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Contracts sjcl(baz)

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what is the predominant factor(bonebrake test?
if the contract is a mixture of goods and services, we will apply the "predominate factor" or "bone break" test, to determine which predominates, goods or services.
what is the definition of goods pursuant to the ucc?
ucc2-105 defines goods as all things which are movable at the time of identification to the contract for sale
can a contract for the sale of minerals or the like or a structure or its materials to be removed from realty a contract for the sale of goods?
yes, if they are to be severed by the seller
what law applies to contracts for the sale of services?
commonlaw
what is a merchant?
a merchant is a person who deals in goods of the kind or otherwise by occupation having or holding himself out as having skill to deal with goods involved in the transaction or to whom such skill is attributed by employment as broker.
what is an offer?
restatement 24- an offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will constitute an acceptance
what is the objective theory of contracts?
a partys intent is deemed to be what a reasonable person in the position of the other party would think that the first partys objective manifestation of intent meant.
are circulars and advertisements considered offers?
general advertising (ie newspaper advertisements) generally cannot constitute an offer; these types of advertisements are "invitations for offers" from the general public. A first come first served clause in the newspaper advertisements make the ad an offer, because it is designated to one specific person.
what is to presumptions the court uses in regards to contents of offers?
where the evidence is ambiguous about whether the parties intended to be bound, the court will follow these rules(1) in a business context, the court will presume that the parties intended their agreement to be legally enforceable(2) but in a social or domestic situation the presumption will be that legal relations were not intended.
what happens if no intent was manifested?
where the evidence of intent is ambiguous, the curt will generally treat a contract as existing as soon as the mutual assent is reached, even if no formal document is ever drawn up later. but for very large deals (ie billion dollar acquisitions? the court will probally find no intent to be bound until the formal document is signed.
does the ucc have gap fillers? if so what are there function?
yes, in the event that a term has been left out of the contract, the court may enter one in.
what is ucc 2-305 open price term mean?
ucc 2-305 open price term- the parties if they o intend can conclude a contract for sale even thrugh the prce is not settled. in such a case the price is a reasonable price at the time for delivery if (a) nothing is said as to price; or (b) the price is left to be agreed by the parties and they fail to agree or (c) the price is to be fixed in terms of some agreed market or other standard as set or recorded by a third person or agency and it is not so set or recorded.
does the ucc address output and requirements and exclusive dealings contracts?
yes, ucc 2-306
a term which measures the quantity by the output of the seller or the requirements of they buyer means such actual output or requirements as may occur in good faith, except that no quantity unreasonably disproportionate to any state estimate or in the absence of a stated estimate to any normal or otherwise comparable prior output or requirements may be tendered or demanded
does the ucc address delivery in singl lots or several lots if none are listed in the contract?
yes, ucc 2-307 addresses delivery in single lots or several lots
unless otherwise agreed all goods called for by a contract for sale must be tendered in a single delivery and payment is due only on such tender but where the circumstances give either party the right to make or demand delivery in lots the price if it can be apportioned may be demanded for each lot
what happens if the contract for goods does not specify a place for delivery?
ucc 2-308 addresses ABSENCE OF SPECIFIED PLACE FOR DELIVERY
unless otherwise agreed, (a) the place for delievery of goods is the sellers place of business or if he has none his residence; but(b) in a contact for sale of identified goods which to the knowledge of the parties at the time of contracting are in some other place, that place is the place for their delivery
what happens if the contract does not address a time for shipment?
ucc 2-309 addresses ABSENCE OF SPECIFIC TIME PROVISIONS; NOTICE OF TERMINATION
(1) the time for shipment or delivery or any other action under a contract if not provided in this article or agreed upon shall be a reasonable time. (2) where the contract provides for successive performances but is indefinite in duration it is valid for a reasonable time but unless otherwise agreed may be terminated at any time by either party.
if no payment due date is specified, when must goods be paid for pursuant to the ucc?
pursuant to 2-310 OPEN TIME FOR PAYMENT OR RUNNING OF CREDIT; AUTHORITY TO SHIP UNDER RESERVATION
unless otherwise agreed (a) payment is due at the time and place at which the buyer is to receive the goods even though the place of shipment is the place of delivery; and (b) if the seller is authorized to send the goods, he may ship them under reservation, and may tender the documents of title, but the buyer may inspect the goods after their arrival before payment is due unless such inspection is inconsistent with the terms of the contract
what is ambiguity of an offer?
Both the UCC and C/L provide that if the terms of an offer are ambiguous as to the method of acceptance, the law will interpret the offer in the light that is most favorable to the offeree. Put another way, the law will resolve ambiguity against the party who drafted the offer.
what duration will an offer remain open?
If not an option contract, an offer will remain open for a
reasonable time, and is freely revocable by the offeror anytime prior to acceptance by the offeree.
what is a direct revokation?
AN offeree’s power of acceptance is terminated
when the offeree receives from the offeror a manifestation of an intent to not enter into the proposed contract.
what is an indirect revokation?
restatement 43
AN offeree’s power of acceptance is terminated when
the offeror takes definite action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect from a reliable 3rd party.
what is a counteroffer?
an offeree's new offer tha varies the terms of the orginal offer and that therefore rejects the original offer
what is a revocation?
withdrawal of an offer by the offeror
what is an option?
generally, an offer is freely revocable, even when the offeror has agreed to keep it open for a fixed period. however, where a party has paid consideration to keep an offer open for a fixed period, an option contract is created and the offeror may not revoke the offer during that period. nor is the offeree's power of acceptance terminated by a rejection and or courteroffer unless the offeror has detrimentally relied on an unequivocal rejection prior to the offerees acceptance before expiration of the option period. an option contract is irrevocable by the offeree for the state time, survives the death of either party and is transferable.
what is paid consideration?
a dollar will suffice to create the option
what is a promissory estoppel based option?
restatement 87(2) an enforceable option contract is formed when it is reasonably forseeable that the offeree would rely on the offeror's promise, and the offeree does in fact justifiably rely to his detriment. the offeree's reliance and sometimes expectancy interests are protected. this applies to both bilateral and unilateral contracts. the detrimental reliance is a substitute for consideration.
what is the mailbox rule?
all communications are effective upon receipt with the acceptation of acceptance, which is effective upon dispatch. The California rule is all communications are effective upon dispatch.
can silence be held as acceptance?
silence will be acceptance if the parties’ course of performance, prior dealings, or industry standards, use silence as an acceptable mode of acceptance.
what is a modification?
modification of a K under the C/L must be supported by consideration from both sides. A preexisting duty, which the party is already obligated to perform cannot serve as consideration.
according to the ucc, may does an agreement modifying a contract need consideration?
pursuant to ucc 2-209 an agreement modifying a K needs no consideration to be binding as long as it is made in good faith. Can be hard bargaining, but not extortion.
what is a unilateral contract?
where there is only one promise (known as the nike contract, just do it)
what are request for bids?
a bid is an offer. a request for bids is a request for offers.
what is a bilateral contract?
a contract in which each party promises a performance, so that each party is an obligor on that partys own promse and and obligee on the others promise
what is the mirror image rule?
the doctrine that the acceptance of a contractual offer must be positive, unconditional, unequivocal, and unambigous and must not change, add to, or qualify the terms of the offer. the common law principle that a for a contract to be formed, the terms of an acceptance must correspond exactly with those of the offer.
what does the court use in dealing with conflicting written contracts?
UCC 2-207 Battle of the forms (MEMORIZE EXACT)
1.If an offeree accepts a contract in writing with terms that are different than the original offer, a contract is formed unless the offeree states that the acceptance is “expressly made conditional on the offeror’s assent to the additional terms.”
2.Additional terms not made conditional are considered proposals if they are between non-merchants (or between merchant / non-merchant). Between merchants they become part of the contract unless:
a.The offer expressly limits acceptance to the terms of the offer;
b.They materially alter it (anything of importance; price, arbitration clause, etc.); or
c.Notification of objection to them has already been given (before acceptance) or is given within a reasonable time after notice of them is received.
3.If there is no contract under section 1, there may be a contract by conduct. The terms of this contract by conduct are those terms agreed upon in writing by both parties. Missing terms are supplemented by UCC gap-fillers, course of performance, dealing, and custom and trade
does death or incapacity of offeror terminate the power of acceptance?
yes
what constitutes a revocation?
a revocation must be a clear manifestation of unwillingness to enter into the proposed bargain.
according to the commonlaw, when is a written revocation or rejection received?
pursuant to restatement 68 a written revocation, rejection or acceptance is received when it omes into the possession of the person addressed, or of some person authorized y him to receive it for him, or when it is deposited in some place which he has authorized as the place for this or similar communications to be deposited for him
does the mailbox rule apply to option contracts?
no
do the traditional laws of offer and acceptance apply in auction situations?
no, when an auctioneer puts goods up for auction, he is soliciting offers. a bid is then an offer, and acceptance takes place when the hammer falls.
is there a presumption that all auctions are with reserve unless otherwise specified?
yes this was a position at common law, and this has been codified in ucc 2-328(3). if an auction is with reserve, the the auctioneer may reject bids that he does not like.
if a bidder at auction revokes his bid before the hammer falls, are the previous bids automaticly reinstated?
no
what is restatement second section 87(2) in regards to genral contractors and subcontractors?
an offer is temporarily irrevocable if the offeror should reasonable expect it to induct action or foreearance of a substantial character on the part of the offeree. this option contract is only binding to the extent necessary to avoid injust. (ie reliance rather than expectancy may be awarded)
what does the commonlaw do in cases of dought on how an offeree is to accept an offer?
restatement 32 in cases of dought an offer is interpreted as inviting the offeree to accept either by promising to perform what the offer requests or by rendering the performance, as the offeree chooses
if an offeree can accept by promise or performance when is acceptance official?
restatement 62 where an offer invites an offeree to choose between acceptance by promise and acceptance by performance, the tender or beginning of the invited performance or a tender of a beginning of it is an acceptance by performance.
what happens if there is a contract but later additional term are brought forward?
puruant to ucc 2-207 it tells you how to handle the additional terms. it states that additonal terms become proposals for addition to the contract unless the two parties are merchants, then the terms are automatically part of the contract unless one of the three exceptions applies.
what is the ucc 2-207 battle of the forms all about?
1. if an offeree accepts a contract in writing with terms that are different than the original offer, a contract is formed unless the offeree states that the acceptance is "expressly made conditional on the offeror's assent to additonal of different terms.
2. additonal terms not made conditional are considered proposals if they are between non-merchants (or between merchant/non merchant.) between merchants they become part of the contract unless:
d)the offer expressly limits acceptance to the terms of the offer
e) they materially alter it (anything of importance: price, arbitration clause, etc.) or
f) notification of object to them has already been given (before acceptance)or is given within a reasonable time after notice of them is received.
3) if there is no contract under section 1, there may be a contract by conduct. the terms of this contract by conduct, are those terms agreed upon in writing by both parties. missing terms are supplemented by ucc gap-fillers, course of performance, dealing, and custom and trade.
what is consideration?
the promissee's detriment must have been bargained for by the promisor
what is the peppercorn theory?
something as insignificant as a little peppercorn can be sufficient consideration when given in exchange for a promise.
what is duress?
if a party is coerced (improper threat sufficent to induce assent) into a contract, the contract is voidable
what is sham consideration?
intention of promisor is essentially to give a gift (a pittance for something of large value would be an example) there can be a gross disparity, and if it is formed as a bargain to make it enforceable when it is really a gift, it is unenforceable because of the sham consideration
what is illusory promise?
Promises that still retain conditions by which the promisor can revoke are illusory if those promises give him an element of control over binding the K.
what does the ucc say about output, requirements and exclusive dealings contracts?
pursuant to ucc 2-306 Output, Requirements and Exclusive Dealings

1.If the contracts measures the quantity by the output of the seller or the requirements of the buyer; means such actual output or requirements as may occur in good faith, except that no quantity unreasonably disproportionate to any stated estimate or in the absence of a stated estimate to any normal or otherwise comparable prior output or requirements may be tendered or demanded.

2.A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes unless otherwise agreed an obligation by the seller to use best efforts to supply the goods and by the buyer to use best efforts to promote their sale.
does the law allow the creation, modification, or destruction of a legal right?
yes the court allows a forbearance not to sue on a valid claim as consideration
does the ucc address good faith of parties?
yes, pursuant to ucc 1-203 there is an obligation of good faith
Every contract or duty within this Act imposes an obligation of good faith in its performance or enforcement.
what does the second restatement concerning alternative promises say?
where a promisory reserves to himself the choice of several alternative performances, the promise made is only enforceable if each alternative performance woul have been consideration had it been bargained for alone.
can a court find implied promises in contracts?
yes, where one party has the right to terminate the agreement at his option, courts will imply a promise of giving reasonable notice (ucc 2-309). these implied promises most often come up in so called exclusive dealings cases, where the courts will imply that the one party has an obligation to use his best efforts to sell, supply, promost buy etc the others products.
what is the pre existing duty doctrine?
one who promises to do something he is already legally obligated to do, has not incurred a sufficient legal detriment for this new promise to constitute consideration.
what is accord and satisfaction?
an accord is an agreement by a creditor to accept a lesser amount of $ for full payment of a debt. A satisfaction is the actual payment of the $ accepted as full payment.
2 prerequisites: the debt must be unliquidated or disputed. An unliquidated debt is one in which the amount owed is in controversy. A disputed debt is when the debtor believes he owes the creditor nothing, but the creditor thinks he does.
in the commonlaw, may a debt be discharged by paying a lesser amount?
yes but it only applies to amounts that are unliquidated and disputed.
if there is a liquidated debt, and the debtor agrees to pay in a different medium, pay at a later date, give additonal security with the part payment, or refrain from bankruptcy proceedings, will the court find consideration?
yes
can a Executory Contract be modified?
A promise modifying a duty under a contract not fully performed on either side is binding
(a) if the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made; or
(b) to the extent provided by statute; or
(c) to the extent that justice requires enforcement in view of material change of position in reliance on the promise.
generally, can a moral obligation be consideration for a promise?
no a moral obligation is not consideration for a promise
generally according to the commonlaw, is a promise to pay for a past act are binding due to a benefit received by the promisor?
yes restatement 2d section 86 holds that promises to pay for a past act are binding due to benefit received by promisor. this section holds for business/economic decisions.
what is promissory estoppel?
A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.
what is expectancy damages?
puts the plaintiff in as good of position as he would have been if the contract had been performed. expectancy gives the plaintiff the benefit of the bargain, the profit he would have made had the contract been performed.
what is reliance damages?
puts the plaintiff in as good of position as he would have been if the contract had never been made. when damages are too speculative it is limited to costs made after the contract was formed and the court will not allow reliance damages if they are greater than the damages if they had been performed.
what is restitution?
the law of unjust enrichment. restitution is not a form of damages; it measures the extent of the defendants unjust enrichment. (1) defendant has materially breached and plaintiff elects to rescind, and pursue restitution. each party must restore any benefit received to the other. (2) there is some defect, such that no contract has been formed, but one party has bestowed a benefit on the other. the party who received the benefit must return it, or pay its value.
what is consequential damages?
damages that would never have been incurred had there not been a breach. damages that were solely cause by the breach. conseequential damages need to be foreseeable at the time of the contract or the breaching party must have been on notice. the breach not been forseeable.
what are incidental damages?
include expenses reasonably incurred in inspection, receipt, transportation, care and custody of goods rightfully rejected, or charges, expenses or commissions in connection with cover and any other reasonable expense incident to the delay or breach. they do not need to be foreseeable or have special circumstances
what are nominal damages?
damages in name only
are punitive damages allowed in a pure contract action?
they are not awared in a pure contract action. plaintiff must show defendant committed a tort that was wholly independent of the breach. fraud, malice, oppression or the tort of "implied covenant of good faith and fair dealing (usually only applicable to insurance co") punitive damages are at discretion of jury. culpability of defendant, vulnerability of plaintiff and offensiveness of defendant's conduct, are all taken into consideration
what are liquidated damages?
clause in the contract specifying the amount to be paid in the event of a breach. cannot be punitive damages disguised as liquidated damages. must be a reasonable attempt to pre-estimate the damages
what is mitigation of damages?
the penalty is that you can't recover damages you could have avoided. its a question of reasonableness. what was it reasonable to require the person to do in order to avoid the damages?
what is specific performance?
literal expectancy. not given for personal services
what is an injunction?
Injunction-Specific performance will almost never be granted in connection with personal service K’s we look to injunctions. Since a promise to render personal services is usually exclusive courts will often enjoin the breaching employee from working for a competitor.
3 hurdles employer must overcome in seeking injunction:
1. Unique skills-employee’s services are unique
2. Other way to make a living-employee has a reasonable means of making a living
3. Employer’s willingness to perform-if the probable result is that employee performs employer must act in good faith (no undesirable relations between them)
what is a mutual rescission?
as long as neither party has fully performed the parties may agree to cancel the whole contract
what is a unilateral rescission?
where one party of a contract has been the victim of fraud, duress, mistake or breach by the other party he will often be allowed to cancel the contract terminating his obligations.
how does the ucc change the commonlaw rul in regards to non-conforming goods?
pursuant to ucc 2-508 the ucc modifies the commonlaw rule for commercial contracts. buyer has a right to reject non-conforming goods before acceptance of the goods (after a reasonable inspection), which will amount to a rescission.
how does the ucc address revocation of acceptance in whole or in part?
ucc 2-608 once the buyer has accepted the goods the buyer can revoke the acceptance(recission) only if nonconformity substantially impairs the value of the goods. the buyer must have accepted the goods on the reasonable assumption that the nonconformity must not have been seasonably cured. the revokation must occur w/i a reasonable time after discovering or should have discovered the nonconformity before substantial change in the condition of the goods. the buyer must notify the seller of his revocation in a reasonable time. the buyer must take reasonable care of the goods revoked.
what are speculative damages?
they are not recoverable. a plaintiff is required to prove damages with reasonabl certainty. a plaintiff who cannot prove damages will only recover nominal damages
what are buyers remedies?
market price-kprice+incidentals+consequential=damages

cover price-kprice+incidentals+consequential=damages
what are sellers remedies?
kprice-resale price+incidntals=damages

kprice-market price+incidentals+damages
what is a lost volume seller?
this compensates the seller for the profit he would have realized had the defendant not breached. He must prove that he would have made the other sale anyways.
what does the ucc do to address goods accepted or of conforming goods lost or damaged or goods identified to the contract are unable to be sold by the seller at a reasonable price?
pursuant to ucc 2-709 specific performance, this is appropriate where the goods are specifically made for the buyer and they cannot be resold, or resale would be futile. the seller's damages are he full price of the contract plus incidentals
If an offeree accepts a contract in writing with terms that are different than the original offer,is a contract formed?
yes, pursuant to ucc 2-207 a contract is formed unless the offeree states that the acceptance is “expressly made conditional on the offeror’s assent to the additional terms.”
Generally are additonal terms not made conditional considered proposals? if they are between non-merchants (or between merchant / non-merchant). Between merchants they become part of the contract unless:
yes pursuant to ucc 2-207(b)if they are between non-merchants (or between merchant / non-merchant). Between merchants they become part of the contract unless:
a.The offer expressly limits acceptance to the terms of the offer;
b.They materially alter it (anything of importance; price, arbitration clause, etc.); or
c.Notification of objection to them has already been given (before acceptance) or is given within a reasonable time after notice of them is received.
under ucc 2-207 may contract be determine by conduct of the parties?
yes pursuant to ucc 2-07 (c)
.If there is no contract under section 1, there may be a contract by conduct. The terms of this contract by conduct are those terms agreed upon in writing by both parties. Missing terms are supplemented by UCC gap-fillers, course of performance, dealing, and custom and trade
what are the defenses to contract formation or breach
1. minors
2. mentally incompetent
3. dures
4. undue influence
5. fraud
6. misrepresentation
7. illegality
what contracts are governed by the statute of frauds?
1. marriage
2. contracts not performed in 1 year
3. interest in land
4. executerships
5. sale of goods over $500.00
6. surety agreements
what is mutual mistake?
wherea mistake of both parties has occured about a basic assumption underlying the k at the time the k was made, where the mistake has a material affect on the agreed exchange of performances, the k is voidable by the adversely affected party unless he bears the risk of the mistake
what is a unilateral mistake?
where a mistake is by one party about the basic assumption underlying the k at the time the k was made, where the mistake has a material affect on the agreed exchange of performances, the k is voidable by the adversely affected party unless he bears the risk of mistake
In claiming a unilateral mistake what must be proven?
the party must show either: the mistake is such that enforcement of the k would be unconscionable, or the other party had reason to know of the mistake. Mistake must not have been caused by adversely affected parties negligence.
what three ways can risk be allocated?
1. risk is allocated by agreement(express or implied) between the parties
2. the party has limited knowledge with respect to the facts which the mistake relates but treats his limited knowledge as sufficient
3. the risk allocated to him by the court on the ground that it is reasonable to do so.
what is the traditional view for impossibility?
when the performance of the k is rendered impossible y the happending of an event that is not under the control of either party, then the court will excuse any performance still due under the k
what is the modern version of commercial impracticability?
where there is an unexpected event or occurance of an event that is not under the control of either party, then the court will excuse any performance still due under the k
what is frustration of purpose?
(pointless to perform) where, after a k is made, a partys principle purpose is substantially frustrated without his fault by the occurrence of an event the non-occurrence o which was a basic assumption on which the k was made, his remaining duties to render performance are discharged
what are the four factors to use for the transatlantic test?
1. was there an unexpected occurance?
2. was the risk of occurrence allocated to any party?
3. the unexpected event renders performance impossible, impraticabity, or pointless (frustration)
4. courts typically require cost of performance be over 100%
For a merchant to disclaim a warranty, what must they do?
pursuant to 2-316 the disclaimer must:
1. be in writing
2. the word merchantability must be there
3. the language and placement of the disclaimer must be conspicuous
what is the parol evidence rule?
applies only if the original contract is an integration. If so evidence of a prior written or oral agreement or a contemporaneous oral agreement that would vary or contradict the original k is barred
what is an integration pursuant to the parol evidence rule?
if the parties intend a documnt to represent the final expression of their agreement, the document is said to be an integration of their agreement
what is a partial integration pursuant to the parol evidence rule?
if the document is not only intended by the parties to include all details of their agreement
what is a total integration pursuant to the parol evidence rule?
the document is intended by the parties to include all the details of their agreement
what is the commonlaw test to determine if there is a integration pursuant to the parol evidence rule?
that the court would look at the writings and subject matter, and decide that naturally, if it was in integration, the parties would have included it.
what is he ucc rule regarding integration pursuant to the parol evidence rule?
that the item would have certainly been made part of the contract.
Does the parol evidence rule apply to a showing of fraud, mistake, illegality, lack of consideration?
no
May evidence be admitted to interpret the meaning of language in the agreement?
yes
According to the commonlaw, is evidence of a condition precedent admittable pursuant to the parole evidence rule?
per the commonlaw, yes, if the parties agree separately that the entire integrated k was to take effect only upon the occurence (or non occurrence) of some external condition, that evidence is admisible.
what is anticipatory repudiation?
when a party makes it reasonably clear by conduct or by works that he does not intend to perform, and the nonperformance will constitute a material breach.
what is unconscionability?
part of the k or the whole k is clearly and oviously unfair. You must prove both that the k is procedurally and substatively unconscionable. The court can choose to not enforce the unconscionabl portion or the whole k.
what is the substantive standard in regards to unconscionability?
it is some provision that imposes something unreasonably unfair, (takes away remedies of one party)
what is the procedural standard in regards to unconscionability?
It asks how it goe into the k in the first place. Usually done by oppression or by unfair suprise. Oppression is ually done by adhesion, take it or leave it situations (superior bargaining power)
what can the court do in regards to unconscionability pursuant to ucc 2-302?
court has flexibility. Court may either not enforce the k, or enforce only those parts that are not unconscionabile. Court may allow parties to introduce evidence.
what is an exculpatory clause?
it will limit a party from liability from its own negligence, unless its enforcement violates a k of public interest. must use tunkle creteria to determine if in public interest
what is the tunkle criteria?
not all are needed:
1. business suitable for public regulation
2. party willing to perform for any member of public who seeks it
3. unequal bargaining power
4. adhesion k, containing exculpatory clause, take it or leave it
5. buyer or buyers property is placed under sellers control
what is a condition?
an event or occurence that must occur and triggers a partys obligation to go forward with the k.
what is a material breach?
a material breach of a promise will justifiably terminate the k and excuse the non-breaching party from performancce
what is a non-material breach?
trivial, insignificant breach of a promise will not terminate the k or excuse performance
what is quasi-contract?
one party owing money, services, or goods that belong to another then even thoughthere is no actual k the implies to k to return the amount which would otherwise be unjust enrichment.
what is quantum meruit?
the reasonable value of services
what contracts are within the Statute of frauds?
MYLEGS
1.marriage
2. contracts not performed in one year
3. interest in land
4. executerships
5. sale of goods> $500.00
6. Surety Agreements
What is a mutual mistake?
where a mistake of both parties has occurred about a basic assumption underlying the k at the time the k was made, where the mistake has a material affect on the agreed exchange of performances, the k is voidable by the adversely affected party unless he bears the risk of the mistake.
what must a party show when arguing unilateral mistake?
the mistake is such that enforcement of the k would be Unconscionable; or the other party had reason to know of the mistake. Mistake must not have been caused by adversely affected parties negligence.
what are the three ways risk can be allocated?
1. the risk is allocated to him by agreement (express or implied) between the parties
2. he has limited knowledge with respect to the facts to which the mistake relates but treats his limited knowledge as sufficient.
3. the risk allocated to him by the court on the ground that it is reasonable to do so.
What is the traditional view of Impossibility?
when the performance of the k is rendered impossible by the happening of an event that is not under the control of either party, then the court will excuse any performance still due under the k.
what is commercial impracticability?
where there is an unexpected event or occurrence, the non-occurrence of which was a basic assumption of the k. Where the k is so costly to perform that it becomes impracticable to comply.
What defenses does the transatlantic test apply to?
1. impossibility
2. impracticability
3. frustration of purpose
What are the four elements of the transatlantic test?
1. was there an unexpected occurrence?
2. was the risk of occurrence allocated to either party?
3. The unexpected event renders performance impossibl, impracticabl or pointless (frustration)
4. Courts typically require cost of performance be over 100%
what does UCC 2-316 state for the rules in disclaiming warranties?
1. disclaim in writing
2. the word merchantability must be there
3. the language of the warranty disclaimer must be conspicuous
what is a partial integration pursuant to the parol evidence rule?:
a document is not intended by the parties to include all details of their agreement
what are the tests to use to see if there has been an integration pursuant to the Parol Evidence rule?
1. restatement rule: naturally would have made it a part of the k
2. ucc rule: certainly would have been made it a part of the k
Does the parol evidence rule apply to a showing of fraud, mistake, illegality, lack of consideration, or any other fact that would make the k void or voidable?
no
May evidence be admitted to nterpret the meaning of language in an agreement?
yes
Discuss condition precedent in regards to the ucc and commonlaw in referance to parol evidence rule
by c/l okay, ucc not sure- if the parties agreed seperately that the entire integrated k was to take effect only upon the occurrence (or non occurrence) of some external condition, that evidence is admissible.
what is substantive in regards to unconscionability?
is some provision that imposes something unreasonably unfair (takes away remedies of one party)
what is procedural in regards to unconscionability?
how did it get into the k in the first place? Usually done by Oppression or unfair suprise. Opression is usually done by adhesion, take it or leave it situations (superior bargaining power)
what are the Tunkle criteria?
1. business suitable for public regulation
2. important/necessary service to the public
3. party willing to perform for any member of public who seeks it
4. Unequal bargaining power
5. adhesion k, containing exculpatory clause, take it or leave it
6. buyer or buyers property is placed under sellers control
Discuss promise versus a condition
The law abhors a forfeiture. Not performing a promise is a breach. Not performing a condition is not a breach; it cancels the other party's obligation to go forward. If it is unclear whether a clause a condition or a promise, the court will interpret the k in a way that avoids forfeiture by one of the following:
1. call the condition a promise
2. excuse conditions
3. waiver
What is a time is of the essence clause?
the parties usually waive the clause by their conduct. Its looked at by the court as a non-material promise.
what is an assignment of rights?
the k has already been formed and now the person receiving the obligation (oblgatee) has transferred rights o another party (assignee). In order to have an effective assignment, there must be a clear intent to vest the rights o the assignee and assignor has to effectively and sufficiently describe the rights being assigned. The obligator mst receive notice of the assignment. Asignment does not have to be in writing unless the k is subject to the SOF.
Discuss limitations pursuant to assignments
any clause in a k that limits the right to assign is treated very narrowly by he courts because of the social and economic benefit of assignments. An enforceable provision must say "any rights attempted to be assigned are void." Under UCC 2-210, all rights are assignable. A provision that prohibits an assignment of a k is treated as barring delegation of duties, but still allows assignment of the benefits.
When is an assignment not valid?
when it changes the duties of the oblgator, increases the obligator's risk, impairs return performance, involves future rights, rights greater than assignor has, if forbidden by statute or public policy.
Discuss the rights of the assignee
if the obligator fails to perform,the assignee can sue just like the obligatee, and any defenses that apply o the assignor apply to the assignee
when may a condition be excused?
(1) its requirements will involve extreme forfeiture or penalty, and
(2) its existence or occurrence forms no essential part of the exchange of the promisor’s performance.
What are three weapons a court can use to avoid harsh forfeiture?
1. Call it a promise rather than a condition. The promise is technically breached but the breach is not material so it does not terminate the agreement (it only results in a minor award of damages to the aggrieved party.)
2. The conditions are excused because:
a.They would cause extreme forfeiture; and
b.They are not an essential party of the agreement.
3. Look to the facts of the case and try to figure out whether or not the party waived the condition. An intentional relinquishment of a known right. If the condition is waived, you cannot enforce it.
ALWAYS TALK ABOUT ALL THREE ON AN EXAM!!!
May parties waive their rights to strict compliance to a contract by their previous course of performance?
yes, prior acts of not adhearing to compliance can cause a waiver
what are the elements of fraudulent misrepresentation?
1. a false representation of fact
2. made with knowledge of its falsity and withintent to induce the other party to enter the contract
3. which does in fact deceives the other party
4. to the other partys injury or detriment.
what are the elements of duress?
1. one of the parties makes a threat
2. the threat must be improper
3. the threat must induce the apparent assent, in that it leaves the victim no reasonable alternative but to agree.
what are the elements of mutual mistake?
1. at the time of contracting, the parties must have shared an erroneus belief concerning a fact.
2. the erroneus fact was a basic assumption on which the contract was made.
3. The mistake must have a material effect on the agreed exchange of performances
4. the adversely affected party must not have borne the risk of the mistake
what are the elements of a unilateral mistake?
1. the error concerns a fact
2. the fact is a basic assumption on which the mistaken party made the contract
3. the mistake has a material effect on the exchange, adverse to the mistaken party
4. the mistaken party must not bear the risk of the mistake
5. the equities must favor relief for the mistake
what is the barf for mistake?
mistake concerns an error of fact in existence at the time of contracting, so fundamental to the premise of the contract that it precludes the formation of true assent
what is the barf for impracticability?
it applies when events following contract formation are so different from the assumptions on which the contract was based, that it would be unfair to hold the adversely affected party to its committments.
what is the difference between mistake and unconscionability?
mistake causes a defect in contract formation, permitting a party to be excused from accountabilty for a manifestation of assent. Impracticability supposes that a binding contract was made, and that it is concerned with whether a post-formation change of circumstanceshas such a seriouseffect on the reasonable expectations of the parties that it shouldbe allowed to excuse performance
what are the elements of impracticability?
1. after the contract was made, an event occured, the non-occurrence of which was a basic assumption of the contract
2. the effect of the event is to render the party's performance impracticable, that is unduly burdensome.
3. the effect of the event is to render the party's performance "impracticable" that s unduly burdensome
4. The party seeking relief was not at fault in causing the occurrence
5. The party seeking relief must not have borne the risk of the event occurring
what is frustration?
it was designed to provide relief when a party could not show that an unexpected supervening event rendered his performance impossible, yet it so destroyed the value of the transaction for him that the contracts underlying purpose was frustrated. Essentially, the other parties performance has no worth or utility to me
what is the barf for frustration?
1. post-formation event
2. the non-occurrence of which was a basic assumption on which the contract was made
3. he event must have not been caused by the fault of the party whose purpose is frustrated
4. the party must must not have borne the risk of its occurrence
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