.
Enforceable when promise + consideration or reliance.
Need to determine whether actual intent to gift or simply desire to do something in future - What contract clause is implied in all contracts in Massachusetts?
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Good Faith
There is an implied covenant of good faith in every contract in Massachusetts, requiring the parties to deal honestly and in good faith in both the performance and enforcement of the terms of their contract. - Can a buyer retract a contract modification unilaterally?
- No - a buyer cannot unilaterally retract a modificaiton.
- Can I keep using the good I just got even though I want to reject it?
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Continued use = "second acceptance"
Buyer, after rejecting/revoking has duty to treat goods in manner consisten w/ seller's ownership.
If continued use reasonable, not necessarily second acceptance - What do vendors know about their products in MA? And what does that mean for the warranty of merchantability?
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All of the product's defects
Adequate warning is based on what vender knew or should have known.
Unreasonably dangerous = not fit for ordinary purpose, regardless of absence of fault on vendor's part. - ALL WARRANTIES, EXPRESS AND IMPLIED ARE HEREBY DISCLAIMED. What’s the effect of this in MA?
- All attempted disclaimers of warranties in a CONSUMER good are void.
- Who is covered by a warranty in MA?
- All persons manufacturer/seller might reasonably expect to use, consumer or be affected by the goods.
- John’s riding his lawn-mower negligently, but, unbeknownst to him, the mower is defective. It explodes. Can his negligence be a defense to full recovery on a breach of warranty theory?
- No comparative negligence in warranty cases
- What method of tendering payment is acceptable?
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Any means unless seller demands legal tender and gives reasonable extra time.
Payment by check is conditional and not payment anymore when check bounces - What happens when the buyer pays before inspecting the goods?
- Buyer isn't excused from paying before inspecting unless defect is so obvious that it doesn't need inspection.
- So, I’ve got damages, and still owe money to the seller, can I deduct the damages from the money I still due on the contract?
- Yes - notify seller of intent - can set off damages from price still due.
- Can I limit warranty remedies to repair?
- Only if the retailer or manufacturer maintains a repair facility in MA.
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I'm an agent for Patty and she's given me her seal. I didn't disclose that I was her agent. Am I liable on the contract?
Can a seal change the liability on an undisclosed agency relationship? - No - a seal does not change liabilities when an agent fails to disclose the principal.
- Exceptions to the rule that with non-UCC you can't sue before law-day?
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1. Equity for specific performance of land contracts
2. Quantum Meruit
3. Recission
4. When accompanied by an actual breach
SQuARe - (Specific, Quantum, Actual, Recission) - What are the exceptions to the requirement that brokerage agreements for the sale for businesses require a writing?
- Attorneys, Real Estate Brokers, Real Estate Sales People