2012 Cal Bar Prep.txt
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Armadillos from Texas . . .
- Applicable law
- Formation of K
- Terms of K
- Remedies for unexcused nonperformance
- Excuse of non performance
- Third-party problems
Unilateral K trigger
Offer expressly states performance as only possible acceptance.
Art. 2 Mixed Deals Rule
All or nothing / most important part
Art. 2 Mixed Deals Rule Exception
K divides payment = UCC applies to goods; CL applies to the rest
True/False: Potential K answers that state "intent" or "intended" are alwasy wrong answers.
True - They are always wrong answers.
Under common law, is price required in a sales K or offer to K?
Yes. Lacking that term voids the K, or results in no offer.
Under Art. 2, is price required in a sales K or offer to K?
No. Gap-filling provisions take care of it.
What ambiguous terms will void an offer?
A - Any terms
B - Material terms
B - Material terms
Trigger words for vague offer terms.
Triggers for requirements or output Ks.
Test for whether post-K increase voids output or requirements K.
Is the increase unreasonsably disproportionate to the original amount.
Note: decreases are not tested
- 1 - Was there an offer?
- 2 - Was the offer terminated?
- 3 - Was the offer accepted?4 - Is there a reason to not enforce the agmnt?
Reasons to not enforce the agmtn:
- Defendant's Capacity
- Statute of Frauds
- Public Policy
- Duress/Undue Influence
- Mistake of Fact
- Ambiguity in Agreement Wording
Four Methods of Offer Termination
- 1 - Lapse of Time
- 2 - Death of party prior to Acceptance.
- 3 - Revocation (offeror)
- 4 - Rejection (offeree)
Offer termination by Lapse
time state or reasonable time
Offer termination by Death
Death / incapacity before acceptance.
Offer terminatin by Revocation
Words - unambiguous, communicated to offeree
Conduct - unambiguous, offeree knows about it
Can an advertisement be an offer?
- - Unilateral K language "$100 to anyone who catches the flue after using our product as directed"
- - States quantity and who can accept: "1 fur coat for $10, first come, first served"
Are multiple offers a revocation?
Can an offeree accept an offer, held by an option, after the option expires?
Yes. Option expiration alone does not revoke an offer.
UCC Firm Offer Rule
- 1 - Merchant
- 2 - offers to buy or sell
- 3 - signed stated promise to keep the offer open
UCC limits time offer open to a max of 3 months.
Test for reliance that makes an offer irrevocable:
- 1 - offeree relies on the offer
- 2 - reliance was reasonably foreseeable to offeror
- 3 - reliance was detrimental to offeree
Once performance begins on a unilateral K, who cannot revoke?
Offeror. Must give offeree reasonable time to complete the performance.
Unilateral K - difference b/w performance and mere preparation.
everything is mere preparation until offeree begins the act that offeror stated
CL - Counter offer
Rejection and new offer. Old offer cannot be accepted.
UCC - Counter offer
Generally treated as a "seasonable expression of acceptance".
CL - Additional terms in counter offer
Rejection of previous offer makes new terms part of the new offer.
The most common Cal Bar essay question and the most frequent MBE question referring to contracts addresses what?
Whether there is a legally enforceable agreement. --> Formation.
Part performance of a _____ K does NOT satisfiy the SoF.
If you're told the sale price in the prompt, it is either a:
- 1) Money damages question; or
- 2) Statute of Frauds question
SoF - Sale of good Ks . . .
. . . do not need to mention the price in the writing to satisfy the Statute of Frauds.
How do you spell p__ evidence?
Standard for compliance with express condition:
Trigger words for Express Condition:
- only if
- provided that
- so long as
- subject to
- in the event that
- on condition that
Past/moral consideration is good for:
Debts, promised in writing, based on a prior debt that is uncollectable due to a technicality (SOL, BK).
What if a counter offer ends in a question mark?
It's bargaining, and NOT a counter offer.
Effect of Conditional Acceptance:
Terminates the offer.
Does a counter offer kill an option?
Mirror Image Rule:
Response that adds terms is rejection and counter offer.
Battle of the Forms (2-207)
- Response to offer, with new terms:
- 1 - Accepts the offer, forming a contract b/c it is a seasonable expression of acceptance
- 2 - Same terms are included
- 3 - Additional terms might be part of the K.
Battle of the Forms, additional terms test:
- Part of the K only if:
- 1 - both parties are merchants
- 2 - additional term not material
- 3 - additional term not rejected
Mailbox rule exception:
Mailbox rule does not apply if offeror states that acceptance must be received by ___.
Can you use the mailbox rule to meet an option deadline?
X orders red widgets; Y ships blue widgets. Result:
X's order is an offer; Y's performance is acceptance; forms contract; Y's shipment of incorrect goods is a breach.
Seller to ship nonconforming goods, stating that the goods are only an accomodation.
Effect of Accomodation:
Counter offer and no breach. K not formed until buyer accepts nonconforming goods.
Can an offer be assigned?
Legal reasons to not enforce:
- 1 - Lack of consideration
- 2 - lack of capacity
- 3 - Statute of Frauds
- 4 - law prohibit performance
- 5 - public policy - never on the bar
- 6 - misrepresentation
- 7 - nondisclosure
- 8 - duress
- 9 - ambiguity
- 10 - unconscionability
- 11 - mistake
- 1 - bargained for,
- 2 - legal detriment
Is a promise consideration?
When is a promise illusory?
If promissor can change mind/terminate at will, without notice.
When is past consideration sufficient?
- 1 - expressly requested by promissor,
- 2 - promisor knows promisee expects payment
Is a pre-existing duty sufficient for consideration?
CL - Never.
Art. 2 - New consideration is NOT necessary to modify sale of goods contracts.
Modern - Only sufficient for consideration IF the duty is owed to a third person.
Promise to forgive balance of debt as consideration requires:
Debt is not due / is disputed.
OR if it is:
- 1 - Written promise;
- 2 - to satisfy obligation
- 3 - for obligation for which there is a technical defense.
Promissory estoppel requires:
- 1 - Promise;
- 2 - Reliance that is reasonable, detrimental, and forseeable
- 3 - Enforcement necessary to avoid injustice.
Consequences of incapacity:
Ks w/in the Statute of Frauds:
1 - Promise to answer for debts of another [suretyship];
2 - Service not capable of being performed w/in 1 yr;
3 - Transfers in real estate;
4 - Sales of goods over $500.
Promise to answer of the debts of another requires:
- 1 - guarantee to pay if someone else does not;
- 2 - main purpose is NOT to benefit to guarantor.
Note: if main purpose is to benefit the guarantor, the K is NOT w/in the SoF, and neither is the guarantee.
Service contract not capable of being performed w/in the time of contracting requires:
Capable = impossible, even w/o unlimited resources
If capable, it's a task and NOT w/in the SoF
Is a one-year lease within the SoF?
Nope, b/c it's one year or less.
Satisfying the SoF requires:
- 1 - Performance; OR
- 2 - a Writing
[SoF] Performance and transfer of real estate requires:
- ANY TWO of:
- 1 - improvements to the land;
- 2 - payment;
- 3 - possession.
[SoF] Performance and service Ks requires:
Full performance by any party.
- Part Performance NEVER satisfies SoF.
- --> but look for recovery under quasi-contract
If prompt mentions sale price, the quesiton is on:
- 1 - Money Damages; or
- 2 - Statute of Frauds
[SoF] Seller's part performance in sales contracts:
Delivered Goods --> No SoF Defense.
Undelivered Goods --> Yes, SoF Defense.
[SoF] Art. 2: What is required?
- 1 - Both parties are merchants.
- Material terms, which means --> K need only show:
- 1) That there is a K for sale of goods; AND
- 2) Quantity
[SoF] - Judicial Admission
SoF satisfied if K admitted in court proceeding; only liable to the extent admitted.
[SoF] Equal Dignity Rule
Modification must satisfy SoF only if it would be w/in SoF if it were original K.
CL - Are K provisions that require all modifications to be in writing valid?
Nope, at least not on the Bar.
UCC - Are K provisions that require all modifications to be in writing valid?
Yes, unless they're waived.
Example of illegal subject matter.
K for battery. --> K not upheld.
K for illegal purpose.
K for airline ticket to fly out to commit battery. --> Ticket pay upheld.
1 - statement of "fact" before the K; and
2 - by party or her agent; and
3 - that is false; and
4 - induces the K.
(generally no duty), look for:
1 - fiduciary;
2 - concealemnt.
Economic Duress requires:
1 - improper threat;
2 - no reasonable alternative.
Undue influence requires:
1 - special relationship;
2 - improper persuasion by stronger on weaker.
1 - unfair surprise (procedural);
2 - oppressive terms (substantive);
3 - tested at time of K.
(two ships, Peerless)
1 - material term open to at least two reasonable interpretations;
2 - each party attaches different meaning to it;
3 - neither party has reason to know the term is open to at least to interpretations.
Mutual Mistake of Existing Fact requires:
Both parties mistakenly believe an underlying fact to be true.
Unlateral Mistake of Material Fact requires:
Mistake must be palpable to the counterparty.
Parol Evidence Rule bars:
Using parol evidence to change or contradict.
Parol Evidence is:
Oral representations made before or during K formation.
Parol Evidence CAN:
be used to show fraud, mistake, duress, ambiguity.
Parol Evidence is NOT:
Oral representations made AFTER formation, and those representations are admissible.
Complete integration requires:
that the contract be the written, final, and complete K.
Merger clause requires:
a clause that states "this is the final and complete agreement", but for the Bar is only persuasive.
Parol Evidence CAN ADD terms:
1 - Court finds that the agreement is only partial integrated; OR
2 - the additional terms would normally be included in a separate agreement.
Conduct for terms - Courts look in this order:
1 - Course of Performance;
2 - Course of Dealing;
3 - Custom.
UCC default terms - Seller's delivery obligations:
1 - gives goods to common carrier;
2 - makes reasonable arrangements for delivery; and
3 - notifies buyer.
Risk of Loss Analysis Mnemonic:
A - Agreement;
B - Breaching party liable for ANY uninsured loss, even if breach is unrelated to problem
C - Common Carrier Delivery --> Risk of loss shifts from sellte rto buyer at time seller completes delivery obligations
C - Catch-all --> is seller a merchant (buyer is irrelevant): merchant = buyer's receipt; non-merchant = tenders goods.
if (seller's city) = shipment K and BUYER risks loss;
if (buyer's city) = destination K
What the party expected to get from the K.
Calculating Expectation Damages:
1 - Look at dollar value w/o breach;
2 - Look at dollar value w/breach;
3 - Compare the two.
Damages rule for sales of goods:
3 Relevant facts:
1 - who breached;
2 - who has the goods; and
3 - was there a later "replacement" deal.
Seller breaches; buyer keeps the goods:
FMV if perfect - FMV as delivered or cost of repair.
Seller breaches; sell has the goods:
market price at time of discovery of breach - contract price; or
reasonable replacement price - contract price
Buyer breaches; buyer keeps goods:
Buyer breaches; seller keeps the goods:
- contract price - resale price, unless seller can't resell; if so:
- seller can recover contract price and provable lost profits
Lost profits for lost volume seller:
Seller gets provable lost profits.
What if buyer breaches, and the item is unique (painting collection)?
Incidental Damages are:
1 - those incurred to store, find a buyer, etc.; AND
2 - ALWAYS recoverable.
1 - only if foreseeable;
2 - those kind that anyone would sustain;
3 - those that are special to this kind of plainiff
1 - are subtracted from P's claim;
2 - e.g. incurred by continuing after breach, turning down opportunities to mitigate
Liquidated Damages require:
1 - damages were difficult to forecast at time of K;
2 - provision is a reasonable forecast.
Excuse for counterparty's breach requires:
Anticipatory repudiation requires:
1 - unambiguous statement or conduct;
2 - that repudiating party will not perform;
3 - made prior to time performance is due.
Does Anticipatory Repudiation excuse performance?
Anticipatory Repudiation - time of recovery:
1 - other party finishes performance before repudiation;
2 - retraction by repudiator.
Excuse of performance due to insecurity requires:
1 - reasonable grounds for insecurity;
2 - written demand for adequate assurance;
3 - commercially reasonable to stop performance.
Material breach divisible K corollary requires:
1 - payment per performance;
2 - payments relate to amount of performance completed.
Express condition triggers:
- only if
- provided that
- so long as
- subject to
- in the event that
- on condition that
An Express Condition requires:
1 - language in a K;
2 - limits obligations created by other K language;
3 - triggering words.
Conditional acceptance is -
Conditional acceptance example:
Oral declaration: "I'll accept your offer on condition that I get a mortgage at 5%."
Express condition example:
Contract states: "A will by B's house if A gets a 5% mortgage."
How can an express condition be eliminated so that its nonoccurence does not affect performance obligations?
WAIVER by the person to be benefited.
the person protected by the express condition hinders the other party from meeting that condition.
Conditions subsequent require:
a condition for performance occuring after signing the K.
Accord and satisfaction requires:
1 - Existing obligation;
2 - parties make new agreement ("accord");
3 - agree that performance of new agreement satisfies original obligation.
If accord is not performed:
other party can recover on EITHER original obligation or the accord.
1 - existing obligation;
2 - agreement by parties to accept a different agreement;
3 - new agreement satisfies old.
1 - existing obligation;
2 - agreement between BOTH parties;
3 - substitutes new party to perform.
Who is liable after novation?
ONLY the new, substituted party.
Does death excuse performance?
UNLESS decedent had a special skill.
A third-party beneficiary requires:
1 - two persons K'ing
2 - with the common intent to benefit a third party
Define: Third-party beneficiary
Not a party to the K. Able to enforce the K made for her benefit.
Look for person who is making the promise that benefits the third party.
Look for person who obtains the promise that benefits the third party.
Intended / Incidental
ONLY intended benes can enforce.
When do a third-party's K rights vest?
1 - knows of K to benefit her;
2 - relied on K
Third-party beneficiary can sue:
Promisee can sue:
Can benficiary recover from promisee?
- 1 - creditor beneficiary;
- 2 - can recover from promiseee ONLY on pre-existing debt
1 - a pre-existing K;
2 - one of the parties later transfers rights under that K to a third party.
Can you assign an offer?
Party who later transfers rights to another.
1 - not a party to original K
2 - Able to enforce b/c of assignment
Other party to the K.
Limitation on assignment requires:
1 - language in the K that invalidates assignments.
Can language that prohibits assignment prevent an assignment from being effective?
UNLESS assignee who does not know of the language relies on the assignment. --> ONLY assignee can enforce.
All assignments are void. Is the provision enforceable?
Assignments that create a substantial change in counterparty's performance . . .
are not enforceable.
When can an assignment not be revoked?
If there is consideraiton.
Assignee can sue
Assignor for consideration
CANNOT recover from obligor.
Obligor has same defenses
against assignee as it would have against assignor.
If gratuitously assigned to multiples . . .
last in time wins.
If assigned for consideration to multiples . . .
first in time wins.
a contract where work obligation transfered to another.
Can be both delegation and assignment.
When is delegation not allowed?
1 - Where K prohibits delegations OR assignments.
2 - Personal services Ks that call for VERY SPECIAL skills
What if K prohibits delegation, but one party delegates anyway?
1 - Delegation ineffective;
2 - Material breach.
Who is liable if delegated party fails to perform?
1 - Delegator ALWAYS liable;
2 - Delegatee liable only if she receives consideration from delegator.
Any direct restraint on alienation is
VOID. --> violates public policy
Conditions on transfer . . .
Under the modern rule, a right of first refusal . . .
Under the CL rule, a right of first refusal . . .
CL language to create FSA:
"To A and his heirs"
CL: "to A"
A only takes a life estate.
Difference between freehold and non-freehold estates.
- When the person can take possession:
- Present = freehold;
- Landlord-Tenant = nonfreehold.
Maj Presumption: Courts will presume . . .
a FSA was granted UNLESS language shows clear intent to do otherwise.
"John wills the farm to Yoko" --> What estate does Yoko take?
Fee Tail requires:
1 - CL jx;
2 - "to A and the heirs of his body"; OR
3 - "to A and his bodily heirs"
Fee Tail (Modern Law; apply unless told CL):
Modern presumption --> creates FSA.
Life estates arise:
expressly or by implication
"to Elvis or 200 years if he lives that long" gives
"to Luci and Lynda after the death of my wife"
wife = life estate
Luci and Lynda = remainders
"to Tarzan for the life of Jane"
Tarzan = Life estate pur autre vie
Jane = nothing
Life estate pur autre vie requires . . .
a life estate measured by another's life.
Life estate pur autre vie, and life estate tenant dies . . . (modern rule)
estate passes to life estate tenant's estate.
estate ends once measuring life ends.
Life tenant sells life estate.
Seller has nothing; is measuring life
Buyer has life estate pur autre vie
A to B for life, but if B tries to sell, the life estate terminates:
B gets life estate;
Restraint is VALID.
Voluntary waste requires:
1 - affirmative action;
2 - beyond right of maintenance;
3 - that harms the premises.
normal use of the land;
ANY change is waste
Is depletion of natural resources waste?
UNLESS consumption IS the normal use of the land.
Is harvesting crops waste?
Nope, b/c it's non-depletable.
Permissive waste requires tenant to
1 - fail to do repairs; OR
2 - fail to pay taxes; OR
3 - fail to pay mortgage interest
Effect of tax sale
extinguishes any future interest. That's the power of the state, baby.
Tentants must pay for repairs, taxes, and interest . . .
ONLY to the extent of profits from the land.
Does life tenant have an insurable interest?
Ameliaorative waste requires
1 - tenant's use is outside the normal use;
2 - increases value of land
If ____ have made the property _____, life tenant can _____, without incurring liability.
1 - changed conditions
2 - relatively worthless
3 - alter the property
where does the tax collector look?
A future interest requires:
1 - a presently existing interest;
2 - that cannot be possessed (vested) until a future time.
Future interests retained by the Grantor:
1 - Reversion
2 - Possibility of Reverter
3 - Right of Re-entry
Future interests given to Grantee:
1 - Remainder
2 - Executory Interests
grantor conveys away less than a full durational estate that grantor held.
that grantor convey a fee simple determinable.
Fee Simple Determinable requires
that the estate goes back to the grantor automatically at the occurrence of a condition.
Fee Simple Determinable magic words:
- so long as
Fee Subject to Condition Subsequent/Right of Re-entry requires
grantor gains right to re-enter on the occurence of a condition.
Fee Subject to Condition Subsequent Magic Words
- provided . . . however
- but if
- on condition that
False Imprisonment requires:
- 1 - Act or omission that confines P to bounded area
- 2 - Intent to confine
- 3 - Causation
- So no reasonably apparent means of reasonable escape.
Defenses to False Imprisonment:
1 - Privilege of Arrest
2 - Shopkeeper's Privilege
Privilege of Arrest (Misdemeanor)
Citizen may arrest where a police officer could.
Misdeameanor - arrest only available if: 1) for breach of the peace; AND 2) committed in the arresting party's presence.
Shopkeeper's Privilege requires:
- 1 - reasonable belief that person committed a theft;
- 2 - detention is conducted in a reasonable manner and for a reasonable period of time.
- 1 - act by D amounting to extreme and outrageous conduct;
- 2 - intent to cause P to suffer severe emotional distress or recklessness as to the effect of D's conduct;
- 3 - causation;
- 4 - damages
Malicious Prosecution requires:
- 1 - institution of criminal proceedings against the P;
- 2 - termination favorable to P;
- 3 - absence of probable cause for prosecution;
- 4 - improper purpose of defendant;
- 5 - damages
Abuse of Process requires:
- 1 - wrongful use of te process for an ulterior purpose;
- 2 - some definite act or threat against P to accomplish the ulterior purpose
employer is liable for the acts of teh employee committed within the scope of his employment.
- 1 - defamatory language on the part of the defendant;
- 2 - he defematory language must be of or concerning the plaintiff;
- 3 - publication to a third person;
- 4 - damage to P's reputation
Defamatory language is:
language that tends to adversely affet one's reputation.
[Defamation] Publication occurs when:
there is a publication toa third person who understands it.
[Defamation] If language is in writing, generally:
- 1 - most jxs will be presumed.
- 2 - A substantial minory of courts hold that while damages will be presumed if the statement is libelous on its face, special damages must be proven for libel per quod.
[Defamation] When the defamatory statement refers to a public figure or matters of public concern, P must also prove:
- 1 - Falsity of the defamatory language;
- 2 - fault on the D's part (malice --> knowledge of falsity or reckless disregard for falsity)
Public figure is:
- 1 - A person who has achieved such pervasive fame or notoriety that she becomes a public figure; OR
- 2 - a person who voluntarily assumes a central role in a particular controversy.
Invasion of Privacy/False Light requires:
- 1 - publicaion of facts that placed him in a false light in the public eye;
- 2 - the false light is something that would be highly offensive to a reasonable person under the circumstances;
- 3 - malice ONLY IF matter is one of public interest
Strict Product Liability requires:
- 1 - strict duty owed by commercial supplier;
- 2 - breach
- 3 - actual and proximate causation
- 4 - damages
Commercial suppliers owe a ___ duty to users, consumers, and bystanders
[Strict Product Liability] To establish a breach of duty, P must show:
that the product was defective when it left the manufacturer's control.
Product Liability Cluster:
- 1 - Strict Liability
- 2 - Negligence
- 3 - Implied Warranties of Merchantabilty and Fitness
- 1 - Express Warranty
- 2 - Misrepresentation
Implied Warranty of Merhantabilty and Fitness:
There is an implied warranty that goods are merchantable and are generally fit for the particular purposes for which such goods are used.
Express Warranty arises:
whenever a seller or supplier makes any affirmation of fact or promise to the buyer relating to the goods that becomes part of teh "basis of the bargain."
Liability arises when a representation by the seller about a product induces reliance by the buyer.
Governmental limitation on symbolic conduct requires:
- 1 - the regulation is within the gov'ts constitutional authority;
- 2 - the regulation furthers an important government interest;
- 3 - the gov't interest is unrelated to suppression of speech;
- 4 - the incidental burden on speech is no greater than necessary
A gov't law that expresses a preference for one group must meet:
1 - strict scrutiny --> must be narrowly tailored to serve a compelling government interest
Where no sect preference exists, to meet the Establishment clause, a gov't action must:
- 1 - have a secular purpose;
- 2 - primary effect to neither advance nor inhibit religion;
- 3 - not produce excessive entanglement w/religion.
that the evidence has any tendancy to make the existence of any fact of consequence to the determination of the actionmore or less probable that it would be without the evidence.
[Evidence] What determines whether a fact is of consequence for relevance?
The underlying substantive law, and the claim it's used to make.
[Evidence] What is unfair prejudice?
- 1 - evid is emotionally disturbing; or
- 2 - evid is admissible for one purpose, but inadmissible for another purpose (and the jury might use it for the inadmissible one)
Is surprise a basis for excluding evidence?
Nope. Might get a continuance, but doesn't affect admissibilty.
Evidence exclusion for policy reasons:
- 1 - liability insurance / ability to pay the judgment IF offer to prove culpable conduct or ability to pay;
- 2 - Subsequent remedial measures UNLESS used to rebut no feasible precaution defense (Except prod liab --> always inadmissible);
- 3 - offers to settle and pleas, and related statements UNLESS no claim or no dispute w/r/t liability;
- 4 - Payments or offers to pay medical expenses, BUT related statements are admissible
- <--> might have to balance probative value against risk of unfair prejudice if evid is admissible for another purpose.
When are similar occurences relevant?
- 1 - to prove causation (e.g. two people in restaurant get food poisoning eating the same meal);
- 2 - P has made previous fraudulent claims;
- 3 - Evidence that shows pre-existing condition (P falls, breaks wrist; has had broken wrist before)
- 4 - Comparable sales to establish value
Character evidence is:
evidence that says something general about a person and conveys a moral judgment.
Habit evidence is:
evidence that describes specific conduct and makes no moral judgment.
- (i) Have a disease of the mind,
- (ii) That caused a defect of reason,
- (iii) Such that he lacked the ability at the time of his actions to either know the wrongfulness of his actions or understand the nature and quality of his actions.
Speedy Trial act requires:
- (i) length of the delay,
- (ii) reason for the delay,
- (iii) whether the defendant asserted his right, and
- (iv) prejudice to the defendant.
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